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Premier Exhibitions, Inc. (PRXI)
F1Q 2014 Earnings Conference Call
July 10, 2013, 05:30 PM ET
Samuel S. Weiser - President and Chief Executive Officer
Michael J. Little - Chief Financial Officer and Chief Operating Officer
Andrew Shapiro - Lawndale Capital Management
Ephraim Fields - Echo Lake Capital
Previous Statements by PRXI
» Premier Exhibitions' CEO Discusses F4Q2013 Results - Earnings Call Transcript
» Premier Exhibitions' CEO Discusses F3Q13 Results - Earnings Call Transcript
» Premier Exhibitions' CEO Discusses F2Q13 Results - Earnings Call Transcript
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 of 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 Incorporated. Please go ahead, sir.
Samuel S. Weiser
Thank you, operator and good afternoon everyone. Before we begin I would like to remind you that in today's call we will discuss adjusted EBITDA, which is a non-GAAP financial measure that our company uses as a key metric for evaluating performance internally. Adjusted EBITDA also provides investors with additional information to facilitate the comparison of past and present performance and an explanation and reconciliation table to the nearest GAAP measure can be found in our earnings release.
I’m going to split my comments into a brief review of our exhibition business and our current exhibition initiatives and then provide an update on our efforts to monetize the Titanic asset. Afterwards, Michael Little, our Chief Financial Officer and Chief Operating Officer will delve more deeply in our financial performance for the three month period itself.
Considering the headwinds that impeded our top line during the period I would characterize the overall performance of our exhibition business in the first quarter as quite respectable. As we detailed in our earnings release the Seaport closure set us back by 1.7 million in revenue. Moreover our first quarter last year benefited from events and promotions around the Titanic's 100 anniversary. Both of these elements had a strong impact with respect to year-over-year comparison and will continue to impact year-over-year comparisons in subsequent quarters as well.
As we've discussed on previous earnings calls one of the primary areas of management focus is to control both variable and fixed costs to mitigate the earnings volatility from the variability of revenue quarter-to-quarter. Our first quarter results demonstrated our ability to do just that, as we generated a 450 basis point increase in our gross profit margin.
While the remainder of the fiscal year remains a challenge primarily because of the Seaport closure we continue to focus on revenue growth and diversification through new content development and the opening of additional permanent locations. To that point we are working at a couple of new permanent locations as well as some exciting new content that should reap benefits for us both later this year and beyond. Specifically we are working towards adding two semi-permanent installations to our exhibition base over the next several months.
First in August we will open in Buena Park, California, where we will showcase our Bodies and Titanic properties. We are excited about the opportunity in Buena Park and look forward to a strong opening. Buena Park and Orange County are both strong tourist markets that we believe hold great promise for Premier. While our move to the former Movieland Wax Museum site is temporary our relationship with the City of Buena Park is strong and our goal is to become a permanent part of the attraction base there.
Additionally we are close to reaching a final agreement with our new landlord in Times Square and expect to open our Titanic and Bodies exhibition there in the fall ahead of the all-important holiday season. Once we complete the lease Premier will be occupying space in a historic landmark building on Broadway in the heart of Times Square. It is, in our opinion, a much better, more centrally located facility that will provide greater access to both the tourist and local market than the now closed downtown location at The South Street Seaport. Times Square is estimated to attract more than 44 million tourists a year, four times the total for The Seaport and we feel strongly that this new Times Square location will significantly out-draw our old Seaport location.
In both Buena Park and Times Square we expect to build significant brand equity while improving the diversity and quality of entertainment options available in these markets just as we have done in Orlando and Las Vegas.
We are also in the midst of expanding our content portfolio with new exhibitions. In November we will be opening an artefact-based exhibit detailing the life and death of the City of Pompeii at the Franklin Institute in Philadelphia. Philadelphia will be the first of three cities where the Pompeii exhibition will tour over the next couple of years.
You may also recall from our last earnings call that we had obtained the developments rights or options to several promising exhibition ideas which we believe could have significant market appeal and could be extremely successful ventures for Premier. Our rationale was rather straightforward. First test exhibition concepts and assess market demand, but only move forward by committing capital and resources if a pipeline for showcasing the exhibitions could be secured. Today we are pleased to announce that we are moving ahead with two of these ideas.