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Caliber(CWD) - 2024 Q2 - Earnings Call Transcript
CWDCaliber(CWD)2024-08-12 23:30
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Financial Data and Key Metrics Changes - Total consolidated revenue for Q2 2024 was 8.2million,adecreaseof608.2 million, a decrease of 60% year-over-year due to the deconsolidation of Caliber Hospitality, LP and Elliot 10 [15] - Consolidated expenses declined by 59.7% to 12.7 million, also attributed to the deconsolidation [16] - Net loss attributed to Caliber was 4.7millionor4.7 million or 0.22 per diluted share, compared to a net loss of 5.7millionor5.7 million or 0.29 per diluted share in the same period last year [16] - Adjusted EBITDA loss for Q2 was 2.4million,slightlyworsethantheadjustedEBITDAlossof2.4 million, slightly worse than the adjusted EBITDA loss of 2.3 million in the prior year [17] - Total managed capital increased by 32.2millionor7.432.2 million or 7.4% from 438 million to 470millionfromDecember31,2023,toJune30,2024[18]BusinessLineDataandKeyMetricsChanges−Consolidatedassetmanagementrevenuesincreasedby70.3470 million from December 31, 2023, to June 30, 2024 [18] Business Line Data and Key Metrics Changes - Consolidated asset management revenues increased by 70.3%, offsetting some losses from other revenue streams [15] - Fund setup fees increased significantly to 665,000 from 9,000intheprioryearduetonewfundofferings[17]−Fundmanagementfeesroseby12.59,000 in the prior year due to new fund offerings [17] - Fund management fees rose by 12.5% to 2.7 million, driven by an increase in managed capital and fees from the Caliber Hospitality Trust [17] - Development and construction fees decreased by 50.1% due to reduced activities compared to the previous year [17] Market Data and Key Metrics Changes - The real estate market has seen a significant drop in value, creating opportunities for acquiring income-generating assets [5] - The company is focusing on acquiring more income-generating real estate investments, with plans to close on 1billionofassetsintheCaliberHospitalityTrust[5][6]CompanyStrategyandDevelopmentDirection−Caliberhassetthreeprioritiesforrevenuegrowth:acquiringmoreincome−generatingrealestateinvestments,providingmoresingleassetinvestmentofferings,andcompletingexistingdevelopments[5][8]−ThecompanyaimstoreturntopositiveEBITDAinQ42024andpositivenetoperatingincomein2025[4]−Thestrategyincludesleveragingtechnologyandoptimizingthego−to−marketstrategytoenhancefundraisingcapabilities[11]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinachievingmediumandlong−termgrowthprospectsdespitecurrentmarketchallenges[11]−Thecompanyisfocusedonmanagingredemptionrequestseffectivelyandmaximizingreturnsforallinvestors[22]−Managementreiteratedthatthe1 billion of assets in the Caliber Hospitality Trust [5][6] Company Strategy and Development Direction - Caliber has set three priorities for revenue growth: acquiring more income-generating real estate investments, providing more single asset investment offerings, and completing existing developments [5][8] - The company aims to return to positive EBITDA in Q4 2024 and positive net operating income in 2025 [4] - The strategy includes leveraging technology and optimizing the go-to-market strategy to enhance fundraising capabilities [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving medium and long-term growth prospects despite current market challenges [11] - The company is focused on managing redemption requests effectively and maximizing returns for all investors [22] - Management reiterated that the 3 billion targeted AUM by 2026 remains unchanged and achievable [27] Other Important Information - The company has initiated cost reduction measures, expecting to realize 6.5millioninannualizedsavingsstartinginthesecondhalfof2024[11]−Caliberhasmadeprogressinrefinancingitsunsecureddebt,havingpaidoffapproximately6.5 million in annualized savings starting in the second half of 2024 [11] - Caliber has made progress in refinancing its unsecured debt, having paid off approximately 4.2 million and extended 27.4 million in debt [12] Q&A Session Summary Question: Fundraising trends in Q2 - Fundraising in Q2 increased to approximately 20 million, doubling from the first quarter, driven by Caliber Hospitality Trust and retail group [20] Question: Redemption trends - Redemption requests have increased but are being managed effectively, with no forced asset sales [22] Question: Single asset investment offerings - Single asset offerings are easier for investors to understand and align with current market preferences, enhancing fundraising efforts [23][24] Question: Confidence in achieving 3billionAUMtarget−Confidenceinthe3 billion AUM target - Confidence in the 3 billion AUM target remains strong, with plans accounting for current market conditions [27]