EPS of $-1.77 increased by 51.5% from previous year
Gross margin of 23.5%
Net income of -3.86M
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The InterGroup Corporation (INTG) QQ4 2024 Results – Revenue Growth Amid Elevated Leverage and Persistent Losses in Travel Lodging
Executive Summary
The InterGroup Corporation delivered a modest top-line improvement in Q4 2024, with revenue of $13.43 million and gross profit of $3.15 million, driven by a gross margin of 23.46%. Despite a positive operating profit of $0.50 million and EBITDA of $1.54 million, the quarter ended with a net loss of $3.86 million due to substantial other expenses and financing costs. Interest expense totaled $4.73 million, and total other income/expenses net was a negative $5.31 million, underscoring the heavy debt burden and the associated carrying costs that continue to compress the bottom line.
From a liquidity and cash-flow perspective, the company generated $5.03 million of operating cash flow and $3.60 million of free cash flow, signaling improving operating efficiency relative to cash generation. However, the balance sheet remains structurally stressed: total assets are $107.8 million versus total liabilities of $214.3 million, resulting in negative shareholders’ equity of approximately $80.34 million. Net debt stands at roughly $187.0 million on $191.34 million in total debt, with a debt-to-capitalization metric of about 1.72 and an interest-coverage ratio of 0.11x, indicating limited cushions to service debt.
Looking ahead, absent a material deleveraging and capital-allocation program, the stock remains exposed to leverage risk and refinancing uncertainty. Potential catalysts include debt refinancing at more favorable terms, monetization or optimization of real estate assets, and ongoing cash-flow-driven improvements in occupancy and operating efficiency. Investors should monitor debt maturities, refinancing conditions, occupancies, and any management commentary on strategic pivots or asset-reallocations.
Net income: -$3.86 million; net income margin -28.75% (YoY net income +52.07%; QoQ -22.00%).
Financial Highlights
Revenue and profitability:
- Q4 2024 revenue: $13.426 million; YoY growth 3.40%; QoQ change -9.79% (Q3 2024 revenue was $14.883 million).
- Gross profit: $3.15 million; gross margin 23.46% (YoY gross profit +18.87%; QoQ +3.89%).
- Operating income: $0.495 million; operating margin 3.69% (YoY operating income +58.15%; QoQ -30.18%).
- EBITDA: $1.542 million; EBITDA margin 11.49%.
- Net income: -$3.86 million; net income margin -28.75% (YoY net income +52.07%; QoQ -22.00%).
- EPS: -$1.77; diluted -$1.77; weighted-average shares 2.18 million.
Cash flow and liquidity:
- Cash from operating activities: $5.031 million; capex: $1.43 million; free cash flow: $3.60 million.
- Net change in cash: -$3.29 million; ending cash: $8.69 million; beginning cash: $11.99 million.
Balance sheet and leverage:
- Total assets: $107.81 million; total liabilities: $214.28 million; total stockholders’ equity: -$80.34 million.
- Total debt: $191.34 million; net debt: $187.01 million.
- Liquidity ratios: current ratio 0.143; quick ratio 0.143; cash ratio 0.0339.
- Interest coverage: 0.11x; debt-to-capitalization: 1.72x; debt-to-equity: -2.38 (negative equity).
Notes on health and trends:
- The business generated positive operating cash flow and free cash flow in Q4, suggesting improving cash conversion though the earnings base remains hampered by financing costs and non-operating charges.
- The balance sheet signals meaningful leverage and an asset-light style of risk that requires refinancing or deleveraging to restore equity and solvency metrics.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
13.43M
3.40%
-9.79%
Gross Profit
3.15M
18.87%
3.89%
Operating Income
495.00K
58.15%
-30.18%
Net Income
-3.86M
52.07%
-22.00%
EPS
-1.77
51.51%
-22.92%
Key Financial Ratios
currentRatio
0.14
grossProfitMargin
23.5%
operatingProfitMargin
3.69%
netProfitMargin
-28.8%
returnOnAssets
-3.58%
returnOnEquity
4.8%
debtEquityRatio
-2.38
operatingCashFlowPerShare
$2.31
freeCashFlowPerShare
$1.65
priceToBookRatio
-0.58
priceEarningsRatio
-3
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note: No earnings call transcript was provided in the data. Consequently, there are no management quotes to quote or themes to extract. The analysis below relies on the disclosed financials for Q4 2024. Potential themes management would likely address in an earnings call, based on the data, would include: (1) deleveraging and capital structure optimization to reduce interest expense and restore equity; (2) cash-flow-centric liquidity management and potential asset monetization or optimization of real estate and investment assets; (3) stabilization of hotel operations and occupancy to support revenue growth and margin expansion. Until a transcript or formal guidance is available, these remain inferred priorities rather than stated commitments.
N/A
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Forward Guidance
No formal forward guidance was provided in the data. Given the current leverage, negative equity, and the high interest burden, any credible guidance would hinge on: (a) debt refinancing terms favorable enough to reduce interest costs and extend maturities; (b) strategies to improve occupancy and average daily rate (ADR) at the hotel property, thereby lifting top-line growth and gross profit; (c) potential monetization or optimization of Real Estate Operations and Investment Transactions to strengthen liquidity. Investors should watch for: upcoming debt maturities and covenant relief, any asset disposition announcements, management commentary on cost controls and operating efficiencies, and industry demand trends for travel lodging in San Francisco and related markets.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
INTG Focus
23.46%
3.69%
4.80%
-3.00%
HTHT
28.40%
13.50%
6.12%
25.28%
ATAT
67.90%
14.20%
10.60%
19.26%
LUXH
-52.40%
-1.07%
15.41%
-1.09%
IHG
20.30%
20.30%
-14.80%
13.00%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The InterGroup Corporation presents a high-risk, high-leverage scenario in the near term. The QQ4 2024 results show meaningful top-line progress versus prior year but a deep net loss driven by heavy financing and non-operating charges. The stock’s upside hinges on meaningful deleveraging and a return to positive net income, which would likely require debt refinancing at lower costs and/or asset monetization coupled with improved hotel performance. In a base-case scenario, if the company can secure favorable refinancing and stabilize cash flow, there could be a path to earnings stabilization and a gradual recovery of equity value. However, without substantial balance-sheet repair and/or asset-driven liquidity events, the risk of continued losses and potential liquidity stress remains high. Investors should monitor debt maturities, refinancing terms, occupancy trends, and any strategic asset actions from management.
Key Investment Factors
Growth Potential
Modest revenue growth possible if occupancy trends improve and the hotel leverages Hilton branding to increase demand. Potential value creation from real estate optimization and selective asset monetization could support cash flow and liquidity.
Profitability Risk
Material downside risk from high leverage and negative equity (total stockholders’ equity around -$80.34m). Interest burden is extreme (interest expense of $4.73m in Q4) with an interest-coverage ratio near 0.11x. Liquidity is tight (current ratio 0.143; cash ratio 0.0339). Dependency on refinancing terms and ability to steward cash flow in a volatile lodging environment.
Financial Position
Distressed balance sheet with negative equity and substantial leverage. While cash from operations and free cash flow are positive in Q4, the persistent net losses and large total liabilities relative to assets imply a need for significant balance-sheet recovery to return to sustainable profitability.
SWOT Analysis
Strengths
Strategic San Francisco hotel asset linked to Hilton brand, 544 rooms with substantial meeting space and a pedestrian connection to market positioning.
Diverse subsidiary footprint (Hotel Operations, Real Estate Operations, Investment Transactions) providing multiple cash-flow streams.
Positive quarterly operating cash flow and free cash flow in QQ4 2024, signaling cash flow discipline amid earnings headwinds.
Weaknesses
Negative shareholders’ equity (~$80.34m) and high leverage with total debt of ~$191.3m and net debt ~$187.0m.
Very tight liquidity (current and quick ratios around 0.14) and heavy debt service burden (interest expense ~$4.73m in Q4).
Significant non-operating charges (total other income/expenses net of -$5.31m in Q4) depressing net income.
Operating earnings are modest (Q4 2024 operating income of $0.495m) with a net loss due to financing and non-operating items.
Opportunities
Debt refinancing or restructuring opportunities to lower interest costs and restore solvency metrics.
Asset optimization or monetization of select real estate/investment holdings to bolster liquidity.
Stabilization or improvement of hotel operations to drive occupancy, ADR, and margin expansion over time.
Threats
Macro fluctuations in travel demand impacting occupancy and room rates, particularly in San Francisco’s travel corridor.
Further tightening of credit markets or unfavorable refinancing terms could exacerbate liquidity risk.
Continued pressure from high interest costs and negative equity could limit strategic flexibility.