Premier Exhibitions, Inc. Reports Record First Quarter Financial Results

ATLANTA, July 3 /PRNewswire-FirstCall/ -- Premier Exhibitions, Inc. today announced financial results for its first quarter ended May 31, 2007. The Company posted record revenue of $11.4 million and a record net quarterly profit of $3.3 million, or $0.10 per diluted share. These results compare to revenue of $5.8 million and a net quarterly profit of $1 million, or $0.03 per diluted share, in the same quarter a year ago.

"We are incredibly pleased to report a quarter of substantial growth in revenue, operating income and EPS," said Arnie Geller, Premier Exhibitions, Inc.'s President and Chief Executive Officer. "This quarter represents a great beginning to what we expect to be a very successful exhibition year for the Company given our current ability to operate 18 concurrent exhibitions."

"We generated a record $5.2 million in cash from operations during the quarter, ending the quarter with $20.1 million in cash and marketable securities," said Stephen Couture, Premier Exhibitions, Inc.'s Vice President and Chief Financial Officer.

Earnings Conference Call

The Company will host a conference call to discuss the results of its first quarter on Thursday, July 5, 2007 at 9:00 a.m. (EST). The conference call can be accessed by dialing 1-800-500-0177 in the U.S. and for international calling 1-719-457-2679. A transcript of the conference call will be made available on the Company's website: http://www.prxi.com/.

Forward-Looking Statements

Certain of the statements contained in this press release contain forward- looking statements that involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Premier Exhibitions, Inc. has based these forward-looking statements on its current expectations and projections about future events, based on the information currently available to it. The forward-looking statements contained in this press release may also include statements relating to the Company's anticipated financial performance, business prospects, new developments, strategies and similar matters. Certain of the factors described in the Company's filings with the Securities and Exchange Commission, including the section of its Annual Report on Form 10-K for the year ended February 28, 2007 entitled "Risk Factors," may affect the Company's future results and cause those results to differ materially from those expressed in the forward-looking statements. The Company disclaims any obligation to update any of its forward-looking statements, except as may be required by law.

Presentation of Additional Information Regarding EBITDA and Free Cash Flow

EBITDA. The Company's EBITDA for the quarters ended May 31, 2006 and 2007 was $2.1 million and $5.7 million, respectively. EBITDA is defined as income from operations before other income and expenses, income taxes, interest and depreciation and amortization. EBITDA does not represent cash flows from operations as defined by GAAP, and should not be considered as either an alternative to net income as an indicator of the Company's operating performance or as an alternative to cash flows as a measure of the Company's liquidity. Nevertheless, the Company believes that providing non-GAAP information regarding EBITDA is important for investors and other readers of its financial statements, as it provides a measure of liquidity. In addition, EBITDA is commonly used as an analytical indicator within the entertainment and exhibitions industries. Because EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, EBITDA, as presented, may not be directly comparable to other similarly titled measures used by other companies. A table reconciling the non-GAAP information presented above to GAAP follows the financial statements included with this press release.

Free Cash Flow. The Company's Free Cash Flow for the quarters ended May 31, 2006 and 2007 was $341,000 and $2.3 million, respectively. Free Cash Flow is defined as net income plus depreciation and amortization less capital expenditures. Free Cash Flow does not represent cash flows from operations as defined by GAAP, and should not be considered as either an alternative to net income as an indicator of the Company's operating performance or as an alternative to cash flows as a measure of its liquidity. Nevertheless, the Company believes that providing non-GAAP information regarding Free Cash Flow is important for investors and other readers of its financial statements, as it provides a measure of liquidity. Because Free Cash Flow is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Free Cash Flow, as presented, may not be directly comparable to other similarly titled measures used by other companies. A table reconciling the non-GAAP information presented above to GAAP follows the financial statements included with this press release.

About Premier Exhibitions, Inc.

Premier Exhibitions, Inc. is a major provider of museum quality touring exhibitions throughout the world.

Investor Relations: North Coast Advisors, Inc: Craig T. Stewart [e-mail] Inquiries: Premier Exhibitions, Inc.: Katherine Morgenstern [e-mail] Exhibitions, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited) Three Months Ended May 31, 2006 2007 Revenue: Exhibition revenues $5,460,000 $11,016,000 Merchandise and other 328,000 358,000 Sale of coal 36,000 32,000 Total revenue 5,824,000 11,406,000 Cost of revenue: Exhibition costs 1,105,000 3,059,000 Cost of merchandise sold 56,000 101,000 Cost of coal sold 4,000 7,000 Total cost of revenue (exclusive of depreciation and amortization shown separately below) 1,165,000 3,167,000 Gross profit 4,659,000 8,239,000 Operating expenses: General and administrative 2,198,000 2,535,000 Depreciation and amortization 347,000 488,000 Litigation settlement 350,000 -- Total operating expenses 2,895,000 3,023,000 Income from operations 1,764,000 5,216,000 Other income and expenses: Interest income 32,000 199,000 Interest expense (34,000) -- Other income 11,000 10,000 Total other income and expenses 9,000 209,000 Income before provision for income taxes 1,773,000 5,425,000 Provision for income taxes 709,000 2,170,000 Net income $1,064,000 $3,255,000 Net income per share: Basic income per common share $0.04 $0.11 Diluted income per common share $0.03 $0.10 Shares used in basic per share calculations 26,344,856 29,261,380 Shares used in diluted per share calculations 30,465,215 33,121,190 Premier Exhibitions, Inc. and Subsidiaries Consolidated Balance Sheets February 28, May 31, 2007 2007 Assets (unaudited) Current assets: Cash and cash equivalents $16,811,000 $19,666,000 Marketable securities -- 1,031,000 Accounts receivable, net of allowance for doubtful accounts of $252,000 and $327,000, respectively 3,050,000 3,362,000 Carpathia receivable, related party 2,500,000 2,500,000 Prepaid expenses and other current assets 2,309,000 3,015,000 Total current assets 24,670,000 29,574,000 Artifacts owned, at cost 3,091,000 3,091,000 Salvor's lien 1,000 1,000 Property and equipment, net of accumulated depreciation of $3,141,000 and $3,429,000, respectively 3,620,000 4,748,000 Exhibition licenses, net of accumulated amortization -- -- of $1,407,000 and $1,607,000, respectively 3,266,000 4,366,000 Deferred income taxes 238,000 -- $34,886,000 $41,780,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities 1,450,000 1,385,000 Income taxes payable -- 1,548,000 Deferred revenue 536,000 849,000 Total current liabilities 1,986,000 3,782,000 Commitments and contingencies -- -- Shareholders' equity: Common stock; $.0001 par value; authorized 40,000,000 shares; issued and outstanding 29,004,318 and 29,523,809 shares at February 28, 2007 and May 31, 2007, respectively 3,000 3,000 Common stock payable 90,000 241,000 Additional paid-in capital 34,252,000 35,922,000 Retained earnings (903,000) 2,352,000 Accumulated other comprehensive income (loss) (129,000) (107,000) Treasury stock, at cost; 56,641 shares at February 28, 2007 and May 31, 2007 (413,000) (413,000) Total shareholders' equity 32,900,000 37,998,000 $34,886,000 $41,780,000 Premier Exhibitions, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited) Three Months Ended May 31, 2006 2007 Cash flows from operating activities: Net income $1,064,000 $3,255,000 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 347,000 488,000 Stock based compensation 412,000 459,000 Provision for doubtful accounts -- 75,000 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (2,974,000) (387,000) (Increase) decrease in deferred income taxes 709,000 238,000 (Increase) decrease in prepaid expenses and other current assets (806,000) (706,000) (Increase) decrease in other assets 21,000 -- Increase (decrease) in deferred revenue (300,000) 313,000 Increase (decrease) in accounts payable and accrued liabilities 622,000 (65,000) Increase (decrease) in income taxes payable -- 1,548,000 Total adjustments (1,969,000) 1,963,000 Net cash provided (used) by operating activities (905,000) 5,218,000 Cash flows used by investing activities: Purchases of property and equipment (1,070,000) (1,416,000) Purchase of exhibition licenses -- (1,300,000) Net decrease (increase) in marketable securities -- (11,000) Purchase of certificate of deposit -- (1,000,000) Net cash used by investing activities (1,070,000) (3,727,000) Cash flows from financing activities: Proceeds from notes payable 342,000 -- Principal payments on notes payable (333,000) -- Proceeds from option and warrant exercises 296,000 1,362,000 Net cash provided by financing activities 305,000 1,362,000 Effects of exchange rate changes on cash and cash equivalents 6,000 2,000 Net increase (decrease) in cash and cash equivalents (1,664,000) 2,855,000 Cash and cash equivalents at beginning of year 4,129,000 16,811,000 Cash and cash equivalents at end of year $2,465,000 $19,666,000 Supplemental disclosure of cash flow information: Cash paid during the period for interest $10,000 $- Supplemental disclosure of non-cash investing and financing activities: Unrealized (gain) loss on marketable securities $- $(20,000) Premier Exhibitions, Inc. and Subsidiaries Non-GAAP Supplementary Materials ATTACHMENT I EBITDA Three Months Ended May 31, 2006 2007 Income from operations $1,764,000 $5,216,000 Depreciation and amortization 347,000 488,000 EBITDA $2,111,000 $5,704,000 Non-GAAP Measure: EBITDA is defined as net income from continuing operations before interest and other income, income taxes, depreciation and amortization. EBITDA should not be considered as an alternative to net income, cash flows from operations or any other indicator of the Company's performance or liquidity, determined in accordance with GAAP. FREE CASH FLOW Three Months Ended May 31, 2006 2007 Net income $1,064,000 $3,255,000 Depreciation and amortization 347,000 488,000 Capital Expenditures (1,070,000) (1,416,000) Free Cash Flow $341,000 $2,327,000 Non-GAAP Measure: Free Cash Flow is defined as net income plus depreciation and amortization less cash used for capital expenditures. Free Cash Flow does not represent cash flows from operations as defined by GAAP, and should not be considered as either an alternative to net income, as an indicator of the Company's operating performance or as an alternative to cash flows as a measure of the Company's liquidity.