DALLAS, May 3, 2018 /PRNewswire/ -- Ashford Inc.
(NYSE American: AINC) (the "Company") today reported the following
results and performance measures for the first quarter ended
March 31, 2018. Unless
otherwise stated, all reported results compare the first quarter
ended March 31, 2018, with the first
quarter ended March 31, 2017 (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 three primary areas:
-
- Expanding the existing platforms accretively and accelerating
performance to earn incentive fees
- Starting new platforms for additional base and incentive
fees
- Investing in or incubating strategic businesses that can
achieve accelerated growth through doing business with our existing
platforms and by leveraging our deep knowledge and extensive
relationships within the hospitality sector
- 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 the Company for the quarter totaled
$5.7 million, or $2.84 per diluted share, compared with a net loss
of $2.4 million, or $1.34 per diluted share, in the prior year
quarter. Adjusted net income for the quarter was $4.6 million, or $1.71 per diluted share, compared with
$4.4 million, or $1.92 per diluted share, in the prior year
quarter.
- Total revenue for the quarter was $48.2
million, reflecting a growth rate of 270% over the prior
year quarter
- Debt placement fee revenue was $632,000 in the quarter
- Adjusted EBITDA for the first quarter was $5.4 million, reflecting a growth rate of 6% over
the prior year quarter
- At the end of the first quarter, the Company had approximately
$6.3 billion of assets under
management
- As of March 31, 2018, the Company
had corporate cash of $30.8
million
ACQUISITION OF REMINGTON'S
PROJECT MANAGEMENT BUSINESS
On April 9, 2018 the Company
announced that it had signed a definitive agreement to acquire the
Project Management business of privately-held Remington Holdings,
L.P. ("Remington"). The
transaction, which is expected to close during the third quarter of
2018, is subject to approval by the Company's stockholders and
customary closing conditions.
Remington's Project Management
business provides comprehensive and cost-effective design,
development, and project management services for both Remington managed hotels as well as external
partners. 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 Ashford
Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or "Trust")
and Braemar Hotels & Resorts Inc. (NYSE: BHR) ("Braemar").
Additionally, it has extensive experience working with many of the
major hotel brands in areas of renovating, converting, developing
or repositioning hotels. In 2017, Remington Project Management had
revenues of approximately $29.0
million and adjusted EBITDA of approximately $16.3 million.
Under the terms of the agreement, the Company will acquire
Remington's Project Management
business for a total transaction value of $203 million. The purchase price will be paid by
issuing convertible preferred stock to the sellers. The newly
created convertible preferred stock will have a conversion price of
$140 per share (a 45% premium to the
trading level at the time of the announcement) and, if converted
immediately after the consummation of the transaction, would
convert into 1,450,000 shares of common stock. Dividends on the
convertible preferred stock are payable at an annual rate of 5.5%
in the first year, 6.0% in the second year, and 6.5% in the third
year and each year thereafter. Voting rights of the convertible
preferred stock will be on an as-converted basis and the holders of
the convertible preferred stock will have a voting limit of 25% of
the Company's voting securities for five years. Upon closing of the
transaction, the sellers will have the right to nominate two
directors to the Company's Board of Directors. The transaction does
not require a private letter ruling from the Internal Revenue
Service.
INVESTMENT IN RED HOSPITALITY & LEISURE
During the quarter, the Company acquired an approximate 80%
controlling interest in RED Hospitality & Leisure for
approximately $1 million in
cash. RED Hospitality & Leisure is a leading provider of
watersports activities and other travel & transportation
services in the U.S. Virgin Islands. RED Hospitality has
already begun limited ferry operations between St. Thomas and St.
John and expects to capitalize on new contracts and charter
business as the Virgin Islands
resorts begin to reopen in the second half of this year and into
early 2019. RED Hospitality generated $256,000 of revenue and $86,000 of Adjusted EBITDA in the first quarter
during the Company's period of ownership.
J&S AUDIO VISUAL UPDATE
The Company currently owns an 85% controlling interest in a
privately held company that conducts the business of J&S Audio
Visual in the United States,
Mexico, and the Dominican Republic ("J&S"). J&S
provides an integrated suite of audio visual services, including
show & event services, hospitality services, creative services,
and design & integration, making J&S a leading
single-source solution for their clients' meeting and event needs.
In the first full quarter since the Company's investment,
revenue growth was 21% and Adjusted EBITDA growth was 29% as
compared to the prior year period. First quarter growth was largely
supported by third-party business which saw 17% growth in revenue
highlighted by one of the best months in the company's history.
Since Ashford's investment in November
2017 through the end of the first quarter, revenues
increased $5.7 million, or 21%, and
Adjusted EBITDA increased $1.6
million, or 60%, over the prior year period. Additionally,
J&S executed three new hotel contracts during the first
quarter. As of the end of the first quarter, J&S had multi-year
contracts in place with 67 hotels and convention centers in
addition to regular business representing over 2,500 annual events
and productions, 500 venue locations, and 650 clients.
OPENKEY UPDATE
Ashford currently owns a 46% interest in OpenKey. OpenKey is the
universal, industry-standard smartphone App for keyless entry in
hotel guestrooms. There have been several recent developments
regarding OpenKey's growth. The company continues to expand
the platform with growth from OpenKey China as well as securing an
additional asset level contract with yet another hotel brand,
Yotel, increasing the company's access to 15 hotel brands and
portfolios. OpenKey remains the industry leader in interfaces with
major lock manufacturers and has access to thousands of hotels
worldwide through its exclusive deal offerings with Preferred
Hotels, World Hotels and its integration with InnDependent Boutique
Collection, a hotel technology platform used worldwide. The company
also continues to be supported by its office in Guadalajara, Mexico which has been
instrumental for growth in Mexico,
Costa Rica, and Colombia as well as independent resellers
currently working in 14 different countries. In the first quarter,
revenue growth was 1,176% compared to the prior year period and 71%
relative to the fourth quarter of 2017. The company has now
achieved five consecutive quarters of revenue growth dating back to
the first quarter of 2017 with the first quarter of 2018 at an
all-time high of 1,176% growth over the prior year.
FINANCIAL RESULTS
Net loss attributable to the Company for the quarter totaled
$5.7 million, or $2.84 per diluted share, compared with a net loss
of $2.4 million, or $1.34 per diluted share, in the prior year
quarter. Adjusted net income for the quarter was $4.6 million, or $1.71 per diluted share, compared with
$4.4 million, or $1.92 per diluted share, in the prior year
quarter.
For the quarter ended March 31,
2018, base advisory fee revenue was $10.7 million, including $8.6 million from Ashford Trust and $2.1 million from Braemar.
Adjusted EBITDA for the quarter was $5.4
million, compared with $5.1
million for prior year quarter, reflecting a growth rate of
6%.
CAPITAL STRUCTURE
At the end of the first quarter, the Company had approximately
$6.3 billion of assets under
management from its managed companies, corporate cash of
$30.8 million, and 2.7 million fully
diluted shares. The Company has a current fully diluted
equity market capitalization of approximately $250 million.
QUARTERLY HIGHLIGHTS FOR ADVISED PLATFORMS
ASHFORD TRUST HIGHLIGHTS
- Trust refinanced a mortgage loan on 8 hotels with an existing
outstanding balance of $377 million.
The new loan totals $395 million and
is expected to result in annual interest savings of approximately
$6.8 million compared to the previous
loan terms.
- Trust sold the SpringHill Suites Glen Allen in Glen Allen, VA for $10.9 million.
- Subsequent to quarter end, Trust refinanced a mortgage loan on
22 hotels with an existing outstanding balance totaling
approximately $972 million. The new
loan totals $985 million and is
expected to result in annual interest savings of approximately
$11 million compared to the previous
loan terms.
Braemar Hotels & Resorts HIGHLIGHTS
- Ashford Hospitality Prime rebranded to Braemar Hotels &
Resorts on April 24, 2018, further
enhancing their strategy to focus on the luxury segment.
- Subsequent to quarter end, Braemar completed the acquisition of
the 266-room Ritz-Carlton Sarasota in Sarasota, FL for $171
million. Concurrent with the completion of the acquisition,
Braemar financed the hotel with a $100
million non-recourse loan.
"We are pleased with our operating results for the first quarter
and the continued execution on our growth strategy," commented
Monty J. Bennett, Ashford's Chairman
and Chief Executive Officer. "During the quarter, we were pleased
to have entered in to an agreement to acquire the high-margin
project management division of Remington. With deep industry experience and
long-term contracts in place, we believe this transaction
represents a compelling opportunity for Ashford to diversify its
earnings stream and, moving forward, the potential to expand
business to other third-party clients. Additionally, the RED
Hospitality investment will give us a foothold in the watersports
and travel & hospitality services sector that we believe has
enormous potential. Looking ahead, we remain committed to
maximizing value for our shareholders and are well positioned to
opportunistically grow our business by accretively expanding our
existing REIT platforms, adding additional investment platforms and
investing in other hospitality-related businesses through which we
can accelerate meaningful, profitable growth."
INVESTOR CONFERENCE CALL AND SIMULCAST
The Company will conduct a conference call on Friday, May 4, 2018, at 12:00 p.m. ET. The number for this
interactive teleconference is (719) 325-4857. A replay
of the conference call will be available through Friday, May 11, 2018, by dialing (719) 457-0820
and entering the confirmation number 1067560.
The Company will also provide an online simulcast and
rebroadcast of its first quarter 2018 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 Friday, May 4,
2018, 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.
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'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: the occurrence of any event, change or other
circumstances that could give rise to the termination of the
transaction to acquire the Project Management business of
Remington; the failure to satisfy
conditions to completion of the transaction, including receipt of
regulatory approvals and stockholder approval; changes in the
business or operating prospects of the Project Management business
of Remington; 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
associated with business combination transactions, such as the risk
that the businesses 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's filings with the Securities and Exchange
Commission.
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.
In connection with the proposed transaction with Remington, Ashford will file with the
Securities and Exchange Commission a definitive proxy statement on
Schedule 14A. Additionally, Ashford files annual, quarterly and
current reports, proxy and information statements and other
information with the Securities and Exchange Commission. INVESTORS
AND SECURITY HOLDERS OF ASHFORD ARE URGED TO READ THESE MATERIALS
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER
RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT ASHFORD
WILL FILE WITH THE SECURITIES AND EXCHANGE COMMISSION WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT ASHFORD AND THE TRANSACTION. The definitive proxy statement
and other relevant materials in connection with the transaction
(when they become available), and any other documents filed by
Ashford with the Securities and Exchange Commission, may be
obtained free of charge at the Securities and Exchange Commission's
website at www.sec.gov. In addition, investors and security holders
may obtain free copies of the documents filed with the Securities
and Exchange Commission at the Ashford's website,
www.ashfordinc.com, under the "Investors" link, or by requesting
them in writing or by telephone from us at 14185 Dallas Parkway,
Suite 1100, Dallas, Texas 75254,
Attn: Investor Relations or (972) 490-9600.
Ashford and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from
Ashford's stockholders with respect to the transaction. Information
about Ashford's directors and executive officers and their
ownership of its common stock is set forth in Amendment No. 1 to
the Annual Report on Form 10-K/A, which was filed with the
Securities and Exchange Commission on April
30, 2018. Information regarding the identity of the
potential participants, and their direct or indirect interests in
the transaction, by security holdings or otherwise, will be set
forth in the definitive proxy statement and other materials filed
with Securities and Exchange Commission in connection with the
transaction.
ASHFORD INC. AND
SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited, in
thousands, except share and per share amounts)
|
|
|
March 31,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
34,910
|
|
|
$
|
36,480
|
|
Restricted
cash
|
15,045
|
|
|
9,076
|
|
Accounts receivable,
net
|
7,141
|
|
|
5,127
|
|
Due from Ashford
Trust OP
|
11,376
|
|
|
13,346
|
|
Due from Braemar
OP
|
96
|
|
|
1,738
|
|
Inventories
|
1,137
|
|
|
1,066
|
|
Prepaid expenses and
other
|
2,971
|
|
|
2,913
|
|
Total current
assets
|
72,676
|
|
|
69,746
|
|
Investments in
unconsolidated entities
|
500
|
|
|
500
|
|
Furniture, fixtures
and equipment, net
|
23,259
|
|
|
21,154
|
|
Goodwill
|
13,103
|
|
|
12,947
|
|
Intangible assets,
net
|
9,472
|
|
|
9,713
|
|
Other
assets
|
587
|
|
|
750
|
|
Total
assets
|
$
|
119,597
|
|
|
$
|
114,810
|
|
LIABILITIES
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
18,648
|
|
|
$
|
20,451
|
|
Due to
affiliates
|
3,999
|
|
|
4,272
|
|
Deferred
income
|
342
|
|
|
459
|
|
Deferred compensation
plan
|
320
|
|
|
311
|
|
Notes payable,
net
|
1,736
|
|
|
1,751
|
|
Other
liabilities
|
13,979
|
|
|
9,076
|
|
Total current
liabilities
|
39,024
|
|
|
36,320
|
|
Accrued
expenses
|
—
|
|
|
78
|
|
Deferred
income
|
12,852
|
|
|
13,440
|
|
Deferred compensation
plan
|
19,420
|
|
|
18,948
|
|
Notes payable,
net
|
11,534
|
|
|
9,956
|
|
Total
liabilities
|
82,830
|
|
|
78,742
|
|
MEZZANINE
EQUITY
|
|
|
|
Redeemable
noncontrolling interests
|
4,662
|
|
|
5,111
|
|
EQUITY
|
|
|
|
Preferred stock,
$0.01 par value, 50,000,000 shares authorized:
|
|
|
|
Series A cumulative
preferred stock, no shares issued and outstanding at March 31, 2018
and
December 31, 2017
|
—
|
|
|
—
|
|
Common stock, $0.01
par value, 100,000,000 shares authorized, 2,103,353 and 2,093,556
shares issued
and outstanding at March 31, 2018 and
December 31, 2017, respectively
|
21
|
|
|
21
|
|
Additional paid-in
capital
|
255,037
|
|
|
249,695
|
|
Accumulated
deficit
|
(224,281)
|
|
|
(219,396)
|
|
Accumulated other
comprehensive income (loss)
|
(232)
|
|
|
(135)
|
|
Total stockholders'
equity of the Company
|
30,545
|
|
|
30,185
|
|
Noncontrolling
interests in consolidated entities
|
1,560
|
|
|
772
|
|
Total
equity
|
32,105
|
|
|
30,957
|
|
Total liabilities and
equity
|
$
|
119,597
|
|
|
$
|
114,810
|
|
ASHFORD INC. AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited, in
thousands, except per share amounts)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2018
|
|
2017
|
REVENUE
|
|
|
|
Advisory
services:
|
|
|
|
Base advisory
fee
|
$
|
10,711
|
|
|
$
|
10,827
|
|
Incentive advisory
fee
|
452
|
|
|
771
|
|
Reimbursable
expenses
|
1,949
|
|
|
2,116
|
|
Non-cash
stock/unit-based compensation
|
9,292
|
|
|
(1,283)
|
|
Other advisory
revenue
|
128
|
|
|
—
|
|
Audio
visual
|
23,310
|
|
|
—
|
|
Other
|
2,326
|
|
|
582
|
|
Total
revenue
|
48,168
|
|
|
13,013
|
|
EXPENSES
|
|
|
|
Salaries and
benefits
|
13,468
|
|
|
10,043
|
|
Non-cash
stock/unit-based compensation
|
13,089
|
|
|
989
|
|
Cost of audio visual
revenues
|
16,587
|
|
|
—
|
|
Depreciation and
amortization
|
1,040
|
|
|
468
|
|
General and
administrative
|
6,255
|
|
|
3,649
|
|
Impairment
|
1,919
|
|
|
—
|
|
Other
|
846
|
|
|
—
|
|
Total operating
expenses
|
53,204
|
|
|
15,149
|
|
OPERATING INCOME
(LOSS)
|
(5,036)
|
|
|
(2,136)
|
|
Interest
expense
|
(143)
|
|
|
—
|
|
Amortization of loan
costs
|
(23)
|
|
|
—
|
|
Interest
income
|
112
|
|
|
33
|
|
Dividend
income
|
—
|
|
|
93
|
|
Unrealized gain
(loss) on investments
|
—
|
|
|
125
|
|
Realized gain (loss)
on investments
|
—
|
|
|
(200)
|
|
Other income
(expense)
|
(39)
|
|
|
(8)
|
|
INCOME (LOSS)
BEFORE INCOME TAXES
|
(5,129)
|
|
|
(2,093)
|
|
Income tax (expense)
benefit
|
(706)
|
|
|
(630)
|
|
NET INCOME
(LOSS)
|
(5,835)
|
|
|
(2,723)
|
|
(Income) loss from
consolidated entities attributable to noncontrolling
interests
|
173
|
|
|
(25)
|
|
Net (income) loss
attributable to redeemable noncontrolling interests
|
(61)
|
|
|
363
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO THE COMPANY
|
$
|
(5,723)
|
|
|
$
|
(2,385)
|
|
|
|
|
|
INCOME (LOSS) PER
SHARE - BASIC AND DILUTED
|
|
|
|
Basic:
|
|
|
|
Net income
(loss) attributable to common stockholders
|
$
|
(2.73)
|
|
|
$
|
(1.18)
|
|
Weighted
average common shares outstanding - basic
|
2,094
|
|
|
2,015
|
|
Diluted:
|
|
|
|
Net income
(loss) attributable to common stockholders
|
$
|
(2.84)
|
|
|
$
|
(1.34)
|
|
Weighted
average common shares outstanding - diluted
|
2,115
|
|
|
2,046
|
|
ASHFORD INC. AND
SUBSIDIARIES
|
RECONCILIATION OF
NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
|
(unaudited, in
thousands)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2018
|
|
2017
|
Net income
(loss)
|
$
|
(5,835)
|
|
|
$
|
(2,723)
|
|
(Income) loss from
consolidated entities attributable to noncontrolling
interests
|
173
|
|
|
(25)
|
|
Net (income) loss
attributable to redeemable noncontrolling interests
|
(61)
|
|
|
363
|
|
Net income (loss)
attributable to the company
|
(5,723)
|
|
|
(2,385)
|
|
Interest
expense
|
121
|
|
|
—
|
|
Amortization of loan
costs
|
16
|
|
|
—
|
|
Depreciation and
amortization
|
1,503
|
|
|
465
|
|
Income tax expense
(benefit)
|
632
|
|
|
630
|
|
Net income (loss)
attributable to redeemable noncontrolling interests
(1)
|
(12)
|
|
|
(4)
|
|
EBITDA
|
(3,463)
|
|
|
(1,294)
|
|
Equity-based
compensation
|
3,793
|
|
|
2,268
|
|
Market change in
deferred compensation plan
|
561
|
|
|
3,340
|
|
Change in contingent
consideration fair value
|
213
|
|
|
—
|
|
Transaction
costs
|
1,156
|
|
|
661
|
|
Software
implementation costs
|
27
|
|
|
59
|
|
Reimbursed software
costs
|
(237)
|
|
|
(55)
|
|
Impairment
|
1,919
|
|
|
—
|
|
Realized and
unrealized (gain) loss on derivatives
|
—
|
|
|
25
|
|
Severance
costs
|
1,301
|
|
|
49
|
|
Amortization of hotel
signing fees and lock subsidies
|
139
|
|
|
—
|
|
Foreign currency
transactions (gain) loss
|
(36)
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
5,373
|
|
|
$
|
5,053
|
|
|
(1)
Represents the 0.2% interest in Ashford Hospitality Advisors, LLC
prior to our legal entity restructuring on April 6, 2017 and 0.2%
interest in Ashford Hospitality Holdings, LLC
thereafter.
|
ASHFORD INC. AND
SUBSIDIARIES
|
RECONCILIATION OF
NET INCOME (LOSS) TO ADJUSTED NET INCOME (LOSS)
|
(unaudited,
in thousands, except per share amounts)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2018
|
|
2017
|
Net income
(loss)
|
$
|
(5,835)
|
|
|
$
|
(2,723)
|
|
(Income) loss from
consolidated entities attributable to noncontrolling
interests
|
173
|
|
|
(25)
|
|
Net (income) loss
attributable to redeemable noncontrolling interests
|
(61)
|
|
|
363
|
|
Net income (loss)
attributable to the company
|
(5,723)
|
|
|
(2,385)
|
|
Depreciation and
amortization
|
1,503
|
|
|
465
|
|
Net income (loss)
attributable to redeemable noncontrolling interests
(1)
|
(12)
|
|
|
(4)
|
|
Equity-based
compensation
|
3,793
|
|
|
2,268
|
|
Market change in
deferred compensation plan
|
561
|
|
|
3,340
|
|
Change in contingent
consideration fair value
|
213
|
|
|
—
|
|
Transaction
costs
|
1,156
|
|
|
661
|
|
Software
implementation costs
|
27
|
|
|
59
|
|
Reimbursed software
costs
|
(237)
|
|
|
(55)
|
|
Impairment
|
1,919
|
|
|
—
|
|
Realized and
unrealized (gain) loss on derivatives
|
—
|
|
|
25
|
|
Severance
costs
|
1,301
|
|
|
49
|
|
Amortization of hotel
signing fees and lock subsidies
|
139
|
|
|
—
|
|
Foreign currency
transactions (gain) loss
|
(36)
|
|
|
—
|
|
Adjusted net
income
|
$
|
4,604
|
|
|
$
|
4,423
|
|
Adjusted net
income per diluted share available to common
stockholders
|
$
|
1.71
|
|
|
$
|
1.92
|
|
Weighted average
diluted shares
|
2,688
|
|
|
2,309
|
|
|
|
|
|
Components of
weighted average diluted shares
|
|
|
|
Common
shares
|
2,097
|
|
|
2,019
|
|
Deferred compensation
plan
|
207
|
|
|
210
|
|
Stock
options
|
331
|
|
|
49
|
|
OpenKey put
option
|
17
|
|
|
31
|
|
J&S put
option
|
27
|
|
|
—
|
|
Restricted
shares
|
9
|
|
|
—
|
|
Weighted average
diluted shares
|
2,688
|
|
|
2,309
|
|
|
(1)
Represents the 0.2% interest in Ashford Hospitality Advisors, LLC
prior to the legal restructuring of our organizational structure on
April 6, 2017 and 0.2% interest in Ashford Hospitality Holdings,
LLC thereafter.
|
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
March 31, 2018
|
|
Three Months Ended
March 31, 2017
|
|
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 fee -
Trust
|
$
|
8,604
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,604
|
|
|
$
|
8,824
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,824
|
|
Incentive advisory
fee - Trust
|
452
|
|
|
—
|
|
|
—
|
|
|
452
|
|
|
452
|
|
|
—
|
|
|
—
|
|
|
452
|
|
Reimbursable expenses
- Trust
|
1,529
|
|
|
—
|
|
|
—
|
|
|
1,529
|
|
|
1,567
|
|
|
—
|
|
|
—
|
|
|
1,567
|
|
Non-cash
stock/unit-based compensation - Trust
|
6,745
|
|
|
—
|
|
|
—
|
|
|
6,745
|
|
|
402
|
|
|
—
|
|
|
—
|
|
|
402
|
|
Base advisory fee -
Braemar
|
2,107
|
|
|
—
|
|
|
—
|
|
|
2,107
|
|
|
2,003
|
|
|
—
|
|
|
—
|
|
|
2,003
|
|
Incentive advisory
fee - Braemar
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
319
|
|
|
—
|
|
|
—
|
|
|
319
|
|
Reimbursable expenses
- Braemar
|
420
|
|
|
—
|
|
|
—
|
|
|
420
|
|
|
549
|
|
|
—
|
|
|
—
|
|
|
549
|
|
Non-cash
stock/unit-based compensation - Braemar
|
2,547
|
|
|
—
|
|
|
—
|
|
|
2,547
|
|
|
(1,685)
|
|
|
—
|
|
|
—
|
|
|
(1,685)
|
|
Other advisory
revenue - Braemar
|
128
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Audio
visual
|
—
|
|
|
23,310
|
|
|
—
|
|
|
23,310
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other
|
1,121
|
|
|
1,205
|
|
|
—
|
|
|
2,326
|
|
|
557
|
|
|
25
|
|
|
—
|
|
|
582
|
|
Total
revenue
|
23,653
|
|
|
24,515
|
|
|
—
|
|
|
48,168
|
|
|
12,988
|
|
|
25
|
|
|
—
|
|
|
13,013
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and
benefits
|
—
|
|
|
2,149
|
|
|
10,426
|
|
|
12,575
|
|
|
—
|
|
|
420
|
|
|
5,961
|
|
|
6,381
|
|
Market change in
deferred compensation plan
|
—
|
|
|
—
|
|
|
561
|
|
|
561
|
|
|
—
|
|
|
—
|
|
|
3,340
|
|
|
3,340
|
|
REIT non-cash
stock/unit-based compensation expense
|
9,292
|
|
|
—
|
|
|
—
|
|
|
9,292
|
|
|
(1,283)
|
|
|
—
|
|
|
—
|
|
|
(1,283)
|
|
AINC non-cash
stock/unit-based compensation expense
|
—
|
|
|
8
|
|
|
3,789
|
|
|
3,797
|
|
|
—
|
|
|
4
|
|
|
2,268
|
|
|
2,272
|
|
Reimbursable
expenses
|
1,949
|
|
|
—
|
|
|
—
|
|
|
1,949
|
|
|
2,116
|
|
|
—
|
|
|
—
|
|
|
2,116
|
|
Cost of audio visual
revenues
|
—
|
|
|
16,587
|
|
|
—
|
|
|
16,587
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
General and
administrative
|
—
|
|
|
2,494
|
|
|
2,144
|
|
|
4,638
|
|
|
—
|
|
|
401
|
|
|
1,454
|
|
|
1,855
|
|
Depreciation and
amortization
|
390
|
|
|
492
|
|
|
158
|
|
|
1,040
|
|
|
259
|
|
|
5
|
|
|
204
|
|
|
468
|
|
Impairment
|
1,919
|
|
|
—
|
|
|
—
|
|
|
1,919
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other
|
—
|
|
|
634
|
|
|
212
|
|
|
846
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
operating expenses
|
13,550
|
|
|
22,364
|
|
|
17,290
|
|
|
53,204
|
|
|
1,092
|
|
|
830
|
|
|
13,227
|
|
|
15,149
|
|
OPERATING INCOME
(LOSS)
|
10,103
|
|
|
2,151
|
|
|
(17,290)
|
|
|
(5,036)
|
|
|
11,896
|
|
|
(805)
|
|
|
(13,227)
|
|
|
(2,136)
|
|
Other
|
19
|
|
|
(224)
|
|
|
112
|
|
|
(93)
|
|
|
—
|
|
|
(8)
|
|
|
51
|
|
|
43
|
|
INCOME (LOSS)
BEFORE INCOME TAXES
|
10,122
|
|
|
1,927
|
|
|
(17,178)
|
|
|
(5,129)
|
|
|
11,896
|
|
|
(813)
|
|
|
(13,176)
|
|
|
(2,093)
|
|
Income tax (expense)
benefit
|
(2,263)
|
|
|
(734)
|
|
|
2,291
|
|
|
(706)
|
|
|
(4,298)
|
|
|
—
|
|
|
3,668
|
|
|
(630)
|
|
NET INCOME
(LOSS)
|
7,859
|
|
|
1,193
|
|
|
(14,887)
|
|
|
(5,835)
|
|
|
7,598
|
|
|
(813)
|
|
|
(9,508)
|
|
|
(2,723)
|
|
(Income) loss from
consolidated entities attributable to noncontrolling
interests
|
—
|
|
|
173
|
|
|
—
|
|
|
173
|
|
|
—
|
|
|
121
|
|
|
(146)
|
|
|
(25)
|
|
Net (income) loss
attributable to redeemable noncontrolling interests
|
—
|
|
|
(73)
|
|
|
12
|
|
|
(61)
|
|
|
—
|
|
|
359
|
|
|
4
|
|
|
363
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO THE COMPANY
|
$
|
7,859
|
|
|
$
|
1,293
|
|
|
$
|
(14,875)
|
|
|
$
|
(5,723)
|
|
|
$
|
7,598
|
|
|
$
|
(333)
|
|
|
$
|
(9,650)
|
|
|
$
|
(2,385)
|
|
Interest
expense
|
—
|
|
|
121
|
|
|
—
|
|
|
121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Amortization of loan
costs
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Depreciation and
amortization
|
390
|
|
|
955
|
|
|
158
|
|
|
1,503
|
|
|
259
|
|
|
2
|
|
|
204
|
|
|
465
|
|
Income tax expense
(benefit)
|
2,263
|
|
|
660
|
|
|
(2,291)
|
|
|
632
|
|
|
4,298
|
|
|
—
|
|
|
(3,668)
|
|
|
630
|
|
Net income (loss)
attributable to redeemable noncontrolling interests
(1)
|
—
|
|
|
—
|
|
|
(12)
|
|
|
(12)
|
|
|
—
|
|
|
—
|
|
|
(4)
|
|
|
(4)
|
|
EBITDA
|
10,512
|
|
|
3,045
|
|
|
(17,020)
|
|
|
(3,463)
|
|
|
12,155
|
|
|
(331)
|
|
|
(13,118)
|
|
|
(1,294)
|
|
Equity-based
compensation
|
—
|
|
|
4
|
|
|
3,789
|
|
|
3,793
|
|
|
—
|
|
|
—
|
|
|
2,268
|
|
|
2,268
|
|
Market change in
deferred compensation plan
|
—
|
|
|
—
|
|
|
561
|
|
|
561
|
|
|
—
|
|
|
—
|
|
|
3,340
|
|
|
3,340
|
|
Change in contingent
consideration fair value
|
—
|
|
|
—
|
|
|
213
|
|
|
213
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Transaction
costs
|
—
|
|
|
70
|
|
|
1,086
|
|
|
1,156
|
|
|
—
|
|
|
—
|
|
|
661
|
|
|
661
|
|
Software
implementation costs
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
57
|
|
|
—
|
|
|
2
|
|
|
59
|
|
Reimbursed software
costs, net
|
(237)
|
|
|
—
|
|
|
—
|
|
|
(237)
|
|
|
(55)
|
|
|
—
|
|
|
—
|
|
|
(55)
|
|
Impairment
|
1,863
|
|
|
—
|
|
|
56
|
|
|
1,919
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Realized and
unrealized (gain) loss on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
25
|
|
Severance
costs
|
—
|
|
|
—
|
|
|
1,301
|
|
|
1,301
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
Amortization of hotel
signing fees and lock subsidies
|
—
|
|
|
139
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Foreign currency
transactions (gain) loss
|
—
|
|
|
(36)
|
|
|
—
|
|
|
(36)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted
EBITDA
|
12,165
|
|
|
3,222
|
|
|
(10,014)
|
|
|
5,373
|
|
|
12,157
|
|
|
(331)
|
|
|
(6,773)
|
|
|
5,053
|
|
Interest
expense
|
—
|
|
|
(121)
|
|
|
—
|
|
|
(121)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Amortization of loan
costs
|
—
|
|
|
(16)
|
|
|
—
|
|
|
(16)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income tax (expense)
benefit
|
(2,263)
|
|
|
(660)
|
|
|
2,291
|
|
|
(632)
|
|
|
(4,298)
|
|
|
—
|
|
|
3,668
|
|
|
(630)
|
|
Adjusted net
income (loss)
|
$
|
9,902
|
|
|
$
|
2,425
|
|
|
$
|
(7,723)
|
|
|
$
|
4,604
|
|
|
$
|
7,859
|
|
|
$
|
(331)
|
|
|
$
|
(3,105)
|
|
|
$
|
4,423
|
|
Adjusted net
income (loss) per diluted share available to common stockholders
(2)
|
$
|
3.68
|
|
|
$
|
0.90
|
|
|
$
|
(2.87)
|
|
|
$
|
1.71
|
|
|
$
|
3.40
|
|
|
$
|
(0.14)
|
|
|
$
|
(1.34)
|
|
|
$
|
1.92
|
|
Weighted average
diluted shares
|
2,688
|
|
|
2,688
|
|
|
2,688
|
|
|
2,688
|
|
|
2,309
|
|
|
2,309
|
|
|
2,309
|
|
|
2,309
|
|
|
(1) Represents the
0.2% interest in Ashford Hospitality Advisors, LLC prior to our
legal entity restructuring on April 6, 2017 and 0.2% interest in
Ashford Hospitality Holdings, LLC thereafter.
|
(2) 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
March 31, 2018
|
|
Three Months Ended
March 31, 2017
|
|
J&S
|
|
OpenKey
|
|
Other
(1)
|
|
Hospitality
Products &
Services
|
|
J&S
|
|
OpenKey
|
|
Other
(1)
|
|
Hospitality
Products &
Services
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audio
visual
|
$
|
23,310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other
|
—
|
|
|
319
|
|
|
886
|
|
|
1,205
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
Total
revenue
|
23,310
|
|
|
319
|
|
|
886
|
|
|
24,515
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and
benefits
|
1,315
|
|
|
527
|
|
|
307
|
|
|
2,149
|
|
|
—
|
|
|
420
|
|
|
—
|
|
|
420
|
|
Equity based
compensation
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
Cost of revenues for
audio visual
|
16,587
|
|
|
—
|
|
|
—
|
|
|
16,587
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
General and
administrative
|
1,901
|
|
|
341
|
|
|
252
|
|
|
2,494
|
|
|
—
|
|
|
401
|
|
|
—
|
|
|
401
|
|
Depreciation and
amortization
|
454
|
|
|
6
|
|
|
32
|
|
|
492
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
Other
|
—
|
|
|
295
|
|
|
339
|
|
|
634
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
operating expenses
|
20,257
|
|
|
1,177
|
|
|
930
|
|
|
22,364
|
|
|
—
|
|
|
830
|
|
|
—
|
|
|
830
|
|
OPERATING INCOME
(LOSS)
|
3,053
|
|
|
(858)
|
|
|
(44)
|
|
|
2,151
|
|
|
—
|
|
|
(805)
|
|
|
—
|
|
|
(805)
|
|
Other
|
(209)
|
|
|
(7)
|
|
|
(8)
|
|
|
(224)
|
|
|
—
|
|
|
(8)
|
|
|
—
|
|
|
(8)
|
|
INCOME (LOSS)
BEFORE INCOME TAXES
|
2,844
|
|
|
(865)
|
|
|
(52)
|
|
|
1,927
|
|
|
—
|
|
|
(813)
|
|
|
—
|
|
|
(813)
|
|
Income tax (expense)
benefit
|
(746)
|
|
|
—
|
|
|
12
|
|
|
(734)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
NET INCOME
(LOSS)
|
2,098
|
|
|
(865)
|
|
|
(40)
|
|
|
1,193
|
|
|
—
|
|
|
(813)
|
|
|
—
|
|
|
(813)
|
|
(Income) loss from
consolidated entities attributable to noncontrolling
interests
|
(11)
|
|
|
156
|
|
|
28
|
|
|
173
|
|
|
—
|
|
|
121
|
|
|
—
|
|
|
121
|
|
Net (income) loss
attributable to redeemable noncontrolling interests
|
(355)
|
|
|
282
|
|
|
—
|
|
|
(73)
|
|
|
—
|
|
|
359
|
|
|
—
|
|
|
359
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO THE COMPANY
|
1,732
|
|
|
(427)
|
|
|
(12)
|
|
|
1,293
|
|
|
—
|
|
|
(333)
|
|
|
—
|
|
|
(333)
|
|
Interest
expense
|
118
|
|
|
—
|
|
|
3
|
|
|
121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Amortization of loan
costs
|
10
|
|
|
3
|
|
|
3
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Depreciation and
amortization
|
924
|
|
|
3
|
|
|
28
|
|
|
955
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Income tax expense
(benefit)
|
672
|
|
|
—
|
|
|
(12)
|
|
|
660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
EBITDA
|
3,456
|
|
|
(421)
|
|
|
10
|
|
|
3,045
|
|
|
—
|
|
|
(331)
|
|
|
—
|
|
|
(331)
|
|
Equity-based
compensation
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Transaction
costs
|
64
|
|
|
—
|
|
|
6
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Amortization of hotel
signing fees and lock subsidies
|
128
|
|
|
11
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Foreign currency
transactions (gain) loss
|
(36)
|
|
|
—
|
|
|
—
|
|
|
(36)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted
EBITDA
|
3,612
|
|
|
(406)
|
|
|
16
|
|
|
3,222
|
|
|
—
|
|
|
(331)
|
|
|
—
|
|
|
(331)
|
|
Interest
expense
|
(118)
|
|
|
—
|
|
|
(3)
|
|
|
(121)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Amortization of loan
costs
|
(10)
|
|
|
(3)
|
|
|
(3)
|
|
|
(16)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income tax (expense)
benefit
|
(672)
|
|
|
—
|
|
|
12
|
|
|
(660)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted net
income (loss)
|
$
|
2,812
|
|
|
$
|
(409)
|
|
|
$
|
22
|
|
|
$
|
2,425
|
|
|
$
|
—
|
|
|
$
|
(331)
|
|
|
$
|
—
|
|
|
$
|
(331)
|
|
Adjusted net
income (loss) per diluted share available to common
stockholders
|
$
|
1.05
|
|
|
$
|
(0.15)
|
|
|
$
|
0.01
|
|
|
$
|
0.90
|
|
|
$
|
—
|
|
|
$
|
(0.14)
|
|
|
$
|
—
|
|
|
$
|
(0.14)
|
|
Weighted average
diluted shares
|
2,688
|
|
|
2,688
|
|
|
2,688
|
|
|
2,688
|
|
|
2,309
|
|
|
2,309
|
|
|
2,309
|
|
|
2,309
|
|
|
________
|
(1) Represents
Pure Rooms and RED Hospitality & Leisure LLC.
|
View original
content:http://www.prnewswire.com/news-releases/ashford-reports-first-quarter-results-300642461.html
SOURCE Ashford Inc.