Drive Shack Inc.

Good morning. My name is Gretchen, and I will be your conference operator today. At this time, I would like to welcome everyone to DriveShack's third quarter 2022 earnings conference call. Currently, all lines have been placed on mute to prevent any background noise. After the prepared remarks, we will have a question and answer session. Instructions will be given at that time. Today's call is being recorded. If you should need operator assistance, please press star zero. At this time, I would like to hand the call over to Kelly Buckhorn, Interim Chief Financial Officer. Ms. Buckhorn, you may begin.

Thanks, Gretchen, and good morning, everyone. I'd like to welcome you to DriveShack, Inc.' 's third quarter 2022 earnings call. Joining me on the call today is President and Chief Executive Officer Hannah Corey. We've posted the investor supplement to our investor relations website at ir.driveshack.com. Please take a moment to download the presentation now if you haven't had a chance to do so already. I'd like to point out that certain remarks made today will include forward-looking statements. Actual results may differ materially from those considered by these statements. We encourage you to review the disclaimers in our press release and investor supplement and to also review the risk factors contained in our annual and quarterly reports filed with the SEC. And with that, I'd like to now turn the call over to Hannah.

Thanks, Kelly, and good morning, everyone. In addition to the two existing puttery venues the company opened in 2021, we opened an additional three venues in 2022, D.C. on June 26, Houston on September 16, and most recently Chicago on November 4. In Q3, the company had a total revenue of $89 million, up 16%, or $12 million versus prior year. The increase was driven by the addition of puttery venues coupled with an increase in event revenue. Our Q3 adjusted EBITDA of $7 million and Q3 puts us on track to achieve our yearly adjusted EBITDA plan of $18 million. The company currently operates four drive shack venues in Orlando, Raleigh, Richmond, and West Palm. We currently operate five puttery venues in the colonies, Charlotte, DC, Houston, and Chicago. In addition to the five puttery venues opened, there are an additional five committed and scheduled to open in 2023. These are in Pittsburgh, Kansas City, Minneapolis, New York City, and Miami. The company also continues to operate the traditional golf side of our business, American Golf Corporation. In this business segment, we operate one owned, 32 leased, and 20 managed courses. I want to turn to our puttery venues on page nine in the supplement. The three puttery venues open the entire quarter delivered a total of $6.2 million in revenue in Q3 2020. and $15.1 million of revenue year-to-date. Total consolidated venue EBITDA for Q3 was $2.2 million, a 35% margin. This includes a one-time inventory true-up for our Charlotte venue. Year-to-date, EBITDA is $4.6 million, which is a margin of 31%. This performance is in line with our expectations. A breakdown of some of the main segments of guest behavior we observe is on page 10. Over 60% of our guests book their visit online in advance via a reservation portal. Nearly 80% of our F&B sales are attributed to alcohol. Finally, it takes an average of 32 minutes to play a nine-hole course at one of our venues. Houston opened on September 16th and generated $1.2 million in revenue between September 16th and October 25th. Photos of the venue are on page 11. Their guest trends are in line with what we've seen across the other venues. 65% of their guests planning their visit online in advance, 87% of their F&B sales are attributed to alcohol, and it takes an average of 35 minutes to play a nine-hole course. On page 12, the performance of Drive Shack Entertainment Venues is outlined. In Q3, the four entertainment golf properties generated total revenue of just over $10 million, down 4% to prior year. Our event revenue has increased by over 20% versus prior year at $2.5 million. EBITDA came in at $2.2 million for Q3, down 29% versus prior year due to a decline in walk-in revenue brought on by weather and other inflationary costs. Moving on to our traditional golf business, on page 13, agencies saw strong event demand in Q3, 51% above prior year. Their revenue of $55.4 million in Q3 is 10% higher than prior year. Our private courses remain at 98% capacity, and our public course revenues from green and cart fees increased 2% over prior year. On page 15, as the company looks towards next year, we are planning on opening an additional five puttery venues in New York City, Miami, Kansas City, Minneapolis, and Pittsburgh. We have an active and expanding pipeline with a number of sites under review and in various stages of market analysis. The company plans to execute additional leases once we have additional funding in place. With that, I'll turn it over to Kelly to review our financial results in greater depth. Thanks, Hannah.