Earnings call transcript Q4 2022

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Operator

Greetings. Welcome to XWELL, Inc.'s Fiscal Year 2022 Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded on April 17, 2023.

I would now like to turn the conference over to Omar Haynes, Interim Chief Financial Officer for XWELL. Please go ahead, sir.

Omar Haynes

everyone. day, Good conference operating our review fiscal XWELL's Welcome call XXXX results. year to to

on Scott Joining Executive call today's me is Officer. Milford, Chief XWELL's

Investor on to the We release of today's website fiscal our also webcast at Relations be can the found located link have our site. section A year www.xwell.com. conference of our posted on earnings

statements following. XXXX. on variety turning within opinions of such Act may These to advise risks may assumptions forward-looking need and the contained remarks, known prepared from based we call the statements of call Before and a by meaning today's current of in the over involve Comments the materially Private statements. Actual his contain Reform suggested results are differ on forward-looking that unknown to uncertainties. forward-looking Scott for and of those Litigation made you Securities or

report time that the as time other Important with SEC filings, factors forth set and well that from our Form SEC. might the those file cause in reports XX, periodic XXXX, our include current ended December differences on XX-K to we as such including year for

to that I'd Scott. call With over said, to the turn like now

Scott Milford

day, our I'll fiscal appreciate activity year XXXX providing of everyone. and joining us we're you performing. today. how and Omar, you, update on Thank provide will begin overview an good by call business today's We an recent Then Omar results.

leverage acquisition. pleased our deliver and during in profitable to in focus strategy expand profit against biosurveillance that to that XWELL operating I'm to outlined a spa to through shareholder grow is progress note and letter, XXXX progress more make executing company's off-airport business As business, further the our December leaner, continued XXXX, steady that our

minutes, compared therapeutic our in our few We're seeing of chairs discuss already better replace will strong our our use performance ago. operation. retail spas of seeing new existing a the lounges. from operating in of year And a performing I'll we're signs are momentum as to Most strong which year-over-year

locations Additionally, execute with advancing business. we're overall to the use in beginning improving the airport the core while autonomous experience improving we all guests upgrade of goal economics of our unit the of while also our our deliver also physical services,

the to number in existing difficult letter decisions December, to we closing made we determined I company-owned meet included continue As look shareholders our in that expect spas XXXX, future which And referenced expectations. in we my of growth would a at continue U.S. portfolio in spas not our we effort that to as had of

letter, This growth on a the us Philadelphia leaner overall a division work. X doesn't services evolve As expect on will business. and will airport will U.S. profitable goal stated of outside and that growth in airport acquisition people to the the our health that airport the brand do to of And spa effort shareholder out-of-airport in my portfolio while accelerate our is rightsizing new altogether, in as we to year. to the mean rationalize more continue require location to wellness our our we it our we spa in add I abandon end, leading go. To and this growth provider for and focusing that

United have XX Amsterdam's X locations Alternatively, letter, have consistently our Airport, outside Istanbul in X as international of and now operating Airport Dubai's in X We shareholder our States, profitable I noted spas Schiphol the an in performance. in been Airport. area of

$XX,XXX January Istanbul spa the locations February. in Turkey, effects performing over in our in of of posting gate, recent sales new and And despite the of the well in are Airport out earthquake net approximately devastating $XX,XXX

our XXth XXXX XXXX. the we high through single-digit during and presence. international to at our locations of Dhabi still We're forward, move As we unit international optimistic open to Abu leverage quarter growth prospects about the targeting remain remain Airport further third positioned

December the retail driving retail to our strategy and revenue. enhanced strategically XWELL's commitment also shareholders to Now highlighted letter

Just to retail and our quickly online. locations half also to recap, in during approach entirely built new the airport we've of second XXXX, an

our products health-focused value-add by momentum very offerings mix beginning from date higher achieved encouraged were items. store throughout New added in We're food XXXX products these add to to we've positive including August. new expect and to the select additional grab-and-go

prior our top From those was margin for revenue retail business at by the the same season. a the perspective, XX% growth solid XpresSpa fourth driven sales quarter, XX% period line versus year. increased during holiday during Product

strategy drive and made tech-forward our also sales, to letter, stronger in a fresh to products not and consumer traffic a new Further shareholder only offerings therapeutic included but deliver approach to to experience. our illustrating we've better higher include commitments service our the retail,

maximize massage. For autonomous and we Las and installed massage Airport. February, example, in Atlanta, Miami, Novo Fort Worth JFK spa XT the this the of therapeutic Dallas results to including X chairs fully Vegas, chairs simulate gravity locations, weightlessness X These

additional standpoint, themselves X From typically $X pay deployed technology, within incremental add-on business. that those a XX% prior to goggle with and currently include of chairs expect This incremental the service and entire massage more VR also neck across break back these it way revenue our margin versus to for experience would X We by services to even. the example. our that months million once chairs, doesn't an be existing our estimate of the revenues be system XX% we to economic X.X from of lounge anticipate for than these took chairs to we will months revenue in-care

and uses additional in an XXXX. overall of of with the an areas all this a without HydroMassage machines target technician. in consumer pulse year our first massage deploy the these our X machines option burst provide pulse we the of micro to and additional we month, Last deployed specifically JFK location, by unit directed also water also to experience expect technology therapy, through use HydroMassage

coupled to additional we investments technology add-on massage, from improve improved further and This does As to services growth. use of revenue autonomous massage. fully such the the and therapy, goggle autonomous revenue VR with we make continue plan experience include as to light measure

our of our have may for launched starting recent release, with read consumers industry. JFK program in now offering you some manicures the a we're robotics pilot partnership in as our beauty with Separately, pioneer Terminal Clockwork, We've through a autonomous location. press X

on our a across an as spa portfolio upon During full service margin of launch deploy basis annualized represents of which robots program, $X.X believe we to potential launch we this excited of approximately expect we We're spas. as an at various million XX%. X initial of and, revenue X-month rollout to XX plan at to across ultimately, least period, Clockwork's potentially AI-powered units many locations

pallets, plans engaged continued retail a our with to our airport spas, approve design logo. aesthetic the leadership Regarding of XpresSpa refreshed physical layouts, even upgrade color we're new respective and equipment, actively to

As here the different approved the importantly, is and different we'll the deployed. plans are as our changes feel by takeaway spas look will even, of upgrading, these airports, begin that but process more are

We the ensure new will are economically to have and Airport be taken we aesthetically to which open driven. location this our of design able Philadelphia will upgrades measured steps summer. efforts see Travelers both our results at make new the

a of for a our higher optimizing leaner traffic goal product to service reinvented our the to spa while experience summary, the mix and we strategy portfolio ticket improving deliver able continue In and of guests. is business and a that drive our more profitable with more

X current the contract to with in out well centers X-year Washington wellness reinventing airports, in LAX. Seattle end, the beyond Dulles, investments extends and San addition X airports: Atlanta platform relationship Newark operates Bioworks Liberty, that busiest permanent To term. more work the our JFK, and In XWELL to Francisco, facilitate business build to we've of nation's and now biosurveillance testing more International, that CDC made biosurveillance a a underway Ginkgo our longer-term also expansive the to

Along with continue we our the to grow program's partners, capabilities.

to earlier For example, we addition were influenza Traveler-based include in year, the Genomic for our a the study virus support to we expanded monitoring doing with program pilot this SARS-CoV-X. work Surveillance

solid administration and remain explore officials We of enjoy this and our world's Looking relationship the growth opportunity to program. CDC, we the of regularly the with true partnership. we ahead, the about biosurveillance working with meet first confident a future with this, partner

on investor about the read quarters U.S. outside this fact, especially program, questions we've the they focused news of of gotten several expansion In during pieces the X last

program, a reality. good of where for sense to clear, makes CDC be strength internationally, and us our growth relationship and bring to this domestically we the with it both grow working partner to To we with have that And the importantly, will. more

very In line drive we disciplined in to driving growth, have cost expenses. business remain managing initiatives to executed on our structure our numerous down and and addition our to commitment top

our I've been expectations. Treat that not has performance met clear of

from services sales and both and wellness and retail year Phoenix As where currently the Harbor the offerings we growth. Airport seeing process more of of the location menu our Lake this a of unprofitable result, our offerings in locations, removing on medical service we're efforts Sky closed the are in focusing Treat JFK Salt higher-margin in Treat earlier

better To to XpresSpa. unified brand approach combining single This we're drive single spa offerings further process. and and operational brand, a strengthen experience the us and model through XpresSpa core allow consumer operating our Treat will optimize into a cost

will to yearn refresh environment them. airport. and modern from in more opening premium want the we and for that the logo from What is new a unplug that pace XpresSpa experience, like the our We're as developing shop XpresSpa something install And our currently right and upgrading Treat. in, hectic consumers have airport we refined efforts, Treat of in expedience a we balance airport locations to to learned innovative through without to the our in They having we ability of the our want and look we and believe locations they environment. upskilling brand all rebuild escape

We've our elsewhere. successful structure also rationalizing cost been

with successful and closing closed XX fit we locations. for XX carefully Since underperforming our on a shuttered profile of no longer business. our our latter spas During reviewed of XpresCheck half a the portfolio focus locations then, that XXXX, we've

by meaningful first expense with and In period the of stores. XXXX. in XXXX, implemented also we compared the by coupled to reductions, second spending compared our the to same XX% labor of G&A headcount in the half half prior XX% cuts G&A reduced optimization and to approximately year We've

the But fewer, we well do. less shape. further. with the to reduce we as still taking will occur path we'll as more to support also clearly, we encouraged This to we spa and side our need return work on continue to a have leaner profitable a That profitability. rightsize Third, as momentum, at support XXXX We're spa to as are initiatives costs units. by to our enter cost-cutting our portfolio, level infrastructure unit and business expect both said,

like encouraged begin we as long-term XXXX. in our remain we I'd summary, to underscore by and our continued business. We strategy, our positioning about evolving remain In our momentum optimistic

call our I'll financial on an Omar? over turn update for now the to results. Omar

Omar Haynes

synopsis brief results. our a Thank provide fiscal year of XXXX you, now Scott. I'm going to

However, for XX-K details, please the refer filed has that with been the SEC. to

For revenue $XX.X year fiscal demand year. the to total $XX.X million the softening facilities. by is XXXX, million driven compared decline This million in was our primarily testing XpresCheck at prior in $XX.X

well approximately biosurveillance partnership in million XXXX $X locations, XXXX, of $XX and year revenue million million in from primarily this revenue related our HyperPointe rather acquisition XpresSpa $XX $X revenue locations. in XpresCheck as of consists revenue earlier earlier the Treat from -- our in our locations million as to from

to Turning expenses.

all of in million in Our acquisition of X in year. cost the the XXXX $XX.X to QX U.S., of the by locations spas increased XpresCheck HyperPointe, to reopening was sales the spas The this Turkey million underperforming and leading principal increase several of in in total the factor the closure $XX.X XXXX. from opening offset prior of several

As labor the in our factors of the cost discussed costs remain sales. testing cost location-level and conference of largest calls, on we've prior kits

These totaled expenses. year $XX.X to compared million Switching administrative comparable to expenses general the prior million $XX.X for and period.

reflects of second $X same As same million the expenses that of for XXXX XXXX. and were XXXX and the period savings XX-Q, half in half than $X Demonstrating G&A half during approximate an second XXXX G&A XXXX. compared initiatives, of savings for reported approximate our to the when million the the approximately first half an $X to in compared of in when period the first million expenses higher cost-cutting XXXX efforts in for

prior reported compared the an to operating the We for an in $XX loss year of profit operating of approximately approximately million million year. $X

prior attributable in $X net was common $XX Our approximately the million to net of to approximately shareholders loss million income year. compared

discussed, strategically our As growth it to long-term initiatives. continue we to that Scott note important invest in is

and and cash in With liquidity $XX respect $XX our cash working GAAP marketable with our debt. capital to totaling million, securities, strong financials, no approximately long-term of remains $XX.X equivalents million million

our program. to Turning buyback stock

or periods XX.X million. of blackout During XXXX, million we shares repurchased approximately outside approximately $XX.X

the and in the shares out occurred shares that of the total X in XXXX approximately in activity in million the XX of All million Board are first X.X quarters, XXXX authorized by and program there XXXX. remaining

some financial back our questions. I'll concludes This Scott turn call the address review. to investor to now

Scott Milford

year recap, To that. our XXXX and Omar. Thanks, was reflect financials for a transitional XWELL,

look As growth, position better and believe potential a we're in ahead, the moving we improved full XXXX we of our that company. towards to enters XWELL unlock

seeing the initiatives, XXXX same-store example, from incremental growth XX% increased For which we're result and XXXX, January our sales growth staffing traction growth meaningful in we offerings. and levels XX% year-over-year retail delivered in in of the expansion retail of course, hours, of is a February

stronger of The beginning to our demonstrate the efforts of benefits the services these offering. results offering take clearly and new we're preliminary our strength are continuing root, retail and

we're our our with services performance labor boost improve overall see will forward, to Moving to opportunity we continue additional retail consistent and adding. the lots of

approach highlighted not to operate sustainable profitability And more short, revenue sight and our will steps a remain hesitate on recognize while adjustments in our and December, dollar the thoughtful capital capital investment, continued is growth deliver in we will our tough or decisions toward value we're line being for for focused we of in to we're available as how in necessary the Additionally, utilized the In XXXX require profit-accretive shareholders. working our disciplined make that and our investing of clear on to how business. making we're efforts. to each take efforts

our a regarding BXB M&A and number from stock investors questions our Before recently our also plans, wrapping up, strategy price. had we've of

Let me where those. each share I with of if can at see we're

Scott Milford

alone We we to we new business, continue acknowledge we was our that us our goals of rebranded growth position recognized in to profit $XXX spa could identity million to by as XXXX. required When the unlock XWELL our airport. while it generate not also one to outside XXXX, to use that brand the expand a business potential would from

pivotal revenue would end, we a advance that our looked possible initial looking existing also that a complement discussions our and serve we platform the at outside letter growth but not To brand, businesses intent. Today, we growth have to and of began acquisitions our that but could number past only were airport. an goals, as EBITDA-accretive of at business serve unable

authority we space and on of mission businesses enable within Ideally, regenerative or XWELL the services the go. acquisition our whether serve in strategic path to or health buying health one effort apply wellness people strategy. that and And wellness to will to involve more its this that aesthetic providers for being continue services, services, an involves of health growth

may policy I'm on acquisition they and to any while in level, may looking to the term, remind discussions I'm updating that comment be general identified to I near diligence at have forward by various recent we our as our or activity, preliminary opportunities you not efforts you stages. our is encouraged specific a have in on

we area about our help ask investors of number to and meaningful this BXB a from are lost growth us sustainable efforts generating XpresCheck. revenue revenue had in also with We've offset and where

made some into services inroads partnership client relationships, less including national with we coworker provider, Association XXXX, approximately in a had we've with Players in and a BXB the revenue space partnership While amenity developing expected. our for than NFL $XXX,XXX generated efforts inroads longer-term in a

we than the anticipated revenue. have and with more generated effort any not meaningful relationships and airlines alike taken time airports have Further, despite

continue however, will, we can. We where to relationships leverage

our to especially, federal why expansion report companies some any in specifics frustration there surrounding and the with CDC we various are reasons for Regarding mind, this a given investors. program, Keep of contract. when contract of work it's government CDC have been point the our recent difficult the recognize communications of

from That being than in million revenue during a more quarter XXXX. we fourth partnership XXXX, of we perspective, biosurveillance expect and our recognized the $X.X said, financial $X.X generate first quarter the of under million to

NASDAQ Last but have updates delisting. for not investors least, a stock possible and repurchases asking been on

as shares repurchases, repurchased XWELL during the stock on terms XX.X Omar In approximately stock XXXX. market mentioned, of open we of million

our any priorities, future allocation planning focus contingent approval balanced investments. and repurchases on capital growth with and price ahead, resource on potential movements, Looking future remain share Board our

our We're of listing details NASDAQ to value with under of considering continuing to to implementing appropriate, the We're of on come the in regain compliance due rules. and NASDAQ. cognizant are monitor stock shares available options, the our requirements More course. if

undervalued, While listing, we take sentiment steps so investment to advice. continued maintain with that stock an I thinks CEO investor not we they're have agree low Every price. extremely it's

take may stock our our recognize also from the it for initiatives. to properly various we're We time value generating reflect

and and profitable against growth. leveraging contract CDC and ensure We're leveraging of executing a properties airport and the profitable additional that optimizing investing biosurveillance more growing to focused efforts, business division fund our leaner future. health and This operationally drive creating on can internationally, to wellness business and our outside and our includes sustainable we through the our strategy growth existing domestically health existing to our serve performing brand well spa structure cost expansion and our in efficiently growth, capital

Towards that joining call turn now look every providing over and you end, thank next I to today, for each and one back I our want I'll of operator. us forward the an to quarter. update to

Operator

concludes this time. at disconnect Thank conference, participation. you you for lines today's your may your this and And

XWELL (XWEL) 17 Apr 232022 Q4 Earnings call transcript