AINC - Earnings call transcript Q4 2017

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Operator

Good day and welcome to the Ashford Inc. Fourth Quarter 2017 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Joe Calabrese with the Financial Relations Board. Please go ahead, Sir.

Joe Calabrese

welcome Inc. conference and results to everyone Ashford for day to call today's review Good fourth of the developments. for quarter on update recent you XXXX and to

the of Eubanks, afternoon of this let over in been statements basis a Chief you conference Chairman included Officer; more only this the the or based in and as this fully Monty Harbor that filings financial uncertainties statements Company's the conference distributed to Litigation Rob and not obligated On this yesterday numerous is statements call notice that in are Company press or Exchange anticipated. pursuant assumptions, Executive made the from Internet the Reform being has are Chief The actual the could forward-looking them. Financial will those or results to of These cause The the listen-only upon covered media. are conference call were update XXXX. the Act Vice release Securities are date of Securities differ revise results are At Welter, made me certain Executive Commission. well President the and Hays, as with of of discussed forward-looking Deric of materially information by in forward-looking Chief Management. and risks call unknown Such Safe assumptions call publicly contain factors the which to Officer; risk Bennett, Private to known subject this provisions Officer; Strategy and Jeremy time, remind today call Asset that accessibility and on be as

or Company's at provided encouraged financial of and will on release. this with is which through X, fourth release, in the In in unless discussed schedules be the X-K call may of call are www.ashfordinc.com. in stated tables reconciliations SEC have website turn release information earnings are otherwise the used quarter the the now listener in to provided addition, and filed the to been also Bennett. Form other call measures, over Please accompanying results accessed certain on reconciliations with Monty non-GAAP the Company's March all I which ahead, Each terms go XXXX those Also quarter earnings fourth compare this reported XXXX. review the provided in together sir. with all XXXX

Monty Bennett

Good morning.

take strong continued the Pure quarter, then growth Inc. driving initiatives, will will performance we is and very our investor Rooms, OpenKey, update and with and will investments RED of present & other ground we earnings as Ashford, laying fourth then review provide provide questions. platform success Leisure, operating results financial Rob in delivered Afterwards, are results significant quarter and in our our for work are performance financial regarding I growth We well J&S, as of pleased for Deric Hospitality we Jeremy highlights will update to XXXX. and an on pleased our our an will reviewing by we the and initiative. for our are net your platform. the the strategic begin fourth outreach revenue

respectively. the share period increased quarter, also per over and income year net XX%, XX% prior the net EBITDA quarter adjusted by increased and During adjusted and by increased fourth the income during XX% revenues XX% adjusted

significant the will a XXXX positive earnings discuss our minutes, full adjusted net of the in adjusted on growth per have XX% as future positioned expect rate the Deric growth impact for of share XXXX We in EBITDA and lower growth few further in for and we've income For will we year, effective XX%. well years. tax a

platforms team hospitality to always our industry. reason built Our We from both in Acting and us advise. we our believe our for distinguished team consider performance. our expertise the it I a stable combined highly advantages the aligned, and management leverage the others our effective shareholders most the in around of have main superior we has company to ability is grow strategy like primary competitive industry. and management one of our

advises traded currently gross December billion and platforms; and REIT Ashford together which Ashford Trust XX, two as have rooms approximately with approximately $X.X of Ashford XXX hotels XXXX. publicly of Prime, XX,XXX assets

a Ashford scalable business and capital a diversified attractive multiple margins generators. It model has fee-based with platform high low needs. platform growth a of fee with is

Additionally, than can’t base that fee the very it from the stipulate Currently, on areas by three with REITs previous stable base of cash fee growth. flow a focused the our has level. more XX% drop the base company minimum as advisor year’s agreements is

First, like our existing accretively REIT we would grow to platforms.

more RED part J&S on has single common base and or and a industry XX% our in newest million with of such of business J&S of dramatically. Pure business growth and replace Hospitality assumes contract locations, Trust provider Ashford would X,XXX stock OpenKey, as connections leading asset contracts add And investment hospitality as a J&S X.X Prime X.X that presence convention and end, quarter, To and accelerate debt. to to venue invest X.X relationships J&S with the Trust Then platforms the our service visual by events addition million our geographical approximately Prime. place and we Visual, cash, for in multi-year XXX productions, clients. hotels our currently owned to integrated currently well-diversified working audio Rooms leveraging expertise, approximately million regular diligently Leisure. X growth their service only there opportunities has and over XXX XX fourth additional like strategy, management through and completed during is third, at hotels the annual & can and in centers in and source stake representing acquisition we Audio are our to acquisition customer capital for related in in our our platforms. Second, we businesses the we initiatives, through buy

significant the between contracts we not synergies and growing J&S Going but asset-managed current and further only revenue Ashford business of expect the J&S’s cost through addition operational also hotels. forward sales channels, through with

Additionally, and in leading the water U.S. of and of approximately these other X in a see activities to in in Islands provider and beyond for Hospitality as quarter, opportunity bring other XX.XX% we growth million they transportation for cash. subsequent sports services expand to business stake We breadth this RED Virgin travel acquired end and offer & services in hotels. the Leisure, a the tremendous we services

to Jeremy Rooms. be these excited in continue significant providing these more Pure businesses and and of OpenKey detailed few update be of also in Both We a a growth saw our about investments all XXXX and will investments minutes. in

creation. a for in fee revolutionary have shareholder incentivizes place We that Prime and structure Trust value

by fee share focus in is to maximize incentive platforms. REIT price performance return base returns the based this total fee shareholder and on outperformance versus With driven our primary teams management peers,

we forward, managed about of optimistic Looking are our REIT prospects two platforms. the

Additionally, outreach adding businesses. the great see invested effort. we discuss turn investing superior grow well additional platforms opportunity I to deliver to for call to other as shareholders to platform by and will in investor as returns our related hospitality our Rob now over incubating this or

Rob Hays

us at in to upon. by We stock. shareholder targeted the the to are would outreach we Investor investing Monty. only this by but volume creating the priority value, increasing long-term program goal our multiple investor liquidity and also accomplish initiatives with trading of accretive that a not of awareness, of that Ashford. of that Throughout understood communicate confidence a importance stated we tough to a rely building platform Thanks, investors outreach for XXXX, we strong remains that

range As of a well as core attended mid-cap component conferences past of focus from this answering questions a Ultimately, investors and Any small reiterating the over we the industry active funds, and investors the striving our these XXX focused targeting program, we potential wide up strategy strategy, family investors dedicated offices to multiple retail year ended investor clarity. to we and XXXX. holders. into over presenting on conferences, provide as

As create reflects the end, our year. directly trading in this shares. investor how for the to of third fourth investors success over quarters time. and to long-term XXX% shareholder we materially approximately price greater believe rose interest volume We a plan In share we Ashford’s value result our in XXXX, understand higher the in experienced by helping and

session financial and can assist statements download an our investors in easily our financial added recently modeling models to on analysts to building company. our we Additionally, website them where historical interactive

about Given and company our very and plan success the optimistic continue with XXXX to our are building and even accelerate this initiatives. initiative XXXX, in of we awareness our of strategic

fourth Deric in our investors. We exposure quarter. our of provide nearly call I'll double over XXXX what conferences converses and of provide the have attended now to XXXX tell number believe the for we've with will meaningful dialog financial performance review to opportunity story in further targeted the and to versus investor potential turn these in

Deric Eubanks

was loss Thanks, $X.XX or Company Rob. the of of share for $X.X XXXX. the $X.XX or fourth fourth million for net Net $X.X a per compared quarter share quarter with to million per income the attributable of XXXX

For XX% have deferred options level the and treatment million. preferred the equity $X.X XX, of program issuance equity, a from $X.X fourth fourth fourth $X.X XXXX, or for common growth of the related $XX.X of shares the the At and units Trust respectively. $XX.X with diluted million $X.X common for marked rate of million fourth XXXX, balance approximately compared We fourth and XXXX, of Adjusted stock corporate to $XX.X currently capitalization base GAAP expenses, income end quarter, as under fully growth per Company the December a Company minority shares, EBITDA advisory for the ended from revenue currently quarter net in XX% reflecting million of Also XXXX per diluted fully fourth had corporate million interest million our reimbursable XX%. fee a million common for the the for investments. $X.XX or no a the quarter a cash. had and December quarter our stock $XXX million the shares put quarter was million money strategic $X.X and had debt, X.X the and including XX, and with Adjusted market were million was X.X the We compared rate of or million Prime. no $X.X we $X.XX share outstanding. in of year total diluted associated with reflecting diluted have million share quarter of options compensation

to of Hospitality XXXX initiatives. regarding the in recent rate over Red expect reform, Jeremy the & now J&S, our we Capital, XX%. to other and Lismore OpenKey, turn income Leader call I tax investment the will Rooms, will be tax approximately impact our financial Pure discuss currently Lastly,

Jeremy Welter

Thank you, Deric.

into provider & on providing by rich this we the industry would In we St. and hospitality industry synergies to are in early businesses the and ferry more a establish service our strategy and an Hospitality fully, grow in Hospitality To Islands travel been our this that Virgin quickly these relationships, controlling contracts U.S. platforms we We're XXXX. the the Monty end, our Virgin them Thomas accelerator Leisure, invest were to our than acquisition three strategies St. transportation ways; cult companies. water excited team companies investment service to invest products from to RED receive growing of John, and strategy into in a U.S. and has REITs, grow leveraging best begun between for entered by industry in services with in to impressed a to and explain vendor. in the unique between through earlier, in hotel operations their announce our we're is interest capitalize already a business Islands. the to and leading able initiative To that and year businesses limited expects and pricing growth. and sports one this, by into referring attractive fee reopen third-party RED higher of services to Thomas hospitality activities similar products half other we they consulting operations. our whereby number on of in our levels resorts this our the St. doing is As and mentioned began of We of have in practices. also vast services strategically second as able operating which in otherwise companies of hotels for act new

see several at We advisory a into our platforms. business this opportunities expand also to of other hotels lot

Trust financings. debt debt growth to which providing fees in Additionally, Capital, platforms. placement we been Capital our Lismore of compared placement on Ashford property quarter, to the to been the pleased have Lismore are Lismore provided to revenue advisory full related XXXX in quarter. Ashford third and has fourth pricing introduce otherwise the Prime began quarter year was third would for Capital which by placing services over competitive prior revenue and level generated parties Beginning terms XXX% $X.X million for debt

We are Capital. future prospects about growth of the excited Lismore for

also are recent for solution very within We source single services, J&S audio event services end revenues through our in year and increased the in Audio the investment design needs leaning and certain show approximately the integrated increased by suite investment excited November about of services, meeting services, a greater over Visual, hospitality adjusted visual events year, and integration. and XX% prior of and EBITDA $XXX,XXX period. This including

half on asset place productions, executed and managed of non-Ashford J&S has share highlighting we with regular in to with hotel hotels revenue the scale XX% to from clients. Additionally annual remain would continue and we as on locations currently Ashford addition our in J&S of the focus X,XXX to venue full Also contracts XX-year approximately business, convention outside by XX centers, increasing provides XXX J&S events a XXX increased in have representing pro hotels, hotels. forma during over multiyear J&S coming market reported contracts year basis, expect XXXX, over XXXX, growth for platform.

for forward a the reputation relative Going tremendous similar integrating given internationally into as we premium in industry. to provider U.S. opportunity competitors a and service hotels Company's the more in outstanding the see J&S

industry our accelerate the leverage and team knowledge in acquired years context the long-term to deep to of along J&S experience the expect and hospitality growth. and with We fuel over management of relationships knowhow extensive

mobile as content clearly will indicated We about like this for ad focus to platform, product our strong OpenKey. key among also aggregation We consumers adoption be a enthusiastic in access hospitality hotel exclusive Collection, owners which investment hotels, preferred luxury increased believe of guests continue preference include drive and have functionality. world will is hotels not which a XXX but technology Boutique hotel with also and OpenKey worldwide. using only provide expanded deals universal its in to thousands hotels of integration worldwide platform hotels, will and InnDependent

secured mobile regarding RMS is global OpenKey manufacturers in with pleased out the we software also two OpenKey's X,XXX ability added industry. the recently Hafele interfaces had of OpenKey performance. to update Systems, to Springer-Miller with directly commence lock XXXX management giving major large over hotels key connect OpenKey used interfaces companies rolling addition, Entrava platform are lock In and with in property Furthermore, worldwide. you the and manufacturers most any

XX First, quickly we to are Hotel expect estimated hotel end, brands Cachet scaling Hersha deployed, XX an hotel XX and contract and contract including under Collection. reach secured an destination over deployments rooms the Independent resorts, we have that level To XX,XXX to estimated portfolios XX,XXX and and with already asset Group rooms months. next

Also, Shanghai Play. a office Colombia. Mexico the has Rica, the the instrumental creation in we Mexico, and startup further been venture. and Secondly, internationally rapid headquartered gained significant platform in growth with Guadalajara, that growth China, Costa with has OpenKey Plug expect of JV and accelerator and traction for from China agreement expansion is OpenKey in

Additionally, resellers Netherlands, Belgium, United along United the States, Indonesia, serve Brazil. Bangladesh, Luxembourg, the Maldives, Australia, Sri additions with Canada Lanka, independent the and Singapore, currently and of India, recent the Kingdom,

Finally, OpenKey all achieved year-over-year growth. to quarter with prior high of growth and consecutive quarters in QX revenue relative time four of the X,XXX% XXXX XXX% at

wellness growth order asset Company hotels Rooms X,XXX of XX industry investment and as knowledge of us the The will for over expertise, Pure hotels. hospitality We’ve XXX We growing Rooms, growth EBIT Ashford provider based including contracts managed currently achieve we the and update to to growth. offerings United XX% growth optimistic in like the States bring leading adjusted basis our pro of allow health remain of in hypoallergenic prior achieved I has Company as demand hospitality outlets well revenue would year. forma Rooms our our in on XXXX, managed Pure in year a optimize full Pure representing with OpenKey. also asset throughout the rooms revenue For in full for to XX% year, industry growth and an and synergistically. OpenKey a the XXX% for approximately investment to space. place Furthermore and the rooms seen provide believe

value Going of believe and Rooms, will compelling. forward, for drive into able to Pure that additional Ashford hotels is significant and only but we anticipate additional to we proposition Rooms product Prime non-Ashford asset we the growth to creation gaining very be also not and adding Ashford we integrate Pure that Trust and manage, property but hotels traction instead by

and between significant Pure participating for in premium future hotel have prospects in night investment. excited typically program very a this rate simply and the of rooms experience the We about per remain XX% found We returns XX% the Rooms. achieve

hope continue We share prepared and quarters. now in in we remain investments more details open up questions. and remarks and evaluating we on our call upcoming front to additional operating companies active your the that to will concludes the That

Operator

B. from We’ll Maher take Riley. our Instructions] first question from [Operator Bryan

Bryan Maher

just of up. smaller I investments you will law no? give any to I the changes growing. you’re know that Remington in thought pursuing a companies had the be these deal did But kind or the question again booking related to making that tax

Monty Bennett

they more is management this over on-and-on a the the just that Remington property the have the for That’s is that project business project and the ruling management from probably little is management management IRS the it’s and business just complicated. reason required while interested both talking property Monty. I'd deal yes something where management. And trying not. that's say bit been no, and we’re set and Yes, Bryan, about in a is presuming to is business or very doing, well, project and move

but talking much very like that the law tax would to something something that been to just we that, like that, doing something have want like do. further changes help we that’s about So do

Bryan Maher

or to going think as capitalization growing And maybe had seem great kind to any it then the instead of the relates your of a some bit cash. XXXX. acquisitions opportunities? of market out as thought forward know a I these the that as shares and raising of the guys you split the Today, capital these shares far on pursue shares little flow of small given you but and company they stocks J&S like issue to there stocks Have

Deric Eubanks

Hey Bryan, it’s Deric.

on $XX got sheet, I on think to the our you I'd cash as cash point balance we of million sheet. balance our

also not, credit facility, it sure ability if credit We the million new $XX am that upsized or announced not be morning you $XX a to I saw million. this facility has to

feel from an standpoint, access we So, powder. dry capital we to like plenty got of

Bryan Maher

the to How it on Yes, rate on pipeline using thinking clearly uniquely have? you the much and you’re lairing these the relates opportunities standpoint you cash half, currently from the just I stock is dry these the I as smallest valuation of kind what's lot should kind shares one powder. XXXX? seeing was course those something growth vehicles, of you’re quarter, mean But in and to over on the keeping of that as One run of grow we seeing about ability the the that think have XXXX bigger. of a

Monty Bennett

to seller two, could, that hard or and give say, we’ve about but that talking really also individualistic with year you try a if and talk deals feel never or year two like we for an to idea would but it happens we when just It’s and we some sometimes negotiate principal happens. a to are there been We there Bryan.

We’ve it. service So thanks fantastic the in number to that say. on is quarters be just some hard past to to of great here a it would on give any just success efforts guidance Jeremy’s had that

to bottom only both that that I in and these how the because all assets incredible have part line growth the and platforms business because our oversee, contacts most numbers these growth just what revenues have of potential them but not is we and our doing the important been industry on The phenomenal of like. just there. mentioned with the think relationships you

Bryan Maher

key strike the stay trying of And that key to Company, deals the founder trying things? at the on guys period the the for pretty of Company insisting some are woman these just lastly, or you you time company are you’re much when the or when man to on negotiate

Monty Bennett

requirement. them. kinds hotels preference, as sales to companies extra of our at like them and but see in but them our the investing We of And investing to business it’s a we competitive access That’s these that acquiring in rather for then all not prices. manage instead providing

to didn't So monetize we try as they organizations good holdings with well. in forward part growth solid solid management to their of to good want find participate want teams that going that

Operator

We our from Vigor will Argus take now Steven question from Instructions] next Research. [Operator

Steven Vigor

Yes, hi guys.

to just to properties on contracts which one for J&S, integration on rolling depends mostly how to Just off. I'm J&S right front expect to timing question linear on with of or loaded? related benefit of transition current the timing end reason revenue I be assume to XXXX, the vendors, the that the through there's is more other vendors wondering it any if the backend the

Monty Bennett

number too here problem our is the Actually, over years. of growth has business. decent past a much J&S had trajectory

platform I business. a want grew guys think decent which the they or encourage to business over five duplicate vendor. numbers again Ashford outside strike if if continue growth. And that, alone to more XX% outside next pursue with would is to never the my years any we And year, you

business as go sprinkled to we because kind third-party be Ashford don't to we in put is the So, turn that going of J&S want business. into away we a

we is So to preference here, keep to just the XX% My pretty growth got XX% depends guidance, but it is up personal in really and on, promises range we've upon what like want that no third-party rates to going much growth I'd see. business their how strongly. no

the Ashford for time least rates to coming or outside those that's try so So business combination at a next the maintain business, we'll three. year of growth Ashford in to two,

Steven Vigor

macro just a And then question.

you growing they of rising know in bit had CBRE -- incomes obviously know a that quite hurricanes demand QX hotel and up nationally was you by the course. So, also helped X.X but quarter fourth from the mentioned the in X.X

that rates think And your macro with from of and average? the So, you national I'm think? higher expect remove boost or How some tax to a footprint to the will to here are seeing relative related any benefit standpoint. that you see wondering compares you cuts just

Monty Bennett

don't about high. economy. wins market. stock bullish our we're platform, particular at we looking give back All confidence the Consumer group We guidance are very The pace at but in is the least on overall are we surge that at.

other as industry start of that’s pretty going growth very, more, on, so that tracks seems on to far industries demand and so we now is rates keeping very the The and as grow receive positive; kind GDP demand be and it that’s to will just we growing down robustly, think strongly. rates

Operator

any that or concludes conference to and would And question today's turn like to for session. I remarks. the over management closing answer now additional

Monty Bennett

everyone you next again. to participating call one. talking our for in on we and Thanks forward look Thanks today's to

Ashford (AINC) 2 Mar 182017 Q4 Earnings call transcript