LuxUrban Hotels Inc.

Greetings and welcome to the Lux Urban Hotels 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Devin Sullivan, Managing Director of the Equity Group. Thank you. You may begin.

Thank you, Daryl. Good morning, everyone, and thank you for joining us today. Our speakers for today will be Brian Ferdinand, Chairman and Chief Executive Officer, and Chanute Katari, the company's President and Chief Financial Officer. Before we begin, I'd like to remind everyone that during this call, we will be discussing forward-looking statements with respect to financial and operational guidance, scheduled property openings, expected closing of noted lease transactions, continued closing on additional leases for properties in the company's pipeline, as well as the company's anticipated ability to commercialize efficiently and profitably the properties it leases and will lease in the future. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those set forth under the caption risk factors in our public filings with the SEC, including an item 1A of our 10-K for the year ended December 31, 2022. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology, such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or variations of such words and phrases that may contain statements that certain actions, events, or results may, could, would, might, or will be taken, will continue, will occur, or will be achieved. The forward-looking information may relate to anticipated events or results including, but not limited to, business strategy, leasing terms, high-level occupancy rates, and sales and growth plans. The financial projections provided herein are based on certain assumptions and existing and anticipated market, travel, and public health conditions, all of which may change. The forward-looking information and forward-looking statements contained in the company's press release and during this call are made as of the date of this event and the company does not undertake to update any forward-looking information and or forward-looking statements that are contained or referenced herein except in accordance with applicable securities laws. Management will also be discussing non-GAAP financial metrics. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures can be found in the company's press release. With that said, I'll now turn the call over to Brian Ferdinand, Chairman and Chief Executive Officer. Brian, please go ahead.

Thank you, Devin, and thanks to each of you for joining us this morning. We are excited to report record full-year financial results, continued success in executing against our growth plans, and an outlook for continuing growth and profitability in 2023. We completed our IPO in August, 2022, which in our view adds important context to all that we accomplished in 2022 and during the early part of 2023. We more than doubled net rental revenue in 2022 to 43.8 million from 21.4 million in 2021, as well tripled our operational unit count as of Q1, 2023. On an adjusted basis, we reported our sixth consecutive quarter of cash basis net income and fifth consecutive quarter of positive EBITDA. We completed a successful corporate rebranding, significantly increased our property portfolio on a fully funded basis, established our presence in new cities, and added scale in two of the country's premier destination cities, New York and Miami. Utilizing our asset-light business model, we increased the number of short-term stay hotels under master lease agreements and expanded total units for rent and operation. At year-end, we operated properties in New York, Miami, Los Angeles, New Orleans, and Washington, D.C. We continued this growth in the first quarter of 2023, both in terms of properties under MLA and units available for rent. We exited our legacy apartment rental business, SoBNY, as part of our plan to focus exclusively on the short-term stay hotel rental business. Although this shift resulted in non-recurring cash exit costs of $4.1 million in 2022, these expenses were confined to 2022, and we believe that we are now well-positioned to capitalize on the ongoing recovery in global travel. We are seeing robust consumer demand as well, very high quality assets in our pipeline that we are continuing to pursue and close. We are proud of our success to date. However, we believe that the opportunities that lie ahead of us are historic in nature. Approximately $31 billion of CMBS loans backed by hotels are set to mature by the end of 2024. reflecting the ongoing distress in hotel assets created by the pandemic and now exacerbated by rapidly rising interest rates. This confluence of factors has resulted in new and challenging financial requirements for hotel owners, which fully aligns with our supply growth strategy in acquiring turnkey hotel properties on long-term master lease agreements at pricing that is at historic cycle lows. We are now accessing a sustained and elongated pipeline of hotel opportunities we think will continue through 2025. As the business continues to scale and mature, we are well positioned to expand margins by applying our advanced revenue management capabilities, as well as pursuing previously untapped high margin revenue streams at each of our lease properties beginning in the second quarter of 2023. We have also completed significant steps to fortify our financial position, simplify our capital structure, generate cash, and accelerate debt repayment of pre-IPO high-interest notes with non-cash expense components. The effect of these initiatives will begin to manifest in our first quarter of 2023 results, specifically with respect to reducing our total legacy debt. We are really excited to continue to see the business performance scale in 2023. This past year has allowed us to showcase the viability of our hotel operating model, and we remain focused on expanding our industry presence in 2023. We anticipate a higher deal flow environment this fiscal year, allowing us to select only the most favorable properties and deal structures to advance our growth. With that, I'll turn it over to Shanukh Kothari, our President and Chief Financial Officer for review of our financials.