Seaport Entertainment Group Reports Third Quarter 2024 Results
NEW YORK--(BUSINESS WIRE)--November 07, 2024--
Seaport Entertainment Group Inc. (NYSE American: SEG) ("Seaport Entertainment Group," "SEG" or the "Company") announced today its operating and financial results for the quarter ended September 30, 2024.
Third Quarter 2024 Highlights
-- Completed the previously announced separation from predecessor parent
company Howard Hughes Holdings Inc. $(HHH)$ ("Howard Hughes") on 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 beginning November 2024.
-- Extended the Company's programming agreement with Live Nation for five
years, effective January 1, 2025, for The Rooftop at Pier 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 at Pier 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 Anton Nikodemus, Chairman, President and Chief Executive Officer of Seaport Entertainment Group. "Looking ahead, we are building momentum by forging strategic partnerships and prioritizing a customer-centric approach to reimagining the customer experience across many of our assets. This emphasis on partnerships and the customer is ultimately what we believe will enable our development of a true entertainment platform that optimizes our unique real estate and market positioning to create long-term shareholder value."
Quarterly Results
The table below provides a summary of the Company's consolidated operating and financial results for the three months ended September 30, 2024, which includes periods during Howard Hughes' ownership prior to the Company's Separation:
For the For the
Three Three
Months Months
Ended Ended Variance
September September to Comparable
30, 2024 30, 2023 Period in Prior Year
----------- ----------- ----------------------
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 September 30, 2024, which includes periods during Howard Hughes' ownership prior to the Company's Separation:
For the For the
Nine Months Nine Months
Ended Ended Variance
September September to Comparable
30, 2024 30, 2023 Period in Prior Year
----------- ----------- ----------------------
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 September 30, 2024, the Company had $27.8 million in cash, cash equivalents and restricted cash, $5.0 million of undrawn availability under its $5.0 million unsecured revolving credit facility, and $103.4 million of consolidated debt outstanding at an effective weighted-average interest rate of 8.0%. As of September 30, 2024, 41% of consolidated debt was fixed at a weighted-average interest rate of 4.9%. The remaining 59% of the Company's consolidated debt is floating at a weighted-average interest rate of 10.2% before the effects of the Company's total return swap, which reduces the effective rate of the floating rate debt to 9.7%. Additionally, 100% of the Company's outstanding debt is asset-specific, secured debt, and the weighted-average maturity of the Company's consolidated debt is approximately 9.0 years. The Company has no meaningful debt maturities until Q3 2029.
During the quarter ended September 30, 2024, the Company completed the following notable capital markets activities:
-- 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 to July 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 September 30, 2024, the Company completed the following notable capital markets activity:
-- 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 September 30, 2024. The Company anticipates hosting its first investor conference call in March 2025 when it reports its operating and financial results for the full year 2024.
About Seaport Entertainment Group (NYSE American: SEG)
Seaport Entertainment Group (NYSE American: SEG) is a premier entertainment and hospitality company formed to own, operate, and develop a unique collection of assets positioned at the intersection of entertainment and real estate. Seaport Entertainment Group's focus is to deliver unparalleled experiences through a combination of restaurant, entertainment, sports, retail and hospitality offerings integrated into one-of-a-kind real estate that redefine entertainment and hospitality. For more information, please visit www.seaportentertainment.com.
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 Manhattan and the Las Vegas area; extreme weather conditions or climate change that may cause property damage or interrupt business; the impact of water and electricity
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