Premier Exhibitions' CEO Discusses F1Q13 Results - Earnings Call Transcript

Premier Exhibitions, Inc. (PRXI)

F1Q13 Earnings Call

July 12, 2012 9:00 am ET

Executives

Samuel S. Weiser – President and Chief Executive Officer

Michael Little – Chief Financial Officer and Chief Operating Officer

Analysts

William Vlahos – Odyssey Value Advisors LLC

Presentation

Operator

Good morning and welcome to the Premier Exhibitions’ Fiscal Year 2013 First Quarter Earnings Results Conference Call. Today’s conference is being recorded. I would like to remind everyone that the company will be making forward-looking statements on today’s call. These forward-looking statements are based on current expectations and are subject to a number of risks and uncertainties and are not guarantees for future performance.

Undue reliance should not be placed upon them as actual results may differ materially. Please refer to the risk factors identified in the company’s filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on the company’s operating results, performance, and financial conditions.

And now, I’d like to turn the conference over to Mr. Sam Weiser, Chief Executive Officer and President of Premier Exhibitions Inc. Please go ahead, sir.

Samuel S. Weiser

Thank you, operator, and good afternoon everyone. As the operator stated, we remind everyone that today’s conference call may contain forward-looking statements, which are based on our current expectations and are subject to risks and uncertainties.

In addition, today we will discuss adjusted EBITDA, a non-GAAP financial measure, which our company uses as a key metric for evaluating performance internally, and which also provides investors additional information to facilitate the comparison of past and present performance. A detailed explanation of this non-GAAP measure can be found in our earnings release and Form 8-K filed today with the SEC.

I would like to begin with a discussion of our business and afterwards, I will turn the call over to Michael Little, our Chief Financial Officer and Chief Operating Officer to review our financial performance in greater detail. In our view, fiscal 2013 should be an exciting year for our business. First, we look forward to completing the sale of the Titanic assets. Second, we are beginning to realize the benefits of prior year cost saving and management initiatives. Lastly, we are building our operating business both organically and through acquisitions to position the company for sustainable profitability quarter-to-quarter.

Our first quarter results indicate that we are off to a pretty good start in building a platform for sustainable top line growth and profitable ongoing operations. As the first quarter results suggest, we made progress along several different fronts including increasing revenue, expanding gross profit, generating substantially more operating cash flow, and diversifying our exhibition portfolio.

Our acquisition of AEI has solidified Premier as the industry leader in the development and exhibition of unique content for education, entertainment, and brand extension. The integration of AEI is progressing smoothly and a number of the new content opportunities we obtained are quickly taking shape. While many of these projects will require a time, we expect that this new content will be accretive to earnings in fiscal 2014.

In the meantime, we are exploring ways to extract additional revenue from the existing properties we acquired, which coupled with the management fees we earn under our agreement with AEG will be accretive to the company in this fiscal year.

The AEI acquisition immediately diversified our exhibition portfolio. Additionally, we believe the revenue potential embedded in the content of the Tut, Cleopatra, Real Pirates and America I Am brands can be more fully exploited by the combined enterprise. The AEI transaction also added experienced professionals who brought strong industry relationships and compelling new exhibition opportunities to our organization that we believe will fully demonstrate our industry leadership and help us to transform the exhibition industry.

The new fiscal year also introduced a new strategic vision for Premier. One in which we intend to extend the exhibition experience beyond the four walls of the exhibition hall. We are pursuing digital strategies that will deliver our content in varied ways to multiple constituencies of consumers. Many of these new strategic initiatives will be introduced this year, and should also be accretive to our bottom line. We are also focused on continuing to build our core business by introducing Premier and AEI to content owners, looking to expand their brands through join ventures and other licensing arrangements.

Furthermore, we are open to exploring other strategic acquisition opportunities that are accretive to our business along with fee-for-service arrangements with content owners looking to develop, construct and tour exhibitions built around their content.

Bookings for existing exhibitions and the newly acquired properties have been strong. Our calendar has fall and we continue to see demand for our unique content. Our business model is unique with both touring and semi-permanent installations. Our semi-permanent installations in Los Vegas, New York, Orlando and Atlanta continue to provide significant contributions to our gross margin.

Our recently acquired venue in Orlando has shown increasing attendance trends and drastically improved the merchandise sales. While the 100 th anniversary didn’t hurt, our marketing in Orlando is beginning to create awareness of the venue as a destination, which should keep these attendance trends in tact .

The touring segment of our business was also strong, as our Titanic shows benefited from the 100 th anniversary of Titanic’s inaugural and only voyage. As Michael explained, the results in our second quarter will better reflect the strength of the attendance at our touring exhibitions during the first quarter.

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