Drive Shack Inc. (NYSE:DS; the “Company”) today reported the
following information for the first quarter ended March 31,
2018.
BUSINESS HIGHLIGHTS
- Drive Shack – The Company opened
its first venue in Orlando, Florida, in April 2018.
- The Company has announced five
additional venues to date, which are in various stages of
development, and are expected to open throughout 2019.
- Drive Shack continues to assess a
national and global pipeline of locations and aims to open five to
ten sites annually as the business ramps.
- American Golf – As of March 31,
2018, the Company owned, leased or managed 74 golf properties
across 12 states. These courses are located predominately in
high-volume, top-tier cities across the U.S.
- On a same-store basis, excluding
managed courses, the traditional golf business ended the first
quarter with approximately 39,000 Players Club members for public
properties, an increase of approximately 4,000 members over the end
of the first quarter of the prior year.
- On the private side of the business,
there were approximately 8,700 full golf members at the end of the
first quarter representing an increase of 464 members from the end
of the first quarter of the prior year. For the trailing twelve
months, average annual dues per full golf private member increased
by $302 since first quarter 2017, on a same-store basis, to
$6,377.
FIRST QUARTER 2018 FINANCIAL
RESULTS
- GAAP Loss of $18 million, or $0.26 per
share, compared to loss of $14 million, or $0.21 per share, in 1Q
2017.
- Core Earnings of $(5) million, or
$(0.08) per share, compared to $(0.4) million, or $(0.01) per
share, in 1Q 2017.
- Year-over-year decrease is primarily
due to lower interest income because of the repayment of the
resorts-related loan and sale of agency securities.
1Q 2018 1Q 2017 GAAP Loss $(18)
million $(14) million GAAP Loss per WA Basic Share $(0.26) $(0.21)
Non-GAAP Results: Core Earnings* $(5) million $(0.4)
million Core Earnings per WA Basic Share* $(0.08) $(0.01)
WA: Weighted Average
*For reconciliations of GAAP Loss to Core Earnings, please refer
to the Reconciliation of Core Earnings below.
SECOND QUARTER 2018 PREFERRED STOCK
DIVIDENDS
Drive Shack Inc.’s Board of Directors declared dividends on the
Company's preferred stock for the period beginning May 1, 2018 and
ending July 31, 2018. The dividends are payable on July 31, 2018 to
holders of record of preferred stock on July 2, 2018. The Company
will pay dividends of $0.609375, $0.503125 and $0.523438 per share
on the 9.750% Series B, 8.050% Series C and 8.375% Series D
preferred stock, respectively.
ADDITIONAL INFORMATION
For additional information that management believes to be useful
for investors, please refer to the presentation posted on the
Investor Relations section of the Company’s website,
http://ir.driveshack.com. For consolidated investment portfolio
information, please refer to the Company’s most recent Quarterly
Report on Form 10-Q or Annual Report on Form 10-K, which are
available on the Company’s website, http://ir.driveshack.com.
EARNINGS CONFERENCE CALL
The Company’s management will host a conference call on
Thursday, May 3, 2018 at 9:00 A.M. Eastern Time. A copy of the
earnings release will be posted to the Investor Relations section
of Drive Shack Inc.’s website, http://ir.driveshack.com.
All interested parties are welcome to participate on the live
call. The conference call may be accessed by dialing 1-866-913-6930
(from within the U.S.) or 1-409-983-9881 (from outside of the U.S.)
ten minutes prior to the scheduled start of the call; please
reference conference ID “5197994.”
A simultaneous webcast of the conference call will be available
to the public on a listen-only basis at http://ir.driveshack.com.
Please allow extra time prior to the call to visit the website and
download any necessary software required to listen to the internet
broadcast.
A telephonic replay of the conference call will also be
available two hours following the call’s completion through 11:30
P.M. Eastern Time on Thursday, May 17, 2018 by dialing
1-800-585-8367 (from within the U.S.) or 1-404-537-3406 (from
outside of the U.S.); please reference conference ID “5197994.”
Consolidated Statements of Operations
(Unaudited)($ in thousands, except share data)
Three Months Ended March 31,
2018 2017 Revenues Golf course
operations $ 53,554 $ 46,296 Sales of food and beverages
13,106 12,845 Total revenues 66,660
59,141
Operating costs Operating
expenses 57,379 50,509 Cost of sales - food and beverages 4,040
4,032 General and administrative expense 9,192 7,487 Management fee
to affiliate — 2,677 Depreciation and amortization 5,548 5,793
Pre-opening costs 1,556 — Impairment 1,473 — Realized and
unrealized (gain) loss on investments (242 ) 3,389
Total operating costs 78,946 73,887
Operating loss (12,286 ) (14,746 )
Other income
(expenses) Interest and investment income 446 7,888 Interest
expense, net (4,049 ) (5,434 ) Other loss, net (406 )
(123 ) Total other income (expenses) (4,009 ) 2,331
Loss before income tax (16,295 ) (12,415 ) Income tax
expense — 539 Net Loss (16,295 )
(12,954 ) Preferred dividends (1,395 ) (1,395 ) Loss
Applicable to Common Stockholders $ (17,690 ) $ (14,349 )
Loss Applicable to Common Stock, per share Basic $ (0.26 ) $
(0.21 ) Diluted $ (0.26 ) $ (0.21 )
Weighted Average
Number of Shares of Common Stock Outstanding Basic
66,977,104 66,841,977 Diluted
66,977,104 66,841,977 Dividends Declared per
Share of Common Stock $ — $ —
Consolidated Balance Sheets($ in
thousands, except share data)
March 31, 2018 December 31, 2017
Assets Current Assets Cash and cash equivalents $ 137,028 $
167,692 Restricted cash 3,162 5,178 Accounts receivable, net 9,046
8,780 Real estate assets, held-for-sale 164,040 2,000 Real estate
securities, available-for-sale 2,362 2,294 Other current assets
25,815 21,568 Total Current Assets
341,453 207,512 Restricted cash, noncurrent 821 818 Property
and equipment, net of accumulated depreciation 86,850 241,258
Intangibles, net of accumulated amortization 54,896 57,276 Other
investments 21,514 21,135 Other assets 8,442
8,649
Total Assets $ 513,976 $ 536,648
Liabilities and Equity Current Liabilities
Obligations under capital leases 4,892 4,652 Membership deposit
liabilities 8,715 8,733 Accounts payable and accrued expenses
34,513 36,797 Deferred Revenue 13,636 31,207 Real estate
liabilities, held-for-sale 13,487 -- Other current liabilities
16,532 22,596 Total Current Liabilities
91,775 103,985 Credit facilities and obligations under
capital leases 112,156 112,105 Junior subordinated notes payable
51,206 51,208 Membership deposit liabilities, noncurrent 88,247
86,523 Deferred revenue, noncurrent 7,332 6,930 Other liabilities
4,779 4,846
Total Liabilities $
355,495 $ 365,597 Commitments and
contingencies
Equity
Preferred stock, $0.01 par value,
100,000,000 shares authorized, 1,347,321 sharesof 9.75% Series B
Cumulative Redeemable Preferred Stock, 496,000 shares of8.05%
Series C Cumulative Redeemable Preferred Stock, and 620,000 shares
of8.375% Series D Cumulative Redeemable Preferred Stock,
liquidation preference$25.00 per share, issued and outstanding as
of March 31, 2018 and December 31, 2017
$ 61,583 $ 61,583
Common stock, $0.01 par value,
1,000,000,000 shares authorized, 66,842,378 and66,824,304 shares
issued and outstanding at March 31, 2018 and December 31, 2017,
respectively
670 670
Additional paid-in capital
3,173,559
3,173,281
Accumulated deficit (3,078,734 ) (3,065,853 ) Accumulated other
comprehensive income 1,403 1,370
Total Equity $ 158,481 $ 171,051
Total Liabilities and Equity $ 513,976 $ 536,648
Reconciliation of Core Earnings($
in thousands)
Three Months Ended March 31, 2018
2017 (Loss) Income applicable to common stockholders $
(17,690 ) $ (14,349 ) Add (Deduct): Impairment 1,473 — Realized and
unrealized (gain) loss on investments (242 ) 3,389 Other loss
(income) (A) 785 502 Depreciation and amortization (B) 8,259 8,407
Acquisition, transaction, restructuring
and spin-offrelated expenses (C)
2,039 1,662 Core earnings $ (5,376 ) $
(389 )
(A) Other (loss) income reconciliation:
Three Months Ended March 31, 2018 2017
Total other income $ (4,009 ) $ 2,331 Add (deduct): Equity in
earnings from equity method investees (379 ) (379 ) Interest and
investment income (446 ) (7,888 ) Interest expense 4,049
5,434 Other (loss) income $ (785 ) $ (502 )
(B) Including accretion of membership deposit
liabilities of $1.7 million and $1.6 million and amortization of
favorable and unfavorable leasehold intangibles of $1.0 million and
$1.0 million in the three months ended March 31, 2018 and 2017,
respectively. The accretion of membership deposit liabilities was
recorded to interest expense, net and the amortization of favorable
and unfavorable leasehold intangibles was recorded to operating
expenses. (C) Including acquisition and transaction expenses of
$1.8 million and $1.7 million and restructuring expenses of $0.2
million and less than $0.1 million during the three months ended
March 31, 2018 and 2017, respectively. The acquisition and
transaction costs were recorded to general and administrative
expense and restructuring expenses were recorded to operating
expenses.
CORE EARNINGS
The following primary variables impact our operating
performance: (i) the current yield earned on our investments that
are not included in non-recourse financing structures (i.e.,
unlevered investments, including investments in equity method
investees and investments subject to recourse debt), (ii) the net
yield we earn from our non-recourse financing structures, (iii) the
interest expense and dividends incurred under our recourse debt and
preferred stock, (iv) the net operating income on our real estate
and golf investments, (v) our operating expenses and (vi) our
realized and unrealized gains or losses, net of related provision
for income taxes, including any impairment, on our investments,
derivatives and debt obligations. Core earnings is a non-GAAP
measure of our operating performance excluding the sixth variable
listed above. Core earnings also excludes depreciation and
amortization charges, including the accretion of membership deposit
liabilities and the impact of the application of acquisition
accounting, acquisition and spin-off related expenses and
restructuring expenses. Core earnings is used by management to
evaluate our performance without taking into account gains and
losses, net of related provision for income taxes, which, although
they represent a part of our recurring operations, are subject to
significant variability and are only a potential indicator of
future performance. These adjustments to our income (loss)
applicable to common stockholders are not indicative of the
performance of the assets that form the core of our activity.
Management utilizes core earnings as a measure in its
decision-making process relating to the underlying fundamental
operations of our investments, as well as the allocation of
resources between those investments, and management also relies on
core earnings as an indicator of the results of such decisions. As
such, core earnings is not intended to reflect all of our activity
and should be considered as only one of the factors in assessing
our performance, along with GAAP net income, which is inclusive of
all of our activities. Management also believes that the exclusion
from core earnings of the items specified above allows investors
and analysts to readily identify and track the operating
performance of the assets that form the core of our activity,
assists in comparing the core operating results between periods,
and enables investors to evaluate our current core performance
using the same measure that management uses to operate the
business.
Core earnings does not represent an alternative to net income as
an indicator of our operating performance or as an alternative to
cash flows from operating activities as a measure of our liquidity,
and is not indicative of cash available to fund cash needs. Our
calculation of core earnings may be different from the calculation
used by other companies and, therefore, comparability may be
limited.
ABOUT DRIVE SHACK INC.
Drive Shack Inc. is a leading owner and operator of golf-related
leisure and entertainment businesses.
FORWARD-LOOKING STATEMENTS
Certain items in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements
regarding the Company’s targets and expectations regarding Drive
Shack’s existing venue in Orlando, Florida and other venues in the
national and global pipeline of locations, including the timing and
frequency of opening new venues. These statements are based on
management's current expectations and beliefs and are subject to a
number of trends and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements, many of which are beyond Drive Shack’s control. The
Company can give no assurance that its expectations will be
attained. Accordingly, you should not place undue reliance on any
forward-looking statements contained in this press release. For a
discussion of some of the risks and important factors that could
cause actual results to differ from such forward-looking
statements, see the sections entitled “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in the Company’s most recent Quarterly
Report on Form 10-Q or Annual Report on Form 10-K. Furthermore, new
risks and uncertainties emerge from time to time, and it is not
possible for the Company to predict or assess the impact of every
factor that may cause its actual results to differ from those
contained in any forward-looking statements. Such forward-looking
statements speak only as of the date of this press release. The
Company expressly disclaims any obligation to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in the Company's expectations with
regard thereto or change in events, conditions or circumstances on
which any statement is based.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180503005448/en/
Drive Shack Inc.Investor Relations516-268-7460
Drive Shack (NYSE:DS)
Historical Stock Chart
From Apr 2024 to May 2024
Drive Shack (NYSE:DS)
Historical Stock Chart
From May 2023 to May 2024