LuxUrban Hotels (LUXH) - 2024 Q1 - Quarterly Results

Financial Highlights and Business Update LuxUrban Hotels Inc. reported increased Q1 2024 net rental revenue and adjusted EBITDA, with strategic focus on operational stability and financial health Key Financial Metrics | Metric | Q1 2024 | YoY Change | | :--- | :--- | :--- | | Net Rental Revenue | $29.1 million | +27.6% | | Adjusted EBITDA | $2.5 million | -37.5% (from $4.0M in Q1 2023) | - The company has undertaken a series of actions to stabilize operations and refine its strategy, including the significant decision to terminate its franchise partnership with Wyndham[3] - Key priorities for 2024 include improving working capital and cash flow, strengthening the balance sheet, and achieving organic revenue growth through revenue management and ancillary revenues[3] Q1 2024 Financial Performance Q1 2024 net rental revenue increased due to more units, but a gross loss and higher net loss resulted from increased expenses and non-recurring costs - As of March 31, 2024, the company leased 13 properties with 1,341 units available for rent, with average weighted lease terms of 15.2 years, extending to 19.5 years with options[5] - Revenue growth was driven by an increase in average units available to rent from 571 to 1,535, but was partially offset by lower Total RevPAR (TRevPAR) due to unit mix and the exit from the Wyndham franchise partnership[6] - Total operating expenses rose to $7.6 million, largely due to $2.7 million in non-cash, non-recurring costs from the franchise partnership exit and $1.6 million in other non-cash charges like stock compensation[6] Q1 Financial Performance Summary | Financial Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Rental Revenue | $29.1 million | $22.8 million | | Gross Profit (Loss) | $(4.6) million | $5.4 million | | Net Loss | $(16.8) million | $(2.8) million | | Adjusted EBITDA | $2.5 million | $4.0 million | Strategic Developments LuxUrban terminated its Wyndham franchise agreements on May 6, 2024, a strategic move for long-term independent operation, with de-platforming expected by month-end - The company terminated its franchise agreements with Wyndham Hotels & Resorts on May 6, 2024, for all properties under the partnership[7] - The process of de-platforming from Wyndham's systems and bringing hotel listings back under full company control is expected to be completed by the end of May 2024 with minimal operational disruption[7] - The decision was made after a review by the Board and management, who concluded that returning to its origins as an independent operator would be more beneficial long-term[8] Financial Statements Unaudited Q1 2024 financial statements detail the company's financial position and performance, including balance sheet, statement of operations, and Adjusted EBITDA reconciliation Condensed Consolidated Balance Sheets As of March 31, 2024, the balance sheet shows total assets, increased total liabilities, and an increased stockholders' deficit Condensed Consolidated Balance Sheet Highlights | Balance Sheet Items | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $276,691,913 | $283,294,022 | | Total Current Assets | $20,416,565 | $19,721,057 | | Total Liabilities | $289,196,162 | $286,791,380 | | Total Current Liabilities | $51,982,785 | $33,125,741 | | Total Stockholders' Deficit | $(18,279,845) | $(9,272,954) | Condensed Consolidated Statement of Operations For Q1 2024, the company reported net rental revenue but incurred a gross loss and a significant net loss, resulting in a loss per share Condensed Consolidated Statement of Operations Summary | Income Statement Items | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Rental Revenue | $29,101,207 | $22,814,175 | | Gross (Loss) Profit | $(4,594,878) | $5,361,874 | | (Loss) Income from Operations | $(12,211,881) | $1,136,903 | | Net Loss | $(16,785,875) | $(2,780,534) | | Net Loss Attributable to Common Stockholders | $(17,024,867) | $(2,780,534) | | Diluted Loss Per Common Share | $(0.35) | $(0.10) | Non-GAAP Financial Measures Reconciliation The reconciliation from GAAP net loss to non-GAAP Adjusted EBITDA for Q1 2024 shows a net loss adjusted to a lower Adjusted EBITDA compared to Q1 2023 Adjusted EBITDA Reconciliation | Reconciliation to Adjusted EBITDA ($) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income (Loss) | $(16,785,875) | $(2,780,534) | | Adjustments (Taxes, Interest, Non-Cash items, etc.) | $19,328,119 | $6,820,310 | | Adjusted EBITDA | $2,542,244 | $4,039,776 | Supplementary Information This section provides investor conference call details, the company's business model, non-GAAP Adjusted EBITDA explanation, and forward-looking statements disclaimer - The company will host an investor conference call on Tuesday, May 14, 2024, at 9:00 am Eastern Time to discuss the results[9] - LuxUrban's business model involves securing long-term operating rights for entire hotels through Master Lease Agreements (MLAs) and renting rooms on a short-term basis to travelers[11] - The company uses Adjusted EBITDA, a non-GAAP measure, to evaluate and manage the business, defined as net income (loss) adjusted for taxes, interest, non-cash expenses, and other specific items[12][13]