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. (NYSE: 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 Three Months Ended
September 30, 2024
For the Three Months Ended
September 30, 2023
Variance to Comparable 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 Nine Months Ended
September 30, 2024
For the Nine Months Ended
September 30, 2023
Variance to Comparable 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 shortages on the Company’s business; the
contamination of the Company’s properties by hazardous or toxic
substances; catastrophic events or geopolitical conditions that may
disrupt the Company’s business; actual or threatened terrorist
activity and other acts of violence, or the perception of a
heightened threat of such events; losses that are not insured or
that excess the applicable insurance limits; risks related to the
disruption or failure of information technology networks and
related systems – both ours and those operated and managed by third
parties; the Company’s ability to attract and retain key personnel;
the Company’s inability to control certain properties due to the
joint ownership of such property and inability to successfully
attract desirable strategic partners, including joint venture
partners; the significant influence Pershing Square has over the
Company; and the other factors detailed in the Company’s filings
with the Securities and Exchange Commission (the “SEC”).
Forward-looking statements speak only as of the date of this press
release. The Company is under no obligation to publicly update or
revise and forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
applicable law.
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 SEC
filings, press releases, public conference calls, webcasts and the
SEG Investor Relations website. The Company uses these channels as
well as social media channels (e.g., LinkedIn
www.linkedin.com/company/new-york-seaportentertainment) as a means
of disclosing information about the Company's business to our
customers, employees, investors, and the public. While not all of
the information that the Company posts to the SEG Investor
Relations website or on the Company's social media channels is of a
material nature, some information could be deemed to be material.
Accordingly, the Company encourages investors, the media, and
others interested in SEG to review the information that it shares
through its website and on the Company's social media channels.
Users may automatically receive email alerts and other information
about the Company when enrolling an email address by visiting
"Email Alerts" in the "Resources" section of the SEG Investor
Relations website at
https://ir.seaportentertainment.com/resources/email-alerts. The
contents of these websites are not incorporated by reference into
this press release or any report or document SEG files with the
SEC, and any references to the websites are intended to be inactive
textual references only.
Seaport Entertainment
Group
Condensed Consolidated and
Combined Balance Sheets
(in thousands except par value
amounts)
(Unaudited)
September 30, 2024
December 31, 2023
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, $0.01 par value, 20,000
shares authorized, none issued or outstanding
—
—
Common stock, $0.01 par value, 480,000
shares authorized, 5,704 issued and outstanding in 2024 and none
issued or outstanding in 2023
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
Seaport Entertainment
Group
Condensed Consolidated and
Combined Statements of Operations
(in thousands except share
amounts)
(Unaudited)
Three months ended September
30,
Nine months ended September
30,
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
)
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version on businesswire.com: https://www.businesswire.com/news/home/20241107981587/en/
Investor Relations: Seaport Entertainment Group Inc. T: (212)
732-8257 ir@seaportentertainment.com
Media Relations: The Door theseaport@thedooronline.com
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