XpresSpa Group Provides Business Update and Announces Fourth Quarter 2020 Financial Results
Eleven XpresCheck Wellness Centers Currently Operating with Two Additional Locations to Open Soon
Positioned to launch
Strong Liquidity Position with Cash Balance of Approximately
Recognize Deferred Revenue from XpresCheck during the First Half of 2021
Webcast and Conference Call Scheduled for
However, given limited airport traffic and changes in consumer behavior due to the pandemic, these reopened locations have underperformed. The Company therefore does not anticipate reopening other spas for traditional services in the near-term, but will re-evaluate possible re-openings of select spas in the future on a location-by-location basis, based on the economic viability of each such location.
XpresCheck Wellness Center Services
The Company launched the XpresCheck™ brand under its
October 2020, XpresCheck expanded its testing services beyond COVID-19 testing in select locations to include additional rapid testing services for other communicable diseases that include influenza, mononucleosis and group A streptococcus, as well as administration of seasonal flu vaccinations.
- As of
November 13, 2020, XpresCheck was designated as a State of Hawaii Trusted Testing Partner. All travelers ages five and over are required to take a Nucleic Acid Amplification Test (NAAT) from a certified Clinical Laboratory Improvement Amendment (CLIA) lab in order to bypass the State of Hawaii’s 14-day mandatory quarantine. The State of Hawaiiaccepts test results only from Trusted Testing and Travel Partnersand tests must be taken no more than 72 hours before flight departure time.
- The Company has partnered with The CommonTrust Network’s CommonPass platform which links COVID-19 test results from partnered labs such as XpresCheck directly into the CommonPass app. Passengers are then able to show their test results through this app to airlines and destinations so as to ensure a hassle-free entry and to avoid quarantines, where applicable.
March 8, 2021, XpresCheck transitioned to a full “fee for service” model for all tests. Under this model, patients pay XpresCheck directly at the time of service and then are able submit their testing fees for insurance reimbursement. Prior to March 8, 2021only the rapid test had been on a fee for service model.
- XpresCheck is currently awaiting approval on a state-by-state basis to administer COVID-19 vaccines approved for use by the FDA at all Wellness Centers. Upon state-by-state approval and the receipt of the necessary COVID-19 vaccines, the Company may launch a vaccination program primarily focused on airline employees and airport staff initially, although passengers could be eligible for vaccinations over time, subject to supply availability and other state eligibility requirements.
March 29, 2020, XpresCheck announced the addition of a rapid PCR test at select airports and plans to add another rapid antigen test to its suite of COVID-19 testing services shortly.
XpresCheck Wellness Center Locations
The Company currently has eleven locations operating in nine airports:
There are currently two additional “popup”
The Company is developing a travel health and wellness brand that is positioned for a post-pandemic world and that leverages its historic travel wellness experience and newly acquired healthcare expertise. The Company is preparing a launch of a
The strategic brand pillars are
The Company sees this concept evolution as a significant opportunity to be a category innovator in a new niche industry where it can leverage technology in addition to its existing real estate and airport experience in providing travelers with peace of mind and access to integrated care. The brand name of this concept will be announced at a later date.
While COVID-19 testing will be available under this new brand, the broader suite of services may include: pre-travel health and wellness planning, on-site medical services such as metabolic panel testing, anxiety care, and convenient travel care; virtual chat care and video care through a partnership with an established telemedicine company; and access to virtual wellness care such as guided meditations and yoga.
The first two integrated
However, over the long-term, the Company envisions that its digital channels will provide more significant growth opportunities for revenue and profit than its airport locations. The success of this revenue stream will be achieved through both subscription-based services that provide care and tools supporting travel health and wellness. Furthermore, the Company will offering upstream content that can be monetized through affiliate revenue as well as curated retail through ecommerce. The Company is currently laying the groundwork to have its initial digital assets launched in the summer timeframe ahead of the first two brick-and-mortar location openings as travel begins its recovery this fall and into 2022.
Given its strong liquidity position and poise for growth, the Company would also consider accretive acquisitions and other investments to further broaden its service and retail offerings and would invest in new opportunities beyond this new evolving concept.
Liquidity and Financial Condition
During the twelve months ended
Summary of Fourth Quarter 2020 Financial Results
Reported revenue during the three months ended
Explanation of Management Service Agreements
The Company entered into management services agreements (MSAs) with professional medical services companies that provide health care services to patients in connection with the XpresCheck. The medical services companies pay XpresCheck a monthly fee to operate in the
As a result of the uncertainties around the cash flow of the XpresCheck business, the Company has concluded that the collectability criteria to qualify as a contract under ASC 606 (
However, as of
Cost of Sales
Cost of sales decreased to
Impairment/Disposal of Assets
Impairment/disposal of assets expense increased to
General and Administrative Expenses
General and administrative expenses was
Loss from Operations
Operating loss from operations increased to
Net Loss Attributable to Common Shareholders
Net loss attributable to common shareholders was
Please refer to the Annual Report on Form on 10-K filed on
XpresCheck Non-GAAP Financial Metrics
Although the Company does not generate revenue directly from patient testing volume, as detailed above, 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 along with other relevant non-GAAP financial metrics.
During the fourth quarter 2020, average daily patient testing volume per
During the first 12 weeks of the first quarter 2021, the average revenue per patient was
Total XpresCheck pro forma Patient Services Revenue for the three months ended
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 1-201-689-8263. 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.
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.