Expects 2022 Net Revenue of $42 - $46
Million Expects 2023 Net Revenue of $100 - $110
Million
Enters New Credit Card Processing
Relationship
LuxUrban Hotels Inc. (or the “Company”) (NASDAQ: LUXH),
which utilizes a long-term lease, asset-light business model to
acquire and manage a growing portfolio of short-term rental
properties in major metropolitan cities, announced today net
revenue and EBITDA guidance for the years ending December 31, 2022
and 2023, and the engagement of a new credit card processing
company that, among other benefits, will reduce processing fees by
approximately 400 bps and result in the release to the Company of
approximately $5.5 million in retained funds over the next 12
months.
“We are very excited at the pace of our ongoing shift to
acquiring, via long-term Master Lease Agreements, short-term rental
hotel units in destination cities,” said Brian Ferdinand, Chairman
and Chief Executive Officer. “We have good visibility into the
anticipated performance metrics across our portfolio for the
balance of 2022 and 2023. We believe that we are well-positioned to
continue to execute our growth strategy in a thoughtful and
impactful manner that will, over time, improve our margins,
generate sustainable cash flow, and enhance overall
profitability.”
Guidance: 2022-2023 Net Revenue and
EBITDA
For the years ending December 31, 2022 and 2023, the Company is
providing the following guidance:
- Full Year 2022 (based on its current operating portfolio of
approximately 1,200 short-term rental hotel units): Net revenue of
$42 - $46 million, and EBITDA of $7 - $9 million.
- Full Year 2023: Net revenue of $100 - $110 million, and EBITDA
of $16 - $20 million, based on its expectation that it will operate
approximately 1,500 short-term rental hotel units by or around
December 31, 2022.
In addition to the existing and anticipated additional units
discussed above, this guidance is based on, among other factors,
the Company’s current business, economic, and public health
conditions; the status of its acquisition pipeline and its ability
to close on these potential acquisitions; and its current view of
forward-looking unit operating metrics.
“The approximately 1,200 units that are currently in operation
have been fully funded,” Mr. Ferdinand continued. “We are committed
to funding our foreseeable growth in a non-dilutive manner. To that
end, the additional units we expect to have in operation by
year-end 2022 will be funded by a combination of anticipated
operating cash flows we are beginning to see in the 2022 fourth
quarter and our existing debt facility, $2.5 million of which is
currently available.”
The Company’s guidance is based on current plans and
expectations and is subject to a number of known and unknown
uncertainties and risks, including those set forth below under
“Forward-Looking Statements.”
Engages New Credit Card
Processor
The Company has engaged a new credit card processing company,
which it expects to be fully operational across its portfolio by or
around November 30, 2022. The new relationship allows the Company
to secure credit card processing across its portfolio of properties
without reserves and reduces the associated processing expenses by
approximately 400 bps compared to its former processor
relationships. As a result of this new relationship the Company’s
former credit card processors will release to the Company
approximately $5.5 million in retained funds over the next 12
months.
LuxUrban Hotels Inc.
LuxUrban Hotels Inc. utilizes a long-term lease, asset-light
business model to acquire and manage a growing portfolio of
short-term rental properties in major metropolitan cities. The
Company’s future growth focuses primarily on seeking to create
“win-win” opportunities for owners of dislocated hotels, including
those impacted by COVID-19 travel restrictions, while providing
LuxUrban Hotels favorable operating margins. LuxUrban Hotels
operates these properties in a cost-effective manner by leveraging
technology to identify, acquire, manage, and market them globally
to business and vacation travelers through dozens of third-party
sales and distribution channels, and the Company’s own online
portal. Guests at the Company’s properties are provided high
quality service under the Company’s consumer brand, LuxUrbanTM.
Forward Looking
Statements
This press release contains forward-looking statements,
including with respect to the expected closing of noted lease
transactions and continued closing on additional leases for
properties in the Company’s pipeline, as well the Company’s
anticipated ability to commercialize efficiently and profitably the
properties it leases and will lease in the future. These
forward-looking statements and the guidance provided herein are
subject to a number of risks, uncertainties and assumptions,
including those set forth under the caption “Risk Factors” in the
prospectus forming part of the Company’s effective Registration
Statement on Form S-1 (File No. 333-262114). Generally, such
forward-looking information or forward-looking statements can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or may contain statements that certain actions, events
or results "may", "could", "would", "might" or "will be taken",
"will continue", "will occur" or "will be achieved".
Forward-looking information may relate to anticipated events or
results including, but not limited to business strategy, leasing
terms, high-level occupancy rates, and sales and growth plans. The
financial projection provided herein are based on certain
assumptions and existing and anticipated market, travel and public
health conditions, all of which may change. The forward-looking
information and forward-looking statements contained in this press
release are made as of the date of this press release, and the
Company does not undertake to update any forward-looking
information and/or forward-looking statements that are contained or
referenced herein, except in accordance with applicable securities
laws.
The Company seeks to achieve profitable, long-term growth by
monitoring and analyzing key operating metrics, including EBITDA.
The Company defines EBITDA as net income before interest, taxes,
and depreciation. The Company’s management uses this non-GAAP
financial metric and related computations to evaluate and manage
the business and to plan and make near and long-term operating and
strategic decisions. The management team believes this non-GAAP
financial metric is useful to investors to provide supplemental
information in addition to the GAAP financial results. Management
reviews the use of its primary key operating metrics from
time-to-time. EBITDA is not intended to be a substitute for any
GAAP financial measure and as calculated, may not be comparable to
similarly titled measures of performance of other companies in
other industries or within the same industry. The Company’s
management team believes it is useful to provide investors with the
same financial information that it uses internally to make
comparisons of historical operating results, identify trends in
underlying operating results, and evaluate its business.
The Company has historically calculated, and plans in the future
to calculate, EBITDA as follows: net income or loss, adjusted for
the provision for taxes, interest and financing costs, further
adjusted for depreciation and amortization (including the
amortization of debt discounts and stock compensation expense). For
purposes of the guidance provided herein, however, estimating such
GAAP measures with the required precision necessary to provide a
meaningful reconciliation could not be accomplished without
unreasonable effort. Non-GAAP measures for future periods which
cannot be reconciled to the most comparable GAAP financial measures
are calculated in a manner which is consistent with the accounting
policies applied in the Company’s consolidated financial
statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221107006154/en/
Shanoop Kothari Chief Financial Officer LuxUrban Hotels Inc.
Devin Sullivan, SVP The Equity Group Inc. (212) 836-9608
dsullivan@equityny.com David Shayne, Analyst The Equity Group Inc.
(212) 836-9628 dshayne@equityny.com
LuxUrban Hotels (NASDAQ:LUXH)
Historical Stock Chart
From Jun 2024 to Jul 2024
LuxUrban Hotels (NASDAQ:LUXH)
Historical Stock Chart
From Jul 2023 to Jul 2024