Tix Corporation (NASDAQ: TIXC, Stock Forum) is a leading integrated entertainment company providing ticketing services, event merchandising, and concert and theatrical productions. Investors should be very cautious these days about companies that rely on discretionary spending given the current stage of the business cycle. Yet upon closer inspection, TIXC is an overlooked micro cap stock that has sent investors a number of very good signals and possesses a unique niche in the media/entertainment sector.

The first positive signal at TIXC was the second-quarter revenue report. Second quarter 2008 revenues increased 258% to $16.9 million, compared to $4.7 million recorded in the comparable period last year. Net loss for the second quarter decreased to $1.2 million, or four cents per diluted share, compared to a loss of $6.2 million, or 32 cents per diluted share, reported in the second quarter of 2007. Even more impressive, the company generated $1.5 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) for the first six months of 2008 compared to an EBITDA loss during the same period last year of $6.5 million. That's a huge swing in performance.

The second signal came when TIXC announced that its Board of Directors had authorized a stock repurchase program. This authorization allows the company to repurchase up to one million shares of the company's common stock in the open market or in privately negotiated transactions. The stock repurchase program will be in effect for up to one year from August 25, 2008. This type of move is always welcomed by the Street.

The third signal came when TIXC responded to the stock price publicly. The company stated that the recent weakness in its stock price was not based on any aspect of its business fundamentals and reiterated previously announced 2008 and 2009 guidance. For the 2008 fiscal year, TIXC has given guidance of revenue in the $42 million to $47 million range and net income in the $2.75 million to $3.25 million range. The company has also given 2009 revenue guidance of $58 million to $62 million and net income of $7.5 to $8.5 million.

When first looking at this stock, I questioned how a company that was dependent on discretionary spending could produce the kind of results and projections that TIXC has shown. The answer is the company's unique business model. TIXC is positioned as a low-cost alternative in entertainment. TIXC has three main lines of business: deep discount Las Vegas show ticket sales (up to 50% discounts), second- and third-tier market theatre sales, and contracted promotional sales (museum events like the King Tut exhibit). Two of these are cost savers for the public. The lower demographic consumer is always looking for savings in Las Vegas, the higher demographic consumer can scale down from New York and Los Angeles to their local theatre, and contracted exhibitions is a good low-risk business. TIXC also has a side business whereby they pre-sell premium event tickets for others on a riskless basis. Investment exposure in the ticketing business is not easy to come by. The ticketing business includes some private companies like TicketCity.com Inc. and Tickets.com, Inc., with Ticketmaster (NASDAQ: TKTM, Stock Forum) being the only major public company we have seen in this business. TIXC has moved up nearly 35% since the stock started rebounding on September 12th. TIXC closed yesterday at $3.73 with trading volume of over 146,000 shares. Still, if the company achieves the low end of its guidance, TIXC will see earnings go from the eight cents range in 2008 to over 20 cents in 2009.  TIXC appears to be a well-run company with a terrific business model. Investors should take a very close look at TIXC.