XpresSpa Group, Inc. (Nasdaq: XSPA), a travel health and wellness
company, today reported that it has filed financial results on Form
10-Q for the first quarter ending March 31, 2022.
Scott Milford, XpresSpa Group CEO, stated, “The
foundation for the future of our company is built on four strategic
imperatives. These imperatives will accelerate our evolution to
being a leading health and wellness provider for people ‘on the
go’. By controlling costs, optimizing the operational structure,
and increasing revenue opportunities in our airport locations we
are poised to experience a truly transformational and productive
year. The entire team is committed to delivering on these business
initiatives and we look forward to sharing our progress with each
He added, “As part of our efforts to return
capital to shareholders, we repurchased over $11 million of our
common stock during the first quarter and intend to complete the
remaining repurchase authorization in the near-term.”
XpresSpa Group’s XpresTest, Inc. subsidiary
(“XpresCheck”) provides medical diagnostic testing services,
including Covid-19 testing options such as a Polymerase Chain
Reaction (PCR) test and a rapid PCR test. As of today, there are 15
XpresCheck locations operating in 12 airports.
In late 2021, XpresCheck began conducting bio
surveillance monitoring, aimed at identifying existing and new
SARS-CoV-2 variants, in collaboration with the Centers for Disease
Control and Prevention (CDC) and Concentric by Ginkgo at four major
U.S. airports (JFK International Airport, Newark Liberty
International Airport, San Francisco International Airport, and
Hartsfield-Jackson Atlanta International Airport). During the first
quarter, we recognized $1.4 million of revenue related to this
contract with the remaining $2.6 million of the contract expected
to be recognized in the second quarter.
In April, as part of the CDC’s Traveler Based
Surveillance program and together with our partner, Concentric by
Ginkgo, we collected, identified, and sequenced one of the first
samples containing the novel BA.4 sublineage of the Omicron variant
and delivered it to the CDC’s lab. The sample was collected from
passengers on a flight originating from South Africa and arriving
at Hartsfield-Jackson Atlanta International Airport. This sequence
represented one of the first sequences of the new Omicron
sublineage that has been identified in the United States. We are
thrilled that our biosurveillance program continues to play a
pivotal role in detecting new variants entering the country,
further highlighting the importance of Covid-19 testing.
Testing volumes decreased as we progressed
through the first quarter, but particularly in March, and that
trend has continued into April and May. While a decline in the
first quarter relative to the fourth quarter last year was not
surprising, as the first quarter is typically the weakest quarter
in terms of airport traffic, the decrease was faster than
projected. We believe the reason is that countries have started to
relax their testing requirements faster than we expected.
We continue to believe that a strong biosafety
program is critical to the continued control of this virus, or any
other potential virus, and we will continue to focus on supporting
this invaluable national effort. That said, as testing volumes
decline, we are evaluating ways to reduce costs associated with
operating our XpresCheck business without compromising the
integrity of our biosafety efforts. We are also looking at
converting existing underperforming XpresChecks back into spa
locations where we may be able to provide testing.
There are currently 19 operating XpresSpa
domestic locations, including two franchise locations. A majority
of the domestic XpresSpa locations are operating approximately
eight hours per day during the busiest hours (compared to up to 16
hours per day pre-pandemic), which has improved labor productivity.
As airport volumes improve, we will continue reviewing our
operating hours to optimize the revenue opportunity.
We are seeing renewed interest in wellness
services among travelers along with a willingness to spend
additional dollars on products and services that will improve their
well-being while they travel.
Internationally, there are also six XpresSpa
locations currently operating. These consist of three in Dubai
International Airport in the UAE and three in Schiphol Amsterdam
Airport in the Netherlands. However, we also have five XpresSpa
locations that will be opening at Istanbul Airport in Turkey, with
the first to open later this summer. These newest XpresSpas are all
designed to improve a traveler’s peace of mind and well-being at
this major airport hub. We believe international expansion is an
important part of our continued growth as margins tend to be higher
and cost of operation is generally lower. These factors, coupled
with a more sophisticated international traveler who is willing to
experience new technologies and spend more on wellness, will serve
our growth efforts in the future.
Treat is our travel, health and wellness brand
transforming the way we access care through a suite of health and
wellness services supported by an integrated digital platform and a
relevant retail offering to the traveling public.
Treat’s on-site centers are currently located in
JFK International Airport in New York and in Phoenix Sky Harbor
International Airport in Arizona, and we will open later this year
in Salt Lake City International Airport in Utah.
Our teams provide travel-related diagnostic
testing for virus, cold, flu and other illnesses as well as
hydration therapy, IV Drips, and vitamin injections. Travelers can
purchase time blocks to use our wellness rooms to engage in
interactive services like self-guided yoga, meditation and low
impact weight exercises, or to relax and unplug from the hectic
pace of the airport and renew themselves before or after their
We will continue to evaluate the Treat model for
expansion as we evolve the product and service offerings in our
current locations. We will also use the opportunity to evolve and
align spa services with some of the more popular Treat offerings to
further integrate these businesses.
In January 2022, we announced and closed on the
acquisition of gcg Connect, LLC d/b/a HyperPointe. HyperPointe is a
leading digital healthcare and data analytics relationship
marketing agency servicing the global healthcare and pharmaceutical
industry. HyperPointe has significant experience in patient and
healthcare professional marketing and deep technological experience
with CXM (customer experience management) and data analytics.
Since June 2020, HyperPointe’s management team
and suite of services and technology have been used to develop and
deploy the technological infrastructure needed to scale the growth
of our XpresCheck business. HyperPointe’s experience in this space
continues to serve the XpresCheck business and will play a critical
role in the expansion of ongoing biosurveillance efforts.
Share Repurchase Program
During the first quarter, we continued to
execute on our share repurchase program, repurchasing 7.1 million
shares at average cost of $1.55 per share, for a total of $11.1
million, all subject to blackout restrictions.
Based upon the current share price, which
management believes is substantially undervalued, our intention is
to repurchase additional shares when possible and complete the
existing repurchase authorization in the near-term, subject to the
limitations of blackout restrictions. As of May 16, 2022, there are
3.2 million shares that may be purchased under the current
Liquidity and Financial
As of March 31, 2022, we had cash and cash
equivalents, excluding restricted cash, of $83.0 million and no
long term debt.
Summary of First Quarter 2022 Financial
Total revenue during the three months ended
March 31, 2022 was $24.0 million compared to $8.5 million in the
corresponding period in 2021. The increase in revenue was primarily
due to the recognition of revenue from XpresCheck locations,
although we also generated $2.9 million in revenue from our
reopened XpresSpa locations and $0.5 million from the HyperPointe
Cost of SalesCost of sales increased to $15.0
million from $4.2 million in the prior year first quarter due to
the increased costs to operate the XpresCheck locations due to the
Covid-19 pandemic, and the reopening of certain XpresSpa locations
that were temporarily closed during the first quarter of 2021.
General and Administrative ExpensesGeneral and
administrative expenses were $10.2 million compared to $4.5 million
for the year ago comparable period. The increase was primarily due
to functional costs associated with the operations of XpresCheck
and Treat wellness centers, XpresSpa locations, and the newly
acquired HyperPointe segment.
Income from OperationsLoss from operations was
$2.5 million compared to $0.9 million in the prior year first
Net Income Attributable to Common
ShareholdersNet loss attributable to common shareholders was $4.3
million compared to $1.1 million in the prior year first
Total Patients by Quarter
Total Rapid Test (Antigen and PCR) / Percent of
Total Patients by Quarter
Rapid PCR Tests / Percent of Total Rapid Tests
Non-GAAP Financial Metrics
Adjusted EBITDAOn a
non-GAAP basis, Adjusted EBITDA was $0.4 million during the first
quarter 2022, compared to Adjusted EBITDA of $0.9 million in the
prior year first quarter.
We define Adjusted
EBITDA as earnings before interest, taxes, depreciation and
amortization expense, non-cash charges, and stock-based
We consider Adjusted EBITDA to be an important
indicator for the performance of our operating business,
XpresCheck. In particular, we believe that it is useful for
analysts and investors to understand that Adjusted EBITDA excludes
certain transactions not related to core cash operating activities,
which are primarily related to XpresCheck. We believe that
excluding these transactions allows investors to meaningfully
analyze the performance of core cash operations.
A reconciliation of operating loss presented in
accordance with GAAP for the three-month periods ended March 31,
2022 and 2021 to Adjusted EBITDA (loss) is presented in the table
Three months ended March 31,
Income (loss) from operations
Revised 2022 Revenue Target
Based on the swift relaxation of Covid-19
testing requirements by other countries for flights originating in
the United States and the continued volatility of testing, we
anticipate revenues to be lower than we originally forecasted.
Webcast and Conference Call
We will host a webcast and conference call at
4:30 p.m. Eastern Time today.
We encourage investors and interested parties to
listen via webcast as there is a limited capacity to access the
conference call by dialing 1-212-231-2930. To submit a question,
please email email@example.com.
The live and later archived webcast can be
accessed from the Investor Relations section of the Company’s
website at http://xpresspagroup.com. Visitors to the website should
select the “Investors” tab and navigate to the “Events” link to
access the webcast.
Participation in Water Tower Research
Fireside Chat Series
We will participate in the Water Tower Research
Fireside Chat Series on Thursday, May 19, 2022 at 2:00 PM Eastern
Time when XpresSpa Group CEO, Scott Milford, will discuss his
strategic vision for the Company. Topics will include:
- Building a
scalable and profitable unified offering under one brand
- Developing an
out of airport strategy
- Potential for
accretive acquisitions to accelerate growth
If you are an institutional or retail investor
and would like to listen to this fireside chat, please click below
to register for the event.
Webcast Link: Water Tower Research | Scott
Milford, CEO of XpresSpa Group, May 19,
About XpresSpa Group, Inc.
XpresSpa Group, Inc. (Nasdaq: XSPA) is a leading
global health and wellness holding company operating three brands:
XpresCheck®, XpresSpa®, Treat™.
- XpresCheck is a leading on-site
airport provider of Covid-19 screening and diagnostic testing with
15 locations in 12 domestic airports. XpresCheck is also partnered
with the CDC and Concentric by Ginkgo, conducting biosurveillance
monitoring at four major domestic airports to identify existing and
new SARS-CoV-2 variants.
- XpresSpa is a leading airport
retailer of wellness services and related products, with 23
locations in 13 airports globally.
- Treat is a travel health and
wellness brand that is providing on-demand access to healthcare
through technology and personalized services, including two
domestic airport locations.
- To further build on XpresSpa
Group’s expertise in the health and wellness space, the Company
acquired HyperPointe in January 2022, a leading digital healthcare
and data analytics relationship marketing agency serving the global
To learn more about XpresCheck, visit:
www.XpresCheck.comTo learn more about XpresSpa, visit
www.XpresSpa.comTo learn more about Treat, visit: www.Treat.comTo
learn more about HyperPointe, visit: www.Hyperpointe.comTwitter:
@xprescheck and Instagram: @realxprescheckTwitter: @XpresSpa and
Instagram: @XpresSpaTwitter: @Treat_Care and Instagram:
This press release may contain "forward-looking"
statements within the meaning of Section 27A of the Securities Act
of 1933, and Section 21E of the Securities Exchange Act of 1934.
These include statements preceded by, followed by or that otherwise
include the words "believes," "expects," "anticipates,"
"estimates," "projects," "intends," "should," "seeks," "future,"
"continue," or the negative of such terms, or other comparable
terminology. Forward-looking statements relating to expectations
about future results or events are based upon information available
to XpresSpa Group as of today's date and are not guarantees of the
future performance of the Company, and actual results may vary
materially from the results and expectations discussed. Additional
information concerning these and other risks is contained in
XpresSpa Group’s Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K, and other Securities and
Exchange Commission filings. All subsequent written and oral
forward-looking statements concerning XpresSpa Group, or other
matters and attributable to XpresSpa Group or any person acting on
its behalf are expressly qualified in their entirety by the
cautionary statements above. XpresSpa Group does not undertake any
obligation to publicly update any of these forward-looking
statements to reflect events or circumstances that may arise after
the date hereof.
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