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Share Name | Share Symbol | Market | Type |
---|---|---|---|
XpresSpa Group Inc | NASDAQ:XSPA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.655 | 0.6501 | 0.68 | 0 | 01:00:00 |
Doug Satzman, XpresSpa Group CEO, stated, “Third quarter results demonstrate that our business turnaround is continuing to take shape, although it is still early in the process. We generated our second consecutive quarter of positive comparable store sales growth, substantially increased our average sales per store, held store margin nearly steady despite a total revenues decline, substantially lowered our G&A expenditures, and recorded a significant reduction in our operating loss from continuing operations.”
Mr. Satzman continued, “Through a series of debt and equity transactions and with our stockholders’ approval, our balance sheet has been meaningfully improved and the previous preferred stockholders’ interests are now fully aligned through the conversion of certain preferred shares to common. We are thankful for the financial flexibility that we now have in executing our strategic priorities and look forward to building upon what we have already accomplished during the upcoming holiday travel season and beyond.”
Mr. Satzman added, “We are strengthening our store portfolio through disciplined growth, select renovations, and targeted closures. In September 2019, we opened our first franchised-operated spa as well as a second company-operated spa in Austin. On November 1, we opened our third spa in Las Vegas and we intend to open our fourth spa in Atlanta before Christmas. In addition, we are also elevating brand perceptions through our remodeling efforts with seven projects completed to date. Finally, we have pruned low volume and unprofitable locations out of lease cycle from the XpresSpa footprint, providing an immediate boost to our performance.”
Mr. Satzman concluded, “We are making progress in expanding and forging new strategic partnerships with brands that share our commitment to health and wellness. Specifically, our relationship with Calm.com for sleep, meditation, and relaxation products has been extended and broadened through July 31, 2021 while we recently announced a new partnership with Persona™, a leading personalized vitamin subscription program, through which we will offer subscriptions and retail nutrition packs which are designed especially for travelers through our stores. Our high-visibility real estate and affluent customer base make XpresSpa a desirable health and wellness partner for other innovative companies and we will continue to work on securing additional strategic partnerships.”
Strategic priorities:
Third Quarter 2019 Highlights
*Comparable Store Sales and Adjusted EBITDA are a non-GAAP financial measure; see "Use of Non-GAAP Financial Measures" below. See tables below for abbreviated financial results for the third quarters 2019 and 2018.
Conference Call
XpresSpa Group, Inc. will host a conference call today at 5:00 p.m. Eastern Time. The conference call can be accessed live over the phone by dialing (631) 891-4304. A replay will be available after the call and can be accessed by dialing (412) 317-6671; the passcode is 10008086. The replay will be available until November 28, 2019.
The webcast can be accessed from Investor Relations section of the Company’s website at http://xpresspagroup.com. Visitors to the website should select the “Investors” tab and navigate to the “Events” link to access the webcast.
About XpresSpa Group, Inc.
XpresSpa Group, Inc. (Nasdaq: XSPA) is a health and wellness holding company. XpresSpa Group’s core asset, XpresSpa, is a leading airport retailer of spa services and related products, with 52 locations in 25 airports globally. XpresSpa offers services that are tailored specifically to the busy travel customer. XpresSpa is committed to providing exceptional customer experiences with its innovative premium spa services, as well as exclusive luxury travel products and accessories. XpresSpa serves almost one million customers per year at its locations in the United States, Netherlands, and the United Arab Emirates. To learn more about XpresSpa Group, visit: www.XpresSpaGroup.com. To learn more about XpresSpa, visit www.XpresSpa.com
Forward-Looking Statements
This press release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These include statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "estimates," "projects," "intends," "should," "seeks," "future," "continue," or the negative of such terms, or other comparable terminology. Forward-looking statements relating to expectations about future results or events are based upon information available to XpresSpa Group as of today's date, and are not guarantees of the future performance of the company, and actual results may vary materially from the results and expectations discussed. Additional information concerning these and other risks is contained in XpresSpa Group’s most recently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q, recent Current Reports on Form 8-K and other SEC filings. All subsequent written and oral forward-looking statements concerning XpresSpa Group, or other matters and attributable to XpresSpa Group or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. XpresSpa Group does not undertake any obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Relations:ICRRaphael Gross(203) 682-8253
XpresSpa Group, Inc. and SubsidiariesCONSOLIDATED CONDENSED BALANCE SHEETS(In thousands, except share and per share data)
September 30, 2019 (Unaudited) | December 31, 2018 | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 2,432 | $ | 3,403 | ||||
Retail inventory | 854 | 782 | ||||||
Other current assets | 690 | 1,574 | ||||||
Total current assets | 3,976 | 5,759 | ||||||
Restricted cash | 451 | 487 | ||||||
Property and equipment, net | 9,621 | 11,795 | ||||||
Intangible assets, net | 7,358 | 9,167 | ||||||
Operating lease right of use assets, net | 9,818 | — | ||||||
Other assets | 2,494 | 3,376 | ||||||
Total assets | $ | 33,718 | $ | 30,584 | ||||
Current liabilities | ||||||||
Accounts payable, accrued expenses and other | $ | 7,761 | $ | 8,172 | ||||
Senior secured note | — | 6,500 | ||||||
Convertible notes, net | — | 1,986 | ||||||
Total current liabilities | 7,761 | 16,658 | ||||||
Senior secured note, net | 4,153 | — | ||||||
Convertible note, net | 1,046 | — | ||||||
Derivative liabilities | 6,088 | 476 | ||||||
Operating lease liabilities | 9,818 | — | ||||||
Other liabilities | 315 | 315 | ||||||
Total liabilities | 29,181 | 17,449 | ||||||
Commitments and contingencies (see Note 16) | ||||||||
Stockholders’ equity * | ||||||||
Series A Convertible Preferred Stock, $0.01 par value per share; 6,968 shares authorized; 6,673 issued and none outstanding | — | — | ||||||
Series C Junior Preferred Stock, $0.01 par value per share; 300,000 shares authorized; none issued and outstanding | — | — | ||||||
Series D Convertible Preferred Stock, $0.01 par value per share; 500,000 shares authorized; 480,417 shares issued and 425,750 shares outstanding as of both periods with a liquidation value of $20,436 | 4 | 4 | ||||||
Series E Convertible Preferred Stock, $0.01 par value per share, 2,397,060 shares authorized; 967,742 issued and outstanding as of both periods with a liquidation value of $3,000 | 10 | 10 | ||||||
Series F Convertible Preferred Stock, $0.01 par value per share, 9,000 shares authorized; 8,996 shares issued and outstanding at September 30, 2019 and none at December 31, 2018 with a liquidation value of $900 | — | — | ||||||
Common Stock, $0.01 par value per share; 150,000,000 shares authorized; 2,918,169 and 1,761,802 issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 363 | 352 | ||||||
Additional paid-in capital | 301,601 | 295,904 | ||||||
Accumulated deficit | (301,068 | ) | (286,913 | ) | ||||
Accumulated other comprehensive loss | (360 | ) | (251 | ) | ||||
Total stockholders’ equity attributable to common shareholders | 550 | 9,106 | ||||||
Noncontrolling interests | 3,987 | 4,029 | ||||||
Total stockholders’ equity | 4,537 | 13,135 | ||||||
Total liabilities and stockholders’ equity | $ | 33,718 | $ | 30,584 |
*Adjusted, where applicable, to reflect the impact of the 1:20 reverse stock split that became effective on February 22, 2019.
The accompanying notes form an integral part of these consolidated condensed financial statements.
XpresSpa Group, Inc. and SubsidiariesCONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(Unaudited)(In thousands, except share and per share data)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue | ||||||||||||||||
Services | $ | 10,230 | $ | 10,391 | $ | 30,704 | $ | 31,220 | ||||||||
Products | 2,301 | 2,531 | 5,781 | 6,540 | ||||||||||||
Other | — | — | 1,184 | 800 | ||||||||||||
Total revenue | 12,531 | 12,922 | 37,669 | 38,560 | ||||||||||||
Cost of sales | ||||||||||||||||
Labor | 5,842 | 5,997 | 17,507 | 18,697 | ||||||||||||
Occupancy | 1,894 | 1,996 | 5,811 | 6,216 | ||||||||||||
Products and other operating costs | 1,953 | 1,992 | 5,322 | 5,208 | ||||||||||||
Total cost of sales | 9,689 | 9,985 | 28,640 | 30,121 | ||||||||||||
General and administrative | 3,108 | 3,943 | 9,204 | 12,443 | ||||||||||||
Depreciation and amortization | 1,464 | 1,879 | 4,692 | 5,375 | ||||||||||||
Impairment of assets | 106 | — | 936 | — | ||||||||||||
Impairment of goodwill | — | — | — | 19,630 | ||||||||||||
Total operating expenses | 14,367 | 15,807 | 43,472 | 67,569 | ||||||||||||
Operating loss from continuing operations | (1,836 | ) | (2,885 | ) | (5,803 | ) | (29,009 | ) | ||||||||
Interest expense | (780 | ) | (624 | ) | (2,052 | ) | (1,212 | ) | ||||||||
Other non-operating income (expense), net | (2,161 | ) | 378 | (5,817 | ) | 877 | ||||||||||
Loss from continuing operations before income taxes | (4,777 | ) | (3,131 | ) | (13,672 | ) | (29,344 | ) | ||||||||
Income tax benefit | 143 | 66 | 101 | 198 | ||||||||||||
Loss from continuing operations after income taxes | (4,634 | ) | (3,065 | ) | (13,571 | ) | (29,146 | ) | ||||||||
Loss from discontinued operations, net of income taxes | — | — | — | (1,115 | ) | |||||||||||
Net loss | (4,634 | ) | (3,065 | ) | (13,571 | ) | (30,261 | ) | ||||||||
Net income attributable to noncontrolling interests | (210 | ) | (122 | ) | (584 | ) | (382 | ) | ||||||||
Net loss attributable to common shareholders | $ | (4,844 | ) | $ | (3,187 | ) | $ | (14,155 | ) | $ | (30,643 | ) | ||||
Loss from continuing operations | $ | (4,634 | ) | $ | (3,065 | ) | $ | (13,571 | ) | $ | (29,146 | ) | ||||
Other comprehensive income (loss) from continuing operations | 82 | (3 | ) | (109 | ) | (205 | ) | |||||||||
Comprehensive loss from continuing operations | (4,552 | ) | (3,068 | ) | (13,680 | ) | (29,351 | ) | ||||||||
Comprehensive loss from discontinued operations | — | — | — | (1,115 | ) | |||||||||||
Comprehensive loss | $ | (4,552 | ) | $ | (3,068 | ) | $ | (13,680 | ) | $ | (30,466 | ) | ||||
Loss per share attributable to common shareholders | ||||||||||||||||
Loss per share from continuing operations | $ | (1.68 | ) | $ | (2.25 | ) | $ | (6.33 | ) | $ | (21.66 | ) | ||||
Loss per share from discontinued operations | — | — | — | (.82 | ) | |||||||||||
Basic and diluted net loss per common share | $ | (1.68 | ) | $ | (2.25 | ) | $ | (6.33 | ) | $ | (22.48 | ) | ||||
Weighted-average number of shares outstanding during the period*: | ||||||||||||||||
Basic | 2,875,501 | 1,417,614 | 2,236,323 | 1,363,440 | ||||||||||||
Diluted | 2,875,501 | 1,417,614 | 2,236,323 | 1,363,440 |
*Adjusted to reflect the impact of the 1:20 reverse stock split that became effective on February 22, 2019.
The accompanying notes form an integral part of these consolidated condensed financial statements.
Q3 2019 Adjusted EBITDA (loss)(amounts in thousands)
Three months endedSeptember 30, | Nine months endedSeptember 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue | ||||||||||||||||
Services | $ | 10,230 | $ | 10,391 | $ | 30,704 | $ | 31,220 | ||||||||
Products | 2,301 | 2,531 | 5,781 | 6,540 | ||||||||||||
Other | — | — | 1,184 | 800 | ||||||||||||
Total revenue | 12,531 | 12,922 | 37,669 | 38,560 | ||||||||||||
Cost of sales | ||||||||||||||||
Labor | 5,842 | 5,997 | 17,507 | 18,697 | ||||||||||||
Occupancy | 1,894 | 1,996 | 5,811 | 6,216 | ||||||||||||
Products and other operating costs | 1,953 | 1,992 | 5,322 | 5,208 | ||||||||||||
Total cost of sales | 9,689 | 9,985 | 28,640 | 30,121 | ||||||||||||
Depreciation, amortization and impairment | ||||||||||||||||
Depreciation and amortization | 1,464 | 1,879 | 4,692 | 5,375 | ||||||||||||
Impairment of assets | 106 | — | 936 | — | ||||||||||||
Impairment of goodwill | — | — | — | 19,630 | ||||||||||||
Total depreciation, amortization and impairment | 1,570 | 1,879 | 5,628 | 25,005 | ||||||||||||
Total general and administrative expense | 3,108 | 3,943 | 9,204 | 12,443 | ||||||||||||
Loss from continuing operations | (1,836 | ) | (2,885 | ) | (5,803 | ) | (29,009 | ) | ||||||||
Interest expense | (780 | ) | (624 | ) | (2,052 | ) | (1,212 | ) | ||||||||
Other non-operating income (expense), net | (2,161 | ) | 378 | (5,817 | ) | 877 | ||||||||||
Loss from continuing operations before income taxes | (4,777 | ) | (3,131 | ) | (13,672 | ) | (29,344 | ) | ||||||||
Income tax benefit | 143 | 66 | 101 | 198 | ||||||||||||
Loss from continuing operations | (4,634 | ) | (3,065 | ) | (13,571 | ) | (29,146 | ) | ||||||||
Loss from discontinued operations, net of income taxes | — | — | — | (1,115 | ) | |||||||||||
Net loss | (4,634 | ) | (3,065 | ) | (13,571 | ) | (30,261 | ) | ||||||||
Net income attributable to noncontrolling interests | (210 | ) | (122 | ) | (584 | ) | (382 | ) | ||||||||
Net loss attributable to common shareholders | $ | (4,844 | ) | $ | (3,187 | ) | $ | (14,155 | ) | $ | (30,643 | ) | ||||
Operating loss from continuing operations | $ | (1,836 | ) | $ | (2,885 | ) | $ | (5,803 | ) | $ | (29,009 | ) | ||||
Add back: | ||||||||||||||||
Depreciation, amortization and impairment of assets | 1,570 | 1,879 | 5,628 | 5,375 | ||||||||||||
Financing transaction, acquisition integration and other one-time costs | 138 | 452 | 363 | 1,057 | ||||||||||||
Goodwill impairment | — | — | — | 19,630 | ||||||||||||
Stock-based compensation expense | 35 | 194 | 266 | 765 | ||||||||||||
Less: | ||||||||||||||||
Net income attributable to noncontrolling interests | (210 | ) | (3 | ) | (584 | ) | (382 | ) | ||||||||
Adjusted EBITDA (loss) | $ | (303 | ) | $ | (363 | ) | $ | (130 | ) | $ | (2,564 | ) |
Same Store Sales
We use GAAP and non-GAAP measurements to assess the trends in our business, including comparable store sales, a non-GAAP measure we define as current period sales from stores opened more than 12 months compared to those same stores’ sales in the prior year period (“Comp Store Sales”). The measurement of Comp Store Sales on a daily, weekly, monthly, quarterly and year-to-date basis provides an additional perspective on XpresSpa’s total sales growth when considering the influence of new unit contribution. Revenue from Comp and Non-Comp Store sales is presented below:
Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2018 | % Inc/(Dec) | ||||||||||||||||||||||||||
Comp Store | Non-Comp Store | Total | Comp Store | Non-Comp Store | Total | Comp Store | ||||||||||||||||||||||
Products and Services | $ | 35,642 | $ | 843 | $ | 36,485 | $ | 34,878 | $ | 2,882 | $ | 37,760 | 2.2 | % |
Comp Store Sales increased 2.2% during the nine months ended September 30, 2019 as compared to the same period in 2018. XpresSpa had 51 open locations during the nine months ended September 30, 2019 and 57 open locations during the comparable period of 2018. Comp Store sales increased despite having six fewer stores open primarily due to an increase in the average ticket per transaction and by fixing retail supplier issues and upselling services.
We plan to grow XpresSpa by continuing to focus on spa-level productivity and leveraging retail partnerships to increase units per transaction, which will contribute to the growth of the Comp Store Sales and through the opening of new locations.
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