DALLAS, Oct. 30, 2019 /PRNewswire/ -- Ashford Inc. AINC ("Ashford" or the "Company") today reported the following results and performance measures for the third quarter ended September 30, 2019. Unless otherwise stated, all reported results compare the third quarter ended September 30, 2019, with the third quarter ended September 30, 2018 (see discussion below). The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.
STRATEGIC OVERVIEW
- High-growth, fee-based business model
- Diversified platform of multiple fee generators
- Seeks to grow in two primary areas:
- Grow our existing REIT platforms accretively and create new platforms; and
- Grow our service businesses via increased AUM and third-party business
- Highly-aligned management team with superior long-term track record
- Leader in asset and investment management for the real estate & hospitality sectors
FINANCIAL AND OPERATING HIGHLIGHTS
- Net loss attributable to common stockholders for the third quarter of 2019 totaled $9.4 million, or $3.94 per diluted share, compared with net income of $1.4 million, or $0.18 per diluted share, in the prior-year quarter. Adjusted net income for the third quarter was $7.0 million, or $1.58 per diluted share, compared with $2.6 million, or $0.75 per diluted share, in the prior-year quarter.
- Total revenue for the third quarter of 2019 was $56.9 million, reflecting a growth rate of 36.9% over the prior-year quarter.
- Adjusted EBITDA for the third quarter was $8.4 million, reflecting a growth rate of 104.1% over the prior-year quarter.
- At the end of the third quarter of 2019, the Company had approximately $8.1 billion of gross assets under management.
- During the quarter, the Company closed on the acquisition of Sebago for $7 million, which equates to an implied trailing 12-month Adjusted EBITDA multiple of 4.4x.
- During the quarter, the Company formed Ashford Securities LLC, a dedicated platform to raise retail capital through financial intermediaries and the broker-dealer channel.
- Subsequent to quarter end, the Company repurchased stock from Ashford Trust and Braemar Hotels & Resorts that represented approximately 16% of its common shares outstanding.
- Subsequent to quarter end, the Company announced it had obtained stockholder approval for the proposed acquisition of Remington Holdings' Hotel Management business.
- As of September 30, 2019, the Company had corporate cash of $33.2 million.
AGREEMENT TO ACQUIRE REMINGTON'S HOTEL MANAGEMENT BUSINESS
On June 3, 2019, the Company announced that it had signed a definitive agreement to acquire the Hotel Management business of privately-held Remington Holdings, LP ("Remington"). The proposed acquisition of Remington's high-margin, low-capex Hotel Management business is expected to be immediately accretive to adjusted net income per share and will immediately add scale, diversification and an enhanced competitive position for Ashford. It will also expand the breadth of services the Company offers to its advised REITs. Additionally, the Company believes the transaction represents a compelling opportunity to further diversify its earnings stream and, moving forward, the potential to expand business to other third-party clients.
Remington is an independent hotel management company with over 40 years of experience in the hospitality business. Remington's Hotel Management business currently provides comprehensive and cost-effective hotel management services for both Ashford Hospitality Trust, Inc. AHT ("Ashford Trust" or "Trust") and Braemar Hotels & Resorts Inc. BHR ("Braemar"). Remington's portfolio consists of almost 90 hotels with over 17,400 rooms of full-service and select-service properties representing over a dozen brands across 28 states as well as the District of Columbia. Remington's Hotel Management business currently has very little third-party business outside of the Company's advised REITs, which will be an immediate growth opportunity and area of focus for the Company going forward.
On October 24, 2019, the Company announced the final results of the Special Meeting of Stockholders held October 24, 2019, during which Ashford stockholders overwhelmingly approved the proposal in connection with the transaction. Holders of approximately 92% of Ashford shares present and voting at the meeting voted in favor of the proposal, including a majority of shares, excluding shares owned by Ashford Trust, Braemar, the Bennetts, and management, present and voting at the meeting voted in favor of the proposal. The Company also announced that it has received the final, official private letter ruling from the Internal Revenue Service related to the transaction.
The proposed acquisition is expected to close on or around November 6, 2019.
STOCK REPURCHASE FROM ASHFORD TRUST AND BRAEMAR
On October 2, 2019, the Company announced that it acquired an aggregate of 412,974 shares of its common stock owned by Ashford Trust and Braemar for $30 per share, resulting in a total cost of approximately $12.4 million. This stock purchase represented approximately 16% of the Company's common shares outstanding. Due to the parameters of the private letter ruling received from the Internal Revenue Service ("IRS"), the Company was only able to acquire the shares held by Ashford Trust's and Braemar's taxable REIT subsidiaries. Ashford Trust has announced that it intends to distribute its remaining 205,086 shares of Ashford common stock to its shareholders and unitholders in a pro-rata distribution. Braemar has also announced that it intends to distribute its remaining 174,983 shares of Ashford common stock to its shareholders and unitholders in a pro-rata distribution. Both distributions are to occur prior to the Remington closing.
CREATION OF ASHFORD SECURITIES
On September 25, 2019, the Company announced that it had formed Ashford Securities LLC ("Ashford Securities") to raise capital in order to grow its existing and future platforms. Following registration with the Financial Industry Regulatory Authority and other regulatory authorities, Ashford Securities will be a dedicated capital raising platform to fund investment opportunities sponsored and asset-managed by Ashford. Types of capital raised may include, but are not limited to, preferred equity, convertible preferred equity, mezzanine debt, or non-traded REIT common equity (for future platforms).
Ashford Securities is not raising common equity for the Company nor for its existing advised platforms of Ashford Trust and Braemar. Ashford Securities expects to begin raising capital late in the first half of next year. Competitors in the space have been able to raise hundreds of millions of dollars annually.
PREMIER PROJECT MANAGEMENT UPDATE
In August 2018, the Company completed the acquisition of Premier Project Management ("Premier") for $203 million. Premier provides comprehensive and cost-effective architecture, design, development, and project management services. It provides project oversight, coordination, planning, and execution of renovation, capital expenditure or ground-up development projects. Its operations are responsible for managing and implementing substantially all capital improvements at Trust and Braemar hotels. Additionally, it has extensive experience working with many of the major hotel brands in the areas of renovating, converting, developing or repositioning hotels. Premier generated $7.9 million of revenue and $3.7 million of Adjusted EBITDA in the third quarter, including $422,000 of revenue from its new architectural services initiative.
JSAV UPDATE
The Company owns a controlling interest in a privately-held company that conducts the business of JSAV in the United States, Mexico and internationally ("JSAV"). JSAV provides an integrated suite of audio visual services, including show and event services, hospitality services, creative services, and design and integration, making JSAV a leading single-source solution for their clients' meeting and event needs. In the first quarter of 2019, JSAV completed the acquisition of BAV. During the third quarter, JSAV had revenue growth of 54% compared to the prior-year period. Additionally, at the end of the third quarter, JSAV had multi-year contracts in place with 93 hotels and convention centers, in addition to regular business representing over 2,700 annual events and productions, 500 venue locations, and 750 clients.
RED HOSPITALITY & LEISURE UPDATE
RED Hospitality & Leisure ("RED Hospitality") is a leading provider of watersports activities and other travel and transportation services in the U.S. Virgin Islands. RED Hospitality has several potential avenues for future growth including opportunities to expand into other hotels at Ashford-advised REITs or non-Ashford hotels in the USVI, the Caribbean, and the U.S. To that end, with the commencement of ferry transportation services and beach and watersports services to the Westin St. John in January, continued beach and watersports services to the Ritz-Carlton St. Thomas Club - the timeshare and rental property adjacent to the Ritz-Carlton St. Thomas hotel - and increased direct bookings and private charter business, in the third quarter, RED Hospitality generated $1.7 million of revenue and $419,000 of Adjusted EBITDA. Third quarter revenue growth was 526% compared to the prior-year period.
ACQUISITION OF SEBAGO
On July 23, 2019, the Company announced that RED Hospitality completed the acquisition of substantially all of the assets of Sebago, a leading provider of watersports activities and excursion services based in Key West, Florida for approximately $2.5 million in cash and $4.5 million of Ashford common stock (excluding transaction costs and working capital adjustments). Based on unaudited financials provided by the seller, Sebago's Adjusted EBITDA for the trailing twelve-month period ended April 30, 2019 was $1.6 million. The implied Adjusted EBITDA multiple based on the total purchase price is 4.4x which the Company believes represents an attractive potential return on investment. After giving effect to the transaction, Ashford will own an approximately 84% interest in the common equity of RED Hospitality.
With over 25 years of operating history, Sebago provides watersports activities and excursion services in the Key West market. Sebago's watersports activities and excursion services include sunset sails, reef snorkeling, kayak tours, jet ski tours, and all-day adventure tours combining the best of all their excursion products. Sebago has a leading brand with 3 of the top 10 ranked tours on TripAdvisor. Sebago's sales booths are well-located across the Key West market, and they have ideal dock locations for marketing and boarding the company's tours in the Key West Bight marina – a hub of tourism centrally located in Key West. Based on local regulations, significant barriers to entry exist for this competitive market including the transfer of boat slips, the supply of boat slips for commercial use, and physical limitations to expanding the Key West Bight marina. The Company believes the brand recognition, existing employee base, lead time to replicate existing assets, and other significant barriers to entry support Sebago's competitive advantage and future growth potential.
FINANCIAL RESULTS
Net loss attributable to common stockholders for the quarter totaled $9.4 million, or $3.94 per diluted share, compared with net income of $1.4 million, or $0.18 per diluted share, in the prior-year quarter. Adjusted net income for the quarter was $7.0 million, or $1.58 per diluted share, compared with $2.6 million, or $0.75 per diluted share in the prior-year quarter.
For the quarter ended September 30, 2019, base advisory fee revenue was $10.6 million. The base advisory fee revenue in the third quarter was comprised of $8.0 million from Ashford Trust and $2.6 million from Braemar.
Adjusted EBITDA for the quarter was $8.4 million, reflecting a growth rate of 104.1% over the prior-year quarter.
CAPITAL STRUCTURE
At the end of the third quarter of 2019, the Company had approximately $8.1 billion of gross assets under management from its advised platforms. The Company had corporate cash of $33.2 million, 3.0 million fully diluted shares, and a current fully diluted equity market capitalization of approximately $56 million. The Company's financial results include 1.45 million common shares associated with its Series B convertible preferred stock. The Company had $28.9 million of loans at September 30, 2019, of which approximately $3.9 million related to its joint venture partners' share of those loans.
QUARTERLY HIGHLIGHTS FOR ADVISED PLATFORMS
ASHFORD TRUST HIGHLIGHTS
- During the quarter, Ashford Trust completed the sale of the Marriott Plaza San Antonio in San Antonio, Texas for $34.0 million.
- During the quarter, Ashford Trust completed the sales of the Courtyard Savannah Downtown in Savannah, Georgia and the Hilton Garden Inn in Wisconsin Dells, Wisconsin for $37.8 million.
- Subsequent to quarter end, Ashford Trust entered into a new franchise agreement for the Hilton Alexandria Old Town in Alexandria, Virginia that transitioned the hotel from being Hilton-managed to being managed by Remington Lodging.
- Subsequent to quarter end, Ashford Trust announced that it had entered into a new franchise agreement with Marriott International to convert its Crowne Plaza La Concha Key West Hotel in Key West, Florida to an Autograph Collection property.
- Subsequent to quarter end, Ashford Trust sold a 1.65-acre parking lot adjacent to its Hilton St. Petersburg Bayfront Hotel in St. Petersburg, Florida for $17.5 million in total consideration which will be paid over time.
BRAEMAR HOTELS & RESORTS HIGHLIGHTS
- During the quarter, Braemar opened The Notary Hotel, an Autograph Collection property, in downtown Philadelphia after a multi-million-dollar conversion of its Courtyard Downtown Philadelphia.
- During the quarter, Braemar announced the planned opening of The Clancy, an Autograph Collection property, in downtown San Francisco. The re-branded property is expected to open in early 2020 after a multi-million-dollar conversion of the Courtyard San Francisco Downtown.
- During the quarter, Braemar announced the extension of its mortgage loan for the Ritz-Carlton St. Thomas.
- During the quarter, Braemar refinanced its mortgage loan for the 142-room Pier House Resort & Spa in Key West, Florida.
- Subsequent to quarter end, Braemar announced the opening of The Maple Grove Presidential Villa at the Bardessono Hotel & Spa in Yountville, CA.
"We are very pleased with our third quarter results, which reflect the diligent execution of our operating strategy focused on accretively growing our advised platforms and acquiring growth-oriented, hospitality-related businesses," commented Monty J. Bennett, Ashford's Chairman and Chief Executive Officer. "To this end, the recent formation of Ashford Securities will provide Ashford and its advised platforms an additional source of capital that is not dependent on the traditional publicly-traded capital markets. We are excited to pursue a fresh source of capital that will help us prudently grow all our platforms over the long term for increased shareholder value. We are also equally excited that the proposed acquisition of Remington's Hotel Management business will immediately add scale, diversification and an enhanced competitive position for Ashford in the hospitality industry. Looking ahead to the remainder of 2019 and 2020, we remain committed to maximizing value for our shareholders as we look to opportunistically grow our existing REIT platforms and create new platforms and grow our service businesses via increased AUM and third-party business."
INVESTOR CONFERENCE CALL AND SIMULCAST
The Company will conduct a conference call on Thursday, October 31, 2019, at 12:00 p.m. ET. The number to call for this interactive teleconference is (201) 493-6725. A replay of the conference call will be available through Thursday, November 7, 2019, by dialing (412) 317-6671 and entering the confirmation number, 13694099.
The Company will also provide an online simulcast and rebroadcast of its third quarter 2019 earnings release conference call. The live broadcast of the Company's quarterly conference call will be available online at the Company's web site, www.ashfordinc.com on Thursday, October 31, 2019, beginning at 12:00 p.m. ET. The online replay will follow shortly after the call and continue for approximately one year.
Included in this press release are certain supplemental measures of performance which are not measures of operating performance under GAAP, to assist investors in evaluating the Company's historical or future financial performance. These supplemental measures include adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA") and Adjusted Net Income. We believe that Adjusted EBITDA and Adjusted Net Income provide investors and management with a meaningful indicator of operating performance. Management also uses Adjusted EBITDA and Adjusted Net Income, among other measures, to evaluate profitability and our board of directors includes these measures in reviews to determine quarterly distributions to stockholders. We calculate Adjusted EBITDA by subtracting or adding to net income (loss): interest expense, income taxes, depreciation, amortization, net income (loss) to noncontrolling interests, transaction costs, and other expenses. We calculate Adjusted Net Income by subtracting or adding to net income (loss): net income (loss) to noncontrolling interests, transaction costs, and other expenses. Our methodology for calculating Adjusted EBITDA and Adjusted Net Income may differ from the methodologies used by other comparable companies, when calculating the same or similar supplemental financial measures and may not be comparable with these companies. Neither Adjusted EBITDA nor Adjusted Net Income represents cash generated from operating activities as determined by GAAP and should not be considered as an alternative to a) GAAP net income (loss) as an indication of our financial performance or b) GAAP cash flows from operating activities as a measure of our liquidity nor are such measures indicative of funds available to satisfy our cash needs. The Company urges investors to carefully review the U.S. GAAP financial information as shown in our periodic reports on Form 10-Q and Form 10-K, as amended and our Current Report on Form 8-K to reflect the acquisition of the Remington project management business.
* * * * *
Ashford provides global asset management, investment management and related services to the real estate and hospitality sectors.
Follow Chairman and CEO Monty Bennett on Twitter at www.twitter.com/MBennettAshford or @MBennettAshford.
Ashford has created an Ashford App for the hospitality REIT investor community. The Ashford App is available for free download at Apple's App Store and the Google Play Store by searching "Ashford."
Forward-Looking Statements
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "can," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford Inc.'s control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: adverse litigation or regulatory developments; general volatility of the capital markets and the market price of our common stock; changes in our business or investment strategy; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the market in which we operate, interest rates or the general economy; the degree and nature of our competition; risks related to Ashford Inc.'s ability to complete the acquisition on the proposed terms; the possibility that competing offers will be made; risks associated with the Remington Hotel Management business combination transaction, such as the risk that the Hotel Management business will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the acquisition will not be realized. These and other risk factors are more fully discussed in Ashford Inc.'s filings with the Securities and Exchange Commission (SEC) including Ashford Inc.'s definitive proxy statement filed with the SEC on September 23, 2019 and Ashford Inc.'s 10-K filed with the SEC on March 8, 2019.
The forward-looking statements included in this press release are only made as of the date of this press release. Investors should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise.
ASHFORD INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(unaudited, in thousands, except share and per share amounts) | |||||||
September 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 36,400 | $ | 51,529 | |||
Restricted cash | 11,978 | 7,914 | |||||
Accounts receivable, net | 6,628 | 4,928 | |||||
Due from affiliates | 55 | 45 | |||||
Due from Ashford Trust OP | 4,444 | 5,293 | |||||
Due from Braemar OP | 2,224 | 1,996 | |||||
Inventories | 1,356 | 1,202 | |||||
Prepaid expenses and other | 4,236 | 3,902 | |||||
Total current assets | 67,321 | 76,809 | |||||
Investments in unconsolidated entities | 3,339 | 500 | |||||
Furniture, fixtures and equipment, net | 72,043 | 47,947 | |||||
Operating lease right-of-use assets | 21,522 | — | |||||
Goodwill | 61,969 | 59,683 | |||||
Intangible assets, net | 193,766 | 193,194 | |||||
Other assets | 1,877 | 872 | |||||
Total assets | $ | 421,837 | $ | 379,005 | |||
LIABILITIES | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 27,314 | $ | 24,880 | |||
Dividends payable | 2,910 | — | |||||
Due to affiliates | 1,353 | 2,032 | |||||
Deferred income | 211 | 148 | |||||
Deferred compensation plan | 47 | 173 | |||||
Notes payable, net | 3,549 | 2,595 | |||||
Operating lease liabilities | 2,206 | — | |||||
Other liabilities | 18,827 | 8,418 | |||||
Total current liabilities | 56,417 | 38,246 | |||||
Deferred income | 11,409 | 13,396 | |||||
Deferred tax liability, net | 31,656 | 31,506 | |||||
Deferred compensation plan | 4,831 | 10,401 | |||||
Notes payable, net | 25,126 | 15,177 | |||||
Operating lease liabilities | 19,340 | — | |||||
Total liabilities | 148,779 | 108,726 | |||||
MEZZANINE EQUITY | |||||||
Series B convertible preferred stock, $25 par value, 8,120,000 shares issued and outstanding, net of discount at | 202,185 | 200,847 | |||||
Redeemable noncontrolling interests | 3,641 | 3,531 | |||||
EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized: | |||||||
Series A cumulative preferred stock, no shares issued and outstanding at September 30, 2019 and | — | — | |||||
Common stock, $0.01 par value, 100,000,000 shares authorized, 2,614,719 and 2,391,541 shares issued and | 26 | 24 | |||||
Additional paid-in capital | 296,213 | 280,159 | |||||
Accumulated deficit | (229,379) | (214,242) | |||||
Accumulated other comprehensive income (loss) | (393) | (498) | |||||
Total stockholders' equity of the Company | 66,467 | 65,443 | |||||
Noncontrolling interests in consolidated entities | 765 | 458 | |||||
Total equity | 67,232 | 65,901 | |||||
Total liabilities and equity | $ | 421,837 | $ | 379,005 | |||
ASHFORD INC. AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(unaudited, in thousands, except per share amounts) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
REVENUE | |||||||||||||||
Advisory services: | |||||||||||||||
Base advisory fee | $ | 10,570 | $ | 11,655 | $ | 32,382 | $ | 33,540 | |||||||
Incentive advisory fee | 170 | 452 | 509 | 1,356 | |||||||||||
Reimbursable expenses | 2,541 | 2,607 | 8,270 | 7,052 | |||||||||||
Non-cash stock/unit-based compensation | 6,643 | 6,170 | 18,912 | 25,780 | |||||||||||
Other advisory revenue | 131 | 132 | 389 | 390 | |||||||||||
Audio visual | 22,430 | 14,526 | 83,532 | 61,212 | |||||||||||
Project management | 7,881 | 3,616 | 23,371 | 3,616 | |||||||||||
Other | 6,523 | 2,407 | 16,310 | 11,598 | |||||||||||
Total revenue | 56,889 | 41,565 | 183,675 | 144,544 | |||||||||||
EXPENSES | |||||||||||||||
Salaries and benefits | 12,393 | 13,666 | 36,689 | 30,610 | |||||||||||
Non-cash stock/unit-based compensation | 8,831 | 8,221 | 26,176 | 33,900 | |||||||||||
Cost of revenues for audio visual | 17,732 | 14,392 | 61,400 | 48,000 | |||||||||||
Cost of revenues for project management | 2,576 | 1,189 | 7,890 | 1,189 | |||||||||||
Depreciation and amortization | 8,374 | 2,972 | 17,835 | 5,205 | |||||||||||
General and administrative | 8,935 | 12,195 | 27,675 | 27,219 | |||||||||||
Impairment | — | — | — | 1,919 | |||||||||||
Other | 4,849 | 434 | 9,326 | 2,172 | |||||||||||
Total operating expenses | 63,690 | 53,069 | 186,991 | 150,214 | |||||||||||
OPERATING INCOME (LOSS) | (6,801) | (11,504) | (3,316) | (5,670) | |||||||||||
Equity in earnings (loss) of unconsolidated entities | 464 | — | (109) | — | |||||||||||
Interest expense | (456) | (289) | (1,198) | (593) | |||||||||||
Amortization of loan costs | (75) | (130) | (214) | (177) | |||||||||||
Interest income | — | 103 | 29 | 288 | |||||||||||
Other income (expense) | (20) | (78) | (115) | (338) | |||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (6,888) | (11,898) | (4,923) | (6,490) | |||||||||||
Income tax (expense) benefit | 297 | 13,904 | (1,429) | 11,593 | |||||||||||
NET INCOME (LOSS) | (6,591) | 2,006 | (6,352) | 5,103 | |||||||||||
(Income) loss from consolidated entities attributable to noncontrolling | 101 | 413 | 395 | 704 | |||||||||||
Net (income) loss attributable to redeemable noncontrolling interests | 334 | 968 | 623 | 817 | |||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | (6,156) | 3,387 | (5,334) | 6,624 | |||||||||||
Preferred dividends | (2,909) | (1,675) | (8,492) | (1,675) | |||||||||||
Amortization of preferred stock discount | (363) | (303) | (1,338) | (303) | |||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON | $ | (9,428) | $ | 1,409 | $ | (15,164) | $ | 4,646 | |||||||
INCOME (LOSS) PER SHARE - BASIC AND DILUTED | |||||||||||||||
Basic: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | (3.65) | $ | 0.67 | $ | (6.09) | $ | 2.20 | |||||||
Weighted average common shares outstanding - basic | 2,580 | 2,109 | 2,489 | 2,100 | |||||||||||
Diluted: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | (3.94) | $ | 0.18 | $ | (7.95) | $ | 0.11 | |||||||
Weighted average common shares outstanding - diluted | 2,782 | 2,337 | 2,679 | 2,417 | |||||||||||
ASHFORD INC. AND SUBSIDIARIES | |||||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA | |||||||||||||||
(unaudited, in thousands) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) | $ | (6,591) | $ | 2,006 | $ | (6,352) | $ | 5,103 | |||||||
(Income) loss from consolidated entities attributable to noncontrolling | 101 | 413 | 395 | 704 | |||||||||||
Net (income) loss attributable to redeemable noncontrolling interests | 334 | 968 | 623 | 817 | |||||||||||
Net income (loss) attributable to the company | (6,156) | 3,387 | (5,334) | 6,624 | |||||||||||
Interest expense | 400 | 257 | 1,050 | 513 | |||||||||||
Amortization of loan costs | 69 | 123 | 197 | 156 | |||||||||||
Depreciation and amortization | 9,408 | 4,298 | 20,790 | 7,542 | |||||||||||
Income tax expense (benefit) | (291) | (13,900) | 1,360 | (11,648) | |||||||||||
Net income (loss) attributable to redeemable noncontrolling | (15) | 3 | (25) | 9 | |||||||||||
EBITDA | 3,415 | (5,832) | 18,038 | 3,196 | |||||||||||
Non-cash stock-based compensation | 2,083 | 1,988 | 6,930 | 8,053 | |||||||||||
Market change in deferred compensation plan | (1,526) | 2,274 | (5,603) | (3,540) | |||||||||||
Change in contingent consideration fair value | 2,784 | (221) | 4,229 | 338 | |||||||||||
Transaction costs | 1,988 | 6,201 | 6,101 | 10,377 | |||||||||||
Software implementation costs | — | — | — | 45 | |||||||||||
Reimbursed software costs | (424) | (489) | (1,591) | (1,165) | |||||||||||
Impairment | — | — | — | 1,919 | |||||||||||
Dead deal costs | (4) | 9 | 83 | 9 | |||||||||||
Legal and settlement costs | — | — | — | (50) | |||||||||||
Severance and executive recruiting costs | 52 | 15 | 712 | 1,316 | |||||||||||
Amortization of hotel signing fees and lock subsidies | 131 | 135 | 458 | 383 | |||||||||||
Other (gain) loss on disposal of assets | (107) | 55 | (64) | (62) | |||||||||||
Foreign currency transactions (gain) loss | 12 | (17) | (9) | 5 | |||||||||||
Adjusted EBITDA | $ | 8,404 | $ | 4,118 | $ | 29,284 | $ | 20,824 | |||||||
ASHFORD INC. AND SUBSIDIARIES | |||||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME (LOSS) | |||||||||||||||
(unaudited, in thousands, except per share amounts) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) | $ | (6,591) | $ | 2,006 | $ | (6,352) | $ | 5,103 | |||||||
(Income) loss from consolidated entities attributable to noncontrolling | 101 | 413 | 395 | 704 | |||||||||||
Net (income) loss attributable to redeemable noncontrolling interests | 334 | 968 | 623 | 817 | |||||||||||
Preferred dividends | (2,909) | (1,675) | (8,492) | (1,675) | |||||||||||
Amortization of preferred stock discount | (363) | (303) | (1,338) | (303) | |||||||||||
Net income (loss) attributable to common stockholders | (9,428) | 1,409 | (15,164) | 4,646 | |||||||||||
Amortization of loan costs | 69 | 123 | 197 | 156 | |||||||||||
Depreciation and amortization | 9,408 | 4,298 | 20,790 | 7,542 | |||||||||||
Net income (loss) attributable to redeemable noncontrolling interests | (15) | 3 | (25) | 9 | |||||||||||
Preferred dividends | 2,909 | 1,675 | 8,492 | 1,675 | |||||||||||
Amortization of preferred stock discount | 363 | 303 | 1,338 | 303 | |||||||||||
Non-cash stock-based compensation | 2,083 | 1,988 | 6,930 | 8,053 | |||||||||||
Market change in deferred compensation plan | (1,526) | 2,274 | (5,603) | (3,540) | |||||||||||
Change in contingent consideration fair value | 2,784 | (221) | 4,229 | 338 | |||||||||||
Transaction costs | 1,988 | 6,201 | 6,101 | 10,377 | |||||||||||
Software implementation costs | — | — | — | 45 | |||||||||||
Reimbursed software costs | (424) | (489) | (1,591) | (1,165) | |||||||||||
Impairment | — | — | — | 1,919 | |||||||||||
Dead deal costs | (4) | 9 | 83 | 9 | |||||||||||
Legal and settlement costs | — | — | — | (50) | |||||||||||
Severance and executive recruiting costs | 52 | 15 | 712 | 1,316 | |||||||||||
Amortization of hotel signing fees and lock subsidies | 131 | 135 | 458 | 383 | |||||||||||
Other (gain) loss on disposal of assets | (107) | 55 | (64) | (62) | |||||||||||
Foreign currency transactions (gain) loss | 12 | (17) | (9) | 5 | |||||||||||
GAAP income tax expense (benefit) | (291) | (13,900) | 1,360 | (11,648) | |||||||||||
Adjusted income tax (expense) benefit (1) | (1,014) | (1,248) | (2,421) | (3,500) | |||||||||||
Adjusted net income | $ | 6,990 | $ | 2,613 | $ | 25,813 | $ | 16,811 | |||||||
Adjusted net income per diluted share available to common stockholders | $ | 1.58 | $ | 0.75 | $ | 5.98 | $ | 5.72 | |||||||
Weighted average diluted shares | 4,434 | 3,482 | 4,313 | 2,937 | |||||||||||
Components of weighted average diluted shares | |||||||||||||||
Common shares | 2,580 | 2,109 | 2,489 | 2,100 | |||||||||||
Series B cumulative convertible preferred stock | 1,450 | 851 | 1,450 | 284 | |||||||||||
Deferred compensation plan | 202 | 205 | 203 | 206 | |||||||||||
Stock options | — | 253 | 29 | 278 | |||||||||||
Put options | 164 | 51 | 113 | 56 | |||||||||||
Acquisition related shares | 22 | — | 15 | — | |||||||||||
Restricted shares and units | 16 | 13 | 14 | 13 | |||||||||||
Weighted average diluted shares | 4,434 | 3,482 | 4,313 | 2,937 | |||||||||||
Reconciliation of income tax expense (benefit) to adjusted income tax | |||||||||||||||
GAAP income tax (expense) benefit | $ | 297 | $ | 13,904 | $ | (1,429) | $ | 11,593 | |||||||
Less GAAP income tax (expense) benefit attributable to noncontrolling | 6 | 4 | (69) | (55) | |||||||||||
GAAP income tax (expense) benefit excluding noncontrolling interests | 291 | 13,900 | (1,360) | 11,648 | |||||||||||
Less deferred income tax (expense) benefit | 1,305 | 15,148 | 1,061 | 15,148 | |||||||||||
Adjusted income tax (expense) benefit (1) | $ | (1,014) | $ | (1,248) | $ | (2,421) | $ | (3,500) | |||||||
(1) Income tax expense (benefit) is adjusted to exclude the effects of deferred income tax expense (benefit) because current income tax expense (benefit) (i) provides a more accurate period-over-period comparison of the ongoing operating performance of our advisory and hospitality products and services businesses, and (ii) provides more useful information to investors regarding our economic performance inclusive of the impacts from the Tax Cuts and Jobs Act. See Note 12 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018. | |||||||||||||||
ASHFORD INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS) BY SEGMENT (unaudited, in thousands, except per share amounts) Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 REIT Hospitality Corporate/ Ashford Inc. REIT Hospitality Corporate/ Ashford Inc. REVENUE Advisory services: Base advisory fee - Trust $ 8,003 $ — $ — $ 8,003 $ 9,145 $ — $ — $ 9,145 Incentive advisory fee - Trust — — — — 452 — — 452 Reimbursable expenses - Trust 2,018 — — 2,018 2,119 — — 2,119 Non-cash stock/unit-based compensation - Trust 4,649 — — 4,649 4,855 — — 4,855 Base advisory fee - Braemar 2,567 — — 2,567 2,510 — — 2,510 Incentive advisory fee - Braemar 170 — — 170 — — — — Reimbursable expenses - Braemar 523 — — 523 488 — — 488 Non-cash stock/unit-based compensation - Braemar 1,994 — — 1,994 1,315 — — 1,315 Other advisory revenue - Braemar 131 — — 131 132 — — 132 Audio visual — 22,430 — 22,430 — 14,526 — 14,526 Project management — 7,881 — 7,881 — 3,616 — 3,616 Other 1,326 4,547 650 6,523 640 1,767 — 2,407 Total revenue 21,381 34,858 650 56,889 21,656 19,909 — 41,565 EXPENSES Salaries and benefits — 5,235 8,169 13,404 — 3,070 7,956 11,026 Market change in deferred compensation plan — — (1,526) (1,526) — — 2,274 2,274 REIT non-cash stock/unit-based compensation 6,643 101 — 6,744 6,170 64 — 6,234 AINC and subsidiary non-cash stock-based compensation — 27 2,060 2,087 — (2) 1,989 1,987 Reimbursable expenses 2,541 — 650 3,191 2,607 — — 2,607 Cost of audio visual revenues — 17,732 — 17,732 — 14,392 — 14,392 Cost of project management revenues — 2,576 — 2,576 — 1,189 — 1,189 General and administrative — 3,833 2,426 6,259 — 3,012 6,942 9,954 Depreciation and amortization 2,722 5,534 118 8,374 808 2,232 (68) 2,972 Other — 4,848 1 4,849 — 654 (220) 434 Total operating expenses 11,906 39,886 11,898 63,690 9,585 24,611 18,873 53,069 OPERATING INCOME (LOSS) 9,475 (5,028) (11,248) (6,801) 12,071 (4,702) (18,873) (11,504) Other — (4) (83) (87) (46) (267) (81) (394) INCOME (LOSS) BEFORE INCOME TAXES 9,475 (5,032) (11,331) (6,888) 12,025 (4,969) (18,954) (11,898) Income tax (expense) benefit (2,093) 192 2,198 297 (2,693) 828 15,769 13,904 NET INCOME (LOSS) 7,382 (4,840) (9,133) (6,591) 9,332 (4,141) (3,185) 2,006 (Income) loss from consolidated entities attributable to noncontrolling interests — 101 — 101 — 413 — 413 Net (income) loss attributable to redeemable noncontrolling interests — 319 15 334 — 971 (3) 968 NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY $ 7,382 $ (4,420) $ (9,118) $ (6,156) $ 9,332 $ (2,757) $ (3,188) $ 3,387 Interest expense — 365 35 400 — 175 82 257 Amortization of loan costs — 21 48 69 — 18 105 123 Depreciation and amortization 2,722 6,566 120 9,408 808 3,558 (68) 4,298 Income tax expense (benefit) 2,093 (186) (2,198) (291) 2,693 (824) (15,769) (13,900) Net income (loss) attributable to redeemable noncontrolling interests — — (15) (15) — — 3 3 EBITDA 12,197 2,346 (11,128) 3,415 12,833 170 (18,835) (5,832) Non-cash stock-based compensation — 23 2,060 2,083 — (1) 1,989 1,988 Market change in deferred compensation plan — — (1,526) (1,526) — — 2,274 2,274 Change in contingent consideration fair value — 2,784 — 2,784 — — (221) (221) Transaction costs — 311 1,677 1,988 — — 6,201 6,201 Reimbursed software costs, net (424) — — (424) (489) — — (489) Dead deal costs — — (4) (4) — — 9 9 Severance and executive recruiting costs — 52 — 52 — 15 — 15 Amortization of hotel signing fees and lock subsidies — 131 — 131 — 135 — 135 Other (gain) loss on disposal of assets — (107) — (107) — 55 — 55 Foreign currency transactions (gain) loss — 12 — 12 — (17) — (17) Adjusted EBITDA 11,773 5,552 (8,921) 8,404 12,344 357 (8,583) 4,118 Interest expense — (365) (35) (400) — (175) (82) (257) Adjusted income tax (expense) benefit (1,164) (1,107) 1,257 (1,014) (1,583) 1,301 (966) (1,248) Adjusted net income (loss) $ 10,609 $ 4,080 $ (7,699) $ 6,990 $ 10,761 $ 1,483 $ (9,631) $ 2,613 Adjusted net income (loss) per diluted share available to common stockholders (1) $ 2.39 $ 0.92 $ (1.74) $ 1.58 $ 3.09 $ 0.43 $ (2.77) $ 0.75 Weighted average diluted shares 4,434 4,434 4,434 4,434 3,482 3,482 3,482 3,482 (1) The sum of the adjusted net income (loss) per diluted share available to common stockholders, as calculated for the segments, may differ from the consolidated total due to rounding.
Advisory
Products
& Services
Other
Consolidated
Advisory
Products
& Services
Other
Consolidated
ASHFORD INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS) BY SEGMENT (unaudited, in thousands, except per share amounts) Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 REIT Hospitality Corporate/ Ashford Inc. REIT Hospitality Corporate/ Ashford Inc. REVENUE Advisory services: Base advisory fee - Trust $ 24,463 $ — $ — $ 24,463 $ 26,611 $ — $ — $ 26,611 Incentive advisory fee - Trust — — — — 1,356 — — 1,356 Reimbursable expenses - Trust 6,716 — — 6,716 5,645 — — 5,645 Non-cash stock/unit-based compensation - Trust 13,486 — — 13,486 20,540 — — 20,540 Base advisory fee - Braemar 7,919 — — 7,919 6,929 — — 6,929 Incentive advisory fee - Braemar 509 — — 509 — — — — Reimbursable expenses - Braemar 1,554 — — 1,554 1,407 — — 1,407 Non-cash stock/unit-based compensation - Braemar 5,426 — — 5,426 5,240 — — 5,240 Other advisory revenue - Braemar 389 — — 389 390 — — 390 Audio visual — 83,532 — 83,532 — 61,212 — 61,212 Project management — 23,371 — 23,371 — 3,616 — 3,616 Other 4,176 11,484 650 16,310 1,757 9,841 — 11,598 Total revenue 64,638 118,387 650 183,675 69,875 74,669 — 144,544 EXPENSES Salaries and benefits — 16,408 24,341 40,749 — 7,637 25,483 33,120 Market change in deferred compensation plan — — (5,603) (5,603) — — (3,540) (3,540) REIT non-cash stock/unit-based compensation 18,912 315 — 19,227 25,780 64 — 25,844 AINC and subsidiary non-cash stock-based compensation — 123 6,826 6,949 — 6 8,050 8,056 Reimbursable expenses 8,270 — 650 8,920 7,052 — — 7,052 Cost of audio visual revenues — 61,400 — 61,400 — 48,000 — 48,000 Cost of project management revenues — 7,890 — 7,890 — 1,189 — 1,189 General and administrative — 11,842 8,456 20,298 — 8,239 12,958 21,197 Depreciation and amortization 5,475 12,023 337 17,835 1,567 3,227 411 5,205 Impairment — — — — 1,863 — 56 1,919 Other — 9,326 — 9,326 — 1,833 339 2,172 Total operating expenses 32,657 119,327 35,007 186,991 36,262 70,195 43,757 150,214 OPERATING INCOME (LOSS) 31,981 (940) (34,357) (3,316) 33,613 4,474 (43,757) (5,670) Other — (1,388) (219) (1,607) — (923) 103 (820) INCOME (LOSS) BEFORE INCOME TAXES 31,981 (2,328) (34,576) (4,923) 33,613 3,551 (43,654) (6,490) Income tax (expense) benefit (7,132) (1,470) 7,173 (1,429) (6,657) (1,711) 19,961 11,593 NET INCOME (LOSS) 24,849 (3,798) (27,403) (6,352) 26,956 1,840 (23,693) 5,103 (Income) loss from consolidated entities attributable to noncontrolling interests — 395 — 395 — 704 — 704 Net (income) loss attributable to redeemable noncontrolling interests — 598 25 623 — 826 (9) 817 NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY $ 24,849 $ (2,805) $ (27,378) $ (5,334) $ 26,956 $ 3,370 $ (23,702) $ 6,624 Interest expense — 945 105 1,050 — 431 82 513 Amortization of loan costs — 53 144 197 — 51 105 156 Depreciation and amortization 5,475 14,977 338 20,790 1,567 5,564 411 7,542 Income tax expense (benefit) 7,132 1,401 (7,173) 1,360 6,657 1,656 (19,961) (11,648) Net income (loss) attributable to redeemable noncontrolling interests — — (25) (25) — — 9 9 EBITDA 37,456 14,571 (33,989) 18,038 35,180 11,072 (43,056) 3,196 Non-cash stock-based compensation — 104 6,826 6,930 — 3 8,050 8,053 Market change in deferred compensation plan — — (5,603) (5,603) — — (3,540) (3,540) Change in contingent consideration fair value — 4,229 — 4,229 — — 338 338 Transaction costs — 784 5,317 6,101 — 70 10,307 10,377 Software implementation costs — — — — — — 45 45 Reimbursed software costs, net (1,591) — — (1,591) (1,165) — — (1,165) Impairment — — — — 1,863 — 56 1,919 Dead deal costs — — 83 83 — — 9 9 Legal and settlement costs — — — — — — (50) (50) Severance and executive recruiting costs — 703 9 712 — 15 1,301 1,316 Amortization of hotel signing fees and lock subsidies — 458 — 458 — 383 — 383 Other (gain) loss on disposal of assets — (64) — (64) — (62) — (62) Foreign currency transactions (gain) loss — (9) — (9) — 5 — 5 Adjusted EBITDA 35,865 20,776 (27,357) 29,284 35,878 11,486 (26,540) 20,824 Interest expense — (945) (105) (1,050) — (431) (82) (513) Adjusted income tax (expense) benefit (3,841) (3,865) 5,285 (2,421) (5,547) (1,179) 3,226 (3,500) Adjusted net income (loss) $ 32,024 $ 15,966 $ (22,177) $ 25,813 $ 30,331 $ 9,876 $ (23,396) $ 16,811 Adjusted net income (loss) per diluted share available to common stockholders (1) $ 7.42 $ 3.70 $ (5.14) $ 5.98 $ 10.33 $ 3.36 $ (7.97) $ 5.72 Weighted average diluted shares 4,313 4,313 4,313 4,313 2,937 2,937 2,937 2,937 (1) The sum of the adjusted net income (loss) per diluted share available to common stockholders, as calculated for the segments, may differ from the consolidated total due to rounding.
Advisory
Products
& Services
Other
Consolidated
Advisory
Products
& Services
Other
Consolidated
ASHFORD INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||
HOSPITALITY PRODUCTS & SERVICES | |||||||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND | |||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS) | |||||||||||||||||||||||||||||||||||||||
(unaudited, in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | ||||||||||||||||||||||||||||||||||||||
Premier | JSAV | OpenKey | Other (1) | Hospitality | Premier | JSAV | OpenKey | Other (1) | Hospitality | ||||||||||||||||||||||||||||||
REVENUE | |||||||||||||||||||||||||||||||||||||||
Audio visual | — | 22,430 | — | — | 22,430 | — | 14,526 | — | — | 14,526 | |||||||||||||||||||||||||||||
Project management | 7,881 | — | — | — | 7,881 | 3,616 | — | — | — | 3,616 | |||||||||||||||||||||||||||||
Other | — | — | 313 | 4,234 | 4,547 | — | — | 301 | 1,466 | 1,767 | |||||||||||||||||||||||||||||
Total revenue | 7,881 | 22,430 | 313 | 4,234 | 34,858 | 3,616 | 14,526 | 301 | 1,466 | 19,909 | |||||||||||||||||||||||||||||
EXPENSES | |||||||||||||||||||||||||||||||||||||||
Salaries and benefits | 1,113 | 3,091 | 436 | 595 | 5,235 | 498 | 1,631 | 633 | 308 | 3,070 | |||||||||||||||||||||||||||||
REIT non-cash stock/unit-based compensation | 101 | — | — | — | 101 | 64 | — | — | — | 64 | |||||||||||||||||||||||||||||
AINC and subsidiary non-cash stock-based compensation | 9 | 12 | 6 | — | 27 | — | — | (2) | — | (2) | |||||||||||||||||||||||||||||
Cost of audio visual revenues | — | 17,732 | — | — | 17,732 | — | 14,392 | — | — | 14,392 | |||||||||||||||||||||||||||||
Cost of project management revenues | 2,576 | — | — | — | 2,576 | 1,189 | — | — | — | 1,189 | |||||||||||||||||||||||||||||
General and administrative | 368 | 2,507 | 336 | 622 | 3,833 | 172 | 2,064 | 512 | 264 | 3,012 | |||||||||||||||||||||||||||||
Depreciation and amortization | 4,937 | 513 | 7 | 77 | 5,534 | 1,618 | 587 | 7 | 20 | 2,232 | |||||||||||||||||||||||||||||
Other | — | 1,623 | 118 | 3,107 | 4,848 | — | — | 128 | 526 | 654 | |||||||||||||||||||||||||||||
Total operating expenses | 9,104 | 25,478 | 903 | 4,401 | 39,886 | 3,541 | 18,674 | 1,278 | 1,118 | 24,611 | |||||||||||||||||||||||||||||
OPERATING INCOME (LOSS) | (1,223) | (3,048) | (590) | (167) | (5,028) | 75 | (4,148) | (977) | 348 | (4,702) | |||||||||||||||||||||||||||||
Other | — | (263) | (3) | 262 | (4) | — | (231) | (4) | (32) | (267) | |||||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (1,223) | (3,311) | (593) | 95 | (5,032) | 75 | (4,379) | (981) | 316 | (4,969) | |||||||||||||||||||||||||||||
Income tax (expense) benefit | 9 | 698 | — | (515) | 192 | (7) | 909 | — | (74) | 828 | |||||||||||||||||||||||||||||
NET INCOME (LOSS) | (1,214) | (2,613) | (593) | (420) | (4,840) | 68 | (3,470) | (981) | 242 | (4,141) | |||||||||||||||||||||||||||||
(Income) loss from consolidated entities attributable to | — | — | 146 | (45) | 101 | — | 151 | 242 | 20 | 413 | |||||||||||||||||||||||||||||
Net (income) loss attributable to redeemable noncontrolling | — | 165 | 154 | — | 319 | — | 679 | 292 | — | 971 | |||||||||||||||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO THE | $ | (1,214) | $ | (2,448) | $ | (293) | $ | (465) | $ | (4,420) | $ | 68 | $ | (2,640) | $ | (447) | $ | 262 | $ | (2,757) | |||||||||||||||||||
Interest expense | — | 263 | — | 102 | 365 | — | 154 | — | 21 | 175 | |||||||||||||||||||||||||||||
Amortization of loan costs | — | 13 | 3 | 5 | 21 | — | 10 | 3 | 5 | 18 | |||||||||||||||||||||||||||||
Depreciation and amortization | 4,937 | 1,456 | 3 | 170 | 6,566 | 1,618 | 1,868 | 3 | 69 | 3,558 | |||||||||||||||||||||||||||||
Income tax expense (benefit) | (9) | (692) | — | 515 | (186) | 7 | (905) | — | 74 | (824) | |||||||||||||||||||||||||||||
EBITDA | 3,714 | (1,408) | (287) | 327 | 2,346 | 1,693 | (1,513) | (441) | 431 | 170 | |||||||||||||||||||||||||||||
Non-cash stock-based compensation | 9 | 11 | 3 | — | 23 | — | — | (1) | — | (1) | |||||||||||||||||||||||||||||
Change in contingent consideration fair value | — | 1,635 | — | 1,149 | 2,784 | — | — | — | — | — | |||||||||||||||||||||||||||||
Transaction costs | — | 199 | — | 112 | 311 | — | — | — | — | — | |||||||||||||||||||||||||||||
Severance and executive recruiting costs | 8 | 24 | — | 20 | 52 | — | — | — | 15 | 15 | |||||||||||||||||||||||||||||
Amortization of hotel signing fees and lock subsidies | — | 110 | 21 | — | 131 | — | 125 | 10 | — | 135 | |||||||||||||||||||||||||||||
Other (gain) loss on disposal of assets | — | (109) | — | 2 | (107) | — | 55 | — | — | 55 | |||||||||||||||||||||||||||||
Foreign currency transactions (gain) loss | — | 12 | — | — | 12 | — | (17) | — | — | (17) | |||||||||||||||||||||||||||||
Adjusted EBITDA | 3,731 | 474 | (263) | 1,610 | 5,552 | 1,693 | (1,350) | (432) | 446 | 357 | |||||||||||||||||||||||||||||
Interest expense | — | (263) | — | (102) | (365) | — | (154) | — | (21) | (175) | |||||||||||||||||||||||||||||
Adjusted income tax (expense) benefit | (1,669) | 40 | — | 522 | (1,107) | (419) | 826 | — | 894 | 1,301 | |||||||||||||||||||||||||||||
Adjusted net income (loss) | $ | 2,062 | $ | 251 | $ | (263) | $ | 2,030 | $ | 4,080 | $ | 1,274 | $ | (678) | $ | (432) | $ | 1,319 | $ | 1,483 | |||||||||||||||||||
Adjusted net income (loss) per diluted share available to | $ | 0.47 | $ | 0.06 | $ | (0.06) | $ | 0.46 | $ | 0.92 | $ | 0.37 | $ | (0.19) | $ | (0.12) | $ | 0.38 | $ | 0.43 | |||||||||||||||||||
Weighted average diluted shares | 4,434 | 4,434 | 4,434 | 4,434 | 4,434 | 3,482 | 3,482 | 3,482 | 3,482 | 3,482 | |||||||||||||||||||||||||||||
(1) Represents RED Hospitality & Leisure LLC, Pure Wellness, Lismore Capital LLC and AINC Bar Draught LLC. | |||||||||||||||||||||||||||||||||||||||
(2) The sum of the adjusted net income (loss) per diluted share available to common stockholders, as calculated for the subsidiaries, may differ from the Hospitality Products & Services total due to rounding. | |||||||||||||||||||||||||||||||||||||||
ASHFORD INC. AND SUBSIDIARIES HOSPITALITY PRODUCTS & SERVICES CONSOLIDATED STATEMENTS OF OPERATIONS AND RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS) (unaudited, in thousands, except per share amounts) Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Premier JSAV OpenKey Other (1) Hospitality Premier JSAV OpenKey Other (1) Hospitality REVENUE Audio visual $ — $ 83,532 $ — $ — $ 83,532 $ — $ 61,212 $ — $ — $ 61,212 Project management 23,371 — — — 23,371 3,616 — — — 3,616 Other — — 764 10,720 11,484 — — 773 9,068 9,841 Total revenue 23,371 83,532 764 10,720 118,387 3,616 61,212 773 9,068 74,669 EXPENSES Salaries and benefits 3,170 10,377 1,321 1,540 16,408 498 4,568 1,659 912 7,637 REIT non-cash stock/unit-based compensation 315 — — — 315 64 — — — 64 AINC and subsidiary non-cash stock-based compensation 69 21 33 — 123 — — 6 — 6 Cost of audio visual revenues — 61,400 — — 61,400 — 48,000 — — 48,000 Cost of project management revenues 7,890 — — — 7,890 1,189 — — — 1,189 General and administrative 1,091 8,209 1,000 1,542 11,842 172 6,030 1,260 777 8,239 Depreciation and amortization 10,413 1,471 21 118 12,023 1,618 1,530 20 59 3,227 Other — 3,262 260 5,804 9,326 — — 420 1,413 1,833 Total operating expenses 22,948 84,740 2,635 9,004 119,327 3,541 60,128 3,365 3,161 70,195 OPERATING INCOME (LOSS) 423 (1,208) (1,871) 1,716 (940) 75 1,084 (2,592) 5,907 4,474 Other — (1,016) (4) (368) (1,388) — (852) (18) (53) (923) INCOME (LOSS) BEFORE INCOME TAXES 423 (2,224) (1,875) 1,348 (2,328) 75 232 (2,610) 5,854 3,551 Income tax (expense) benefit (759) 130 — (841) (1,470) (7) (339) — (1,365) (1,711) NET INCOME (LOSS) (336) (2,094) (1,875) 507 (3,798) 68 (107) (2,610) 4,489 1,840 (Income) loss from consolidated entities attributable to — — 475 (80) 395 — 58 585 61 704 Net (income) loss attributable to redeemable noncontrolling — 71 527 — 598 — 29 797 — 826 NET INCOME (LOSS) ATTRIBUTABLE TO THE $ (336) $ (2,023) $ (873) $ 427 $ (2,805) $ 68 $ (20) $ (1,228) $ 4,550 $ 3,370 Interest expense — 761 — 184 945 — 394 — 37 431 Amortization of loan costs — 36 9 8 53 — 30 9 12 51 Depreciation and amortization 10,413 4,224 10 330 14,977 1,618 3,793 9 144 5,564 Income tax expense (benefit) 759 (199) — 841 1,401 7 284 — 1,365 1,656 EBITDA 10,836 2,799 (854) 1,790 14,571 1,693 4,481 (1,210) 6,108 11,072 Non-cash stock-based compensation 69 19 16 — 104 — — 3 — 3 Change in contingent consideration fair value — 3,080 — 1,149 4,229 — — — — — Transaction costs — 478 — 306 784 — 64 — 6 70 Severance and executive recruiting costs 106 557 20 20 703 — — — 15 15 Amortization of hotel signing fees and lock subsidies — 372 86 — 458 — 353 30 — 383 Other (gain) loss on disposal of assets — (66) — 2 (64) — (56) — (6) (62) Foreign currency transactions (gain) loss — (9) — — (9) — 5 — — 5 Adjusted EBITDA 11,011 7,230 (732) 3,267 20,776 1,693 4,847 (1,177) 6,123 11,486 Interest expense — (761) — (184) (945) — (394) — (37) (431) Adjusted income tax (expense) benefit (3,831) (236) — 202 (3,865) (419) (363) — (397) (1,179) Adjusted net income (loss) $ 7,180 $ 6,233 $ (732) $ 3,285 $ 15,966 $ 1,274 $ 4,090 $ (1,177) $ 5,689 $ 9,876 Adjusted net income (loss) per diluted share available to $ 1.66 $ 1.45 $ (0.17) $ 0.76 $ 3.70 $ 0.43 $ 1.39 $ (0.40) $ 1.94 $ 3.36 Weighted average diluted shares 4,313 4,313 4,313 4,313 4,313 2,937 2,937 2,937 2,937 2,937 (1) Represents RED Hospitality & Leisure LLC, Pure Wellness, Lismore Capital LLC and AINC Bar Draught LLC. (2) The sum of the adjusted net income (loss) per diluted share available to common stockholders, as calculated for the subsidiaries, may differ from the Hospitality Products & Services total due to rounding.
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noncontrolling interests
interests
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common stockholders (2)
View original content:http://www.prnewswire.com/news-releases/ashford-reports-third-quarter-2019-results-300948576.html
SOURCE Ashford Inc.
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