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| NEWS RELEASE |
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| Contact: | | Deric Eubanks | | Jordan Jennings | | Joe Calabrese |
| | Chief Financial Officer | | Investor Relations | | Financial Relations Board |
| | (972) 490-9600 | | (972) 778-9487 | | (212) 827-3772 |
ASHFORD REPORTS THIRD QUARTER 2022 RESULTS
Gross Assets Under Management $8.1 Billion at Quarter End
Net Loss Attributable to Common Stockholders was $(10.0) Million
Adjusted EBITDA Increased 31% to $16.4 Million
Trailing 12-Month Adjusted EBITDA Through the Third Quarter was $76 Million
Adjusted Net Income Per Share Increased 33% to $1.48
DALLAS, November 2, 2022 - Ashford Inc., an alternative asset management company with a portfolio of strategic operating businesses (NYSE American: AINC) (“Ashford” or the “Company”), today reported the following results and performance measures for the third quarter ended September 30, 2022. Unless otherwise stated, all reported results compare the third quarter ended September 30, 2022, with the third quarter ended September 30, 2021 (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
•Four paths to growth:
◦Recovery of the hospitality industry;
◦Increase assets under management (AUM);
◦Growth of third-party business; and
◦Acquisition or incubation of additional businesses
•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 quarter was $(10.0) million, or $(3.38) per diluted share. Adjusted net income for the quarter was $11.8 million, or $1.48 per diluted share. The Adjusted net income per diluted share result reflects a 33% growth rate over the prior year quarter.
•Total revenue, excluding cost reimbursement revenue, for the quarter was $68.0 million, reflecting a 41% growth rate over the prior year quarter.
•Adjusted EBITDA for the quarter was $16.4 million, reflecting a 31% growth rate over the prior year quarter.
•Adjusted EBITDA on a trailing 12-month basis as of the end of the quarter was $75.8 million.
•At the end of the third quarter, the Company had approximately $8.1 billion of gross assets under management.
•At the end of the third quarter, the Company’s advised REITs had total net working capital of $932 million.
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November 2, 2022
•As of September 30, 2022, the Company had corporate cash of approximately $29.3 million.
ASHFORD SECURITIES UPDATE
The Company formed Ashford Securities as a dedicated capital raising platform to fund investment opportunities sponsored and asset-managed by Ashford. Ashford Securities currently has three offerings in the market: a non-traded preferred equity security for Braemar Hotels & Resorts Inc. (“Braemar”) (NYSE: BHR), a non-traded preferred equity security for Ashford Hospitality Trust, Inc. (“Ashford Trust”) (NYSE: AHT), and a growth oriented private offering that will target investments in all types of commercial real estate in the state of Texas. To date, Ashford Securities has placed approximately $289 million of Braemar’s non-traded preferred stock.
Long term, the Company believes there is a substantial opportunity to grow its assets under management by offering differentiated alternative investment products through Ashford Securities to help investors further diversify their portfolios.
REMINGTON UPDATE
Remington’s high-margin, low-capex Hotel Management business continues to benefit from the recovery in the lodging industry and expand its third-party business. In the third quarter, Remington generated hotel management fee revenue of $12.9 million, Net Income Attributable to the Company of $2.4 million, and Adjusted EBITDA of $6.8 million. Third quarter Adjusted EBITDA growth was 64% over the prior year quarter.
As previously announced, during the second quarter 2022, Remington acquired privately held Chesapeake Hospitality, a premier third-party hotel management company. The strategic transaction increased the scale and scope of Remington’s hotel management business while expanding Remington’s geographic footprint to complementary Midwestern markets, including Pittsburgh, Milwaukee, Detroit, and St. Louis. Further, the acquisition added several IHG Hotels & Resorts to its portfolio, as well as the 877-key Showboat Atlantic City, which is now the largest hotel in Remington’s portfolio. The combined company is operating under the Remington brand and is focused on leveraging its enhanced scale to pursue profitable growth opportunities, including the continued expansion of hotel management to third parties.
This transaction significantly diversified Remington’s client base and grew its mix of third-party managed hotels, which currently account for approximately 38% of managed hotels. At the end of the third quarter, Remington managed 117 properties that were open and operating – 44 under third-party management agreements and 73 for Ashford, Ashford Trust and Braemar – located in 27 states and Washington, D.C. across 23 brands, including 18 independent and boutique properties.
INSPIRE UPDATE
INSPIRE provides an integrated suite of audio visual services, including show and event services, hospitality services, creative services, and design and integration, making INSPIRE a leading single-source solution for its clients’ meeting and event needs. INSPIRE has seen its hospitality business rebound very strongly over the past two quarters as both corporate and social groups have been eager to gather. It has seen a similar recovery in its show services segment. During the third quarter of 2022, INSPIRE had revenue of $26.2 million, Net Loss Attributable to the Company of $(0.2) million, and Adjusted EBITDA of $2.0 million. Third quarter revenue growth was 73% over the prior year quarter.
PREMIER UPDATE
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. Premier is responsible for managing and implementing substantially all capital improvements at Ashford Trust and Braemar hotels.
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November 2, 2022
Additionally, it has extensive experience working with major hotel brands in renovating, converting, developing and repositioning hotels. Similar to Remington, Premier has also made a concerted effort to grow its third-party business, and to date, Premier has signed 44 third-party engagements, totaling $12.2 million in fees. In the third quarter, Premier generated $6.3 million of design and construction fee revenue, Net Income Attributable to the Company of $0.1 million, and Adjusted EBITDA of $3.3 million.
RED HOSPITALITY & LEISURE UPDATE
RED Hospitality is a leading provider of watersports activities and other travel and transportation services in the U.S. Virgin Islands (“USVI”), Puerto Rico, Florida and Turks & Caicos. RED Hospitality has continued to benefit from the resurgence in leisure travel and the desire of consumers for unique and memorable experiences. RED Hospitality has several opportunities for expansion into additional Ashford-advised and third-party hotels in the USVI, elsewhere in the Caribbean, and in U.S. coastal markets. Despite the short-term impact of Hurricanes Ian and Fiona in the third quarter, RED Hospitality generated $6.6 million of revenue, Net Income Attributable to the Company of $0.5 million, and $1.4 million of Adjusted EBITDA.
FINANCIAL RESULTS
Net loss attributable to common stockholders for the quarter totaled $(10.0) million, or $(3.38) per diluted share. Adjusted net income for the quarter was $11.8 million, or $1.48 per diluted share.
For the quarter ended September 30, 2022, base advisory fee revenue was $12.1 million. The base advisory fee revenue in the third quarter was comprised of $8.9 million from Ashford Trust and $3.3 million from Braemar.
Adjusted EBITDA for the quarter was $16.4 million, reflecting a growth rate of 31% over the prior year quarter.
CAPITAL STRUCTURE
At the end of the third quarter of 2022, the Company had approximately $8.1 billion of gross assets under management from its advised platforms. The Company had corporate cash of $29.3 million and 7.6 million fully diluted shares. The Company’s fully diluted shares include 4.1 million common shares associated with its Series D convertible preferred stock. The Company had $98.4 million of loans as of September 30, 2022, of which approximately $45,000 related to its joint venture partners’ share of such loans.
As previously announced, the Company closed on a $100 million strategic corporate financing during the second quarter 2022. The Corporate Term Loan (the “Loan”) has an initial term of five years with three, one-year extension options subject to the satisfaction of certain conditions and bears interest at a rate of LIBOR + 7.35%. At closing, the Company drew down $50 million on the Loan and has the option to draw the additional $50 million until April 2024. The Company currently has $70 million drawn on the Loan. The proceeds of the Loan were used to pay off the Company’s existing term loan and for general corporate purposes. Future proceeds will be used for general corporate purposes, including potential acquisitions.
QUARTERLY HIGHLIGHTS FOR ADVISED PLATFORMS
ASHFORD TRUST HIGHLIGHTS
•Reported Adjusted EBITDAre of $82.1 million for the third quarter.
•Now has an effective registration statement and has commenced the offering for its Series J and Series K Redeemable Preferred Stock.
Ashford Reports Third Quarter Results
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November 2, 2022
BRAEMAR HOTELS & RESORTS HIGHLIGHTS
•Reported Adjusted EBITDAre of $34.0 million for the third quarter.
•Third quarter RevPAR for Braemar was $288, which exceeded third quarter 2019 RevPAR by 19%.
•To date, Braemar has issued approximately $289 million of its non-traded preferred stock.
•Announced agreement to acquire the Four Seasons Resort Scottsdale at Troon North for $267.8 million.
“Ashford delivered strong third quarter results, and we remain confident that the Ashford group of companies is well-positioned to capitalize on the recovery we continue to see in the hospitality industry,” commented Monty J. Bennett, Ashford’s Chairman and Chief Executive Officer. “Looking at our advised platforms, our REITs are well positioned and both continue to benefit from the strong demand trends we are seeing across the lodging industry. Braemar has the highest quality portfolio in the public markets and has been benefiting from its resort-heavy focus while its urban hotels continue to significantly ramp up as corporate transient and group demand rebound. Ashford Trust’s high-quality, geographically diverse portfolio is also benefiting from increased demand and notable rate increases in many key markets. I was also pleased to see that Ashford Trust RevPAR performance in September represents its first positive month versus 2019. Looking ahead, we believe both of our advised REITs are poised for further growth in 2022 and beyond.”
Mr. Bennett continued, “Our growth in the quarter was led by Premier, which continues to benefit from the ramp up in capital spending at our advised REITs and expansion of its third-party business. Remington and INSPIRE also continue to benefit from the strong demand trends we are seeing in the lodging industry. We remain pleased that Ashford Securities continues to accelerate the pace at which our advised platforms can raise capital, and are very excited about our first investment offering outside of the hospitality industry.” Mr. Bennett added, “Moving forward, we believe demand trends will continue to be strong and we believe the lodging industry and our advised REITs remain well-positioned for growth. Additionally, the corporate financing that we closed earlier this year gives us access to attractive capital to continue to grow our platform and consider additional strategic bolt-on acquisitions. With our talented and dedicated management team, I am excited about the future prospects for our Company.”
INVESTOR CONFERENCE CALL AND SIMULCAST
The Company will conduct a conference call on Thursday, November 3, 2022, at 1:00 p.m. ET. The number to call for this interactive teleconference is (201) 689-8263. A replay of the conference call will be available through Thursday, November 10, 2022, by dialing (412) 317-6671 and entering the confirmation number, 13732688.
The Company will also provide an online simulcast and rebroadcast of its third quarter 2022 earnings release conference call. The live broadcast of the Company’s quarterly conference call will be available online at the Company’s website, www.ashfordinc.com on Thursday, November 3, 2022, beginning at 1:00 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. We calculate Adjusted EBITDA by subtracting or adding to net income (loss): interest expense, income taxes, depreciation, amortization, net income (loss) to noncontrolling
Ashford Reports Third Quarter Results
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November 2, 2022
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 Reports on Form 8-K.
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 is an alternative asset management company with a portfolio of strategic operating businesses that provides global asset management, investment management and related services to the real estate and hospitality sectors.
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. Forward-looking statements in this press release include, among others, statements about the Company’s strategy and future plans. These forward-looking statements are subject to risks and uncertainties. When we use the words “will likely result,” “may,” “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: the impact of COVID-19, including one or more possible recurrences of COVID-19 case surges that would cause state and local governments to reinstate travel restrictions and the rate of adoption and efficacy of vaccines to prevent COVID-19, on our business and investment strategy; our ability to maintain compliance with NYSE American LLC continued listing standards; our ability to regain Form S-3 eligibility; our ability to repay, refinance or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in the Company’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. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. 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, except to the extent required by law.
ASHFORD INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts) | | | | | | | | | | | |
| September 30, 2022 | | December 31, 2021 |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 44,071 | | | $ | 37,571 | |
| Restricted cash | 37,114 | | | 34,878 | |
| Restricted investment | 348 | | | 576 | |
| | | |
| Accounts receivable, net | 19,458 | | | 10,502 | |
| Due from affiliates | 256 | | | 165 | |
| Due from Ashford Trust | 4,483 | | | 2,575 | |
| Due from Braemar | 9,562 | | | 1,144 | |
| | | |
| Inventories | 1,853 | | | 1,555 | |
| Prepaid expenses and other | 5,760 | | | 9,490 | |
| | | |
| Total current assets | 122,905 | | | 98,456 | |
| Investments in unconsolidated entities | 3,941 | | | 3,581 | |
| Property and equipment, net | 81,471 | | | 83,566 | |
| Operating lease right-of-use assets | 24,800 | | | 26,975 | |
| | | |
| Goodwill | 58,675 | | | 56,622 | |
| Intangible assets, net | 233,031 | | | 244,726 | |
| Other assets, net | 376 | | | 870 | |
| Total assets | $ | 525,199 | | | $ | 514,796 | |
| LIABILITIES | | | |
| Current liabilities: | | | |
| Accounts payable and accrued expenses | $ | 47,751 | | | $ | 39,897 | |
| Dividends payable | 26,777 | | | 34,574 | |
| Due to affiliates | 236 | | | — | |
| | | |
| | | |
| | | |
| Deferred income | 426 | | | 2,937 | |
| | | |
| Notes payable, net | 5,046 | | | 6,725 | |
| Finance lease liabilities | 2,441 | | | 1,065 | |
| Operating lease liabilities | 3,880 | | | 3,628 | |
| Other liabilities | 26,644 | | | 25,899 | |
| Total current liabilities | 113,201 | | | 114,725 | |
| | | |
| Deferred income | 7,537 | | | 7,968 | |
| Deferred tax liability, net | 28,516 | | | 32,848 | |
| Deferred compensation plan | 2,759 | | | 3,326 | |
| Notes payable, net | 88,961 | | | 52,669 | |
| Finance lease liabilities | 41,915 | | | 43,479 | |
| Operating lease liabilities | 21,041 | | | 23,477 | |
| Other liabilities | 2,876 | | | — | |
| Total liabilities | 306,806 | | | 278,492 | |
| | | |
| MEZZANINE EQUITY | | | |
| Series D Convertible Preferred Stock, $0.001 par value, 19,120,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 478,000 | | | 478,000 | |
| Redeemable noncontrolling interests | 1,732 | | | 69 | |
| EQUITY (DEFICIT) | | | |
| | | |
| | | |
| Common stock, 100,000,000 shares authorized, $0.001 par value, 3,182,033 and 3,072,688 shares issued and 3,115,061 and 3,023,002 shares outstanding at September 30, 2022 and December 31, 2021, respectively | 3 | | | 3 | |
| Additional paid-in capital | 297,069 | | | 294,395 | |
| Accumulated deficit | (557,635) | | | (534,999) | |
| Accumulated other comprehensive income (loss) | (471) | | | (1,206) | |
| Treasury stock, at cost, 66,972 and 49,686 shares at September 30, 2022 and December 31, 2021, respectively | (877) | | | (596) | |
| Total equity (deficit) of the Company | (261,911) | | | (242,403) | |
| Noncontrolling interests in consolidated entities | 572 | | | 638 | |
| Total equity (deficit) | (261,339) | | | (241,765) | |
| Total liabilities and equity (deficit) | $ | 525,199 | | | $ | 514,796 | |
ASHFORD INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| REVENUE | | | | | | | |
| Advisory services fees: | | | | | | | |
| Base advisory fees | $ | 12,124 | | | $ | 10,012 | | | $ | 35,637 | | | $ | 29,743 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Other advisory revenue | 131 | | | 131 | | | 389 | | | 389 | |
| Hotel management fees: | | | | | | | |
| Base management fees | 9,285 | | | 6,166 | | | 24,943 | | | 15,331 | |
| Incentive management fees | 2,242 | | | 1,584 | | | 6,113 | | | 3,406 | |
| | | | | | | |
| | | | | | | |
| Other management fees | 1,349 | | | — | | | 2,418 | | | — | |
| Design and construction fees | 6,276 | | | 2,202 | | | 15,538 | | | 5,611 | |
| | | | | | | |
| Audio visual | 26,159 | | | 15,108 | | | 87,101 | | | 28,170 | |
| Other | 10,391 | | | 13,104 | | | 33,902 | | | 35,899 | |
| Cost reimbursement revenue | 96,651 | | | 59,879 | | | 259,979 | | | 137,417 | |
| Total revenues | 164,608 | | | 108,186 | | | 466,020 | | | 255,966 | |
| EXPENSES | | | | | | | |
| Salaries and benefits | 19,454 | | | 12,877 | | | 51,686 | | | 43,956 | |
| Stock/unit-based compensation | 1,921 | | | 910 | | | 3,591 | | | 3,650 | |
| Cost of revenues for design and construction | 1,789 | | | 1,032 | | | 5,905 | | | 2,812 | |
| Cost of revenues for audio visual | 19,884 | | | 11,353 | | | 61,042 | | | 22,611 | |
| Depreciation and amortization | 8,096 | | | 8,056 | | | 23,740 | | | 24,454 | |
| General and administrative | 8,343 | | | 7,591 | | | 25,425 | | | 18,799 | |
| Impairment | — | | | 1,160 | | | — | | | 1,160 | |
| Other | 5,750 | | | 4,758 | | | 16,886 | | | 13,428 | |
| Reimbursed expenses | 96,576 | | | 59,822 | | | 259,665 | | | 137,154 | |
| Total operating expenses | 161,813 | | | 107,559 | | | 447,940 | | | 268,024 | |
| OPERATING INCOME (LOSS) | 2,795 | | | 627 | | | 18,080 | | | (12,058) | |
| | | | | | | |
| | | | | | | |
| Equity in earnings (loss) of unconsolidated entities | (147) | | | 12 | | | 110 | | | (160) | |
| Interest expense | (2,966) | | | (1,290) | | | (6,781) | | | (3,845) | |
| Amortization of loan costs | (219) | | | (78) | | | (524) | | | (209) | |
| Interest income | 76 | | | 72 | | | 195 | | | 207 | |
| | | | | | | |
| | | | | | | |
| Realized gain (loss) on investments | (3) | | | 370 | | | (74) | | | (3) | |
| Other income (expense) | (22) | | | 29 | | | (134) | | | (256) | |
| INCOME (LOSS) BEFORE INCOME TAXES | (486) | | | (258) | | | 10,872 | | | (16,324) | |
| Income tax (expense) benefit | (617) | | | (98) | | | (5,971) | | | 1,550 | |
| NET INCOME (LOSS) | (1,103) | | | (356) | | | 4,901 | | | (14,774) | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | 272 | | | 180 | | | 830 | | | 509 | |
| Net (income) loss attributable to redeemable noncontrolling interests | (158) | | | 13 | | | (290) | | | 208 | |
| NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | (989) | | | (163) | | | 5,441 | | | (14,057) | |
| Preferred dividends, declared and undeclared | (9,029) | | | (8,762) | | | (27,422) | | | (26,001) | |
| Amortization of preferred stock discount | — | | | (306) | | | — | | | (933) | |
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | (10,018) | | | $ | (9,231) | | | $ | (21,981) | | | $ | (40,991) | |
| | | | | | | |
| INCOME (LOSS) PER SHARE - BASIC AND DILUTED | | | | | | | |
| Basic: | | | | | | | |
| Net income (loss) attributable to common stockholders | $ | (3.38) | | | $ | (3.31) | | | $ | (7.59) | | | $ | (14.93) | |
| Weighted average common shares outstanding - basic | 2,960 | | | 2,785 | | | 2,895 | | | 2,746 | |
| Diluted: | | | | | | | |
| Net income (loss) attributable to common stockholders | $ | (3.38) | | | $ | (3.64) | | | $ | (7.64) | | | $ | (14.93) | |
| Weighted average common shares outstanding - diluted | 2,960 | | | 2,982 | | | 2,960 | | | 2,746 | |
| | | | | | | |
| | | | | | | |
ASHFORD INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| Net income (loss) | $ | (1,103) | | | $ | (356) | | | $ | 4,901 | | | $ | (14,774) | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | 272 | | | 180 | | | 830 | | | 509 | |
| Net (income) loss attributable to redeemable noncontrolling interests | (158) | | | 13 | | | (290) | | | 208 | |
| Net income (loss) attributable to the company | (989) | | | (163) | | | 5,441 | | | (14,057) | |
| Interest expense | 2,967 | | | 1,324 | | | 6,783 | | | 3,881 | |
| Amortization of loan costs | 219 | | | 78 | | | 524 | | | 214 | |
| Depreciation and amortization | 9,603 | | | 9,298 | | | 27,782 | | | 28,346 | |
| Income tax expense (benefit) | 617 | | | 98 | | | 5,971 | | | (1,550) | |
| | | | | | | |
| Net income (loss) attributable to unitholders redeemable noncontrolling interests | 158 | | | (13) | | | 290 | | | (56) | |
| EBITDA | 12,575 | | | 10,622 | | | 46,791 | | | 16,778 | |
| Deferred compensation plans | (78) | | | (1,611) | | | (567) | | | 1,190 | |
| Stock/unit-based compensation | 1,912 | | | 860 | | | 3,663 | | | 4,041 | |
| Change in contingent consideration fair value | 300 | | | — | | | 300 | | | 22 | |
| Transaction costs | 501 | | | 745 | | | 2,369 | | | 2,237 | |
| | | | | | | |
| Loss on disposal of assets | 58 | | | 157 | | | 822 | | | 1,323 | |
| | | | | | | |
| Reimbursed software costs, net | (75) | | | (113) | | | (312) | | | (320) | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Legal, advisory and settlement costs | 300 | | | 800 | | | 1,163 | | | 1,652 | |
| Severance and executive recruiting costs | 731 | | | 340 | | | 1,459 | | | 1,045 | |
| | | | | | | |
| Amortization of hotel signing fees and lock subsidies | 160 | | | 135 | | | 511 | | | 377 | |
| Other (gain) loss | 27 | | | (529) | | | 156 | | | (605) | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Impairment | — | | | 1,160 | | | — | | | 1,160 | |
| | | | | | | |
| Adjusted EBITDA | $ | 16,411 | | | $ | 12,566 | | | $ | 56,355 | | | $ | 28,900 | |
ASHFORD INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME (LOSS)
(unaudited, in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| Net income (loss) | $ | (1,103) | | | $ | (356) | | | $ | 4,901 | | | $ | (14,774) | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | 272 | | | 180 | | | 830 | | | 509 | |
| Net (income) loss attributable to redeemable noncontrolling interests | (158) | | | 13 | | | (290) | | | 208 | |
| Preferred dividends, declared and undeclared | (9,029) | | | (8,762) | | | (27,422) | | | (26,001) | |
| Amortization of preferred stock discount | — | | | (306) | | | — | | | (933) | |
| Net income (loss) attributable to common stockholders | (10,018) | | | (9,231) | | | (21,981) | | | (40,991) | |
| Amortization of loan costs | 219 | | | 78 | | | 524 | | | 214 | |
| Depreciation and amortization | 9,603 | | | 9,298 | | | 27,782 | | | 28,346 | |
| Net income (loss) attributable to unitholders redeemable noncontrolling interests | 158 | | | (13) | | | 290 | | | (56) | |
| Preferred dividends, declared and undeclared | 9,029 | | | 8,762 | | | 27,422 | | | 26,001 | |
| Amortization of preferred stock discount | — | | | 306 | | | — | | | 933 | |
| Deferred compensation plans | (78) | | | (1,611) | | | (567) | | | 1,190 | |
| Stock/unit-based compensation | 1,912 | | | 860 | | | 3,663 | | | 4,041 | |
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| Change in contingent consideration fair value | 300 | | | — | | | 300 | | | 22 | |
| Transaction costs | 501 | | | 745 | | | 2,369 | | | 2,237 | |
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| Loss on disposal of assets | 58 | | | 157 | | | 822 | | | 1,323 | |
| Non-cash interest from finance lease | 160 | | | 200 | | | 487 | | | 501 | |
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| Reimbursed software costs, net | (75) | | | (113) | | | (312) | | | (320) | |
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| Legal, advisory and settlement costs | 300 | | | 800 | | | 1,163 | | | 1,652 | |
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| Severance and executive recruiting costs | 731 | | | 340 | | | 1,459 | | | 1,045 | |
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| Amortization of hotel signing fees and lock subsidies | 160 | | | 135 | | | 511 | | | 377 | |
| Other (gain) loss | 27 | | | (529) | | | 156 | | | (605) | |
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| Impairment | — | | | 1,160 | | | — | | | 1,160 | |
| GAAP income tax expense (benefit) | 617 | | | 98 | | | 5,971 | | | (1,550) | |
Adjusted income tax (expense) benefit (1) | (1,825) | | | (3,062) | | | (9,593) | | | (3,618) | |
| Adjusted net income available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis | $ | 11,779 | | | $ | 8,380 | | | $ | 40,466 | | | $ | 21,902 | |
| Adjusted net income per diluted share available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis | $ | 1.48 | | | $ | 1.11 | | | $ | 5.24 | | | $ | 2.94 | |
| Weighted average diluted shares | 7,932 | | | 7,570 | | | 7,729 | | | 7,448 | |
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| Components of weighted average diluted shares | | | | | | | |
| Common shares | 2,960 | | | 2,785 | | | 2,895 | | | 2,746 | |
| Series D convertible preferred stock | 4,221 | | | 4,284 | | | 4,218 | | | 4,246 | |
| Deferred compensation plan | 205 | | | 197 | | | 203 | | | 198 | |
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| Acquisition related shares | 376 | | | 140 | | | 269 | | | 152 | |
| Restricted shares and units | 170 | | | 164 | | | 144 | | | 106 | |
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| Weighted average diluted shares | 7,932 | | | 7,570 | | | 7,729 | | | 7,448 | |
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| Reconciliation of income tax expense (benefit) to adjusted income tax (expense) benefit | | | | | | | |
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| GAAP income tax (expense) benefit | $ | (617) | | | $ | (98) | | | $ | (5,971) | | | $ | 1,550 | |
| Less deferred income tax (expense) benefit | 1,208 | | | 2,964 | | | 3,622 | | | 5,168 | |
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Adjusted income tax (expense) benefit (1) | $ | (1,825) | | | $ | (3,062) | | | $ | (9,593) | | | $ | (3,618) | |
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(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 products and services businesses, and (ii) provides more useful information to investors regarding our economic performance. See Note 16 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.
ASHFORD INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS) BY SEGMENT
(unaudited, in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 | | Three Months Ended September 30, 2021 |
| REIT Advisory | | Products & Services | | Corporate/ Other | | Ashford Inc. Consolidated | | REIT Advisory | | Products & Services | | Corporate/ Other | | Ashford Inc. Consolidated |
| REVENUE | | | | | | | | | | | | | | | |
| Advisory services fees: | | | | | | | | | | | | | | | |
| Base advisory fees - Trust | $ | 8,855 | | | $ | — | | | $ | — | | | $ | 8,855 | | | $ | 7,254 | | | $ | — | | | $ | — | | | $ | 7,254 | |
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| Base advisory fees - Braemar | 3,269 | | | — | | | — | | | 3,269 | | | 2,758 | | | — | | | — | | | 2,758 | |
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| Other advisory revenue - Braemar | 131 | | | — | | | — | | | 131 | | | 131 | | | — | | | — | | | 131 | |
| Hotel management fees: | | | | | | | | | | | | | | | |
| Base management fees | — | | | 9,285 | | | — | | | 9,285 | | | — | | | 6,166 | | | — | | | 6,166 | |
| Incentive management fees | — | | | 2,242 | | | — | | | 2,242 | | | — | | | 1,584 | | | — | | | 1,584 | |
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| Other management fees | — | | | 1,349 | | | — | | | 1,349 | | | — | | | — | | | — | | | — | |
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| Design and construction fees | — | | | 6,276 | | | — | | | 6,276 | | | — | | | 2,202 | | | — | | | 2,202 | |
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| Audio visual | — | | | 26,159 | | | — | | | 26,159 | | | — | | | 15,108 | | | — | | | 15,108 | |
| Other | — | | | 10,391 | | | — | | | 10,391 | | | 28 | | | 13,076 | | | — | | | 13,104 | |
| Cost reimbursement revenue | 7,798 | | | 84,232 | | | 4,621 | | | 96,651 | | | 7,765 | | | 51,250 | | | 864 | | | 59,879 | |
| Total revenues | 20,053 | | | 139,934 | | | 4,621 | | | 164,608 | | | 17,936 | | | 89,386 | | | 864 | | | 108,186 | |
| EXPENSES | | | | | | | | | | | | | | | |
| Salaries and benefits | — | | | 11,099 | | | 8,433 | | | 19,532 | | | — | | | 7,164 | | | 7,324 | | | 14,488 | |
| Deferred compensation plans | — | | | 17 | | | (95) | | | (78) | | | — | | | — | | | (1,611) | | | (1,611) | |
| Stock/unit-based compensation | — | | | 93 | | | 1,828 | | | 1,921 | | | — | | | 85 | | | 825 | | | 910 | |
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| Cost of audio visual revenues | — | | | 19,884 | | | — | | | 19,884 | | | — | | | 11,353 | | | — | | | 11,353 | |
| Cost of design and construction revenues | — | | | 1,789 | | | — | | | 1,789 | | | — | | | 1,032 | | | — | | | 1,032 | |
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| Depreciation and amortization | 853 | | | 7,179 | | | 64 | | | 8,096 | | | 980 | | | 7,000 | | | 76 | | | 8,056 | |
| General and administrative | — | | | 6,593 | | | 1,750 | | | 8,343 | | | — | | | 4,776 | | | 2,815 | | | 7,591 | |
| Impairment | — | | | — | | | — | | | — | | | — | | | 1,160 | | | — | | | 1,160 | |
| Other | — | | | 5,750 | | | — | | | 5,750 | | | 26 | | | 4,724 | | | 8 | | | 4,758 | |
| Reimbursed expenses | 3,147 | | | 84,170 | | | 4,621 | | | 91,938 | | | 2,304 | | | 51,156 | | | 864 | | | 54,324 | |
| REIT stock/unit-based compensation | 4,576 | | | 62 | | | — | | | 4,638 | | | 5,404 | | | 94 | | | — | | | 5,498 | |
| Total operating expenses | 8,576 | | | 136,636 | | | 16,601 | | | 161,813 | | | 8,714 | | | 88,544 | | | 10,301 | | | 107,559 | |
| OPERATING INCOME (LOSS) | 11,477 | | | 3,298 | | | (11,980) | | | 2,795 | | | 9,222 | | | 842 | | | (9,437) | | | 627 | |
| Other | — | | | (1,386) | | | (1,895) | | | (3,281) | | | — | | | (593) | | | (292) | | | (885) | |
| INCOME (LOSS) BEFORE INCOME TAXES | 11,477 | | | 1,912 | | | (13,875) | | | (486) | | | 9,222 | | | 249 | | | (9,729) | | | (258) | |
| Income tax (expense) benefit | (2,849) | | | (119) | | | 2,351 | | | (617) | | | (2,011) | | | (516) | | | 2,429 | | | (98) | |
| NET INCOME (LOSS) | 8,628 | | | 1,793 | | | (11,524) | | | (1,103) | | | 7,211 | | | (267) | | | (7,300) | | | (356) | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | — | | | 272 | | | — | | | 272 | | | — | | | 180 | | | — | | | 180 | |
| Net (income) loss attributable to redeemable noncontrolling interests | — | | | — | | | (158) | | | (158) | | | — | | | — | | | 13 | | | 13 | |
| NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | $ | 8,628 | | | $ | 2,065 | | | $ | (11,682) | | | $ | (989) | | | $ | 7,211 | | | $ | (87) | | | $ | (7,287) | | | $ | (163) | |
| Interest expense | — | | | 1,166 | | | 1,801 | | | 2,967 | | | — | | | 1,056 | | | 268 | | | 1,324 | |
| Amortization of loan costs | — | | | 33 | | | 186 | | | 219 | | | — | | | 55 | | | 23 | | | 78 | |
| Depreciation and amortization | 853 | | | 8,686 | | | 64 | | | 9,603 | | | 980 | | | 8,242 | | | 76 | | | 9,298 | |
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| Income tax expense (benefit) | 2,849 | | | 119 | | | (2,351) | | | 617 | | | 2,011 | | | 516 | | | (2,429) | | | 98 | |
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| Net income (loss) attributable to unitholders redeemable noncontrolling interests | — | | | — | | | 158 | | | 158 | | | — | | | — | | | (13) | | | (13) | |
| EBITDA | 12,330 | | | 12,069 | | | (11,824) | | | 12,575 | | | 10,202 | | | 9,782 | | | (9,362) | | | 10,622 | |
| Deferred compensation plans | — | | | 17 | | | (95) | | | (78) | | | — | | | — | | | (1,611) | | | (1,611) | |
| Stock/unit-based compensation | — | | | 84 | | | 1,828 | | | 1,912 | | | — | | | 36 | | | 824 | | | 860 | |
| Change in contingent consideration fair value | — | | | 300 | | | — | | | 300 | | | — | | | — | | | — | | | — | |
| Transaction costs | — | | | 682 | | | (181) | | | 501 | | | — | | | 169 | | | 576 | | | 745 | |
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| Loss on disposal of assets | — | | | 58 | | | — | | | 58 | | | 26 | | | 131 | | | — | | | 157 | |
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| Reimbursed software costs, net | (75) | | | — | | | — | | | (75) | | | (113) | | | — | | | — | | | (113) | |
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| Legal, advisory and settlement costs | — | | | 78 | | | 222 | | | 300 | | | — | | | 10 | | | 790 | | | 800 | |
| Severance and executive recruiting costs | — | | | 24 | | | 707 | | | 731 | | | — | | | 26 | | | 314 | | | 340 | |
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| Amortization of hotel signing fees and lock subsidies | — | | | 160 | | | — | | | 160 | | | — | | | 135 | | | — | | | 135 | |
| Other (gain) loss | — | | | 27 | | | — | | | 27 | | | — | | | (532) | | | 3 | | | (529) | |
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| Impairment | — | | | — | | | — | | | — | | | — | | | 1,160 | | | — | | | 1,160 | |
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| Adjusted EBITDA | 12,255 | | | 13,499 | | | (9,343) | | | 16,411 | | | 10,115 | | | 10,917 | | | (8,466) | | | 12,566 | |
| Interest expense | — | | | (1,166) | | | (1,801) | | | (2,967) | | | — | | | (1,056) | | | (268) | | | (1,324) | |
| Non-cash interest from finance lease | — | | | 160 | | | — | | | 160 | | | — | | | 200 | | | — | | | 200 | |
| Adjusted income tax (expense) benefit | (3,022) | | | (1,817) | | | 3,014 | | | (1,825) | | | (2,200) | | | (1,236) | | | 374 | | | (3,062) | |
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| Adjusted net income (loss) available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis | $ | 9,233 | | | $ | 10,676 | | | $ | (8,130) | | | $ | 11,779 | | | $ | 7,915 | | | $ | 8,825 | | | $ | (8,360) | | | $ | 8,380 | |
Adjusted net income (loss) per diluted share available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis (1) | $ | 1.16 | | | $ | 1.35 | | | $ | (1.02) | | | $ | 1.48 | | | $ | 1.05 | | | $ | 1.17 | | | $ | (1.10) | | | $ | 1.11 | |
| Weighted average diluted shares | 7,932 | | | 7,932 | | | 7,932 | | | 7,932 | | | 7,570 | | | 7,570 | | | 7,570 | | | 7,570 | |
(1) The sum of the adjusted net income (loss) per diluted share, 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) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 | | Nine Months Ended September 30, 2021 |
| REIT Advisory | | Products & Services | | Corporate/ Other | | Ashford Inc. Consolidated | | REIT Advisory | | Products & Services | | Corporate/ Other | | Ashford Inc. Consolidated |
| REVENUE | | | | | | | | | | | | | | | |
| Advisory services fees: | | | | | | | | | | | | | | | |
| Base advisory fees - Trust | $ | 26,202 | | | $ | — | | | $ | — | | | $ | 26,202 | | | $ | 21,762 | | | $ | — | | | $ | — | | | $ | 21,762 | |
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| Base advisory fees - Braemar | 9,435 | | | — | | | — | | | 9,435 | | | 7,981 | | | — | | | — | | | 7,981 | |
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| Other advisory revenue - Braemar | 389 | | | — | | | — | | | 389 | | | 389 | | | — | | | — | | | 389 | |
| Hotel management fees: | | | | | | | | | | | | | | | |
| Base management fees | — | | | 24,943 | | | — | | | 24,943 | | | — | | | 15,331 | | | — | | | 15,331 | |
| Incentive management fees | — | | | 6,113 | | | — | | | 6,113 | | | — | | | 3,406 | | | — | | | 3,406 | |
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| Other management fees | — | | | 2,418 | | | — | | | 2,418 | | | — | | | — | | | — | | | — | |
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| Design and construction fees | — | | | 15,538 | | | — | | | 15,538 | | | — | | | 5,611 | | | — | | | 5,611 | |
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| Audio visual | — | | | 87,101 | | | — | | | 87,101 | | | — | | | 28,170 | | | — | | | 28,170 | |
| Other | 16 | | | 33,886 | | | — | | | 33,902 | | | 61 | | | 35,838 | | | — | | | 35,899 | |
| Cost reimbursement revenue | 22,626 | | | 228,919 | | | 8,434 | | | 259,979 | | | 19,556 | | | 116,100 | | | 1,761 | | | 137,417 | |
| Total revenues | 58,668 | | | 398,918 | | | 8,434 | | | 466,020 | | | 49,749 | | | 204,456 | | | 1,761 | | | 255,966 | |
| EXPENSES | | | | | | | | | | | | | | | |
| Salaries and benefits | — | | | 28,785 | | | 23,468 | | | 52,253 | | | — | | | 19,693 | | | 23,073 | | | 42,766 | |
| Deferred compensation plans | — | | | 53 | | | (620) | | | (567) | | | — | | | — | | | 1,190 | | | 1,190 | |
| Stock/unit-based compensation | — | | | 270 | | | 3,321 | | | 3,591 | | | — | | | 443 | | | 3,207 | | | 3,650 | |
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| Cost of audio visual revenues | — | | | 61,042 | | | — | | | 61,042 | | | — | | | 22,611 | | | — | | | 22,611 | |
| Cost of design and construction revenues | — | | | 5,905 | | | — | | | 5,905 | | | — | | | 2,812 | | | — | | | 2,812 | |
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| Depreciation and amortization | 2,558 | | | 20,848 | | | 334 | | | 23,740 | | | 3,053 | | | 20,960 | | | 441 | | | 24,454 | |
| General and administrative | — | | | 18,328 | | | 7,097 | | | 25,425 | | | — | | | 11,680 | | | 7,119 | | | 18,799 | |
| Impairment | — | | | — | | | — | | | — | | | — | | | 1,160 | | | — | | | 1,160 | |
| Other | 706 | | | 16,150 | | | 30 | | | 16,886 | | | 645 | | | 12,757 | | | 26 | | | 13,428 | |
| Reimbursed expenses | 9,410 | | | 228,705 | | | 8,434 | | | 246,549 | | | 5,925 | | | 115,792 | | | 1,761 | | | 123,478 | |
| REIT stock/unit-based compensation | 12,902 | | | 214 | | | — | | | 13,116 | | | 13,368 | | | 308 | | | — | | | 13,676 | |
| Total operating expenses | 25,576 | | | 380,300 | | | 42,064 | | | 447,940 | | | 22,991 | | | 208,216 | | | 36,817 | | | 268,024 | |
| OPERATING INCOME (LOSS) | 33,092 | | | 18,618 | | | (33,630) | | | 18,080 | | | 26,758 | | | (3,760) | | | (35,056) | | | (12,058) | |
| Other | — | | | (3,334) | | | (3,874) | | | (7,208) | | | — | | | (3,318) | | | (948) | | | (4,266) | |
| INCOME (LOSS) BEFORE INCOME TAXES | 33,092 | | | 15,284 | | | (37,504) | | | 10,872 | | | 26,758 | | | (7,078) | | | (36,004) | | | (16,324) | |
| Income tax (expense) benefit | (8,196) | | | (5,695) | | | 7,920 | | | (5,971) | | | (6,144) | | | (991) | | | 8,685 | | | 1,550 | |
| NET INCOME (LOSS) | 24,896 | | | 9,589 | | | (29,584) | | | 4,901 | | | 20,614 | | | (8,069) | | | (27,319) | | | (14,774) | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | — | | | 830 | | | — | | | 830 | | | — | | | 509 | | | — | | | 509 | |
| Net (income) loss attributable to redeemable noncontrolling interests | — | | | — | | | (290) | | | (290) | | | — | | | 152 | | | 56 | | | 208 | |
| NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | $ | 24,896 | | | $ | 10,419 | | | $ | (29,874) | | | $ | 5,441 | | | 20,614 | | | (7,408) | | | (27,263) | | | (14,057) | |
| Interest expense | — | | | 3,282 | | | 3,501 | | | 6,783 | | | — | | | 3,047 | | | 834 | | | 3,881 | |
| Amortization of loan costs | — | | | 135 | | | 389 | | | 524 | | | — | | | 116 | | | 98 | | | 214 | |
| Depreciation and amortization | 2,558 | | | 24,890 | | | 334 | | | 27,782 | | | 3,053 | | | 24,852 | | | 441 | | | 28,346 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Income tax expense (benefit) | 8,196 | | | 5,695 | | | (7,920) | | | 5,971 | | | 6,144 | | | 991 | | | (8,685) | | | (1,550) | |
| | | | | | | | | | | | | | | |
| Net income (loss) attributable to unitholders redeemable noncontrolling interests | — | | | — | | | 290 | | | 290 | | | — | | | — | | | (56) | | | (56) | |
| EBITDA | 35,650 | | | 44,421 | | | (33,280) | | | 46,791 | | | 29,811 | | | 21,598 | | | (34,631) | | | 16,778 | |
| Deferred compensation plans | — | | | 53 | | | (620) | | | (567) | | | — | | | — | | | 1,190 | | | 1,190 | |
| Stock/unit-based compensation | — | | | 342 | | | 3,321 | | | 3,663 | | | — | | | 750 | | | 3,291 | | | 4,041 | |
| Change in contingent consideration fair value | — | | | 300 | | | — | | | 300 | | | — | | | 22 | | | — | | | 22 | |
| Transaction costs | — | | | 1,777 | | | 592 | | | 2,369 | | | — | | | 541 | | | 1,696 | | | 2,237 | |
| | | | | | | | | | | | | | | |
| Loss on disposal of assets | 706 | | | 116 | | | — | | | 822 | | | 645 | | | 678 | | | — | | | 1,323 | |
| | | | | | | | | | | | | | | |
| Reimbursed software costs, net | (312) | | | — | | | — | | | (312) | | | (320) | | | — | | | — | | | (320) | |
| | | | | | | | | | | | | | | |
| Legal, advisory and settlement costs | — | | | (6) | | | 1,169 | | | 1,163 | | | — | | | 305 | | | 1,347 | | | 1,652 | |
| Severance and executive recruiting costs | — | | | 155 | | | 1,304 | | | 1,459 | | | — | | | 126 | | | 919 | | | 1,045 | |
| | | | | | | | | | | | | | | |
| Amortization of hotel signing fees and lock subsidies | — | | | 511 | | | — | | | 511 | | | — | | | 377 | | | — | | | 377 | |
| Other (gain) loss | — | | | 69 | | | 87 | | | 156 | | | — | | | (642) | | | 37 | | | (605) | |
| | | | | | | | | | | | | | | |
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| Impairment | — | | | — | | | — | | | — | | | — | | | 1,160 | | | — | | | 1,160 | |
| | | | | | | | | | | | | | | |
| Adjusted EBITDA | 36,044 | | | 47,738 | | | (27,427) | | | 56,355 | | | 30,136 | | | 24,915 | | | (26,151) | | | 28,900 | |
| Interest expense | — | | | (3,282) | | | (3,501) | | | (6,783) | | | — | | | (3,047) | | | (834) | | | (3,881) | |
| Non-cash interest from finance lease | — | | | 487 | | | — | | | 487 | | | — | | | 501 | | | — | | | 501 | |
| Adjusted income tax (expense) benefit | (9,252) | | | (9,262) | | | 8,921 | | | (9,593) | | | (7,646) | | | (4,373) | | | 8,401 | | | (3,618) | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Adjusted net income (loss) available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis | $ | 26,792 | | | $ | 35,681 | | | $ | (22,007) | | | $ | 40,466 | | | $ | 22,490 | | | $ | 17,996 | | | $ | (18,584) | | | $ | 21,902 | |
Adjusted net income (loss) per diluted share available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis (1) | $ | 3.47 | | | $ | 4.62 | | | $ | (2.85) | | | $ | 5.24 | | | $ | 3.02 | | | $ | 2.42 | | | $ | (2.50) | | | $ | 2.94 | |
| Weighted average diluted shares | 7,729 | | | 7,729 | | | 7,729 | | | 7,729 | | | 7,448 | | | 7,448 | | | 7,448 | | | 7,448 | |
(1) The sum of the adjusted net income (loss) per diluted share, as calculated for the segments, may differ from the consolidated total due to rounding.
ASHFORD INC. AND SUBSIDIARIES
PRODUCTS & SERVICES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS)
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 | | |
| Remington | | Premier | | INSPIRE | | RED | | OpenKey | | Other (1) | | | | Products & Services | | | | | | | | | | | | | | |
| REVENUE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Hotel management fees: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Base management fees | $ | 9,285 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | $ | 9,285 | | | | | | | | | | | | | | | |
| Incentive management fees | 2,242 | | | — | | | — | | | — | | | — | | | — | | | | | 2,242 | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other management fees | 1,349 | | | — | | | — | | | — | | | — | | | — | | | | | 1,349 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Design and construction fees | — | | | 6,276 | | | — | | | — | | | — | | | — | | | | | 6,276 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Audio visual | — | | | — | | | 26,159 | | | — | | | — | | | — | | | | | 26,159 | | | | | | | | | | | | | | | |
| Other | — | | | — | | | — | | | 6,608 | | | 389 | | | 3,394 | | | | | 10,391 | | | | | | | | | | | | | | | |
| Cost reimbursement revenue | 80,880 | | | 3,306 | | | 38 | | | 8 | | | — | | | — | | | | | 84,232 | | | | | | | | | | | | | | | |
| Total revenues | 93,756 | | | 9,582 | | | 26,197 | | | 6,616 | | | 389 | | | 3,394 | | | | | 139,934 | | | | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and benefits | 5,653 | | | 555 | | | 3,204 | | | 778 | | | 588 | | | 321 | | | | | 11,099 | | | | | | | | | | | | | | | |
| Deferred compensation plans | — | | | — | | | — | | | 17 | | | — | | | — | | | | | 17 | | | | | | | | | | | | | | | |
| Stock/unit-based compensation | 61 | | | 20 | | | 7 | | | 5 | | | — | | | — | | | | | 93 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cost of audio visual revenues | — | | | — | | | 19,884 | | | — | | | — | | | — | | | | | 19,884 | | | | | | | | | | | | | | | |
| Cost of design and construction revenues | — | | | 1,789 | | | — | | | — | | | — | | | — | | | | | 1,789 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Depreciation and amortization | 3,288 | | | 2,978 | | | 418 | | | 175 | | | 3 | | | 317 | | | | | 7,179 | | | | | | | | | | | | | | | |
| General and administrative | 957 | | | 707 | | | 2,476 | | | 1,599 | | | 704 | | | 150 | | | | | 6,593 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other | 300 | | | — | | | — | | | 3,496 | | | 70 | | | 1,884 | | | | | 5,750 | | | | | | | | | | | | | | | |
| Reimbursed expenses | 80,866 | | | 3,276 | | | 20 | | | 8 | | | — | | | — | | | | | 84,170 | | | | | | | | | | | | | | | |
| REIT stock/unit-based compensation | 14 | | | 30 | | | 18 | | | — | | | — | | | — | | | | | 62 | | | | | | | | | | | | | | | |
| Total operating expenses | 91,139 | | | 9,355 | | | 26,027 | | | 6,078 | | | 1,365 | | | 2,672 | | | | | 136,636 | | | | | | | | | | | | | | | |
| OPERATING INCOME (LOSS) | 2,617 | | | 227 | | | 170 | | | 538 | | | (976) | | | 722 | | | | | 3,298 | | | | | | | | | | | | | | | |
| Other | 53 | | | — | | | (459) | | | (206) | | | — | | | (774) | | | | | (1,386) | | | | | | | | | | | | | | | |
| INCOME (LOSS) BEFORE INCOME TAXES | 2,670 | | | 227 | | | (289) | | | 332 | | | (976) | | | (52) | | | | | 1,912 | | | | | | | | | | | | | | | |
| Income tax (expense) benefit | (256) | | | (112) | | | 53 | | | 192 | | | — | | | 4 | | | | | (119) | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) | 2,414 | | | 115 | | | (236) | | | 524 | | | (976) | | | (48) | | | | | 1,793 | | | | | | | | | | | | | | | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | — | | | — | | | — | | | — | | | 223 | | | 49 | | | | | 272 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | $ | 2,414 | | | $ | 115 | | | $ | (236) | | | $ | 524 | | | $ | (753) | | | $ | 1 | | | | | $ | 2,065 | | | | | | | | | | | | | | | |
| Interest expense | — | | | — | | | 345 | | | 197 | | | — | | | 624 | | | | | 1,166 | | | | | | | | | | | | | | | |
| Amortization of loan costs | — | | | — | | | 24 | | | 9 | | | — | | | — | | | | | 33 | | | | | | | | | | | | | | | |
| Depreciation and amortization | 3,288 | | | 2,978 | | | 1,679 | | | 594 | | | 3 | | | 144 | | | | | 8,686 | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income tax expense (benefit) | 256 | | | 112 | | | (53) | | | (192) | | | — | | | (4) | | | | | 119 | | | | | | | | | | | | | | | |
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| EBITDA | 5,958 | | | 3,205 | | | 1,759 | | | 1,132 | | | (750) | | | 765 | | | | | 12,069 | | | | | | | | | | | | | | | |
| Deferred compensation plans | — | | | — | | | — | | | 17 | | | — | | | — | | | | | 17 | | | | | | | | | | | | | | | |
| Stock/unit-based compensation | 52 | | | 20 | | | 7 | | | 5 | | | — | | | — | | | | | 84 | | | | | | | | | | | | | | | |
| Change in contingent consideration fair value | 300 | | | — | | | — | | | — | | | — | | | — | | | | | 300 | | | | | | | | | | | | | | | |
| Transaction costs | 445 | | | — | | | 11 | | | 226 | | | — | | | — | | | | | 682 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss on disposal of assets | — | | | — | | | 58 | | | — | | | — | | | — | | | | | 58 | | | | | | | | | | | | | | | |
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| Legal, advisory and settlement costs | 4 | | | — | | | 38 | | | 36 | | | — | | | — | | | | | 78 | | | | | | | | | | | | | | | |
| Severance and executive recruiting costs | 16 | | | — | | | — | | | 8 | | | — | | | — | | | | | 24 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Amortization of hotel signing fees and lock subsidies | — | | | — | | | 153 | | | — | | | 7 | | | — | | | | | 160 | | | | | | | | | | | | | | | |
| Other (gain) loss | (18) | | | 30 | | | 15 | | | — | | | — | | | — | | | | | 27 | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA | 6,757 | | | 3,255 | | | 2,041 | | | 1,424 | | | (743) | | | 765 | | | | | 13,499 | | | | | | | | | | | | | | | |
| Interest expense | — | | | — | | | (345) | | | (197) | | | — | | | (624) | | | | | (1,166) | | | | | | | | | | | | | | | |
| Non-cash interest from finance lease | — | | | — | | | — | | | — | | | — | | | 160 | | | | | 160 | | | | | | | | | | | | | | | |
| Adjusted income tax (expense) benefit | (1,283) | | | (917) | | | 143 | | | 274 | | | — | | | (34) | | | | | (1,817) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted net income (loss) available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis | $ | 5,474 | | | $ | 2,338 | | | $ | 1,839 | | | $ | 1,501 | | | $ | (743) | | | $ | 267 | | | | | $ | 10,676 | | | | | | | | | | | | | | | |
Adjusted net income (loss) per diluted share available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis (2) | $ | 0.69 | | | $ | 0.29 | | | $ | 0.23 | | | $ | 0.19 | | | $ | (0.09) | | | $ | 0.03 | | | | | $ | 1.35 | | | | | | | | | | | | | | | |
| Weighted average diluted shares | 7,932 | | | 7,932 | | | 7,932 | | | 7,932 | | | 7,932 | | | 7,932 | | | | | 7,932 | | | | | | | | | | | | | | | |
(1) Represents Pure Wellness, Lismore Capital and Marietta Leasehold L.P.
(2) The sum of the adjusted net income (loss) per diluted share, as calculated for the subsidiaries, may differ from the Products & Services total due to rounding.
ASHFORD INC. AND SUBSIDIARIES
PRODUCTS & SERVICES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS)
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2021 |
| Remington | | Premier | | INSPIRE | | RED | | OpenKey | | Other (1) | | | | Products & Services |
| REVENUE | | | | | | | | | | | | | | | |
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| Hotel management fees: | | | | | | | | | | | | | | | |
| Base management fees | $ | 6,166 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | $ | 6,166 | |
| Incentive management fees | 1,584 | | | — | | | — | | | — | | | — | | | — | | | | | 1,584 | |
| | | | | | | | | | | | | | | |
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| Design and construction fees | — | | | 2,202 | | | — | | | — | | | — | | | — | | | | | 2,202 | |
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| Audio visual | — | | | — | | | 15,108 | | | — | | | — | | | — | | | | | 15,108 | |
| Other | — | | | — | | | — | | | 6,738 | | | 505 | | | 5,833 | | | | | 13,076 | |
| Cost reimbursement revenue | 50,405 | | | 845 | | | — | | | — | | | — | | | — | | | | | 51,250 | |
| Total revenues | 58,155 | | | 3,047 | | | 15,108 | | | 6,738 | | | 505 | | | 5,833 | | | | | 89,386 | |
| EXPENSES | | | | | | | | | | | | | | | |
| Salaries and benefits | 3,165 | | | 810 | | | 1,741 | | | 658 | | | 563 | | | 227 | | | | | 7,164 | |
| | | | | | | | | | | | | | | |
| Stock/unit-based compensation | 6 | | | 14 | | | 58 | | | 7 | | | — | | | — | | | | | 85 | |
| | | | | | | | | | | | | | | |
| Cost of audio visual revenues | — | | | — | | | 11,353 | | | — | | | — | | | — | | | | | 11,353 | |
| Cost of design and construction revenues | — | | | 1,032 | | | — | | | — | | | — | | | — | | | | | 1,032 | |
| | | | | | | | | | | | | | | |
| Depreciation and amortization | 3,036 | | | 3,058 | | | 471 | | | 106 | | | 4 | | | 325 | | | | | 7,000 | |
| General and administrative | 577 | | | 394 | | | 1,667 | | | 1,294 | | | 651 | | | 193 | | | | | 4,776 | |
| Impairment | — | | | — | | | 1,160 | | | — | | | — | | | — | | | | | 1,160 | |
| Other | — | | | — | | | — | | | 3,236 | | | 159 | | | 1,329 | | | | | 4,724 | |
| Reimbursed expenses | 50,354 | | | 802 | | | — | | | — | | | — | | | — | | | | | 51,156 | |
| REIT stock/unit-based compensation | 51 | | | 43 | | | — | | | — | | | — | | | — | | | | | 94 | |
| Total operating expenses | 57,189 | | | 6,153 | | | 16,450 | | | 5,301 | | | 1,377 | | | 2,074 | | | | | 88,544 | |
| OPERATING INCOME (LOSS) | 966 | | | (3,106) | | | (1,342) | | | 1,437 | | | (872) | | | 3,759 | | | | | 842 | |
| Other | 466 | | | — | | | (184) | | | (238) | | | — | | | (637) | | | | | (593) | |
| INCOME (LOSS) BEFORE INCOME TAXES | 1,432 | | | (3,106) | | | (1,526) | | | 1,199 | | | (872) | | | 3,122 | | | | | 249 | |
| Income tax (expense) benefit | (469) | | | 728 | | | 350 | | | (377) | | | — | | | (748) | | | | | (516) | |
| NET INCOME (LOSS) | 963 | | | (2,378) | | | (1,176) | | | 822 | | | (872) | | | 2,374 | | | | | (267) | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | — | | | — | | | — | | | (14) | | | 215 | | | (21) | | | | | 180 | |
| | | | | | | | | | | | | | | |
| NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | $ | 963 | | | $ | (2,378) | | | $ | (1,176) | | | $ | 808 | | | $ | (657) | | | $ | 2,353 | | | | | $ | (87) | |
| Interest expense | — | | | — | | | 257 | | | 160 | | | — | | | 639 | | | | | 1,056 | |
| Amortization of loan costs | — | | | — | | | 43 | | | 12 | | | — | | | — | | | | | 55 | |
| Depreciation and amortization | 3,036 | | | 3,058 | | | 1,716 | | | 346 | | | 4 | | | 82 | | | | | 8,242 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Income tax expense (benefit) | 469 | | | (728) | | | (350) | | | 377 | | | — | | | 748 | | | | | 516 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| EBITDA | 4,468 | | | (48) | | | 490 | | | 1,703 | | | (653) | | | 3,822 | | | | | 9,782 | |
| Stock/unit-based compensation | — | | | 14 | | | 22 | | | — | | | — | | | — | | | | | 36 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Transaction costs | — | | | — | | | 76 | | | 93 | | | — | | | — | | | | | 169 | |
| | | | | | | | | | | | | | | |
| Loss on disposal of assets | — | | | — | | | 131 | | | — | | | — | | | — | | | | | 131 | |
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| | | | | | | | | | | | | | | |
| Legal, advisory and settlement costs | — | | | — | | | 10 | | | — | | | — | | | — | | | | | 10 | |
| Severance and executive recruiting costs | 18 | | | — | | | — | | | 8 | | | — | | | — | | | | | 26 | |
| | | | | | | | | | | | | | | |
| Amortization of hotel signing fees and lock subsidies | — | | | — | | | 128 | | | — | | | 7 | | | — | | | | | 135 | |
| Other (gain) loss | (375) | | | — | | | (157) | | | — | | | — | | | — | | | | | (532) | |
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| Impairment | — | | | — | | | 1,160 | | | — | | | — | | | — | | | | | 1,160 | |
| | | | | | | | | | | | | | | |
| Adjusted EBITDA | 4,111 | | | (34) | | | 1,860 | | | 1,804 | | | (646) | | | 3,822 | | | | | 10,917 | |
| Interest expense | — | | | — | | | (257) | | | (160) | | | — | | | (639) | | | | | (1,056) | |
| Non-cash interest from finance lease | — | | | — | | | — | | | — | | | — | | | 200 | | | | | 200 | |
| Adjusted income tax (expense) benefit | (1,180) | | | 101 | | | 671 | | | (18) | | | — | | | (810) | | | | | (1,236) | |
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| | | | | | | | | | | | | | | |
| Adjusted net income (loss) available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis | $ | 2,931 | | | $ | 67 | | | $ | 2,274 | | | $ | 1,626 | | | $ | (646) | | | $ | 2,573 | | | | | $ | 8,825 | |
Adjusted net income (loss) per diluted share available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis (2) | $ | 0.39 | | | $ | 0.01 | | | $ | 0.30 | | | $ | 0.21 | | | $ | (0.09) | | | $ | 0.34 | | | | | $ | 1.17 | |
| Weighted average diluted shares | 7,570 | | | 7,570 | | | 7,570 | | | 7,570 | | | 7,570 | | | 7,570 | | | | | 7,570 | |
(1) Represents Pure Wellness, Lismore Capital, Marietta Leasehold L.P.
(2) The sum of the adjusted net income (loss) per diluted share, as calculated for the subsidiaries, may differ from the Products & Services total due to rounding.
ASHFORD INC. AND SUBSIDIARIES
PRODUCTS & SERVICES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS)
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 | | |
| Remington | | Premier | | INSPIRE | | RED | | OpenKey | | Other (1) | | | | Products & Services | | | | | | | | | | | | | | |
| REVENUE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| Hotel management fees: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Base management fees | $ | 24,943 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | $ | 24,943 | | | | | | | | | | | | | | | |
| Incentive management fees | 6,113 | | | — | | | — | | | — | | | — | | | — | | | | | 6,113 | | | | | | | | | | | | | | | |
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| Other management fees | 2,418 | | | — | | | — | | | — | | | — | | | — | | | | | 2,418 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Design and construction fees | — | | | 15,538 | | | — | | | — | | | — | | | — | | | | | 15,538 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Audio visual | — | | | — | | | 87,101 | | | — | | | — | | | — | | | | | 87,101 | | | | | | | | | | | | | | | |
| Other | 181 | | | — | | | — | | | 20,337 | | | 1,180 | | | 12,188 | | | | | 33,886 | | | | | | | | | | | | | | | |
| Cost reimbursement revenue | 221,407 | | | 7,355 | | | 134 | | | 17 | | | 4 | | | 2 | | | | | 228,919 | | | | | | | | | | | | | | | |
| Total revenues | 255,062 | | | 22,893 | | | 87,235 | | | 20,354 | | | 1,184 | | | 12,190 | | | | | 398,918 | | | | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and benefits | 13,920 | | | 1,545 | | | 8,557 | | | 2,114 | | | 1,901 | | | 748 | | | | | 28,785 | | | | | | | | | | | | | | | |
| Deferred compensation plans | — | | | — | | | — | | | 53 | | | — | | | — | | | | | 53 | | | | | | | | | | | | | | | |
| Stock/unit-based compensation | 161 | | | 52 | | | 44 | | | 13 | | | — | | | — | | | | | 270 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cost of audio visual revenues | — | | | — | | | 61,042 | | | — | | | — | | | — | | | | | 61,042 | | | | | | | | | | | | | | | |
| Cost of design and construction revenues | — | | | 5,905 | | | — | | | — | | | — | | | — | | | | | 5,905 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Depreciation and amortization | 9,107 | | | 8,914 | | | 1,358 | | | 501 | | | 9 | | | 959 | | | | | 20,848 | | | | | | | | | | | | | | | |
| General and administrative | 2,835 | | | 2,285 | | | 6,734 | | | 3,978 | | | 1,906 | | | 590 | | | | | 18,328 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other | 300 | | | — | | | — | | | 10,475 | | | 217 | | | 5,158 | | | | | 16,150 | | | | | | | | | | | | | | | |
| Reimbursed expenses | 221,341 | | | 7,263 | | | 78 | | | 17 | | | 4 | | | 2 | | | | | 228,705 | | | | | | | | | | | | | | | |
| REIT stock/unit-based compensation | 66 | | | 92 | | | 56 | | | — | | | — | | | — | | | | | 214 | | | | | | | | | | | | | | | |
| Total operating expenses | 247,730 | | | 26,056 | | | 77,869 | | | 17,151 | | | 4,037 | | | 7,457 | | | | | 380,300 | | | | | | | | | | | | | | | |
| OPERATING INCOME (LOSS) | 7,332 | | | (3,163) | | | 9,366 | | | 3,203 | | | (2,853) | | | 4,733 | | | | | 18,618 | | | | | | | | | | | | | | | |
| Other | 89 | | | — | | | (1,048) | | | (619) | | | 4 | | | (1,760) | | | | | (3,334) | | | | | | | | | | | | | | | |
| INCOME (LOSS) BEFORE INCOME TAXES | 7,421 | | | (3,163) | | | 8,318 | | | 2,584 | | | (2,849) | | | 2,973 | | | | | 15,284 | | | | | | | | | | | | | | | |
| Income tax (expense) benefit | (251) | | | (678) | | | (3,318) | | | (680) | | | — | | | (768) | | | | | (5,695) | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) | 7,170 | | | (3,841) | | | 5,000 | | | 1,904 | | | (2,849) | | | 2,205 | | | | | 9,589 | | | | | | | | | | | | | | | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | — | | | — | | | — | | | — | | | 677 | | | 153 | | | | | 830 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | $ | 7,170 | | | $ | (3,841) | | | $ | 5,000 | | | $ | 1,904 | | | $ | (2,172) | | | $ | 2,358 | | | | | $ | 10,419 | | | | | | | | | | | | | | | |
| Interest expense | — | | | — | | | 861 | | | 537 | | | — | | | 1,884 | | | | | 3,282 | | | | | | | | | | | | | | | |
| Amortization of loan costs | — | | | — | | | 94 | | | 41 | | | — | | | — | | | | | 135 | | | | | | | | | | | | | | | |
| Depreciation and amortization | 9,107 | | | 8,914 | | | 5,043 | | | 1,487 | | | 7 | | | 332 | | | | | 24,890 | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income tax expense (benefit) | 251 | | | 678 | | | 3,318 | | | 680 | | | — | | | 768 | | | | | 5,695 | | | | | | | | | | | | | | | |
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| EBITDA | 16,528 | | | 5,751 | | | 14,316 | | | 4,649 | | | (2,165) | | | 5,342 | | | | | 44,421 | | | | | | | | | | | | | | | |
| Deferred compensation plans | — | | | — | | | — | | | 53 | | | — | | | — | | | | | 53 | | | | | | | | | | | | | | | |
| Stock/unit-based compensation | 233 | | | 52 | | | 44 | | | 13 | | | — | | | — | | | | | 342 | | | | | | | | | | | | | | | |
| Change in contingent consideration fair value | 300 | | | — | | | — | | | — | | | — | | | — | | | | | 300 | | | | | | | | | | | | | | | |
| Transaction costs | 1,387 | | | — | | | 55 | | | 335 | | | — | | | — | | | | | 1,777 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss on disposal of assets | — | | | — | | | 68 | | | — | | | 48 | | | — | | | | | 116 | | | | | | | | | | | | | | | |
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| Legal, advisory and settlement costs | 9 | | | — | | | (60) | | | 45 | | | — | | | — | | | | | (6) | | | | | | | | | | | | | | | |
| Severance and executive recruiting costs | 50 | | | 77 | | | 19 | | | 8 | | | 1 | | | — | | | | | 155 | | | | | | | | | | | | | | | |
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| Amortization of hotel signing fees and lock subsidies | — | | | — | | | 490 | | | — | | | 21 | | | — | | | | | 511 | | | | | | | | | | | | | | | |
| Other (gain) loss | (31) | | | 87 | | | 13 | | | — | | | — | | | — | | | | | 69 | | | | | | | | | | | | | | | |
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| Adjusted EBITDA | 18,476 | | | 5,967 | | | 14,945 | | | 5,103 | | | (2,095) | | | 5,342 | | | | | 47,738 | | | | | | | | | | | | | | | |
| Interest expense | — | | | — | | | (861) | | | (537) | | | — | | | (1,884) | | | | | (3,282) | | | | | | | | | | | | | | | |
| Non-cash interest from finance lease | — | | | — | | | — | | | — | | | — | | | 487 | | | | | 487 | | | | | | | | | | | | | | | |
| Adjusted income tax (expense) benefit | (3,726) | | | (1,584) | | | (2,684) | | | (413) | | | — | | | (855) | | | | | (9,262) | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted net income (loss) available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis | $ | 14,750 | | | $ | 4,383 | | | $ | 11,400 | | | $ | 4,153 | | | $ | (2,095) | | | $ | 3,090 | | | | | $ | 35,681 | | | | | | | | | | | | | | | |
Adjusted net income (loss) per diluted share available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis (2) | $ | 1.91 | | | $ | 0.57 | | | $ | 1.47 | | | $ | 0.54 | | | $ | (0.27) | | | $ | 0.40 | | | | | $ | 4.62 | | | | | | | | | | | | | | | |
| Weighted average diluted shares | 7,729 | | | 7,729 | | | 7,729 | | | 7,729 | | | 7,729 | | | 7,729 | | | | | 7,729 | | | | | | | | | | | | | | | |
(1) Represents Pure Wellness, Lismore Capital and Marietta Leasehold L.P.
(2) The sum of the adjusted net income (loss) per diluted share, as calculated for the subsidiaries, may differ from the Products & Services total due to rounding.
ASHFORD INC. AND SUBSIDIARIES
PRODUCTS & SERVICES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS)
(unaudited, in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2021 |
| Remington | | Premier | | INSPIRE | | RED | | OpenKey | | Other (1) | | | | Products & Services |
| REVENUE | | | | | | | | | | | | | | | |
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| Hotel management fees: | | | | | | | | | | | | | | | |
| Base management fees | $ | 15,331 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | $ | 15,331 | |
| Incentive management fees | 3,406 | | | — | | | — | | | — | | | — | | | — | | | | | 3,406 | |
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| Design and construction fees | — | | | 5,611 | | | — | | | — | | | — | | | — | | | | | 5,611 | |
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| Audio visual | — | | | — | | | 28,170 | | | — | | | — | | | — | | | | | 28,170 | |
| Other | 20 | | | — | | | — | | | 18,159 | | | 1,436 | | | 16,223 | | | | | 35,838 | |
| Cost reimbursement revenue | 114,290 | | | 1,810 | | | — | | | — | | | — | | | — | | | | | 116,100 | |
| Total revenues | 133,047 | | | 7,421 | | | 28,170 | | | 18,159 | | | 1,436 | | | 16,223 | | | | | 204,456 | |
| EXPENSES | | | | | | | | | | | | | | | |
| Salaries and benefits | 8,602 | | | 2,265 | | | 4,763 | | | 1,705 | | | 1,757 | | | 601 | | | | | 19,693 | |
| | | | | | | | | | | | | | | |
| Stock/unit-based compensation | 297 | | | 47 | | | 86 | | | 8 | | | 5 | | | — | | | | | 443 | |
| | | | | | | | | | | | | | | |
| Cost of audio visual revenues | — | | | — | | | 22,611 | | | — | | | — | | | — | | | | | 22,611 | |
| Cost of design and construction revenues | — | | | 2,812 | | | — | | | — | | | — | | | — | | | | | 2,812 | |
| | | | | | | | | | | | | | | |
| Depreciation and amortization | 9,104 | | | 9,171 | | | 1,408 | | | 291 | | | 12 | | | 974 | | | | | 20,960 | |
| General and administrative | 1,471 | | | 1,079 | | | 4,182 | | | 2,961 | | | 1,713 | | | 274 | | | | | 11,680 | |
| Impairment | — | | | — | | | 1,160 | | | — | | | — | | | — | | | | | 1,160 | |
| Other | — | | | — | | | 22 | | | 8,866 | | | 459 | | | 3,410 | | | | | 12,757 | |
| Reimbursed expenses | 114,106 | | | 1,686 | | | — | | | — | | | — | | | — | | | | | 115,792 | |
| REIT stock/unit-based compensation | 184 | | | 124 | | | — | | | — | | | — | | | — | | | | | 308 | |
| Total operating expenses | 133,764 | | | 17,184 | | | 34,232 | | | 13,831 | | | 3,946 | | | 5,259 | | | | | 208,216 | |
| OPERATING INCOME (LOSS) | (717) | | | (9,763) | | | (6,062) | | | 4,328 | | | (2,510) | | | 10,964 | | | | | (3,760) | |
| Other | 73 | | | — | | | (748) | | | (713) | | | (1) | | | (1,929) | | | | | (3,318) | |
| INCOME (LOSS) BEFORE INCOME TAXES | (644) | | | (9,763) | | | (6,810) | | | 3,615 | | | (2,511) | | | 9,035 | | | | | (7,078) | |
| Income tax (expense) benefit | (1,132) | | | 2,048 | | | 1,427 | | | (1,171) | | | — | | | (2,163) | | | | | (991) | |
| NET INCOME (LOSS) | (1,776) | | | (7,715) | | | (5,383) | | | 2,444 | | | (2,511) | | | 6,872 | | | | | (8,069) | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | — | | | — | | | — | | | (52) | | | 626 | | | (65) | | | | | 509 | |
| Net (income) loss attributable to redeemable noncontrolling interests | — | | | — | | | — | | | — | | | 152 | | | — | | | | | 152 | |
| NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY | $ | (1,776) | | | $ | (7,715) | | | $ | (5,383) | | | $ | 2,392 | | | $ | (1,733) | | | $ | 6,807 | | | | | $ | (7,408) | |
| Interest expense | — | | | — | | | 670 | | | 454 | | | — | | | 1,923 | | | | | 3,047 | |
| Amortization of loan costs | — | | | — | | | 87 | | | 29 | | | — | | | — | | | | | 116 | |
| Depreciation and amortization | 9,104 | | | 9,171 | | | 5,154 | | | 979 | | | 8 | | | 436 | | | | | 24,852 | |
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| Income tax expense (benefit) | 1,132 | | | (2,048) | | | (1,427) | | | 1,171 | | | — | | | 2,163 | | | | | 991 | |
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| EBITDA | 8,460 | | | (592) | | | (899) | | | 5,025 | | | (1,725) | | | 11,329 | | | | | 21,598 | |
| Stock/unit-based compensation | 650 | | | 47 | | | 50 | | | — | | | 3 | | | — | | | | | 750 | |
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| Change in contingent consideration fair value | — | | | — | | | 22 | | | — | | | — | | | — | | | | | 22 | |
| Transaction costs | 159 | | | — | | | 76 | | | 306 | | | — | | | — | | | | | 541 | |
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| Loss on disposal of assets | — | | | — | | | 704 | | | (26) | | | — | | | — | | | | | 678 | |
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| Legal, advisory and settlement costs | 25 | | | — | | | 280 | | | — | | | — | | | — | | | | | 305 | |
| Severance and executive recruiting costs | 79 | | | — | | | — | | | 8 | | | 39 | | | — | | | | | 126 | |
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| Amortization of hotel signing fees and lock subsidies | — | | | — | | | 355 | | | — | | | 22 | | | — | | | | | 377 | |
| Other (gain) loss | (375) | | | — | | | (266) | | | — | | | (1) | | | — | | | | | (642) | |
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| Impairment | — | | | — | | | 1,160 | | | — | | | — | | | — | | | | | 1,160 | |
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| Adjusted EBITDA | 8,998 | | | (545) | | | 1,482 | | | 5,313 | | | (1,662) | | | 11,329 | | | | | 24,915 | |
| Interest expense | — | | | — | | | (670) | | | (454) | | | — | | | (1,923) | | | | | (3,047) | |
| Non-cash interest from finance lease | — | | | — | | | — | | | — | | | — | | | 501 | | | | | 501 | |
| Adjusted income tax (expense) benefit | (1,770) | | | (176) | | | 531 | | | (389) | | | — | | | (2,569) | | | | | (4,373) | |
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| Adjusted net income (loss) available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis | $ | 7,228 | | | $ | (721) | | | $ | 1,343 | | | $ | 4,470 | | | $ | (1,662) | | | $ | 7,338 | | | | | $ | 17,996 | |
Adjusted net income (loss) per diluted share available to common stockholders, unitholders and Series D convertible preferred stockholders on an "as converted" basis (2) | $ | 0.97 | | | $ | (0.10) | | | $ | 0.18 | | | $ | 0.60 | | | $ | (0.22) | | | $ | 0.99 | | | | | $ | 2.42 | |
| Weighted average diluted shares | 7,448 | | | 7,448 | | | 7,448 | | | 7,448 | | | 7,448 | | | 7,448 | | | | | 7,448 | |
(1) Represents Pure Wellness, Lismore Capital and Marietta Leasehold L.P.
(2) The sum of the adjusted net income (loss) per diluted share, as calculated for the subsidiaries, may differ from the Products & Services total due to rounding.
ASHFORD INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
(unaudited, in thousands)
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| 2022 | | 2022 | | 2022 | | 2021 | | September 30, 2022 |
| | 3rd Quarter | | 2nd Quarter | | 1st Quarter | | 4th Quarter | | TTM |
| Net income (loss) | $ | (1,103) | | | $ | 5,325 | | | $ | 679 | | | $ | 3,956 | | | $ | 8,857 | |
| (Income) loss from consolidated entities attributable to noncontrolling interests | 272 | | | 298 | | | 260 | | | 169 | | | 999 | |
| Net (income) loss attributable to redeemable noncontrolling interests | (158) | | | (141) | | | 9 | | | 7 | | | (283) | |
| Net income (loss) attributable to the company | (989) | | | 5,482 | | | 948 | | | 4,132 | | | 9,573 | |
| Interest expense | 2,967 | | | 2,537 | | | 1,279 | | | 1,303 | | | 8,086 | |
| Amortization of loan costs | 219 | | | 232 | | | 73 | | | 113 | | | 637 | |
| Depreciation and amortization | 9,603 | | | 9,297 | | | 8,882 | | | 9,263 | | | 37,045 | |
| Income tax expense (benefit) | 617 | | | 4,076 | | | 1,278 | | | 1,388 | | | 7,359 | |
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| Net income (loss) attributable to unitholders redeemable noncontrolling interests | 158 | | | 141 | | | (9) | | | (7) | | | 283 | |
| EBITDA | 12,575 | | | 21,765 | | | 12,451 | | | 16,192 | | | 62,983 | |
| Deferred compensation plans | (78) | | | (600) | | | 111 | | | 481 | | | (86) | |
| Stock/unit-based compensation | 1,912 | | | 920 | | | 831 | | | 897 | | | 4,560 | |
| Change in contingent consideration fair value | 300 | | | — | | | — | | | — | | | 300 | |
| Transaction costs | 501 | | | 1,339 | | | 529 | | | 1,187 | | | 3,556 | |
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| Loss on disposal of assets | 58 | | | 10 | | | 754 | | | 272 | | | 1,094 | |
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| Reimbursed software costs, net | (75) | | | (94) | | | (143) | | | (187) | | | (499) | |
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| Legal, advisory and settlement costs | 300 | | | 749 | | | 112 | | | 168 | | | 1,329 | |
| Severance and executive recruiting costs | 731 | | | 368 | | | 360 | | | 285 | | | 1,744 | |
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| Amortization of hotel signing fees and lock subsidies | 160 | | | 199 | | | 152 | | | 141 | | | 652 | |
| Other (gain) loss | 27 | | | 291 | | | (162) | | | 52 | | | 208 | |
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| Adjusted EBITDA | $ | 16,411 | | | $ | 24,947 | | | $ | 14,995 | | | $ | 19,488 | | | $ | 75,841 | |
