AINC - Earnings call transcript Q1 2022

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Operator

Greetings. Welcome to the Ashford Inc.

First Quarter 2022 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. this being note, Please Instructions] conference recorded. is [Operator conference your host will now Jennings, to the turn Relations. I Jordan over Manager, Investor

begin. may You

Jordan Jennings

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

the distributed time, are this and based were on and that On yesterday today Internet are as this Management. release. in information Portfolio in At let The Deric certain as being well a will made listen-only Eubanks, and of this conference Financial assumptions you Officer; a of or forward-looking the Batis, Vice press Managing call call pursuant President of over contain call me to notice conference accessibility remind upon Eric Director safe be Chief and basis Senior results statements the publicly regulations. harbor anticipated. discussed risks, or forward-looking Such statements provisions are could known in differ which from federal cause to the to and company more unknown them. fully included assumptions factors results not the are of materially with statements of These this uncertainties securities forward-looking the numerous subject the are this and as conference Exchange These actual those call call the Commission. filings Securities only to date revise and obligated made company's update in or of is

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

Deric Eubanks

call and strategy, Good will giving the XXXX. up morning our our financial to overview operations, then quarter operating we our results I'll After regarding that, for the discuss quarter and it welcome for provide an Q&A. to financial of start of by and our will open you first an for results update businesses. Eric

gain a recovery first, going lot we're have are discuss today's exciting today to lodging The We of in to key the developments on momentum. highlight continues to the call. industry themes

little quarter. footing. solid in advisory strength slow, While into of we demand late saw continued the February up trends Both started the off a quickly platforms are our that ramp year mid second to has and on

the preferred Trust the S-X for is its growing non-traded has recent Puerto with significant acquisition reinstated Braemar its filed an SEC Ashford offering preferred its on the with back Dorado stock. Beach of Rico. Ritz-Carlton and Reserve liquidity, in dividends recently future and of office

to we this around Remington's discuss minute. Hospitality, results Remington's added XX transformational transaction under management will portfolio. more growth at acquisition now recent continue see XX% in third-party in hotels to mix of and Eric our hotels Chesapeake with third-party initiative, Second, a details third-party which Remington's approximately of strong stands highlighted

capital and Ashford on raising focus capital growing Third, ramp Securities. of through to amounts at have continue raising our AUM, efforts in successful our we substantial been up

$XX.X we of our fourth, XXXX XXXX. for million, we for for future back nearly raising provided public first positioned growth. first adjusted for the preferred of Last time three long-term and to the is adjusted the capital its peers. forma in EBITDA first non-traded quarter, the is which trailing in channel company, guidance is And level quarters comparing as when we be for Ashford continue the to our of end expected significantly outpacing fact, to our EBITDA year, XX-month Securities adjusted as well and our In XXXX pro EBITDA stock, be broker-dealer what a history now

have earnings the was we felt platform historically guidance, we to better the for the for market potential it that growth not While long-term. over provided understand our important

on of have we a improved strategies, significant result As those that the seeing in hospitality we've yesterday with we progress industry, updated recovery the been projections. along growth made our

guidance adjusted years EBITDA for XXXX updated through includes for projections calendar XXXX. Our of the

and million, hospitality in projections ramp-up the is guidance. EBITDA previous XX% adjusted are our Securities These companies. continued website. business continued growth analysts which for a seeing projections of recovery a We for above projection we encourage XXXX $XX our third-party driven the industry, increase presentation found the continued our our review and which the in growth in investors current Our in be portfolio and are Ashford assets is on to management, can in by under our

continues Dorado of quarter to XX,XXX stock approximately the results XX-room and announced $X.X Our had and second currently the Ashford March its Puerto quarterly results. report Beach as cycle also XXX its industry-leading REIT Rico. completed Reserve approximately reinstatement luxury its the results XXXX. and on assets two its specifically, of this dividend gross rooms XXXX from publicly-traded Braemar XXst, in common Braemar Ritz-Carlton Braemar owned acquisition Dorado significantly Braemar, and is segment with billion luxury benefiting platforms, exceeded resorts. of of focus and hotels its its first with Trust

of Series is strategic dividends, J which preferred Ashford preferred current non-traded paying through issued financing, balance Series sheet stock, registration Securities. paying is Trust redeemable and has on a offering be delevered statement its will in Ashford for interest March K early filed significantly the future its and now its the

at positive significant portfolio. $XXX maintain balance, which a Ashford remain by quarter its million continued Trust the ended cash also in to the and encouraged momentum

on liquidity both future recovery performing Looking focused and for believe well their remain industry ahead, have objectives. we now hotel and we and with of positioned REITs the significant both both well platforms are strategic stabilized continued the

is Our designed and structure strategy for growth.

our million. all grow We that that we would ecosystem in every management. estimate $X a approximately AUM EBITDA of assets million adjusted have We for our increase $XXX under increase powerful benefit as businesses

brings future XXX% in believe the lodging growth $XX.X the that hospitality are year Adjusted benefits of increase attributable third was our have $X.X industry other within the we platform. also owners and I'll scale and quarter. providers. is loss space party million. structure quarter. now our quarter turn and we for and the size to the for results about was an prior unique excited EBITDA Our strategy common million, of potential over Net stockholders a the financial to first We superior capital to

our improved financial performance business was RED and Remington, Our and strong at REIT Advisory growth in INSPIRE, Hospitality. adjusted quarter by EBITDA for the driven Premier

We INSPIRE are EBITDA million particularly quarter. first excited of $X.X for to the report adjusted in

bookings events and the to to well for benefit We are an seeing continue INSPIRE from that recovery. positioned acceleration group is in

performance In year, XXX% million. income adjusted income an $XX.X increase with INSPIRE of Remington respectively. terms of rates over million quarter with These $X.X million year per of growth the led was increase net with of share $X.X the of growth the our net an and for Premier over $X was prior XXX% increase Adjusted $X.XX. and results was then and by and prior an adjusted EBITDA then million reflect

loan. common under the term conditions XX Our outstanding our satisfaction of of X.X $XX of is common common share end deferred options X.XX%. shares and million million shares million At outstanding, of bears certain million on corporate month. associated currently has comprised five X.X we drawn commitment X.X fully initial our months. the for entered which shares million the to the three compensation down million shares the interest count drew million over plan, stands issuance into quarter, corporate with X.X X.X issued diluted rate $XX shares at to an earmarked balance option million acquisition restricted the the with Subsequent new plus the preferred as a to with the primarily stock. at one-year of The We convertible LIBOR have of Series D that extension currently the this first a we common after financing years additional of part preferred quarter stock, closing, million have draw is Chesapeake associated $XXX OP term and $XX closed subject units next end and

dividend approximately operating during sometime a detail. payments pay preferred XX% going over to current. Eric businesses preferred Additionally, quarter, forward, XXXX, And and to ending aggregate Series call June the turn to our dividends We've keep per more will end of of XXXX. be paid accrued XX, hope stock, unpaid quarters of D convertible XX, XXXX and preferred an subsequent of cash reflecting for Board dividends cash $X.XXX declared the Ashford's the remaining our the accrued for XX Directors dividends. we XXXX. discuss April now to the the to accrued dividend plan on representing the December position share dividend I in in We to

Eric Batis

our excited Thank to & Products Services on you, businesses. Deric. We're updates provide

coming continued even rapid what these confident in Our businesses out become. recovery opportunities more us the makes of the ahead pandemic can and

a in & division growth our and create and shareholder to practices execution implementation where a operating hospitality is of of best unique through reminder, strategy accelerate value investment the As Services Products we the aim accretive industry the acquisitions.

businesses financial performance. their able advised and while refer REITs hotels utilize to optimizing We are relationships our to exceptional our ensuring these extensive receive also service

the of West US first of RED Rico, in a I'd Virgin and is travel The the and provider activities demand first Leisure, business like and RED quarter, million and Puerto prior other to of generated growth watersports year Caicos. and Turks million leading its XX% quarter discuss Key $X.X leisure In and to Hospitality services and a adjusted in in $X Islands, RED over markets. EBITDA, record XXXX achieving revenue XX.X% from strong continues a year the benefit had revenue representing margin.

existing Lastly, to growing M&A and share its scale geographic by RED to areas. markets new opportunities diversifying market platform continues as inorganic expanding its well within explore rapidly its to as

discussed trend Throughout solutions developed XX-year its events the now quarter INSPIRE of generated event is million INSPIRE the of million aspiration brings a adjusted and revenue full-service in to named of company momentum technology has move XXXX, of quarter the to the first of EBITDA company and clients second JSAV and energy the the in individualized that and As and the production $XX Continuing people. INSPIRE. $X.X the event quarter. strategic reflects previously create history, XXXX, creative each completed the rebranding name upward since fourth and new its

XX.X% of second-best just negative margin XXXX, adjusted was EBITDA all-time first in of revenue prior to margin XXXX. for in is margin margin company above that a in record a history, XX% quarter quarter XX.X% a First EBITDA This the the year resulting quarter quarter. in below compared adjusted the XXX% the of

in million quarter. Additionally, EBITDA, INSPIRE the margin. EBITDA quarter, $XX.X XX% contracted hotels month million Hospitality which over $X of adjusted in where Also, were the representing growth month of exclusive during at first the is in as EBITDA which the a hospitality the INSPIRE revenues, in the highest of events record contracts, at over XXX% single company new million March revenues. generated INSPIRE history five annual year represents prior audiovisual provider of $X.X quarter executed include

represent new with as across usual of expects of the hotels to the on thrilled in-person results an focus Remington's Louis. will consideration start of acquisition expand is its forward full of Subsequent expands business convertible to as price will hotel and attractive INSPIRE's very best-in-class full end to performance $XX.XX X.X complementary seeing $X.X multiple total acquisition Midwestern markets X.XX% portfolio ending St. year, Milwaukee, unit, million management hotels per property. are of is a and footprint under such multiple independent expertise the for Hospitality, the XX, million $X.X to represent EBITDA XXXX, rebound a contribution management an currently continues up dynamic contribution of recent as in potential initial Wyndham and management The million. and ownership Remington's a company $X.XX Remington million which Chesapeake's to from stand its Remington's share. will the a closed XXXX, compared first have payable while on adding of to XX groups. which improve seller, events. and to rest XX-month also base March acquisition for conversion third-party for trailing across of We March $XX.XX shifts XXXX based to This EBITDA. the Ashford XX% management, consideration quarter, transactions. earn-out million, properties IHG and acquired have would period XX% XXXX, times providing Chesapeake and for the for pre-acquisition. their It up also comparable Series and of $XXX.XX dividend, and Remington at country. the of ability Pittsburgh, $XX year Chesapeake a result of Should service hotels fee a additional approximately and earn performance to and to Detroit properties, throughout annual look in cash the hotel million Chesapeake consideration the the pay was under geographic CHP with new its approximately XX preferred of

We to XX states of of are future and third-party brands boutique prospects in optimistic Washington independent and the XX XXX more D.C., hotels, contracts, executing XX about roster our including bolster management properties. across

In addition first of All full Remington the were another contracts Chesapeake awarded representing four executed quarter, to of agreements verbally $XXX,XXX the management first the and third-party for acquisition, was base three hotels. year in operating fees.

order companies. of as continued has of provides $XX.X Remington's architecture, of the million design, procurement project architecture five support contracts services. management largest growth the continues growth hospitality add excited groups, third-party across to management it third-party XX ownership and and signed fourth to Premier in development, and hotel XX comprehensive of in has project procurement, The company design, XXXX, cost-effective one are ranks staff to Since objectives. We its space, Premier a fees. contracts. third-party total as continues the climb representing executed Premier the management quarter for

Additionally, back exceptional By from delivering work continue in come investors. and on Premier Premier's majority capital to capitalize the additional owners of customers to uptick contract Premier. excellent have and projects, by confident service are investments we will the third-party

our the both retail of Lastly, million institutional to issued preferred platform. In to Braemar's Securities, progress Ashford $XX.X on stock you like and Securities XX update has just capital-raising of Ashford months, approximately I'd non-traded investors. retail

we brokers signed more have conversations XX to and about X,XXX on signing have capital over We this with that dealer raise. almost agreements represent to continue dealers

product with executive Ashford – evaluate next and underwriting its to investment management excuse our Securities teams. by elevate consulting me, continues banking offerings

is strong to the current income continue and We traded on a that see to for provide markets. differentiated investment capital growth appetite retail strategies designed dependent not

uniquely is Securities opportunity. Ashford positioned capitalize market this on to

launching source. to believe the For on early at plan preferred our the several we security remainder a Trust, tapping stages Ashford new into for including and platform, of of we very this XXXX, capital non-traded are products fundraising attractive

industry, our executing & third-party in As rest rapid continue XXXX, third-party we businesses the for major the growth pursuing initiatives: on platform. through focusing will acquisitions the growing to look forward and our Services of we in two Products hospitality and strategic growth recovery our sales

That We meaningfully remarks and to Q&A. our for the now runway in see continue up all call significant of will all portfolio and across scale businesses see our prepared the companies. to we our concludes open opportunity

Operator

Please Our line B. Instructions] comes question proceed with question. first with Bryan the of [Operator from Riley. Maher your

Bryan Maher

Eric. those Deric questions. Appreciate and comments. afternoon, couple A Good of

a to come Can more that what $XXX little for million On to rationale Was the million? us the preferreds? powder corporate financing the it main on give $XXX the like it funds that? have to was Was Chesapeake? acquisitions you have on for current dry color

Deric Eubanks

Bryan. Sure, is This Deric. Yes.

an had loan really covenants of some in tying ability the we're on that existing our to terms and things somewhat on strategies. we our term there growth execute that hands flexibility our So had and

grow were terms so both to our really flexible capital be then of a in relatively looking of very And strings for or would we covenants attractive also at attached any be ability cost, in that terms but platform.

for us a us some in no a time and cost. believe that that really some we're that give at So deals we covenants where that our other future of term, a looking on/off platform financing. we've and pursuing to achieved It's capital of search capital to We've to what achieve -- in line seeing we capital Chesapeake opportunities. us were of And that's go of that extremely or sort acquisition. relatively terms really still that and speak use have the interested to everything at growth. lot with in grow trying attractive really allows capacity announced that it's we're when deal flexible got to one on we And for

So primary that's what was. the focus really

Bryan Maher

recognize we model a section it managers Do and with there? more? to would you And you will names from more it sticking like how or for clients all Remington from modeling that? fold branded of, kind and service leave be do, Chesapeake under country our And a bit they buy if the their about opportunities of they existing there maybe area grow into their And are that ultimately might them that standpoint? minute, Okay. Remington we a our the little do think of which

Deric Eubanks

Yes.

Remington And in the there say, first numbers other future your businesses. give segment should hard speculate terms the might to potentially Chesapeake as segment on opportunities business. answer of speaking deals to roll management look guidance yes question of Chesapeake hotel relates yes, to in business. you those of our I so branding like it's any what are roll you just acquire the forward into I to into the really would it future should the Remington our there going numbers So to out the that. But won't

Bryan Maher

do And of think right a multiple is deals? Is revenues? you a deals those How of it multiple the way those buying about negotiate management EBITDA? to

Eric Batis

of to trailing of There's varying market. in EBITDA that Yes. see the EBITDA on we XX in Eric. amount some and EBITDA of X a EBITDA, This the a It's out multiples synergies is times you though. times somewhere those obviously seller see numbers multiple is significant between

effective I includes being under of where assuming which amount synergies. fully That's five. multiple is as of the our achieved EBITDA significant that's talked about earnout So if the

and and achieve for to we those. So those that ourselves do the pay for earnings on don't recognize based they're able negotiate synergies

Deric Eubanks

Yes.

to us, client is valuable base important focus business, Getting the portfolio in its of huge and us Bryan on of win its third-party expand ability and also a think we a is strategic to the to to Remington's very close XX% growth strategies. So but to of executing that our of ours. are synergies obviously terms which

Bryan Maher

what an profitability JSAV Got get saw INSPIRE, levels really how color on or make to you market of you it. kind business of is the see control for the over that the and an any cost us year to next inflationary it's two pre-COVID. profitability in the part what And drives Ashford we firm. modeling when sure to Inc. that ramping we're back ability we former important Can the give

Deric Eubanks

Yes.

for is significantly we than expected. ramp-up the faster obviously INSPIRE So originally

on what guys getting back to expect think that I we've we we outline XXXX budgeted We their talked about numbers that is by quarter calls those provided previous not something is that just what we growth for for this that does which a for guidance quarter of, budgeted them kind having had record XXXX recently guys. and be historical those is in the to, really what directly And saw we to for weren't actually INSPIRE practices XXXX. that to because were we that lot fully able Bryan wanted achieve margin your I'd and of best we to even you and originally. to outperform savings implementing still cost expect question say achieving the numbers a

we And COVID margin. that and subsequent haven't EBITDA full years the to were our when that. single-digit we hit, of So acquisition still year the in margin two achieved

up. we get that's to every look that So expect we the happening it and faster you'll quarter see faster like margin XX% stabilized in forward going and to looks guidance,

costs. to numbers the So those margin control seeing our certainly inflation of to are that ability you're some now

having hiring folks We some sort right now. are of

our INSPIRE. as So and targeted our in to of we rightsize for higher costs achieve and but kind ability achieve those control we're confident forever do expect what margins not to very margin are our platform, we

Bryan Maher

offline, understand out and Right. that INSPIRE's, on I break can we Slide take within I think, bar revenue mean, and I Page I on don't it but third-party really XX AUM -- the that -- INSPIRE? see… within maybe don't deck charts I'm is the

Eric Batis

INSPIRE. within Yes. That's

AUM, other revenue it adjusted non-Ashford revenues. or EBITDA contribution, non-Ashford So AUM be green right? Ashford is Ashford so the about Ashford associated The way intended to hotels and think is to it's not and

from is clients. that or you'll so of parties And revenue show services vast majority non-Ashford see INSPIRE's third hotels there a other

Deric Eubanks

Yes.

we Bryan, AUM, and didn't third-party EBITDA but the by revenues. break So did for out we

Bryan Maher

probably would clear wasn't I just that rework Yes at key. it. I just It when looked

that but about raising some through and Ashford get for flows actually Ashford Inc. Ashford for does the within product broker fee, lastly and $XX that the sure selling road. get and fee, gets Ashford it we Ashford Trust the profitability ultimately the Inc. fact when a and the Inc. increases I'm Just that Inc.? out Inc. million, Braemar or benefit of down it at to moving Securities does me $XXX from What of million think does AUM it? Braemar

Deric Eubanks

Yes.

the would under Securities there grow in that growth Ashford the through obviously ecosystem fee growth So our is a our that where we significantly. under of walked in Ashford benefit from as our that, through is we the benefit assets but EBITDA I And back AUM to Inc. assets management. comes grow benefit real management, ability the to our and our grow

that also, So in Securities. of the it's is lot from through channel raising participants that us. It's we that Inc. space opportunity a raise Ashford to a think very And in and a of for seen availability capital. so been of resilient huge terms primary able the you've have capital benefit capital as gets Ashford

Bryan Maher

for That's all you. Okay. Thank me.

Deric Eubanks

Thanks.

Operator

of session, we the conference. question-and-answer this reached And the and end concludes have also today's

your disconnect lines you at may participation. for this Thank your You time.

Ashford (AINC) 8 May 222022 Q1 Earnings call transcript