Ashford Inc. (Holding Company)

Greetings and welcome to the Ashford third quarter 2022 results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow a formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the call over to our host, Jordan Jennings, Investor Relations. Thank you. You may begin.

Good day, everyone, and welcome to today's conference call to review results for Oxford for the third quarter of 2022 and to update you on recent developments. On the call today will be Derek Eubanks, Chief Financial Officer, and Eric Batis, Executive Vice President of Operations. 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 and uncertainties and known or unknown risk which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in accompanying 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 the company's tables or schedules, which have been filed on Form 8A with the SEC on November 2nd, 2022, and may also be accessed through the company's website at www.axfordinc.com. Each listener is encouraged to review those reconciliations provided in the earnings released 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 2022 with the third quarter of 2021. I will now turn the call over to Derek.

Good afternoon and welcome to our call to discuss our financial results for the third quarter of 2022. I'll start by giving you an overview of our operations, strategy, and financial results for the quarter, and then Eric will provide an update regarding our operating businesses. After that, we'll open it up for Q&A. We have a lot of exciting developments to discuss on today's call. The key things we're going to highlight today are, first, the recovery in the lodging industry continues to gain momentum, and both of our advisory platforms are well-positioned. Asher Trust continues to have significant liquidity and is benefiting from increased demand associated with with the corporate and group segments. Braemar continues to benefit from strong leisure demand and saw our permanent hotels bounce back strongly in the third quarter as corporate and group demand accelerated. Second, we continue to see strong results in our third party growth initiative highlighted with Remington's recent acquisition of Chesapeake Hospitality which added significantly to Remington's mix of third party business. At the end of the third quarter, Remington's of third-party hotels under management stood at approximately 38%. Eric will discuss more details around Remington later in the call. And third, through our focus on growing asset under management, the pace of our capital raising efforts at Ashford Securities continues to accelerate. To date, Braemar has issued approximately $289 million of its non-traded preferred stock with $126 million of its capital coming in the third quarter. Ashford Trust's offering of its non-traded preferred stock is also effective and we've launched a growth-oriented private offering that will target investments in all types of commercial real estate in the state of Texas. Our two publicly traded REIT platforms, Ashford Trust and Braemar, owned 114 hotels with approximately 26,000 rooms and had approximately $8.1 billion of gross assets as of September 30, 2022. While Braemar's exposure to the resort segment has fueled its strong performance for several quarters now, in the third quarter, its urban hotels ramped up significantly. Braemar continues to report industry-leading results and its third quarter results significantly exceeded its 2019 results. Braemar has been active on the acquisition front, having completed two acquisitions this cycle, including the iconic 96-room Ritz-Carlton Reserve, Dorado Beach, and Dorado Puerto Rico, and this week announced an agreement to acquire the 210-room Four Seasons Resort Scottsdale at Troon North. We anticipate that Braymar will continue to actively look to deploy capital into accretive hotel investment opportunities. Ashford Trust has significantly deleveraged its balance sheet from a couple of years ago, and the registration statement is now effective for its offering of its Series J and Series K redeemable non-traded preferred stock, which is being issued through Ashford Securities. As for Trust also continues to maintain a substantial cash balance which ended the quarter at $506 million. Looking ahead we believe both advisory platforms have ample liquidity and we remain focused on their future strategic objectives. Our strategy and structure are designed for growth. We have a powerful ecosystem of businesses that all benefit as we grow our assets under management. Our size and scale in the lodging industry also brings benefits to third party owners and other capital providers, as we are one of the largest owners and fee payers for the major hotel brands. We believe we have a superior strategy and structure that is unique within the hospitality space, and we are excited about the potential growth of our platform. I will now turn to our financial results for the quarter. Net loss attributable to common stockholders for the third quarter was $10 million. Adjusted EBITDA was $16.4 million, an increase of 31% over the prior year quarter. Our strong growth in adjusted EBITDA for the quarter was driven by Premier, Remington and Inspire. Adjusted net income for the quarter was $11.8 million and adjusted net income for diluted share was $1.48. These results reflect growth rates over the prior year of 41% and 33% respectively. Looking ahead to the fourth quarter, I want to remind analysts and investors that in the fourth quarter of 2021, we recognized $5.5 million of base advisory fees from Ashford Trust, which had been deferred in previous quarters. As you think about year-over-year comparisons, it's important to keep that in mind. Our share count currently stands at 7.6 million fully diluted shares outstanding, which is comprised of 3.1 million common shares outstanding. 0.2 million common shares earmarked for issuance under our deferred compensation plan, 4.1 million common shares associated with our Series D convertible preferred stock, 0.1 million common shares associated with the Chesapeake acquisition, and the balance is primarily restricted stock. Now I'd like to turn the call over to Eric to discuss our operating businesses in more detail.