Premier Exhibitions Inc. Reports Operating Results (10-Q)
Premier Exhibit has a market cap of $89.6 million; its shares were traded at around $1.64 with and P/S ratio of 2.1. PRXI is in the portfolios of Whitney Tilson of T2 Partners Management, LP, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Due to both the lack of historical investment in the core business as well as the scope and breadth of our initiatives themselves, we will require between $6.0 million and $7.0 million of capital investment during fiscal 2011. Through November 30, 2010, approximately $5.0 million has been spent on these initiatives, the majority of which has been capitalized in the 2010 Expedition Titanic Dive costs of $3.9 million. We estimate cash on hand and cash flows from operations will be adequate to fund these remaining initiatives.
Gross (loss) profit. During the quarter ended November 30, 2010, our gross profit decreased by $3.0 million, as in the third quarter of fiscal 2011 we generated a gross loss of $0.4 million compared to a gross profit of $2.6 million for the same quarter of last year. Our gross profit was down due to generating lower revenue per exhibition day coupled with higher operating costs associated with additional self-operated exhibitions.
Operating expenses. Our general and administrative expenses of $4.6 million remained stable for both the quarters ended November 30, 2010 and 2009. However, during the current quarter operating expenses decreased due to lower stored exhibits expense and lower legal, accounting and consulting fees of $0.3 and $0.5, respectively. This decline in expense was offset by higher bad debt expense and higher office and other expenses of $0.2 million and $0.5 million, respectively for the quarter ended November 30, 2010.
Exhibition revenue of $31.7 million increased by $1.4 million driven by an increase in self-run exhibitions and exhibition days during the nine months ended November 30, 2010 compared to the same period of last year, partially offset by lower overall attendance. Total exhibition days, which is the total number of days our exhibitions were open to the public, remained stable at 4,684 for the nine months ended November 30, 2010 compared to 4,624 for the same period last year. Revenue from self-run exhibitions was 78% and 30% of revenue for the nine months of fiscal year 2011 and fiscal year 2010, respectively. Total attendance for the nine months ended November 30, 2010 decreased by 403,828 from 3,306,979 for the same period last year, reflecting the closing of 3 exhibitions that are no longer presented by the Company, as well as lower attendance at our Bodies and Titanic exhibits. Average attendance per exhibition day decreased 13 percent, with attendance at many of our touring Bodies exhibitions hovering below break-even gross margin levels, while other locations, like our longer-term exhibitions in Las Vegas and most of the touring Titanic shows, continuing to reflect strong or even increased attendance.
Operating expenses. Our total operating expenses of $17.2 million decreased by $11.0 million as compared to the same period last year primarily due to impairment expense of $4.5 million, a decline in amortization and depreciation expense of $0.6 million, and lower general and administrative expenses of $5.9 million.
Our impairment expense decreased primarily to an impairment of goodwill and intangible assets in fiscal 2010 of $4.5 million. General and administrative expenses declined primarily due to lower stored exhibits expense, bad debt expense, and legal, accounting and consulting fees of $1.0 million, $1.4 million, and $3.2 million, respectively.
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