Attached files
file | filename |
---|---|
EX-10.8 - EX-10.8 - PREMIER EXHIBITIONS, INC. | l37665exv10w8.htm |
EX-10.6 - EX-10.6 - PREMIER EXHIBITIONS, INC. | l37665exv10w6.htm |
EX-32.1 - EX-32.1 - PREMIER EXHIBITIONS, INC. | l37665exv32w1.htm |
EX-10.7 - EX-10.7 - PREMIER EXHIBITIONS, INC. | l37665exv10w7.htm |
EX-31.1 - EX-31.1 - PREMIER EXHIBITIONS, INC. | l37665exv31w1.htm |
EX-31.2 - EX-31.2 - PREMIER EXHIBITIONS, INC. | l37665exv31w2.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended August 31, 2009
or
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 000-24452
PREMIER EXHIBITIONS, INC.
(Exact name of registrant as specified in its charter)
Florida | 20-1424922 | |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
incorporation or organization) | ||
3340 Peachtree Road, NE, Suite 2250, Atlanta, GA | 30326 | |
(Address of principal executive offices) | (Zip Code) |
(404) 842-2600
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for at least the past
90 days.
Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting Company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
Yes o No þ
The number of shares outstanding of the registrants common stock on October 7, 2009 was
46,582,034.
PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
QUARTERLY PERIOD ENDED AUGUST 31, 2009
TABLE OF CONTENTS
Page | ||||||||
PART I. FINANCIAL INFORMATION | ||||||||
Item 1. | 3 | |||||||
Item 2. | 14 | |||||||
Item 3. | 21 | |||||||
Item 4. | 22 | |||||||
PART II. OTHER INFORMATION | ||||||||
Item 1. | 22 | |||||||
Item 1A. | 22 | |||||||
Item 4. | 23 | |||||||
Item 6. | 23 | |||||||
EX-10.6 | ||||||||
EX-10.7 | ||||||||
EX-10.8 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 |
Table of Contents
Item 1.
Financial Statements.
Premier Exhibitions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share data)
Condensed Consolidated Balance Sheets
(in thousands, except share data)
August 31, | ||||||||
2009 | February 28, | |||||||
(unaudited) | 2009 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 7,653 | $ | 4,452 | ||||
Marketable securities |
3,284 | 1,277 | ||||||
Accounts receivable, net of allowance for doubtful accounts
of $2,080 and $1,193, respectively |
5,265 | 5,009 | ||||||
Merchandise inventory, net of reserve of $182 and $143, respectively |
546 | 431 | ||||||
Income taxes receivable |
4,113 | 3,806 | ||||||
Deferred income taxes |
2,087 | 1,408 | ||||||
Prepaid expenses and other current assets |
2,058 | 4,981 | ||||||
Total current assets |
25,006 | 21,364 | ||||||
Artifacts owned, at cost |
3,063 | 3,081 | ||||||
Salvors lien |
1 | 1 | ||||||
Property and equipment, net of accumulated depreciation
of $9,376 and $7,503, respectively |
14,876 | 15,706 | ||||||
Exhibition licenses, net of accumulated amortization
of $4,887 and $4,806, respectively |
4,207 | 7,225 | ||||||
Goodwill |
| 2,567 | ||||||
Deferred income taxes |
3,506 | 2,685 | ||||||
Note receivable |
625 | 625 | ||||||
Other assets |
250 | 521 | ||||||
$ | 51,534 | $ | 53,775 | |||||
Liabilities and Shareholders Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
$ | 4,805 | $ | 11,712 | ||||
Deferred revenue |
676 | 2,340 | ||||||
Total current liabilities |
5,481 | 14,052 | ||||||
Long-term liabilities: |
||||||||
Convertible promissory notes |
12,000 | | ||||||
Income taxes payable |
1,191 | 1,166 | ||||||
Total long-term liabilities |
13,191 | 1,166 | ||||||
Shareholders equity: |
||||||||
Common stock; $.0001 par value; authorized 65,000,000 shares;
issued 31,314,507 and 31,265,415 shares, respectively outstanding 30,248,058 and 29,414,919, respectively |
3 | 3 | ||||||
Additional paid-in capital |
45,293 | 44,691 | ||||||
(Accumulated deficit) retained earnings |
(4,934 | ) | 1,384 | |||||
Accumulated other comprehensive loss |
(310 | ) | (331 | ) | ||||
Treasury stock, at cost; 1,066,449 shares |
(7,190 | ) | (7,190 | ) | ||||
Total shareholders equity |
32,862 | 38,557 | ||||||
$ | 51,534 | $ | 53,775 | |||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
3
Table of Contents
Premier Exhibitions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Three Months Ended August 31, | Six Months Ended August 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue: |
||||||||||||||||
Exhibition revenue |
$ | 12,503 | $ | 12,636 | $ | 22,353 | $ | 25,895 | ||||||||
Merchandise and other |
937 | 2,468 | 2,024 | 4,439 | ||||||||||||
Total revenue |
13,440 | 15,104 | 24,377 | 30,334 | ||||||||||||
Cost of revenue: |
||||||||||||||||
Exhibition costs |
5,052 | 7,440 | 9,942 | 13,799 | ||||||||||||
Cost of merchandise sold |
213 | 522 | 465 | 1,496 | ||||||||||||
Total cost of revenue (exclusive of depreciation
and amortization shown separately below) |
5,265 | 7,962 | 10,407 | 15,295 | ||||||||||||
Gross profit |
8,175 | 7,142 | 13,970 | 15,039 | ||||||||||||
Operating expenses: |
||||||||||||||||
General and administrative |
7,449 | 4,718 | 14,773 | 12,740 | ||||||||||||
Depreciation and amortization |
1,318 | 1,123 | 2,945 | 2,418 | ||||||||||||
Impairment of goowill and intangible assets |
| | 4,512 | | ||||||||||||
Total operating expenses |
8,767 | 5,841 | 22,230 | 15,158 | ||||||||||||
(Loss) Income from operations |
(592 | ) | 1,301 | (8,260 | ) | (119 | ) | |||||||||
Other (expense) income |
(171 | ) | 78 | (209 | ) | 159 | ||||||||||
(Loss) income before provision for income taxes |
(763 | ) | 1,379 | (8,469 | ) | 40 | ||||||||||
Benefit from (provision for) income taxes |
250 | (440 | ) | 2,152 | (13 | ) | ||||||||||
Net (loss) income |
$ | (513 | ) | $ | 939 | $ | (6,317 | ) | $ | 27 | ||||||
Net (loss) income per share: |
||||||||||||||||
Basic (loss) income per common share |
$ | (0.02 | ) | $ | 0.03 | $ | (0.21 | ) | $ | 0.00 | ||||||
Diluted (loss) income per common share |
$ | (0.02 | ) | $ | 0.03 | $ | (0.21 | ) | $ | 0.00 | ||||||
Shares used in basic per share calculations |
30,212,306 | 29,203,500 | 29,954,630 | 29,176,833 | ||||||||||||
Shares used in diluted per share calculations |
30,212,306 | 31,245,556 | 29,954,630 | 31,442,467 | ||||||||||||
The
accompanying notes are an integral part of the condensed consolidated financial statements.
4
Table of Contents
Premier Exhibitions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended August 31, | ||||||||
2009 | 2008 | |||||||
Cash flows from operating activities: |
||||||||
Net (loss) income |
$ | (6,317 | ) | $ | 27 | |||
Adjustments to reconcile net (loss) income to net cash
(used) provided by operating activities: |
||||||||
Depreciation and amortization |
2,945 | 2,267 | ||||||
Stock based compensation |
312 | (1,018 | ) | |||||
Provision for doubtful accounts |
887 | 219 | ||||||
Stock issued in settlement of lawsuit |
50 | | ||||||
Impairment of goodwill and intangibles assets |
4,512 | | ||||||
Excess tax benefit on the exercise of employee stock options |
| (5 | ) | |||||
Changes in operating assets and liabilities: |
||||||||
Increase in accounts receivable |
(1,143 | ) | (2,111 | ) | ||||
Increase in merchandise inventory |
(115 | ) | | |||||
Increase in deferred income taxes |
(1,498 | ) | (17 | ) | ||||
Decrease (increase) in prepaid expenses and other assets |
3,214 | (1,111 | ) | |||||
Decrease in Carpathia receivable |
| 2,500 | ||||||
(Increase) in income tax benefit |
| (2,495 | ) | |||||
Increase (decrease) in deferred revenue |
(1,664 | ) | 453 | |||||
(Decrease) increase in accounts payable and accrued liabilities |
(6,907 | ) | 1,810 | |||||
Increase in income taxes recievable |
(307 | ) | | |||||
Total adjustments |
286 | 492 | ||||||
Net cash (used) provided by operating activities |
(6,031 | ) | 519 | |||||
Cash flows used in investing activities: |
||||||||
Purchases of property and equipment |
(1,043 | ) | (4,829 | ) | ||||
Net increase in marketable securities |
(2,007 | ) | (19 | ) | ||||
Purchase of exhibition licenses |
| (2,107 | ) | |||||
Acquisition, net of cash received |
| (2,101 | ) | |||||
Net cash used in investing activities |
(3,050 | ) | (9,056 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from convertible notes |
12,000 | | ||||||
Proceeds from option and warrant exercises |
261 | 229 | ||||||
Excess tax benefit on the exercise of stock options |
| 5 | ||||||
Net cash provided by financing activities |
12,261 | 234 | ||||||
Effects of exchange rate changes on cash and cash equivalents |
21 | (18 | ) | |||||
Net increase (decrease) in cash and cash equivalents |
3,201 | (8,321 | ) | |||||
Cash and cash equivalents at beginning of period |
4,452 | 16,426 | ||||||
Cash and cash equivalents at end of period |
$ | 7,653 | $ | 8,105 | ||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid during the period for interest |
| $ | 3 | |||||
Cash paid during the period for taxes |
| $ | 1,537 | |||||
Supplemental disclosure of non-cash investing and financing activities: |
||||||||
Cashless exercise of stock options |
$ | 14 | | |||||
The
accompanying notes are an integral part of the condensed consolidated financial statements.
5
Table of Contents
PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
1. Background and Basis of Presentation
Premier Exhibitions, Inc. is in the business of developing and touring museum quality
exhibitions. Income from exhibitions is generated primarily through ticket sales, third-party
licensing, sponsorships and merchandise sales.
When we use the terms Premier, Company, we, us and our, we mean Premier Exhibitions,
Inc., a Florida corporation and its subsidiaries. We have prepared the accompanying unaudited
condensed consolidated financial statements and condensed notes pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC) regarding interim financial
reporting. Accordingly, they do not contain all of the information and notes required by United
States generally accepted accounting principles (U.S. GAAP) for complete financial statements and
should be read in conjunction with the consolidated financial statements and notes thereto included
in our Annual Report on Form 10-K for our fiscal year ended February 28, 2009. In our opinion, the
accompanying unaudited condensed consolidated financial statements reflect all adjustments
(consisting of only normal recurring adjustments) considered necessary for a fair presentation of
our financial condition as of August 31, 2009, our results of operations for the three and six
months ended August 31, 2009 and 2008 and cash flows for the six months ended August 31, 2009 and
2008. The data in the consolidated balance sheet as of February 28, 2009 was derived from our
audited consolidated balance sheet as of February 28, 2009, as presented in our Annual Report on
Form 10-K for our fiscal year ended February 28, 2009. The unaudited condensed consolidated
financial statements include the accounts of Premier and its wholly owned subsidiaries after the
elimination of all significant intercompany accounts and transactions. Our operating results for
the three months and six months ended August 31, 2009 are not necessarily indicative of the
operating results that may be expected for the full fiscal year ending February 28, 2010 (fiscal
2010).
2. Significant Accounting Policies
During the first quarter of fiscal 2010, the Company entered into an amendment to an existing
multiple element agreement with promoters that modified certain of the terms and
conditions of the agreement. Although these modifications had no impact on revenue recognized in
the first and second quarters or prior periods, the amendments modify our analysis and computation
of the fair value of the undelivered elements in such a way that we will no longer be able to
support the fair value of the undelivered elements in a multiple element arrangement as required by
U.S. GAAP. As a result, in the future the Company will no longer recognize payment of
non-refundable exhibition license revenue upon execution of an agreement or upon cash collection as
a separate deliverable, but rather will defer such amounts until the time that the exhibition
occurs, or the allowed time period for such an exhibition has passed and no remaining obligation to
host such exhibition exists. This first quarter change had no impact on revenue recognized in
prior periods, including non-refundable exhibition license revenue that was recognized.
3. Recent Accounting Pronouncements
In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 141
(revised 2007), Business Combinations (SFAS 141R). SFAS 141R establishes principles and
requirements for how an acquirer recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree
and the goodwill acquired. SFAS 141R also established disclosure requirements to enable the
evaluation of the nature and financial effects of the business combination. Effective March 1,
2009, the Company adopted SFAS 141R, which did not have an impact on our consolidated financial
statements.
6
Table of Contents
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statements-an amendment of Accounting Research Bulletin No. 51 (SFAS No. 160). SFAS
No. 160 establishes accounting and reporting standards for ownership interests in subsidiaries held
by parties other than the parent, the amount of consolidated net income attributable to the parent
and to the non-controlling interest, changes in parents ownership interest, and the valuation of
retained non-controlling equity investments when a subsidiary is deconsolidated. SFAS No. 160 also
established disclosure requirements that clearly identify and distinguish between the interests of
the parent and the interests of the non-controlling owners. Effective March 1, 2009, the Company
adopted SFAS No. 160, which did not have an impact on its consolidated financial statements.
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles. The pronouncement mandates that GAAP hierarchy resides in the accounting literature
as opposed to the audit literature. This has the practical impact of elevating the FASB Statements
of Financial Accounting Concepts in the GAAP hierarchy. This statement will become effective 60
days following SEC approval. The Company determined this statement has no impact on its
consolidated financial statements.
In May 2009, the FASB issued SFAS No. 165, Subsequent Events, which establishes general
standards for accounting for and disclosures of events that occur after the balance sheet date but
before the financial statements are issued or are available to be issued. The pronouncement
requires the disclosure of the date through which an entity has evaluated subsequent events and the
basis for that date, whether that date represents the date the financial statements were issued or
were available to be issued. Effective June 15, 2009, the Company adopted SFAS 165, which did not
have a material impact on its consolidated financial statements.
In
June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards CodificationTM and
the Hierarchy of Generally Accepted Accounting Principles A Replacement of FASB Statement No.
162, which establishes the FASB Accounting Standards CodificationTM
(the Codification), as the
single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental
entities. Rules and interpretive releases of the SEC under authority of federal securities laws are
also sources of authoritative U.S. GAAP for SEC registrants. The Codification will supersede all
existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting
literature not included in the Codification will become nonauthoritative. Following SAFS No. 168,
the FASB will not issue new standards in the form of SFAS, FASB Staff Positions, or EITF Abstracts.
Instead, the FASB will issue Accounting Standards Updates, which will serve only to: (a) update the
Codification; (b) provide background information about the guidance; and (c) provide the bases for
conclusions on the change(s) in the Codification. SFAS No. 168 and the Codification are effective
for financial statements issued for interim and annual periods ending after September 15, 2009.
4. Goodwill and Other Intangible Assets
In the first quarter, management assessed the amount of human anatomical displays it has to
exhibit and compared that amount to the estimated addressable market for such exhibitions. In
managements judgment, the Company maintained an excess capacity of human anatomical displays and
is in the process of reducing the amount of capacity by negotiating a return of certain specimens.
Consequently, those specimens have no future estimated cash flows associated with them and the
previously capitalized and yet unamortized costs of such specimens are no longer considered
recoverable; therefore, the Company recorded an impairment charge of $1.9 million to reduce the
carrying value of the finite lived intangibles related to those specimens to zero. Because there
was goodwill associated with the original acquisition of those specimen sets, the Company recorded
an impairment charge of $2.6 million to reduce the carrying value of goodwill to zero.
The following is a summary of the changes in the carrying value for goodwill and intangible
assets for the six months ended August 31, 2009 (in thousands):
7
Table of Contents
Goodwill |
||||
Balance as of February 28, 2009 |
$ | 2,567 | ||
Impairment charge |
(2,567 | ) | ||
Balance as of August 31, 2009 |
$ | | ||
Intangible Assets |
||||
Balance as of February 28, 2009 |
$ | 7,225 | ||
Amortization during the period |
(1,074 | ) | ||
Impairment charge |
(1,945 | ) | ||
Balance as of August 31, 2009 |
$ | 4,206 | ||
5. Shareholders Equity
On August 6, 2009, the shareholders voted to increase the number of authorized shares of
common stock to 65 million.
Effective June 17, 2009, the Companys Board of Directors adopted the 2009 Equity Incentive
Plan (the 2009 Plan), which was approved by the shareholders at the 2009 annual meeting held on
August 6, 2009. The 2009 Plan replaced the Amended and Restated 2007 Restricted Stock Plan, 2000
Stock Option Plan, and Amended and Restated 2004 Stock Option Plan, all of which terminated
immediately after the 2009 annual meeting. The Company will not grant any new awards under these
terminated plans, but any outstanding awards under the plans will remain outstanding in accordance
with their terms.
Under the 2009 Plan, 3,000,000 shares of common stock may be issued or delivered pursuant to
awards granted to directors, employees and consultants to provide the ability to grant a full range
of equity and cash-based awards, including incentive stock options (ISOs), nonqualified stock
options, stock appreciation rights (SARs), restricted stock, restricted stock units, performance
units, performance shares, dividend equivalents and other awards relating to the Companys common
stock. Vesting requirements and terms of the awards will be administered by the Compensation
Committee of the Board of Directors. Full-value awards, meaning all awards other than stock
options and SARs, will be counted against the 2009 Plan limit in a 2-to-1 ratio. Stock options and
SARs will be counted against the 2009 Plan limit in an 1-to-1 ratio.
The 2009 Plan additionally imposes various sub-limits on the number of shares of the Companys
common stock that may be issued or transferred under the 2009 Plan. In order to comply with the
rules applicable to ISOs, the 2009 Plan provides that the aggregate number of shares actually
issued or transferred upon the exercise of ISOs may not exceed 3,000,000 shares. In order to comply
with the exemption from Section 162(m) of the Internal Revenue Code relating to performance-based
compensation, the 2009 Plan imposes the following additional individual sub-limits on awards
intended to satisfy that exemption:
| the maximum aggregate number of shares that may be subject to stock options or SARs granted in any calendar year to any one participant is 1,200,000 shares; | ||
| the maximum aggregate number of shares of restricted stock and shares subject to restricted stock units and other stock-based awards granted in any calendar year to any one participant is 600,000 shares; | ||
| the maximum aggregate number of shares deliverable under performance shares granted in any calendar year to any one participant is 750,000 shares; | ||
| the maximum aggregate compensation that can be paid pursuant to performance units or other cash-based awards granted in any calendar year to any one participant is $1.2 million or a number of shares having an aggregate fair market value not in excess of such amount; and |
8
Table of Contents
| the maximum dividend equivalent that may be paid in any calendar year to any one participant is $0.3 million. |
The vesting requirements and terms of the awards granted under the 2009 Plan will be
administered by the Compensation Committee of the Board of Directors. The 2009 Plan will terminate
on June 16, 2019, or such earlier date as the Board of Directors may determine and will remain in
effect for outstanding awards until no awards remain outstanding.
The Company recorded stock based compensation expense related to stock options and restricted
stock granted to the Companys employees and warrants issued to consultants of $0.1 million and
$1.5 million during the three months ended August 31, 2009 and 2008, respectively. The Company
recorded stock based compensation expense related to stock options and restricted stock granted to
the Companys employees and warrants issued to consultants of $0.2 million and $3.1 million for the
six months ended August 31, 2009 and 2008, respectively. The Company also recorded forfeitures of
stock options and restricted stock granted to the Companys employees and directors who resigned or
were terminated without cause of $4.1 million during the three and six months ended August 31,
2008, which was partially offset as the result of a modification to the stock option agreement for
one of the departing officers that totaled approximately $0.3 million.
During the three months and six months ended August 31, 2009, the Company did not grant any
stock options or warrants. During the three months and six months ended August 31, 2008, the
Company issued 300,000 warrants at a fair value of $4.57 per unit with an average vesting period of
three years. During the same period ended August 31, 2008, the Company issued 40,000 options with
a fair value of $4.78 per option with an average vesting period of three years.
During the three months ended August 31, 2009, the Company granted an officer 75,000 shares of
restricted stock at a fair value of $.78 per share with a three year vesting period. During the
six months ended August 31, 2009, the Company granted directors 191,786 shares of restricted stock
at a fair value of $0.73 per share with a twelve month vesting period. The Company granted
employees 70,000 shares of restricted stock at a fair value of $4.78 per share during the six
months ended August 31, 2008.
During the three months ended August 31, 2009, the Company issued to the directors who were
not re-elected at the 2009 shareholders meeting 49,092 shares of common stock for restricted stock
grants that vested. During the six months ended August 31, 2009, the Company issued to an employee
8,334 shares of common stock for restricted stock grants that vested. During the six months ended
August 31, 2008, the Company did not issue any shares of common stock for restricted stock grants
that vested.
During the three months and six months ended August 31, 2009, no warrants were exercised.
During the six months ended August 31, 2008, the Company received $0.1 million for the exercises of
warrants to purchase shares of common stock at exercise prices at $1.00 per share. The Company
issued 50,000 shares of common stock for the exercise of warrants during the six months ended
August 31, 2008.
During the three months ended August 31, 2009, no options were exercised. During the six
months ended August 31, 2009, the Company received approximately $0.3 million from the exercise of
stock options to purchase shares of common stock at exercise prices ranging from $0.28 to $0.40.
During the six months ended August 31, 2008, the Company received approximately $0.2 million from
the exercise of options to purchase shares of common stock at an exercise price of $2.15 per share.
The Company issued 705,633 and 83,167 shares of common stock for the exercise of options during
the six months ended August 31, 2009 and 2008, respectively.
6. Debt
On May 6, 2009, the Company entered into a convertible note purchase agreement with Sellers
Capital Master Fund, Ltd. (Sellers Capital), pursuant to which the Company sold its unsecured
convertible promissory notes (the Notes) in the aggregate principal amount of $12.0 million.
Sellers Capital and SAF Capital Fund LLC (the Note Holders) acquired Notes in the principal amount
of $11.55 million and $0.45 million, respectively. The Notes bear interest at an initial rate of
6.0% per annum and become due in three years from the issue date, if not prepaid by the Company or
converted prior to such date. The Notes are convertible into shares of the Companys common stock
at a conversion price of
9
Table of Contents
$0.75 per share, a premium of approximately 7.1% to the closing price of
the Companys common stock on the NASDAQ Global Market immediately preceding the execution of the
convertible note purchase agreement. In addition, the Company will have the right to convert the
Notes into its common stock if the closing price of its common stock exceeds $1.00 per share for
five successive trading days. In the event that the Notes are converted into shares of the
Companys common stock, the noteholders will be restricted from voting the shares received by them
in connection with such conversion except upon specific events outside the normal course.
From the note proceeds, $1.8 million was used to pay off our credit facility with Bank of
America, NA (the credit facility). Based on the Companys performance, the Company does not have
access to the credit facility as previously disclosed in its Form 10-K for the year ended February
28, 2009.
7. Loss Per Share Data
Basic per share amounts exclude dilution and are computed using the weighted average number of
common shares outstanding for the period. Unless the effects are anti-dilutive, diluted per share
amounts reflect the potential reduction in earnings per share that could occur if equity based
awards were exercised or converted into common stock. Potential common shares are determined using
the treasury stock method and include common shares issuable upon exercise of outstanding stock
options and warrants. The following table sets forth the computation of basic and diluted net loss
per share:
Three Months Ended August 31, | Six Months Ended August 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Numerator: |
||||||||||||||||
Net (loss) income |
$ | (513 | ) | $ | 939 | $ | (6,317 | ) | $ | 27 | ||||||
Denominator: |
||||||||||||||||
Basic weighted-average
shares outstanding |
30,212,306 | 29,203,500 | 29,954,630 | 29,176,833 | ||||||||||||
Effect of dilutive stock
options and warrants |
| 2,042,056 | | 2,265,634 | ||||||||||||
Diluted weighted-average
shares outstanding |
30,212,306 | 31,245,556 | 29,954,630 | 31,442,467 | ||||||||||||
Net (loss) income per share: |
||||||||||||||||
Basic |
$ | (0.02 | ) | $ | 0.03 | $ | (0.21 | ) | $ | 0.00 | ||||||
Diluted |
$ | (0.02 | ) | $ | 0.03 | $ | (0.21 | ) | $ | 0.00 | ||||||
Since the three and six-month periods ended August 31, 2009 resulted in a net loss, the
impact of dilutive effects of stock options was not added to the weighted average shares. Common
stock options not included in per share computation because the option exercise price was greater
than the average market price of the common shares was 67,177 and 21,196 for the three and six
months ended August 31, 2008, respectively. The diluted per share amounts also exclude shares to
be issued under the convertible note agreement as their effect is anti-dilutive.
8. Post Employment Benefits
In May 2009, a Company executive resigned resulting in charge to operations of $0.2 million in
connection with such resignation.
In August 2008, certain Company executives and Directors tendered their resignations. The
Company recorded $1.7 million as a liability in the month of August 2008 in connection with such
resignations and in connection with a termination without cause. Additionally, 1,125,000
stock options and 625,000 shares of restricted stock were forfeited in connection with such
resignations and termination without cause. The Company reversed $4.1 million of previously
recognized stock compensation as a result of the forfeitures. This reversal of stock based
compensation was partially offset as the result of a modification to the stock option agreement for
one of the departing officers that totaled approximately $0.3 million.
10
Table of Contents
9. Legal Proceedings and Contingencies
Status of International Treaty Concerning the Titanic Wreck
The U.S. Department of State and the National Oceanic and Atmospheric Administration of the
U.S. Department of Commerce are working together to implement an international treaty with the
governments of the United Kingdom, France and Canada concerning the Titanic wreck site. If
implemented by the U.S., this treaty could affect the way the U.S. District Court for the Eastern
District of Virginia monitors the Companys Salvor-in-Possession rights to the Titanic. These
rights include the exclusive right to explore the wreck site, claim possession of and perhaps title
to artifacts recovered from the site, restore and display recovered artifacts and make other use of
the wreck. The Company has raised numerous objections to the U.S. Department of State regarding the
participation of the U.S. in efforts to reach an agreement governing salvage activities with
respect to the Titanic. The treaty, as drafted, does not recognize the Companys existing
Salvor-in-Possession rights to the Titanic. The United Kingdom signed the treaty in November 2003,
and the U.S. signed the treaty in June 2004. For the treaty to take effect, the U.S. must enact
implementing legislation. As no implementing legislation has been passed, the treaty currently has
no binding legal effect.
Several years ago, the Company initiated legal action to protect its rights to the Titanic
wreck site from this treaty. On April 3, 2000, the Company filed a motion for declaratory judgment
in U.S. District Court for the Eastern District of Virginia asking that the court declare
unconstitutional the efforts of the U.S. to implement the treaty. On September 15, 2000, the court
ruled that the Companys motion was not ripe for consideration and that the Company may renew its
motion when and if the treaty is agreed to and signed by the parties, final guidelines are drafted,
and Congress passes implementing legislation. As discussed above, the treaty has been finalized but
is not yet in effect because Congress has not adopted implementing legislation, thus it is not yet
time for the Company to refile its motion. Neither the implementation of the treaty nor the
Companys decision whether to refile the legal action regarding its constitutionality will likely
have an impact on the Companys ownership interest over the artifacts that it has already
recovered.
As discussed in more detail below, in light of a January 31, 2006 decision by the U.S. Court
of Appeals for the Fourth Circuit, title to the approximately 2,000 artifacts recovered by the
Company during the 1987 expedition now rests firmly with the Company. Title to the remaining
artifacts in the Companys collection should be resolved through litigation seeking in specie (in
kind) salvage award.
Status of Salvor-in-Possession and Interim Salvage Award Proceedings
On April 12, 2002, the U.S. Court of Appeals for the Fourth Circuit affirmed two orders of the
U.S. District Court for the Eastern District of Virginia in the Companys ongoing
Salvor-in-Possession case titled R.M.S. Titanic, Inc. v. The Wrecked and Abandoned Vessel, et al.,
in rem. These orders, dated September 26, 2001 and October 19, 2001, respectively, restricted the
sale of artifacts recovered by the Companys wholly-owned subsidiary R.M.S. Titanic, Inc., or RMST,
from the Titanic wreck site. In its opinion, the appellate court reviewed and declared ambiguous
the June 1994 order of the district court that had awarded ownership to RMST of all items then
salvaged from the wreck of the Titanic as well as all items to be salvaged in the future so long as
RMST remained Salvor-in-Possession. Having found the June 1994 order ambiguous, the court of
appeals reinterpreted the order to convey only possession, not title, pending determination of a
salvage award. On October 7, 2002, the U.S. Supreme Court denied RMSTs petition of appeal.
On May 17, 2004, RMST appeared before the U.S. District Court for the Eastern District of
Virginia for a pre-trial hearing to address issues in preparation for an interim salvage award
trial. At that hearing, RMST confirmed its intent to retain its Salvor-in-Possession rights in
order to exclusively recover
and preserve artifacts from the wreck site of the Titanic. In addition, RMST stated its intent
to conduct another expedition to the wreck site. As a result of that hearing, on July 2, 2004, the
court rendered an opinion and order in which it held that it would not recognize a 1993
Proces-Verbal, pursuant to which the government of France granted RMST title to all artifacts
recovered from the wreck site during the 1987 expedition. The court also held that RMST would not
be permitted to present evidence at the interim salvage award trial for the purpose of arguing that
RMST should be awarded title to the Titanic artifacts through the law of finds.
11
Table of Contents
RMST appealed the July 2, 2004 court order to the U.S. Court of Appeals for the Fourth
Circuit. On January 31, 2006, the court of appeals reversed the lower courts decision to
invalidate the 1993 Proces-Verbal, pursuant to which the government of France granted RMST title to
all artifacts recovered from the wreck site during the 1987 expedition. As a result, the appellate
court tacitly reconfirmed that RMST owns the approximately 2,000 artifacts recovered during the
1987 expedition. The appellate court affirmed the lower courts ruling that RMST will not be
permitted to present evidence at the interim salvage award trial for the purpose of arguing that
RMST should be awarded legal title to the remainder of the Titanic artifacts through the law of
finds.
On November 30, 2007, RMST filed a motion with the U.S. District Court for the Eastern
District of Virginia, Norfolk Division seeking an interim salvage award. On March 25, 2008, the
court entered an order granting permission to the U.S. to file an amicus curiae (friend of the
court) response regarding RMSTs motion for an interim salvage award. The U.S. response states that
an interim in specie award with limitations, made by the court to RMST, could serve as an
appropriate mechanism to satisfy RMSTs motion for a salvage award and to help ensure that the
artifacts recovered by RMST from the wreck of the Titanic are conserved and curated together in an
intact collection that is available to the public for historical review, educational purposes, and
scientific research in perpetuity. The District Court has not yet ruled on the motion for an
interim in specie salvage award.
On April 15, 2008, the District Court entered an order requesting the Company to propose
suggested covenants that would be included in an in specie award. The order also outlines a process
for further discussion pertaining to such covenants should the court decide to issue an in specie
award.
In September 2008, RMST submitted revised covenants and conditions in connection with the
Companys request for an in specie award for the remaining Titanic artifacts. This submission was
made pursuant to the order issued by the U.S. District Court in April 2008. As part of developing
the revised covenants and restrictions, the Company engaged in consultative discussions with the
U.S. government. On October 14, 2008, the U.S. filed an amicus response to RMSTs proposed revised
covenants, and by leave of the District Court granted on October 31, 2008, RMST in turn filed a
reply brief on November 12, 2008. On November 18, 2008, the Company attended a status conference at
the District Court. At the conclusion of that hearing, the District Court asked for certain
additional submissions from RMST and the U.S., which were provided. The District Court has now
scheduled an evidentiary hearing for the week of October 26, 2009 on the Companys motion for a
salvage award. The Company cannot predict how the District Court will ultimately rule on RMSTs
motion for an interim salvage award.
Other Litigation
On January 29, 2009, Arnie Geller, a former Premier officer and director, filed an action
titled Arnie Geller v. Premier Exhibitions, Inc. in the Circuit Court of the Thirteenth Judicial
Circuit in Hillsborough County, Florida. Gellers claims arise from his termination for cause as
the Companys former President, Chief Executive Officer and Chairman of the Board of Directors.
Geller alleges that the Company breached his employment agreement when the Company allegedly
rejected Gellers voluntary termination and when the Company terminated Geller for cause. Geller
also brought an equitable action for an accounting due to the complex transactional history and
accounting issues involved in Gellers compensation from the Company. The Company filed its answer
and counterclaims on March 10, 2009. Answering Gellers complaint, the Company denied Gellers
allegations and maintained that Geller was properly terminated for cause. The Company
counterclaimed against Geller for breach of fiduciary duty and unjust enrichment caused by Gellers
actions during his tenure at various times as the Companys President, Chief Executive Officer,
Chairman of the Board of Directors, and Director. Discovery is now in its early stages. The
Company intends to vigorously defend the case and pursue its counterclaims.
On July 30, 2009, Sports Immortals, Inc. and its principals, Joel Platt and Jim Platt, filed
an action against the Company in the Circuit Court of the Fifteenth Judicial District in Palm Beach
County, Florida for claims arising from their license agreement with the Company under which the
Company obtained rights to present sports memorabilia exhibitions utilizing the Sports Immortals,
Inc. collection. The plaintiffs allege that the Company breached the contract when the Company
purported to terminate it several months ago, and they seek fees and stock warrant agreements
required under the agreement. The Company filed its answer and counterclaims on September 7, 2009.
Answering the complaint, the Company denied plaintiffs allegations and maintained that the Sports
Immortals, Inc, license agreement
12
Table of Contents
was properly terminated. The Company counterclaimed against the
plaintiffs for breach of contract, fraudulent inducement and misrepresentation, breach of the
covenant of good faith and fair dealing, and violation of Floridas deceptive and unfair practices
act. The litigation is in its very early stages, and the Company intends to vigorously defend the
case and pursue its counterclaims.
From time to time the Company is or may become involved in other legal proceedings that result
from the operation of its exhibitions and business.
Contingencies
The Companys federal tax return for the year ended February 28, 2007 is under examination by
the Internal Revenue Service.
The Company believes that adequate provisions for resolution of all contingencies, claims and
pending litigation have been made for probable losses and that the ultimate outcome of these
actions will not have a material adverse effect on its financial condition.
From time to time, the Company has or may receive requests and inquiries from governmental
entities that result from the operation of our exhibitions and business. As a matter of policy, the
Company will cooperate with any such inquiries.
10. Subsequent Events
Subsequent events have been evaluated through October 9, 2009, the date the financial
statements were issued.
On September 3, 2009, the Company entered into a new three-year employment contract with
Christopher J. Davino who will continue employment as President and Chief Executive Officer and
continue to serve on the Board of Directors, subject to re-election. Mr. Davino will receive an
annual salary of $290,000, a housing stipend of $2,000 per month, reimbursement of commuting
expenses and an annual incentive bonus opportunity with a target equal to 50 percent of his annual
salary. Additionally, the Company granted Mr. Davino a one-time stock option to purchase 1,170,000
shares of the Companys common stock, which has an exercise price per share equal to the closing
price per share of the Companys common stock on the grant date and will vest one-third per year
over three years.
On September 15, 2009, the Company received a notice from the NASDAQ Global Market that a
deficiency exists with regards to the Companys compliance with the Listing Rules requiring listed
securities to maintain a minimum bid price of $1.00 per share based on the closing price of the
Companys common stock for the last 30 days. The rule provides a grace period of 180 days to
regain compliance. If at any time during the grace period the bid price of the Companys common
stock closes at $1.00 per share or more for a minimum of ten consecutive business days, the NASDAQ
Global Market will provide the Company written confirmation of compliance. The Board of Directors
of the Company prefers to maintain the listing and is considering available options to regain
compliance and maintain its listing.
On September 16, 2009, the Board of Directors of the Company approved an amendment to the
Companys Amended and Restated Bylaws to provide that the Companys Board of Directors must consist
of no fewer than three but not more than nine Directors. That same day, the Board of Directors
appointed Messrs. Ronald C. Bernard and Stephen W. Palley as members of the Board. Messrs. Bernard
and Palley will serve on the Companys Audit Committee with Mr. Bernard serving as the Chair of the Audit
Committee.
On September 18, 2009, the Board of Directors authorized the Company to repurchase up to
1,000,000 shares of its common stock from time to time in open market and privately negotiated
transactions, through block trades or otherwise, as market and business conditions warrant. This
repurchase authorization replaces all other such authorizations.
13
Table of Contents
The
Company is ending early the term of our Star Trek exhibit rights
agreement by mutual agreement signed at the end of September 2009.
The Company will assist with certain future shows [in San Jose
and Hollywood] on a fee for services basis, and will provide
certain transition, booking and other services through calendar year
end.
On September 30, 2009 and October 1, 2009, the Company exercised its right to convert the
Notes into common stock because the closing price of its common stock exceeded $1.00
for a period of five successive trading days as reported on the NASDAQ Global Market. A total of
16,328,878 shares of the Companys common stock will be issued in accordance with this conversion,
which includes the outstanding Convertible Notes principal and accrued interest at a conversion
price of $0.75 per share.
On
October 1, 2009, the Company announced that the Company and JAM Exhibitions,
LLC (JAM)
settled to their mutual satisfaction litigation initiated in July,
2009 by the Company in New York, in
a manner that results in the Company terminating its business ties with JAM, obtaining full ownership
and operating rights to Bodies...The Exhibition in New York City and retaining 100% of the net
revenues derived from the operation of that property. Additionally, the Company announced that
finalized new terms in its agreements with promoters of its human
anatomy exhibitions, allowing the Company
to continue its relationship with S2BN Entertainment Corporation (S2BN) and its
principal, Michael Cohl, with whom the Company has shared a long and fruitful business relationship.
Under the settlement and new agreement:
| The Company has rights to present between five and fifteen human anatomy exhibitions itself in the European, Asian and other territories previously reserved exclusively for JAM/S2BN. | ||
| The remaining options for S2BN to jointly present additional exhibitions with the Company are exercisable at the discretion of S2BN, and moneys owed for any such options will be paid as those shows occur. | ||
| S2BN has an additional six months to exercise each of its remaining options. | ||
| If S2BN elects not to proceed with any option, the Company will be free to expand upon its existing international presentation rights and to jointly present exhibitions worldwide with the numerous other third party international promoters with whom the Company already has successful working relationships in connection with its other properties. |
On October 8, 2009, the Company entered into a written Consultant Agreement (the
Agreement) with Doug Banker, a member of the Companys Board of Directors, to
document an existing consulting arrangement with Mr. Banker. The term of the
Agreement commenced on July 1, 2009 and ends on April 30, 2010. Unless either of the
parties provides written notice at least thirty (30) days prior to April 30, 2010, the
Agreement shall extend on a month-to-month basis until such written notice of
termination is provided by either of the parties. Mr. Banker will be paid $10,000 per
month for his consulting services, which encompass locating potential opportunities for
Premiers properties on an international basis, including identifying and introducing third
party local promoters to the Company.
Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
This quarterly report contains forward-looking statements and information relating to
subsidiaries and us. The words believes, expects, may, should, projects, anticipates,
forecasts, intends, or similar terminology identify forward-looking statements. These
statements are based on the beliefs of management as well as assumptions made using information
currently available to management. Because these statements reflect current views of management
concerning future events, they involve risks, uncertainties and assumptions; therefore, actual
results may differ significantly from the results discussed in the forward-looking statements.
When we use the terms Premier, PRXI, Company, we, us and our, we mean Premier
Exhibitions, Inc., a Florida corporation, and its subsidiaries.
You are urged to read the risk factors described in our Annual Report on Form 10-K for our
fiscal year ended February 28, 2009, as filed with the Securities and Exchange Commission. Except
as required by law, we undertake no obligation to update publicly any forward-looking statement for
any reason, even if new information becomes available. The following discussion should be read in
conjunction with the unaudited condensed financial statements and notes appearing elsewhere herein
and our Annual Report on Form 10-K for our fiscal year ended February 28, 2009.
14
Table of Contents
Overview
We are in the business of developing and touring museum quality exhibitions. We generate
income from our exhibitions primarily through ticket sales, third-party licensing, sponsorships and
merchandise sales.
We presently operate and/or present and promote three different types of exhibitions.
Titanic
The R.M.S. Titanic has continued to captivate the thoughts and imaginations of millions of
people throughout the world since 1912 when she struck an iceberg and sank in the North Atlantic
Ocean on her maiden voyage. Through our explorations, we have obtained and are in possession of
the largest collection of artifacts, data, information, images, and cultural materials associated
with the shipwreck, which we present to the public through our exhibitions. Our Titanic
exhibitions have been presented in more than sixty venues throughout the world, including in the
U.S., Canada, Germany, Norway, France, Greece, Japan, Switzerland, Chile, Argentina, China, Mexico,
Hungary, South Korea and England.
Bodies
We presently have the rights to multiple human anatomy sets, each of which contains a
collection of whole human body specimens plus single human organs and body parts. We acquired the
rights to produce these exhibitions through separate exhibition agreements. These specimens are
assembled into anatomy-based exhibitions featuring preserved human bodies, organs and body parts to
offer the public an opportunity to view the intricacies and complexities of the human body. The
exhibitions include displays of dissected human bodies that are permanently preserved through a
process called polymer preservation, also known as plastination. In essence, the bodies are drained
of all fat and fluids, which are replaced with polymers such as silicone rubber, epoxy and
polyester. This preserves the flesh and maintains its natural look. Skin from the bodies is
removed, or partially removed, to reveal musculoskeletal, nervous, circulatory and reproductive or
digestive systems. The full body specimens are complimented by presentation cases of related
individual organs and body parts, both healthy and diseased, that provide a detailed look into the
elements that comprise each system.
Dialog in the Dark
On February 25, 2008, we expanded our exhibition portfolio beyond those related to the Titanic
and human anatomy when we entered into a long-term license agreement to present an exhibition
series entitled Dialog in the Dark. Our Dialog in the Dark exhibitions are intended to provide
visitors with an opportunity to experience the paradox of learning to see without the use of
sight. Visitors are escorted through a series of galleries immersed in total darkness and
challenged to perform tasks without the use of vision. Our first Dialog in the Dark exhibition
opened in August 2008.
Star Trek
On June 4, 2008, we entered into a long-term license agreement to present, promote and conduct
Star Trek, The Exhibition exhibitions. This multi-city, touring exhibition contains the worlds
most comprehensive collection of authentic Star Trek ships, sets, costumes and props from five
television series and ten films over the last 40 years. Star Trek, the Exhibition fully immerses
the visitor in the legendary journey that has become synonymous with scientific innovation and
ingenuity. Highlights of the experience include: the opportunity to ride through a Star Trek
adventure in full-motion, Star Trek-based flight simulators; the ability for visitors to sit on a
full-size U.S.S. Enterprise bridge from the original television series; and detailed re-creations
of original sets.
We
are ending early the term of our Star Trek exhibit rights agreement
by mutual agreement signed at the end of September 2009. We will
assist with certain future shows [in San Jose and
Hollywood] on a fee for services basis, and will provide certain
transition, booking and other services through calendar year end.
15
Table of Contents
Merchandise
We also earn revenue from the sale of merchandise, such as apparel, catalogs, posters and
Titanic-related jewelry which utilizes coal we have recovered from the shipwreck.
Information Regarding Exhibitions Outside the United States
Our exhibitions regularly tour outside the United States. Approximately 14% and 7% of our
revenues for the six months ended August 31, 2009 and 2008, respectively, resulted from exhibition
activities outside the United States. Because our financial arrangements with our foreign vendors
have historically been based upon foreign currencies, we are exposed to the risk of currency
fluctuations between the U.S. dollar and the currencies of the countries in which our exhibitions
are touring. See Quantitative and Qualitative Disclosures About Market Risk in this report for
more information.
The Quarter Ended August 31, 2009 Compared to the Quarter Ended August 31, 2008
Revenue. During the quarter ended August 31, 2009, our revenue decreased by $1.7 million or
11% to $13.4 million. This decrease in exhibition revenue is primarily attributable to
managements decision to reduce the number of human anatomical exhibitions due to the excess of
capacity in relation to the estimated addressable market for such exhibitions and the general decline in economic
conditions Exhibition revenue of $12.5 million decreased by $0.1 million. Attendance decreased
by 49,977 to 1,324,495 for the three months ended August 31, 2009 compared to 1,374,472 for the
same three month period ended August 31, 2008. Attendance at our Titanic exhibitions increased by
143,405 for the three months ended August 31, 2009 compared to the same three month period last
fiscal year. Total days of operation, a non-financial measurement, which is the total number of
days in which our venues were in operations, decreased to 1,639 for the three months ended August
31, 2009 compared to 1,953 for the same three months ended August 31, 2008. We attribute these
changes to a reduction in the number of venues
presented, an overall decrease in global economic conditions and an improvement in the quality of the venue locations.
Merchandise
and other revenue decreased approximately $1.5 million or 62% to $0.9 million
during the quarter ended August 31, 2009 as compared to the quarter ended August 31, 2008. This
decrease is primarily the result of the disposition of the live music aspect of our merchandising
business, in which we recognized an additional $1.3 million of merchandise revenue during the
second quarter last year.
Cost of revenue. Our total cost of revenue of $5.3 million decreased by $2.7 million or 34%
for our second quarter ended August 31, 2009 as compared to our second quarter ended August 31,
2008.
Our exhibition costs decreased by $2.4 million to $5.1 million for our second quarter this
year as compared to the same quarter in fiscal year 2009. Our exhibition costs as a percentage of
exhibition revenue was 40% for the three months ending August 31, 2009 compared to 59% for the same
period last year. During the second quarter of this year, cost of opening exhibitions decreased by
$1.0 million because we opened six exhibitions compared to 12 exhibitions in the second
quarter last year. Additionally, our marketing and exhibition licensing costs declined by $0.9
million and $1.3 million, respectively, due to managements assessment that the amount of human
anatomical displays it has to exhibit is greater than the addressable market resulting in reducing
the number of human anatomical displays. These reductions in costs were offset by higher rent,
primarily in Las Vegas, of $0.9 million.
Cost of merchandise sold decreased by $0.3 million to $0.2 million for the quarter ended
August 31, 2009 as compared to the quarter ended August 31, 2008. This decrease is primarily a
result of the disposition of the live music aspect of our merchandising business.
Gross profit. During the quarter ended August 31, 2009, our gross profit
increased by $1.0 million to $8.2 million compared to the quarter ended August 31, 2008. Gross
profit margin increased by 14% to 61% for the quarter ended August 31, 2009 compared to 47% for the
same quarter last year.
16
Table of Contents
Operating expenses. Our general and administrative expenses of $7.5 million increased by $2.7
million or 58% during the quarter ended August 31, 2009 as compared to the quarter ended August 31,
2008. Our compensation expense decreased by $2.7 million this quarter compared to the same quarter
last year primarily due to the resignation of certain senior management, officers and directors;
however, this decrease is offset by stock compensation expense this quarter of $0.1 million
compared to a reduction in stock compensation for the same quarter last year of $2.6 million due to
the resignation of those same senior management, officers and
directors. We recorded
$0.4 million in exhibition licensing fees for those exhibitions not being displayed during the
quarter ended August 31, 2009, and bad debt expense, consulting expense and legal fees increased
this quarter compared to the same quarter last year by $1.4 million, $0.5 million and $0.6 million,
respectively.
Our depreciation and amortization expenses increased $0.2 million or 17% to $1.3 million
during the quarter ended August 31, 2009 as compared to the quarter ended August 31, 2008. The
increase in depreciation expense is primarily attributable to an increase in property and equipment
located at the Luxor in Las Vegas.
(Loss) income from operations. We realized a loss from operations of $0.6 million during the
quarter ended August 31, 2009 as compared to income from operations of $1.3 million in the same
prior year period.
(Loss) income before benefit from (provision for) income taxes. We realized a loss before
benefit from income taxes of $0.8 for the quarter ended August 31, 2009 as compared to an income
before provision for income taxes of $1.4 million for the quarter ended August 31, 2008.
Benefit from (provision for) income taxes. We recorded an income tax benefit of $0.3 million
for the three months ended August 31, 2009 at an effective rate of 33% versus a tax provision of
$0.4 million at an effective rate of 32% for the same period in the prior year.
Net (loss) income. We realized a net loss of $0.5 million during the quarter ended August 31,
2009 as compared to a net income of $0.9 million in the prior year period.
(Loss) income per share. Basic and diluted loss per common share for the quarter ended August
31, 2009 was $(0.02) as compared to basic and diluted income per share of $0.03 for the quarter
ended August 31, 2008. The basic and fully diluted weighted average shares outstanding for the
three months ended August 31, 2009 were 30,213,306 compared to basic and fully diluted weighted
average shares outstanding for the three months ended August 31,
2008 of 29,203,500 and 31,245,556,
respectively.
The Six Months Ended August 31, 2009 Compared to the Six Months Ended August 31, 2008
Revenue. During the six months ended August 31, 2009, our revenue decreased by $6.0 million or
20% to $24.4 million. This decrease is primarily attributable to a decrease in exhibition revenue
of $3.5 million or 14% to $22.4 million. This decrease in exhibition revenue is primarily
attributable to managements decision to reduce the number of human anatomical exhibitions due to
the excess of estimated addressable market for such exhibitions and the general decline in
economic conditions, which resulted in a decrease in total attendance at our exhibition venues.
Attendance decreased by 371,286 to 2,515,032 for the six months ended August 31, 2009 compared to
2,886,318 for the same six month period ended August 31, 2008. Attendance at our Titanic
exhibitions increased by 312,285 for the six months ended August 31, 2009 compared the same period
last year. Total days of operation, a non-financial measurement, which is the total number of days
in which our venues were in operations, decreased by 288 to 3,263 for the six months ended August
31, 2009 compared to 3,551 for the same six months ended August 31, 2008.
Merchandise and other revenue decreased by $2.4 million or 54% to $2.0 million during the six
months ended August 31, 2009 as compared to the six months ended August 31, 2008. This decrease is
primarily the result of the disposition of the live music aspect of our merchandising business, in
which we recognized an additional $2.7 million of merchandise revenue during the same period last
year.
17
Table of Contents
Cost of revenue. Our total cost of revenue of $10.4 million, which consists of exhibition
costs, including marketing expenses and cost of merchandise sold, decreased by $4.9 million or 32%
for our six months ended August 31, 2009 as compared to our six months ended August 31, 2008.
Our exhibition costs decreased by $3.9 million or 28% to $9.9 million for our six months this
year as compared to the same six months in fiscal year 2009. Our exhibition costs as a percentage
of exhibition revenue was 44% for the six months ending August 31, 2009 compared to 53% for the
same period last year. Exhibition licensing fees decreased by $1.9 million or 42% to $2.6 million.
Marketing expense decreased by $2.2 million or 68% to $1.0 million during our six months ended
August 31, 2009 as compared to our six months ended August 31, 2008.
Cost of merchandise sold decreased by $1.0 million or 69% to $0.5 million for the six months
ended August 31, 2009 as compared to the six months ended August 31, 2008. This decrease is
primarily a result of the disposition of the live music aspect of our merchandising business.
Gross
profit. During the six months ended August 31, 2009, our gross profit decreased by $1.0
million or 7% to $14.0 million as compared to the six months ended August 31, 2008. Exhibition
gross profit increased by $0.2 million on $3.6 million less revenues for the six months ended
August 31, 2009 compared to the same period last year. Gross profit for merchandise decreased by
$1.3 million to $1.6 million for the six months ended August 31, 2009 compared to the same period
last year primarily due to the disposition of the live music aspect of our merchandising business.
Operating expenses. Our general and administrative expenses of $14.8 million increased by $2.0
million or approximately 16% during the six months ended August 31, 2009 as compared to the six
months ended August 31, 2008. Compensation, including stock based compensation, decreased by $2.7
million for the six months ended August 31, 2009 compared to the same six months last year;
however, we recorded $1.0 million in exhibition licensing fees for those exhibitions not being
displayed, and legal fees, consulting fees and bad debt expense increased by $2.1 million, $1.0
million and $1.5 million, respectively.
During the six-month period ended August 31, 2009, management assessed the amount of human
anatomical displays it has to exhibit and compared that amount to the estimated addressable market
for such exhibitions. In managements judgment, the Company currently maintains an excess capacity
of human anatomical displays, and we intend to reduce the amount of capacity by negotiating the
return or sale of certain specimens. Consequently, those specimens have no future estimated cash
flows associated with them and the previously capitalized and yet unamortized costs of such
specimens are no longer considered recoverable; therefore, we recorded an impairment charge of $1.9
million to reduce the carrying value of the finite lived intangibles related to those specimens to
zero. Because there was goodwill associated with the original acquisition of those specimen sets,
we recorded an impairment charge of $2.6 million to reduce the carrying value of goodwill to zero.
Our
depreciation and amortization expenses increased $0.5 million or 22% to $2.9 million
during the six months ended August 31, 2009 as compared to the six months ended August 31, 2008.
The increase in depreciation expense is primarily attributable to an increase in property and
equipment located at the Luxor in Las Vegas.
Loss from operations. We realized a loss from operations of $8.3 million during the six
months ended August 31, 2009 as compared to a loss from operations of $0.1 million in the same
prior year period.
(Loss) income before benefit from (provision for) income taxes. We realized a net loss before
benefit from income taxes of $8.5 million for the six months ended August 31, 2009 compared to an
income before provision for income taxes of $0.04 million for the six months ended August 31, 2008.
Benefit from income taxes. We recorded an income tax benefit of $2.2 million for the six
months ended August 31, 2009 at an effective rate of 25% versus a tax benefit of $0.01 million at
an effective rate of 32% for the same period in the prior year. The decrease in the effective rate
is primarily due to the impairment charge of $4.5 million that is not a tax deductible item;
accordingly, it is not considered in the tax benefit calculation. Not considering the
non-deductibility of the impairment charge, our effective tax rate would have been 37%.
18
Table of Contents
Net loss. We realized a net loss of $6.3 million during the six months ended August 31, 2009
as compared to a net income of $0.03 million in the prior year period.
Loss per share. Basic and fully diluted loss per common share for the six months ended August
31, 2009 and 2008 was $(0.21) and $0.00, respectively. The basic and fully diluted weighted average
shares outstanding for the six months ended August 31, 2009 and 2008 were 29,954,630 compared to
the basic and fully diluted weighted average shares outstanding for the six months ended August 31,
2008 of 29,176,833 and 31,422,467, respectively.
Liquidity and Capital Resources
The following tables show selected information about our cash flows during the six months
ended August 31, 2009 and 2008 and selected balance sheet data as of August 31, 2009 and February
28, 2009 (in thousands):
Selected cash flow information:
As of | ||||||||
Six Months Ended August 31, | ||||||||
2009 | 2008 | |||||||
Net cash (used) provided by operating activities |
$ | (6,031 | ) | $ | 519 | |||
Net cash used by investing activities |
(3,050 | ) | (9,056 | ) | ||||
Net cash provided by financing activities |
12,261 | 234 | ||||||
Effects of exchange rate changes on cash and cash equivalents |
21 | (18 | ) | |||||
Net increase (decrease) in cash and cash equivalents |
$ | 3,201 | $ | (8,321 | ) | |||
Selected balance sheet data:
As of | ||||||||
August 31, 2009 | February 28, 2009 | |||||||
Cash and cash equivalents |
$ | 7,653 | $ | 4,452 | ||||
Marketable securities |
3,284 | 1,277 | ||||||
Working capital |
19,525 | 7,312 | ||||||
Total assets |
51,534 | 53,775 | ||||||
Total shareholders equity |
32,862 | 38,557 |
Operating Activities.
For the six months ended August 31, 2009, cash used by operations was $6.0 million, compared
to $0.5 million cash provided by operations for the period ended August 31, 2008. Cash used by
operations for the six months ended August 31, 2009 includes the effects of:
| Our net loss of $6.3 million | ||
| Depreciation and amortization expense of $2.9 million | ||
| Stock based compensation of $0.3 million | ||
| Impairment of goodwill and intangible assets of $4.5 million | ||
| Accounts receivable of $(1.1) million | ||
| Deferred income taxes of $(1.5) million |
19
Table of Contents
| Prepaid and other current assets of $3.2 million | ||
| Deferred revenue of $(1.7) million | ||
| Accounts payable and accrued liabilities of $(6.9) million |
Investing Activities. Cash used by investing activities was $3.1 million for the six months
ended August 31, 2009 compared to $9.1 million for the three months ended August 31, 2008. Of the
cash used by investing activities for the six months ended August 31, 2009, $1.0 million and $2.0
were for the purchase of property and equipment and a certificate of deposit recorded as marketable
securities, respectively.
Financing Activities. Cash from financing activities was $12.3 million for the six months
ended August 31, 2009 compared to $0.2 million for the six months ended August 31, 2008. Of the
cash from financing activities for the six months ended August 31, 2009, $12.0 million was proceeds
from the issuance of convertible notes and $0.3 million was proceeds from option exercises.
On May 6, 2009, we entered into a convertible note purchase agreement with Sellers Capital
Master Fund, Ltd. (Sellers Capital), pursuant to which we sold our unsecured convertible
promissory notes (the Notes) in the aggregate principal amount of $12.0 million. Sellers Capital
acquired Notes in the principal amount of $11.55 million and SAF Capital Fund LLC acquired Notes in
the principal amount of $0.45 million. The Notes bore interest at an initial rate of 6.0% per
annum, payable monthly in cash, and would have become due in three years from the issue date, if not prepaid
by us or converted prior to such date. The Notes were convertible into shares of our common stock at
a conversion price of $0.75 per share, a premium of approximately 7.1% to the closing price of our
common stock on the NASDAQ Global Market immediately preceding the execution of the convertible
note purchase agreement. On September 30, 2009 and
October 1, 2009, we exercised our
right to convert the Notes into common stock because the closing
price of our common
stock exceeded $1.00 for a period of five successive trading days as reported on the NASDAQ Global
Market. A total of 16,328,878 shares of our common stock will be issued in accordance
with this conversion, which includes the outstanding Notes principal and accrued
interest at a conversion price of $0.75 per share.
Capital requirements. We believe that our expected cash flows from operations together with
our existing cash will be sufficient to meet our anticipated cash needs for working capital
requirements, debt obligations and capital expenditures for the next 12 months. If cash generated
from operations with our existing cash is insufficient to satisfy our liquidity requirements, we
may seek additional financing, which could include the issuance of equity or debt securities. The
sale of equity or convertible debt securities could result in additional dilution to our
shareholders. Additional indebtedness would result in increased fixed obligations and could result
in operating covenants that would restrict our operations. We cannot assure that financing will be
available in amounts or on terms acceptable to us, or at all.
Off-Balance Sheet Arrangements
We have no off-balance sheet financial arrangements.
Critical Accounting Policies
During
the first quarter of fiscal 2010, we entered into an amendment to an existing
multiple element agreement with promoters that modified certain of the terms and
conditions of the agreement. Although these modifications had no impact on revenue recognized in
the first and second quarters or prior periods, the amendments modify our analysis and computation
of the fair value of the undelivered elements in such a way that we will no longer be able to
support the fair value of the undelivered elements in a multiple element arrangement as required by
U.S. GAAP. As a result, in the future we will no longer recognize payment of
non-refundable exhibition license revenue upon execution of an agreement or upon cash collection as
a separate deliverable, but rather will defer such amounts until the time that the exhibition
occurs, or the allowed time period for such an
exhibition has passed and no remaining obligation to host such exhibition exists. This first
quarter change had no impact on revenue recognized in prior periods, including non-refundable
exhibition license revenue that was recognized.
20
Table of Contents
There have been no other significant changes to our critical accounting policies as disclosed
in our Annual Report filed on Form 10-K for our fiscal year ended February 28, 2009.
Contractual Obligations
Based on our performance, we do not have access to the credit facility as previously disclosed
in our Form 10-K for the year ended February 28, 2009.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market risk represents the risk of loss that may impact our financial position due to adverse
changes in financial market prices and rates. Market risk exposure is primarily a result of
fluctuations in interest rates and foreign currency exchange rates. We do not hold or issue
financial instruments for trading purposes.
Interest Rate Risk
Interest income on our cash, cash equivalents and short-term investments is subject to
interest rate fluctuations, but we believe that the impact of these fluctuations does not have a
material effect on our financial position due to the short-term nature of any such investments. Our
long-term debt is at a fixed rate of interest; therefore, we do not believe there is any material
exposure to market risk changes in interest rates relating to our long-term debt. Our interest
income and interest expense are most sensitive to the general level of interest rates in the U.S.
Sensitivity analysis is used to measure our interest rate risk. For the six months ended August 31,
2009, a 100 basis-point adverse change in interest rates would not have had a material effect on
our consolidated financial position, earnings or cash flow.
Foreign Currency Risk
We conduct a portion of our business activities outside of the U.S., and are thereby exposed
to the risk of currency fluctuations between the U.S. dollar (USD) and foreign currencies of the
countries in which we are conducting business. If the value of the USD decreases in relation to
such foreign currencies, our potential revenue from exhibition and merchandising activities outside
of the U.S. will be adversely affected. During the six months ended August 31, 2009, we did not
incur any material losses because of changes in the exchange rates with respect to foreign
currencies. Although our financial arrangements with foreign parties may be based upon foreign
currencies, we have sought, and will continue to seek where practicable, to make our financial
commitments and understandings based upon the USD in order to minimize the adverse potential effect
of currency fluctuations.
21
Table of Contents
Item 4. Controls and Procedures.
Under the supervision and with the participation of our management, including our President
and Chief Executive Officer and our Chief Financial Officer, our management has evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and
15(d)-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered
by this Quarterly Report on Form 10-Q. Based on this evaluation, our President and Chief Executive
Officer and our Chief Financial Officer concluded that, as of the end of the period covered by this
Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective to ensure that
information required to be disclosed in the reports that we file or submit under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms and is accumulated and communicated to our
management, including our President and Chief Executive Officer and our Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
There have been no changes in our internal control over financial reporting during the period
covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
PART II OTHER INFORMATION
Information presented in PART I of this FORM 10-Q is incorporated herein by reference.
Item 1. Legal Proceedings.
In connection with the Salvor-in-possession and interim salvage award proceedings, the
District Court scheduled an evidentiary hearing for the week of October 26, 2009 on our motion for
a salvage award. We cannot predict how the District Court will ultimately rule on our motion for an
interim salvage award.
On July 30, 2009, Sports Immortals, Inc. and its principals, Joel Platt and Jim Platt, filed
an action against us in the Circuit Court of the Fifteenth Judicial District in Palm Beach County,
Florida for claims arising from their license agreement with us under which we obtained rights to
present sports memorabilia exhibitions utilizing the Sports Immortals, Inc. collection. The
plaintiffs allege that we breached the contract when we purported to terminate it several months
ago, and they seek fees and stock warrant agreements required under the agreement. We filed our
answer and counterclaims on September 7, 2009. Answering the complaint, we denied plaintiffs
allegations and maintained that the Sports Immortals, Inc. license agreement was properly
terminated. We counterclaimed against the plaintiffs for breach of contract, fraudulent inducement
and misrepresentation, breach of the covenant of good faith and fair dealing, and violation of
Floridas deceptive and unfair practices act. The litigation is in its very early stages, and we
intend to vigorously defend the case and pursue our counterclaims.
There have been no other material changes in the legal proceedings discussed in our Annual
Report on Form 10-K for the year ended February 28, 2009.
Item 1A. Risk Factors.
For a complete list of our Risk Factors, please refer to our Annual Report on Form 10-K for
our fiscal year ended February 28, 2009. During the six months ended August 31, 2009, there were
no material changes to our Risk Factors. You should consider carefully the Risk Factors. If any
of these risks actually occur, our business, financial condition or results of operations would
likely suffer. In that case, the trading price of our common stock could decline, and you may lose
all or a part of the money you paid to buy our common stock.
22
Table of Contents
Item 4.
Submission of Matters to a Vote of Security Holders.
Our 2009 Annual Meeting of Shareholders (the Annual Meeting) was held on August 6, 2009.
Our shareholders:
1. | Elected William M. Adams, Douglas Banker, Christopher J. Davino, Jack Jacobs, Mark A. Sellers, Bruce Steinberg and Samuel S. Weiser as directors to serve until our 2010 Annual Meeting of Shareholders and until the subsequent election and qualification of their respective successors; | ||
2. | Approved the issuance of our common stock upon conversion of our notes held by Sellers Capital Master Fund, Ltd. and SAF Capital Fund LLC in the aggregate principal amount of $12.0 million; | ||
3. | Approved an amendment to our articles of incorporation to increase the number of our authorized shares of common stock from 40 million to 65 million shares, to enable the full conversion of the notes held by Sellers Capital Master Fund, Ltd. and SAF Capital Fund LLC in the aggregate principal amount of $12.0 million, the issuance of shares under our 2009 Equity Incentive Plan, and for other corporate purposes; | ||
4. | Approved our 2009 Equity Incentive Plan; and | ||
5. | Ratified the selection of Cherry, Bekaert & Holland, L.L.P. as our independent registered public accounting firm for our fiscal year ending February 28, 2010. |
Messrs. N. Nick Cretan, Mark A. Hugh Sam and Alan B. Reed were not nominated by our board of
directors for re-election at the Annual Meeting and did not continue as directors following the
Annual Meeting.
The following sets forth information regarding the results of the voting at the Annual
Meeting:
1. | Director Election |
Nominee | Votes For | Votes Withheld | ||||||
William M. Adams |
16,891,610 | 9,856,416 | ||||||
Douglas Banker |
16,769,825 | 9,978,201 | ||||||
Christopher J. Davino |
16,867,877 | 9,880,149 | ||||||
Jack Jacobs |
16,884,312 | 9,863,714 | ||||||
Mark A. Sellers |
16,889,846 | 9,858,180 | ||||||
Bruce Steinberg |
16,896,644 | 9,851,382 | ||||||
Samuel S. Weiser |
14,919,801 | 11,828,225 |
2. | Approval of Issuance of Common Stock Upon Conversion of Notes |
Votes For | Votes Against | Abstentions | |||||||||||
9,485,429 | 6,806,268 | 2,092,785 |
3. | Approval of Amendment to Articles of Incorporation |
Votes For | Votes Against | Abstentions | |||||||||||
9,452,908 | 6,835,484 | 2,096,090 |
4. | Approval of 2009 Equity Incentive Plan |
Votes For | Votes Against | Abstentions | |||||||||||
8,855,105 | 8,206,358 | 1,323,019 |
5. | Ratification of Cherry, Bekaert & Holland, L.L.P. |
Votes For | Votes Against | Abstentions | |||||||||||
24,206,524 | 320,529 | 2,220,971 |
Item 6.
Exhibits.
See
Index to Exhibits on page 25 of this Quarterly Report on Form 10-Q.
23
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
PREMIER EXHIBITIONS, INC. |
||||
Dated: October 9, 2009 | By: | /s/ Christopher J. Davino | ||
Christopher J. Davino | ||||
President and Chief Executive Officer (Principal Executive Officer) |
||||
Dated: October 9, 2009 | By: | /s/ John A. Stone | ||
John A. Stone, | ||||
Chief Financial Officer (Principal Financial Officer) |
24
Table of Contents
INDEX TO EXHIBITS
Exhibit | Filed | Incorporated by Reference | ||||||||||
No. | Exhibit Description | Herewith | Form | Exhibit | Filing Date | |||||||
3.1
|
Second Amendment, dated August 6, 2009, to Articles of Incorporation of Premier Exhibitions, Inc. | S-8 | 4.3 | 08-17-09 | ||||||||
3.2
|
Amended and Restated Bylaws of Premier Exhibitions, Inc., dated September 16, 2009 | 8-K | 3.2 | 09-21-09 | ||||||||
10.1#
|
Premier Exhibitions, Inc. 2009 Equity Incentive Plan | S-8 | 10.1 | 08-17-09 | ||||||||
10.2#
|
Form of Premier Exhibitions, Inc. 2009 Equity Incentive Plan Nonqualified Stock Option Agreement | S-8 | 10.2 | 08-17-09 | ||||||||
10.3#
|
Form of Premier Exhibitions, Inc. 2009 Equity Incentive Plan Restricted Shares Agreement | S-8 | 10.3 | 08-17-09 | ||||||||
10.4#
|
Employment Agreement, dated September 3, 2009, by and between the Company and Christopher J. Davino | 8-K | 10.1 | 09-08-09 | ||||||||
10.5#
|
Nonqualified Stock Option Agreement, dated September 3, 2009, by and between the Company and Christopher J. Davino | 8-K | 10.2 | 09-08-09 | ||||||||
10.6#
|
Employment Agreement, dated June 2009, by and between the Company and John A. Stone | X | ||||||||||
10.7#
|
Restricted Shares Agreement, dated August 6, 2009, by and between the Company and John A. Stone | X | ||||||||||
10.8#
|
Consulting Agreement, dated October 8, 2009, by and between the Company and Douglas Banker | X | ||||||||||
+10.9
|
Letter Agreement, entered into as of September 25, 2009, by and between the Company and S2BN Entertainment Corporation | 8-K | 10.1 | 10-01-09 | ||||||||
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of President and Chief Executive Officer | X | ||||||||||
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | X | ||||||||||
32.1
|
Section 1350 Certification | X |
# | Management contract or compensatory plan or arrangement. | |
+ | The Company has requested confidential treatment of certain information contained in this exhibit. Such information has been filed separately with the Securities and Exchange Commission pursuant to the Companys application for confidential treatment under 17 C.F.R. §200.80(b)(4) and § 240.24b-2. |
25