XWELL Inc (XWEL) 2023 Q4 法說會逐字稿

Hello, and welcome to XWELL fiscal year 2023 earnings results conference call. During today's presentation, all parties will be in a listen-only mode. (Operator Instructions) As a reminder, this conference call is being recorded on April 16, 2024.

您好，歡迎參加 XWELL 2023 財政年度業績電話會議。在今天的演示過程中，各方都將處於僅聽模式。（操作員說明）謹此提醒，本次電話會議於 2024 年 4 月 16 日錄製。

I would now like to turn the conference over to Suzanne Scrabis, Chief Financial Officer for XWELL. Please go ahead.

我現在想將會議交給 XWELL 財務長 Suzanne Scrabis。請繼續。

Good day, everyone. Welcome to XWELL conference call to review our year end 2023 financial results. Joining me on today's call is Scott Milford, XWELL's Chief Executive Officer. We have posted our fiscal year earnings release on the Investor Relations section of our website located at www.xwell.com. The link to the webcast of today's conference call can also be found on our site. Before turning the call over to Scott, for his prepared remarks, we need to advise you of the following.

大家好。歡迎參加 XWELL 電話會議，回顧我們 2023 年底的財務表現。參加今天電話會議的是 XWELL 執行長 Scott Milford。我們已在我們網站 www.xwell.com 的投資者關係部分發布了本財年收益報告。今天電話會議的網路廣播連結也可以在我們的網站上找到。在將電話轉給斯科特之前，為了讓他準備好講話，我們需要向您提供以下建議。

Comments made on today's call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 Section 27 A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934. These forward-looking statements are based on current assumptions as of the date of this earnings conference call and webcast and opinions that involve a variety of known and unknown risks and uncertain certainties.

對今天電話會議的評論可能包含 1995 年《私人證券訴訟改革法案》、1933 年《證券法》第 27 A 條和 1934 年《證券交易法》第 21 E 條含義內的前瞻性陳述。這些前瞻性陳述是基於截至本次財報電話會議和網路廣播之日的當前假設以及涉及各種已知和未知風險以及不確定性的觀點。

Actual results may differ materially from those contained in or suggested by such forward-looking statements. Important factors that might cause such differences include those set forth from time to time in our SEC filings, including our annual report on Form 10-K for the year ended December 31, 2023, as well as our other current and periodic reports that we filed with the SEC.

實際結果可能與此類前瞻性陳述中包含或暗示的結果有重大差異。可能導致此類差異的重要因素包括我們不時向 SEC 提交的文件中列出的因素，包括我們截至 2023 年 12 月 31 日的年度 10-K 表格年度報告，以及我們提交的其他當前和定期報告與美國證券交易委員會。

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

話雖如此，我現在想把電話轉給斯科特。

Thanks, Suzanne. We appreciate everyone joining us today. Operationally, XWELL had a very productive year during which we cost effectively integrated new products, technologies and services into our spas, expanded the scope and long term value of our CDC bio surveillance partnership acquired and out of airport business that were actively growing and evolving expanded internationally, broadened our footprint to include spas and other transit hubs and made meaningful progress advancing a leaner business on our path towards profitability.

謝謝，蘇珊娜。我們感謝今天加入我們的所有人。在營運方面，XWELL 度過了非常富有成效的一年，在此期間，我們以經濟高效的方式將新產品、技術和服務整合到我們的水療中心，擴大了我們收購的CDC 生物監測合作夥伴關係的範圍和長期價值，並擴大了積極增長和發展的機場業務在國際上，擴大了我們的足跡，將水療中心和其他交通樞紐納入其中，並取得了有意義的進展，在我們實現盈利的道路上推動更精簡的業務。

Now let me turn to some of the specifics, driven by more effective staff deployment, an introduction of new services and technology to drive more passengers into our locations. Our spas continue to perform better with Express by delivering revenue growth of approximately 39% when compared to 2022. Our International Airport spas also delivered solid operating performance, benefiting from enhanced operational efficiencies. New store growth and the integration with our US retail strategy.

現在讓我談談一些具體細節，這些細節是由更有效的員工部署、引入新服務和技術來吸引更多乘客進入我們的地點所推動的。與 2022 年相比，我們的水療中心透過 Express 繼續表現更好，收入成長了約 39%。我們的國際機場水療中心也受惠於營運效率的提高，實現了穩健的營運績效。新店成長以及與我們美國零售策略的整合。

Year over year, our international spas achieved revenue growth of approximately 40% when compared to 2022. We continue to capitalize on the growth of air travel in Europe and the Middle East as these countries begin to open their doors to more business and leisure travel.

與 2022 年相比，我們的國際水療中心營收年增約 40%。隨著歐洲和中東國家開始向更多商務和休閒旅行敞開大門，我們將繼續利用這些國家航空旅行的成長。

In Q4, we opened our 11th international location in Abu Dhabi International Airport, one of the busiest airports in the Middle East, and a key hub for both passenger and cargo traffic. We're pleased with its performance out of the gate, beating our expectations by approximately 25%. Our goal with the spa business continues to be improving our unit economics, improving profitability through operational efficiencies and the continued deployment of wellness products and services that we can sell at a higher margin.

第四季度，我們在阿布達比國際機場開設了第 11 個國際機場，這是中東最繁忙的機場之一，也是客運和貨運的重要樞紐。我們對其一開始的表現感到滿意，比我們的預期高出約 25%。我們水療業務的目標仍然是改善我們的單位經濟效益，透過提高營運效率和持續部署可以以更高利潤銷售的健康產品和服務來提高獲利能力。

I'd now like to share our progress growing outside the airport. As we reported in mid-September 2023, we completed our acquisition of Naples Wax for approximately $1.5 million and have been very busy integrating its three premium aesthetic centers into our portfolio. It continues to perform well, and it's executing above our initial expectations.

現在我想分享我們在機場外發展的進展。正如我們在 2023 年 9 月中旬報導的那樣，我們以約 150 萬美元完成了對 Naples Wax 的收購，並一直忙於將其三個優質美容中心整合到我們的投資組合中。它繼續表現良好，並且執行效果超出了我們最初的預期。

During the fourth quarter of 2023, Naples wax reported revenue growth of approximately 3% year over year, and we've seen strong momentum as we head into 2024. In February of this year, we unveiled plans to open three additional Naples wax locations, adding to our strong footprint in Southwest Florida and extending our reach into the vibrant and growing Tampa-Saint Peterburg metro area.

2023 年第四季度，那不勒斯蠟業報告營收年增約 3%，進入 2024 年我們看到了強勁的勢頭。今年 2 月，我們公佈了增設三個那不勒斯蠟像地點的計劃，擴大了我們在佛羅裡達州西南部的影響力，並將我們的業務範圍擴展到充滿活力和不斷發展的坦帕-聖彼得堡都市區。

Since then, consistent with our projections, we've executed additional Florida leases, including further expansion into the center of the state. Our goal with the Naples Wax brand is to extend its reach across the Southeast with approximately 10 locations by early 2025. And as we open new locations we intend to incorporate additional aesthetic services into the model to drive new revenue and broaden the offerings at those locations.

從那時起，根據我們的預測，我們執行了佛羅裡達州的額外租賃，包括進一步擴展到該州中心。我們對 Naples Wax 品牌的目標是到 2025 年初將其影響力擴展到整個東南部，開設約 10 個地點。當我們開設新店時，我們打算將額外的美容服務納入該模式，以增加新的收入並擴大這些店的產品範圍。

Furthermore, as that business scales, we're hopeful it will provide frictionless alignment with our spa brand, allowing more customers to experience XWELL. But our Naples Wax brand isn't the only business model we're expanding outside the airport. I'm excited about our plans to take the XpresSpa brand out of the airport with a new labor light model in New York City's Penn Station. Further solidifying our commitment to driving retail revenue growth and more leverage of our brands beyond traditional venues.

此外，隨著業務規模的擴大，我們希望它能與我們的水療品牌無縫對接，讓更多客戶體驗 XWELL。但我們的那不勒斯蠟品牌並不是我們在機場外擴張的唯一商業模式。我很高興我們計劃在紐約市賓州車站推出一款新的勞動燈模型，將 XpresSpa 品牌帶出機場。進一步鞏固我們推動零售收入成長的承諾，並在傳統場所之外提高我們品牌的影響力。

Having a spot and one of the busiest transit stations in the country, one that serves more than 600,000 passengers daily is an ideal test of the concept potential in a non airport venue. To ensure its success we've customized the New York City Penn Station XpresSpa layout to provide rapid commuters with Quick Serve products and services, including high tech chair massage and 10 minute robotic manicures as well as curated retail aimed at the rail commuter.

擁有一個站點，並且是該國最繁忙的中轉站之一，每天為超過 600,000 名乘客提供服務，是對非機場場所概念潛力的理想測試。為了確保其成功，我們客製化了紐約市 Penn Station XpresSpa 佈局，為快速通勤者提供 Quick Serve 產品和服務，包括高科技椅子按摩和 10 分鐘機器人美甲，以及針對鐵路通勤者的精心策劃的零售。

We also plan to accelerate other new growth strategies outside the airport, including the planned launch of TreatStudios later this year. The concept builds on our wellness focus, providing rentable space to establish practitioners in a uniquely designed environment that caters to the practitioners customers. We will look to share details about trade studios in the coming months.

我們還計劃加速機場以外的其他新成長策略，包括計劃在今年稍後推出 TreatStudios。這個概念建立在我們對健康的關注之上，提供可出租的空間，讓從業者在獨特設計的環境中建立起來，以滿足從業者客戶的需求。我們將在未來幾個月分享有關貿易工作室的詳細資訊。

Now, as I've highlighted on prior earnings calls, leveraging technology continues to play a critical role in our growth objectives, enabling us to cost effectively increase revenue, drive more retail traffic while also delivering an efficient experience for our customers. I'm happy to share that we have deployed our new autonomous chairs across most of our US spot portfolio.

現在，正如我在先前的財報電話會議上所強調的那樣，利用科技繼續在我們的成長目標中發揮關鍵作用，使我們能夠經濟有效地增加收入，推動更多零售流量，同時為我們的客戶提供高效的體驗。我很高興與大家分享，我們已經在美國大部分現貨產品組合中部署了新的自主座椅。

Autonomous massage brings higher margins and has represented nearly 10% of all express bus services in 2023. We also expanded our partnership with Clockwork and launched autonomous manicure stations in our Las Vegas, Harry Reid, international airports spa. Bringing our total count to three locations. Since the initial launch of this pilot, we've seen 15% to 20% blended growth in the service.

自動按摩帶來更高的利潤，到 2023 年將佔所有高速巴士服務的近 10%。我們還擴大了與 Clockwork 的合作關係，並在拉斯維加斯、哈利里德國際機場水療中心推出了自動美甲站。使我們的總數達到三個位置。自從這個試點計畫首次啟動以來，我們看到該服務實現了 15% 至 20% 的綜合成長。

And looking ahead to 2024 and expect to continue our pilot in other US locations, including potential expansion abroad. We've also expanded our service offerings with the introduction of a proprietary stretching service in several of our XpresSpa locations in the US. Introduced in September 2023 stretch complements the array of massage services already available. And leverages the diverse expertise and capabilities of existing technicians.

展望 2024 年，我們預計將繼續在美國其他地區進行試點，包括潛在的海外擴張。我們也擴大了我們的服務範圍，在美國的幾個 XpresSpa 地點推出了專有的伸展服務。2023 年 9 月推出的伸展服務補充了現有的一系列按摩服務。並利用現有技術人員的多樣化專業知識和能力。

And despite its late launch in 2023, [strenches] already showing initial signs of growth as we expand this offering in other airports and continue to market the service across the business. We believe integrating new technologies and offerings, coupled with the continued growth of our retail business, further strengthens the viability of our XpresSpa business.

儘管該服務於 2023 年較晚推出，但隨著我們在其他機場擴展此服務並繼續在整個業務中推廣該服務，[stretch] 已經顯示出初步增長跡象。我們相信，整合新技術和產品，加上我們零售業務的持續成長，將進一步增強我們 XpresSpa 業務的生存能力。

Turning to our Express test business. Since 2021, we have been helping the country in its effort to monitor and hopefully reduce the threat of pathogen transmission through the first ever national bio surveillance program in the United States, the initial collaboration with Ginkgo Bioworks and the CDC has evolved and expanded multiple times and today has grown to include seven of the nation's busiest airports.

轉向我們的快速測試業務。自 2021 年以來，我們一直在透過美國首個國家生物監測計畫幫助該國監測並希望減少病原體傳播的威脅，與 Ginkgo Bioworks 和 CDC 的初步合作已經多次發展和擴大如今，該機場已發展成為包括全國最繁忙的七個機場。

Together, we're leveraging voluntary nasal swabs, wastewater from aircraft, wastewater from airport, waste triderators as well as air sampling from international travelers to detect more than 30 viral and bacterial pathogens. Additionally, the current program funding and scope were recently expanded to an estimated $36.7 million, reflecting an expansion with new collection locations at US international airports in Miami and Chicago, and the rollout of multi pathogen testing across the program.

我們共同利用自願性鼻拭子、飛機廢水、機場廢水、廢物三聯體以及國際旅客的空氣採樣來檢測 30 多種病毒和細菌病原體。此外，目前計劃的資金和範圍最近擴大到估計 3,670 萬美元，反映出美國邁阿密和芝加哥國際機場新收集地點的擴大，以及在整個計劃中推出多種病原體檢測。

We take great pride and excellent ongoing support of this vital collaboration. And it's worth highlighting that the bio surveillance program continues to be one of the United States for first lines of defense against impending threats and has achieved several key milestones. For example, during 2023, actual conducted approximately 330,000 tests from travelers from over 130 countries.

我們對這項重要合作感到非常自豪和持續的大力支持。值得強調的是，生物監視計畫仍然是美國應對迫在眉睫的威脅的第一道防線之一，並已取得了幾個關鍵的里程碑。例如，2023 年期間，actual 對來自 130 多個國家的旅客進行了約 33 萬次測試。

The TTS program is also collecting over 7,000 samples a week, leading to the discovery of new variants and pathogens ahead of other surveillance programs. Notably the traveler base genomic surveillance program has survived multiple rounds of congressional callbacks and COVID-19 funding and the transition to multi pathogen testing broadens the utility of the program and positioned it for potential future growth.

TTS 計畫每週還收集 7,000 多個樣本，從而領先其他監測計畫發現新的變異體和病原體。值得注意的是，旅行者基礎基因組監測計劃經受住了多輪國會回調和 COVID-19 資金的考驗，向多病原體檢測的過渡擴大了該計劃的效用，並為其未來的潛在增長奠定了基礎。

And while we're focused on growth and driving increased revenue, our primary goal continues to be returning to profitability. During 2023, we believe we've made meaningful strides in optimizing our cost structure diligently managing expenses and enhancing our operating efficiencies. Throughout the past year, we've continued to take measured steps to optimize our US spa count to reflect a more profitable business closing locations that we believe will not support our long-term profit expectations.

雖然我們專注於成長和推動收入增加，但我們的主要目標仍然是恢復盈利。2023 年，我們相信我們在優化成本結構、努力管理費用和提高營運效率方面取得了有意義的進展。在過去的一年裡，我們繼續採取謹慎的措施來優化我們的美國水療中心數量，以反映利潤更高的業務關閉地點，我們認為這些地點將無法支持我們的長期利潤預期。

Further, our measured steps have also included reductions in our operating cost structure. In 2023, we removed $11 million from the business in a combination of headcount system and process reductions. In 2024, we expect an additional $5 million in savings as a result of these efforts. One of the key strategies we deployed in 2023 was a knew your business, your unit, your team system-wide initiatives.

此外，我們採取的措施還包括降低營運成本結構。2023 年，我們透過人員系統和流程削減相結合，從業務中削減了 1,100 萬美元。到 2024 年，我們預計這些努力將額外節省 500 萬美元。我們在 2023 年部署的關鍵策略之一是了解您的業務、您的部門、您的團隊全系統計畫。

Rolled out in mid-2023. The program is designed to position our wellness locations to operate more efficiently. The initiative fosters a culture of accountability by maximizing revenue, minimizing expenses and achieving unit profitability. For instance, by optimizing staffing and adjusting employee hours, we have achieved labor savings ranging from 10% to 50% within our US portfolio.

於 2023 年中期推出。該計劃旨在讓我們的健康場所更有效率地運作。該計劃透過最大化收入、最小化支出和實現單位利潤來培育問責文化。例如，透過優化人員配置和調整員工工作時間，我們在美國的投資組合中實現了 10% 至 50% 的勞動力節省。

In addition, in spas were notable, labor savings have been observed. We have experienced revenue increases of up to 3%, providing further proof of success of the program. I'm pleased to report that initial results from our cost structure and return to profitability initiatives have been meaningful. As of December 31, 2023, total cost of sales decreased approximately 40% year over year, and 2023 salaries, general and administrative expenses decreased approximately 33% year over year.

此外，在水療中心，勞力的節省也很引人注目。我們的收入成長了高達 3%，這進一步證明了該計劃的成功。我很高興地報告，我們的成本結構和盈利能力恢復計劃的初步結果是有意義的。截至2023年12月31日，總銷售成本較去年同期下降約40%，2023年薪資、一般及管理費用較去年同期下降約33%。

We continue to see opportunities for better performance in 2024, and we believe we're on a clear path to return to profitability. And to reiterate, we're focused on multiple long-term strategic priorities, including delivering improved results and increasing retail revenue, leveraging new retail products and technologies.

我們繼續看到 2024 年實現更好業績的機會，並相信我們正走在恢復盈利的明確道路上。重申一下，我們專注於多個長期策略重點，包括利用新的零售產品和技術提供更好的業績和增加零售收入。

Market expansion both domestically and internationally, accelerating excellence out of airport portfolio growth, launching our new treat studios model, continuing our collaboration with global governments in biosecurity, optimizing efficiencies and driving strong operational execution and cultivating an efficient and cost-effective business model. In summary, we're confident in our direction and optimistic about XWELL's position.

國內和國際市場擴張，加速機場投資組合的卓越成長，推出新的治療工作室模式，繼續與全球政府在生物安全方面的合作，優化效率並推動強有力的運營執行，並培育高效且具有成本效益的商業模式。綜上所述，我們對自己的方向充滿信心，對XWELL的地位持樂觀態度。

With that, I'd like to briefly turn the call over to Suzanne, for a recap of certain of our 2023 financial results.

說到這裡，我想簡單地將電話轉給 Suzanne，回顧我們 2023 年的某些財務表現。

Thank you, Scott. I'm now going to provide a brief synopsis of our fiscal year results. However, for details, please refer to the 10-K filed with the SEC. In accordance with US generally accepted accounting principles, 2023 results included non-cash goodwill and intangible asset impairment charges totaling approximately $8.9 million, primarily related to our high point unit and other assets related to treat and XpresSpa.

謝謝你，斯科特。我現在將簡要介紹我們的財政年度業績。不過，詳情請參閱向 SEC 提交的 10-K。根據美國公認會計原則，2023 年業績包括總計約 890 萬美元的非現金商譽和無形資產減損費用，主要與我們的高點單位以及與 treat 和 XpresSpa 相關的其他資產有關。

As previously announced, on April 12, 2024, the audit committee of the Board of Directors, the company after audit work performed in consultation with management and with its independent registered public accounting firm, determined that the company incorrectly applied US GAAP as it related to the determination of the impairment of the company's tree, Incorporated business segment with the three and nine months ended September 30, 2023, in the quarterly report on Form 10-Q for the period ended September 30, 2023.

如同先前所宣布的，2024 年 4 月 12 日，公司董事會審計委員會在與管理層及其獨立註冊會計師事務所協商進行審計工作後，確定公司錯誤地應用了美國公認會計準則，因為它涉及在截至2023 年9 月30 日的10-Q 表格季度報告中，確定了截至2023 年9 月30 日止三個月和九個月的公司樹公司業務部門的減損。

The cumulative effect is an understatement of the impairment expenses as it related to the treat business segment of $1.6 million, as part of its determination, the audit committee concluded that it was appropriate to correct the misapplication of GAAP described above for financial statements for Q3 2023 included in the third quarter quarterly report by restating such unaudited financial information because the errors in the financial statements are material to the financial statements for Q3 2023.

累積影響低估了減損費用，因為它與 160 萬美元的對待業務部門相關，作為其決定的一部分，審計委員會得出結論，糾正上述 2023 年第三季財務報表中 GAAP 的誤用是適當的通過重述此類未經審計的財務訊息，將其納入第三季季度報告中，因為財務報表中的錯誤對2023 年第三季的財務報表至關重要。

As a result, the audited financial statements for Q3 2023 should no longer be relied on. Similarly, any previously issued or filed reports, press releases, earnings releases and investor presentations or other communications describing the company's financial statements and other related financial information covering Q3 2023 should no longer be relied upon.

因此，不應再依賴 2023 年第三季經審計的財務報表。同樣，不應再依賴任何先前發布或提交的報告、新聞稿、收益發布和投資者演示文稿或描述公司財務報表的其他通信以及涵蓋 2023 年第三季度的其他相關財務資訊。

These errors have no effect on the company's previously reported cash and cash equivalents or marketable security balances or cash runway. Prior to the restatement the company previously reported impairment charges of approximately $6.8 million associated with certain intangible assets in its quarterly report on Form 10-Q for the quarter ended September 30, 2023, filed with the SEC on November 14, 2023.

這些錯誤對公司先前報告的現金和現金等價物或有價證券餘額或現金跑道沒有影響。在重述之前，該公司先前在其於2023 年11 月14 日向SEC 提交的截至2023 年9 月30 日的季度10-Q 表格季度報告中報告了與某些無形資產相關的約680 萬美元的減損費用。

Turning to our results for fiscal year 2023, total revenue was approximately $30.1 million and primarily consisted of approximately $19.5 million from XpresSpa locations and Treat locations, approximately $9.9 million from XpresTest, which includes XWELL's bio-surveillance partnership and its hyper point business and $650,000 from Naples Wax Center, which was acquired at the end of the third quarter.

轉向我們2023 財年的業績，總收入約為3,010 萬美元，主要包括來自XpresSpa 地點和Treat 地點的約1,950 萬美元，來自XpresTest 的約990 萬美元，其中包括XWELL 的生物監測合作夥伴關係及其超級超級點業務，以及來自XpresTest 的約990 萬美元，以及來自XpresTest 的約990 萬美元。

Turning to expenses, our total cost of sales decreased to $26.4 million from $43.9 million in the prior year. Switching to salary, general and administrative expenses, demonstrating our cost cutting efforts and initiatives, these expenses totaled $20.9 million compared to $31.2 million for the prior year. We reported an operating loss for the year of approximately $28.2 million compared to an operating loss of approximately $31.2 million in the prior year.

說到費用，我們的總銷售成本從前一年的 4,390 萬美元下降到 2,640 萬美元。轉向工資、一般和行政費用，展示了我們削減成本的努力和舉措，這些費用總計 2,090 萬美元，而上一年為 3,120 萬美元。我們報告本年度的營運虧損約為 2,820 萬美元，而上一年的營運虧損約為 3,120 萬美元。

As Scott has discussed in the past, and it is important to reiterate here that we continue to strategically invest in our long-term growth initiatives. Our net loss attributable to XWELL was approximately $28 million compared to a net loss of approximately $32.7 million in the prior year.

正如史考特過去所討論的那樣，這裡需要重申的是，我們將繼續對長期成長計畫進行策略性投資。XWELL 的淨虧損約為 2,800 萬美元，而前一年的淨虧損約為 3,270 萬美元。

Turning to our balance sheet, at year end, we had approximately $8.4 million of cash and cash equivalents, $14.6 million in marketable securities, total assets of approximately $26.6 million and no long-term debt. Looking ahead, we remain focused on continued improvements in execution, including prudent cost management and enhanced operational processes.

談到我們的資產負債表，截至年底，我們擁有約 840 萬美元的現金和現金等價物，1,460 萬美元的有價證券，總資產約 2,660 萬美元，沒有長期債務。展望未來，我們仍專注於執行方面的持續改進，包括審慎的成本管理和增強的營運流程。

I look forward to speaking with you all again in the months ahead. I'll now turn the call back to the operator.

我期待在未來幾個月再次與大家交談。我現在將把電話轉回給接線生。

Thank you very much. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines and have a great day.

非常感謝。會議現已結束。感謝您參加今天的演講。您現在可以斷開線路並度過美好的一天。