NEW YORK - January 23, 2017 - FORM
Holdings Corp. ("FORM") (NASDAQ: FH), a diversified holding
company, today updated its shareholders on the performance of each
of the company's operating units in 2016, and provided an outlook
for the company in 2017.
"We enter 2017 excited about the
future of FORM. We concluded 2016 by completing the
acquisition of XpresSpa, our largest transaction to date, and have
now established ourselves as a diversified holding company. The
total aggregate revenue of the individual companies, including
XPresSpa (which FORM acquired in December 2016) was over $60
million in 2016,*" said Andrew D. Perlman, FORM's Chief Executive
Officer.
"2016 was a transformational year
for our company, focused on creating a growth-oriented platform for
our companies. We witnessed strong growth at Group Mobile and
the beginning stages of commercialization at FLI Charge, and
extracted as much value as possible from our intellectual property
assets, in which we executed a number of licenses and divested the
vast majority of our patent assets," Perlman concluded.
Select 2016
Highlights and Outlook for 2017
XpresSpa
XpresSpa is the world's largest
airport spa company providing nearly 1,000,000 air travelers with
premium health and wellness services per year, as well as a branded
line of travel products and accessories at its 52 locations across
24 major airports. The company is headquartered in New York,
and has over 700 employees worldwide.
2016
Review
-
On August 8, 2016, FORM announced the signing of
a definitive agreement to acquire XpresSpa; the transaction closed
on December 23, 2016.
-
Ed Jankowski was recruited to be Chief Executive
Officer concurrent with the acquisition process and joined XpresSpa
in June 2016, bringing extensive retail and airport experience from
his time at Luxottica, Godiva, Safilo Group, Solstice, World Duty
Free, Liz Claiborne and Macy's.
-
XpresSpa management employed several strategic
initiatives in the second half of the year to improve revenue and
profitability:
-
Total revenue in 2016 was $43.3 million, an
11.6% increase as compared to 2015.
-
Same store comparable sales grew by 7.6% in 2016
as compared to 2015.*
-
For the first half of 2016, prior to
implementing management's strategic initiatives, same store
comparable sales were -1.6%.*
-
For the second half of 2016, following the
implementation of management's strategic initiatives, same store
comparable sales grew by 12%.*
-
Opened six new spa locations, including stores
in the Houston, Charlotte and Dubai airports, in which XpresSpa
previously did not have a footprint.
-
Extended key leases in airports including JFK,
Orlando and Minneapolis.
*Same
store comparable sales is a Non-GAAP financial measure, see "Use of
Non-GAAP Financial Measures" below.
2017
Outlook
We intend to grow XpresSpa's
revenue by attempting to improve same store revenue in existing
stores and by continuing to open new stores throughout the
world:
-
We expect to improve same store revenue
by:
-
Focusing on the retention and recruitment of
in-store staff;
-
Updating point of sale and technology
infrastructure to optimize efficiencies and labor at the store
level;
-
Rolling out XpresSpa 2.0, which has an updated
aesthetic and optimizes the use of space in the storefronts, while
clearly communicating the company's mission of delivering a great
spa experience in 30 minutes or less; and
-
Implementing marketing efforts which the company
has yet to commence to date.
-
We anticipate increasing the total store count
by participating in and winning requests for proposals ("RFPs") for
new locations both domestically and internationally.
-
There are currently five new XpresSpa locations
scheduled to open in 2017.
-
We are currently participating in 13 RFPs for
additional XpresSpa locations.
-
There are 25 additional RFPs scheduled to come
out in 2017.
-
Historically XpresSpa wins 80% of the RFPs in
which it participates.
-
We plan to explore a franchising model to
penetrate secondary and tertiary airport markets.
Group
Mobile
Group Mobile is an end-to-end
solution provider for all areas of the rugged mobile hardware and
services market. The company primarily focuses on large
custom solutions for enterprise and the public sector. Group Mobile
is headquartered in Arizona and has 30 employees.
2016
Review
-
Achieved significant increase in customer demand
resulting in strong year-over-year growth:
-
2016 bookings and customer commitments of $12.1
million as compared to $5.3 million in 2015 (128% year-over-year
growth)*.
-
Anticipate an additional $1 million of services
revenue in the first quarter of 2017 that will be completed upon
delivery of orders made during the fourth quarter*.
-
Bookings and customer commitments in the fourth
quarter of 2016 were $6.4 million, an increase of over 450% as
compared to the fourth quarter of 2015*.
-
Although bookings reached an all-time high,
revenues for the fourth quarter will be light with revenue
recognition for these orders to fall primarily in the first quarter
resulting in 2016 revenue of $6.7 million. This is due to the
longer manufacturing lead times on larger custom
orders.
-
Largest customer in 2016 accounted for $3.3
million of orders and commitments, more than 1000% increase from
the largest customer of 2015*.
-
Achieved strong sales growth by changing the
business model from that of a reseller to a full-service solutions
provider.
-
Recruited Darin White, President May 1, 2016
brining two decades of specific industry experience, key industry
supplier relationships at Getac, Panasonic, Twinhead, Xplore
Technologies, Sierra Wireless, Gamber Johnson and Synnex refocusing
Group Mobile's industry message, core business vision, mission and
goals.
-
Recruited Roger Cresswell as Senior Vice
President of Service and Operations. Mr. Cresswell was a founding
member of Itronix, which was acquired by General Dynamics, and
brings extensive experience in across all areas of computer
services.
-
Acquired and provisioned 10,000 square foot
configuration and service center in fourth quarter of 2016.
2017
Outlook
FLI
Charge
FLI Charge is an early stage
technology company focused on charging and power transfer solutions
for low power devices, higher powered devices as well as solving
infrastructure related problems. The company is headquartered
in New York and has eight employees.
2016
Review
-
Launched the company at the Consumer Electronics
Show in January 2016.
-
Developed extensive business development
pipeline for direct implementation of FLI Charge technology at OEM
level.
-
Launched consumer product June 2016, generating
approximately $225,000 in pre-orders.
-
Completed manufacturing and delivery of
pre-ordered product.
-
Executed partnership agreements with Bretford
Furniture, MITO Corporation, HGU New York, Papp Plastics and Global
Sourcing Specialist.
-
Launched e-commerce site in November 2016 and
partnered with The Sharper Image to sell product through their
website.
2017
Outlook
FLI Charge's 2017 goals are
to:
-
Grow direct to consumer business by achieving
positive digital marketing ROI.
-
Secure placement in traditional and big box
retailers.
-
Partner with additional online outlets as well
as domestic and overseas distributors.
-
Design and bring to market current pipeline of
additional consumer and enterprise products.
-
Commercialize solutions with strategic partners
in education, hospitality, office and several other key
markets.
-
Secure additional partnerships and launch
products with established brands in the furniture, power tool,
hospitality and auto markets.
-
Build an established and recognized brand.
Intellectual
Property
On December 5, 2016, we
transferred the majority of our Telecom parent portfolio, totaling
approximately 500 patents and patent applications to Nokia. Moving
forward we will continue to extract as much value from our
remaining patent assets, maximizing return on investment.
Use of Non-GAAP
Financial Measures
XpresSpa uses GAAP and non-GAAP
measurements to assess the trends in its business. Items XpresSpa
reviews on an ongoing basis are revenues, Comp Store Sales (which
it defines as sales from stores opened longer than a year compared
to the same period sales of those stores a year ago), store
contribution margins, and number of transactions (which is a way to
measure traffic in spas). In addition, XpresSpa monitors stores'
performance compared to its model store metrics to ensure that it
is consistently opening spas that have the same or similar return
dynamics as historical stores. XpresSpa believes the trends
exhibited by its business are strong and substantiate its continued
investment in additional locations and infrastructure.
Please note that FORM's consolidated Statement of
Operations will include XpresSpa results from December 23, 2016
onwards. During the full year of 2016, XpresSpa generated $43.4
million of revenue.
Group Mobile uses bookings and
customer commitments as a non GAAP measure to assess the health of
the business. They represent orders placed and orders committed
from the customers, which will be fulfilled in the future. Group
Mobile expects to recognize bookings and commitments from customers
as revenues throughout 2017.
About FORM
Holdings Corp.
FORM Holdings Corp. (NASDAQ: FH)
is a publicly held diversified holding company that specializes in
identifying, investing in and developing companies with superior
growth potential. FORM's current holdings include XpresSpa,
Group Mobile, FLI Charge, Infomedia and intellectual property
assets. XpresSpa is the world's largest airport spa company
with 52 locations across 24 major airports. Group Mobile is a
provider of rugged, mobile and field-use computing products,
serving customers worldwide. FLI Charge designs, develops,
licenses, manufactures and markets wireless conductive power and
charging solutions. Infomedia is a leading provider of
customer relationship management and monetization technologies to
mobile carriers and device manufacturers. FORM Holdings'
intellectual property division is engaged in the development and
monetization of intellectual property. To learn more about Form
Holdings Corp., visit: www.FormHoldings.com.
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. Statements in
this press release regarding the merger between FORM and XpresSpa;
the potential value created by the merger for FORM's stockholders
and XpresSpa's equity holders; the potential of FORM's business
after the merger; XpresSpa's projected revenue, the ability to
raise capital to fund operations and business plan; the continued
listing of FORM's securities on the Nasdaq Capital Market; market
acceptance of FORM products; the collective ability to protect
intellectual property rights; competition from other providers and
products; FORM's management and board of directors after the
merger; and any other statements about FORM's management team's
future expectations, beliefs, goals, plans or prospects 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 inability to realize
the potential value created by the merger for FORM's stockholders;
FORM's inability to maintain the listing of its securities on the
Nasdaq Capital Market; the potential lack of market acceptance of
FORM's products; FORM's inability to monetize and recoup FORM's
investment with respect to assets and other businesses that that
were acquired or will be acquired in the future; general economic
conditions and level of information technology and consumer
electronics spending; unexpected trends in the mobile phone and
telecom computing industries; the potential loss of one or more of
FORM's significant Original Equipment Manufacturer ("OEM")
suppliers,; market acceptance, quality, pricing, availability and
useful life of FORM's products and services, as well as the
mix of FORM's products and services sold; potential
competition from other providers and products; FORM's inability to
license and monetize FORM's patents, including the outcome of
litigation; FORM's inability to develop and introduce new products
and/or develop new intellectual property; FORM's inability to
protect FORM's intellectual property rights; new legislation,
regulations or court rulings related to enforcing patents, that
could harm FORM's business and operating results; FORM's inability
to retain key members of its management team; and other risks and
uncertainties and other factors discussed from time to time in our
filings with the Securities and Exchange Commission ("SEC"),
including FORM's Annual Report on Form 10-K for the year ended
December 31, 2015 filed with the SEC on March 10, 2016. FORM
expressly disclaims any obligation to publicly update any
forward-looking statements contained herein, whether as a result of
new information, future events or otherwise, except as required by
law.
Contacts:
FORM
Holdings
212-309-7549
info@FORMHoldings.com
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: FORM Holdings Corp. via Globenewswire
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