PRXI: Solid progress
Premier Exhibition recently announced their quarterly report. For the most part it was a ‘flat report’, which I think is great news. Here are some highlights:
– Total revenue increased $0.2 million to $10.3 million despite fewer shows on tour indicating improved fourth quarter productivity.
– General and Administrative expenses decreased 41% to $5.2 million driven primarily by lower compensation expense and savings related to legal and professional fees.
– Cash provided by operations improved 13% to $3.5 million
The market was not that impressed by the results. Now there is nothing great in these earnings but lets look at something that is very important, the company’s cash balance. This is from a posting by the Maestro:
August $10.9 million
September $11.9 million
November $10.2 million.
December $13.8 million
February $13.6 million
April $13.9 million
When you look at any company, you have to first understand the past and current situation of a company. If you just look at the quarterly earnings with no historic perspective, you are to miss the real story. PRXI has been going through a major turnaround. Each turnaround is unique, so you can’t apply same processes or viewpoint to each scenario. For PRXI, the company was burning cash and had poor top-line and bottom-line performance. The turnaround is a multi-phase play. In PRXI case, the first phase should be stop burning cash and improve the balance sheet. Looking at the above data, you can see how quickly management has fixed this situation. Cash has grown substantially. Also, if you listen to the conference call you will see the company is expecting another 2.7M in cash from a tax refund. So at the end of the next quarter, we are looking at an extremely strong cash position for this company.
Now the next phase is turning around the top and bottom line. If you listen to the conference call, management has stated a 5-7M CapEx budget to improve existing exhibitions and create new content/exhibitions. I think this quarterly report was a completion of one stage of the turnaround and start of another one.
I am excited about the future growth of this company. I think the turnaround on PRXI can take a while but I think management is making all the right moves to position the company for a strong future.