Premier Exhibitions CEO Discusses F3Q11 Results - Earnings Call Transcript

Jan.17.11 | About: Premier Exhibitions, (PRXI)

Premier Exhibitions, Inc. (NASDAQ:PRXI)

F3Q11 (Qtr End 11/30/2010) Earnings Call

January 11, 2011 9:00 am ET


John Stone - CFO

Chris Davino - President and CEO


Bill Vlahos - Odyssey Value Partners


Good morning and welcome to Premier Exhibitions' third quarter fiscal year 2011 earnings results conference call. Today's conference is being recorded.

I will remind everyone that we will be making forward-looking statements on today's call. These forward-looking statements are based on our current expectations and are subject to a number of risks and uncertainties. Actual results may differ materially. Please refer to the factors identified in our Form 10-K for the period ending February 28, 2010 and our subsequent filings with the Securities and Exchange Commission.

Now I'd like to turn the call over to Mr. John Stone, Chief Financial Officer of Premier Exhibitions, Inc.

John Stone

Regarding the third quarter results, obviously posting a gross profit margin loss is a painful thing. And I will walk you through the mechanics of what has occurred, the source of the problem as we have identified it, and then I'll let Chris talk more specifically about what we are going to do about that going forward.

First of all, we had all of our shares open during the second quarter, and by design kept them in place through Labor Day. By Labor Day, almost every show had been in market for its planned run and was scheduled to move, and we did in fact move thirteen of our shows in the third quarter.

So with starters, the third quarter was going to be challenging operationally to get all those shows moved and re-opened. And our team did a great job making all that happen. We would actually like to say thanks to them for all the hard work, creativity and determination to make that happen. But the cost and the downtime of so many moves had an impact on the third quarter results.

The second order of consequence of this dynamic moving so many shows is that all those shows opened in new markets. If you have been following us, you'll know that we opened touring Bodies shows in Oporto, Albuquerque, Winnipeg, St. Louis, Madison, Brasilia, Tulsa, Greensboro, Grand Rapids.

In addition, we opened touring Titanic shows in Kitchner, Ontario, Indianapolis, Tucson and London. By the way, half those new shows were self-operated, so they required a great deal more of our own working capital and a higher amount of human capital to basically open one or two shows every week for two-and-a-half months straight.

As we're going it alone so to speak in these self-operated shows, there is no one to share the many losses with if the shows don't perform as well as planned. With this kind of concentration of operating activity, we actually try to avoid it, but certain market forces have given us little options in the third quarter, particularly on the Bodies side of the business where the specimen license fees are at a fixed cost whether you are open to the public or you are holding them in storage. Quite literally, the show must go on.

How did all these new shows do? As you can see, many of these shows did not perform to our expectations. But it is key that you notice where in the business platform the failed shows occurred; in the touring portion of the Bodies business. Let me first make very clear how we are currently configured to operate in the event anyone hasn't already drawn this out for themselves.

And you can look at Table 5 in the press release and follow me if you'd like. Our current business is 22 concurrent shows, including 14 Bodies shows, seven Titanic shows and one Dialogue show. Within that, there are stationary shows and touring shows. So there are three stationary Bodies shows in New York, Atlanta and Las Vegas. There is one stationary Titanic show in Las Vegas, and there is one stationary Dialogue show in Atlanta.

As currently configured, all the stationary locations produce positive gross margin, and did so to the tune of about $1.3 million in the third quarter, $6.2 million for the nine months. By the way, these shows are not constantly moving, so there is a lower working capital demand and a lower human capital required in terms of G&A. So this part of the business is reliable, positive cash flow; fine. That leaves six touring Titanic shows and 11 touring Bodies shows.

First, the Titanic. We had managed to keep the Titanic shows moving largely in conjunction with museums and promoters as opposed to so many self-operated shows. And for the third quarter, these shows generated positive gross margin of about $600,000 and $4 million for the nine months. That leaves the touring Bodies business; 11 shows, or roughly half our total capacity. You'll see from the Table, this part of the business lost $2.4 million in gross margin in the third quarter, more than offsetting the profits from all other operations.

Not to mention, that many shows moving around has required the bulk of the attention of the people who constitute G&A. So while Bodies touring business made a positive contribution during the first half of the year, it struggled in the third quarter, based on weak performances of several of the new shows that recently opened.

Many of you may have noticed, we actually moved to close one of these shows early in light of what appeared to be continuing soft attendance after the initial few weeks of being open. Specifically, St. Louis, Albuquerque, Madison, Tulsa were new shows, and before them, Omaha, Cleveland, Sacramento, even Mexico City have underperformed. There is an important distinction here though between the results where we have partnered with the museum and a local promoter versus us going into an unbranded facility, particularly in some of these tertiary markets. Chris will get into this in greater detail.

It's important to note also, the level of license fee that we had been contractually required to pay related to the collection of Bodies specimens as compared to the Titanic, for which artifacts we do not owe any license fees.

In the stationery shows for Bodies, about 20% of our gross profit goes towards third parties for the right to use their content. This is a fixed cost, so as attendance rises, we keep 100% of it in the additional profits. So when attendance is good, everyone makes good money. But at the attendance levels we've seen recently in the self-operated model, specifically for Bodies, these license fees are unsustainable, and the return to Premier is too low considering the amount of capital that we have to put at risk for each show.

While we have come to a point that is the natural end of the initial term of several of these leases or licenses for specimens, and in the face of these results, we are not going to continue touring the bodies this way. As Chris will elaborate, we are scaling back the Bodies touring business in a way that leaves us with a lowered capacity, but plenty of reasonably priced specimens that can be used in conjunction with museums and promoters.

These are obviously gross profit margin figures and do not include all the costs, but only the costs in our venues. There are costs at headquarters to develop, book, plan, coordinate and move all these shows. Those costs are in G&A. And as indicated, a larger part of the activity in those costs relate to the touring shows, as the stationery shows do not require the same level of attention.

Now, with that explanation of what happened to cause a loss on the gross margin line, I am going to pause here and hand the call over to Chris to tell you more about what we're going to do about it.

Chris Davino

Thanks, John. I'm going to try to provide a little bit of color around results that John described. First, as we've discussed on prior earnings calls, our focus has been to revitalize both the Bodies and Titanic brands, as well as pursue new contests. Over the last 18 months for Bodies, the focus has been to relaunch the properties in an attempt to reverse significant declines in attendance that we experienced on the 20/20 segments that aired in March, 2008.

The relaunch included redesigning the exhibition to make it more compelling, visually engaging, interactive, as well as to develop a marketing approach that is more web-oriented.

Lastly and importantly, our approach to providing a self-operated touring model, why was that part of our plans? Well, by way of background it's important to note that we have been actually working to reduce our level of Bodies inventory over the course of time, including the decision to return The Universe Within Bodies set in 2009. That notwithstanding, as John mentioned, the company has been burdened with six long-term leases that come with an annual fixed cost of $6 million.

As promoter museum interest in Bodies began to wane following the 20/20 segment, we look forward basically to self-operate so as to avoid bearing $6 million in lease cost without having corresponding revenue.

Our self-operating plan included returning to primary and secondary markets such as Sacramento and St. Louis, and we felt enough time had elapsed since prior Bodies plays, which in our view warranted return to the market.

Candidly, as we began to run out of real state for primary and secondary markets, we began to focus on tertiary markets. Albuquerque and Tulsa are good examples, and those are markets with 800,000 to 1.2 million people.

Our expectations for the re-launch candidly were very high, given the success that we had in Dallas and Seattle, which as you remember were our first two self-runs on my watch, each of which of those shows had elements of redesigned show as well as elements of our new online marketing approach. I'll discuss the impact of the Bodies results and our plans to address those results in a moment, but first let me recap our focus on Titanic and new content.

For Titanic, I think it's pretty clear our primary objective over the course of time has been to realize value inherent in the collection. We believe the Court ruling represents a positive outcome for the company in that regard. As you're aware, we got that outcome in August and we expect the final decision from the Court on or before August 2011.

Our Expedition Titanic last summer was also instrumental in helping us to build a more robust business model around the brand. The assets generated from the exhibition, the 3D video, the data for the 3D mosaic will ultimately translate to value over the course of time. With the expedition, we also solidified our scientific contribution to preserving the wrecked site as well as for the artifacts themselves.

During the next few months, it's our intent to pursue these opportunities, be it the 3d video, the documentary, processing, the data for the 3D mosaic, which will again have applications in gaming, online research and the like. We're going to be pursuing these opportunities, but we're not yet in position to ascribe specific value to any of these revenue streams or assets.

What we are going to be doing in the meantime is continuing to work with Woods Hole, NOAA, the Park Service and other partners to create a larger scientific and archaeological framework around Titanic as well as to build out the business model around Titanic.

For new content, our goal has been and continues to be to position Premier as an industry leader, bringing new content to the market that's meaningful, compelling and ultimately profitable.

What we've been very successful over the last couple months has been in pitching and winning new business opportunities. What I think we've been less successful is translating new projects into profitable exhibitions. Having said that, I believe we'll have significant success in the next 12 to 24 months as the company begins to focus more fully on realizing these opportunities.

To be candid, one of the primary issues we face in bringing new products to market is raising capital from promoters and investors. We basically look to raise third-party capital as we look to reduce the overall level of risk associated with each of these projects. But again, over the next couple of months, we're going to march forward and we expect to make good progress as we go forward.

Let me go back to Bodies for a moment. As John noted in his remarks, the Bodies touring segment of the business represented the majority of last quarter's negative results. The bottomline is our decision to keep the specimens working through the self-operated touring model posed challenges that were just too difficult to overcome.

Whether it's taking on venues that are not branded facilities, having to spend significant amounts of marketing dollars for advertising, to create awareness to promote not only the show, but the venue, as well as the sheer operational logistic and managing such a large number of shows all contributed to the negative results we experienced in Bodies and the touring segments. In fact, over the last few quarters, as John said, we opened as many as 11 self-runs, each requiring a capital investment upwards of $1 million.

While we certainly expected the larger markets like Mexico City and St. Louis to draw attendants similar to those results achieved in Dallas and Seattle, again two shows that made positive gross margin, in the end, the attendance just literally never materialized. And the results across the board were dismal.

What's our plan in the face of this? As John mentioned, we've decided to significantly pare back inventory now that the leases for the three sets have finally begun to mature. We're in the process of returning three of the six sets, each having $1 million in fixed cost associated with them, and we expect and plan to return a fourth set next summer when that lease expires as well.

By doing so, we'll have largely aggregated the self-operated portion of the business and we can focus on the permanent location, New York, Vegas, Atlanta that have been profitable, while utilizing the remaining sets to work with promoters and museums.

As John highlighted, the Bodies permanent shows generated positive gross margins, and all of our Titanic shows be it Vegas, inventory shows, also reflected positive result. Going forward, the focus is going to be on these segments of the business as well to drive a higher attendance at all of our existing shows.

It's also important point out that the process of putting up self-ops, be at the research, the marketing venues, to produce and operate the travel and shows requires us to carry significant infrastructure.

Well, consistent with the decision to pare back inventory comes the opportunity to take significant cost out of the system. By this, I mean primarily headcount. And that's a process that while we'll be unwilling is literally starting today.

But before I get to that, let's talk about the fourth quarter. Clearly, there is going to be significantly cost associated with us making these moves. Closing shows, in some cases closing shows early, and returning Bodies sets will cover some costs. We estimate the cost of doing this to be approximately $500,000 to $750,000 in the fourth quarter or primarily in the fourth quarter, but these are obviously one-time in nature.

Once complete, we hope to realize between $3 million and $3.5 million in annualized cost savings, all in G&A and primarily headcount. And while this will be executed over the course of time, we expect to see the results of this process in Q1 and Q2 of next year.

So I know I've covered a lot of ground, as did John, but let's talk about what's next for Premier. Obviously we're going to continue to evaluate our infrastructure and continue to rightsize the company in the context of paring back Bodies business.

We are preparing to re-launch Bodies New York in the next 30 days or so as well as to add Dialogue in the Dark in the spring of 2011 within the existing New York facility. We are pretty excited about Dialogue. We think there is opportunity and we've been working to build out that business model well beyond the experience that we have her in the Atlanta. So we are pretty excited about what Dialogue will bring to us both from New York and beyond New York over the course of the next year or so.

Obviously for Titanic, where you're seeing us focus on capitalizing on the 100-year anniversary, but basically overall we are going to focus on those portions of the business that have worked historically and have been profitable. And by that, I mean the permanent locations as well as working with promoters and museums in branded facilities.

As John pointed out, when you strip away the touring portion of the Bodies business, what remains is the business that includes the Body permanent locations, the Titanic permanent and touring shows. Now, those segments of the business produce approximately $10.5 million of margin year-to-date. And from the sets that remain, as John said, again they won't have fixed costs associated with them. We'll have to chase the revenue as we did in the last quarter and the last couple of quarters. Our approach therefore could be more opportunistic.

Before I turn it over to questions, I'm going to ask myself three questions that I am sure are in the minds of many of you. And tentatively these are questions that I've asked myself each and every day as these results have started to come in.

One, why did the Bodies strategy fail? Was it a poor approach? Was it poor execution? Two, why did we pare back Bodies earlier? Three, if we're going to pursue new content, how are we going to do that with limited capital?

Let me address each of these in turn. Body, why didn't your strategy work? I'll be candid with you all. The strategy that we deployed in Bodies was somewhat aggressive. It was aggressive when you consider the content. It was aggressive when you consider the maturation of that content. And it was aggressive when you consider the bandwidth at Premier in terms of management and staff.

It was certainly aggressive in light of the fact that we pursued the Bodies re-launch at the very same time we pursued Expedition Titanic and the overall Titanic game plan. These are two extraordinarily bold moves for a company that hadn't either successfully before.

Our plan for Bodies was a plan that we believed in. It was solidly conceived and tentatively was rational in light of the early success that we had in Dallas and Seattle. For Titanic, we really didn't have a choice in terms of timing. We had to go last summer.

So again, these are two initiatives that were bold. They had to happen concurrently. And clearly we knew that we were stretching the organization to pull them both off. Bottomline is one bet paid off and it paid off well, Titanic. The other bet, Bodies self-run clearly didn't.

Question two, why didn't we exit the Bodies business earlier? One, as John pointed out, we have leases that didn't provide us with outs. They just clearly didn't. They were pretty tight contracts. That notwithstanding, since I've been here, we've been negotiating ongoingly with the supplier of those specimens to speak better terms.

I will tell you candidly he wasn't budging. He was pretty focused on collecting $6 million in annual lease payments and having us live up to our contracts. And so we now that we've got the opportunity to gather those feel to get those back.

And three, I'll be honest. We have a plan for the Bodies re-launch that we believed in. That plan didn't work. It didn't work all at once. So be it. We pulled back. We returned sets. We cut cost dramatically. We focused on those areas of the business that are profitable.

New content, again, how are we going to pursue new content when we've got limited capital, and certainly limited capital in the face of these results? Well, we're going to continue to be aggressive. We're going to continuing to do what we've been doing well, which is identifying interesting opportunities, winning business, looking to the contractors that we've assembled over the course of the last few years that are brilliant, that are really the best in the business, that we don't have to hire full time, but come on across as needed basis. These are people that will continue to help us create the big idea, conceptualize compelling content that's unique to the market.

We're going to continue to work with our partners, be it S2BN, which is Michael Cohl's company, or others to deliver capital, deliver promotional capabilities and other expertise. And we're going to look to bring projects to market with a rational risk/reward profile. And as I said earlier, we think we're going to be successful in that regard over the next couple of months.

So with that, I'm going to open it up to questions.

Question-and-Answer Session


(Operator Instructions) We'll take the first question from Bill Vlahos with Odyssey Value Partners.

Bill Vlahos - Odyssey Value Partners

Chris, I have a couple of questions for you. First question, when do you guys anticipate announcing new exhibition?

Chris Davino

Bill, we're going to over the course of time. I think on the last call, we announced one project. We didn't name it candidly, because we're not yet in a position to do so, that we're working with our joint venture partner, S2BN, again Michael Cohl's company.

It's a pretty exciting project, an iconic brand. It's got international feel as we've market-tested it. And it really presents an opportunity to take what had then for us static exhibition more into the experiential and event realm. Although it's not definitive, we're hopeful that we can announce that and describe to the marketplace pretty quickly and be pretty clear about what it is and what it includes and why we think it's compelling.

Beyond that, we have got three or four maybe even five and six when I look out into the future other projects that we've identified that are also with what I would characterize as iconic brands across everything from the sports world, entertainment pop culture as well as the traditional educational oriented museum profile for content that we have been working in some cases on our own, in some cases with our joint venture partner, S2BN, and in some cases with other partners to bring these projects to light. But it'll probably be a couple of months in our calendar before we announce anything.

Bill Vlahos - Odyssey Value Partners

How soon do you guys anticipate being cash flow positive? Would that be something that you would anticipate, say, within the next two quarters?

John Stone

Obviously, we're not going to give guidance, but obviously that's our goal.

Bill Vlahos - Odyssey Value Partners

I mean because if you kind of take a look at your numbers, it seems like it's very plausible to be cash flow positive in two quarters.

John Stone

I think we are not prepared to give guidance. And so I'm going to dance around your question, but try to help people think through it. If you think about the profile of the gross profit margin and the gross profit loss that is generated, and we're able to stop that very quickly due to the timing of these leases.

So just imagine that you could put that part of the loss from that part of the business aside for a minute, then that's very helpful right. Then if you take pretty quick action and take $3 million, maybe $3.5 million out of G&A, you do the math.

Bill Vlahos - Odyssey Value Partners

I'm doing the math. It looks like you're actually not very far away. I appreciate what you guys are doing talking about taking out some (stat) and rightsizing the company, reducing G&A. Is Board of Directors and executive comp in that classification as well, because it seems to me that the comp, both Board and executive, it's not consistent with the size of the enterprise and the lack of profitability. And as fiduciary, it seems to me that it's way too high. Is that something that you guys are willing to address?

Chris Davino

As I said earlier, we're going to continue to look at all aspects of the business as we downsize and look for opportunities to save money. That's the bottomline.

Bill Vlahos - Odyssey Value Partners

But would you agree that your comp is out of whack?

John Stone

I think it's fair to say that the size and the comp associated with the senior management team for a company that is going to be scaled back, at least before it grows, certainly might grow high. And as I said before, we're going to continue to look at all kinds of opportunities to rightsize the business.

Bill Vlahos - Odyssey Value Partners

I wouldn't say it looks high. I would just say it is high.

John Stone

It's a fair comment. It is high. We built an infrastructure up to this point in time that was predicated on revitalizing Bodies and Titanic and keeping all these shows in motion and pursuing the expedition and pursuing the Bodies, the building of Titanic business model. All of these things we put infrastructure in place to realize on our plans and expectations. Now that we're changing course literally on a dime, obviously we're going to look at all that we've built and look at scaling it back.

Bill Vlahos - Odyssey Value Partners

Clearly you guys have done a very good job with court case and clearly the assets are worth substantially more than your market cap. But now for two years, operationally you guys have really struggled. Would you consider making some changes not only in the comp, but in upper management and even on the Board? I mean is that really most productive to only have Sellers Capital representative on the Board. I mean are you guys also considering sort of your human capital and adjustments there as well?

Chris Davino

Mark might have a slightly different answer to this. I'll give you my answer. Our Board is not represented only by the Sellers Capital. Obviously we've put together a Board that has some of the brightest minds that I've worked with.

Bill Vlahos - Odyssey Value Partners

If your Board is so bright, how come now for two years you guys have struggled so much on the ops side?

Chris Davino

It's an excellent question and let me take it in turn. So from the Board's standpoint, we've got extraordinarily talented and experienced individuals that come from private equity, that have run entertainment properties, that have been a great value Board for me tentatively as we've mapped out a strategy, tentatively a very bold plan over the course of time.

So it's really not a Board issue. It's a management issue, and I'll take it squarely on my shoulders. We've put together, as I said, a plan in the last two years to revitalize few businesses that were falling by the wayside. When I got here, we had $4 million in cash and $2 million a month cash burn and half of our shows weren't booked. And we've put this company back together again first to get the shows in motion and then we've set out tentatively a very bold plan to revitalize those properties.

Bill Vlahos - Odyssey Value Partners

But you said that the bold plan was a mistake earlier in your call.

Chris Davino

Clearly, the Bodies re-launch did not work. Now, as I said before, if I went back in time a year ago and conceived a different plan, I got to tell you I'm not sure I would have done things terribly differently. And here is why.

One, as I said, we were boxed in with these lease costs. We didn't have a choice. We were either going to bear $6 million in leases without having corresponding revenue or we're going to self-operate. The museums and the promoters post the 20/20 segment just weren't there anymore, certainly the museums. So the choice was self-operate or not.

Then you take the decision further. You want to self-operate with a show that was completely static in its prior form, or you want to attempt to vitalize that property and put it back out in a more compelling way. Again, it was a bold move in that we didn't know if the customers would come back if the show was improved. We didn't if the customers were going to come back if we had a different marketing approach, including mnore of an online focus.

When you go to a market as large as Mexico City and you're getting a couple of hundred people a day, obviously you're going to scratch your head. I mean there is no way to rationalize getting literally a third of your expected attendance in a market that that's large and tentatively that affluent with a brand new show. There is no way we could have predicted that people just weren't going to show up.

So we go back and look at our plan and what we set out to achieve, again I'm not sure we would have done things differently. I'm not sure a different management team would have approached the world differently.

Bill Vlahos - Odyssey Value Partners

I didn't say different management team. I said it seems to me that you guys could really benefit from the modifications in your executive personnel. Would you consider that?

Chris Davino

As I said, we're constantly considering the talent that we've brought to the table. I think we've arranged the right type of talent to re-launch the property. I'm not being defensive. I'm just being candid. It was meticulously crafted. It did work.

Bill Vlahos - Odyssey Value Partners

You guys did a great job with the lawsuit, but operationally you guys are struggling. We're getting nowhere here. So what I would just suggest is that you guys consider making some adjustments in your Board personnel and your management, at least consider it, because I think it would be beneficial.


(Operating Instructions) We'll move to (Norman Kline), a private investor.

Unidentified Analyst

Last call, I asked a question about the vacant space in Vegas, and you said that apparently that week you had signed some sports venue that was coming in and they were going to be opening up before the Super Bowl, and the Super Bowl getting very close. So could you give us an update on what's going on with that space?

Chris Davino

Yes, they are progressing more slowly than we had hoped. And candidly, I can't give you timing on it today. Our partner or the third party that was intending to open that experience in that space is still focused on doing so, but the timing has slipped.

Unidentified Analyst

But that's still happening?

Chris Davino

I'm sure that if it'll open by kick-off of the Super Bowl, but that's still very much happening on.

Unidentified Analyst

Do we have any sort of equity interest in that property when it opens or is it strictly a lessee.

Chris Davino

We have rent that is variable depending on how successful they are. So the more successful they are in the space, and we think that it will be somewhat synergistic to have more entertainment like there in the some place, then we'll share in that success.

Unidentified Analyst

Can you give us a summary of the post expedition, where we are? I know Woods Hole had some contractual timeframes to deliver finished product to you? Can you tell us like what they've delivered so far, what's still is in process? Can you give us sort of an overview, what you've learned from the debris field, any surprises, any disappointments?

Is it everything that you hoped and expected it would be? Or is it less than what you thought it might be overall?

Chris Davino

Certainly, overall our experience with Expedition Titanic was much more than we ever had hoped. We said on a prior call when we covered literally quite a lot of ground in terms of mapping the entire wreck site optically and with Sonar.

From an asset generation standpoint, we've got 50 hours of high-def 3D footage the likes of which really have never been seen or hit the market before on any ship wreck, not only on Titanic. So we're pretty excited about the opportunity for a high-def 3D piece separate and apart from the documentary that we're doing that we contracted with and that we filmed out in the Expedition with the major cable network. So that's part one.

Part two, one of the things we've really set out to do that we're hopeful about is creating a 3D mosaic of at least a bow and stern and some other large targets in the debris field. That is a challenging process, because what we're dealing with really requires merging datasets, optic datasets, acoustic datasets and Sonar datasets in a way that's really never been done before. And there were challenges with the equipment, but I think we've got through most of that. So it's really now that there are massive processing job that brings all of our partners into it, both NOAA and Park Service, Woods Hole, us, various contractors, technicians that we have on mosaic. That will be a multi-month process.

We're excited about what that might lead to. But again, I want to be clear although all of the aspects of that data collection were successful, the processing is not without its challenges and cost and it will take some time. It's all cutting-edge, but we hope the results of that will be really interesting and will have applications in a number of mediums, including online gaining.

Unidentified Analyst

Is there any chance of another expedition this year?

Chris Davino

We've got a lot of work in front of us just to focus on the core business, rightsizing the business and realizing on the assets that we've already developed. But what I will say one of the things that I set out to do before the expedition was to tighten our relationship with all those entities that I mention to you earlier and to create a real entity around Titanic, be it the Titanic preservation alliance or a Titanic advisory council that will work to preserve the wrecked site over the course of time, starting with developing a proper archaeological plan, which had never been done before by anybody.

With this group, to set up to develop that plan and develop a long-term site management plan, that's going to be a multiyear process that's really going to solidify our leadership not only on Titanic, but in the larger oceanographic community. So that's a very important part of this picture that really even is bigger than just the next trip to Titanic.

Solidifying these relationships with these entities and then somewhat antagonistic to the company impacting the court case over the course of time, that's all turned on a dime, that's part of our goal over the next couple of months.

Unidentified Analyst

Can you tell us how many shares the company has bought back since the Court ruling?

John Stone

I don't have the exact figure in my hand.

Unidentified Analyst

100,000, 500,000, 1 million, just give me a ballpark.

John Stone

It's in the lower end of that range. And frankly, I remind you that we put in a plan in place and announced that we were going to do that, just buy back shares. And then almost the next day, the court ruled in our favor and brought the stock price up to where it has been recently.

I'll remind you and other people on the call that there are a number of dynamics that once you put a plan like that in place it's very difficult to adjust that plan. And that's all I'll say.

Unidentified Analyst

Well, this is what I have to say. If you truly believe that Titanic is worth north of $200 million and the market cap has been consistently between $80 million and $90 million, I don't understand even if you had to take on a small amount of debt that the company and its officers and directors, and I think only director who is shelling almost every share he owns, there hasn't been any activity. And again, if you truly believe what you were saying that Titanic is worth more than north of $200 million, which is over $4 a share, and it's trading at a $1.70, $1.80, $1.90 a share, why everybody wouldn't be just buying everything they could get their hands on? So explain that to me.

Chris Davino

I hear your point. I'm not going to speak for other people in management or the Board. Obviously, for me personally, most of my comp is tied to equity. So I'm pretty well vested in the future success of this company and on Titanic. I'm focused like a laser on producing results, the value play that you expressed might be here and that we believe in as well. So that's certainly my focus and my commitment to this company.

Unidentified Analyst

Store sales on online, is that gaining any momentum? Could you give us an idea what that's running and is it really worth keeping, or how do you see that?

Chris Davino

It's absolutely worth keeping. We took a very small step with e-commerce starting with the Expedition. We take that to a part of the business we can really build out over the course of time, not only for Titanic, but other content that we bring to the market. And we built the beginning of an infrastructure to accommodate it. So I think it's certainly going to be an area of focus over the coming months.


There is no additional question in the queue. So at this point, I'll turn the call back over to management.

Chris Davino

Thank you everyone for taking the time to dial in today. As always, John and I are both available to answer any questions that might arise in the coming days or week. Thank you so much. Have a great day.


Once again, thank you for your participation in the Premier Exhibition Inc. earnings conference call. Any further questions or comments, you may contact the company directly. This concludes today's call.

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