FORM Holdings Corp. (Nasdaq:FH) (“FORM” or the “Company”), a
diversified holding company, today updated its shareholders on the
Company’s preliminary second quarter estimated financial results,
its unit growth objectives for the balance of 2017, as well as
initial revenue guidance for 2018. Additionally, the
Company’s efforts to establish itself as a pure-play Health &
Wellness company are ongoing with plans to complete this transition
by the end of the first quarter 2018.
Second quarter 2017 preliminary estimated
financial results for the period ended June 30, 2017:
• Wellness Segment (XpresSpa)
- Expected revenues of approximately $12.9 million, representing
a 15.3% increase versus the second quarter 2016.
- Segment-level Adjusted EBITDA* in the range of approximately
$0.9 million to $1.2 million, as compared to $0.2 million Adjusted
EBITDA loss in the quarter ended March 31, 2017. Adjusted
EBITDA is a non-GAAP financial measure; see "Use of Non-GAAP
Financial Measures" below.
• Technology (Group Mobile)
- Expected revenues of approximately $3.0 million to $4.0
million.
- Guiding to sequential margin improvement.
Wellness segment revenue projection for 2017 and
updated unit growth expectations for the period ended December 31,
2017:
• The Company is reiterating its previous 2017 revenue
guidance for its Wellness segment of approximately $50 million.
• Accelerated unit opening schedule is as follows:
- Previous expectations for two planned units continue to be on
track to open during the second half of 2017.
- An additional seven units are now anticipated to open during
the second half of 2017. These seven units have associated
lease agreements or term sheets in place.
- The Company has identified another eight units that are
presently in negotiation, some of which may open prior to year-end
2017.
Initial revenue projections for 2018:
• The Company is providing initial revenue guidance for
its Wellness segment of approximately $60 million, representing an
increase of approximately 20% from 2017 reiterated guidance of
approximately $50 million.
Such revenue estimates are subject to factors
that could adversely impact store revenues generally, as well as
the delays frequently encountered in opening new locations,
including delays in negotiating suitable lease arrangements with
landlords, receiving airport approvals and completing leasehold
improvements.
Our financial statements for the quarter ended June 30, 2017 are
not yet available and our independent registered public accounting
firm, CohnReznick LLP, has not completed its review of any
financial statements for such period. Our expectations with respect
to our unaudited results for the period discussed above are based
upon management estimates. Such results are preliminary and subject
to revision based upon the completion of our quarter-end financial
closing process and are not meant to be comprehensive for this
period. Following the completion of our quarter-end financial
closing process and review by our independent registered public
accounting firm, we may report financial results that could differ
from these estimates. While we believe that the above
information and estimates are based on reasonable assumptions, our
actual results may vary, and such variation may be material.
Factors that could cause the preliminary financial data and
estimates to differ include, but are not limited to: (i) additional
adjustments in the calculation of, or application of accounting
principles, for the financial results for the quarter ended June
30, 2017; (ii) discovery of new information that affects accounting
estimates and management’s judgment underlying these estimated
results; and (iii) the completion of the review by our independent
registered public accounting firm of our financial results for the
quarter ended June 30, 2017.
Announcing Anticipated Second Quarter 2017
Earnings Release Date:
• August 9th, 2017 at 4:30 p.m. ET (call details to be
released at a later date)
The following table provides a reconciliation of estimated
Adjusted EBITDA to Operating income (loss) for the Wellness segment
for the three months periods presented:
|
For the three months ended March 31, 2017 |
For the three months ended June 30, 2017 estimated
range |
Wellness segment -
Operating Loss |
$ |
(2,371,000 |
) |
$ |
(2,525,000 |
) |
$ |
(2,020,000 |
) |
Plus: |
|
|
|
Depreciation and
amortization |
|
1,715,000 |
|
|
3,100,000 |
|
|
2,750,000 |
|
Franchise and misc.
taxes |
|
- |
|
|
75,000 |
|
|
120,000 |
|
M&A
and integration costs |
|
484,000 |
|
|
250,000 |
|
|
350,000 |
|
Adjusted EBITDA income
(loss) |
$ |
(172,000 |
) |
$ |
900,000 |
|
$ |
1,200,000 |
|
*Use of Non-GAAP Financial Measures:
FORM uses GAAP and non-GAAP measurements to assess the trends in
its business. With respect to XpresSpa, FORM reviews XpresSpa
adjusted EBITDA, which is earnings before interest, tax,
depreciation and amortization expense, excluding one-time costs
(e.g. M&A and integration related costs).
FORM considers EBITDA and Adjusted EBITDA to be important
indicators for the performance of its business, but not measures of
performance or liquidity calculated in accordance with U.S.
GAAP. FORM has included these non-GAAP financial measures
because management utilizes this information for assessing its
performance and liquidity, and as indicators of its ability to make
capital expenditures and finance working capital
requirements. Management believes that EBITDA and Adjusted
EBITDA are measurements that are commonly used by analysts and some
investors in evaluating the performance and liquidity of companies
such as FORM. In particular, FORM believes that it is useful
for analysts and investors to understand this relationship because
it excludes transactions not related to FORM's core cash operating
activities. FORM believes that excluding these transactions
allows investors to meaningfully trend and analyze the performance
of FORM's core cash operations. EBITDA and Adjusted EBITDA
are not measures of financial performance or liquidity under GAAP
and should not be considered in isolation or as alternatives to
cash flow from operating activities or as alternatives to operating
income or as indicators of operating performance or any other
measures of performance derived in accordance with GAAP. In
evaluating FORM's performance as measured by EBITDA, management
recognizes and considers the limitations of this measurement.
EBITDA and Adjusted EBITDA do not reflect FORM's obligations for
the payment of income taxes, interest expense, or other obligations
such as capital expenditures. Accordingly, EBITDA and
Adjusted EBITDA are only two of the measurements that management
utilizes.
About FORM Holdings Corp.
FORM Holdings Corp. (NASDAQ:FH) is a publicly
held diversified holding company that specializes in identifying,
investing in and developing companies with superior growth
potential. FORM's current holdings include XpresSpa, Group
Mobile, FLI Charge, InfoMedia and intellectual property
assets. XpresSpa is the world's largest airport spa company
with 52 locations across 23 major airports. Group Mobile is a
provider of rugged hardware and software solutions, including
laptops, tablets, and mobile printers, as well as installation and
deployment services. FLI Charge designs, develops, licenses,
manufactures and markets wireless conductive power and charging
solutions. InfoMedia is a leading provider of customer
relationship management and monetization technologies to mobile
carriers and device manufacturers. FORM's intellectual property
division is engaged in the monetization of patents related to
content and ad delivery, remote monitoring and mobile technologies.
To learn more about Form Holdings Corp., visit:
www.FormHoldings.com.
Forward-Looking Statements
This press release includes forward-looking
statements, which may be identified by words such as "believes,"
"expects," "anticipates," "estimates," "projects," "intends,"
"should," "seeks," "future," "continue," or the negative of such
terms, or other comparable terminology. Forward-looking statements
are statements that are not historical facts. Such
forward-looking statements are subject to risks and uncertainties,
which could cause actual results to differ materially from the
forward-looking statements contained herein. The forward
looking statements in this press release, including with respect to
the proposed offering and the intended use of the proceeds of the
offering, constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. There are
a number of important factors that could cause actual results or
events to differ materially from those indicated by such
forward-looking statements, including, but not limited to: the
impact of our business and asset acquisitions on our operations and
operating results including our ability to realize the expected
value and benefits of such acquisitions; our ability to develop and
introduce new products and/or develop intellectual property; our
ability to protect and maintain our intellectual property rights;
our ability to raise additional capital to fund our operations and
business plan and the effects that such financing may have on the
value of the equity instruments held by our stockholders; our
ability to retain key members of our management team; general
economic conditions and level of consumer and corporate spending on
technology, consumer electronics, health and wellness, and travel;
our ability to hire a skilled labor force and the costs associated
with that labor; our ability to secure new locations, maintain
existing ones, and ensure continued customer traffic at those
locations; our ability to protect our customers’ financial data and
other personal information; the loss of one or more of our
significant suppliers or vendors; unexpected trends in the travel,
health and wellness, mobile phone, telecom computing, and consumer
electronics industries and potential technology and service
obsolescence; market acceptance, quality, pricing, availability and
useful life of our products and/or services, as well as the mix of
our products and services sold; lawsuits, claims, and
investigations that may be filed against us and other events that
may adversely affect our reputation; our ability to license and
monetize our patents, including litigation outcomes; and
competitive conditions within our industries; and other risks and
uncertainties and other factors discussed from time to time in our
filings with the Securities and Exchange Commission ("SEC"),
including FORM's Annual Report on Form 10-K for the year ended
December 31, 2016 filed with the SEC on March 30, 2017, as amended
on May 1, 2017, and FORM’s Quarterly Report on Form 10-Q for the
three months ended March 31, 2017, filed with the SEC on May 15,
2017. FORM expressly disclaims any obligation to publicly
update any forward-looking statements contained herein, whether as
a result of new information, future events or otherwise, except as
required by law.
Contacts:
FORM Holdings
Jeff Sonnek
ICR
646-277-1263
Jeff.Sonnek@icrinc.com
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