DENVER, Aug. 13, 2024 (GLOBE NEWSWIRE) -- Inspirato Incorporated ("Inspirato" or the "Company") (NASDAQ:ISPO), the innovative luxury travel club, today announced its 2024 second quarter financial and operating results, the closing of its previously announced $10 million Investment Agreement with One Planet Group LLC ("One Planet Group") and is in the process of implementing initiatives expected to reduce costs by approximately $25 million on an annualized basis. Except as otherwise stated, all financial results discussed below are presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. As supplemental information, we have provided certain additional non-GAAP financial measures in this press release's supplemental tables, and such supplemental tables include a reconciliation of these non-GAAP measures to our GAAP results. The sum of individual metrics may not always equal total amounts indicated due to rounding. Recent Highlights: Closed a comprehensive transaction with One Planet, including a $10 million investment in exchange for approximately 2.9 million new shares of Inspirato Class A Common Stock and approximately 2.9 million warrants. The purchase price for each share and warrant in the transaction is $3.43. The first tranche of the transaction will close August 13, 2024 for consideration of approximately $4.6 million; the second tranche is expected to close in September 2024, subject to shareholder approval, for consideration of approximately $5.4 million. Following the second closing, One Planet Group will have an option to invest an additional $2.5 million on the same terms. Appointed One Planet founder Payam Zamani as CEO and Chairman of Inspirato's Board of Directors. One Planet to name three new Directors to Inspirato's Board of Directors, which is expected to remain at seven Directors. Expected to reduce costs by approximately $25 million on an annualized basis, including an immediate reduction of force of 15% and the termination of previously impaired, underperforming leases. Entered into a termination agreement on August 12, 2024, of certain previously impaired, underperforming leases whereby the Company is extinguishing a $41.2 million lease liability for leases that previously did not have termination rights. Following a $6.6 million payment in August 2024 through March 2025, the Company will save approximately $50 million in lease payments from 2025 through 2031. Received an extension on August 5, 2024 to remain listed on the Nasdaq Stock Exchange until November 22, 2024 subject to regaining compliance with the Exchange's Listing Rules relating to maintaining the minimum market value of publicly held shares. 2024 Second Quarter Highlights: Operational efficiencies contributed to year-over-year improvements in cost of revenue, gross margin, Adjusted EBITDA loss and negative free cash flow. Launched Inspirato Invited, a premium offering with an entry fee of more than $150,000 featuring an extended booking window of two years and fixed nightly rate offerings for ten years. Second quarter 2024 residence and hotel occupancy rates of 70% and 79%, respectively, compared to 72% and 76% in the second quarter of 2023. Second quarter 2024 total revenue of $67.4 million, a year-over-year decrease of 20% compared to the second quarter of 2023. Net loss of $15.4 million compared to a net loss of $46.7 million in the second quarter of 2023, which included the impact of a $30.1 million non-cash asset impairment. Ended the quarter with approximately 12,000 members and approximately 12,700 Active Subscriptions comprised of approximately 10,800 Inspirato Club subscriptions and approximately 1,900 Inspirato Pass subscriptions. Management Commentary Chairman and Chief Executive Officer, Payam Zamani, commented, "I'm incredibly excited for the opportunity to not only join the Inspirato team, but to show my support – and express my confidence in the future of Inspirato – by investing in the business and becoming its largest shareholder. I'm confident that a strong foundation has been laid and the path we are on is the right one. With a fresh perspective, a simplified approach and improved cost structure, I look forward to achieving our goals sooner than previously expected." "The $10 million investment from One Planet has meaningfully improved our liquidity and ability to achieve our operational goals," added Chief Financial Officer Robert Kaiden. "We anticipate the combination of our portfolio optimization efforts and reduced cost structure has us well-positioned to achieve our future profitability goals without sacrificing the member experience." 2024 Guidance Due to the change in leadership and the cost reduction efforts being implemented, the Company is removing 2024 financial guidance. 2024 Second Quarter Financial Results and Operational Metrics The following table provides the components of gross margin for the three and six months ended June 30, 2024 and 2023:     Three Months Ended June 30,           Six Months Ended June 30,         (Unaudited, in millions)   2024     2023     % Change   2024     2023     % Change Travel revenue   $ 38.8       $ 48.0       (19.1 ) %   $ 88.5       $ 103.2       (14.2 ) % Subscription revenue     25.2         36.0       (30.0 ) %     53.3         72.5       (26.5 ) % Rewards and other revenue     3.3         0.1       14,230.4   %     5.8         0.1       6,807.1   % Total revenue     67.4         84.1       (19.9 ) %     147.6         175.8       (16.0 ) % Cost of revenue     51.2         64.7       (20.9 ) %     99.7         124.8       (20.1 ) % Asset impairments     0.0         30.1       (100.0 ) %     0.0         30.1       (100.0 ) % Gross margin   $ 16.2       $ (10.7 )     251.5   %   $ 47.9       $ 21.0       128.5   % Gross margin (%)     24   %     (13 ) %   37   pp     32   %     12   %   21   pp n/m = not meaningfulpp = percentage points The following table provides a breakdown of Nights Delivered, Occupancy and ADR for the three and six months ended June 30, 2024 and 2023:     Three Months Ended June 30,   Six Months Ended June 30,     2024   2023   2024   2023 Residences                                 Paid Nights Delivered     13,600       14,000       30,500       31,200   Total Nights Delivered     21,700       27,900       47,300       57,700   Occupancy     70 %     72 %     74 %     74 % ADR   $ 1,535     $ 1,744     $ 1,744     $ 1,969                                     Hotels                                 Paid Nights Delivered(1)     8,300       11,100       17,400       22,000   Total Nights Delivered(1)     14,000       19,500       29,800       40,300   Occupancy(2)     79 %     76 %     73 %     73 % ADR(2)   $ 1,035     $ 922     $ 1,044     $ 988                                     Total                                 Paid Nights Delivered(1)     21,900       25,100       47,900       53,100   Total Nights Delivered(1)     35,700       47,400       77,000       98,000   Occupancy(2)     71 %     73 %     74 %     74 % ADR(2)   $ 1,346     $ 1,379     $ 1,514     $ 1,563   (1)   Includes net rate hotel nights.(2)   Excludes net rate hotel nights as we purchase individual nights but do not have a total number of nights obligation. Reconciliation of Non-GAAP Financial Measures In addition to Inspirato's results determined in accordance with GAAP, Inspirato uses Adjusted Net Loss, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow as part of its overall assessment of performance, including the preparation of its annual operating budget and quarterly forecasts, to evaluate the effectiveness of its business strategies and to communicate with its Board concerning our business and financial performance. Inspirato believes that these non-GAAP financial measures provide useful information to investors about its business and financial performance, enhance their overall understanding of our past performance and future prospects, and allow for greater transparency with respect to metrics used by its management in their financial and operational decision making. Inspirato is presenting these non-GAAP financial measures to assist investors in seeing its business and financial performance through the eyes of management, and because we believe that these non-GAAP financial measures provide an additional tool for investors to use in comparing results of operations of our business over multiple periods with other companies in our industry. There are limitations related to the use of these non-GAAP financial measures, including that they exclude significant expenses that are required by GAAP to be recorded in Inspirato's financial measures. Other companies may calculate non-GAAP financial measures differently or may use other measures to calculate their financial performance, and therefore, our non-GAAP financial measures may not be directly comparable to similarly titled measures of other companies. Thus, these non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to any measures derived in accordance with GAAP. Inspirato provides a reconciliation of Adjusted Net Loss, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow to their respective related GAAP financial measures. Inspirato encourages investors and others to review our business, results of operations, and financial information in its entirety, not to rely on any single financial measure, and to view Adjusted Net Loss, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow in conjunction with their respective related GAAP financial measures. Adjusted Net Loss. Adjusted Net Loss is a non-GAAP financial measure that Inspirato defines as net loss and comprehensive loss less fair value gains and losses on financial instruments and asset impairments. The above items are excluded from Inspirato's Adjusted Net Loss measure because management believes that these costs and expenses are not indicative of core operating performance and do not reflect the underlying economics of Inspirato's business. Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure that Inspirato defines as net loss and comprehensive loss less interest, income taxes, depreciation and amortization, equity-based compensation expense, fair value gains and losses on financial instruments and asset impairments. Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of total revenue for the same period. The above items are excluded from Inspirato's Adjusted EBITDA measure because management believes that these costs and expenses are not indicative of core operating performance and do not reflect the underlying economics of ...