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spk08: 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.
spk01: 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.
spk04: 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.
spk05: Thanks, Jeremy. Net loss attributable to common stockholders for the third quarter was $9.2 million. Adjusted EBITDA for the third quarter was $12.6 million. which reflected growth of 85% over the prior year quarter. The growth in adjusted EBITDA over the prior year quarter was led by Remington with an increase of $3.3 million, and Spire with an increase of $3 million, and Red with an increase of $1.7 million. Adjusted net income for the third quarter was $8.4 million, and adjusted net income per share was $1.11. As it relates to our advised REITs, during the third quarter, Ashford Trust continued to make significant progress in converting its preferred stock into common stock, and to date has exchanged approximately 70.2% of its preferred share count prior to the exchanges into common stock. Also, year to date, Ashford Trust has raised approximately $550 million from the sale of shares of its common stock. Braymar has raised equity capital of approximately $102.4 million from the sale of shares of his common stock year to date and has raised $9.3 million in net proceeds from the sale of its non-traded preferred stock. These capital raises and exchanges have helped shore up both REITs liquidity and lower their leverage. In terms of financial results for our portfolio of companies, I'll provide some highlights and then Eric will discuss more details. TAB, Mark McIntyre, Lists more recorded revenue of $3.2 million in the quarter related to debt placement services and disagreements with asher trust and brain mark to seek modifications and forbearance for the wreath debt. TAB, Mark McIntyre, The forbearance effort is mostly completed, but this one will continue to record this revenue over the remaining term of the agreement which expired in April of 2022. TAB, Mark McIntyre, Remington realized hotel management fee revenue of $7.8 million in the quarter. net income attributable to the company of $1.0 million, and adjusted EBITDA of $4.1 million. For the third quarter, Premier had design and construction fee revenue of $2.2 million, net loss attributable to the company of $2.4 million, and adjusted EBITDA of negative $34,000. Open Key finished the quarter with 267 hotels under contract, which compares to 255 hotels under contract at the end of the second quarter. This growth was driven by a significant shift in guest preferences with utilization of digital keys increasing by 40% in the third quarter over the prior year quarter and approximately 40% of guests from July through September opted to use a digital key when offered. Obakee also reported revenue growth of 48% over the prior year quarter. Financial results for INSPIRE for the third quarter included revenue of $15.1 million, net loss attributable to the company of $1.2 million, and adjusted EBITDA of $1.9 million. The revenue for INSPIRE reflected a growth rate of 385% over the prior year quarter, and it's the second consecutive quarter of positive adjusted EBITDA for INSPIRE. As of September 30, 2021, we had 7.6 million fully diluted shares of common stock and units which included 4.3 million common shares associated with our Series D convertible preferred stock. We had 2.8 million common shares issued in outstanding, 0.2 million common shares earmarked for issuance under our deferred compensation plan, and the balance primarily comprised a restricted stock. I will now turn the call over to Eric.
spk02: Thank you, Derek. We are excited to provide updates on our products and services businesses. Looking forward, We believe our businesses are optimally positioned for an acceleration of growth. In the third quarter, our businesses continued building on the forward momentum previously established. Cost control measures are still in place at all of our businesses. However, we are engaging in rebuilding our staffing levels to support recovering demand. I'm excited to share that we are delivering results quicker and stronger than expected. Our talented and experienced team is executing very well. As a reminder, our mandate is to invest in market leading businesses with seasoned management teams and identify growth opportunities supported by enticing macro dynamics. To explain this strategy more fully, our products and services division is a unique investment strategy in the hospitality industry, where through a multi-pronged approach, we aim to accelerate growth and create shareholder value through rigorous industry research, the implementation of best operating practices, and the execution of bolt-on acquisitions. We are also able to utilize our extensive relationships and refer these businesses to our advised REITs, ensuring their hotels receive best-in-market service. The first business I'd like to discuss is Red Hospitality and Leisure, a leading provider of water sports activities and other travel services in the U.S. Virgin Islands, Key West, and Turks and Caicos. In the third quarter, Red generated $6.7 million of revenue and $1.8 million of adjusted EBITDA, representing 168% and 1,188% growth, respectively, over the prior year quarter. If you remember from our last call, RED had an exceptional second quarter where it broke company records for revenue and EBITDA. July performance exceeded those record-breaking months, generating $2.9 million of revenue and approximately $1.1 million of adjusted EBITDA. Both of these figures represent the highest month ever recorded in the history of the company. It is worth noting that RED's year-to-date revenues through the third quarter have already surpassed the full year revenues for last year. During the third quarter, RED ramped up operations at the Ritz-Carlton Turks and Caicos and began providing activities and services to guests. In its first few months of operations, demand is exceeding expectations and the future looks bright at this property. With RED's dominance in the marketplace throughout 2021, the company will look to leverage this year's success to win additional third-party contracts. Additionally, we continue to explore our inorganic M&A opportunities with RED to rapidly scale the platform, as well as strategically bolt-on platforms that complement our offering. Another business that continues to grow is OpenKey, which provides Bluetooth-enabled lock upgrade modules. These modules are added to existing locks at a fraction of the cost of replacing an entire lock system, saving hotels money. OpenKey continues to capitalize on growing customer preference for a mobile contactless check-in experience. The company posted another impressive quarter, which included both app download growth of 48% and key delivery growth of 43% over the prior year period. While OpenKey's operating metrics continue to gain traction as brands go live on the platform, the third quarter is headlined by strong revenue growth. Third quarter revenue was up 48% compared to prior year quarter. Also worth highlighting is the number of live hotels and hotel rooms. As of the end of the third quarter, there were 211 hotels live on the platform versus 126 at the end of the prior year quarter, an increase of 67%. Additionally, there are now 21,340 rooms live on the platform versus 12,608 rooms in the prior year quarter, representing a 69% increase. We now have 15 Four Seasons properties under contract and added several other key properties in the third quarter. With a new chief technology officer in place and a hyper focus on building lasting partnerships, OpenKey is poised to continue driving the hospitality industry forward by delivering a seamless and contactless journey for guests. To that end, during the quarter, OpenKey announced another partnership with Adrift Hospitality, a collection of boutique coastal properties in the Pacific Northwest, looking to provide guests a contactless service across its portfolio. We are thrilled and appreciative for all our partnerships and look forward to providing updates as the year goes on. Remington is a dynamic hotel management company providing best in class service and expertise to hotels across the country. CEO Sloan Dean and his team were awarded three third party management agreements in the third quarter, two of which are expected to begin soon and one is a development deal which will take some time to begin generating management fees. On the financial front, For the third quarter, Remington realized hotel management fee revenue of $7.8 million. This figure eclipses the strong second quarter the team at Remington was able to put together. We are excited by the pace of recovery in the travel and leisure space and looking to continue driving success for our properties under management. Year to date through the third quarter of 2021, Remington has executed eight new third party hotel management agreements representing $1.7 million of full year base fees. This brings Remington's total third party hotels to 11 and represents 13% of hotels under management. With several 2021 hires on our development team now fully ramped up, we are optimistic about the future prospects surrounding our focus on winning third party management contracts. to bolster our roster of 82 hotels across 15 brands and 23 states in Washington, D.C. Premier provides comprehensive and cost-effective design, development, architecture, procurement, and project management services. The company continues to add staff in order to support its growth objectives. A key hire in the quarter was Senior Vice President of Architecture, Robin Ballerby. Previously, Ballerby was a principal at Humphreys and Partners Architects, where she led production and construction projects and managed 80 team members. She managed numerous high-profile projects from design development to project completion, including Manhattan, a $120 million, 700-unit condominium in Las Vegas, and Mockingbird Flats, a $28 million, 412-unit multifamily development in Dallas. Her vast experience will provide Premier the expertise to deliver exceptional customer experience as we push to expand our architectural services. During the quarter, Premier was awarded four additional multifamily design and procurement contracts along with one hospitality contract. Through the third quarter, Premier has been awarded over $6.1 million of third party fees. With its new sales leaders fully ramped up, we expect to see an increase in opportunity identification in markets outside our historical hospitality focus. Our two-pronged push to win third-party business and expand outside hospitality poises Premier to fully capitalize on the rebound in capital investments as the recovery continues. Premier has an exciting future and is exploring several inorganic growth opportunities, and we look forward to keeping you updated on their progress in future quarters. Inspire, formerly known as JSAV, launched a rebranding campaign to raise its profile in the marketplace. As a leading single-source solution for meeting an event needs with an integrated suite of audiovisual services, including show and event services, hospitality services, creative services, and design and integration, Inspire has been aspiring to inspire its clients for over 30 years. Over that time, Inspire has been serving its clients to help audiences reach their full potential. By undergoing this rebrand, Inspire will significantly increase its brand awareness and opportunity identification in turn, driving third-party revenue growth. Continuing the trend of the second quarter, Inspire produced another three consecutive months of positive adjusted EBITDA, growing that trend to six consecutive months, and reported adjusted EBITDA of $1.1 million for the month of September, which was the best adjusted EBITDA for the month of September in company history. The month of September delivered $6.2 million of revenue, which is more than a 160% increase over the trailing 11-month average. Building off the momentum established in the second quarter, Inspire is starting to find its stride. Hospitality revenues continue to rebound quicker than expected. September hospitality revenue is up 66% from our previous call where we spoke on June revenue. Since March, hospitality revenue has increased every single month. The pipeline for the remainder of the year remains robust, and is 137% higher than previously forecasted during our last call. Lastly, I'd like to update you on the progress of Ashford Securities, our relatively new retail capital raising platform. Jay Steigerwald and his team continue to build out a world-class fundraising platform by hiring exceptional people and growing our relationships in the broker-dealer community. We believe our long-term commitment to this platform distinguishes us from many of our competitors in the lodging industry. The first close of new investors into the BHR non-traded preferred offering was on July 9th of this year. And to date, the offering has raised $9.3 million in net proceeds through 17 syndicate member firms. As you may recall, We see a substantial long-term opportunity to raise substantial amounts of capital from retail investors through Ashford Securities. We believe this will ultimately benefit our entire enterprise as Ashford Securities can provide capital to any number of our companies or businesses. Ashford Securities continues to evaluate its next product offering by consulting with our underwriting, investment banking, and executive management teams. We continue to see a strong retail appetite for differentiated investment strategies designed to provide current income and growth that is not dependent on the traded capital markets. Ashford Securities is uniquely positioned to capitalize on this market opportunity. In summary, we are very pleased with our decision to enter the retail space and are excited to see the first fruits of our investment start to pay off. In short, we're excited to access a fresh source of retail capital that will help us grow all our platforms over the long term with the goal of growing our assets under management and increasing shareholder value. That concludes our prepared remarks and we will now open up the call for Q&A.
spk08: Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star one on your cell phone keypad, and a confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Tyler Battery with Jani. Please proceed.
spk06: Hi, good afternoon. This is Jonathan on for Tyler. Thanks for taking our questions. First one for me, on the third-party business, wondering if you could provide some color on how that avenue is progressing compared to your original expectations, particularly at Remington and Premier, where growth has been quite strong. And if there's any ways that it's changed the opportunity as you've seen the strength?
spk04: What was the last part? I'm sorry, you cut out a little bit. Any ways to what?
spk06: Sorry, if you're thinking about any changes to the way you're thinking about the opportunity long term.
spk04: Yeah, definitely. I think that there's tremendous opportunity across the board with each one of these companies. And I can make an argument. I think if you look at Red, Premier, Remington, Spire, maybe even Open Key as well, which one is going to be either the most valuable or or contribute the most even uh depending on the metric um and and we're very very excited about uh the teams we've got in place the strategies we've got in place and the opportunities we have in front of us uh red uh has done a fantastic job on third-party business most of his business is third-party and and i think it's just uh incredible that uh you know we're expanding this partnership that we've got with ritz carlton uh just recently entering into Turks and Caicos. That hotel is not affiliated with Ashford in any way. And it's a huge opportunity and a huge new market for us. And so we continue to look at other ways to enter new markets. We see a ton of potential because we've got a very unique offering that is very, very competitively priced, but also an incredible experience and way we do business. And so we see a lot of opportunity, third-party growth there, and then also continue to see a nice touch on acquisitions that probably are going to be north of 30% on the IRRs. So we're very excited about that opportunity. When you look at Premier, we signed our first contract in March of 2020. So we just entered third-party business when the world was – falling apart, as you know. And so we're very pleased with the fact that as we stand today, we're almost at 30 contracts. It adds up to a good amount of fees. But when you look at the pipeline and the opportunity there, I'm very, very excited. I think we've got an incredible team there as well. We've won numerous awards on renovations we've done. love to walk you through any of our assets. And you can see the transformations this team has done. One of the things that I want you to keep in mind is that their core bread and butter is focused on hospitality, hospitality renovations. Well, renovations have been dramatically cut back across the board, as you know, in hospitality space. And there's a decent amount of lead time for renovations. But the fact that we've been able to get a good amount of business so far, in spite of owners not really investing in their hotels, I think is a great achievement by the team. And also, I like the fact that we entered into a new market in multifamily, and we've got a lot of good traction there as well. So I think we look back as we stand today. I'm very pleased with what the team has created there in terms of a selling effort. And then Rennington, again, is very similar. We basically launched our third party effort in the midst of the pandemic. And we signed up a decent amount of hotels. I think we're pleased with where we stand today. But I'm actually much more pleased with the potential in terms of the pipeline we have in place. And the reason why is because we're really starting to expand our relationship base. I mean, you're starting from a company that has a great team and core business, but was pretty much 100% affiliated with Premier and Ashford. And so it takes a while to get confidence in some ownership groups that Remington will take good care of them and look over their assets appropriately. But where we have a huge amount of opportunity is on the repeat business side. We've got owners that have put Remington in place, and they've been incredibly pleased with the performance of Remington relative to other management companies. And so that's creating a lot of recurring business with similar groups. And so I like the fact that folks have signed up for Evington are going back and being very loyal to that service provider. Finally, I'll talk a little bit about Inspire, which is one that has done a great job third party because it was 100% third party before we bought it. And we've been able to pick up some nice contracts since the beginning of the pandemic. But it hasn't been as rapid as I'd like it to see. And it's not from lack of effort. It's not from lack of ownership groups wanting to do business with Inspire. It's just the fact that hotels are ramping up. And the last thing that they're really concerned about is being out their audiovisual services contracts. They've been focused on cash flow. They've been focused on hiring people. They've been focused on supply chain issues that they've got to deal with. And so it just hasn't been a focus yet. And so we haven't had as many opportunities I'd like to see, but I'm as bullish on where they stand competitively within the marketplace than probably any of these companies because they've got an incredible offering as well. And they're uniquely positioned in the marketplace being now the number two provider in hospitality, the clear number two, but being much smaller than their largest competitor. And I think that creates a lot of opportunity for us to grow. And I do believe we'll see a good amount of growth there. And if you've tracked the store here at Ashford, the investment we made in Inspire, formerly JSAV, was just a home run for us. And I know that it was the most difficult, hardest hit by the pandemic, but it is also coming back very strongly. We quoted the EBITDA in the third quarter, which was a nice surprise. Actually, I believe September of 2021 was actually higher than September of 2019. And so that's phenomenal when you think in terms of, you know, audio visual services company in the early stages of a recovery from a global pandemic.
spk06: Okay, great. I appreciate all that detail, Jeremy. That's a nice segue into my next question on Inspire. Results in the quarter were well above our expectations. So I'm curious if you can provide some color on the demand. I know you gave the statistics on September, but broader quarter. And also, how has that rebrand been received by some of the clients?
spk02: The rebranding's been great. I think that across the board, we've heard positive feedback about the rebrand. I've been on several calls with folks just commenting and complimenting us on it. Not to say anything about the JSAV brand. We love that brand and that name and what it represents and the family history of the company, but have heard great things in the market about what the real meaning Inspire has. for them and what JSA, what Inspire, excuse me, is able to bring to the market now. So very, very positive feedback across the board and excited about their future prospects for sure.
spk04: Yeah, it's created a lot of energy with the team because it's one of the things that, if you recall, we did a tuck on acquisition with BAV, which was a great acquisition as well, and we integrated that company very well. But we've been separately keeping two brands out there. And so this is always the plan, was to rebrand the newly combined company. It got put on the back burner a little bit when we had to go through some hand-to-hand combat during the pandemic. But I think that they did a great job on the rebranding. We're very pleased with the outcome.
spk06: Okay, great. Thank you. And then last one for me, if I could. Turning toward the acquisition of additional businesses, any changes to the way you're thinking about those bolt-on acquisitions? Any specific opportunities you would target and How aggressive are you willing to be now that, you know, the broader lodging industry is on the path toward recovery?
spk04: Yeah, I think we want to be aggressive. I have more opportunities than I have capital right now. And so we've been selective in what we want to pursue. I think that if you go through the list of opportunities, probably the biggest opportunities right now are with REDD. There's just an opportunity to buy some nice businesses at very attractive returns. And so we will do that. And then there just tends to be a lot of synergies. Synergies on the cost side, but also on the revenue side. We just find that in our team and our processes that we have in place from a broader, you know, Ashford revenue strategy, we just do a much better job on the top line as well. I would say that red would be the first initial ones that you potentially may see, but then also there's some opportunities at Remington that we're seeing as well where we can potentially buy some smaller management companies. And when we do that, there's just a tremendous amount of synergies there as well on the cost side. So I think you'll see us do some nice acquisitions, but we're being very prudent on allocation and capital. And, you know, right now we're looking at ways to fund that most creatively for the platforms.
spk07: Thanks, guys. I appreciate all the detail. That's all for me.
spk08: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the queue. Our next question is from Brian Marr with B Riley Securities. Please proceed.
spk03: Good afternoon. A couple questions from me, and I'll try and keep it tight. When we think about INSPIRED, I just want to check a number. Did you guys say it was $6.2 million in revenue at INSPIRED just in September?
spk04: I don't remember quite September. Did we put September? Yeah, let us get that number.
spk02: I do believe, if I recall. That's right, Brian. 6.2 in December and 1.1 million of EBITDA for the month of September. Yeah.
spk03: Great.
spk04: Brian, that was a huge surprise that we got over a million dollars of EBITDA for the month of September. I mean, it was just fantastic to see that.
spk03: Great. And when we think about that business ramping back up, If memory serves me, I think it did about $110 million in 2019. How long do you think it takes to get back to there? Is it 2023? Is it 2024? What are your thoughts on how quickly you can rebuild that business?
spk04: That is a very, very difficult question for us to answer just because And there hasn't been a lot of visibility in that business, as you can imagine. And I will say that it's of the teams we had in place, we probably had the best forecasting ability at that platform. We've got an incredible CFO. But what we're seeing is just continued every single week. We continue to add more business to the pipeline, more bookings. Even in the midst of Delta variant, which was very pleasing for us to see, that we're still able to pick up new business. I think you see a lot of the industry folks say maybe 2024, maybe mid part of 2023 when you get back to 2019 rev par. You naturally think that audio visual would lag that just because it tracks group business. But I'm not sure that it really will lag it. I would say that it's probably going to be somewhere between 2023 and 2024 that we get back to 2019 numbers on a same store basis. But I do believe that we're also going to pick up a decent amount of business outside of what we currently have. And that's going to be not only through the growth of assets that ask for trust or acquire, but also we think there's just a heavy, robust opportunity for us to continue to pick up new business with other ownership groups.
spk03: Understood. And really, kind of shifting gears, but same question. You know, thoughts on Premier. I mean, that was kind of devastated as well in the pandemic. I know you've added in multifamily, but when do you think that the combined, you know, kind of old business and new business kind of get you back to that 2019 level?
spk04: Yeah, if you remember during our investor day, we got some information on Premier that goes out to 2025. I would say that's the platform we've been the most conservative on. from an outlook perspective. And so that's also difficult for me to say. I think that what we're saying that we laid out in terms of our projections was that it may not be back to 2019 until after 2025. I do believe that that hopefully is very conservative and we'll be able to get back to 2019 well before that.
spk03: Okay, and then last for me, and I know that this is a very difficult question to answer, but I'm going to ask it anyway. What are the thoughts internally on coming current on the preferred dividends and or restructuring that part of the capital stack? And I ask that because it's difficult on our end to get more constructive on our overall opinion on Ashford Inc. shares with that hanging out there. Can you give us any color on that? Thanks.
spk04: Yeah, no, I appreciate it, Brian. So I don't, we don't have any, uh, near term plans to bring the preferreds current. Uh, and the reason why is because we're, we're happy right now to do it every other quarter, not trigger the, uh, the, uh, the, the increased dividend payment by doing that. Uh, and the reason being is because it's actually relatively a low cost of capital. Uh, and we just have much better opportunities to deploy that capital higher returns. And so we're going to take advantage of that. In terms of restructuring the preferreds, we've looked at a lot of different ways to do that. And I will tell you that you're right. If we did that right now, short term, I think it would be a good benefit for the shareholders. But actually, long term, if you look at what our internal models project, we're much better off just growing out from underneath the preferreds because it is an attractive capital base for us. It's not anything that we deem is going to hurt us. We recognize that it creates an overhang right now where we can't issue common stock and our common stock is maybe at a depressed level than what it otherwise could be or should be. Uh, but we're not looking to issue common stock. And so, uh, as I've mentioned to you before and, and, uh, other investors that I've been a big buyer of our stock because I believe in the story, I believe in what we're doing and we're okay. I mean, we're going to be patient on this because we're going to be committed towards a longterm shareholder appreciation. And I can tell you that I think that there's a lot of opportunity for folks that want to buy in our stock that the things that we're doing, that the plans we're executing upon, I do think that there's a good amount of upside in terms of where we can take this platform with our current capital structure. And some of the other things we're looking to do is if you look at it, we're low on net debt. We don't have a lot of net debt at Asherdink. much less so than your typical fee-based service provider. And so we're in process of potentially refinancing our current credit facility and upsizing that. The debt markets, as you know, are very attractive. It would be a highly accretive way for us to take advantage of some of the opportunities that exist before us. And so I'm committed to continue to add growth. We're seeing the growth. We're well above what we would have hoped to have been as we stand right now. And so if you look at what we believe we could be from a forward EBITDA perspective, I actually think that it's really an attractive multiple for the common shareholder right now.
spk07: Okay, thank you. Thank you.
spk08: Ladies and gentlemen, this concludes the question and answer session. And this will end today's conference. You may disconnect your lines at this time. Thank you very much for your participation and have a great day.
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