Company Announcements

Ashford Reports Fourth Quarter And Year End 2019 Results

DALLAS, Feb. 25, 2020 /PRNewswire/ -- Ashford Inc. (NYSE American: AINC) ("Ashford" or the "Company") today reported the following results and performance measures for the fourth quarter and year ended December 31, 2019.  Unless otherwise stated, all reported results compare the fourth quarter and year ended December 31, 2019, with the fourth quarter and year ended December 31, 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 fourth quarter of 2019 totaled $15.1 million, or $6.31 per share, compared with net income of $0.3 million, or $0.14 per share, in the prior-year quarter. Adjusted net income for the fourth quarter was $7.2 million, or $1.27 per diluted share, compared with $9.3 million, or $2.20 per diluted share, in the prior-year quarter.
  • Total revenue for the fourth quarter of 2019 was $107.6 million, reflecting a growth rate of 111% over the prior-year quarter.
  • Adjusted EBITDA for the fourth quarter was $8.9 million, reflecting a growth rate of 11.9% over the prior-year quarter.
  • At the end of the fourth quarter of 2019, the Company had approximately $8.1 billion of gross assets under management.
  • During the quarter, the Company repurchased stock from Ashford Trust and Braemar Hotels & Resorts that represented approximately 16% of its common shares outstanding.
  • During the quarter, the Company completed the acquisition of Remington Holdings' Hotel Management business.
  • As of December 31, 2019, the Company had corporate cash of $32.3 million.

COMPLETES COMBINATION WITH REMINGTON'S HOTEL MANAGEMENT BUSINESS
On November 6, 2019, the Company completed the previously announced combination with Remington Holdings, LP ("Remington").  The acquisition of Remington's high-margin, low-capex Hotel Management business immediately adds scale, diversification and an enhanced competitive position for Ashford. It also expands 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 the potential to expand business to other third-party clients.  To drive its next stage of growth, during the quarter, Remington appointed Sloan Dean III as its new President & Chief Executive Officer. Over the past two years, Mr. Dean served as Remington's Chief Operating Officer.

Remington is an independent hotel management company with over 40 years of experience in the hospitality business. Remington'sHotel Management business currently provides comprehensive and cost-effective hotel management services for both Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or "Trust") and Braemar Hotels & Resorts Inc. (NYSE: BHR) ("Braemar"). Remington's portfolio consists of 88 hotels in 27 states across 17 brands, including 12 independent and boutique properties. Remington'sHotel 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.

In the fourth quarter, Remington generated hotel management fee revenue of $4.5 million and Adjusted EBITDA of $2.5 millionRemington recently entered into new contracts to manage three hotels on a third-party basis: the Residence Inn Steamboat Springs in Steamboat Springs, Colorado; the Sheraton Tarrytown Hotel in Tarrytown, New York; and the SpringHill Suites Jacksonville in Jacksonville, Florida.

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 rulings received by each of Ashford Trust and Braemar 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. After the Company's share purchase, Ashford Trust announced that it distributed its remaining 205,086 shares of Ashford common stock to its common shareholders and unitholders through a pro-rata distribution. Braemar also announced that it distributed its remaining 174,983 shares of Ashford common stock to its common shareholders and unitholders through a pro-rata distribution.  Both distributions occurred in early November.

ASHFORD SECURITIES UPDATE
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.  Ashford Securities is 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).  In the fourth quarter, Braemar announced that it had filed a registration statement for a non-traded preferred equity security via Ashford Securities.  Additionally, Ashford Securities became a FINRA member firm in February of this year and anticipates raising capital at the end of the second quarter of 2020. Longer term, the Company believes there is a substantial opportunity to offer different types of product structures and strategies all with the goal of providing differentiated alternative investment products to retail investors looking to diversify their portfolios.  Ashford Securities is not raising common equity for the Company nor for its existing advised platforms of Ashford Trust and Braemar.

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 also 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 $6.1 million of project management fee revenue and $2.9 million of Adjusted EBITDA in the fourth quarter, including $438,000 of revenue from its new architectural services initiative.  Subsequent to the end of the quarter, Premier signed its first contract to provide project management services on a third-party basis.

JSAV UPDATE
The Company owns a controlling interest in a privately-held company that conducts the business of J&S Audio Visual ("JSAV") in the United States, Mexico and internationally.  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 and the operations are now reported on a combined basis.  During the fourth quarter, JSAV (including BAV) had revenue growth of 36% compared to the prior-year period.  Additionally, at the end of the fourth quarter, JSAV had multi-year contracts in place with 94 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. During 2019, RED Hospitality continued as the beach and watersports services provider to the Ritz-Carlton St. Thomas Club - the timeshare and rental property adjacent to the Ritz-Carlton St. Thomas hotel, commenced ferry transportation services and beach and watersports services to the Westin St. John, and completed the acquisition of Sebago, a leading provider of watersports activities and excursion services based in Key West, Florida.  Additionally, when coupled with the reopening of the Ritz-Carlton St. Thomas in November 2019 as well as increased direct bookings and private charter business, RED Hospitality generated $3.0 million of revenue and $543,000 of Adjusted EBITDA during the fourth quarter.  Fourth quarter revenue growth was 131% compared to the prior-year period. Going forward, 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, elsewhere in the Caribbean, and in the U.S.

FINANCIAL RESULTS
Net loss attributable to common stockholders for the quarter totaled $15.1 million, or $6.31 per share, compared with net income of $0.3 million, or $0.14 per share, in the prior-year quarter.  Adjusted net income for the quarter was $7.2 million, or $1.27 per diluted share, compared with $9.3 million, or $2.20 per diluted share in the prior-year quarter.

For the quarter ended December 31, 2019, base advisory fee revenue was $10.6 million.  The base advisory fee revenue in the fourth quarter was comprised of $8.0 million from Ashford Trust and $2.6 million from Braemar.

Adjusted EBITDA for the quarter was $8.9 million, reflecting a growth rate of 11.9% over the prior-year quarter.

CAPITAL STRUCTURE
At the end of the fourth 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 $32.3 million, 5.7 million fully diluted shares, and a current fully diluted equity market capitalization of approximately $62 million.  The Company's financial results include 3.0 million common shares associated with its Series D convertible preferred stock.  The Company had $36.8 million of loans at December 31, 2019, of which approximately $3.6 million related to its joint venture partners' share of those loans.

QUARTERLY HIGHLIGHTS FOR ADVISED PLATFORMS

ASHFORD TRUST HIGHLIGHTS

  • During the quarter, 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 Hotels.
  • During the quarter, 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.
  • During the quarter, 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.
  • During the quarter, Ashford Trust announced the sale of the 102-room SpringHill Suites Jacksonville in Jacksonville, Florida for $11.2 million ($109,000 per key).

BRAEMAR HOTELS & RESORTS HIGHLIGHTS

  • During the quarter, Braemar announced the opening of The Maple Grove Presidential Villa at the Bardessono Hotel & Spa in Yountville, California.
  • During the quarter, Braemar announced that it had reopened its 180-room Ritz-Carlton St. Thomas hotel in St. Thomas, USVI on November 22, 2019.
  • During the quarter, Braemar announced that it had entered into a new secured credit facility that replaced a previous credit facility that was set to expire in November.
  • During the quarter, Braemar filed a registration statement with the Securities and Exchange Commission for a Series E Redeemable Preferred Equity security.

"We are very pleased with our fourth quarter and year-end 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. "Towards this end, our recent combination with Remington rapidly builds operating scale, increases the Company's earnings potential, facilitates additional growth from third-party hotel management business and enhances our competitive position in the hospitality industry.  Importantly, by adding hotel property management to our diverse stable of hotel-related businesses, we are extremely well-positioned to continue to successfully execute on our growth strategy. Additionally, 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 our platforms over the long term for increased shareholder value.  Ashford is a growth platform and, looking ahead to 2020, we believe the pieces are in place to significantly grow our business. We remain committed to maximizing value for our shareholders as we look to opportunistically grow our existing REIT platforms, create new platforms as well as grow our service businesses via increased AUM and third-party business."

INVESTOR CONFERENCE CALL AND SIMULCAST
The Company will conduct a conference call on Tuesday, February 25, 2020, at 4:00 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 Tuesday, March 3, 2020, by dialing (412) 317-6671 and entering the confirmation number, 13697613.

The Company will also provide an online simulcast and rebroadcast of its fourth 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 Tuesday, February 25, 2020, beginning at 4:00 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.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities.  Securities will be offered only by means of a registration statement and prospectus which can be found at www.sec.gov.

*  *  *  *  *

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)



December 31, 2019


December 31, 2018

ASSETS




Current assets:




Cash and cash equivalents

$

35,349



$

51,529


Restricted cash

17,900



7,914


Restricted investment for deferred compensation

1,195




Accounts receivable, net

7,241



4,928


Due from affiliates

357



45


Due from Ashford Trust

4,805



5,293


Due from Braemar

1,591



1,996


Inventories

1,642



1,202


Prepaid expenses and other

7,212



3,902


Total current assets

77,292



76,809


Investments in unconsolidated entities

3,476



500


Property and equipment, net

116,190



47,947


Operating lease right-of-use assets

31,699




Goodwill

205,606



59,683


Intangible assets, net

347,961



193,194


Other assets

276



872


Total assets

$

782,500



$

379,005


LIABILITIES




Current liabilities:




Accounts payable and accrued expenses

$

 

38,745



$

24,880


Dividends payable

4,725




Due to affiliates

1,011



2,032


Deferred income

233



148


Deferred compensation plan

450



173


Notes payable, net

 

3,550



 

2,074


Finance lease liabilities

572



 

521


Operating lease liabilities

3,207




Other liabilities

19,066



8,418


Total current liabilities

71,559



38,246


Deferred income

13,047



13,396


Deferred tax liability, net

69,521



31,506


Deferred compensation plan

4,694



10,401


Notes payable, net

33,033



15,037


Finance lease liabilities

 

41,482



 

140


Operating lease liabilities

28,519




Other liabilities

430




Total liabilities

262,285



108,726






MEZZANINE EQUITY




Series B Convertible Preferred Stock, $0.01 par value, no shares issued and outstanding as of December 31, 2019 and 8,120,000 
     shares issued and outstanding, net of discount, at December 31, 2018



200,847


Series D Convertible Preferred Stock, $0.001 par value, 19,120,000 shares issued and outstanding, net of discount, as of 
     December 31, 2019 and no shares issued and outstanding at December 31, 2018

474,060




Redeemable noncontrolling interests

4,131



3,531


EQUITY




Common stock, 100,000,000 shares authorized, $0.001 and $0.01 par value, 2,202,580 and 2,391,541 shares issued and 
     outstanding at December 31, 2019 and December 31, 2018, respectively

2



24


Additional paid-in capital

285,825



280,159


Accumulated deficit

(244,084)



(214,242)


Accumulated other comprehensive income (loss)

(216)



(498)


Treasury stock, at cost, 1,638 shares and 0 shares at December 31, 2019 and December 31, 2018, respectively

(131)




Total stockholders' equity of the Company

41,396



65,443


Noncontrolling interests in consolidated entities

628



458


Total equity

42,024



65,901


Total liabilities and equity

$

782,500



$

379,005


 

 

ASHFORD INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)



Three Months Ended


Year Ended


December 31,


December 31,


2019


2018


2019


2018

REVENUE








Advisory services:








Base advisory fees

$

10,603



$

11,365



$

42,985



$

44,905


Incentive advisory fees

169



1,131



678



2,487


Other advisory revenue

132



131



521



521


Hotel management:








Base management fees

4,054





4,054




Incentive management fees

472





472




Project management fees

6,052



5,860



25,584



8,802


Audio visual

27,077



19,974



110,609



81,186


Other

6,459



2,319



21,179



13,068


Cost reimbursement revenue

52,557



10,196



85,168



44,551


Total revenues

107,575



50,976



291,250



195,520


EXPENSES








Salaries and benefits

16,779



6,531



51,251



35,731


Non-cash equity-based compensation

1,925



1,962



8,874



10,018


Cost of revenues for project management

1,487



929



5,853



1,508


Cost of revenues for audio visual

20,837



16,555



82,237



64,555


Depreciation and amortization

7,871



3,744



24,542



7,919


General and administrative

11,396



5,218



33,018



27,112


Impairment







1,919


Other

2,736



1,078



12,062



3,250


Reimbursed expenses

52,458



10,128



84,643



44,347


Total operating expenses

115,489



46,145



302,480



196,359


OPERATING INCOME (LOSS)

(7,914)



4,831



(11,230)



(839)


Equity in earnings (loss) of unconsolidated entities

(177)





(286)




Interest expense

(861)



(366)



(2,059)



(959)


Amortization of loan costs

(94)



(64)



(308)



(241)


Interest income

17



41



46



329


Other income (expense)

118



(496)



3



(834)


INCOME (LOSS) BEFORE INCOME TAXES

(8,911)



3,946



(13,834)



(2,544)


Income tax (expense) benefit

(111)



(1,229)



(1,540)



10,364


NET INCOME (LOSS)

(9,022)



2,717



(15,374)



7,820


(Income) loss from consolidated entities attributable to noncontrolling
interests

141



220



536



924


Net (income) loss attributable to redeemable noncontrolling interests

360



621



983



1,438


NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

(8,521)



3,558



(13,855)



10,182


Preferred dividends

(5,944)



(2,791)



(14,435)



(4,466)


Amortization of preferred stock discount

(590)



(427)



(1,928)



(730)


NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
STOCKHOLDERS

$

(15,055)



$

340



$

(30,218)



$

4,986










INCOME (LOSS) PER SHARE - BASIC AND DILUTED








Basic:








Net income (loss) attributable to common stockholders

$

(6.31)



$

0.14



$

(12.03)



$

2.29


Weighted average common shares outstanding - basic

2,202



2,381



2,416



2,170


Diluted:








Net income (loss) attributable to common stockholders

$

(6.31)



$

(1.96)



$

(13.55)



$

(2.11)


Weighted average common shares outstanding - diluted

2,206



2,652



2,568



2,332


 

 

ASHFORD INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
(unaudited, in thousands)



Three Months Ended


Year Ended


December 31,


December 31,


2019


2018


2019


2018

Net income (loss)

$

(9,022)



$

2,717



$

(15,374)



$

7,820


(Income) loss from consolidated entities attributable to noncontrolling
interests

141



220



536



924


Net (income) loss attributable to redeemable noncontrolling interests

360



621



983



1,438


Net income (loss) attributable to the company

(8,521)



3,558



(13,855)



10,182


Interest expense

811



313



1,861



826


Amortization of loan costs

80



59



277



215


Depreciation and amortization

9,257



4,788



30,047



12,330


Income tax expense (benefit)

75



1,217



1,435



(10,431)


Net income (loss) attributable to redeemable noncontrolling
interests

(29)





(54)



9


EBITDA

1,673



9,935



19,711



13,131


Non-cash stock-based compensation

1,894



1,960



8,824



10,013


Market change in deferred compensation plan

(129)



(4,904)



(5,732)



(8,444)


Change in contingent consideration fair value

(171)





4,058



338


Transaction costs

5,161



844



11,340



11,230


Software implementation costs







45


Reimbursed software costs

(424)



(462)



(2,015)



(1,627)


Legal and settlement costs







(50)


Severance and executive recruiting costs

474



3



1,186



1,319


Compensation adjustment

115








Amortization of hotel signing fees and lock subsidies

352



245



810



628


Other (gain) loss

(43)



334



(116)



248


Impairment







1,919


Adjusted EBITDA

$

8,902



$

7,955



$

38,066



$

28,750


 

 

ASHFORD INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME (LOSS)
(unaudited, in thousands, except per share amounts)



Three Months Ended


Year Ended


December 31,


December 31,


2019


2018


2019


2018

Net income (loss)

$

(9,022)



$

2,717



$

(15,374)



$

7,820


(Income) loss from consolidated entities attributable to noncontrolling
interests

141



220



536



924


Net (income) loss attributable to redeemable noncontrolling interests

360



621



983



1,438


Preferred dividends

(5,944)



(2,791)



(14,435)



(4,466)


Amortization of preferred stock discount

(590)



(427)



(1,928)



(730)


Net income (loss) attributable to common stockholders

(15,055)



340



(30,218)



4,986


Amortization of loan costs

80



59



277



215


Depreciation and amortization

9,257



4,788



30,047



12,330


Net income (loss) attributable to redeemable noncontrolling interests

(29)





(54)



9


Preferred dividends

5,944



2,791



14,435



4,466


Amortization of preferred stock discount

590



427



1,928



730


Non-cash stock-based compensation

1,894



1,960



8,824



10,013


Market change in deferred compensation plan

(129)



(4,904)



(5,732)



(8,444)


Change in contingent consideration fair value

(171)





4,058



338


Transaction costs

5,161



844



11,340



11,230


Non-cash interest from finance lease

53





53




Software implementation costs







45


Reimbursed software costs

(424)



(462)



(2,015)



(1,627)


Legal and settlement costs







(50)


Severance and executive recruiting costs

474



3



1,186



1,319


Compensation adjustment

115








Amortization of hotel signing fees and lock subsidies

352



245



810



628


Other (gain) loss

(43)



334



(116)



248


Impairment







1,919


GAAP income tax expense (benefit)

75



1,217



1,435



(10,431)


Adjusted income tax (expense) benefit (1)

(944)



1,691



(3,365)



(1,809)


Adjusted net income

$

7,200



$

9,333



$

32,893



$

26,115


Adjusted net income per diluted share available to common stockholders

$

1.27



$

2.20



$

7.07



$

8.01


Weighted average diluted shares

5,667



4,236



4,651



3,262










Components of weighted average diluted shares








Common shares

2,202



2,381



2,416



2,170


Convertible preferred stock

2,999



1,450



1,837



575


Deferred compensation plan

201



205



202



206


Stock options



121



22



239


Put options

173



66



129



59


Acquisition related shares

76





30




Restricted shares and units

16



13



15



13


Weighted average diluted shares

5,667



4,236



4,651



3,262










Reconciliation of income tax expense (benefit) to adjusted income tax
(expense) benefit








GAAP income tax (expense) benefit

$

(111)



$

(1,229)



$

(1,540)



$

10,364


Less GAAP income tax (expense) benefit attributable to noncontrolling
interests

(36)



(12)



(105)



(67)


GAAP income tax (expense) benefit excluding noncontrolling interests

(75)



(1,217)



(1,435)



10,431


Less deferred income tax (expense) benefit

869



(2,908)



1,930



12,240


Adjusted income tax (expense) benefit (1)

$

(944)



$

1,691



$

(3,365)



$

(1,809)



(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 December 31, 2019


Three Months Ended December 31, 2018


REIT
Advisory


Hospitality
Products
& Services


Corporate/
Other


Ashford Inc.
Consolidated


REIT
Advisory


Hospitality
Products
& Services


Corporate/
Other


Ashford Inc.
Consolidated

REVENUE
















Advisory services:
















Base advisory fees - Trust

$

8,023



$



$



$

8,023



$

8,871



$



$



$

8,871


Incentive advisory fees - Trust









453







453


Base advisory fees - Braemar

2,580







2,580



2,494







2,494


Incentive advisory fees - Braemar

169







169



678







678


Other advisory revenue - Braemar

132







132



131







131


Hotel Management:
















Base management fees



4,054





4,054










Incentive management fees



472





472










Project management fees



6,052





6,052





5,860





5,860


Audio visual



27,077





27,077





19,974





19,974


Other

1,113



5,346





6,459



310



2,009





2,319


Cost reimbursement revenue

8,046



43,918



593



52,557



9,038



1,158





10,196


Total revenues

20,063



86,919



593



107,575



21,975



29,001





50,976


EXPENSES
















Salaries and benefits



8,266



8,642



16,908





3,688



7,747



11,435


Market change in deferred compensation plan





(129)



(129)







(4,904)



(4,904)


Non-cash equity-based compensation



110



1,815



1,925





4



1,958



1,962


Cost of audio visual revenues



20,837





20,837





16,555





16,555


Cost of project management revenues



1,487





1,487





929





929


Depreciation and amortization

2,467



5,351



53



7,871



169



3,458



117



3,744


General and administrative



4,755



6,641



11,396





3,171



2,047



5,218


Other



2,736





2,736





1,080



(2)



1,078


Reimbursed expenses

1,392



43,713



593



45,698



3,024



1,049





4,073


REIT non-cash equity-based compensation

6,555



205





6,760



5,946



109





6,055


Total operating expenses

10,414



87,460



17,615



115,489



9,139



30,043



6,963



46,145


OPERATING INCOME (LOSS)

9,649



(541)



(17,022)



(7,914)



12,836



(1,042)



(6,963)



4,831


Other



(836)



(161)



(997)





(841)



(44)



(885)


INCOME (LOSS) BEFORE INCOME TAXES

9,649



(1,377)



(17,183)



(8,911)



12,836



(1,883)



(7,007)



3,946


Income tax (expense) benefit

(2,729)



(510)



3,128



(111)



(4,489)



116



3,144



(1,229)


NET INCOME (LOSS)

6,920



(1,887)



(14,055)



(9,022)



8,347



(1,767)



(3,863)



2,717


(Income) loss from consolidated entities attributable to noncontrolling interests



141





141





220





220


Net (income) loss attributable to redeemable noncontrolling interests



331



29



360





621





621


NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

$

6,920



$

(1,415)



$

(14,026)



$

(8,521)



$

8,347



$

(926)



$

(3,863)



$

3,558


Interest expense



682



129



811





277



36



313


Amortization of loan costs



32



48



80





14



45



59


Depreciation and amortization

2,758



6,412



87



9,257



562



4,109



117



4,788


Income tax expense (benefit)

2,729



474



(3,128)



75



4,489



(128)



(3,144)



1,217


Net income (loss) attributable to redeemable noncontrolling interests





(29)



(29)










EBITDA

12,407



6,185



(16,919)



1,673



13,398



3,346



(6,809)



9,935


Non-cash stock-based compensation



80



1,814



1,894





1



1,959



1,960


Market change in deferred compensation plan





(129)



(129)







(4,904)



(4,904)


Change in contingent consideration fair value



(171)





(171)










Transaction related costs



93



5,068



5,161





6



838



844


Reimbursed software costs, net

(424)







(424)



(462)







(462)


Severance and executive recruiting costs



474





474





3





3


Compensation adjustment





115



115










Amortization of hotel signing fees and lock subsidies



352





352





245





245


Other (gain) loss



(43)





(43)





334





334


Adjusted EBITDA

11,983



6,970



(10,051)



8,902



12,936



3,935



(8,916)



7,955


Interest expense



(682)



(129)



(811)





(277)



(36)



(313)


Non-cash interest from finance lease



53





53










Adjusted income tax (expense) benefit

(3,802)



(1,507)



4,365



(944)



(239)



(98)



2,028



1,691


Adjusted net income (loss)

$

8,181



$

4,834



$

(5,815)



$

7,200



$

12,697



$

3,560



$

(6,924)



$

9,333


Adjusted net income (loss) per diluted share available to common stockholders (1)

$

1.44



$

0.85



$

(1.03)



$

1.27



$

3.00



$

0.84



$

(1.63)



$

2.20


Weighted average diluted shares

5,667



5,667



5,667



5,667



4,236



4,236



4,236



4,236



(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.

 

 

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)



Year Ended December 31, 2019


Year Ended December 31, 2018


REIT
Advisory


Hospitality
Products
& Services


Corporate/
Other


Ashford Inc.
Consolidated


REIT
Advisory


Hospitality
Products
& Services


Corporate/
Other


Ashford Inc.
Consolidated

REVENUE
















Advisory services:
















Base advisory fees - Trust

$

32,486



$



$



$

32,486



$

35,482



$



$



$

35,482


Incentive advisory fees - Trust









1,809







1,809


Base advisory fees - Braemar

10,499







10,499



9,423







9,423


Incentive advisory fees - Braemar

678







678



678







678


Other advisory revenue - Braemar

521







521



521







521


Hotel Management:
















Base management fees



4,054





4,054










Incentive management fees



472





472










Project management fees



25,584





25,584





8,802





8,802


Audio visual



110,609





110,609





81,186





81,186


Other

4,349



16,830





21,179



1,218



11,850





13,068


Cost reimbursement revenue

36,168



47,757



1,243



85,168



42,719



1,832





44,551


Total revenues

84,701



205,306



1,243



291,250



91,850



103,670





195,520


EXPENSES
















Salaries and benefits



24,674



32,309



56,983





11,325



32,850



44,175


Market change in deferred compensation plan





(5,732)



(5,732)







(8,444)



(8,444)


Non-cash equity-based compensation



233



8,641



8,874





10



10,008



10,018


Cost of audio visual revenues



82,237





82,237





64,555





64,555


Cost of project management revenues



5,853





5,853





1,508





1,508


Depreciation and amortization

6,778



17,374



390



24,542



706



6,685



528



7,919


General and administrative



16,597



16,421



33,018





11,410



15,702



27,112


Impairment









1,863





56



1,919


Other



12,062





12,062





2,913



337



3,250


Reimbursed expenses

10,176



47,237



1,243



58,656



10,789



1,659





12,448


REIT non-cash equity-based compensation

25,467



520





25,987



31,726



173





31,899


Total operating expenses

42,421



206,787



53,272



302,480



45,084



100,238



51,037



196,359


OPERATING INCOME (LOSS)

42,280



(1,481)



(52,029)



(11,230)



46,766



3,432



(51,037)



(839)


Other



(2,224)



(380)



(2,604)





(1,764)



59



(1,705)


INCOME (LOSS) BEFORE INCOME TAXES

42,280



(3,705)



(52,409)



(13,834)



46,766



1,668



(50,978)



(2,544)


Income tax (expense) benefit

(9,861)



(1,980)



10,301



(1,540)



(11,146)



(1,595)



23,105



10,364


NET INCOME (LOSS)

32,419



(5,685)



(42,108)



(15,374)



35,620



73



(27,873)



7,820


(Income) loss from consolidated entities attributable to noncontrolling interests



536





536





924





924


Net (income) loss attributable to redeemable noncontrolling interests



929



54



983





1,447



(9)



1,438


NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

$

32,419



$

(4,220)



$

(42,054)



$

(13,855)



$

35,620



$

2,444



$

(27,882)



$

10,182


Interest expense



1,627



234



1,861





708



118



826


Amortization of loan costs



85



192



277





65



150



215


Depreciation and amortization

8,233



21,389



425



30,047



2,129



9,673



528



12,330


Income tax expense (benefit)

9,861



1,875



(10,301)



1,435



11,146



1,528



(23,105)



(10,431)


Net income (loss) attributable to redeemable noncontrolling interests





(54)



(54)







9



9


EBITDA

50,513



20,756



(51,558)



19,711



48,895



14,418



(50,182)



13,131


Non-cash stock-based compensation



184



8,640



8,824





4



10,009



10,013


Market change in deferred compensation plan





(5,732)



(5,732)







(8,444)



(8,444)


Change in contingent consideration fair value



4,058





4,058







338



338


Transaction related costs



877



10,463



11,340





76



11,154



11,230


Software implementation costs













45



45


Reimbursed software costs, net

(2,015)







(2,015)



(1,627)







(1,627)


Legal and settlement costs













(50)



(50)


Severance and executive recruiting costs



1,177



9



1,186





18



1,301



1,319


Amortization of hotel signing fees and lock subsidies



810





810





628





628


Other (gain) loss



(116)





(116)





248





248


Impairment









1,863





56



1,919


Adjusted EBITDA

48,498



27,746



(38,178)



38,066



49,131



15,392



(35,773)



28,750


Interest expense



(1,627)



(234)



(1,861)





(708)



(118)



(826)


Non-cash interest from finance lease



53





53










Adjusted income tax (expense) benefit

(7,643)



(5,372)



9,650



(3,365)



(5,786)



(1,277)



5,254



(1,809)


Adjusted net income (loss)

$

40,855



$

20,800



$

(28,762)



$

32,893



$

43,345



$

13,407



$

(30,637)



$

26,115


Adjusted net income (loss) per diluted share available to common stockholders (1)

$

8.78



$

4.47



$

(6.18)



$

7.07



$

13.29



$

4.11



$

(9.39)



$

8.01


Weighted average diluted shares

4,651



4,651



4,651



4,651



3,262



3,262



3,262



3,262



(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.

 

 

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 December 31, 2019


Three Months Ended December 31, 2018


Remington


Premier


JSAV


OpenKey


Other (1)


Hospitality
Products &
Services


Premier


JSAV


OpenKey


Other (1)


Hospitality
Products &
Services

REVENUE






















Hotel Management:






















Base management fees

$

4,054



$



$



$



$



$

4,054



$



$



$



$



$


Incentive management fees

472











472












Project management fees



6,052









6,052



5,860









5,860


Audio visual





27,077







27,077





19,974







19,974


Other







223



5,123



5,346







226



1,783



2,009


Cost reimbursement revenue

42,761



1,157









43,918



1,158









1,158


Total revenues

47,287



7,209



27,077



223



5,123



86,919



7,018



19,974



226



1,783



29,001


EXPENSES






















Salaries and benefits

2,267



1,147



3,685



402



765



8,266



888



2,076



392



332



3,688


Non-cash equity-based compensation

71



21



13



5





110







4





4


Cost of audio visual revenues





20,837







20,837





16,555







16,555


Cost of project management revenues



1,487









1,487



929









929


Depreciation and amortization

2,459



2,081



524



6



281



5,351



2,740



691



7



20



3,458


General and administrative

217



470



3,051



325



692



4,755



362



1,964



523



322



3,171


Other





(40)



53



2,723



2,736







246



834



1,080


Reimbursed expenses

42,655



1,058









43,713



1,049









1,049


REIT non-cash equity-based compensation

106



99









205



109









109


Total operating expenses

47,775



6,363



28,070



791



4,461



87,460



6,077



21,286



1,172



1,508



30,043


OPERATING INCOME (LOSS)

(488)



846



(993)



(568)



662



(541)



941



(1,312)



(946)



275



(1,042)


Other

2





(123)



(14)



(701)



(836)





(823)



(5)



(13)



(841)


INCOME (LOSS) BEFORE INCOME TAXES

(486)



846



(1,116)



(582)



(39)



(1,377)



941



(2,135)



(951)



262



(1,883)


Income tax (expense) benefit

(140)



(489)



141





(22)



(510)



(232)



415





(67)



116


NET INCOME (LOSS)

(626)



357



(975)



(582)



(61)



(1,887)



709



(1,720)



(951)



195



(1,767)


(Income) loss from consolidated entities attributable to
noncontrolling interests







149



(8)



141







241



(21)



220


Net (income) loss attributable to redeemable noncontrolling
interests





176



155





331





332



289





621


NET INCOME (LOSS) ATTRIBUTABLE TO THE
COMPANY

$

(626)



$

357



$

(799)



$

(278)



$

(69)



$

(1,415)



$

709



$

(1,388)



$

(421)



$

174



$

(926)


Interest expense





218





464



682





239





38



277


Amortization of loan costs





12



7



13



32





10



2



2



14


Depreciation and amortization

2,459



2,081



1,626



2



244



6,412



2,740



1,297



3



69



4,109


Income tax expense (benefit)

140



489



(177)





22



474



232



(427)





67



(128)


EBITDA

1,973



2,927



880



(269)



674



6,185



3,681



(269)



(416)



350



3,346


Non-cash stock-based compensation

46



21



11



2





80







1





1


Change in contingent consideration fair value





(43)





(128)



(171)












Transaction related costs

13





92





(12)



93





6







6


Severance and executive recruiting costs

429





45







474







3





3


Amortization of hotel signing fees and lock subsidies





337



15





352





234



11





245


Other (gain) loss





(42)





(1)



(43)





305



29





334


Adjusted EBITDA

2,461



2,948



1,280



(252)



533



6,970



3,681



276



(372)



350



3,935


Interest expense





(218)





(464)



(682)





(239)





(38)



(277)


Non-cash interest from finance lease









53



53












Adjusted income tax (expense) benefit

(1,295)



(910)



213





485



(1,507)



(704)



622





(16)



(98)


Adjusted net income (loss)

$

1,166



$

2,038



$

1,275



$

(252)



$

607



$

4,834



$

2,977



$

659



$

(372)



$

296



$

3,560


Adjusted net income (loss) per diluted share available to
common stockholders (2)

$

0.21



$

0.36



$

0.22



$

(0.04)



$

0.11



$

0.85



$

0.70



$

0.16



$

(0.09)



$

0.07



$

0.84


Weighted average diluted shares

5,667



5,667



5,667



5,667



5,667



5,667



4,236



4,236



4,236



4,236



4,236



(1) Represents RED Hospitality & Leisure LLC, Pure Wellness, Lismore Capital LLC, AINC Bar Draught LLC and Marietta Leasehold L.P.

(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)



Year Ended December 31, 2019


Year Ended December 31, 2018


Remington


Premier


JSAV


OpenKey


Other (1)


Hospitality
Products
& Services


Premier


JSAV


OpenKey


Other (1)


Hospitality
Products
& Services

REVENUE






















Hotel Management:






















Base management fees

$

4,054



$



$



$



$



$

4,054



$



$



$



$



$


Incentive management fees

472











472












Project management fees



25,584









25,584



8,802









8,802


Audio visual





110,609







110,609





81,186







81,186


Other







987



15,843



16,830







999



10,851



11,850


Cost reimbursement revenue

42,761



4,996









47,757



1,832









1,832


Total revenues

47,287



30,580



110,609



987



15,843



205,306



10,634



81,186



999



10,851



103,670


EXPENSES






















Salaries and benefits

2,267



4,317



14,062



1,723



2,305



24,674



1,386



6,644



2,051



1,244



11,325


Non-cash equity-based compensation

71



90



34



38





233







10





10


Cost of audio visual revenues





82,237







82,237





64,555







64,555


Cost of project management revenues



5,853









5,853



1,508









1,508


Depreciation and amortization

2,459



12,494



1,995



27



399



17,374



4,358



2,221



27



79



6,685


General and administrative

217



1,561



11,260



1,325



2,234



16,597



534



7,994



1,783



1,099



11,410


Other





3,222



313



8,527



12,062







666



2,247



2,913


Reimbursed expenses

42,655



4,582









47,237



1,659









1,659


REIT non-cash equity-based compensation

106



414









520



173









173


Total operating expenses

47,775



29,311



112,810



3,426



13,465



206,787



9,618



81,414



4,537



4,669



100,238


OPERATING INCOME (LOSS)

(488)



1,269



(2,201)



(2,439)



2,378



(1,481)



1,016



(228)



(3,538)



6,182



3,432


Other

2





(1,139)



(18)



(1,069)



(2,224)





(1,675)



(23)



(66)



(1,764)


INCOME (LOSS) BEFORE INCOME TAXES

(486)



1,269



(3,340)



(2,457)



1,309



(3,705)



1,016



(1,903)



(3,561)



6,116



1,668


Income tax (expense) benefit

(140)



(1,248)



271





(863)



(1,980)



(239)



76





(1,432)



(1,595)


NET INCOME (LOSS)

(626)



21



(3,069)



(2,457)



446



(5,685)



777



(1,827)



(3,561)



4,684



73


(Income) loss from consolidated entities attributable to
noncontrolling interests







624



(88)



536





58



826



40



924


Net (income) loss attributable to redeemable noncontrolling
interests





247



682





929





361



1,086





1,447


NET INCOME (LOSS) ATTRIBUTABLE TO THE
COMPANY

$

(626)



$

21



$

(2,822)



$

(1,151)



$

358



$

(4,220)



$

777



$

(1,408)



$

(1,649)



$

4,724



$

2,444


Interest expense





979





648



1,627





633





75



708


Amortization of loan costs





48



16



21



85





40



11



14



65


Depreciation and amortization

2,459



12,494



5,850



12



574



21,389



4,358



5,090



12



213



9,673


Income tax expense (benefit)

140



1,248



(376)





863



1,875



239



(143)





1,432



1,528


EBITDA

1,973



13,763



3,679



(1,123)



2,464



20,756



5,374



4,212



(1,626)



6,458



14,418


Non-cash stock-based compensation

46



90



30



18





184







4





4


Change in contingent consideration fair value





3,037





1,021



4,058












Transaction related costs

13





570





294



877





70





6



76


Severance and executive recruiting costs

429



106



602



20



20



1,177







3



15



18


Amortization of hotel signing fees and lock subsidies





709



101





810





587



41





628


Other (gain) loss





(117)





1



(116)





254





(6)



248


Adjusted EBITDA

2,461



13,959



8,510



(984)



3,800



27,746



5,374



5,123



(1,578)



6,473



15,392


Interest expense





(979)





(648)



(1,627)





(633)





(75)



(708)


Non-cash interest from finance lease









53



53












Adjusted income tax (expense) benefit

(1,295)



(4,741)



(23)





687



(5,372)



(1,123)



259





(413)



(1,277)


Adjusted net income (loss)

$

1,166



$

9,218



$

7,508



$

(984)



$

3,892



$

20,800



$

4,251



$

4,749



$

(1,578)



$

5,985



$

13,407


Adjusted net income (loss) per diluted share available to
common stockholders (2)

$

0.25



$

1.98



$

1.61



$

(0.21)



$

0.84



$

4.47



$

1.30



$

1.46



$

(0.48)



$

1.83



$

4.11


Weighted average diluted shares

4,651



4,651



4,651



4,651



4,651



4,651



3,262



3,262



3,262



3,262



3,262



(1) Represents RED Hospitality & Leisure LLC, Pure Wellness, Lismore Capital LLC, AINC Bar Draught LLC and Marietta Leasehold L.P.

(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.


 

 

Cision View original content:http://www.prnewswire.com/news-releases/ashford-reports-fourth-quarter-and-year-end-2019-results-301010767.html

SOURCE Ashford Inc.