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Hilton Reports First Quarter Results, Expands Brand Portfolio
Reading Time: 15 minutes
MCLEAN, Va.–(BUSINESS WIRE)–Hilton Worldwide Holdings Inc. (“Hilton” or the “Company”) (NYSE: HLT)
today reported its first quarter 2019 results. Highlights include:
-
Diluted EPS was $0.54 for the first quarter, a 6 percent increase
from the same period in 2018, and diluted EPS, adjusted for special
items, was $0.80, a 16 percent increase from the same period in 2018 -
Net income for the first quarter was $159 million, a 2 percent
decrease from the same period in 2018 -
Adjusted EBITDA for the first quarter was $499 million, an increase
of 12 percent from the same period in 2018 and exceeding the high end
of guidance -
System-wide comparable RevPAR increased 1.8 percent on a currency
neutral basis for the first quarter from the same period in 2018 -
Approved 29,300 new rooms for development during the first quarter,
growing Hilton’s development pipeline to over 371,000 rooms as of
March 31, 2019 -
Opened 12,100 rooms in the first quarter, contributing to 10,000
net additional rooms, on track to deliver approximately 6.5 percent
net unit growth for the full year - Launched a new meetings-and-events-focused brand, Signia Hilton
-
In February 2019, Hilton’s board of directors authorized an
additional $1.5 billion for share repurchases under its stock
repurchase program -
Repurchased 3.9 million shares of Hilton common stock during the
first quarter, bringing total capital return, including dividends, to
approximately $340 million for the quarter -
Full year 2019 system-wide RevPAR is expected to increase between
1.0 percent and 3.0 percent on a comparable and currency neutral basis
compared to 2018; full year net income is projected to be between $881
million and $910 million; full year Adjusted EBITDA is projected to be
between $2,265 million and $2,305 million -
Full year 2019 capital return is projected to be between $1.3
billion and $1.8 billion
Overview
Christopher J. Nassetta, President & Chief Executive Officer of Hilton,
said, “We are happy to report a good start to the year with first
quarter results that exceeded the high end of guidance for Adjusted
EBITDA and diluted EPS, adjusted for special items. We continued to
drive impressive market share gains across all brand segments and
regions during the first quarter, further increasing our
industry-leading RevPAR index premium. We were also excited to launch
our newest brand, Signia Hilton. We expect this dynamic and innovative
brand to change the meetings and events space and enable us to better
serve our guests and owners.”
For the three months ended March 31, 2019, system-wide comparable RevPAR
grew 1.8 percent, driven by increases in both ADR and occupancy.
Management and franchise fee revenues increased 12 percent during the
three months ended March 31, 2019 as a result of RevPAR growth of 1.7
percent at comparable managed and franchised hotels, increased licensing
and other fees and the addition of new properties to Hilton’s portfolio.
For the three months ended March 31, 2019, diluted EPS was $0.54 and
diluted EPS, adjusted for special items, was $0.80 compared to $0.51 and
$0.69, respectively, for the three months ended March 31, 2018. Net
income and Adjusted EBITDA were $159 million and $499 million,
respectively, for the three months ended March 31, 2019, compared to
$163 million and $445 million, respectively, for the three months ended
March 31, 2018.
Development
In the first quarter of 2019, Hilton opened 85 new hotels totaling
12,100 rooms and achieved net unit growth of 10,000 rooms, a 41 percent
increase from the same period in 2018.
As of March 31, 2019, Hilton’s development pipeline totaled nearly 2,480
hotels consisting of over 371,000 rooms throughout 108 countries and
territories, including 37 countries and territories where Hilton does
not currently have any open hotels. Additionally, 200,000 rooms in the
development pipeline were located outside the U.S., and 193,000 rooms,
or more than half, were under construction.
During the quarter, Hilton added several notable properties to its
system, including further expansion of its luxury and lifestyle
portfolio with the openings of the Conrad Washington, DC, Conrad
Hangzhou in China and Canopy by Hilton Minneapolis Mill District.
In February 2019, Hilton launched its newest brand, Signia Hilton, a
dynamic, meetings-and-events-focused brand. Signia will further
reinforce Hilton’s commitment to innovation that meets the evolving
needs of today’s travelers and will bring premium experiences to top
urban and resort destinations around the world. The brand will debut
with the openings of the Signia Hilton Orlando Bonnet Creek, Signia
Hilton Atlanta and Signia Hilton Indianapolis.
Balance Sheet and Liquidity
As of March 31, 2019, Hilton had $7.4 billion of long-term debt
outstanding, excluding deferred financing costs and discount, with a
weighted average interest rate of 4.46 percent. Excluding finance lease
liabilities and other debt of Hilton’s consolidated variable interest
entities, Hilton had $7.2 billion of long-term debt outstanding with a
weighted average interest rate of 4.41 percent.
Total cash and cash equivalents were $461 million as of March 31, 2019,
including $79 million of restricted cash and cash equivalents. As of
March 31, 2019, Hilton had $50 million outstanding under its senior
secured revolving credit facility and a borrowing capacity of $891
million, which includes outstanding letters of credit.
In February 2019, Hilton’s board of directors authorized an additional
$1.5 billion for share repurchases under its stock repurchase program.
During the first quarter of 2019, Hilton repurchased 3.9 million shares
of its common stock at a cost of approximately $296 million and an
average price per share of $76.65. From the inception of Hilton’s stock
repurchase program in March 2017, Hilton has repurchased approximately
41.7 million shares of its common stock for approximately $3.0 billion
at an average price per share of $71.30. The amount remaining under
Hilton’s stock repurchase program is approximately $1.7 billion.
In March 2019, Hilton paid a quarterly cash dividend of $0.15 per share
on shares of its common stock, for a total of $44 million. In April
2019, Hilton’s board of directors authorized a regular quarterly cash
dividend of $0.15 per share of common stock to be paid on or before June
28, 2019 to holders of record of its common stock as of the close of
business on May 17, 2019.
Adoption of New Accounting Standard
On January 1, 2019, the Company adopted Accounting Standards Update
(“ASU”) No. 2016-02 Leases (Topic 842) (“ASU 2016-02”),
which supersedes existing guidance on accounting for leases in Leases
(Topic 840) and generally requires all leases, including operating
leases, to be recognized in the balance sheet of lessees as right-of-use
assets and lease liabilities. As permitted, the Company has applied this
ASU at the adoption date; therefore, the presentation of financial
information for all periods prior to January 1, 2019 remains unchanged
and in accordance with Leases (Topic 840). The provisions of ASU
2016-02 did not affect the Company’s cash flow or cash available for
capital return, and did not have a material impact on the Company’s
consolidated statement of operations. Refer to Hilton’s Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2019, which is
expected to be filed on or about the date of this press release, for
additional information on the effect of this ASU.
Outlook
Share-based metrics in Hilton’s outlook include actual share repurchases
to date, but do not include the effect of potential share repurchases
hereafter.
Full Year 2019
-
System-wide RevPAR is expected to increase between 1.0 percent and 3.0
percent on a comparable and currency neutral basis compared to 2018. -
Diluted EPS, before special items, is projected to be between $2.98
and $3.07. -
Diluted EPS, adjusted for special items, is projected to be between
$3.74 and $3.84. - Net income is projected to be between $881 million and $910 million.
-
Adjusted EBITDA is projected to be between $2,265 million and $2,305
million. -
Management and franchise fee revenue is projected to increase between
7 percent and 9 percent compared to 2018. -
Contract acquisition costs and capital expenditures, excluding amounts
indirectly reimbursed by hotel owners, are expected to be between $175
million and $200 million. -
Capital return is projected to be between $1.3 billion and $1.8
billion. -
General and administrative expenses are projected to be between $430
million and $450 million. - Net unit growth is expected to be approximately 6.5 percent.
Second Quarter 2019
-
System-wide RevPAR is expected to increase between 1.0 percent and 2.0
percent on a comparable and currency neutral basis compared to the
second quarter of 2018. -
Diluted EPS, before special items, is projected to be between $0.81
and $0.86. -
Diluted EPS, adjusted for special items, is projected to be between
$0.98 and $1.03. - Net income is projected to be between $238 million and $253 million.
-
Adjusted EBITDA is projected to be between $590 million and $610
million. -
Management and franchise fee revenue is projected to increase between
6 percent and 8 percent compared to the second quarter of 2018.
Conference Call
Hilton will host a conference call to discuss first quarter 2019 results
on May 1, 2019 at 10:00 a.m. Eastern Time. Participants may listen to
the live webcast by logging on to the Hilton Investor Relations website
at https://ir.hilton.com/events-and-presentations.
A replay and transcript of the webcast will be available within 24 hours
after the live event at https://ir.hilton.com/financial-reporting/quarterly-results/2019.
Alternatively, participants may listen to the live call by dialing
1-888-317-6003 in the United States or 1-412-317-6061 internationally.
Please use the conference ID 3985417. Participants are encouraged to
dial into the call or link to the webcast at least fifteen minutes prior
to the scheduled start time. A telephone replay will be available for
seven days following the call. To access the telephone replay, dial
1-877-344-7529 in the United States or 1-412-317-0088
internationally using the conference ID 10130262.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
statements include, but are not limited to, statements related to the
expectations regarding the performance of Hilton’s business, financial
results, liquidity and capital resources and other non-historical
statements, including the statements in the “Outlook” section of this
press release. In some cases, these forward-looking statements can be
identified by the use of words such as “outlook,” “believes,” “expects,”
“potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,”
“projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”
or the negative version of these words or other comparable words. Such
forward-looking statements are subject to various risks and
uncertainties, including, among others, risks inherent to the
hospitality industry, macroeconomic factors beyond Hilton’s control,
competition for hotel guests and management and franchise contracts,
risks related to doing business with third-party hotel owners,
performance of Hilton’s information technology systems, growth of
reservation channels outside of Hilton’s system, risks of doing business
outside of the United States of America (“U.S.”) and Hilton’s
indebtedness. Additional factors that could cause Hilton’s results to
differ materially from those described in the forward-looking statements
can be found under the section entitled “Part I—Item 1A. Risk Factors”
of Hilton’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2018, filed with the Securities and Exchange Commission
(“SEC”), as such factors may be updated from time to time in Hilton’s
periodic filings with the SEC, which are accessible on the SEC’s website
at www.sec.gov.
Accordingly, there are or will be important factors that could cause
actual outcomes or results to differ materially from those indicated in
these statements. These factors should not be construed as exhaustive
and should be read in conjunction with the other cautionary statements
that are included in this press release and in Hilton’s filings with the
SEC. The Company undertakes no obligation to publicly update or review
any forward-looking statement, whether as a result of new information,
future developments or otherwise, except as required by law.
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not recognized
under U.S. generally accepted accounting principles (“GAAP”) in this
press release, including: net income, adjusted for special items;
diluted EPS, adjusted for special items; Adjusted EBITDA; Adjusted
EBITDA margin; net debt; and net debt to Adjusted EBITDA ratio. See the
schedules to this press release, including the “Definitions” section,
for additional information and reconciliations of such non-GAAP
financial measures.
About Hilton
Hilton (NYSE: HLT) is a leading global hospitality company, with a
portfolio of 17 world-class brands comprising more than 5,700 properties
with over 923,000 rooms, in 113 countries and territories. Dedicated to
fulfilling its mission to be the world’s most hospitable company, Hilton
earned a spot on the 2018 world’s best workplaces list and has welcomed
more than 3 billion guests during its 100-year history. Through the
award-winning guest loyalty program, Hilton Honors, more than 89 million
members who book directly with Hilton can earn Points for hotel stays
and experiences money can’t buy, plus enjoy instant benefits including
digital check-in with room selection, Digital Key and Connected Room.
Visit newsroom.hilton.com
for more information, and connect with Hilton on facebook.com/hiltonnewsroom,
twitter.com/hiltonnewsroom,
linkedIn.com/company/hilton,
instagram.com/hiltonnewsroom
and youtube.com/hiltonnewsroom.
|
HILTON WORLDWIDE HOLDINGS INC. EARNINGS RELEASE SCHEDULES TABLE OF CONTENTS |
|
|
|
Condensed Consolidated Statements of Operations |
|
Comparable and Currency Neutral System-Wide Hotel Operating |
|
Property Summary |
|
Capital Expenditures and Contract Acquisition Costs |
|
Non-GAAP Financial Measures Reconciliations |
|
Definitions |
|
HILTON WORLDWIDE HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in millions, except per share data) |
||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Revenues | ||||||||||
| Franchise and licensing fees | $ | 382 | $ | 331 | ||||||
| Base and other management fees | 80 | 77 | ||||||||
| Incentive management fees | 55 | 55 | ||||||||
| Owned and leased hotels | 312 | 334 | ||||||||
| Other revenues | 26 | 23 | ||||||||
| 855 | 820 | |||||||||
| Other revenues from managed and franchised properties | 1,349 | 1,254 | ||||||||
| Total revenues | 2,204 | 2,074 | ||||||||
| Expenses | ||||||||||
| Owned and leased hotels | 298 | 320 | ||||||||
| Depreciation and amortization | 84 | 82 | ||||||||
| General and administrative | 107 | 104 | ||||||||
| Other expenses | 20 | 14 | ||||||||
| 509 | 520 | |||||||||
| Other expenses from managed and franchised properties | 1,383 | 1,275 | ||||||||
| Total expenses | 1,892 | 1,795 | ||||||||
| Operating income | 312 | 279 | ||||||||
| Interest expense | (98 | ) | (83 | ) | ||||||
| Gain on foreign currency transactions | — | 11 | ||||||||
| Other non-operating income, net | 4 | 14 | ||||||||
| Income before income taxes | 218 | 221 | ||||||||
| Income tax expense | (59 | ) | (58 | ) | ||||||
| Net income | 159 | 163 | ||||||||
| Net income attributable to noncontrolling interests | (1 | ) | (2 | ) | ||||||
| Net income attributable to Hilton stockholders | $ | 158 | $ | 161 | ||||||
| Weighted average shares outstanding: | ||||||||||
| Basic | 293 | 316 | ||||||||
| Diluted | 295 | 319 | ||||||||
| Earnings per share: | ||||||||||
| Basic | $ | 0.54 | $ | 0.51 | ||||||
| Diluted | $ | 0.54 | $ | 0.51 | ||||||
| Cash dividends declared per share | $ | 0.15 | $ | 0.15 | ||||||
|
HILTON WORLDWIDE HOLDINGS INC.
COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING BY REGION, BRAND AND SEGMENT (unaudited) |
||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||
| Occupancy | ADR | RevPAR | ||||||||||||||||||||||
| 2019 | vs. 2018 | 2019 | vs. 2018 | 2019 | vs. 2018 | |||||||||||||||||||
| U.S. | 72.2 | % | 0.4 | % pts. | $ | 147.55 | 1.3 | % | $ | 106.52 | 1.8 | % | ||||||||||||
| Americas (excluding U.S.) | 65.6 | 0.6 | 125.76 | 3.4 | 82.56 | 4.4 | ||||||||||||||||||
| Europe | 68.9 | (0.1 | ) | 128.23 | 3.3 | 88.38 | 3.2 | |||||||||||||||||
| Middle East & Africa | 75.2 | 2.7 | 140.90 | (9.1 | ) | 106.01 | (5.7 | ) | ||||||||||||||||
| Asia Pacific | 68.9 | 1.7 | 130.32 | (1.5 | ) | 89.84 | 1.0 | |||||||||||||||||
| System-wide | 71.4 | 0.5 | 143.44 | 1.1 | 102.41 | 1.8 | ||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||
| Occupancy | ADR | RevPAR | ||||||||||||||||||||||
| 2019 | vs. 2018 | 2019 | vs. 2018 | 2019 | vs. 2018 | |||||||||||||||||||
| Waldorf Astoria Hotels & Resorts | 71.7 | % | 0.1 | % pts. | $ | 384.45 | 0.6 | % | $ | 275.51 | 0.7 | % | ||||||||||||
| Conrad Hotels & Resorts | 72.9 | 3.6 | 266.04 | (0.8 | ) | 193.96 | 4.3 | |||||||||||||||||
| Hilton Hotels & Resorts | 72.2 | — | 168.73 | 1.7 | 121.76 | 1.8 | ||||||||||||||||||
| Curio Collection by Hilton | 69.3 | (1.0 | ) | 218.54 | 4.6 | 151.36 | 3.1 | |||||||||||||||||
| DoubleTree by Hilton | 70.3 | 0.1 | 130.74 | 0.4 | 91.85 | 0.6 | ||||||||||||||||||
| Embassy Suites by Hilton | 76.0 | 0.9 | 163.98 | 1.5 | 124.61 | 2.7 | ||||||||||||||||||
| Hilton Garden Inn | 71.7 | 0.5 | 127.77 | 1.0 | 91.57 | 1.7 | ||||||||||||||||||
| Hampton by Hilton | 68.6 | 0.5 | 118.58 | 0.7 | 81.35 | 1.5 | ||||||||||||||||||
| Tru by Hilton | 63.1 | 4.7 | 99.63 | 3.7 | 62.84 | 12.0 | ||||||||||||||||||
| Homewood Suites by Hilton | 77.1 | 0.5 | 138.46 | 0.9 | 106.78 | 1.5 | ||||||||||||||||||
| Home2 Suites by Hilton | 75.3 | 3.9 | 114.78 | 1.0 | 86.41 | 6.5 | ||||||||||||||||||
| System-wide | 71.4 | 0.5 | 143.44 | 1.1 | 102.41 | 1.8 | ||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||
| Occupancy | ADR | RevPAR | ||||||||||||||||||||||
| 2019 | vs. 2018 | 2019 | vs. 2018 | 2019 | vs. 2018 | |||||||||||||||||||
| Management and franchise | 71.4 | % | 0.5 | % pts. | $ | 142.69 | 1.0 | % | $ | 101.90 | 1.7 | % | ||||||||||||
| Ownership(1) | 70.7 | (0.3 | ) | 177.73 | 3.2 | 125.67 | 2.8 | |||||||||||||||||
| System-wide | 71.4 | 0.5 | 143.44 | 1.1 | 102.41 | 1.8 | ||||||||||||||||||
|
____________
(1) Includes owned and leased hotels, as well as |
||||||||||||||||||||||||
|
HILTON WORLDWIDE HOLDINGS INC. PROPERTY SUMMARY As of March 31, 2019 |
||||||||||||||||||||||||
| Owned / Leased(1) | Managed | Franchised | Total | |||||||||||||||||||||
| Properties | Rooms | Properties | Rooms | Properties | Rooms | Properties | Rooms | |||||||||||||||||
| Waldorf Astoria Hotels & Resorts | ||||||||||||||||||||||||
| U.S. | 1 | 215 | 14 | 5,956 | — | — | 15 | 6,171 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | 1 | 142 | 1 | 984 | 2 | 1,126 | ||||||||||||||||
| Europe | 2 | 463 | 4 | 898 | — | — | 6 | 1,361 | ||||||||||||||||
| Middle East & Africa | — | — | 4 | 949 | — | — | 4 | 949 | ||||||||||||||||
| Asia Pacific | — | — | 4 | 895 | — | — | 4 | 895 | ||||||||||||||||
| LXR Hotels & Resorts | ||||||||||||||||||||||||
| Middle East & Africa | — | — | — | — | 1 | 234 | 1 | 234 | ||||||||||||||||
| Conrad Hotels & Resorts | ||||||||||||||||||||||||
| U.S. | — | — | 5 | 1,649 | 1 | 236 | 6 | 1,885 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | 2 | 402 | — | — | 2 | 402 | ||||||||||||||||
| Europe | — | — | 4 | 1,155 | — | — | 4 | 1,155 | ||||||||||||||||
| Middle East & Africa | 1 | 614 | 2 | 993 | — | — | 3 | 1,607 | ||||||||||||||||
| Asia Pacific | 1 | 164 | 18 | 5,359 | 1 | 654 | 20 | 6,177 | ||||||||||||||||
| Canopy by Hilton | ||||||||||||||||||||||||
| U.S. | — | — | — | — | 6 | 1,014 | 6 | 1,014 | ||||||||||||||||
| Europe | — | — | — | — | 2 | 263 | 2 | 263 | ||||||||||||||||
| Asia Pacific | — | — | 1 | 150 | — | — | 1 | 150 | ||||||||||||||||
| Hilton Hotels & Resorts | ||||||||||||||||||||||||
| U.S. | — | — | 67 | 48,780 | 176 | 53,695 | 243 | 102,475 | ||||||||||||||||
| Americas (excluding U.S.) | 1 | 405 | 26 | 9,320 | 21 | 7,085 | 48 | 16,810 | ||||||||||||||||
| Europe | 50 | 13,843 | 48 | 15,238 | 38 | 10,616 | 136 | 39,697 | ||||||||||||||||
| Middle East & Africa | 5 | 1,998 | 42 | 12,995 | 3 | 1,609 | 50 | 16,602 | ||||||||||||||||
| Asia Pacific | 7 | 3,437 | 95 | 34,510 | 7 | 2,826 | 109 | 40,773 | ||||||||||||||||
| Curio Collection by Hilton | ||||||||||||||||||||||||
| U.S. | — | — | 4 | 1,981 | 35 | 7,452 | 39 | 9,433 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | — | — | 8 | 1,194 | 8 | 1,194 | ||||||||||||||||
| Europe | — | — | 3 | 270 | 12 | 1,477 | 15 | 1,747 | ||||||||||||||||
| Middle East & Africa | — | — | 2 | 255 | 1 | 356 | 3 | 611 | ||||||||||||||||
| Asia Pacific | — | — | 3 | 663 | 1 | 50 | 4 | 713 | ||||||||||||||||
| DoubleTree by Hilton | ||||||||||||||||||||||||
| U.S. | — | — | 34 | 11,565 | 319 | 74,251 | 353 | 85,816 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | 1 | 172 | 26 | 5,471 | 27 | 5,643 | ||||||||||||||||
| Europe | — | — | 12 | 3,347 | 93 | 15,844 | 105 | 19,191 | ||||||||||||||||
| Middle East & Africa | — | — | 10 | 2,349 | 6 | 718 | 16 | 3,067 | ||||||||||||||||
| Asia Pacific | — | — | 57 | 15,797 | 3 | 1,072 | 60 | 16,869 | ||||||||||||||||
| Tapestry Collection by Hilton | ||||||||||||||||||||||||
| U.S. | — | — | — | — | 19 | 2,701 | 19 | 2,701 | ||||||||||||||||
| Embassy Suites by Hilton | ||||||||||||||||||||||||
| U.S. | — | — | 42 | 11,115 | 202 | 45,515 | 244 | 56,630 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | 3 | 667 | 5 | 1,330 | 8 | 1,997 | ||||||||||||||||
| Hilton Garden Inn | ||||||||||||||||||||||||
| U.S. | — | — | 5 | 537 | 660 | 91,325 | 665 | 91,862 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | 11 | 1,561 | 40 | 6,279 | 51 | 7,840 | ||||||||||||||||
| Europe | — | — | 21 | 3,826 | 45 | 7,431 | 66 | 11,257 | ||||||||||||||||
| Middle East & Africa | — | — | 13 | 2,763 | 1 | 175 | 14 | 2,938 | ||||||||||||||||
| Asia Pacific | — | — | 29 | 6,261 | — | — | 29 | 6,261 | ||||||||||||||||
| Hampton by Hilton | ||||||||||||||||||||||||
| U.S. | — | — | 46 | 5,644 | 2,147 | 210,312 | 2,193 | 215,956 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | 12 | 1,565 | 95 | 11,373 | 107 | 12,938 | ||||||||||||||||
| Europe | — | — | 18 | 2,956 | 66 | 10,276 | 84 | 13,232 | ||||||||||||||||
| Middle East & Africa | — | — | 1 | 420 | — | — | 1 | 420 | ||||||||||||||||
| Asia Pacific | — | — | — | — | 73 | 11,718 | 73 | 11,718 | ||||||||||||||||
| Tru by Hilton | ||||||||||||||||||||||||
| U.S. | — | — | — | — | 61 | 5,803 | 61 | 5,803 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | — | — | 1 | 90 | 1 | 90 | ||||||||||||||||
| Homewood Suites by Hilton | ||||||||||||||||||||||||
| U.S. | — | — | 18 | 1,916 | 443 | 50,583 | 461 | 52,499 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | 2 | 261 | 22 | 2,456 | 24 | 2,717 | ||||||||||||||||
| Home2 Suites by Hilton | ||||||||||||||||||||||||
| U.S. | — | — | 2 | 198 | 300 | 31,303 | 302 | 31,501 | ||||||||||||||||
| Americas (excluding U.S.) | — | — | — | — | 5 | 543 | 5 | 543 | ||||||||||||||||
| Other | — | — | 3 | 1,450 | 1 | 250 | 4 | 1,700 | ||||||||||||||||
| Hotels | 68 | 21,139 | 689 | 216,930 | 4,947 | 676,564 | 5,704 | 914,633 | ||||||||||||||||
| Hilton Grand Vacations | — | — | — | — | 53 | 8,477 | 53 | 8,477 | ||||||||||||||||
| Total | 68 | 21,139 | 689 | 216,930 | 5,000 | 685,041 | 5,757 | 923,110 | ||||||||||||||||
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____________
(1) Includes hotels owned or leased by entities in |
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|
HILTON WORLDWIDE HOLDINGS INC. CAPITAL EXPENDITURES AND CONTRACT ACQUISITION COSTS (unaudited, dollars in millions) |
||||||||||||||
| Three Months Ended | ||||||||||||||
| March 31, | Increase / (Decrease) | |||||||||||||
| 2019 | 2018 | $ | % | |||||||||||
| Capital expenditures for property and equipment(1) | $ | 23 | $ | 10 | 13 | NM(3) | ||||||||
| Capitalized software costs(2) | 19 | 15 | 4 | 26.7 | ||||||||||
| Total capital expenditures | 42 | 25 | 17 | 68.0 | ||||||||||
| Contract acquisition costs | 15 | 14 | 1 | 7.1 | ||||||||||
| Total capital expenditures and contract acquisition costs | $ | 57 | $ | 39 | 18 | 46.2 | ||||||||
| ____________ | ||
|
(1) |
Includes expenditures for hotels, corporate and other property and equipment, of which $5 million and $2 million were indirectly reimbursed by hotel owners for the three months ended March 31, 2019 and 2018, respectively. Excludes expenditures for furniture, fixtures and equipment (“FF&E”) replacement reserve expenses of $14 million and $12 million for the three months ended March 31, 2019 and 2018, respectively. |
|
|
(2) |
Includes $15 million and $7 million of expenditures that were indirectly reimbursed by hotel owners for the three months ended March 31, 2019 and 2018, respectively. |
|
|
(3) |
Fluctuation in terms of percentage change is not meaningful. | |
|
HILTON WORLDWIDE HOLDINGS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS NET INCOME AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS (unaudited, in millions, except per share data) |
||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Net income attributable to Hilton stockholders, as reported | $ | 158 | $ | 161 | ||||||
| Diluted EPS, as reported | $ | 0.54 | $ | 0.51 | ||||||
| Special items: | ||||||||||
| Net other expenses from managed and franchised properties | $ | 34 | $ | 21 | ||||||
| Purchase accounting amortization(1) | 51 | 51 | ||||||||
| FF&E replacement reserves | 14 | 12 | ||||||||
| Other adjustments(2) | 1 | (4 | ) | |||||||
| Total special items before tax | 100 | 80 | ||||||||
| Income tax expense on special items | (24 | ) | (20 | ) | ||||||
| Total special items after tax | $ | 76 | $ | 60 | ||||||
| Net income, adjusted for special items | $ | 234 | $ | 221 | ||||||
| Diluted EPS, adjusted for special items | $ | 0.80 | $ | 0.69 | ||||||
| ____________ | ||
|
(1) |
Represents the amortization of intangible assets that were recorded at their fair value in October 2007 when the Company became a wholly owned subsidiary of affiliates of The Blackstone Group L.P (“Blackstone”). |
|
|
(2) |
Includes severance costs related to the 2015 sale of the Waldorf Astoria New York that were recognized in general and administrative expenses and, for the three months ended March 31, 2018, also includes a gain on the refinancing of a loan Hilton issued to finance the construction of a hotel that Hilton manages, which was recognized in other non-operating income, net. |
|
|
HILTON WORLDWIDE HOLDINGS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (unaudited, dollars in millions) |
||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Net income | $ | 159 | $ | 163 | ||||||
| Interest expense | 98 | 83 | ||||||||
| Income tax expense | 59 | 58 | ||||||||
| Depreciation and amortization | 84 | 82 | ||||||||
| EBITDA | 400 | 386 | ||||||||
| Gain on foreign currency transactions | — | (11 | ) | |||||||
| FF&E replacement reserves | 14 | 12 | ||||||||
| Share-based compensation expense | 34 | 28 | ||||||||
| Amortization of contract acquisition costs | 7 | 7 | ||||||||
| Net other expenses from managed and franchised properties | 34 | 21 | ||||||||
| Other adjustment items(1) | 10 | 2 | ||||||||
| Adjusted EBITDA | $ | 499 | $ | 445 | ||||||
|
____________ (1) Includes adjustments for severance and other items. |
||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Total revenues, as reported | $ | 2,204 | $ | 2,074 | ||||||
| Add: amortization of contract acquisition costs | 7 | 7 | ||||||||
| Less: other revenues from managed and franchised properties | (1,349 | ) | (1,254 | ) | ||||||
| Total revenues, as adjusted | $ | 862 | $ | 827 | ||||||
| Adjusted EBITDA | $ | 499 | $ | 445 | ||||||
| Adjusted EBITDA margin | 57.9 | % | 53.8 | % | ||||||
|
HILTON WORLDWIDE HOLDINGS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS NET DEBT AND NET DEBT TO ADJUSTED EBITDA RATIO (unaudited, dollars in millions) |
|||||||||||||||||||
| March 31, | December 31, | ||||||||||||||||||
| 2019 | 2018 | ||||||||||||||||||
| Long-term debt, including current maturities | $ | 7,365 | $ | 7,282 | |||||||||||||||
| Add: unamortized deferred financing costs and discount | 76 | 79 | |||||||||||||||||
|
Long-term debt, including current maturities and excluding unamortized deferred financing costs and discount |
7,441 | 7,361 | |||||||||||||||||
|
Add: Hilton’s share of unconsolidated affiliate debt, excluding unamortized deferred financing costs |
13 | 15 | |||||||||||||||||
| Less: cash and cash equivalents | (382 | ) | (403 | ) | |||||||||||||||
| Less: restricted cash and cash equivalents | (79 | ) | (81 | ) | |||||||||||||||
| Net debt | $ | 6,993 | $ | 6,892 | |||||||||||||||
| Three Months Ended | Year Ended | TTM(1) | |||||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||||||
| 2019 | 2018 | 2018 | 2019 | ||||||||||||||||
| Net income | $ | 159 | $ | 163 | $ | 769 | $ | 765 | |||||||||||
| Interest expense | 98 | 83 | 371 | 386 | |||||||||||||||
| Income tax expense | 59 | 58 | 309 | 310 | |||||||||||||||
| Depreciation and amortization | 84 | 82 | 325 | 327 | |||||||||||||||
| EBITDA | 400 | 386 | 1,774 | 1,788 | |||||||||||||||
| Loss (gain) on foreign currency transactions | — | (11 | ) | 11 | 22 | ||||||||||||||
| FF&E replacement reserve | 14 | 12 | 50 | 52 | |||||||||||||||
| Share-based compensation expense | 34 | 28 | 127 | 133 | |||||||||||||||
| Amortization of contract acquisition costs | 7 | 7 | 27 | 27 | |||||||||||||||
| Net other expenses from managed and franchised properties | 34 | 21 | 85 | 98 | |||||||||||||||
| Other adjustment items(2) | 10 | 2 | 27 | 35 | |||||||||||||||
| Adjusted EBITDA | $ | 499 | $ | 445 | $ | 2,101 | $ | 2,155 | |||||||||||
| Net debt | $ | 6,993 | |||||||||||||||||
| Net debt to Adjusted EBITDA ratio | 3.2 | ||||||||||||||||||
Contacts
Investor Contact
Jill Slattery
+1 703 883 6043
Media Contact
Nigel Glennie
+1 703 883 5262
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Innocan
Innocan Pharma Reports Breakthrough in a Pre-Clinical Trial: Liposomal-CBD Injection Restores Mobility to an Amputee Female Donkey
HERZLIYA, Israel and ALGARY, AB, May 9, 2024 /PRNewswire/ — Innocan Pharma Corporation (CSE: INNO) (FSE: IP4) (OTCQB: INNPF) (“Innocan” or the “Company”), a pioneer in the pharmaceutical and biotechnology industries, is pleased to announce the successful pre-clinical treatment with a liposomal-CBD injection in a female donkey. Innocan’s innovative therapy provided immediate noticeable pain relief and improved mobility.
Miri, a 7-year-old female donkey, underwent amputation of her right front limb at a young age, resulting in a weight burden primarily borne by her left front limb. Consequently, she developed laminitis in her left front limb, an inflammatory disease affecting the soft tissue that connects the foot bone to the hoof, seemingly causing extreme pain and limited mobility. Over time, Miri’s condition worsened, culminating in the formation of a abscess in the affected hoof, which appeared to have intensified her pain. Despite receiving pain relief medications, Miri found no respite, was unable to move, and her caregivers were advised to euthanize her.
As an act of compassionate therapy, the female donkey was administered a liposomal-CBD injection. The effect was immediate, with Miri becoming active and roaming the farm. Following the liposomal-CBD injection, the abscess in her affected foot healed, and Miri regained her ability to walk and move as she did before her laminitis developed.
“Thanks to our innovative liposomal-CBD injection, we are thrilled to have brought relief to Miri, eliminating the need for euthanasia,” commented Iris Bincovich, CEO of Innocan. “Once again, Innocan has shown liposomal-CBD to be effectively active for pain relief and well-being. We see this pre-clinical treatment as strong evidence of liposomal-CBD’s potential to improve the lives of animal patients and potentially human patients.”
“Laminitis is a crippling condition well familiar and common in horses,” said Prof Chezy Barenholz, the Chief Scientific Officer of Innocan. “The disease results in severe pain condition, representing another big market for liposomal-CBD with great potential to treat horses. Innocan is dedicated to advancing the development of CBD-based therapeutics for various indications in both humans and animals.”
For further information and a supporting video, please see: https://youtu.be/Hgqh2WOlwJQ?si=oGgSYrGi3rkW-RC
About Innocan Pharma:
Innocan is a pharmaceutical tech company that operates under two main segments: Pharmaceuticals and Consumer Wellness. In the Pharmaceuticals segment, Innocan focuses on developing innovative drug delivery platform technologies comprises with cannabinoids science, to treat various conditions to improve patients’ quality of life. This segment involves two drug delivery technologies: (i) LPT CBD-loaded liposome platform facilitating exact dosing and the prolonged and controlled release of CBD into the blood stream. The LPT delivery platform research is in the preclinical trial phase for two indications: Epilepsy and Pain Management. In the Consumer Wellness segment, Innocan develops and markets a wide portfolio of innovative and high-performance self-care products to promote a healthier lifestyle. Under this segment Innocan has established a Joint Venture by the name of BI Sky Global Ltd. that focuses developing on advanced targeted online sales. https://innocanpharma.com/
Contact Information:
For Innocan Pharma Corporation:
Iris Bincovich, CEO
+1 5162104025
+972-54-3012842
+442037699377
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Caution Regarding Forward-Looking Information
Certain information set forth in this news release, including, without limitation, the Company’s plans for human trials of its LPT-CBD platform, is forward-looking information within the meaning of applicable securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond Innocan’s control. . The forward-looking information contained in this news release is based on certain key expectations and assumptions made by Innocan, including expectations and assumptions concerning the anticipated benefits of the products, satisfaction of regulatory requirements in various jurisdictions and satisfactory completion of production and distribution arrangements.
Forward-looking information is subject to various risks and uncertainties that could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this news release. The key risks and uncertainties include but are not limited to: global and local (national) economic, political, market and business conditions; governmental and regulatory requirements and actions by governmental authorities; and potential disruption of relationships with suppliers, manufacturers, customers, business partners and competitors. There are also risks that are inherent in the nature of product distribution, including import/export matters and the failure to obtain any required regulatory and other approvals (or to do so in a timely manner). The anticipated timeline for entry to markets may change for a number of reasons, including the inability to secure necessary regulatory requirements, or the need for additional time to conclude and/or satisfy the manufacturing and distribution arrangements. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this news release. A comprehensive discussion of other risks that impact Innocan can be found in Innocan’s public reports and filings which are available under Innocan’s profile at www.sedarplus.ca.
Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. Innocan does not undertake to update, correct or revise any forward-looking information as a result of any new information, future events or otherwise, except as may be required by applicable law.
Logo: https://mma.prnewswire.com/media/2046271/3968398/Innocan_Pharma_Corporation_Logo.jpg
View original content:https://www.prnewswire.co.uk/news-releases/innocan-pharma-reports-breakthrough-in-a-pre-clinical-trial-liposomal-cbd-injection-restores-mobility-to-an-amputee-female-donkey-302141590.html
IMC prepares for accelerated growth after legalization in Germany and recovers from the impact of the Israel-Hamas war.
TORONTO and GLIL YAM, Israel, May 8, 2024 /PRNewswire/ — IM Cannabis Corp. (the “Company” or “IMC“) (NASDAQ: IMCC) (CSE: IMCC), an international medical cannabis company, announced its financial results today for the first quarter ended March 31, 2024. All amounts are reported in Canadian dollars and compared to the quarter ended March 31, 2023, unless otherwise stated.
Q1 2024 Financial Highlights
- 13% Revenue increase vs. Q4 2023 of $12.1M vs. $10.7M and 4% decrease vs. Q1 2023 of $12.5M
- 125% Gross profit increase vs. Q4 2023 of $1.8M vs. $0.8 and 39% Gross profit decrease vs. Q1 2023 of $2.9M
- 29% decrease in operating expenses vs. Q1 2023 excluding the one-time Oranim revoke related losses of $4.6M vs. $6.5M and 14% increase including Oranim
- 12% increase of Non-IFRS Adjusted EBITDA loss to $2.1M
Operational Highlights
The Company intends to complete a non-brokered private placement (the “Offering“) of secured convertible debentures of the Company (each, a “Debenture“) for aggregate proceeds of up to C$2,500,000. The Debentures will mature on the date that is 12 months from the date of issuance and will not incur interest except in the event of default. The Debentures are being issued to holders of short term loans and obligations owed by the Company or its wholly owned subsidiaries. The principal of the Debenture may be converted into common shares in the Company (each, a “Share“) at a conversion price of $1.08 per Share.
Management Commentary
“With the April 1st cannabis legalization in Germany, we are augmenting our focus and resources on the German market, where we expect to see the biggest growth potential, and the best return on investment. While it is still too early to make any predictions, our sales in Germany almost doubled during the month of April,” said Oren Shuster, Chief Executive Officer of IMC. “Looking back on the first month post legalization in Germany, I see that we have the infrastructure and the supply agreements in place to continue delivering the accelerated growth we have already seen in April. We will also ensure that we have the necessary resources in place for success.”
“In 2023 we completely restructured, becoming a very lean and agile company, leaning into active cost management. This process is reflected in the numbers, our G&A decreased 27% vs Q1 2023” said Uri Birenberg, Chief Financial Officer of IMC. “While our results have recovered from the impact of the Israel-Hamas war, our revenue was still effected by both an unfavorable exchange rate, as well as price reductions to sell off inventory.”
Q1 2024 Conference Call
The Company will host a Zoom web conference call today at 9:00 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. Investors are invited to register by clicking here. All relevant information will be sent upon registration.
If you are unable to join us live, a recording of the call will be available on our website at https://investors.imcannabis.com/ within 24 hours after the call.
Q1 2024 Financial Results
- Revenues for the first quarter of 2024 were $12.1 million compared to $12.5 million in the first quarter of 2023, a decrease of 3%. The decrease is mainly due an exchange rate effect of about $0.2 million and decrease in avg. price per sale due to increased competition.
- Gross profit for the first quarter of 2024 was $1.8 million, compared to $2.9 million in Q1 2024, a decrease of 39%. The downside is attributed mainly to the slow-moving stock that was moved out at a lower price and an exchange rate difference totaling $0.4 million and $0.64 million cost of sales loss due to an inventory erase of the slow-moving stock. Company fair value adjustment was $0 and $0.4 million for the Q1 2024 and Q1 2023 respectively.
- Total Dried Flower sold in Q1 2024 was approximately 1,873 kg with an average selling price of $5.68 per gram, compared to approximately 1,842kg in Q1 2023, with an average selling price of $6.59 per gram. This difference is mainly due to increased competition within the retail segment, and mid-range stock discounts to move out slow moving stock.
- Total operating expenses in Q1 2024 were $7.4 million compared to $6.5 million in Q1 2023. The increase is due to the other operating expenses related to Oranim Deal revoke, with an expected losses of $2.8 million. Adjusting for this one-time losses, Q1 2024 operating expenses were $4.6 million compared to $6.5 million in Q1 2023, a decrease of 29%.
- G&A Expenses in Q1 2024 were $2.3 million, compared to $3.2 million in Q1 2023, a decrease of 28%. The decrease in the G&A expense is attributable mainly to salaries and professional services of $0.64 million.
- Selling and Marketing Expenses in Q1 2024 were $2.3 million, compared to $2.8 million in Q1 2023, a decrease of 18% mainly due to a decrease in Salaries and professional services of $0.5 million.
- Net Loss from continuing operations in Q1 2024 was $6.0 million, compared to $0.9 million in Q12023.
- Basic and diluted Loss per Share in Q1 2024 was $0.42, compared to a loss of $0.05 per Share in Q1 2023.
- Non-IFRS Adjusted EBITDA loss in Q1 2024 was $2.1 million, compared to an Adjusted EBITDA loss of $1.9 million in Q1 2023 an increase of 10%.
- Cash and Cash Equivalents as of March 31, 2024, were $1.0 million compared to $1.8 million in December 31, 2023.
- Total assets as of March 31, 2024, were $41.1 million, compared to $48.8 million in December 31, 2023, a decrease of 16%. The decrease is mainly attributed to the goodwill reduction due to Oranim agreement cancelation of about $2.8M, a reduction in Inventory of $2.1 million, reduction of Cash and cash equivalents of $0.8M and reduction in Trade payables of $1.2 million.
- Total Liabilities as of March 31, 2024, were $32.8 million, compared to $35.1 in December 31, 2023, a decrease of about 7%. The decrease was mainly due to the reduction in other accounts payables and accrued expenses of $1.8 million and reduction in the PUT option liability of $0.7 million.
The Company’s financial statements as of March 31, 2024 includes a note regarding the Company’s ability to continue as a going concern. The Company’s Q1 2024 financial results do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the Company be unable to continue as a going concern. For more information, please refer to the “Liquidity and Capital Resources” and “Risk Factors” sections in the Company’s management’s discussion and analysis for the quarter ended March 31, 2024.
Non-IFRS Measures
This press release makes reference to “Gross Margin” and “Adjusted EBITDA”, which are financial measures that are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. These measures are provided as complementary information to the Company’s IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should neither be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
For an explanation of how management defines Gross Margin and Adjusted EBITDA, see the Company’s management’s discussion and analysis for the period ended March 31, 2024, available under the Company’s SEDAR+ profile at www.sedarplus.ca on EDGAR at www.sec.gov/edgar.
We reconcile these non-IFRS financial measures to the most comparable IFRS measures as set out below.
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
||||||
|
Canadian Dollars in thousands |
||||||
|
March 31, |
December 31, |
|||||
|
Note |
(Unaudited) |
|||||
|
ASSETS |
||||||
|
CURRENT ASSETS: |
||||||
|
Cash and cash equivalents |
$ 1,048 |
$ 1,813 |
||||
|
Trade receivables |
6,506 |
7,651 |
||||
|
Advances to suppliers |
780 |
936 |
||||
|
Other accounts receivable |
3,732 |
3,889 |
||||
|
Inventories |
3 |
7,901 |
9,976 |
|||
|
19,967 |
24,265 |
|||||
|
NON-CURRENT ASSETS: |
||||||
|
Property, plant and equipment, net |
4,939 |
5,058 |
||||
|
Investments in affiliates |
2,078 |
2,285 |
||||
|
Right-of-use assets, net |
1,243 |
1,307 |
||||
|
Intangible assets, net |
5,440 |
5,803 |
||||
|
Goodwill |
7,442 |
10,095 |
||||
|
21,142 |
24,548 |
|||||
|
Total assets |
$ 41,109 |
$ 48,813 |
||||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
||||||
|
Canadian Dollars in thousands |
||||||
|
March 31, |
December 31, |
|||||
|
Note |
(Unaudited) |
|||||
|
LIABILITIES AND EQUITY |
||||||
|
CURRENT LIABILITIES:
|
||||||
|
Trade payables |
$ 9,511 |
$ 9,223 |
||||
|
Bank loans and credit facilities |
11,941 |
12,119 |
||||
|
Other accounts payable and accrued expenses |
4,440 |
6,218 |
||||
|
Accrued purchase consideration liabilities |
2,165 |
2,097 |
||||
|
PUT Option liability |
1,967 |
2,697 |
||||
|
Current maturities of operating lease liabilities |
461 |
454 |
||||
|
30,485 |
32,808 |
|||||
|
NON-CURRENT LIABILITIES:
|
||||||
|
Warrants measured at fair value |
4 |
137 |
38 |
|||
|
Operating lease liabilities |
744 |
815 |
||||
|
Long-term loans |
401 |
394 |
||||
|
Employee benefit liabilities, net |
96 |
95 |
||||
|
Deferred tax liability, net |
902 |
963 |
||||
|
2,280 |
2,305 |
|||||
|
Total liabilities |
32,765 |
35,113 |
||||
|
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY: |
5 |
|||||
|
Share capital and premium |
253,887 |
253,882 |
||||
|
Translation reserve |
1,399 |
95 |
||||
|
Reserve from share-based payment transactions |
9,664 |
9,637 |
||||
|
Accumulated deficit |
(255,431) |
(249,145) |
||||
|
Total equity attributable to equity holders of the Company |
9,519 |
14,469 |
||||
|
Non-controlling interests |
(1,175) |
(769) |
||||
|
Total equity |
8,344 |
13,700 |
||||
|
Total liabilities and equity |
$ 41,109 |
$ 48,813 |
||||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS |
||||||
|
AND OTHER COMPREHENSIVE INCOME (UNAUDITED) |
||||||
|
Canadian Dollars in thousands, except per share data |
||||||
|
Three months ended March 31, |
||||||
|
Note |
2024 |
2023 (*) |
||||
|
Revenues |
$ 12,063 |
$ 12,529 |
||||
|
Cost of revenues |
10,274 |
9,286 |
||||
|
Gross profit before fair value adjustments |
1,789 |
3,243 |
||||
|
Fair value adjustments: |
||||||
|
Realized fair value adjustments on inventory sold in the period |
(10) |
(339) |
||||
|
Total fair value adjustments |
(10) |
(339) |
||||
|
Gross profit |
1,779 |
2,904 |
||||
|
General and administrative expenses |
2,332 |
3,175 |
||||
|
Selling and marketing expenses |
2,292 |
2,805 |
||||
|
Restructuring expenses |
– |
283 |
||||
|
Share-based compensation |
32 |
258 |
||||
|
Other operating expenses |
9 |
2,753 |
– |
|||
|
Total operating expenses |
7,409 |
6,521 |
||||
|
Operating loss |
5,630 |
3,617 |
||||
|
Finance income |
4 |
(14) |
3,530 |
|||
|
Finance expense |
(487) |
(795) |
||||
|
Finance income, net |
(501) |
2,735 |
||||
|
Gain (loss) before income taxes |
(6,131) |
(882) |
||||
|
Income tax benefit |
(111) |
(16) |
||||
|
Net )loss( gain |
(6,020) |
(866) |
||||
|
Other comprehensive income that will not be reclassified to profit or loss in |
||||||
|
Total other comprehensive income that will not be reclassified to profit or loss |
67 |
36 |
||||
|
Exchange differences on translation to presentation currency |
1,330 |
(562) |
||||
|
Total other comprehensive income (loss) that will not be reclassified to profit |
1,397 |
(526) |
||||
|
Other comprehensive income that will be reclassified to profit or loss in |
||||||
|
Adjustments arising from translating financial statements of foreign operation |
(35) |
155 |
||||
|
Total other comprehensive income (loss) that will be reclassified to profit or loss |
(35) |
155 |
||||
|
Total other comprehensive income (loss) |
1,362 |
(371) |
||||
|
Total comprehensive loss |
$ (4,658) |
$ (1,237) |
||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS |
||||||
|
AND OTHER COMPREHENSIVE INCOME (UNAUDITED) |
||||||
|
Canadian Dollars in thousands, except per share data |
||||||
|
Three months ended March 31, |
||||||
|
Note |
2024 |
2023 (*) |
||||
|
Net income (loss) attributable to: |
||||||
|
Equity holders of the Company |
(5,623) |
(600) |
||||
|
Non-controlling interests |
(397) |
(266) |
||||
|
$ (6,020) |
$ (866) |
|||||
|
Total comprehensive income (loss) attributable to: |
||||||
|
Equity holders of the Company |
(4,252) |
(959) |
||||
|
Non-controlling interests |
(406) |
(278) |
||||
|
$ (4,658) |
$ (1,237) |
|||||
|
Net income (loss) per share attributable to equity holders of the Company: |
7 |
|||||
|
Basic and diluted (loss) gain per share (in CAD) |
$ (0.42) |
$ (0.05) |
||||
|
Earnings (loss) per share attributable to equity holders of the Company |
||||||
|
Basic and diluted (loss) gain per share (in CAD) |
$ (0.42) |
$ (0.05) |
||||
|
(*) See note 1 regarding figures disclosure. |
||||||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||
|
Canadian Dollars in thousands |
||||
|
Three months ended March 31, |
||||
|
2024 |
2023 (*) |
|||
|
Cash provided by operating activities: |
||||
|
Net income (loss) for the period |
$ (6,020) |
$ 43 |
||
|
Adjustments for non-cash items: |
||||
|
Fair value adjustment on sale of inventory |
10 |
339 |
||
|
Fair value adjustment on Warrants, investments and accounts receivable |
100 |
(3,636) |
||
|
Depreciation of property, plant and equipment |
147 |
174 |
||
|
Amortization of intangible assets |
452 |
456 |
||
|
Depreciation of right-of-use assets |
118 |
179 |
||
|
Impairment of goodwill |
2,753 |
– |
||
|
Finance expenses, net |
401 |
635 |
||
|
Deferred tax liability, net |
(69) |
(150) |
||
|
Share-based payment |
32 |
258 |
||
|
Restructuring expense |
– |
283 |
||
|
3,944 |
(1,462) |
|||
|
Changes in working capital: |
||||
|
Decrease (increase) in trade receivables |
1,332 |
1,937 |
||
|
Decrease (increase) in other accounts receivable and advances to suppliers |
159 |
(940) |
||
|
Decrease (increase) in inventories, net of fair value adjustments |
2,159 |
90 |
||
|
Decrease (increase) in trade payables |
663 |
(6,021) |
||
|
Changes in employee benefit liabilities, net |
– |
(22) |
||
|
Increase in other accounts payable and accrued expenses |
(2,745) |
(14) |
||
|
1,568 |
(4,970) |
|||
|
Taxes (paid) received |
(121) |
328 |
||
|
Net cash used in operating activities |
(629) |
(6,061) |
||
|
Cash flows from investing activities: |
||||
|
Purchase of property, plant and equipment |
(2) |
(411) |
||
|
Payment of purchase consideration |
– |
(56) |
||
|
Net cash used in investing activities |
$ (2) |
$ (467) |
||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||
|
Canadian Dollars in thousands |
||||
|
Three months ended March 31, |
||||
|
2024 |
2023 |
|||
|
Cash flow from financing activities: |
||||
|
Proceeds from issuance of share capital, net of issuance costs |
176 |
825 |
||
|
Proceeds from issuance of warrants |
(176) |
7,027 |
||
|
Repayment of lease liability |
(118) |
(175) |
||
|
Interest paid – lease liability |
(15) |
(18) |
||
|
Receipt (repayment) of bank loan and credit facilities |
(2,856) |
(1,046) |
||
|
Cash paid for interest |
(444) |
(56) |
||
|
Proceeds from discounted checks |
2,581 |
|||
|
Net cash (used in) provided by financing activities |
(852) |
6,557 |
||
|
Effect of foreign exchange on cash and cash equivalents |
718 |
(1,059) |
||
|
Decrease in cash and cash equivalents |
(765) |
(1,030) |
||
|
Cash and cash equivalents at beginning of the period |
1,813 |
2,449 |
||
|
Cash and cash equivalents at end of the period |
$ 1,048 |
$ 1,419 |
||
|
Supplemental disclosure of non-cash activities: |
||||
|
Right-of-use asset recognized with corresponding lease liability |
$ 40 |
$ 49 |
||
|
Issuance of shares in payment of debt settlement to a non-independent director of the company |
$ – |
$ 222 |
||
|
(*) See note 1 regarding Figures disclosure. |
||||
|
The accompanying notes are an integral part of the interim condensed consolidated financial statements. |
||||
About IM Cannabis Corp.
IMC (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis company that provides premium cannabis products to medical patients in Israel and Germany, two of the largest medical cannabis markets. The Company has exited operations in Canada to pivot its focus and resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany. The Company leverages a transnational ecosystem powered by a unique data-driven approach and a globally sourced product supply chain. With an unwavering commitment to responsible growth and compliance with the strictest regulatory environments, the Company strives to amplify its commercial and brand power to become a global high-quality cannabis player.
The IMC ecosystem operates in Israel through Focus Medical Herbs Ltd., which imports and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies, online platforms and logistical hubs in Israel that enable the safe delivery and quality control of IMC products throughout the entire value chain. In Germany, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients. The Company also operated in Canada through Trichome Financial Corp and its wholly owned subsidiaries. The Company has exited operations in Canada and considers these operations as discontinued.
Disclaimer for Forward-Looking Statements
This press release contains forward-looking information or forward-looking statements under applicable Canadian and United States securities laws (collectively, “forward-looking statements“). All information that addresses activities or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”, “likely” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. In the press release, such forward-looking statements include, but are not limited to, statements relating to: the impact of the Israel-Hamas war on the Company, including its operations and the medical cannabis industry in Israel; the timing and impact of the legalization of medicinal cannabis in Germany, including, the Company having it “all in house”; the Company being positioned to take advantage of the legalization; the Company’s growth in 2024; the market growth for medicinal cannabis in Germany; the stated benefits of the Company’s EU-GMP processing facility and an EU-GDP logistics center; the Company to host a teleconference meeting as stated; and the Company’s stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.
Forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to: the Company’s ability to focus and resources to achieve sustainable and profitable growth in its highest value markets; the Company’s ability to mitigate the impact of the Israel-Hamas war on the Company; the Company’s ability to take advantage of the legalization of medicinal cannabis in Germany; the Company’s ability to host a teleconference meeting as stated; and the Company’s ability to carry out its stated goals, scope, and nature of operations in Germany, Israel, and other jurisdictions the Company may operate.
The above lists of forward-looking statements and assumptions are not exhaustive. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated or implied by such forward-looking statements due to a number of factors and risks. These include: the failure of the Company to comply with applicable regulatory requirements in a highly regulated industry; unexpected changes in governmental policies and regulations in the jurisdictions in which the Company operates; the Company’s ability to continue to meet the listing requirements of the Canadian Securities Exchange and the NASDAQ Capital Market; any unexpected failure to maintain in good standing or renew its licenses; the ability of the Company and its subsidiaries (collectively, the “Group“) to deliver on their sales commitments or growth objectives; the reliance of the Group on third-party supply agreements to provide sufficient quantities of medical cannabis to fulfil the Group’s obligations; the Group’s possible exposure to liability, the perceived level of risk related thereto, and the anticipated results of any litigation or other similar disputes or legal proceedings involving the Group; the impact of increasing competition; any lack of merger and acquisition opportunities; adverse market conditions; the inherent uncertainty of production quantities, qualities and cost estimates and the potential for unexpected costs and expenses; risks of product liability and other safety-related liability from the usage of the Group’s cannabis products; supply chain constraints; reliance on key personnel; the risk of defaulting on existing debt; risks surrounding war, conflict and civil unrest in Eastern Europe and the Middle East, including the impact of the Israel-Hamas war on the Company, its operations and the medical cannabis industry in Israel; risks associated with the Company focusing on the Israel and Germany markets; the inability of the Company to achieve sustainable profitability and/or increase shareholder value; the inability of the Company to actively manage costs and/or improve margins; the inability of the company to grow and/or maintain sales; the inability of the Company to meet its goals and/or strategic plans; the inability of the Company to reduce costs and/or maintain revenues; the Company’s inability to take advantage of the legalization of medicinal cannabis in Germany; and the Company’s inability to host a teleconference meeting as stated.
Please see the other risks, uncertainties and factors set out under the heading “Risk Factors” in the Company’s annual report dated March 28, 2024, which is available on the Company’s issuer profile on SEDAR+ at www.sedarplus.ca and Edgar at www.sec.gov/edgar. Any forward-looking statement included in this press release is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward looking information is made. The Company does not undertake any obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place undue reliance on forward-looking statements. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Company Contact:
Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
[email protected]
Oren Shuster, CEO
IM Cannabis Corp.
+972-77-3603504
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View original content:https://www.prnewswire.co.uk/news-releases/im-cannabis-reports-first-quarter-financial-results-302139688.html
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