DALLAS—Ashford Inc. reported a 140% increase in total revenue for the year ended December 31, 2018, as well as a 72% increase in the fourth quarter.
“We are pleased with our operating results for 2018, which reflect the diligent execution of our strategy focused on growing our advised platforms and acquiring growth-oriented hospitality related businesses,” said Monty J. Bennett, Ashford’s chairman/CEO.
Other highlights include the following:
- Net income attributable to common stockholders for the fourth quarter of 2018 totaled $0.3 million, or $0.14 per share, compared with a net loss of $7.4 million, or $3.58 per share, in the prior year quarter. Adjusted net income for the fourth quarter was $9.3 million, or $2.20 per diluted share, compared with $4.9 million, or $1.91 per diluted share, in the prior year quarter.
- Total revenue for the fourth quarter of 2018 was $51 million, reflecting a growth rate of 72% over the prior year quarter. Total revenue for the full year 2018 was $195.5 million, reflecting a growth rate of 140% over the prior year.
- Adjusted EBITDA for the fourth quarter was $8 million reflecting a growth rate of 65% over the prior year quarter. Adjusted EBITDA for the full year 2018 was $28.8 million, reflecting a growth rate of 65% over the prior year.
- At the end of the fourth quarter of 2018, the company had approximately $6.5 billion of assets under management.
- In September and October, the company completed an underwritten public offering of 280,000 shares of common stock resulting in net proceeds of approximately $19 million.
- On Jan. 17, 2019, the company announced the new Enhanced Return Funding Program agreement with Braemar Hotels & Resorts.
- As of Dec. 31, 2018, the company had corporate cash of $50.4 million.
“During the year, through the acquisition of Premier Project Management, we added scale, diversification and enhanced our competitive position in the hospitality industry, and we also continued to benefit from strong growth within our service businesses,” said Bennett. “We remain extremely excited about our Enhanced Return Funding Program with our advised platforms and so far have successfully partnered with them on the acquisition of five high-quality hotels totaling over $500 million in new assets. We believe these two ERFP Programs should continue to create substantial growth in assets under management for us while also delivering attractive returns to our shareholders and the shareholders of our advised platforms. Looking ahead to 2019, we are well-positioned to continue to successfully execute on our strategy.”
On Jan. 17, 2019, the company announced that it entered into an agreement with Braemar Hotels & Resorts, Inc. for the new Enhanced Return Funding Program (ERFP). Under the program with Braemar, the company has agreed to provide up to $50 million in connection with the acquisition by Braemar of additional hotels. Ashford will provide 10% of the purchase price of each hotel acquired by Braemar up to $500 million in total acquisitions.
Braemar’s acquisition of the Ritz-Carlton Lake Tahoe located in Truckee, CA, which was completed on Jan. 15, 2019 for $103 million, is the first hotel acquisition by Braemar to benefit from the program. In connection with this acquisition, and subject to the terms of the ERFP, the company has committed to provide Braemar with approximately $10.3 million of cash via the future purchase of hotel furniture, fixtures and equipment at Braemar properties.
During the second quarter of 2018, the company entered into an agreement with Ashford Hospitality Trust, Inc. for an ERFP. Under the program with Trust, the company agreed to provide $50 million in connection with the acquisition by Trust of additional hotels. Ashford will provide 10% of the purchase price of each hotel acquired by Trust, and, to date, Trust has acquired four hotels for a combined $406 million under the program.
During the quarter, Trust completed the acquisition of the La Posada de Santa Fe in Santa Fe, NM for $50 million, which is the second hotel acquisition to benefit from the ERFP. Also, during the quarter, the company acquired $16.1 million in FF&E from Ashford Trust, fulfilling its ERFP obligation on the Hilton Alexandria Old Town and La Posada de Santa Fe acquisitions.
Subsequent to quarter end, Trust completed the acquisition of the Embassy Suites New York Midtown Manhattan in New York for $195 million, becoming the third hotel acquisition to benefit from the ERFP. In connection with the acquisition, the company has committed to provide Ashford Trust with approximately $19.5 million of cash under the ERFP via the future purchase of FF&E at Trust properties.
Subsequent to quarter end, Trust completed the acquisition of the Hilton Santa Cruz/Scotts Valley in Santa Cruz, CA for $50 million, becoming the fourth hotel acquisition to benefit from the ERFP. In connection with the acquisition, the company has committed to provide Ashford Trust with approximately $5 million of cash under the ERFP via the future purchase of FF&E at Trust properties.
In August 2018, the company completed the acquisition of Premier Project Management for $203 million. Premier provides comprehensive and cost-effective design, development and project management services. It provides project oversight, coordination, planning and execution of renovation, capital expenditure or ground-up development projects. Its operations are responsible for managing and implementing substantially all capital improvements at Ashford Trust and Braemar hotels. Additionally, it has extensive experience working with many of the major hotel brands in the areas of renovating, converting, developing or repositioning hotels. Premier produced Adjusted EBITDA of $3.7 million in the fourth quarter and $5.4 million since the acquisition.