XpresSpa Group Announces Second Quarter 2021 Financial Results and Provides Business Update
Record MSA Practice Patient Fees Increases to
Net revenue of
Net Loss Narrows to
Strong Liquidity Position with Unrestricted Cash Balance of
Re-opening an Additional Eight to Ten Legacy XpresSpa Locations this Fall
Launched Phase 2 of Treat™ Today – Mobile App
Launching Phase 3 of Treat this Fall – Locations in
Webcast and Conference Call Scheduled for
XpresCheckTM Wellness Centers
XpresCheck provides COVID-19 testing to the frontline airport workforce and passengers across thirteen locations in eleven airports. XpresCheck’s medical team of state licensed physicians and nurse practitioners operate under management services agreements and administer COVID-19 testing options including a rapid molecular COVID-19 test, a Polymerase Chain Reaction (PCR) test, and a rapid PCR test.
The Company believes that COVID-19 testing will remain an important and necessary service for airline employees, airport staff, and passengers for the foreseeable future. This is due to various factors including COVID-19 variants, international travel requirements, and break-through vaccination infection rates.
Developments since the onset of the second quarter 2021 include:
April 5th, XpresCheck announced that it had signed an agreement with Delta Air Lines to administer the new rapid antigen test to passengers traveling from JFK International Airportto Milan Malpensa and Rome–Fiumicino International Airports.
April 7th, XpresCheck opened a COVID-19 testing facility at Seattle-Tacoma International Airport(SEA) pre-security inside the terminal, in the Baggage Claim area near Carousel 9.
April 21st, XpresCheck opened a COVID-19 testing facility at San Francisco International Airport (SFO) pre-security, near the baggage claim area on the Arrivals level at Terminal 3.
July 30th, XpresCheck announced its collaboration with the World Health Organization (WHO) Foundationto promote the “Go Give One” campaign, dedicated to delivering COVID-19 vaccines worldwide in the fight to reduce the growing vaccine equity gap. As a kick-off to the campaign, the Company is matching customer donations up to $100,000 cumulative.
August 5th, XpresCheck launched a pilot program with EL AL Israel Airlines, the national airline of Israel. The State of Israelrequires negative COVID-19 PCR tests from passengers departing the US and arriving at Ben-Gurion International Airportin Israel. XpresCheck provided pre-travel PCR testing services onsite at JFK International Airportfor EL AL passengers. This is designed to safely eliminate the required PCR test upon landing in Tel Avivsaving passengers time exiting the airport.
August 13th, XpresCheck announced the approval of a $2 million, 8-week pilot program with the Centers for Disease Control and Prevention( CDC). The program will conduct bio surveillance monitoring at three U.S.airports operating XpresCheck™ COVID-19 testing facilities, and will be aimed at identifying existing and new COVID-19 variants, including the highly contagious Delta variant and other new variants surfacing in the U.S.
- Hartsfield-Jackson Atlanta Int’l Airport (ATL) Concourse A
- Dallas/Fort Worth Int’l Airport (DFW) Concourse A
- Charlotte Douglas International Airport (CLT) Concourse D
- Las Vegas McCarran Int’l Airport (LAS) Concourse D
In addition, there are currently two company-operated
We now have plans to open the next wave of 8-10 high performing XpresSpas by early fall. We will continue to re-evaluate each airport on a month by month basis as well as review continued learnings as our portfolio continues to be re-activated.
Treat™: Vision for
Treat, the Company’s new travel health and wellness brand, is designed to deliver on-demand access to integrated healthcare through technology and personalized services. Travelers will be able to access 24/7 on-demand, virtual health care, a travel health wallet with your medical records and real-time global COVID travel requirements all in one place, as well as book appointments in our on-site airport wellness centers as they open. The brand is being launched in three distinct phases:
- Phase 1: Website and brand campaign- Launched on
June 1st. The Treat website (www.treatcare.com) currently features original content, access to resources about global COVID-19 requirements, and curated e-commerce products targeting the savvy traveler living a wellness lifestyle. The website also allows consumers to opt in for the bi-weekly Treat newsletter, The Treatment.
- Phase 2: Treat’s mobile app- Launched today,
August 16th. The mobile app provides access to on-demand virtual care, including chat care, video care and a “travel wallet” with access to a person’s medical records and test results. Memberships are available for a subscription to the mobile app and start at $200for 3 months or can be $720for 12 months. Included within the membership is unlimited virtual care services plus one free PCR COVID-19 test and one free flu vaccine per year. Additional features such as prescription discounts and scheduling appointments at Treat in-person facilities will be available upon their respective openings.
- Phase 3:
Treat In-Airport Wellness Centers- First location to open in mid-Q4 at JFK International Airportfollowed by Phoenix Sky Harbor International Airportby the holidays. The on-site Treat locations in airports will offer integrated health and wellness personalized services in a premium environment. Upon entering, customers will see a beautifully curated retail and check in area and will be greeted by Treat Wellnessconcierges. Well-appointed treatment rooms will allow a respite from the airport environment and offer a list of health and wellness services to travelers.
Treat in-airport Wellness Centers will offer services such as COVID-19 testing, travel vaccines, anxiety care, emergency prescriptions, vitamin IV therapies, as well as private, technology led wellness sessions including fitness, yoga, meditation, and mindfulness sessions in a premium hospitality environment. Upon entering, customers will see a beautifully curated retail and check in area and will be greeted by Treat Wellness concierges. Well-appointed treatment rooms will allow a break from the hectic airport environment and offer a list of health and wellness services designed for travelers.
The Company is evaluating converting some legacy
Over time, the Company envisions that Treat’s digital channels will provide more significant growth opportunities for revenue and profit than its brick and mortar airport locations. The success of this revenue stream will be achieved through both subscription-based services that provide on-demand virtual care and tools supporting travel health and wellness.
Given its strong liquidity position and poise for growth, the Company would also consider accretive acquisitions and other strategic transactions to further broaden its service and retail offerings and would invest in new opportunities beyond this new evolving concept. The Company may also consider a potential stock repurchase program.
Liquidity and Financial Condition
Summary of Second Quarter 2021 Financial Results
Reported revenue during the three months ended
Explanation of Management Services Agreements (“MSAs”)
During 2020, the Company entered into MSAs with professional medical services companies that provide health care services to patients in connection with XpresCheck. The medical services companies pay XpresCheck a monthly fee to operate in the
However, as a result of uncertainties around the cash flows of XpresCheck, the Company concluded in 2020 that the collectability criteria to qualify as a contract under ASC 606 was not met, and therefore, revenue associated with the monthly management fee would not be recognized until a subsequent reassessment resulted in the MSAs meeting the collectability criteria. XpresCheck recognized revenue of
Cost of Sales
Cost of sales increased to
Gross profit was
General and Administrative Expenses
General and administrative expenses were
Loss from Operations
Operating loss from operations decreased to
Net Loss Attributable to Common Shareholders
Net loss attributable to common shareholders was
Please refer to the Quarterly Report on Form on 10-Q filed on
XpresCheck Non-GAAP Financial Metrics
Although the Company does not generate revenue directly from patient testing volume, in the interest of providing investors with greater transparency regarding XpresCheck’s performance, the Company has opted to disclose recent and current average daily patient testing volumes and Adjusted EBITDA, along with other relevant non-GAAP financial metrics.
During the second quarter 2021, average daily patient testing volume at XpresCheck rose to over 1,000 people. With additional centers opened, total patient volume grew nearly 146% in the second quarter 2021 compared to the first quarter of 2021.
During the second quarter 2021, the number of higher revenue, higher-margin COVID-19 rapid tests increased from just over 300 per day in Q1 to more than 800 per day in Q2 (176%). Total patient volume was over 92,000 visits including more than 75,000 rapid tests.
The impact of the above is that at the Practices level, Patient Services’ fees topped
During July, higher revenue / higher margin COVID-19 rapid tests (Molecular and PCR) as a percentage of total tests averaged 97%. Total patient volume was over 33,700 including more than 33,000 rapid test volume.
On a non-GAAP basis, Adjusted EBITDA loss was
The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization expense, non-cash charges and stock-based compensation expense.
The Company considers Adjusted EBITDA to be an important indicator for the performance of its operating business, XpresCheck. In particular, it believes 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. The Company believes that excluding these transactions allows investors to meaningfully analyze the performance of core cash operations. For a reconciliation to GAAP EBITDA, please refer to the 10-Q filed this afternoon.
Webcast and Conference Call Today
The Company will host a webcast and conference call at
The Company encourages investors and interested parties to listen via webcast as there is a limited capacity to access the conference call by dialing 1-412-317-6026. To submit a question, please email firstname.lastname@example.org.
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.
To learn more about
To learn more about Treat, visit: www.TreatCare.com.
To learn more about XpresCheck, visit: www.XpresCheck.com.
To learn more about
Twitter: @Treat_Care and Instagram: @treat_care
Twitter: @xprescheck and Instagram: @realxprescheck
Twitter: @XpresSpa and Instagram: @XpresSpa
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
Source: XpresSpa Group, Inc.