Ashford Inc. (Holding Company)

Greetings and welcome to Ashford Inc's third quarter 2021 results conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your cell phone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jordan Jennings of Investor Relations.

Good day, everyone, and welcome to today's conference call to review results for Ashford for the third quarter of 2021 and to update you on recent developments. On the call today will be Jeremy Welter, President and Chief Operating Officer, Derek Eubanks, Chief Financial Officer, and Eric Batis, Managing Director and Senior Vice President of Portfolio Management. The results as well as notice of accessibility of this conference call on a listen-only basis over the Internet were distributed yesterday in a press release. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the federal securities regulations. Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risk, which could cause actual results to differ materially from those anticipated. These factors were more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call and the company is not obligated to publicly update or revise them. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules which have been filed on Form 8 with the SEC on October 27, 2021 and may also be accessed through the company's website at www.ashfordinc.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compare the third quarter of 2021 with the third quarter of 2020. I will now turn the call over to Jeremy.

Good morning and welcome to our call to discuss our financial results for the third quarter of 2021. I will begin by discussing Ashford's operations and strategy. Derek will then review our financial results for the quarter, and then Eric will provide an update regarding our products and services businesses. After that, we will open it up for Q&A. We had a great third quarter. Our strong growth and adjusted EBITDA for the quarter was driven by Remington, Inspire, and REDD. As a reminder, Inspire is our audiovisual business that was recently rebranded from JSAV. We're particularly excited to report $1.9 million of adjusted EBITDA for Inspire, our business that was hit the hardest by the pandemic. As we look forward, I'm extremely optimistic about the future of our company, and we have a lot of exciting developments to discuss on today's call. The key things we're going to highlight today are, first, we have stabilized Ashford Trust. and built significant liquidity for that platform while Braemar is back on offense with its recent acquisition of the Mr. C Hotel in Beverly Hills. Second, we continue to see strong results in our third party growth initiative. Third, we have been successful in raising substantial capital and we are ramping up our capital raising efforts at Ashford Securities. And fourth, we have a comprehensive asset life business that is unique in the hospitality industry and well positioned for growth going forward. Ashford advises two publicly traded REIT platforms, Ashford Trust and Braemar, which together owned 114 hotels with approximately 26,000 rooms and had approximately $7.8 billion of gross assets as of September 30th, 2021. Braemar is currently benefiting from its focus on the luxury segment and specifically its luxury resorts, which has been the first demand segment to recover and had a solid third quarter operationally. Braemar also recently completed its first acquisition of this cycle with the 138-room Mr. C Beverly Hills Hotel in Los Angeles, California. Asher Trust has significantly deleveraged its balance sheet and continue to grow its cash balance, which ended the quarter at $673 million. Looking ahead, both platforms now have significant liquidity, and with both REITs stabilized and performing well, we believe both are well positioned for the continued recovery of the hotel industry, and we remain focused on their future strategic objectives. Remington and Premier continue to execute on their long-term growth strategies. Both companies are benefiting from the improved demand trends we are seeing at our hotels, and we continue to believe that those two businesses are well positioned to achieve growth with their third-party business initiatives. Both Remington and Premier have solid reputations in the industry. While we are still in the early stages of the growth of our third-party business, we have already seen strong momentum with Remington signing 11 new hotel management contracts with third-party hotel owners and Premier signing close to 30 new third-party contracts. Looking ahead, we are extremely excited about the long-term opportunity for third-party growth at both Remington and Premier. Here today, we have raised approximately $900 million of capital at our advised REITs. Only approximately 1% of this capital was through Ashford Securities. We formed Ashford Securities to be a dedicated platform to raise retail capital through financial intermediaries and a broker-dealer channel in order to grow our existing and future platforms. Our goal for Ashford Securities is to provide the market with highly differentiated alternative investment products. Types of capital raised may include, but are not limited to, non-traded preferred equity, non-traded convertible preferred equity, and non-traded re-common equity for future platforms. Ashford Securities is ramping up nicely and has recently begun raising capital for Braymore. In its first four months of capital raising for Braemar, Ashford Securities raised over $9.3 million in net proceeds of Braemar's non-traded preferred stock. This is a fantastic result, and we're excited to pursue fresh source of capital that will help us grow all of our platforms over the long term, all with the goal of increasing shareholder value. One of our portfolio companies where we are seeing strong growth is Red Hospitality and Leisure. Red is a leading provider of water sports activities and other travel and transportation services in the U.S. Virgin Islands, Key West, Florida, and most importantly in Turks and Caicos. Red had a very strong quarter driven by strong leisure demand in its markets, and Red anticipates that these markets will continue their strong performance in the coming months. In addition, Red recently entered into an agreement with the Ritz Carlton Turks and Caicos Resort to provide services including water sports, beach, and recreation operations, as well as destination and transportation services to the property. This is a great expansion opportunity for REDD, and we're excited about the potential to grow this business at other properties in Turks and Caicos. Additionally, the products offered by Open Key and Pure Wellness continue to thrive in this environment. As the hotel industry strives to implement measures to provide a clean and safe environment, Many hotels and guests are seeking automatic check-ins, allowing them to bypass the front desk with keyless entry and secure digital key capabilities. To that end, we are pleased to note that Open Key has entered into a partnership with Adrift Hospitality to bring contactless check-in to Adrift's collection of boutique coastal properties in the Pacific Northwest. The industry is also seeking enhanced sanitation and air purification standards within the guest rooms. We believe the benefits that Open Key and Pure Wellness offer will position them well to achieve accelerated adoption and growth hotels nationwide. We're also excited to announce that subsequent to the quarter end, JSAV completed a strategic rebranding and is now named Inspire. Throughout its 35-year history, the full-service event technology company has developed creative and individualized event production solutions, and the new name, Inspire, reflects the energy and momentum the company brings to each of its clients and the aspiration to create events that move people. The upward trend in hospitality revenue for the year is a bright spot and inspire, and looking forward, we are optimistic for continued uptake in sales opportunities. On the investor relations front, we believe having an active investor outreach effort and broadening our investor base are important areas of focus. A couple of weeks ago, we held an investor day in New York. It was very well attended and gave us the opportunity to share the Ashford story and strategy with the existing and potential investors. Over the coming months, we plan to attend several conferences targeting a wide range of investors from small and mid-cap focused funds to industry dedicated investors, as well as family offices and retail holders. We believe exposure at these conferences will provide further opportunity to tell our story and provide a meaningful dialogue with potential investors, which should in turn continue to have a positive impact on expanding our investor base. Looking ahead, we believe we have a superior strategy and structure that is unique within the hospitality space. We're starting to see the recovery in our industry and are also seeing investment opportunities of very attractive, unlevered returns that we did not see pre-pandemic. We believe there are four key areas of growth for Ashburn. The recovery of the hospitality industry and higher hotel revenues and increase in our assets under management, growth of our third-party business, and the acquisition or incubation of additional businesses. I will now turn the call over to Derek.