Ashford Inc. (AINC) 10-K Annual Report March 2023

DALLAS, February 22, 2023 - Ashford Inc., an alternative asset management company with a portfolio of strategic operating businesses (NYSE American: AINC) (“Ashford” or the “Company”), today reported the following results and performance measures for the fourth quarter and full year ended December 31, 2022. Unless otherwise stated, all reported results compare the fourth quarter and full year ended December 31, 2022, with the fourth quarter and full year ended December 31, 2021 (see discussion below). The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

STRATEGIC OVERVIEW

•High-growth, fee-based business model

•Diversified platform of multiple fee generators

•Four paths to growth:

◦Recovery of the hospitality industry;

◦Increase assets under management (AUM);

◦Growth of third-party business; and

◦Acquisition or incubation of additional businesses

•Highly-aligned management team with superior long-term track record

•Leader in asset and investment management for the real estate & hospitality sectors

FOURTH QUARTER 2022 FINANCIAL HIGHLIGHTS

•Net loss attributable to common stockholders for the quarter was $(10.8) million, or $(3.65) per diluted share. Adjusted net income for the quarter was $13.2 million, or $1.65 per diluted share.

•Total revenue, excluding cost reimbursement revenue, for the quarter was $76.6 million, reflecting a 24% growth rate over the prior year quarter. In the prior year quarter, the Company recognized $5.5 million of Base Advisory Fee revenue from Ashford Hospitality Trust, Inc. (“Ashford Trust”) (NYSE: AHT) which had been deferred in previous quarters.

•Total Advisory Fee revenue from Braemar Hotels & Resorts Inc. (“Braemar”) (NYSE: BHR) in the fourth quarter increased 27% over the prior year quarter.

•Adjusted EBITDA for the quarter was $19.4 million.

•During the quarter, the Company completed a transaction with Ashford Trust whereby the Company transferred its interest in the operating lease for the Hilton Atlanta/Marietta Hotel and Conference Center to Ashford Trust in exchange for the remaining ERFP obligation of $11.4 million.

•At the end of the fourth quarter, the Company had approximately $8.2 billion of gross assets under management.

The following information was filed by Ashford Inc. (AINC) on Wednesday, February 22, 2023 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Ashford Inc.'s 10-K Annual Report:

Financial - Expense Highlight
Depreciation and amortization expense decreased by $832,000, or 2.6%, to $31.8 million for 2022 compared to 2021, primarily due to a decrease in FF&E related to the respective ERFP agreements with Ashford Trust and Braemar compared to 2021.

Financial - Dividend Highlight
In the event the Company fails to pay the dividends on the Series D Convertible Preferred Stock for two consecutive quarterly periods (a "Preferred Stock Breach"), then until such arrearage is paid in cash in full: (A) the dividend rate on the Series D Convertible Preferred Stock will increase to 10.00% per annum until no Preferred Stock Breach exists; (B) no dividends on the Company's common stock may be declared or paid, and no other distributions or redemptions may be made, on the Company's common stock; and (C) the Board will be increased by two seats and the holders of 55% of the outstanding Series D Convertible Preferred Stock will be entitled to fill such newly created seats.
Other - Other Highlight
Premier provides design and construction management services, capital improvements, refurbishment, project management, and other services such as purchasing, interior design, architectural services and freight management at properties.
Financial - Dividend Highlight
The Board implemented the rights plan by declaring (i) a dividend to the holders of the Company's common stock of one preferred share purchase right (a "Right") for each share of common stock and (ii) a dividend to the holders of the Company's Series D Convertible Preferred Stock of one Right in respect of each share of the Company's common stock issuable upon conversion of the Series D Convertible Preferred Stock.
Revenue - Product Highlight
For hotels owned by Ashford Trust and Braemar, Remington receives base management fees of 3% of gross hotel revenue for managing the hotel employees and daily operations of the hotels, pursuant to Remington's hotel management agreements, subject to a specified floor (which is subject to increase annually based on increases in the consumer price index).
Revenue - Product
We provide: (i) advisory services;...Read more
Other - Other
These were offset by $70.4...Read more
M & A - Other
Other liquidity considerations-On December 5,...Read more
Financial - Earnings
The applicable margin for borrowings...Read more
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In the third quarter of...Read more
Financial - Expense
The increase is additionally due...Read more
Financial - Expense
These costs primarily consist of...Read more
Financial - Dividend
The amortization of preferred stock...Read more
Other - Other
These were offset by $2.9...Read more
Financial - Cash Flow
The increase in cash flows...Read more
Revenue - Product
Audio Visual Revenue Audio visual...Read more
Financial - Cash Flow
These cash flows consisted of...Read more
Revenue - Product
The increase in other services...Read more
Other - Other
For smaller reporting companies, ASU...Read more
Financial - Expense
LIQUIDITY AND CAPITAL RESOURCES Our...Read more
Financial - Expense
The change in general and...Read more
Financial - Expense
Reimbursed expenses may vary from...Read more
Revenue - Product
Revenue Recognition-The following provides detailed...Read more
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On December 16, 2022, the...Read more
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During 2020, as a result...Read more
Financial - Debt
This ASU (1) simplifies the...Read more
Revenue - Product
(4) The increase in hotel...Read more
Other - Other
We seek to grow through...Read more
Financial - Earnings
Year Ended December 31, 2022...Read more
Other - Other
ASU 2019-10 revised the mandatory...Read more
Financial - Shares
As of March 14, 2023,...Read more
Financial - Dividend
Preferred dividends, declared and undeclared,...Read more
Revenue - Product
(5) The increase in design...Read more
Financial - Expense
The increase was primarily caused...Read more
Financial - Expense
Amortization of loan costs relates...Read more
Financial - Dividend
The Company used a portion...Read more
Financial - Dividend
To the extent not paid...Read more
Financial - Expense
Cost Reimbursement Revenue Cost reimbursement...Read more
Financial - Income
The payment is included in...Read more
Financial - Earnings
Borrowings under the Credit Agreement...Read more
Financial - Expense
Cost of revenues for audio...Read more
Financial - Expense
General and administrative expenses increased...Read more
Financial - Expense
INSPIRE, RED and Remington had...Read more
Revenue - Product
These were offset by cash...Read more
Financial - Expense
The change in salaries and...Read more
Other - Other
Incentive advisory fees are measured...Read more
Other - Other
Net loss attributable to common...Read more
Revenue - Product
Practical Expedients and Exemptions We...Read more
Financial - Expense
Hotel management costs primarily consist...Read more
M & A - Other
The excess of the purchase...Read more
Financial - Dividend
Preferred stock dividends-As of December...Read more
Financial - Income
The "Income Taxes" topic of...Read more
Financial - Dividend
The Company paid the dividend...Read more
Financial - Dividend
The Company paid the dividend...Read more
Financial - Expense
Reimbursed expenses increased $157.4 million...Read more
Financial - Income
For other agreements, deferred income...Read more
Revenue - Product
These were offset by cash...Read more
M & A - Other
Indefinite-lived intangible assets primarily include...Read more
Financial - Expense
Salaries and Benefits Expense....Read more
Other - Other
Certain segments of our business...Read more
Financial - Cash Flow
These cash flows consisted of...Read more
Other - Other
Realized Gain (Loss) on Investments....Read more
Other - Other
The increase is primarily due...Read more
Other - Other
The Cash Management Fees will...Read more
Financial - Debt
The Credit Facility does not...Read more
Other - Other
The Company has commitments related...Read more
Financial - Expense
Interest expense increased $4.9 million...Read more
Financial - Income
Income tax (expense) benefit changed...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Ashford Inc. provided additional information to their SEC Filing as exhibits

Exhibit 4.6: Instruments Defining The Rights Of Security Holders, Including Indentures

Exhibit 10.10 2: Material Contract

Exhibit 10.10 3: Material Contract

Exhibit 10.10 4: Material Contract

Exhibit 21: Subsidaries Of The Registrant

Exhibit 23.1: Consents Of Experts And Counsel

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: AINC
CIK: 1604738
Form Type: 10-K Annual Report
Accession Number: 0001604738-23-000017
Submitted to the SEC: Thu Mar 16 2023 7:23:20 PM EST
Accepted by the SEC: Fri Mar 17 2023
Period: Saturday, December 31, 2022
Industry: Management Consulting Services