Tix Corp. Sells Exhibit Merchandising Subsidiary

Tix Corp. recently sold off its museum exhibit merchandising subsidiary to Premier Exhibitions Inc., a Georgia company that produces touring exhibits featuring artifacts from ancient Egypt and the sunken ocean liner Titanic. The Studio City-based company said it sold Exhibit Merchandising LLC to Premier Exhibitions Management LLC for $125,000 due to uncertainty about future exhibits. Premier Exhibitions bought the fixed assets and inventory and agreed to assume certain existing obligations. The subsidiary included retail stores that toured with two King Tut exhibits, offering custom-branded products for sale. The King Tut exhibits are set to close in December after an eight-year run. The exhibit merchandising unit was not a core business unit for Tix. The company mainly operates kiosks and booths in Las Vegas selling discounted tickets to live shows. For the first quarter ended March 31, the exhibit merchandising unit brought in revenue of $722,000 and had an operating loss of $86,000. In the same period from the prior year, it reported revenue of $1.4 million and an operating loss of $488,000. Overall for the first quarter, Tix Corp. reported a net loss of $294,000, or $0.01 per diluted share, on revenue of $6.6 million. In the same period in 2011, the company reported net income of $70,000 on revenue of $6.4 million. In February, Tix announced it was seeking alternatives for the subsidiary, including a sale, after being notified by its partner, museum exhibition producer Arts & Exhibitions International (AEI), that it was not renewing an agreement with the Egyptian government to continue touring artifacts in the “Tutankhamun and The Golden Age of the Pharaohs” and “Tutankhamun the Golden King and the Great Pharaohs” exhibits. “That left us to reevaluate the business if there were going to be gaps (in exhibits) in the future,” said Steve Handy, chief financial officer for Tix. The two King Tut exhibits have toured the world since opening in Los Angeles in 2005 and the Egyptian government determined the artifacts had been out of the country long enough, said Arts & Exhibitions President John Norman. “Typically, lenders give you two years so this is really exceptional they let us have it for this long,” Norman said. About eight million visitors have viewed both Tut exhibits. AEI was a subsidiary of Los Angeles-based AEG Live until it was acquired by Premier Exhibitions in April. AEI also produces “Real Pirates” and “Cleopatra: The Search for the Last Queen of Egypt,” now on display at the California Science Center. Premier Exhibitions is a publicly-traded company that reported first quarter net income of $1.3 million, or $0.02 per diluted share, on revenue of $11.4 million. That is an 18 percent increase from the same period in 2011 when the company reported net income of $1.1 million, or $0.02 per diluted share, on revenue of $9.7 million. Premier has its own merchandising division built primarily around its popular “Titanic” exhibit. “It made sense to do this acquisition (with Tix),” Norman said. “We’ll have a stronger merchandising presence in addition to the recent acquisition of AEI.” This is not the first time that Tix has sold off a non-core business. In December 2010, the company disposed of Tix Productions Inc. (TPI), its live entertainment subsidiary. A group of TPI executives purchased the subsidiary. TPI produced Broadway shows “American Idiot” and “Rain — A Tribute to the Beatles on Broadway” but had not been a consistent revenue generator. Between the second quarter 2009 and the second quarter of 2010 the division experienced a 60 percent drop in revenue.