XpresSpa Group(US:XWEL)2022-11-14 00:41Financial Data and Key Metrics Changes - In Q3 2022, total revenue was $10.7 million, a decline from $26.8 million in the prior year, primarily due to reduced demand at Express Check testing facilities [27] - The operating loss for the quarter was $7.6 million, compared to an operating profit of $7.1 million in the prior year [29] - Net loss attributable to common shareholders was $7.2 million, down from a net income of $5.6 million in the prior year [29] - Adjusted EBITDA was minus $4.5 million, compared to $8.7 million in the prior year [32] Business Line Data and Key Metrics Changes - Revenue from reopened Express spa locations was $4 million, with an additional $1.8 million from the biosurveillance partnership and $4.3 million from XpressCheck locations [27] - Retail sales historically accounted for approximately 17% of total revenue, with expectations of a sequential growth of 15% to 25% in Q1 2023 [13][14] Market Data and Key Metrics Changes - The company is expanding its international presence, with plans to open a 12th international location at Abu Dhabi International Airport in Q1 2023 [9] - The company has opened new locations in Istanbul, with plans for further expansion in the region [40][42] Company Strategy and Development Direction - The company is focused on a leaner business model with a path to profitability, emphasizing retail strategy and international expansion [5][19] - A new corporate identity was unveiled, and the company began trading under the new NASDAQ ticker symbol XWEL [6] - The company is exploring acquisition opportunities to diversify and grow its revenue base [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in emerging as a leaner and profitable company, with ongoing efforts to remove costs and optimize operations [25][54] - The company is optimistic about growth opportunities in both retail and international markets, with a focus on enhancing customer experience [52][54] Other Important Information - The company has successfully removed approximately $1 million in costs from its system and plans to close additional unprofitable locations [30][21] - Liquidity remains strong with cash and cash equivalents totaling $49.4 million and no long-term debt [31] Q&A Session Summary Question: Insight on XWELL's brands expanding into local communities - Management confirmed that expanding outside the airport is part of the overall strategy, with plans for strategic acquisitions in off-airport health and wellness businesses [35][36] Question: Update on M&A agreement with Benchmark - Management is actively looking at 3 to 4 potential acquisition opportunities but has no definitive agreements in place yet [38] Question: Plans to increase XWELL's global reach - Management highlighted ongoing international expansion efforts, including new locations in Istanbul and plans for Abu Dhabi [40][42] Question: Staffing trends and hiring challenges - Management acknowledged challenges in the labor market but noted improvements in recruiting tactics and staffing efforts [44][45] Question: Reduction of expenses and path to profitability - Management discussed the plan to reduce costs by over $1 million a month, which is expected to accelerate the path to profitability [46][48] Question: Future of XpressCheck footprint - Management confirmed the closure of unprofitable XpressCheck locations, entering 2023 with a streamlined operation [49][50] Question: Growth outlook for next year - Management expressed optimism about growth opportunities through core business improvements, international expansion, and potential acquisitions [52][54]