FORM Holdings Announces Preliminary Financial Results for the Second Quarter of 2017
Second quarter 2017 preliminary estimated financial results for the period ended
• 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 endedMarch 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
• The Company is reiterating its previous 2017 revenue guidance for its Wellness segment of approximately
• 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
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
Announcing Anticipated Second Quarter 2017 Earnings Release Date:
• August 9th, 2017 at
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.
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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
Contacts:FORM Holdings Jeff Sonnek ICR 646-277-1263 Jeff.Sonnek@icrinc.com