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Premier Exhibitions, Inc. (PRXI)
F3Q13 Earnings Call
January 9, 2013 5:30 PM ET
Sam Weiser – President and CEO
Mike Little – CFO and COO
Mark Busher – Private Investor
Sam Kidston – North & Webster LLC
David Daggett – Private Investor
Previous Statements by PRXI
» Premier Exhibitions' CEO Discusses F2Q13 Results - Earnings Call Transcript
» Premier Exhibitions' CEO Discusses F1Q13 Results - Earnings Call Transcript
» Premier Exhibitions' CEO Discusses F4Q12 Results - Earnings Call Transcript
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 have a direct bearing on the company’s operating results, performance and financial condition.
And now, I’d like to turn the conference over to Mr. Sam Weiser, Chief Executive Officer and President of Premier Exhibitions Incorporated. Please go ahead, sir.
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, 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 in Form 8-K filed today with the SEC.
I’m going to start things off with an overall discussion of our business and ongoing initiatives and then Mike Little, our Chief Financial Officer and Chief Operating Officer, will review our financial performance for the recent quarter in greater detail.
In terms of the Titanic sale, we do not have an update from our previous call, but rather continued working towards monetizing the assets as we’ve already described. As you know, a consortium of individuals has signed a non-binding letter of intent to purchase the stock of RMS Titanic, Inc. for educational, regional, development and cultural purposes. Completing the transaction is subject to the parties negotiating binding purchase agreements, obtaining requisite financing commitments and other approvals and, therefore, the execution of the LOI does not guarantee that a purchase will be consummated. As this process is ongoing and confidential, we will provide additional information as material developments warrant, but we’ll not be taking questions on this subject during the Q&A portion of today’s call.
Now, in terms of the third quarter itself, we’re pleased with our performance from both the top line and bottom line perspective despite the impact from Hurricane Sandy, which has affected our operations in New York as described in our earnings release. Michael will discuss this in more detail, but our Bodies and Dialog exhibitions have been unable to reopen since the storm hit the Seaport.
As we discussed on our October call, the third quarter is generally our seasonally slowest period of the year and we usually take down, move and set up touring exhibitions for presenting in the fourth quarter and the first quarter of the new fiscal year. This obviously has implications from both the revenue and cost perspective as our top line revenue is generally the weakest of the four quarterly periods and we’re unable to leverage our expense structure as much as we can at other points in the year.
Given this background as well as our previously discussed expectations heading into the third quarter of being net income neutral hopefully you can appreciate our actual results given our reported losses associated with the interruption of our New York operations.
As you can see, we generated strong growth on our top-line, sharp increases in our gross profit and gross margin, and a $1.8 million improvement in adjusted EBITDA compared to the year ago period. In addition, our more modest net loss of $600,000 will make it easier for us to realize our goal of full year profitability for the first time in many years.
Through the first three quarters of fiscal 2013, our adjusted EBITDA of $7.6 million compares very favorably to $1.5 million for the same nine-month period of fiscal 2012, while our year-to-date net income of $3.3 million reflects a $6.2 million positive swing from the comparable timeframe in fiscal 2012. In other words, through a lot of hard work and the strength of our personnel and overall organization, we have been able to change our business trajectory and position ourselves for more consistent profitability as we move forward.
On top of our existing Titanic and Bodies properties, our accretive acquisitions of AEI and Exhibit Merchandising earlier this year have strengthened and helped diversify our revenue base and become important contributors to our overall business. Unfortunately, the King Tut, and Cleopatra artifacts are returning to Egypt this month as both of these exhibitions, which were part of the AEI transaction, have completed their U.S. tours. These closings have no impact on our financial results as revenues from Tut and Cleopatra are not included in our financial statements. That being said, we are looking at the feasibility of organizing another Egyptian focused exhibition for the U.S. market that can be introduced in the next fiscal year.