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Share Name | Share Symbol | Market | Type |
---|---|---|---|
LuxUrban Hotels Inc | NASDAQ:LUXH | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.0976 | -19.57% | 0.4011 | 0.401 | 0.4011 | 0.4987 | 0.441101 | 0.4987 | 599,803 | 00:30:27 |
Net Rental Revenue rose 159% to $113.4 million
Net loss of $78.5 million included $61.1 million in non-cash charges and $24.6 million in non-recurring cash costs
EBITDA rose 78% to $25.3 million; Adjusted EBITDA increased 109% to $29.8 million
LuxUrban Hotels Inc. (or the “Company”) (Nasdaq: LUXH, LUXHP), a hospitality company which leases entire existing hotels on a long-term basis and rents rooms in its hotels to business and vacation travelers, including through its partnership with Wyndham Hotels & Resorts (“Wyndham”), today announced financial results for full year (“FY 2023”) ended December 31, 2023, including EBITDA and adjusted EBITDA, which are non-GAAP measures and are accompanied by reconciliation tables in this release. The Company also announced that it filed its Form 10-K with the Securities and Exchange Commission on April 15, 2024.
“Following 2023’s significant growth, 2024 will be a period of measured expansion with a focus on acquiring the long-term operating rights to higher end (3.5 star to 4.5 star) hotel properties, a commitment to improving our working capital, receivables, and cash flow profile, capturing the benefits of scale from our portfolio, enhancing the guest experience, and continuing to fortify our executive team and board,” said Brian Ferdinand, Chairman. “We believe that we are playing a critical role in the current CRE ecosystem by allowing hotel owners and landlords to utilize our Triple Net Lease option to realize a fixed, stable, and financeable cash flow while maintaining the equity value of their properties. We have a robust pipeline of hotel operating rights acquisition opportunities in our core markets to pursue as our capital resources allow, the support of Wyndham, and a refreshed executive team and board that will help us to fully capture the opportunities ahead of us.”
“Our results for 2023 reflect the actions necessary to address various legacy issues, decrease financial and operating risk, and mitigate the effects of future headwinds,” said Shanoop Kothari, Co-CEO and Chief Financial Officer. “The majority of the cash and non-cash costs and expenses we recorded in 2023 to address these matters are not expected to recur, nor should they mask the underlying strength of our business and promising outlook. We believe that we have properly aligned our operations to the market, stripped away operational drags to our financial performance, fortified our fiscal foundation, and put ourselves on the path to generate improving results in 2024 and make ourselves more attractive to potential sources of capital.”
Select Full Year 2023 Financial Results
All comparisons are to the full year ended December 31, 2022 (“FY 2022”) as audited, unless otherwise stated.
Results for 2023 reflected a one-time negative impact from the onboarding of the Company’s initial hotels to the Wyndham platform (“Wyndham transition”) in Q3 and Q4 2023, during which time these hotel rooms were not available for rent. This was a one-time occurrence and not expected to be repeated in 2024.
Select Q4 2023 Financial Results
All comparisons are to the fourth quarter ended December 31, 2022 (“Q4 2022”) unless otherwise stated.
Surety Agreement
As previously disclosed, the Company entered into a master collateral trust agreement that provides up to an aggregate of $10 million in surety bonds that can be used to fund deposit requirements under long-term hotel leases. The provider of the bond is currently rated A+ by A.M. Best (Superior).
Property Summary
As previously disclosed, the Company surrendered four properties representing less than 200 keys in total that had created a consistent drag on its operating results and decided to not move forward on a previously agreed to Master Lease Agreement due to repairs not being completed by the landlord. Given the pro forma effect of these actions, as of December 31, 2023 the Company leased 14 properties with 1,406 units available for rent with an average weighted lease term of 14.2 years and 19.0 years, including extension options.
2024 Outlook and Guidance
For the first quarter ended March 31, 2024:
For full year 2024, the Company reiterated its commitment to the following priorities:
The Company expects to increase net rental revenue in 2024 and will provide more specific guidance over the coming quarters.
Investor Call
The Company will host a conference call on Tuesday, April 16, 2024 at 9:00 am Eastern Time to discuss the results.
Investors interested in participating in the live call can dial:
A simultaneous webcast of the call may be accessed online from the Events & Presentations section of the Investor Relations page of the Company’s website at www.luxurbanhotels.com. You may pre-register for the webcast using this link: https://events.q4inc.com/attendee/690991736
LuxUrban Hotels Inc.
LuxUrban Hotels Inc. secures long-term operating rights for entire hotels through Master Lease Agreements (MLA) and rents out, on a short-term basis, hotel rooms to business and vacation travelers. The Company is strategically building a portfolio of hotel properties in destination cities by capitalizing on the dislocation in commercial real estate markets and the large amount of debt maturity obligations on those assets coming due with a lack of available options for owners of those assets. LuxUrban’s MLA allows owners to hold onto their assets and retain their equity value while LuxUrban operates and owns the cash flows of the operating business for the life of the MLA. Through its partnership with Wyndham Hotels & Resorts, the largest hotel company in the world by rooms, LuxUrban gains several competitive advantages including joint branding for marketing, sales, and distribution, capital allocation from Wyndham for each hotel it acquires, and ongoing customer support and training across its portfolio.
Non-GAAP Information
The Company defines EBITDA as net income (loss) before income taxes and other taxes, interest and financing costs, non-cash compensation expense, non-cash expenses associated with common stock issuance and stock options, non-cash rent expense amortization, depreciation, amortization, allowances, and CECL, non-cash financing costs, costs associated with its exit from SoBeNY and deposit surrender, incremental processing and channel financing fees, non-cash write offs associated with its exit from the apartment rental business, and bad debt expense. Adjusted EBITDA is defined as EBITDA less the estimated impact of the Wyndham transition.
The Company seeks to achieve profitable, long-term growth by monitoring and analyzing key operating metrics, including EBITDA and Adjusted EBITDA. The Company’s management uses these non-GAAP financial metrics and related computations to evaluate and manage the business and to plan and make near and long-term operating and strategic decisions. The management team believes these non-GAAP financial metrics are useful to investors to provide supplemental information in addition to the GAAP financial results. Management reviews the use of its primary key operating metrics from time-to-time.
EBITDA and Adjusted EBITDA are not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to similarly titled measures of performance of other companies in other industries or within the same industry. The Company’s management team believes it is useful to provide investors with the same financial information that it uses internally to make comparisons of historical operating results, identify trends in underlying operating results, and evaluate its business.
Attached to this release is a reconciliation of the non-GAAP measures of EBITDA and Adjusted EBITDA, which management believes are the nearest correlated GAAP measures.
Forward Looking Statements
This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). The statements contained in this release that are not purely historical are forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Generally, the words “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this release may include, for example, statements with respect to the success of the Company’s collaboration with Wyndham Hotels & Resorts, scheduled property openings, expected closing of noted lease transactions, the Company’s ability to continue closing on additional leases for properties in the Company’s pipeline, as well the Company’s anticipated ability to commercialize efficiently and profitably the properties it leases and will lease in the future. The forward-looking statements contained in this release are based on current expectations and belief concerning future developments and their potential effect on the Company. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements are subject to a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results of performance to be materially different from those expressed or implied by these forward-looking statements, including those set forth under the caption “Risk Factors” in our public filings with the SEC, including in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on April 15, 2024, and any updates to those factors as set forth in subsequent Quarterly Reports on Form 10-Q or other public filings with the SEC. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.
Condensed Consolidated Balance Sheets
December 31,
December 31,
2023
2022
ASSETS
Current Assets
Cash and Cash Equivalents
$
752,848
$
1,076,402
Treasury Bills
-
2,661,382
Accounts Receivable, Net
329,887
-
Channel Retained Funds, Net
1,500,000
1,500,000
Processor Retained Funds, Net
2,633,926
5,234,220
Receivables from On-Line Travel Agencies, Net
6,936,254
-
Receivables from City of New York and Landlords, Net
4,585,370
-
Prepaid Expenses and Other Current Assets
1,959,022
963,300
Prepaid Guarantee Trust - Related Party
1,023,750
-
Security Deposits - Current
-
112,290
Total Current Assets
19,721,057
11,547,594
Other Assets
Furniture, Equipment and Leasehold Improvements, Net
691,235
197,129
Restricted Cash
-
1,100,000
Security Deposits - Noncurrent
20,307,413
11,233,385
Other Noncurrent Assets
960,729
559,838
Operating Lease Right-Of-Use Assets, Net
241,613,588
83,325,075
Total Other Assets
263,572,965
96,415,427
Total Assets
$
283,294,022
$
107,963,021
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses
$
23,182,305
$
6,252,491
Bookings Received in Advance
4,404,216
2,566,504
Short Term Business Financing, Net
1,115,120
2,003,015
Loans Payable - Current
1,654,589
10,324,519
Initial Direct Costs Leases - Current
486,390
Operating Lease Liabilities - Current
1,982,281
4,293,085
Development Incentive Advances - Current
300,840
-
Total Current Liabilities
33,125,741
25,439,614
Long-Term Liabilities
Loans Payable
1,459,172
1,689,193
Development Incentive Advances – Noncurrent
5,667,857
-
Security Deposit Letter of Credit
-
2,500,000
Initial Direct Costs Leases - Noncurrent
4,050,000
Operating Lease Liabilities - Noncurrent
242,488,610
81,626,338
Total Long-Term Liabilities
253,665,639
85,815,531
Total Liabilities
286,791,380
111,255,145
Mezzanine Equity
13% Redeemable Preferred Stock; Liquidation Preference $25 per Share; 10,000,000 Shares Authorized; 294,144 and 0 shares issued and outstanding at December 31, 2023 and 2022
5,775,596
-
Commitments and Contingencies
Stockholders’ Deficit
Common Stock (90,000,000 shares authorized, issued, outstanding - 39,462,440, and
27,691,918, respectively)
394
276
Additional Paid In Capital
90,437,155
17,726,592
Accumulated Deficit
(99,710,503
)
(21,018,992
)
Total Stockholders’ Deficit
(9,272,954
)
(3,292,124
)
Total Liabilities and Stockholders’ Deficit
$
283,294,022
$
107,963,021
Condensed Consolidated Statement of Operations
For The Year Ended December 31,
2023
2022
Net Rental Revenue
$
113,397,012
$
43,825,424
Rent Expense
26,779,821
10,340,188
Non-Cash Rent Expense Amortization
8,169,833
1,894,731
Surrender of Deposits
2,961,058
-
Other Property Level Expenses
66,553,940
19,215,156
Total Cost of Revenue
104,464,652
31,450,075
Gross Profit
8,932,360
12,375,349
General and Administrative Expenses
15,587,297
6,794,111
Non-Cash Issuance of Common Stock for Operating Expenses
1,664,601
-
Non-Cash Stock Compensation Expense
9,310,843
2,547,536
Non-Cash Stock Option Expense
674,818
-
Costs Associated with Apartment Rental and Hotel Exits
12,237,728
4,103,898
Non-Cash Write-Off of Net Right-of-Use Assets Associated with Apartment Rental Exit
-
2,385,995
Total Operating Expenses
39,474,927
15,831,540
Loss from Operations
(30,542,567
)
(3,456,191
)
Other Income (Expense)
Other Income
1,236,690
1,584,105
Cash Interest and Financing Costs
(7,983,134
)
(5,483,891
)
Non-Cash Financing Costs
(41,234,366
)
(2,034,376
)
Total Other Expense
(47,980,810
)
(5,934,162
)
Loss Before Provision for Income Taxes
(78,523,377
)
(9,390,353
)
Provision for Income Taxes
-
-
Net Loss
$
(78,523,377
)
$
(9,390,353
)
Preferred Stock Dividend
(168,134
)
-
Net Loss Attributable to Common Stockholders
$
(78,691,511
)
$
(9,390,353
)
Basic Loss Per Common Share
$
(2.05
)
$
(0.40
)
Diluted Loss Per Common Share
$
(2.05
)
$
(0.40
)
Basic Weighted Average Number of Common Shares Outstanding
38,433,422
23,432,870
Diluted Weighted Average Number of Common Shares Outstanding
38,433,422
23,432,870
Non-GAAP Financial Measures
To supplement the condensed consolidated financial statements, which are prepared in accordance with GAAP, we use EBITDA and Adjusted EBITDA as non-GAAP financial measures. We define EBITDA and Adjusted EBITDA above in the paragraph entitled “Non-GAAP Information.”
The following table provides reconciliation of our net income (loss) to EBITDA and Adjusted EBITDA.
For The Year Ended
($ in millions)
December 31,
2023
2022
Net Income (Loss)
$
(78,523,377)
$
(9,390,353)
Provision for Income Taxes and Other Taxes
8,207,385
591,968
Interest and Financing Costs
7,983,134
5,483,891
Non-Cash Compensation Expense
9,310,483
2,547,536
Non-Cash Issuance of Common Stock for Operating Expenses
1,664,601
-
Non-Cash Stock Option Expense
674,818
-
Non-Cash Rent Expense Amortization
8,169,833
1,894,731
Depreciation, Amortization Expense, Allowances, & CECL
2,012,154
2,071,054
Non-Cash Financing Costs
41,234,366
2,034,376
Exit Apartment Rental and Restructuring Costs / Deposit Surrender
15,198,786
4,103,898
Incremental Processing and Channel Financing Fees for Credit Risk
5,555,896
2,527,543
Legacy Union Costs
-
-
Non-Cash Write-Off of Net Right-of-Use Assets Associated with Apartment Rental Exit
-
2,385,995
Bad Debt Expense
3,830,073
-
EBITDA
$
25,318,152
$
14,250,639
Estimated Net Wyndham Transition Impact
4,475,000
-
Adjusted EBITDA
$
29,793,152
$
14,250,639
1The Company defines Total RevPAR (or TRevPAR) as total revenue received by the Company inclusive of room rental rates, ancillary fees (which include but are not limited to resort fees, late/early check-in, baggage fees, parking fees paid to us, and upgrade fees), cancellation fees, taxes (including other pass-through expenses) and other miscellaneous income received by the Company, divided by the average available rooms for rent during a given period.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240414026581/en/
Shanoop Kothari Co-Chief Executive Officer & Chief Financial Officer LuxUrban Hotels Inc. shanoop@luxurbanhotels.com
Devin Sullivan Managing Director The Equity Group Inc. dsullivan@equityny.com
Conor Rodriguez, Analyst crodriguez@equityny.com
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