Greetings and welcome to XpresSpa Group, Incorporated Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. An interactive question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this call is being recorded. Today's call -- today's conference call will be hosted by Mr. Doug Satzman, CEO and Ms. Janine Canale, Controller and Principal Financial and Accounting Officer. Before I turn the call over to Mr. Satzman for opening remarks, I need to advise you of the following. Comments made on today's call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current assumptions and opinions and involve a variety of known and unknown risks and uncertainties. Actual results may differ materially from those contained in or suggested by such forward-looking statements. Important factors that may cause differences include those set forth from time-to-time in the company's SEC filings, including the company's report on Form 10-K for the year ending December 31, 2018, which will be filed shortly and other current and periodic reports the company files with the SEC. During today's call, the company will refer to certain non-GAAP financial measures, which it believes can be used in evaluating its performance. The presentation of these measures and other information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. For the reconciliations of these non-GAAP financial measures to GAAP measures and discussion of why the company considers these measures useful, please refer to today’s earnings release. With that, I’d like to turn the call over to Doug Satzman, CEO of XpresSpa. Doug?

Thank you, operator. I appreciate everyone joining us today. I'm very excited to be here as XpresSpa's new CEO for my inaugural conference call. I intent to use our time together this afternoon to briefly share with you my relevant career experiences, what attracted me to the company and what I have learned over the past several weeks in meetings and speaking with our team members. And finally, what our longer term priorities and near-term focus areas for the business. As I'm sure you can all appreciate, I am highly confident that over time we will enhance the guest experience, improve our financial condition and capitalize on the many opportunities ahead. By way of background, I have worked as a C level executive and have 20 plus year track record across various roles at Blue Chip multinational retailers across the U.S. and EMEA. I led successful business transformations, characterized by significant improvements in sales and profitability. In doing so, I have also prioritized the development of human capital and talent that I have learned how important they are to the organization's health and competitiveness. Before coming to XpresSpa I served as the CEO of Joe Coffee Company, a premium specialty coffee chain with over 20 company owned cafes in New York City and Philadelphia. During my tenure I developed a multi-channel national growth plan, created infrastructure and assembled a leadership team after the first private equity investment in a 15 year old family business. Prior to that I was the CEO for the U.S. business of Le Pain Quotidien, a premium Belgium bakery and full service restaurant chain with over 90 company owned restaurants across the U.S. and over 250 across the globe. While at LPQ I developed a long-term growth strategy focused on building organic sales, opening new stores…

Thank you, Doug. Let me briefly review highlights from the full year financials before going into more detail on fourth quarter itself. During the year ended December 31, 2018, we recorded total revenue of $50.1 million, which represents an increase of $1.3 million or 2.6% as compared to $48.8 million recorded in the year ended December 31, 2017. The increase in revenue was mainly due to the timing of the opening of new XpresSpa locations during the fourth quarter of 2017 and the first three quarters of 2018, which contributed to an incremental $1.9 million in non-comp store revenue. Although, we have 56 locations at both year-end period, we have 57 locations as of September 30, 2018, compared to 51 locations as of September 30, 2017. During 2018, we generated 83% of our revenues for services and 17% of our revenues from retail sales. Note that comparable store sales also decreased 3% on an annual basis. Total cost of sales of $39.5 million represented a 1.2% increase from the prior year and was consistent with the increase in revenue. Cost of sales increased due to higher labor and occupancy costs due to the opening of new stores during the fourth quarter of 2017 and the first three quarters of 2018. However, this was partially offset by initiative taken to streamline processes and reduce store level costs, which included reduced warehousing and shipping charges as we completed the transition of inventory sourcing to our strategic partner during the first half of 2018. Goodwill impairment of $19.6 million, which related to a number of triggering events early last year such as our rebranding efforts to a pure-play health and wellness service company the decline in our stock price and management transition. General and administrative expenses decreased to $16.2 million from $16.6 million…

To conclude, I am extremely excited to be here today supporting our approximately 700 XpresSpa team members. With passion and commitment we plan on dissecting every aspect of the business so we can provide the best quality, value and hospitality for our guests. Our brand has so much potential, which makes me bullish about the future of this company and which is why I am here. We will work closely with the Board on refining our approach to the business in both the short-term and the long-term. I'll put together a very detailed strategic plan to maximize the results of our existing spas, identify strategic opportunities and expand wisely. Our objective is to enhance value for our key shareholders and stakeholders, our guests, our team members, our vendor, supply partners and of course, our shareholders. And with that, we will now take your questions.

Thank you. We will now be conducting a question and answer session. [Operator Instructions] Our first question comes from the line of Will Coflin [ph], a private investor. Please proceed with your question.

Hi, thank you for taking my question. When can we expect to hear more specifics on your near-term priorities? And will those involved any incremental costs or investments?

Thank you for the question. I am not in a position to provide any further detail other than what I outlined on my near-term priorities and then highlighting the longer term opportunities. We have just started to put some of these plans in motion. But frankly, I've been here four or five weeks, and most of the time has been spent out in the field and spending time with the leadership in the office to develop this view. And the second part of your question was incremental costs or investments. There's nothing that I'm planning right now beyond making our investments and hopefully profitable new stores and things that are already lined up.

Got it, thank you.

Thank you. Our next question comes from the line of Michelle Marino, a private investor. Please proceed with your question.

Hi, Doug, congratulations on the new role. Given that we are essentially done with Q1, can you tell us about the performance if anything?

Well, I can't tell you that much, we're still working on our books for the quarter. We haven't even close Q3 yet. But what I can share is our top line sales are performing better than they did in Q4. We're still in a negative comp environment, but the gap is closing. And it gives me continued optimism that some of the plans set previously are coming through influencing this and helps me look forward to Q2, Q3 and Q4.

Great, thanks for taking the question.

Thank you. Our next question comes from the line of Ryan McGuire, a private investor. Please proceed with your question.

Hey, guys. You mentioned activating new partnerships due, can you mentioned any specifics around that?

Yes, I'm not in a position to disclose any deals that might be in the works, but what I can share what this organization has learned from our partnership with Calm is there are win-win opportunities with others in directly in the health and wellness space and maybe outside that are all after that very desirable consumer segment that is in the airports, in the bigger cities walking by our space, but also using our services. And there are several other companies that are interested in participating and partnering to have access to these customers, whether it's in our spas, or taking our brand outside of our spas and working with the airlines and credit card companies who have loyalty programs that reward their members. Again, that very desirable top 1% of our economy and finding ways that our brands can be part of that reward and recognition program outside our spas.

Great, thank you.

Thank you. Our next question comes from line of Steven Young, a private investor. Please proceed with your question.

Hi, Doug, congrats again on your new role. Just a quick question from me, how long do you think it'll take before you can put your plan into action and we can begin seeing some tangible results?

Yes, I'd like to be able to tell you next month, but the reality is it takes some time, we have some initiatives that should have a very quick impact. But some are going to take a couple quarters and we have a long-term view on this business to make good sound business decisions, but at the same time, we recognize the urgency in picking up some quick wins. So again, I can't forecast when you'll see tangible results, but know that we're approaching it with a combination of short-term quick initiatives, but still building a long term muscle that will continue this company for the next 10 years.

Okay, that's fair enough. Thank you again.

We have no further questions at this time, I'd like to turn the floor back over to management for closing comments.

Well, I think you got all my best stuff. So thank you everyone for your participation today. Have a nice day and I look forward to engaging with you next quarter.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.