Seaport Entertainment Group Reports Third Quarter 2024 Results
Third Quarter 2024 Highlights
-
Completed the previously announced separation from predecessor parent company
(NYSE: HHH) (“Howard Hughes”) onHoward Hughes Holdings Inc .July 31, 2024 (the “Separation”), and is now an independent, standalone publicly traded company listed on the NYSE American under the ticker symbol “SEG”. -
Reported a net loss of
($32.5) million , or ($5.89 ) per basic and diluted share attributable to common stockholders, compared with a net loss of($736.2) million , or ($133.31 ) per basic and diluted share attributable to common stockholders for the third quarter of 2023. -
Total revenues were
$39.7 million compared to$40.5 million for the prior year quarter.
Other Recent Highlights
-
Completed the previously announced rights offering on
October 17, 2024 , issuing 7,000,000 shares of common stock at a price per share of$25.00 , generating net proceeds to the Company of approximately$166.7 million . -
Signed a license agreement with The Dead Rabbit to brand The Rooftop at
Pier 17 food & beverage operations during the Company’s holiday and winter programming beginningNovember 2024 . -
Extended the Company’s programming agreement with
Live Nation for five years, effectiveJanuary 1, 2025 , for The Rooftop atPier 17 , the Company’s one-of-a-kind live music experience with panoramic views of some of New York City’s most iconic landmarks. -
Launching year-round concert and event programming in partnership with
Live Nation for The Rooftop atPier 17 utilizing a seasonal floor-to-ceiling glass enclosure, commencing in fall/winter 2025.
“We are excited to embark on a new chapter following our recent public listing and successful rights offering. These key milestones position us to focus on long-term value creation as we implement innovative strategies across our portfolio intended to enhance operational efficiencies and strengthen cash flow,” said
Quarterly Results
The table below provides a summary of the Company’s consolidated operating and financial results for the three months ended
|
|
For the Three
|
|
For the Three
|
|
Variance
|
||||
Total Revenues |
$ |
39,697 |
$ |
40,486 |
$ |
(789) |
(1.9%) |
|||
|
|
|
|
|
|
|
|
|||
Net loss |
$ |
(32,274) |
$ |
(736,154) |
$ |
703,880 |
95.6% |
|||
Net loss attributable to common stockholders |
$ |
(32,511) |
$ |
(736,154) |
$ |
703,643 |
95.6% |
|||
Net loss attributable to common stockholders per share |
$ |
(5.89) |
$ |
(133.31) |
$ |
127.42 |
95.6% |
|||
Note: $ in thousands, except per share data. |
Year-to-Date Results
The table below provides a summary of the Company’s consolidated operating and financial results for the nine months ended
|
|
For the Nine Months
|
|
For the Nine Months
|
|
Variance
|
||||
Total Revenues |
$ |
88,292 |
$ |
92,775 |
$ |
(4,483) |
(4.8%) |
|||
|
|
|
|
|
|
|
|
|||
Net loss |
$ |
(111,349) |
$ |
(802,057) |
$ |
690,708 |
86.1% |
|||
Net loss attributable to common stockholders |
$ |
(111,586) |
$ |
(802,057) |
$ |
690,471 |
86.1% |
|||
Net loss attributable to common stockholders per share |
$ |
(20.21) |
$ |
(145.25) |
$ |
125.04 |
86.1% |
|||
Note: $ in thousands, except per share data. |
Capital Markets and Balance Sheet
As of
During the quarter ended
-
The Company completed its previously announced Separation from predecessor Howard Hughes on
July 31, 2024 , and is now an independent, standalone publicly traded company listed on the NYSE American under the ticker symbol “SEG”. -
Prior to the Separation, a subsidiary of Howard Hughes that became a subsidiary of the Company in connection with the Separation issued 10,000 shares of 14.0% Series A Cumulative Redeemable Preferred Stock with an aggregate liquidation preference of
$10.0 million . The Series A Preferred Stock is intended to preserve certain tax benefits for HHH and is not redeemable by the Company prior toJuly 11, 2029 , except under limited circumstances. -
Also in connection with the Separation, on
July 31, 2024 , the Company entered into a revolving credit agreement (the “Revolving Credit Agreement”) with Howard Hughes, as lender. The Revolving Credit Agreement provides for a revolving commitment of$5.0 million , with an interest rate of 10.0% and a term of one year.
Subsequent to the quarter ended
-
Completed the previously announced rights offering, issuing 7,000,000 shares of common stock at a price per share of
$25.00 , generating net proceeds to the Company of approximately$166.7 million .
Investor Conference Call and Webcast
The Company will not be conducting an investor conference call for the quarter ended
About
Safe Harbor and Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the federal securities laws. Such forward-looking statements include, but are not limited to, statements concerning the Company’s plans, goals, objectives, outlook, expectations, and intentions. Forward-looking statements are based on the Company’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause the Company’s results to differ materially from current expectations include, but are not limited to: risks related to our recent separation from, and relationship with, Howard Hughes; risks related to macroeconomic conditions; changes in discretionary consumer spending patterns or consumer tastes or preferences; risks associated with the Company’s investments in real estate assets and trends in the real estate industry; the Company’s ability to obtain operating and development capital on favorable terms, or at all; the availability of debt and equity capital; the Company’s ability to renew its leases or re-lease available space; the Company’s ability to compete effectively; the Company’s ability to successfully identify, acquire, develop, and manage properties on terms that are favorable to it; the impact of uncertainty around, and disruptions to, the Company’s supply chain; risks related to the concentration of the Company’s properties in
Availability of Information on SEG’s Website and Social Media Channels
Investors and others should note that SEG routinely announces material information to investors and the marketplace using
|
||||||
Condensed Consolidated and Combined Balance Sheets |
||||||
(in thousands except par value amounts) |
||||||
(Unaudited) |
||||||
|
|
|
|
|
||
|
|
September
|
|
December
|
||
ASSETS |
|
|
|
|
|
|
Buildings and equipment |
|
$ |
532,415 |
|
$ |
528,299 |
Less: accumulated depreciation |
|
|
(216,211) |
|
|
(203,208) |
Land |
|
|
9,497 |
|
|
9,497 |
Developments |
|
|
142,216 |
|
|
102,874 |
Net investment in real estate |
|
|
467,917 |
|
|
437,462 |
Investments in unconsolidated ventures |
|
|
33,879 |
|
|
37,459 |
Cash and cash equivalents |
|
|
23,727 |
|
|
1,834 |
Restricted cash |
|
|
4,041 |
|
|
42,011 |
Accounts receivable, net |
|
|
9,351 |
|
|
13,672 |
Deferred expenses, net |
|
|
4,285 |
|
|
4,379 |
Operating lease right-of-use assets, net |
|
|
39,284 |
|
|
40,884 |
Other assets, net |
|
|
40,320 |
|
|
39,112 |
Total assets |
|
$ |
622,804 |
|
$ |
616,813 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
Mortgages payable, net |
|
$ |
102,542 |
|
$ |
155,628 |
Operating lease obligations |
|
|
47,630 |
|
|
48,153 |
Accounts payable and other liabilities |
|
|
28,925 |
|
|
28,139 |
Total liabilities |
|
|
179,097 |
|
|
231,920 |
Commitments and Contingencies |
|
|
— |
|
|
— |
EQUITY |
|
|
|
|
|
|
Preferred stock, |
|
|
— |
|
|
— |
Common stock, |
|
|
57 |
|
|
— |
Additional paid in capital |
|
|
443,783 |
|
|
— |
Accumulated deficit |
|
|
(10,033) |
|
|
— |
Net parent investment |
|
|
— |
|
|
384,893 |
Stockholders' equity |
|
|
433,807 |
|
|
384,893 |
Noncontrolling interest in subsidiary |
|
|
9,900 |
|
|
— |
Total equity |
|
|
443,707 |
|
|
384,893 |
Total liabilities and equity |
|
$ |
622,804 |
|
$ |
616,813 |
|
||||||||||||||||
Condensed Consolidated and Combined Statements of Operations |
||||||||||||||||
(in thousands except share amounts) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sponsorships, events, and entertainment revenue |
|
$ |
24,703 |
|
|
$ |
24,482 |
|
|
$ |
47,534 |
|
|
$ |
50,643 |
|
Hospitality revenue |
|
|
8,817 |
|
|
|
10,677 |
|
|
|
21,735 |
|
|
|
25,633 |
|
Rental revenue |
|
|
6,165 |
|
|
|
5,326 |
|
|
|
18,929 |
|
|
|
16,495 |
|
Other revenue |
|
|
12 |
|
|
|
1 |
|
|
|
94 |
|
|
|
4 |
|
Total revenues |
|
|
39,697 |
|
|
|
40,486 |
|
|
|
88,292 |
|
|
|
92,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sponsorships, events, and entertainment costs |
|
|
18,196 |
|
|
|
16,166 |
|
|
|
35,601 |
|
|
|
36,988 |
|
Hospitality costs |
|
|
8,373 |
|
|
|
8,495 |
|
|
|
22,308 |
|
|
|
23,983 |
|
Operating costs |
|
|
11,615 |
|
|
|
11,261 |
|
|
|
34,440 |
|
|
|
31,272 |
|
Provision for (recovery of) doubtful accounts |
|
|
298 |
|
|
|
104 |
|
|
|
2,558 |
|
|
|
91 |
|
General and administrative |
|
|
18,319 |
|
|
|
7,220 |
|
|
|
53,486 |
|
|
|
19,713 |
|
Depreciation and amortization |
|
|
7,694 |
|
|
|
13,636 |
|
|
|
21,101 |
|
|
|
40,036 |
|
Other |
|
|
— |
|
|
|
30 |
|
|
|
— |
|
|
|
51 |
|
Total expenses |
|
|
64,495 |
|
|
|
56,912 |
|
|
|
169,494 |
|
|
|
152,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OTHER |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for impairment |
|
|
— |
|
|
|
(672,492 |
) |
|
|
— |
|
|
|
(672,492 |
) |
Other income (loss), net |
|
|
4,798 |
|
|
|
23 |
|
|
|
4,715 |
|
|
|
26 |
|
Total other |
|
|
4,798 |
|
|
|
(672,469 |
) |
|
|
4,715 |
|
|
|
(672,466 |
) |
Operating income (loss) |
|
|
(20,000 |
) |
|
|
(688,895 |
) |
|
|
(76,487 |
) |
|
|
(731,825 |
) |
Interest income (expense) |
|
|
(3,133 |
) |
|
|
(592 |
) |
|
|
(8,889 |
) |
|
|
(1,849 |
) |
Equity earnings (losses) from unconsolidated ventures |
|
|
(7,578 |
) |
|
|
(46,619 |
) |
|
|
(24,410 |
) |
|
|
(68,335 |
) |
Loss on early extinguishment of debt |
|
|
(1,563 |
) |
|
|
(48 |
) |
|
|
(1,563 |
) |
|
|
(48 |
) |
Income (loss) before income taxes |
|
|
(31,274 |
) |
|
|
(736,154 |
) |
|
|
(111,349 |
) |
|
|
(802,057 |
) |
Income tax expense (benefit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
(31,274 |
) |
|
|
(736,154 |
) |
|
|
(111,349 |
) |
|
|
(802,057 |
) |
Preferred distributions to noncontrolling interest in subsidiary |
|
|
(237 |
) |
|
|
— |
|
|
|
(237 |
) |
|
|
— |
|
Net loss attributable to common stockholders |
|
$ |
(32,511 |
) |
|
$ |
(736,154 |
) |
|
$ |
(111,586 |
) |
|
$ |
(802,057 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total weighted average shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
5,522 |
|
|
|
5,522 |
|
|
|
5,522 |
|
|
|
5,522 |
|
Diluted |
|
|
5,522 |
|
|
|
5,522 |
|
|
|
5,522 |
|
|
|
5,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per share attributable to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
$ |
(5.89 |
) |
|
$ |
(133.31 |
) |
|
$ |
(20.21 |
) |
|
$ |
(145.25 |
) |
Diluted |
|
$ |
(5.89 |
) |
|
$ |
(133.31 |
) |
|
$ |
(20.21 |
) |
|
$ |
(145.25 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107981587/en/
Investor Relations:
T: (212) 732-8257
ir@seaportentertainment.com
Media Relations:
The Door
theseaport@thedooronline.com
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