The expected approval of the Dinoking merger with Premier Exhibitions took place on 29 Oct 2015. According to the press release, the merger transaction will take place in the next few days. Upon merger completion, Daoping Bao will be appointed the president and chief executive officer of the company. Some shareholders have expressed the hope that Bao will fix the problems caused by poor management of the company.
Premier Exhibitions, which owns RMS TItanic Inc and Titanic:The Artifact Exhibition, has reported its second quarter 2016 results. Here is some information from that statement:
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.
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.
Company president Michael Little stated that they need additional financing to keep going. “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.” Which is why they desperately want to merge with Dinoking (proxies have been mailed out for the special 29 Oct 15 meeting).
Little argues the merger will allow them to get additional capital ($5m) to fund ongoing operations and to have the company “break-even” in its operations. Otherwise he warns:
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.
Of course there is that lawsuit out there by Mark Sellers to enforce the previous merger agreement, which could throw all plans out the window if it survives early judicial review.
Premier Exhibitions, the owner of RMS Titanic Inc and Titanic:The Artifact Exhibition, had a sudden stock drop this week. The company in an official statement says:
With regard to the recent decline in our stock price, Premier Exhibitions, Inc. (Nasdaq:PRXI) knows of no specific reason for the decline. As previously announced, the board is currently exploring all strategic and financing options. The board is currently in advanced discussions with a potential strategic partner and is considering several other financing alternatives. We expect to have more news to report in the near future.
Now it could be just a general drift of the market but this is a niche stock, one that is not traded on the big boards. The big problem the company has is that, aside from monetizing the Titanic artifacts, it has been unable to sell the collection to another buyer. The strict conditions imposed by a federal judge means the entire collection gets sold at one time. It cannot be sold in sets or individual lots. The high sale price means only the most wealthy of investors or institutions can afford to purchase. And even if a bid is finally accepted by Premier, then you head off to federal court to have the judge sign off on it. And that will not be easy. The judge will demand lots of proof you are going to maintain the collection. And the hearing will be public. Expect anti-salvors to show up to protest the sale. Not to mention petitions that seek to reopen the salvage award.
Or another reason could be the decision to have a 1 for 10 reverse stock spilt. Normally a stock split gives you stock (for every ten shares you own we give you two). Reverse stock splits are not unheard of but unusual. It is cheaper than a stock buy-back but means investors loose shares. Say you have 100 shares in Premier. Every 10 shares will be converted to 1 share. So instead of 100 shares, it gets cut to 50. In theory, by reducing the number of shares held by investors it increases the market value. Premier had 49.1 million shares before the deadline of 27 Feb 2015. Now thanks to the reverse stock split, it now has 4.9 million shares thus increasing its market value. And its ability to keep the stock price above a certain threshold ($1.00)to be publicly traded as well perhaps bettering the chances for financing.
Investors ought to be worried. They cannot sell the Titanic collection, a major deal to sell shares to another entity fell through, and there seems to be a sense that something is not going right at Premier. Taking back shares is a desperate gamble to keep the stock from sinking below $1.00. As of today, the stock is trading at $3.02. So it seems to have worked but still the stock is more trending down than up. Investors are right to be wary about this stock and perhaps take their cash out when it gets high enough to make some money. But more likely it is a loss on the tax form.
Premier Exhibitions, which owns artifacts salvaged from RMS Titanic and operates a touring artifact exhibition, had a interesting filing with the U.S. Securities and Exchange (SEC) Commission. It announced in its 25 Nov 13D filing that current chairman Mark Sellers deal to sell his 31% share interest to Armada Group GP Inc has been canceled. The terms of the deal required that changes in the board of directors would have to take place and two would have to be independent. Since the deal is now cancelled, those changes are also voided. No word as to what happened but the filing states Sellers concluded Armada Group would not fulfill the obligations required. The filing also opens the possibility of legal action against Armada for not meeting its obligations.
What does this all mean? Speculation is the deal fell through because of some other deal that was tied to it. But that of course is just speculation. An an early deal to sell the artifacts fell through so they are trying to find ways to either sell the collection or a new way to monetize it. Shares of the company fell to 64 cents on the news.
NASDAQ recently sent a letter of non-compliance to Premier Exhibitions (NASDAQ:PRXI) regarding the recent director resignations. Specifically they are out of compliance with the audit committee requirements which require the audit committee be comprised of three independent directors. They have to resolve it either at the next annual shareholder’s meeting or by 27 Aug 2015. However if the annual shareholders meeting is held before 23 Feb 2015, then they must show compliance on that date. Four directors resigned on 25 Aug 2014 and were replaced by Jack H. Jacobs and Rick Kraniak on the same day.
Premier Exhibitions, which owns RMS Titanic Inc and Titanic:The Artifact Exhibition, recently announced three directors had resigned. William M. Adams, Ronald C. Bernard, and Bruce Steinberg resigned on 25 August 2014. They were replaced on the same day by Jack H. Jacobs and Rick Kraniak making it five directors for the company. Jacobs was a previous member of the board fr0m February 2009-February 2011.
What makes this interesting is that Jack Jacobs has both financial and government connections. His previous experience in real estate development investments and finance allowed him to meet with prominent people in and out of government, particularly those with large amounts of capital to invest. He has through his military analyst role at NBC connections at the Pentagon and other places. Rick Kraniak is a retread as well serving on the board from 2005-2008. He has lots media connections thanks to his being a media consultant but also has ties to financial services companies. In short, both of these guys have ties in the financial sector (and in Jacob’s case government as well) that will be used to 1)find sources to invest in the company and other projects; 2) find and connect people that will want to purchase the Titanic collection; 3) finance a sale of the entire company to whole new entity.
It looks like, if one reads these tea leaves correctly, they plan to make interesting changes within the next 12 months. And it is more likely that with these connections that they can sell the Titanic collection.
Premiere Exhibitions, which owns RMS Titanic Inc, recently announced its earnings for the first fiscal quarter of 2015 saw revenue decrease by 16.2% compared with first quarter last year. According to the press release:
Total revenue decreased 16.2% to $7.5 million compared to $8.9 million in the first quarter of fiscal 2014. Exhibition revenue was negatively impacted by a decrease in admissions revenue as a result of fewer touring exhibitions achieving profit share participation despite comparable average attendance per day. This was only partially offset by higher non-refundable license fees. Merchandise revenue was negatively impacted by a decrease in total attendance for semi-permanent and partnered exhibitions along with a decline in average retail sales per attendee.
Average attendance per exhibition day fell by 9.4% to 462 compared to same quarter last year with 510. They had more exhibition days during the quarter compared to last year. Some costs went down due to lower compensation costs.
So what does it all mean? Well Michael Little the interim president writes:
Our top-line performance reflects weaker demand for Titanic and Bodies in established venues such as Las Vegas and Orlando, lower average ticket prices across all semi-permanent locations, along with fewer of our domestic touring partnered exhibitions achieving profit share participation. These factors led to admission and merchandise sales declines that were only partially offset by higher license fees for rented exhibitions touring internationally. The year over year decrease in total revenues, coupled with rising exhibition costs, yielded a reduction in adjusted EBITDA and a net loss for the Company during the three-month period.
So things are not rosy over at Premiere. Fewer people are going to their exhibitions which translates into fewer merchandise sales. As for the Titanic artifacts collection, the official line is “Premier continues to explore strategic alternatives in conjunction with J.P. Morgan, however, there is nothing definitive to announce at the present time. In addition, the Company expects its independent appraisers to complete new appraisals of the entire Titanic collection, including all the artifacts and intellectual property obtained and developed subsequent to the last appraisal in 2009, over the next month.”
The nugget here is a new appraisal is being undertaken but not just of the Titanic artifacts but the intellectual property developed as part of this collection. That tells me they are trying to sweeten the pot. They will not only get the entire Titanic collection but all the other proprietary materials as well. It also makes sense if you are asking big money people to pony up millions of dollars.
According to Atlanta Business Chronicle, Premier Exhibitions (which owns RMS Titanic, Inc and Titanic:The Artifact Exhibition), reported in a regulatory filing that the board of directors approved a review of “strategic alternatives.”
“The board of directors is working to pursue all appropriate actions to enhance the value of the company for its shareholders,” said Mark A. Sellers, chairman of the board of Premier Exhibitions. “To that end, we have determined that a broad evaluation of strategic alternatives led by a top tier investment bank should be the next step in that process and we are very excited to have engaged a prominent, New York based investment bank as our adviser.”
That sounds like they are preparing to sell the company or perhaps parts of it to other interested parties. With the Titanic artifact sale up in limbo at this point (a consortium backed out since it could not raise the money) and likely no deal in the immediate future, it probably means they would prefer someone else have that headache. Do not be surprised if a sale ends up being done either to a gulf state business or to a Chinese company. Both areas been making moves to capitalize on the Titanic tourist trade.
South Florida Science Center & Aquarium Photo: WIkipedia
Titanic:The Artifact Exhibition will open at the South Florida Science Center & Aquarium in West Palm Beach on 16 Nov. The exhibit will run till 20 April 2014. For hours and ticket prices go to sfsciencecenter.org. As always plan ahead as tickets often sell out fast at these exhibitions.
Analysts at TheStreet has downgraded its rating from hold to sell. According to the analysis, the reasons for the downgrade are:
The company has significantly underperformed in net income in the same quarter a year ago. Net income decreased by 102.3% compared to same quarter a year ago.
Operating cash flow has decreased.
Stock performance is bad. It tumbled 33.49% and company’s earnings per share are down.
Return on equity has only slightly improved from same quarter last year. While that is good, its return on equity trails that of others in the same industry.
Gross profit margin is still high at 51.21% but still shows a decrease from last year at the same period.
The stock(PRXI) closed down today (14 Oct 2013) at $1.36.
The expected approval of the Dinoking merger with Premier Exhibitions took place on 29 Oct 2015. According to the press release, the merger transaction will take place in the next few days. Upon merger completion, Daoping Bao will be appointed the president and chief executive officer of the company. Some shareholders have expressed the hope that Bao will fix the problems caused by poor management of the company.
Premier Exhibitions, which owns RMS Titanic Inc and Titanic:The Artifact Exhibition, recently announced three directors had resigned. William M. Adams, Ronald C. Bernard, and Bruce Steinberg resigned on 25 August 2014. They were replaced on the same day by Jack H. Jacobs and Rick Kraniak making it five directors for the company. Jacobs was a previous member of the board fr0m February 2009-February 2011.
Premiere Exhibitions, which owns RMS Titanic Inc, recently announced its earnings for the first fiscal quarter of 2015 saw revenue decrease by 16.2% compared with first quarter last year. According to the press release:
According to Atlanta Business Chronicle, Premier Exhibitions (which owns RMS Titanic, Inc and Titanic:The Artifact Exhibition), reported in a regulatory filing that the board of directors approved a review of “strategic alternatives.”
