ATLANTA, Oct. 14, 2015 (GLOBE NEWSWIRE) -- Premier Exhibitions, Inc. (NASDAQ:PRXI), a leading presenter of museum-quality touring exhibitions around the world, today announced financial results for the second quarter of fiscal 2016 ended August 31, 2015.
Comparing the second fiscal quarter 2016 with the prior year's second fiscal quarter:
- Total revenue decreased 18.8% to $6.7 million compared to $8.3 million in the second quarter of fiscal 2015.
- Gross profit decreased to $1.1 million from $3.0 million in last year's second fiscal quarter while gross margins fell to 16.1% from 36.5% in the prior year period. The decrease in gross profit is primarily due to the decrease in revenues and an increase in production and marketing expenses related to our New York City location.
- Net loss after non-controlling interest was $3.1 million, or $0.63 per diluted share, compared to net loss after non-controlling interest of $1.7 million, or $0.34 per diluted share in last year's second quarter. Adjusted EBITDA, a non-GAAP measure (1), was $(1.3) million, a decrease of $0.8 million from the second quarter of prior year.
- Total exhibition days decreased 28.4% to 1,076 as compared to 1,503 in the second fiscal quarter of 2015.
- Average attendance per exhibition day decreased 26.7% to 366 compared to 499 in last year's second fiscal quarter. Average ticket prices for semi-permanent and partner presented exhibitions decreased 4.1% to $16.10 from $16.79 in the second quarter of fiscal 2015.
- Average attendance per exhibition day for semi-permanent exhibitions was 319 compared to 344 in the prior year period. Average ticket prices for semi-permanent exhibitions increased 3.7% to $22.20 from $21.40 in the second quarter of fiscal 2015.
- General and administrative expenses decreased 29.1% to $2.6 million, compared with $3.7 million in last year's second fiscal quarter as the Company incurred lower compensation expense during the second quarter of fiscal 2016.
- On August 31, 2015, the Company had total cash and cash equivalents of $1.6 million.
Michael Little, Premier's Interim President and Chief Executive Officer, stated, "Our Saturday Night Live exhibition ticket sales have unfortunately been significantly below our expectations. We fully appreciate the importance of our New York exhibition facility to our future growth and profitability and we are exploring all options to both enhance the facility's revenue streams and reduce our operating costs. To that end we plan on opening a second exhibition, 'The Discovery of King Tut,' in our New York City location in November 2015."
Little continued, "We need additional financing to be able to continue our operations. We have a working capital deficit of $1.4 million excluding the convertible debt of $13.5 million, which is included in the short term portion of note payable on the balance sheet. We believe through management of our cash flow and payment obligations that the Company should reach the expected merger date of October 29, 2015 without the need for incremental financing. However, post-merger management believes that the Company will need up to $5.0 million of additional capital to fund ongoing operations and to bring accounts payable and accrued liabilities current. This amount should be sufficient to return the Company to at least break-even operations in the near term, assuming that management's plan of operations is achieved. If we are unable to obtain additional financing, we will likely not be able to continue operations as they are currently anticipated or at all."
Little concluded, "We remain committed to our merger agreement with Dinoking Tech, Inc. We have mailed the proxy statement to shareholders for their vote on the merger-related proposals at the special meeting scheduled to be held on October 29, 2015."
(1) Adjusted EBITDA
See Table 4 below for reconciliations of Adjusted EBITDA to GAAP Net income/(loss).
This press release contains certain financial measures that are not prepared in accordance with GAAP (generally accepted accounting principles in the U.S.). Such financial measures are referred to herein as "non-GAAP" and are presented in this press release in accordance with Regulation G as promulgated by the Securities and Exchange Commission. A reconciliation of each such non-GAAP measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes each such non-GAAP financial measure provides useful information to investors, is provided below.
Adjusted EBITDA is a non-GAAP financial measure that the Company defines as earnings before certain unusual and/or non-cash charges, depreciation and amortization, loss/(gain) on sale of operating assets, impairment of intangible assets and fixed assets, and non-cash compensation expenses. The Company uses Adjusted EBITDA to evaluate the performance of its operating segments. The Company believes that information about Adjusted EBITDA assists investors by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect net income, thus providing insights into both operations and the other factors that affect reported results. Adjusted EBITDA is not calculated or presented in accordance with GAAP. A limitation on the use of Adjusted EBITDA as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenue in the Company's business. Accordingly, Adjusted EBITDA should be considered in addition to, and not as a substitute for, operating income/(loss), net income/(loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies. Therefore, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.
About Premier Exhibitions
Premier Exhibitions, Inc. (NASDAQ:PRXI), located in Atlanta, GA, is a major provider of museum quality exhibitions throughout the world and a recognized leader in developing and displaying unique exhibitions for education and entertainment. The Company's exhibitions present unique opportunities to experience compelling stories using authentic objects and artifacts in diverse environments. Exhibitions are presented in museums, exhibition centers and other entertainment venues.
Additional information about Premier Exhibitions is available at www.prxi.com.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve certain risks and uncertainties. The actual results or outcomes of Premier Exhibitions, Inc. may differ materially from those anticipated. Although Premier Exhibitions believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any such assumptions could prove to be inaccurate. Therefore, Premier Exhibitions can provide no assurance that any of the forward-looking statements contained in this press release will prove to be accurate.
In light of the significant uncertainties and risks inherent in the forward-looking statements included in this press release, such information should not be regarded as a representation by Premier Exhibitions that its objectives or plans will be achieved. Included in these uncertainties and risks are, among other things, fluctuations in operating results, ability to achieve management's plan of operations, general economic conditions, ability to consummate and integrate acquisitions, mergers and other significant transaction, ability to obtain necessary funding, uncertainty regarding the results of certain legal proceedings and competition. Forward-looking statements consist of statements other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as "may," "intend," "expect," "will," "should," "anticipate," "estimate" or "continue" or the negatives thereof or other variations thereon or comparable terminology. Because they are forward-looking, such statements should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Premier Exhibitions' most recent Annual and Quarterly Reports filed with the Securities and Exchange Commission, including under the heading entitled "Risk Factors." Premier Exhibitions does not undertake an obligation to update publicly any of its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Table 1 | ||
| Premier Exhibitions, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (in thousands, except share data) | ||
| August 31, | February 28, | |
| 2015 | 2015 | |
| (Unaudited) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 1,606 | $ 4,798 |
| Accounts receivable, net of allowance for doubtful accounts of $220 | 886 | 1,417 |
| Merchandise inventory, net of reserve of $45 and $25, respectively | 997 | 1,127 |
| Income taxes receivable | 9 | 49 |
| Prepaid expenses | 2,963 | 2,684 |
| Other current assets | 556 | 459 |
| Total current assets | 7,017 | 10,534 |
| Artifacts owned, at cost | 2,872 | 2,881 |
| Salvor's lien | 1 | 1 |
| Property and equipment, net of accumulated depreciation of $24,756 and $22,766, respectively | 21,096 | 11,503 |
| Exhibition licenses, net of accumulated amortization of $5,293 and $6,069, respectively | 1,493 | 1,629 |
| Film, gaming and other application assets, net of accumulated amortization of $2,038 and $1,726, respectively | 1,295 | 1,608 |
| Deferred financing costs, net of accumulated amortization of $383 and $318, respectively | -- | 65 |
| Future rights fees, net of accumulated amortization of $3,634 and $3,551, respectively | 746 | 829 |
| Construction deposit | -- | 134 |
| Lease incentive | -- | 5,899 |
| Restricted cash | 68 | 426 |
| Restricted securities | 801 | 801 |
| Deferred income taxes | 60 | 60 |
| Long-term exhibition costs | 200 | 261 |
| Subrogation rights | 250 | 250 |
| Total Assets | $ 35,899 | $ 36,881 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $ 5,788 | $ 4,782 |
| Deferred rent | -- | 668 |
| Deferred revenue | 2,014 | 2,901 |
| Deferred income taxes | 60 | 60 |
| Current portion of capital lease obligations | 62 | 31 |
| Current portion of royalty payable, net of discount of $3 and $48, respectively | 294 | 413 |
| Current portion of notes payable, net of discount of $3 and $10, respectively | 13,696 | 8,190 |
| Total current liabilities | 21,914 | 17,045 |
| Long-Term liabilities: | ||
| Lease abandonment | 785 | 997 |
| Deferred rent | 9,048 | 8,867 |
| Long-term portion of capital lease obligations | 258 | 32 |
| Long-term portion of royalty payable, net of discount of $48 | 207 | 301 |
| Total long-term liabilities | 10,298 | 10,197 |
| Commitment and Contingencies | ||
| Shareholders' equity: | ||
| Common stock; $.0001 par value; authorized 65,000,000 shares; issued 4,917,423 and 4,916,644 shares, respectively; outstanding 4,917,222 and 4,916,443 shares, respectively | 1 | 1 |
| Additional paid-in capital | 54,157 | 54,104 |
| Accumulated deficit | (51,478) | (46,105) |
| Accumulated other comprehensive loss | (13) | (13) |
| Less treasury stock, at cost; 201 shares | (1) | (1) |
| Equity Attributable to Shareholders of Premier Exhibitions, Inc. | 2,666 | 7,986 |
| Equity Attributable to Non-controlling interest | 1,021 | 1,653 |
| Total liabilities and shareholders' equity | $ 35,899 | $ 36,881 |
| Table 2 | ||||
| Premier Exhibitions, Inc. | ||||
| Condensed Consolidated Statements of Comprehensive Loss | ||||
| (in thousands, except share and per share data) | ||||
| (unaudited) | ||||
| Three Months Ended August 31, | Six Months Ended August 31, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Revenue: | ||||
| Exhibition revenue | $ 5,489 | $ 6,755 | $ 11,402 | $ 12,763 |
| Merchandise revenue | 1,218 | 1,409 | 2,490 | 2,754 |
| Management fee | 32 | 133 | 66 | 271 |
| Licensing fee | -- | -- | 30 | -- |
| Total revenue | 6,739 | 8,297 | 13,988 | 15,788 |
| Cost of revenue: | ||||
| Exhibition costs | 5,283 | 4,687 | 10,254 | 8,508 |
| Cost of merchandise sold | 373 | 583 | 911 | 1,169 |
| Total cost of revenue (exclusive of depreciation and amortization shown separately below) | 5,656 | 5,270 | 11,165 | 9,677 |
| Gross profit | 1,083 | 3,027 | 2,823 | 6,111 |
| Operating expenses: | ||||
| General and administrative | 2,649 | 3,735 | 5,515 | 7,030 |
| Depreciation and amortization | 1,483 | 1,149 | 2,521 | 2,300 |
| Gain on disposal of assets | (33) | -- | (33) | (4) |
| Total operating expenses | 4,099 | 4,884 | 8,003 | 9,326 |
| Loss from operations | (3,016) | (1,857) | (5,180) | (3,215) |
| Interest expense | (444) | (21) | (819) | (44) |
| Other income | -- | 20 | (6) | 38 |
| Loss before income taxes | (3,460) | (1,858) | (6,005) | (3,221) |
| Income tax expense | -- | -- | -- | -- |
| Net loss | (3,460) | (1,858) | (6,005) | (3,221) |
| Less: Net loss attributable to non-controlling interest | 364 | 205 | 632 | 356 |
| Net loss attributable to the shareholders of Premier Exhibitions, Inc. | $ (3,096) | $ (1,653) | $ (5,373) | $ (2,865) |
| Net loss per share: | ||||
| Basic loss per common share | $ (0.63) | $ (0.34) | $ (1.09) | $ (0.58) |
| Diluted loss per common share | $ (0.63) | $ (0.34) | $ (1.09) | $ (0.58) |
| Shares used in basic per share calculations | 4,917,222 | 4,907,343 | 4,917,154 | 4,906,892 |
| Shares used in diluted per share calculations | 4,917,222 | 4,907,343 | 4,917,154 | 4,906,892 |
| Comprehensive loss | $ (3,096) | $ (1,653) | $ (5,373) | $ (2,865) |
| Table 3 | ||||
| Premier Exhibitions, Inc. | ||||
| Condensed Consolidated Statements of Cash Flow | ||||
| (in thousands) | ||||
| (unaudited) | ||||
| Three Months Ended August 31, | Six Months Ended August 31, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Cash flows from operating activities: | ||||
| Net loss | $ (3,460) | $ (1,858) | $ (6,005) | $ (3,221) |
| Adjustments to reconcile net loss to net cash provided by/(used in) operating activities: | ||||
| Depreciation and amortization | 1,483 | 1,149 | 2,521 | 2,300 |
| Lease abandonment | (106) | (114) | (212) | (231) |
| Gain on disposal of assets | (33) | -- | (33) | (4) |
| Stock-based compensation | 13 | 145 | 53 | 218 |
| Allowance for doubtful accounts | -- | 6 | -- | 16 |
| Write-off of deferred financing costs | -- | 100 | -- | 100 |
| Amortization of deferred financing costs | -- | -- | 65 | -- |
| Write-off of assets | -- | -- | 16 | -- |
| Amortization of debt discount | 29 | 20 | 51 | 41 |
| Changes in operating assets and liabilities: | ||||
| Decrease in accounts receivable | 783 | 322 | 437 | 263 |
| (Increase)/decrease in merchandise inventory, net of reserve | 104 | (7) | 130 | 54 |
| (Increase)/decrease in prepaid expenses | 246 | 189 | (381) | (202) |
| Increase in other current assets | (51) | (44) | (97) | (64) |
| Decrease in income taxes receivable | 40 | 134 | 40 | 207 |
| Increase in other receivables | -- | (6) | -- | (16) |
| (Increase)/decrease in restricted cash | 25 | (141) | 358 | (149) |
| (Increase)/decrease in long-term development costs | (5) | (60) | 147 | 23 |
| Increase/(decrease) in accounts payable and accrued liabilities | (363) | 555 | 1,006 | 1,618 |
| Increase/(decrease) in deferred rent | (248) | 544 | (487) | 538 |
| Increase/(decrease) in deferred revenue | (366) | (277) | (887) | 285 |
| Total adjustments | 1,551 | 2,515 | 2,727 | 4,997 |
| Net cash provided by/(used in) operating activities | (1,909) | 657 | (3,278) | 1,776 |
| Cash flows from investing activities: | ||||
| Purchases of property and equipment | (93) | (23) | (5,259) | (393) |
| Proceeds from disposal of assets | 33 | -- | 33 | 4 |
| Purchase of restricted certificate of deposit | -- | -- | -- | (800) |
| Redemption of certificates of deposit | -- | -- | -- | 201 |
| Decrease in artifacts | 5 | 5 | 9 | 11 |
| Net cash used in investing activities | (55) | (18) | (5,217) | (977) |
| Cash flows from financing activities: | ||||
| Deferred financing costs | -- | (50) | -- | (100) |
| Payments on notes payable | -- | -- | -- | (220) |
| Payments on royalty payable | -- | -- | (164) | -- |
| Payments on capital lease obligations | (19) | (8) | (33) | (17) |
| Proceeds from short-term notes payable | 2,000 | -- | 5,500 | -- |
| Net cash provided by/(used in) financing activities | 1,981 | (58) | 5,303 | (337) |
| Effects of exchange rate changes on cash and cash equivalents | -- | -- | -- | -- |
| Net increase/(decrease) in cash and cash equivalents | 17 | 581 | (3,192) | 462 |
| Cash and cash equivalents at beginning of period | 1,589 | 3,315 | 4,798 | 3,434 |
| Cash and cash equivalents at end of period | $ 1,606 | $ 3,896 | $ 1,606 | $ 3,896 |
| Supplemental disclosure of cash flow information: | ||||
| Cash paid during the period for interest | $ 390 | $ 2 | $ 583 | $ 11 |
| Cash received during the period for taxes | $ 40 | $ 135 | $ 40 | $ 208 |
| Supplemental disclosure of non-cash investing and financing activities: | ||||
| Purchases of property and equipment under capital leases | $ -- | $ -- | $ 290 | $ -- |
| Non-cash refinancing of notes payable | $ -- | $ -- | $ 8,000 | $ -- |
| Net assets recognized from execution of royalty agreement | $ -- | $ -- | $ -- | $ 31 |
| Non-cash payment on royatly payable | $ -- | $ -- | $ 94 | $ -- |
| Non-cash purchase of property and equipment using lease incentive and construction deposit | $ 1,290 | $ -- | $ 6,033 | $ -- |
| Table 4 | ||||
| Adjusted EBITDA | ||||
| (In thousands) | ||||
| Three Months Ended | Six Months Ended | |||
| August 31, 2015 | August 31, 2014 | August 31, 2015 | August 31, 2014 | |
| 2Q16 | 2Q15 | 2Q16 | 2Q15 | |
| Net loss | $ (3,460) | $ (1,858) | $ (6,005) | $ (3,221) |
| Other income | -- | (20) | 6 | (38) |
| Interest expense | 444 | 21 | 819 | 44 |
| Depreciation and amortization | 1,483 | 1,149 | 2,521 | 2,300 |
| Gain on disposal of assets | (33) | -- | (33) | (4) |
| Stock based compensation | 13 | 140 | 53 | 213 |
| Transaction related expenses | 227 | -- | 744 | -- |
| Adjusted EBITDA(1) | $ (1,326) | $ (568) | $ (1,895) | $ (706) |
(1) Adjusted EBITDA
Adjusted EBITDA is defined as earnings before certain unusual and/or non-cash charges, depreciation and amortization, loss/(gain) on sale of operating assets, impairment of intangible assets and goodwill, and non-cash compensation expenses. The Company uses Adjusted EBITDA to evaluate the performance of its operating segments. Adjusted EBITDA should be considered in addition to, and not as a substitute for, operating income/(loss), net income/(loss), and other measures of financial performance reported in accordance with GAAP.
| Table 5 | ||||
| Summary of General & Administrative expense | ||||
| (In thousands) | ||||
| Three Months Ended | Six Months Ended | |||
| August 31, 2015 | August 31, 2014 | August 31, 2015 | August 31, 2014 | |
| 2Q16 | 2Q15 | 2Q16 | 2Q15 | |
| Compensation, excluding stock-based compensation | $ 953 | $ 1,749 | $ 1,944 | $ 3,324 |
| Stock-based compensation | 13 | 140 | 53 | 213 |
| Legal and other professional fees | 755 | 781 | 1,608 | 1,283 |
| Rent and other office expenses | 386 | 440 | 829 | 867 |
| Other | 542 | 625 | 1,081 | 1,343 |
| General & Administrative expense | $ 2,649 | $ 3,735 | $ 5,515 | $ 7,030 |
| Table 6 | ||||
| Exhibition Revenue & Operating Statistics | ||||
| (In thousands) | ||||
| Three Months Ended | Six Months Ended | |||
| August 31, 2015 | August 31, 2014 | August 31, 2015 | August 31, 2014 | |
| 2Q16 | 2Q15 | 2Q16 | 2Q15 | |
| Admissions revenue | $ 4,662 | $ 5,157 | $ 9,502 | $ 9,822 |
| Non-refundable license fees for current exhibitions | 827 | 1,598 | 1,900 | 2,941 |
| Total exhibition revenue | $ 5,489 | $ 6,755 | $ 11,402 | $ 12,763 |
| Key Non-financial Measurements | ||||
| Total number of exhibitions presented | 13 | 18 | 18 | 22 |
| Semi-permanent exhibitions presented | 7 | 6 | 7 | 6 |
| Partnered exhibitions presented | 3 | 6 | 8 | 8 |
| Exhibitions rented to promoters or museums | 3 | 6 | 3 | 8 |
| Total operating days for semi-permanent, partner and rented exhibitions | 1,076 | 1,503 | 2,154 | 2,929 |
| Total attendance for semi-permanent and partner presented exhibitions (in 000's) | 332 | 544 | 777 | 1,039 |
| Average attendance per day for semi-permanent and partnered exhibitions presented | 366 | 499 | 425 | 480 |
| Average ticket price for semi-permanent and partnered exhibitions presented | $ 16.10 | $ 16.79 | $ 17.21 | $ 16.04 |
| Average retail per attendee for semi-permanent and partnered exhibitions presented | $ 3.75 | $ 2.71 | $ 3.12 | $ 2.69 |
| Semi permanent exhibitions: | ||||
| Total operating days | 644 | 550 | 1,198 | 1,102 |
| Total attendance (in 000's) | 205 | 189 | 395 | 394 |
| Average attendance per day | 319 | 344 | 330 | 358 |
| Average ticket price | $ 22.20 | $ 21.40 | $ 21.82 | $ 20.43 |
| Average retail per attendee | $ 4.34 | $ 3.86 | $ 3.97 | $ 3.57 |