Las Vegas ticketing group Tix Corporation has urged stockholders to ignore communications from an “activist stockholder,” as the company reports an eight per cent rise in revenue year-on-year for the quarter.
The firm, which provides discount ticketing services for concerts and shows via its Tix4Tonight brand, pointed to its “aggressive” approach to turning around its major losses over the past two years.
Tix has reported operating income at $34,000 (£28,000/€30,000) for the first six months of 2019 to June, compared to an operating loss of $1.2m in the prior year period.
Tix Corporation provides discount-ticketing services through several stores in the Nevada entertainment hub under its Tix4Tonight marque. It offers discounted tickets for same-day shows, concerts, attractions and sporting events, as well as discount reservations for dining. Tix4Tonight also serves as the official Las Vegas guest services partner for Expedia and its other brands.
The company’s share price has increased approximately 200 per cent this year since reporting the return of the MGM Cirque du Soleil shows and profitable operations.
MGM Resorts, which is a partner of four of the five Cirque du Soleil shows, pulled the show’s tickets from the company’s Tix4Tonight booths to retain them for its own sales in November 2017. Cirque du Soleil made up 15 per cent of Tix’s total ticket sales. MGM also opened five of its own discount ticket booths
For the first half of 2019, cash flows from operations improved to $147,000, compared to cash used in operations of $1.2m in the prior year period.
Revenue for the first six months has also improved by six per cent.
Tix Corporation’s chief executive, Mitch Francis, said: “We have aggressively addressed the difficult Las Vegas show ticket market conditions experienced over the past two years. We entered into a new five-year agreement with MGM Resorts and Cirque du Soleil; increased service fees; and we effected significant operating cost savings. As a result, we are proud to report a return to year-over-year revenue growth; positive cash flow; and have maintained cash reserves with no debt.
“In July of this year, we developed a new venture with Reservations Gateway to form TixRez, which will provide online booking of activities throughout the world from a truly state-of-the-art web portal. We are particularly excited about this venture as it moves the company’s sale of activities well beyond Las Vegas and portends a powerhouse online opportunity.”
However, the company said significant expenses have been incurred over the last two years due to an “inexperienced and unqualified activist stockholder, Mr. Haren S. Bhakta (individually, ‘Mr. Bhakta’) and his fund HSB Capital Partners, L.P, whose interests are not aligned with, and who has a total disregard for, the interests of Tix stockholders at large.”
Francis continued: “During the past two-plus years, Mr. Bhakta’s and HSB’s actions towards the company, its employees, management and business have caused the company to incur significant expenses, which have undermined the company’s bottom line performance, together with lost opportunity costs arising from these distractions.
“Such actions have adversely affected our past and current financial results, including a reduction of the positive results described above. We urge Tix stockholders to ignore any communications from Mr. Bhakta and HSB and to allow the company to continue its fruitful efforts to improve its operating results for all stockholders.”
In July, Francis said in an open letter to shareholders that HSB and Bhakta have been blocked from nominating four new members to the company’s board.
Image: Stuart Seeger