Aug. 4, 2016 — Ashford (NYSE MKT: AINC) (the "Company") today reported the following results and performance measures for the second quarter ended June 30, 2016. For the second quarter, the Company has consolidated the financial position and operating results of the private investment funds managed by Ashford Investment Management. The financial impact from this consolidation is adjusted out of the Company's financials through the noncontrolling interests in consolidated entities line items on the Company's income statement and balance sheet. Unless otherwise stated, all reported results compare the second quarter ended June 30, 2016, with the second quarter ended June 30, 2015 (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, low-capex business model
- Diversified platform of multiple fee generators
- Highly-aligned management team with superior long-term track record
- Leader in asset and investment management for the real estate & hospitality sectors
- Proposed business combination with Remington Holdings, LP ("Remington") will create the only public, pure-play provider of asset and property management services to the lodging industry
FINANCIAL AND OPERATING HIGHLIGHTS
- Total revenue for the second quarter of 2016 was $18.2 million
- Adjusted EBITDA for the second quarter was $3.2 million
- Adjusted net income for the second quarter was $3.9 million, or $1.69 per diluted share
- At the end of the second quarter 2016, the Company had approximately $6.1 billion of assets under management
- As of June 30, 2016, the Company had corporate cash of $25.0 million
UPDATE ON PROPOSED COMBINATION WITH REMINGTON As announced previously, the Company's stockholders approved Ashford Inc.'s combination with Remington Holdings LLP at a special meeting held on April 12, 2016. Currently, the proposed transaction is expected to be completed in the fourth quarter of 2016, subject to receiving an acceptable private letter ruling from the U.S. Internal Revenue Service, receipt of certain tax opinions, satisfaction of other tax related conditions and other customary closing conditions.
Remington is a premier hotel property and project management company with over 40 years of experience in the lodging industry and a proven track record of outperforming other hotel property managers. It currently operates 92 hotels in 28 states with almost 18,000 hotel rooms and employs approximately 8,000 associates. Current brand operations include: Marriott, Renaissance, Residence Inn, Courtyard, Fairfield Inn, SpringHill Suites, Sheraton, Westin, Crowne Plaza, Hilton, Embassy Suites, Hyatt, Hampton Inn, Hilton Garden Inn, and Homewood Suites. In addition to branded hotels, Remington also operates several independent hotels and The Galleryâ„¢, Remington's collection of independent luxury resort hotels.
INVESTMENT IN OPENKEY The Company has made an investment in OpenKey. OpenKey is the universal, industry-standard smartphone App for keyless entry in hotel guestrooms. By creating an open platform solution, OpenKey seeks to make mobile key technology more accessible and convenient, streamlining the process for hotel owners and guests. OpenKey's powerful software has a secure interface with lock companies that represent a majority of the installed guestroom locks globally. The Company has already installed OpenKey at some of the hotels owned by its managed REITs and anticipates additional hotels coming online soon. OpenKey has made significant traction in non-Ashford hotels as well and is growing its hotel subscriber base.
FINANCIAL RESULTS For the second quarter ended June 30, 2016, advisory services revenue totaled $18.1 million, including $12.1 million from Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Trust") and $6.0 million from Ashford Hospitality Prime, Inc. (NYSE: AHP) ("Prime").
Net loss attributable to the Company for the second quarter of 2016 totaled $1.1 million, or $0.71 per diluted share, compared with net income of $3.9 million, or $1.97 per share, for the second quarter of 2015.
Adjusted EBITDA for the second quarter of 2016 was $3.2 million, compared with $3.0 million for the second quarter of 2015.
Adjusted net income for the second quarter of 2016 was $3.9 million, or $1.69 per diluted share, compared with $2.7 million, or $1.22 per diluted share, for the second quarter of 2015.
CAPITAL STRUCTURE At the end of the second quarter 2016, the Company had approximately $6.1 billion of assets under management from its managed companies and corporate cash of $25.0 million.
QUARTERLY HIGHLIGHTS FOR ADVISED PLATFORMS
ASHFORD TRUST HIGHLIGHTS
- In the second quarter, Trust completed the sale of a 5-hotel, 1,396-room portfolio of select-service hotels for $142 million in cash ($102,000 per key).
- During the quarter, Trust also announced that it had entered into a definitive agreement to sell the 151-room Courtyard Palm Desert and the 130-room Residence Inn Palm Desert for $36 million (128,000 per key).
- Subsequent to quarter end, on July 6, 2016, Trust announced it had priced its underwritten public offering of 4,800,000 shares of 7.375% Series F Cumulative Preferred Stock at $25.00 per share. The closing of the offering occurred in July.
- Subsequent to quarter end, on July 8, 2016, the Company announced that it intends to redeem all of its issued and outstanding shares of 9.00% Series E Cumulative Preferred Stock. The redemption date is August 8, 2016.
ASHFORD PRIME HIGHLIGHTS
Subsequent to quarter end, on July 5, 2016, Prime announced that it completed the sale of the 250-room Courtyard Seattle Downtown/Lake Union for $84.5 million in cash ($338,000 per key).
Since its announcement of a $50 million stock repurchase program on April 8, 2016, Prime has repurchased approximately 2.9 million shares for an aggregate value of $39 million. This repurchase activity represents 10.1% of Prime's outstanding common stock prior to the initiation of the share repurchase program.
"We continue to be very excited about the combination of Ashford and Remington as it will rapidly build operating scale and earnings power for the Ashford platform," commented Monty J. Bennett, Ashford's Chairman and Chief Executive Officer. "We expect this to significantly accelerate Ashford's growth and drive meaningful value creation for our shareholders. The transaction continues to progress and we currently believe it will be completed during the fourth quarter."
To view full financial release and corresponding tables please click the PDF icon or visit: http://www.ashfordinc.com/resourcefiles/OtherImages/ashfordreportssecondquarterresults.pdf
