Provides Business and Financial Liquidity
Update
Drive Shack Inc. (the “Company”) (NYSE: DS) announced financial
results for the first quarter ended March 31, 2020. The Company
also provided an update on the impact of the COVID-19 pandemic on
its business, together with measures the Company has taken to
reduce cash expenditures.
Hana Khouri, Chief Executive Officer and President of the
Company, stated, “While it is undeniable that the pandemic presents
us with a challenge like we have never seen, we used this as an
opportunity to rationalize our business and adapt our operating
model, leaving ourselves poised to reopen safely, responsibly and
efficiently.”
“We believe these measures, coupled with our relatively
unlevered balance sheet, will distinguish us from other
experiential businesses and provide a platform for solid growth
going forward,” Khouri continued.
Business Update
By the end of March, all 4 of the Company’s golf entertainment
venues and 57 of 61 of its owned, leased or managed traditional
golf courses were closed as mandated shutdowns and stay-at-home
orders went into effect across the country.
As it prepares for reopening golf entertainment venues, the
Company remains focused on safeguarding the health of its
employees, guests and communities. It has invested in supplies and
protocols intended to keep guests and employees safe and
comfortable, including antibody testing, temperature checks, masks
and gloves.
“While we cannot predict with certainty when state governments
will give us the green light to reopen our Drive Shack venues,
early indications suggest that some locations could be open as
early as May 2020,” said Khouri.
The Company’s traditional golf business is starting to show
signs of resurgence. As of May 7, 2020, the Company has opened 31
of its 61 owned, leased or managed courses. Across the courses that
are open, demand for traditional golf appears to be strong, as
guests seek a social outlet that allows them to maintain
distance.
Financial Liquidity Update
As of April 30, 2020, the Company had approximately $14 million
of unrestricted cash on hand. In order to preserve cash savings,
the Company furloughed over 4,000 employees across operations and
the corporate office, deferred the payment of 2019 annual employee
bonuses, temporarily suspended the quarterly cash dividend on the
Company’s preferred stock and halted new construction. In addition,
the Company is in discussion with all of its landlords relating to
rent deferral and forgiveness.
First Quarter Results
(unaudited)
Three Months Ended March 31, 2020
compared to the Three Months Ended March 31, 2019
($ in thousands, except for per
share data):
Three Months Ended
March 31, 2020
March 31, 2019
Total revenues
$
61,135
$
53,952
Loss applicable to common stockholders
$
(18,757
)
$
(15,995
)
Loss applicable to Common Stock, per
share
Basic
$
(0.28
)
$
(0.24
)
Diluted
$
(0.28
)
$
(0.24
)
For the three months ended March 31, 2020, the Company reported
a loss of $19 million, or ($0.28) per share, compared to a loss of
$16 million, or ($0.24) share, in the corresponding period of the
prior year.
Conference Call Friday, May 8, 2020
Management will hold a conference call to discuss these results
Friday, May 8th at 8:00 a.m. Eastern Time. The conference call can
be accessed over the phone by dialing 1-866-913-6930 (from within
the U.S.) or 1-409-983-9881 (from outside of the U.S.) ten minutes
prior to the scheduled start of the call; please reference
conference ID “6275653.”
A copy of the earnings release will be posted to the Investor
Relations section of Drive Shack Inc.’s website,
http://ir.driveshack.com.
A simultaneous webcast of the conference call will be available
to the public on a listen-only basis at http://ir.driveshack.com.
Please allow extra time prior to the call to visit the website and
download any necessary software required to listen to the internet
broadcast. A telephonic replay of the conference call will also be
available two hours following the call’s completion through 11:30
P.M. Eastern Time on Friday, May 22, 2020 by dialing 1-800-585-8367
(from within the U.S.) or 1-404-537-3406 (from outside of the
U.S.); please reference conference ID “6275653.”
Additional Information
For additional information that management believes to be useful
for investors, please refer to the presentation posted on the
Investor Relations section of the Company’s website,
http://ir.driveshack.com. For consolidated information, please
refer to the Company’s most recent Quarterly Report on Form 10-Q or
Annual Report on Form 10-K, which are available on the Company’s
website, http://ir.driveshack.com.
About Drive Shack
Drive Shack Inc. is a leading owner and operator of golf-related
leisure and “eatertainment” businesses.
Forward-Looking Statements: The Company cautions that
this release contains forward-looking statements, including,
without limitation, statements relating to our expected results of
operations and the impact on our business and operations of the
global spread of the novel coronavirus outbreak. These
forward-looking statements involve risks and uncertainties and,
consequently, could be affected by the uncertain and unprecedented
impact of the coronavirus on our business and operations and the
related impact on our liquidity needs; our ability to continue as a
going concern; our ability to access other funding sources; the
duration of government-mandated and voluntary shutdowns; the speed
with which our venues safely can be reopened and the level of
customer demand following reopening; the economic impact of the
coronavirus and related disruptions on the communities we serve;
our overall level of indebtedness and leverage; general business
and economic conditions, including as a result of the coronavirus;
the impact of competition; the seasonality of the Company's
business; adverse weather conditions; guest and employee complaints
and litigation; labor costs and availability; changes in consumer
and corporate spending, including as a result of the coronavirus;
changes in demographic trends; changes in governmental regulations;
unfavorable publicity, our ability to open new venues, and acts of
God. Accordingly, actual results may differ materially from the
forward-looking statements, and the Company therefore cautions you
against relying on such forward-looking statements. The Company
intends these forward-looking statements to speak only as of the
time of this release and does not undertake to update or revise
them as more appropriate information becomes available, except as
required by law.
Consolidated Balance Sheets
(dollars in thousands, except share
data)
(Unaudited)
March 31, 2020
December 31,
2019
Assets
Current assets
Cash and cash equivalents
$
16,785
$
28,423
Restricted cash
3,041
3,103
Accounts receivable, net of allowance of
$904 and $1,082, respectively
4,190
5,249
Real estate assets, held-for-sale, net
16,970
16,948
Real estate securities,
available-for-sale
3,103
3,052
Other current assets
13,966
17,521
Total current assets
58,055
74,296
Restricted cash, noncurrent
513
438
Property and equipment, net of accumulated
depreciation
184,219
179,641
Operating lease right-of-use assets
212,246
215,308
Intangibles, net of accumulated
amortization
16,780
17,565
Other investments
24,365
24,020
Other assets
5,245
4,723
Total assets
$
501,423
$
515,991
Liabilities and Equity
Current liabilities
Obligations under finance leases
$
6,004
$
6,154
Membership deposit liabilities
10,784
10,791
Accounts payable and accrued expenses
31,242
25,877
Deferred revenue
25,118
26,268
Real estate liabilities, held-for-sale
4
4
Other current liabilities
23,367
23,964
Total current liabilities
96,519
93,058
Credit facilities and obligations under
finance leases - noncurrent
12,468
13,125
Operating lease liabilities -
noncurrent
185,802
187,675
Junior subordinated notes payable
51,190
51,192
Membership deposit liabilities,
noncurrent
97,648
95,805
Deferred revenue, noncurrent
6,389
6,283
Other liabilities
3,496
3,278
Total liabilities
$
453,512
$
450,416
Commitments and contingencies
Equity
Preferred stock, $0.01 par value,
100,000,000 shares authorized, 1,347,321 shares of 9.75% Series B
Cumulative Redeemable Preferred Stock, 496,000 shares of 8.05%
Series C Cumulative Redeemable Preferred Stock, and 620,000 shares
of 8.375% Series D Cumulative Redeemable Preferred Stock,
liquidation preference $25.00 per share, issued and outstanding as
of March 31, 2020 and December 31, 2019
61,583
61,583
Common stock, $0.01 par value,
1,000,000,000 shares authorized, 67,070,513 and 67,068,751 shares
issued and outstanding at March 31, 2020 and December 31, 2019,
respectively
671
671
Additional paid-in capital
3,177,384
3,177,183
Accumulated deficit
(3,193,399
)
(3,175,572
)
Accumulated other comprehensive income
1,672
1,710
Total equity
$
47,911
$
65,575
Total liabilities and equity
$
501,423
$
515,991
Consolidated Statements of
Operations (unaudited)
(dollars in thousands, except
share data)
Three Months Ended March
31,
2020
2019
Revenues
Golf operations
$
48,625
$
44,706
Sales of food and beverages
12,510
9,246
Total revenues
61,135
53,952
Operating costs
Operating expenses
54,367
47,723
Cost of sales - food and beverages
3,655
2,698
General and administrative expense
9,818
11,619
Depreciation and amortization
6,794
4,924
Pre-opening costs
552
1,179
Impairment and other losses
792
4,088
Total operating costs
75,978
72,231
Operating loss
(14,843
)
(18,279
)
Other income (expenses)
Interest and investment income
130
344
Interest expense, net
(2,745
)
(2,153
)
Other income (loss), net
367
5,488
Total other income (expenses)
(2,248
)
3,679
Loss before income tax
(17,091
)
(14,600
)
Income tax expense
271
—
Net Loss
(17,362
)
(14,600
)
Preferred dividends
(1,395
)
(1,395
)
Loss Applicable to Common
Stockholders
$
(18,757
)
$
(15,995
)
Loss Applicable to Common Stock, per
share
Basic
$
(0.28
)
$
(0.24
)
Diluted
$
(0.28
)
$
(0.24
)
Weighted Average Number of Shares of
Common Stock Outstanding
Basic
67,069,534
67,027,104
Diluted
67,069,534
67,027,104
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507006242/en/
For Investor Relations Inquiries: Austin Pruitt Head of
Investor Relations 646-585-5591 IR@driveshack.com
Drive Shack (NYSE:DS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Drive Shack (NYSE:DS)
Historical Stock Chart
From Jul 2023 to Jul 2024