Q3 2021 Ashford Inc Earnings Call
Greetings and welcome to Ashford, Inc. Third quarter 2021 results conference call.
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I'd 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, Eric Eubanks, Chief Financial Officer, and Erik Betas, managing director and senior Vice President.
Portfolio management.
As well as notice of the accessibility of this conference call on a listen only basis over the Internet were distributed yesterday in a press release at.
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 risks, 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 before 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.
The earnings release, and accompanying tables or schedules, which have been filed on form 8-K with the SEC on October 27th 2021, and May also be accessed through the Companys website at Www Dot Ashford, Inc. Dot com each.
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.
Morning, and welcome to our call to discuss our financial results for the third quarter of 2021.
I will begin by discussing Ashford operations and strategy there.
Eric 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 in adjusted EBITDA for the quarter was driven by Remington inspire and red.
As a reminder, inspire is our audio visual business.
<unk> recently rebranded from J S. A D.
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 am 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 are 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.
Fourth we have a comprehensive asset like business that is unique in the hospitality industry and well positioned for growth going forward.
Ashford advisers, two publicly traded REIT platforms, Ashford Trust, and Braemar, which together own 114 hotels with approximately 26000 rooms and had approximately $7 8 billion of gross assets as of September 32021.
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.
<unk> also recently completed its first acquisition of the cycle with the 138 room. Mr. C. Beverly Hills Hotel in Los Angeles, California.
Ashford Trust has significantly deleverage its balance sheet and continue to grow as cash balance which ended the quarter at $673 million.
Looking ahead, we both platforms now have significant liquidity.
And with both reached 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.
Well, the Remington and Premier has solid reputation 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 contract.
Looking ahead, we are extremely excited about the long term opportunity for third party growth at both Remington and Premier.
Year to date, we have raised approximately $900 million of capital and our advised Reits.
Only approximately 1% of this capital was their Ashford securities.
We formed Ashford securities to be dedicated platform to raise retail capital through financial intermediaries and the 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.
So capital raised May include but are not limited to non traded preferred equity non traded convertible preferred equity and non traded REIT common equity for future platforms. Ashford Securities is ramping up nicely and has recently begun raising capital for Braemar.
In its first four months of capital raising for Braemar.
Ashford Securities raised over nine 3 million in net proceeds of frameworks 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 as red hospitality and leisure.
<unk> is a leading provider of water sports activities and other travel and transportation services in the US 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 and.
In addition, read recently entered into an agreement with Ritz Carlton Turks and Caicos resort to provide services and clean water Sports Beach, and recreation operations as well as destination and transportation services to the property.
This is a great expansion opportunity for Red and were excited about the potential to grow this business at other properties in Turks and Caicos.
Additionally, the products offered by open key in pure wellness continue to thrive in this environment as.
As the hotel industry strives to implement measures to provide a clean and safe environment. Many hotels and guests are seeking automatic check and allowing them to bypass the front desk with keyless entry and secured digital T capabilities.
To that end we are pleased to note that open key has entered into a partnership with a drift hospitality to bring contactless check in to address collection of boutique coastal properties and Pacific Northwest.
The industry is also seeking enhanced sanitation and air purification standards within the Guestrooms.
We believe the benefits it opened key in 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 <unk> completed a strategic rebranding and is now named inspire throughout.
<unk> 35 year history, the full service <unk> Technology company has developed creative and individualized and then production solutions and the new name inspire reflect the energy and momentum the company brings to each of its clients and the aspiration to create events. The most 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 and 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 existing and potential investors over.
Over the coming months, we plan to attend several conferences targeting a wide range of investors from small and midcap 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 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 hospital space.
We're starting to see the recovery in our industry.
We are also seeing investment opportunities are very attractive unlevered returns.
We did not see pre pandemic.
We believe there are four key areas of growth for Ashford.
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 oriented incubation of additional businesses.
I'll now turn the call over to Derek 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.
A 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 inspire 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 a preferred stock into common stock and to date have exchanged approximately 72% 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 Braemar.
Braemar has raised equity capital of approximately $102 4 million from the sale of shares of its common stock year to date and has raised $9 $3 million of net proceeds from the sale of its non traded preferred stock.
These capital raises and exchanges of help shore up both rates liquidity and lower leverage.
In terms of financial results of our portfolio of companies I'll provide some highlights and then Eric will discuss more details.
<unk> recorded revenue of $3 2 million in the quarter related to debt placement services and its agreements with Ashford Trust and Braemar to seek modifications and forbearance for the REIT debt.
The <unk> effort is mostly completed but listen we will continue to record. This revenue over the remaining term of the agreement, which expires in April of 2022.
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 $34000.
<unk> 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 gas from July through September after to use additional key when offered.
<unk> 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.
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 32021, 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 and outstanding.
0.2 million common shares earmarked for issuance under our deferred compensation plan and the balance primarily comprised of restricted stock I will now turn the call over to Eric.
Thank you Derek we're 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 received best in market service.
The first business I'd like to discuss is red hospitality and leisure leading provider of Watersports 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 160.
8% and 1188% growth respectively over the prior year quarter.
If you remember from our last call Red had an exceptional second quarter, We're 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 <unk> 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 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 as open key which provides Bluetooth enabled lock upgrade modules. These modules are added to existing lots at a fraction of the cost of replacing an entire lock system saving hotels money.
Open key continues to capitalize on growing customer preference for our 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 open keys operating metrics continued to gain traction as as brands go live on the platform.
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 21340 rooms live on the platform.
Versus 12608 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 our new Chief Technology officer in place and a hyper focus on building lasting partnerships, hoping he is poised to continue driving the hospitality industry forward by delivering a seamless and contactless journey for guests to that end during the quarter open key announced another partnership with a drift hospitality a collection of boutique coastal property.
He's in the Pacific Northwest looking to provide guests a contactless service across its portfolio.
We are thrilled and appreciative for all of 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 look 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 remingtons 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 in 23 States and Washington DC.
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, Robyn <unk> previously <unk> was a principal at Humphreys and partners are.
<unk>, where she led production and construction projects and managed 80 team members show.
Managed numerous high profile projects from design development to project completion, including Manhattan, a $120 million 700 unit condominium in Las Vegas, and Mockingbird flat at $28 million 412 unit multifamily development in Dallas.
Our 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 poisonous 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 <unk>.
Once the rebranding campaign to raise its profile in the marketplace.
As a leading single source solution for meeting and 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 reached 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.
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 a relatively new retail capital raising platform.
Jay Steigerwald and his team continued 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 non traded preferred offering was on July <unk> 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 trading <unk>.
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 investments start to pay off in.
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.
Okay.
Thank you.
Ladies and gentlemen, we will now be conducting a question and answer session.
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For participants using speaker equipment, it may be necessary, because the handset before pressing the star keys, one moment, please while we poll for questions.
Our first question is from Tyler battery with Janney. Please proceed.
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.
If there is any of the blades.
We've changed the opportunity.
The strength.
What was the last part I'm, sorry, you cut out a little bit any ways to what.
Sorry.
Are you thinking about any changes to the way youre thinking about the opportunity long term.
Yes.
Definitely I think that there is 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 inspire maybe even though the key as well, which one is going to be.
<unk> is the most valuable or contributed the most to EBITDA.
Spending on the metric.
And we're very very excited about the teams we've got in place the strategy, we've got in place and the opportunities we have in front of us.
Red.
Done a fantastic job on third party business most of its business is third party in and I think it is just incredible that we're expanding this partnership that we've got with Ritz Carlton.
Just recently entering into Turks, and Caicos hotels not affiliated.
One related 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 has incredible experience and.
And way, we do business in and so we see a lot of opportunity third party growth. There and then also continue to see some nice tuck on acquisitions that probably are going to be north of 30% Unlevered IRR. So we're very excited about that opportunity mainland premier.
When we signed our first contract in.
2020 March 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 30 contracts.
It adds up to a good amount of fees, but when you look at the pipeline and the opportunity there.
I am very very excited I think we've got an incredible team there as well.
Won numerous awards I'm renovations, we've done I would love to walk you through any of our assets and you can see the transformation. 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 has been dramatically cut back across the board as you know.
And asked Audi space and there is a decent amount of lead time for renovations, but the fact that we were able to get a good amount of business so far and.
In spite of counter is not really investing in.
And their hotels I think is.
Yes.
A great achievement by the team.
And also I'd like the fact that we entered into a new market and multifamily and we've gotten a lot of good traction there as well.
So I think I think we look backs we stand today.
Very pleased with what the team has created there.
In terms of the selling effort and then Remington again is very similar we basically launched our third party effort.
And I mentioned the pandemic.
And we.
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 youre starting from a company that has a great team and core business that was pretty much a 100% affiliated with with Remy.
Premier in Ashford and so.
It takes a while to get confidence in some ownership groups that.
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 has had.
Have put Remington and in place and they've been incredibly pleased with the performance.
Remington relative to other management companies and so that's creating a lot of.
Refer our recurring business with with similar groups and so I like the fact that that that folks have signed up Remington are going back and being very loyal.
To that service provider.
Finally, I'll talk a little bit about inspire which is one.
That is 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.
<unk>.
At the beginning of the pandemic, but it hasn't been as is.
As rapid as I'd like it to see and.
And it's not for lack of effort is not lack of ownership groups wanting to do business with with its fire. It's just the fact that hotels ramping up.
And the last thing that they are really concerned about us being out there audio visual services got caught.
Tracts they've.
<unk> been focused on cash flow and then focused on.
And people have been focused on supply chain issues that they got to deal with and so it just hasnt 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.
Our uniquely positioned in the marketplace being now the number two provider in hospitality the clear number two.
But the much smaller than than our largest competitor.
And I think that creates a lot of opportunity for us to grow and.
I do believe we will see a good amount of growth there and if you've tracked.
The store here at Ashford.
The investment we made in inspire formerly <unk> was just a home run for us and I know that it.
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 'twenty 2019, and so that's phenomenal when you think in terms of.
Digital services company in the early stages of a recovery from a global pandemic.
Okay, Great I appreciate all that detail Jeremy that's a nice segue into my next question on inspire our results in the quarter were well above our expectations. So.
I'm curious if you can provide some color on the demand. That's there I know you gave particularly post September but broader quarter and also how.
How is that rebrand been received by some of the clients.
Thanks, John rebranding yeah.
Okay go ahead Ed.
The rebranding has been great I think that across the board.
We've heard positive feedback about the rebrand about several calls with folks just commenting and complementing us on it so not to say anything about the <unk>.
The <unk> brand, we love that brand of that name and what it represents a family history of the company, but have heard great things in the market about what.
The real meaning inspire has for them and what Jason 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. Yes. It does create a lot of energy with the team because it is one of the things that is.
If you recall, we did a tuck in acquisition with PIV, which.
Was create acquisition as well and we integrated that company very well, but we did separately keeping two brands out there and so this was always the plan was to rebrand the newly combined company.
Got put on the back burner, a little bit when we had.
Go through some hand to hand combat during the during the pandemic.
But I think they did a great job on the rebranding were very pleased with the outcome.
Okay, great. Thank you and then last one for me if I could.
Turning towards the acquisition of additional businesses any changes to the way you're thinking about those bolt on acquisitions.
Pacific opportunities you would target and how aggressive are you willing to be now that the broader loggers logging industry is on the path.
Further progress.
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 where if you go through the list of opportunities probably the biggest opportunities right now are with Red There's just an opportunity to buy some some nice businesses at very attractive.
Turns and so we will do that and then Theres just tends to be a lot of synergy synergies on the cost side, but also on the revenue side, we just find that in.
Our team in.
Our processes that we have in place from a broader Ashford.
Revenue strategy, we just do a much better job on the top line as well.
So.
I would say that the red would be the first initial ones.
<unk> may see but then also theres some opportunities that Remington that we're seeing as well where we.
We can potentially buy some smaller management companies and when we do that is just a tremendous amount of synergies there as well on the cost side. So I think youll see us do some some nice acquisitions.
But we're being very prudent on allocation of capital.
And right now we're looking at ways to fund that at most accretively for the platforms.
Thanks, guys I appreciate all the detail that's all from me.
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Our next question is from Bryan Maher with B Riley Securities. Please proceed.
Good afternoon, a couple questions for me I'll try and keep it tight.
Well when we think about inspire.
Wanted to check a number did you guys say it was $6 2 million in revenue at inspire just in September.
I don't remember quite a September guidance that we put September.
Yes, but let us get that number.
I do believe the vertical and Thats right.
0.2 in December and $1 1 million of EBITDA for the month of September.
Great.
Right that was a there was a huge surprise that we got over $1 million of EBITDA for the month of September I mean, it was just.
It was just.
Fantastic to see that.
Great and when we think about that business ramping back up.
If memory serves me I think you did about $110 million in 2019, how long do you think it takes to get back to there is it 2023 and 2024.
What are your thoughts on how quickly you can rebuild that business.
That 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 of the teams we have in place.
We probably have the best forecasting ability.
At that platform and get an incredible CFO.
But what we're seeing is just continued every single week.
<unk> to add.
More and more business in the pipeline more bookings, even even in the midst of Delta virus 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. So let's say maybe 2024, maybe mid part of 2023, when you get back to 2019 Revpar you.
Naturally think that audiovisual would lag that just because it tracks group business, but I'm not sure that it really will lag I would say that it's probably going to be somewhere between 2023, and 2024 that we get back to 2019 numbers on our 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.
We currently have and thats going to be not only through the growth of ASP.
Assets at Ashford Trust or Braemar 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.
Understood.
Kind of shifting gears. The 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 multi family, but when do you think that the combined.
Kind of old business in new business kind of get you back to that 2019 level.
Yes, if you remember during.
Our Investor Day, we've got some information on Premier.
It.
It goes out to 2025 I would say that's the platform aimed at the most conservative on.
From from an outlet perspective and so.
That is.
It's also difficult for me to say.
I think that what we're saying is 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.
Hopefully is very conservative and we will be able to.
Get back to 2019, well before that.
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.
The thoughts internally on how many current on the preferred dividend <unk> restructuring that part of the capital stack and I ask that because it is.
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.
Yeah, No I appreciate it Brian.
I don't we don't have any.
Near term plans to bring the preferreds current.
And the reason why is because we're happy right now to do it every other quarter not trigger the.
The increased dividend payment by doing that.
And the reason being is because it's actually relatively a low cost of capital.
And we just have much better opportunities to deploy that capital at 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 as it were much better off just grown out from underneath the preferred because it is at 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 issue common stock and our common stock is.
Maybe at a depressed level than what it otherwise could be or should be.
But we're not looking to issue common stock and so.
I've mentioned to you before and.
Other investors and I've been a big buyer of our stock because I believe in the store I believe in what we're doing.
And we're okay. I mean, we're going to be patient on that because we're going to be committed towards a long term shareholder appreciation and I can tell you that I think that there is a lot of opportunity for folks that want to buy in our stock that the things that we're doing that the plans were executing upon.
I do think that there's a good amount of upside in <unk>.
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 Ashford Inc. 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.
Would be a highly accretive way for us to take advantage of some of the opportunities exist before us and so I'm committed to to continue to add growth, we're seeing a growth well above what we would have hoped it in <unk>.
Stand right now and so.
If you look at it.
What we believe we can be from afford EBITDA perspective.
Actually I think that is.
Really it attracted multiple for the common shareholder right now.
Okay. Thank you.
Okay.
Thank you.
Ladies and gentlemen, this cute.
A 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.