Yesterday Premier Exhibitions (PRXI) gave a presentation to investors and shareholders in Las Vegas, Nevada on the company’s efforts to restructure. I just finished going over the Premier Exhibition Investor Day presentation slides that were posted in a SEC filing. Here are some of the highlights.
Premier Exhibitions has undertaken a critical assessment of their properties and process. The assessment examined product presentation, market facing activities, brand extensions, and new concept development. The company found that it is underinvested in its core business, early success drivers for new exhibits are no longer available, their historic approach and process in ineffective, but solutions and opportunities abound for improvement. I guess when not much is going right, there are definitely opportunities to improve.
The attendance numbers for 2009 were not good:
The revenue trend from these exhibits doesn’t quite appear to have stabilized yet either.
The company did share some key facts about their shows that are worth noting. Premier Exhibitions can run up to 21 shows simultaneously. A typical show runs for six months. During one year they could run a show twice, but there is down time between each showing so the optimal operation is about 80 to 85%.
Their strategy looking forward is to better coordinate their functional groups, make critical assessments of markets and venues, and enhance lead time before selecting a show location. This is key so that they can outreach to key constituents in the market and assess third-party resources in the area such as PR firms. Premier Exhibitions will also do a comprehensive financial assessment before committing to a show. They believe that have made progress on these key points in their upcoming show bookings. They indicate they’ve successfully engaged with potential opponents, improved third-party relations, and improved the efficiency of their internal processes.
Premier Exhibitions also plans to improve their exhibits to make them more modern. They plan on adding guest appearances, designing more engaging experiences, and make it more digital. I think the move to more digital and online components to the exhibits is definitely the right move in today’s entertainment market. Last time I examined Premier Exhibitions‘ online presence, I was surprised at how weak it was.
While the presentation was not earth shattering and nothing real new was presented. I did note a focus on improving operating cash flows. I hope that this new and motivated management team can get this company on track. The value of the Titanic artifacts they are in possession of are key to the value of this stock. Premier owns all the artifacts recovered in 1987 and the federal court in Norfolk, Virginia has control over the post-1987 artifacts. Hopefully, this year the court will finally decide on the final fate of these remaining artifacts.
The Fat Pitch Financials Portfolio continues to retain a position in Premier Exhibitions. However, my patience is wearing thing. I expect to see major improvements this year in operating cash flows, especially if the economy continues to recover. If improvements aren’t achieved, I will reassess holding this stock.
Disclosure: I own Premier Exhibition (PRXI) shares at the time this article was posted.