Ashford Inc. (Holding Company)

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Ashford, Inc. Fourth Quarter 2023 Results Conference Call. Please note, this conference is being recorded. I will now turn the conference over to your host, Jordan Jennings, Director of Investment Relations. Thank you. You may begin.

Good day, and welcome to today's conference call to review results for Ashford for the fourth quarter and full year 2023 and to update you on recent developments. On the call today will be Derek Eubanks, Chief Financial Officer, and Eric Batist, 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 State's harbor provisions of the Federal Securities Regulations. Such forward-looking statements are subject to numerous assumptions and certainties and known or unknown risk, which could cause actual results to differ materially from those anticipated. These factors are 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 in company tables or schedules which have been filed on Form 8K with the SEC on February 29, 2024, and may also be accessed through the company's website at www.ashfordinc.com. Each listener is encouraged to review these 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 conference Compare the fourth quarter and year ended December 31st, 2023 with the fourth quarter and year ended December 31st, 2022. I will now turn the call over to Derek.

Thanks, Jordan. And welcome everyone to our call to discuss our fourth quarter and full year financial results for 2023. I'll start by giving you an overview of our operations strategy and financial results, and then Eric will provide an update regarding our operating businesses. After that, we'll open it up for Q&A. The key things we're going to highlight today are first, the lodging industry has continued to perform well and for the quarter we reported solid overall revenue growth over the prior year period. Second, we continue to see an attractive pace of capital raising through Ashford Securities and have raised approximately $580 million of gross capital since its launch in 2021. And third, we're excited to provide an update on our newest advised platform, the Texas Strategic Growth Fund and Sterling Hotels and Resorts. The Texas Strategic Growth Fund is a private investment vehicle focused on investing in all types of commercial real estate in Texas. Sterling Hotels and Resorts is a newly formed private NAV REIT that plans to invest in a diverse portfolio of hotels and resorts across all chain scales, primarily located in the United States with a focus on both income and growth. As of December 31st, 2023, our three advised REIT platforms, Ashford Trust, Braymar, and Sterling, had ownership interests in 113 hotels with approximately 25,000 rooms and approximately $7.5 billion of gross assets. Braymar's resort portfolio continues to see some stabilization in both demand and pricing as leisure guests now have more options for travel, while its urban hotels continue to recover nicely as both corporate and group demand continues to strengthen. Additionally, as the hotel debt capital markets continue to improve, Raymar recently addressed multiple near-term debt maturities and has refinanced or extended almost all of its 2024 debt maturities. Ashford Trust continues to focus on deleveraging its balance sheet and extending its debt maturities and ends the quarter with $209 million of networking capital. To date, Ashford Trust has issued approximately $105 million of its non-traded preferred stocks And we believe this is an attractive source of capital for that platform. AstroTrust recently announced its plan for paying off its corporate financing during 2024, primarily through select asset sales, refinancing, extending upcoming debt maturities, and raising capital through its non-traded preferred stock offering. Our newest advised platform is the Texas Strategic Growth Fund, which we launched in late 2022. Ashford made a $2.5 million investment into this fund, and that capital, along with other capital raised from outside investors, was used to make an equity investment in a multifamily property in San Antonio, Texas. We're also excited about our newest platform, a private NAV REIT called Sterling Hotels and Resorts. Sterling will invest in a diversified portfolio of hotels and resorts across all chain scales. We plan to raise capital for this platform through Ashford Securities. Our strategy and structure are designed for growth. We have a powerful ecosystem of businesses that all benefits we grow are 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. Over the past few years, we have completed numerous bolt-on acquisitions for our operating businesses, and we continue to look for attractive opportunities to strategically and accretively grow our business. I will now turn to our financial results for the quarter and full year. Net loss attributable to common stockholders for the fourth quarter was $13.6 million, and net loss attributable to common stockholders for the full year was $40.8 million. Adjusted EBITDA was $13.2 million for the fourth quarter and $60.4 million for the full year. Adjusted net income for the fourth quarter was $8.6 million and adjusted net income per diluted share was $1.02. Adjusted net income and adjusted net income per share for the full year 2023 were $42.4 million and $5.20 respectively. Our share count currently stands at 8.4 million fully diluted shares outstanding, which is comprised of 3.1 million common shares outstanding, 0.2 million common shares earmarked for issuance under a deferred compensation plan, 4.3 million common shares associated with our Series D convertible preferred stock, and the remaining 0.8 million shares are for acquisition-related shares and restricted stock. I'll now turn the call over to Eric to discuss our operating businesses in more detail.