Ashford (US:AINC)2021-11-11 16:00Financial Performance - Total revenues increased by $46.5 million, or 83.2%, to $102.4 million for the three months ended September 30, 2021, compared to the same period in 2020 [241]. - Operating income improved by $15.26 million, reaching $627,000 for the 2021 quarter, compared to a loss of $14.63 million in the prior year [240]. - Net income attributable to common stockholders improved by $12.75 million, or 58.0%, resulting in a loss of $9.23 million for the three months ended September 30, 2021 [240]. - Total revenues for the nine months ended September 30, 2021, increased by $19.3 million, or 8.2%, to $254.6 million compared to $235.3 million for the same period in 2020 [268]. - Operating loss improved by $192.166 million, or 94.1%, to a loss of $12.058 million for the nine months ended September 30, 2021, compared to a loss of $204.224 million in the same period in 2020 [268]. - Net loss attributable to common stockholders decreased by $184.048 million to a loss of $40.991 million for the nine months ended September 30, 2021, compared to a loss of $225.039 million in the same period in 2020 [268]. Revenue Sources - Hotel management fees rose by 105.2% to $7.75 million, driven by a $2.39 million increase in base management fees [241]. - Cost reimbursement revenue increased by 92.1% to $54.05 million, indicating strong operational performance [241]. - Audio visual revenue surged by 385.2% to $15.1 million, reflecting a significant recovery in event-related services [241]. - Hotel management fees increased by $5.145 million, or 37.9%, to $18.737 million for the nine months ended September 30, 2021, compared to $13.592 million in the same period in 2020 [268]. - Advisory services fees decreased by $3.966 million, or 11.6%, to $30.132 million for the nine months ended September 30, 2021, primarily due to lower revenue from Ashford Trust [268]. Expenses and Costs - General and administrative expenses increased by $2.0 million, or 36.9%, to $7.6 million, primarily due to higher professional fees [252]. - Salaries and benefits expense decreased by $27,000, or 0.2%, to $13.8 million, with total cash salaries and benefits increasing by $1.475 million [247]. - Reimbursed expenses increased by $25.9 million to $54.0 million, reflecting higher hotel management expenses due to increased room demand [256]. - General and administrative expenses rose by $3.4 million, or 21.0%, to $19.4 million for the 2021 period, primarily due to increased professional fees [277]. COVID-19 Impact - The Company significantly reduced staffing and expenses due to the impact of COVID-19, which has resulted in reduced occupancy and RevPAR [227]. - The Company expects the COVID-19 pandemic to continue negatively impacting its results of operations, financial position, and cash flow in 2021 and potentially beyond [227]. - The company recognized intangible asset impairment charges of $1.2 million for the indefinite-lived JSAV trademarks during the 2021 quarter [254]. - Audio visual revenue decreased by $5.6 million, primarily due to the impact of COVID-19, but showed recovery in the second and third quarters of 2021 [270]. Dividends and Stockholder Returns - As of September 30, 2021, the Company had aggregate undeclared preferred stock dividends of approximately $25.6 million related to the second and fourth quarters of 2020 and the second quarter of 2021 [227]. - The Company declared $8.4 million in dividends in each of the first and third quarters of 2021 for its Series D Convertible Preferred Stock [229]. - Preferred dividends increased by $777,000, or 9.7%, to $8.8 million in Q3 2021 compared to $8.0 million in Q3 2020 due to an increase in the dividend rate of the Series D Convertible Preferred Stock [263]. - Preferred dividends declared and undeclared increased by $2.201 million, or 9.2%, to $26.001 million for the nine months ended September 30, 2021, compared to $23.800 million in the same period in 2020 [268]. Compliance and Regulatory Matters - The Company received a notification letter from the NYSE American on August 9, 2021, confirming compliance with all continued listing standards [234]. - The company achieved compliance with NYSE American listing standards after addressing previously cited deficiencies [235]. - The company has implemented a compliance plan to increase the market value of publicly held shares above $15 million [235]. Liquidity and Financial Position - As of September 30, 2021, the company had cash and cash equivalents of $40.2 million, down from $45.3 million as of December 31, 2020 [302]. - Total indebtedness as of September 30, 2021, was $59.7 million, with $55.5 million being variable-rate debt [312]. - The company reclassified $19.3 million of INSPIRE's outstanding loans from current to noncurrent notes payable as of September 30, 2021, indicating improved liquidity [290]. - The company amended its Term Loan Agreement to increase the required amortization rate from 1.25% to 2.50% each quarter starting July 1, 2021, and requires a minimum liquidity of $15.0 million at all times [292].