Premier Exhibitions CEO Discusses F2Q2011 Results - Earnings Call Transcript

Premier Exhibitions Inc. (PRXI)

F2Q2011 Earnings Call Transcript

October 7, 2010 5:30 pm ET

Executives

Chris Davino – President and CEO

John Stone – CFO

Brian Wainger – VP and Chief Legal Counsel

Analysts

Christopher Bratcher [ph]

Jason Braswell [ph]

Norman Klein [ph]

Nicholas Green – Green Partners

Presentation

Operator

Good evening and welcome to the Premier Exhibitions second quarter fiscal year 2011 earnings results conference call. Today’s conference is being recorded. I will remind everyone that we will be making forward-looking statements on today’s call. These forward-looking statements are based on our current expectations and are subject to a number of risks and uncertainties. Actual results may differ materially. Please refer to the risk factors identified in our Form 10-K for the period ended February 28, 2010, and our subsequent filings with the Securities and Exchange Commission.

And now, I will hand the call over to Chris Davino, President and Chief Executive Officer of Premier Exhibitions Incorporated. Please go ahead, sir.

Chris Davino

Good afternoon everyone. I appreciate you joining us all today. We are going to structure the call a little bit differently than we have in the past. Rather than John going through all of the financial detail upfront, I am going to give an overview of the quarterly results, really just a headline; two, I am going to describe the current the context within which I believe those results should be viewed mainly in the context of the focus and progress we have made in the quarter against various strategic initiatives. Three, am going to spend some time discussing what our current focus is and again there primarily new content development and some of the partnerships that we formed in the context of new content development; and four, last and address what I will characterize the corporate strategic alternatives, judging by a lot of the calls that John and I get in terms of letters we have received overtime, I think there are a fair amount of questions, I just want to deal with the topic upfront.

So, the quarterly results, in the main, revenue was essentially flat with the second quarter last year, that in spite of having more operating days this year as all of our exhibitions were generally booked. Utilization was pretty significantly high in the high 80s. This is a vast improvement over the period last year and it’s a pretty good comparison just two prior quarters in the main. Attendance overall unfortunately was soft. We did see some encouraging signs for attendance, particularly some tertiary markets, but we have got higher demographic penetration than we usually see and John will provide some of those details. Our Vegas shows did particularly well. Bodies was up 40% year-on-year, and Titanic was up roughly 24% compared to the same period last year.

But overall, attendance was down at least in part in my judgment a reflection of the economic environment that we are in. Margins were also off as a result of attendance, partially reflected by the fact that we are operating more of our shows is self-operating shows today. We continue to believe that’s the right strategy long term and I can talk about that obviously.

With regard to G&A, we were able to keep it under control, and again that is quite making significant strategic investments to grow the business. The bottom line as I look at it, EBITDA around $1.1 million for the quarter, while the positives, obviously there’s room for improvement. John can provide some of those details.

At the outset, for me I think it’s important to look at the financial results in the quarter again on the context of largely very significant moves that we have made vis-à-vis repositioning the core properties, both Titanic and Bodies. And I will start with Bodies, and I will cover this pretty quickly. We have spoken about this on prior calls, but just to remind everyone that in this quarter, really the first half of the year taken together, for Bodies, we were fulfilling four to five distinct initiatives all at the same time.

We relaunched the show itself, the actual Bodies presentation has been formally relaunched, and I will talk about what that means. Two, again more of a focus on self-run versus promoter deals; three, addressing new market opportunities again primarily tertiary markets and international markets and self-runs; and last but not least, really the different marketing efforts, and I will give into some of that as well.

So, taken together just within Bodies, four or five distinct pretty significant initiatives that pursued in execution all at the same time. So, I think and I will discuss all of these one by one, starting with the exhibition, and again I have covered some of this ground in the past, but I think it’s important to note that what we had when I got here in terms of the Bodies presentation was a relatively static model, which is primarily specimens in cases, under light, some limited black and white educational text. And what we want to create we think is categorically required that consumers in 2010 expect for any kind of entertainment offering is more vibrant, immersive, experiential, interactive model, and that we are working.

To that end, we developed some concepts that could create distinct concepts and ultimately landed on a concept that we call Your Amazing Body. I will not get into all of the attributes of that on the call, unless people have questions, obviously we will get into it, suffice it to say it’s miles from what the show was originally. And I think very different than anything our competitors have at the marketplace today.

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