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Share Name | Share Symbol | Market | Type |
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Drive Shack Inc | NYSE:DS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.1676 | 0 | 01:00:00 |
Company announces four new Drive Shack locations and confirms three new venue openings in 2019
Has closed sales of 15 golf courses for $115 million and repaid $102 million of debt
Drive Shack Inc. (NYSE:DS), an owner and operator of golf entertainment and dining venues and traditional golf courses, today announced financial results for its fourth quarter and full-year ended December 31, 2018.
Business Highlights
“In 2018, we took a big step in our transition from a traditional golf company to a full-fledged entertainment business with great golf content. We now look forward to a transformative 2019, as we quadruple the number of our golf entertainment venues. Expansion into dining and entertainment is our top priority, and we continue to invest in identifying new Drive Shack locations, building them quicker, and improving the customer experience for our guests,” said Ken May, Chief Executive Officer.
“We generated $115 million in gross proceeds from the sale of 15 owned golf courses and repaid $102 million of debt. As we continue to monetize our golf courses, these proceeds will serve as the platform for growth for our entertainment golf business where we are targeting 20 open units by 2022,” said David Hammarley, Chief Financial Officer.
Development
Since third quarter of 2018, the Company signed 4 new locations across Chicago, IL; Houston, TX; Newport Beach, CA; Portland, OR. The company plans to open up 3 new Drive Shack site locations in Raleigh, NC, West Palm Beach, FL, and Richmond, VA in the second half of 2019.
Financial Outlook
Our FY 2019 expectations and stabilized targets are as follows:
Preferred Stock Dividends
The Company will pay dividends on April 29, 2019 to holders of record of preferred stock on April 1, 2019, for the period beginning February 1, 2019 and ending April 30, 2019, in an amount equal to $0.609375, $0.503125 and $0.523438 per share on the 9.750% Series B, 8.050% Series C and 8.375% Series D preferred stock, respectively.
Financial Results
Fourth Quarter 2018 compared to the Fourth Quarter 2017 ($ in thousands, except for per share data):
Three Months Ended December 31, 2018 2017 Total revenues $ 69,286 $ 70,402 Loss applicable to common stockholders $ (4,905 ) $ (25,467 ) Loss applicable to common stockholders Per Basic Share $ (0.07 ) $ (0.38 ) Loss applicable to common stockholders Per Diluted Share $ (0.07 ) $ (0.38 )Full year 2018 compared to the full year 2017:
Year Ended December 31, 2018 2017 Total revenues $ 314,369 $ 292,594 Loss applicable to common stockholders $ (44,263 ) $ (47,781 ) Loss applicable to common stockholders Per Basic Share $ (0.66 ) $ (0.71 ) Loss applicable to common stockholders Per Diluted Share $ (0.66 ) $ (0.71 )Conference Call Today
Management will hold a conference call to discuss these results today at 9:00 a.m. Eastern Time. The conference call can be accessed over the phone 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 “2396776.”
A copy of the earnings release will be posted to the Investor Relations section of Drive Shack Inc.’s website, http://ir.driveshack.com.
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, March 28, 2019 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 “2396776.”
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 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.
About Drive Shack
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, but not limited to, statements regarding Drive Shack Inc.’s (NYSE: DS; “DS Inc.” or the “Company” and “we,” “us” and “our,” as applicable) (a) statements relating to returns on our investments, (b) anticipated future sales of selected owned golf properties, including without limitation statements relating to the timing and amount of anticipated proceeds, (c) our plans and expectations to optimize the operation of, and grow, our existing leased and managed golf properties, (d) redeployment of cash from our generated liquidity, (e) targeted multiples, yields and returns, (f) our ability to terminate or restructure leases and (g) the Company’s current business plan and expectations relating to our Drive Shack venues, including (i) the number of venues that we may be able to develop, (ii) timing and frequency for opening venues, (iii) financial performance of these venues and capital expenditure costs, (iv) the growth of the golf, golf entertainment, and eatertainment industry and business, and (v) our ability to enhance technology. These statements are based on management's current expectations and beliefs and are subject to a number of risks, trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control. We cannot give any assurances that management’s current expectations will be attained. For a discussion of some of the risks and important factors that could cause actual results to differ materially 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 periodic reports filed with the Securities and Exchange Commission (“SEC”), which are available on the Company’s website (http://ir.driveshack.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible to predict or assess the impact of every factor that may cause actual results to differ from those contained in any forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained in this Press Release. Forward-looking statements speak only as of the date of this Press Release. We expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
Past Performance; No Offer; No Reliance: Past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. This Press Release does not constitute an offer to sell, or a solicitation of an offer to buy, any security. Any such offer would only be made by means of formal offering documents, the terms of which would govern in all respects. You should not rely on this Press Release as the basis upon which to make any investment decision.
The Company has not reconciled its EBITDA or free cash flow targets set forth in this press release to net income (loss) or cash from operations, as items that impact such measures are out of the Company’s control and/or cannot be reasonably predicted. Accordingly, a reconciliation is not available without unreasonable effort.
Cautionary Note regarding Estimated / Targeted Returns and Growth: Targeted returns and growth represent management’s view and are estimated based on current and projected future operating performance of our location in Orlando and other targeted locations, comparable companies in our industry and a variety of other assumptions, many of which are beyond our control, that could prove incorrect. As a result, actual results may vary materially with changes in our liquidity or ability to obtain financing, changes in market conditions and additional factors described in our reports filed with the SEC, which we encourage you to review. We undertake no obligation to update these estimates. See above for more information on forward-looking statements.
Consolidated Balance Sheets
December 31, 2018 2017 Assets Current Assets Cash and cash equivalents $ 79,235 $ 167,692 Restricted cash 3,326 5,178 Accounts receivable, net 7,518 8,780 Real estate assets, held-for-sale, net 75,862 2,000 Real estate securities, available-for-sale 2,953 2,294 Other current assets 20,505 21,568 Total Current Assets 189,399 207,512 Restricted cash, noncurrent 258 818 Property and equipment, net of accumulated depreciation 132,605 241,258 Intangibles, net of accumulated amortization 48,388 57,276 Other investments 22,613 21,135 Other assets 8,684 8,649 Total Assets $ 401,947 $ 536,648 Liabilities and Equity Current Liabilities Obligations under capital leases $ 5,489 $ 4,652 Membership deposit liabilities 8,861 8,733 Accounts payable and accrued expenses 45,284 36,797 Deferred revenue 18,793 31,207 Real estate liabilities, held-for-sale 2,947 — Other current liabilities 22,285 22,596 Total Current Liabilities 103,659 103,985 Credit facilities and obligations under capital leases 10,489 112,105 Junior subordinated notes payable 51,200 51,208 Membership deposit liabilities, noncurrent 90,684 86,523 Deferred revenue, noncurrent 6,016 6,930 Other liabilities 5,232 4,846 Total Liabilities $ 267,280 $ 365,597 Commitments and contingencies Equity Preferred stock, $0.01 par value, 100,000,000 shares authorized,1,347,321 shares of 9.75% Series B Cumulative Redeemable Preferred Stock,496,000 shares of 8.05% Series C Cumulative Redeemable Preferred Stock, and620,000 shares of 8.375% Series D Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, issued and outstanding as of December 31, 2018 and 2017 $ 61,583 $ 61,583 Common stock, $0.01 par value, 1,000,000,000 shares authorized, 67,027,104 and 66,977,104 shares issued and outstanding at December 31, 2018 and 2017, respectively 670 670 Additional paid-in capital 3,175,843 3,173,281 Accumulated deficit (3,105,307 ) (3,065,853 ) Accumulated other comprehensive income 1,878 1,370 Total Equity $ 134,667 $ 171,051 Total Liabilities and Equity $ 401,947 $ 536,648Consolidated Statements of Operations
Three Months Ended December 31, Year Ended December 31, 2018 2017 2018 2017 Revenues Golf operations $ 53,014 $ 52,768 $ 244,646 $ 221,737 Sales of food and beverages 16,272 17,634 69,723 70,857 Total revenues 69,286 70,402 314,369 292,594 Operating costs Operating expenses 57,043 56,876 251,794 232,796 Cost of sales - food and beverages 4,740 5,197 20,153 20,959 General and administrative expense 8,951 8,679 38,560 31,413 Management fee and termination payment to affiliate — 13,378 — 21,410 Depreciation and amortization 5,346 6,352 19,704 24,304 Pre-opening costs 435 129 2,483 320 Impairment 2,595 — 8,240 60 Realized and unrealized (gain) loss on investments 152 (118 ) (131 ) 6,243 Total operating costs 79,262 90,493 340,803 337,505 Operating loss (9,976 ) (20,091 ) (26,434 ) (44,911 ) Other income (expenses) Interest and investment income 412 461 1,794 23,162 Interest expense, net (3,699 ) (4,246 ) (16,639 ) (19,581 ) Other income (loss), net 10,037 (278 ) 2,880 94 Total other income (loss) 6,750 (4,063 ) (11,965 ) 3,675 Loss before income tax (3,226 ) (24,154 ) (38,399 ) (41,236 ) Income tax expense 284 (82 ) 284 965 Net loss (3,510 ) (24,072 ) (38,683 ) (42,201 ) Preferred dividends (1,395 ) (1,395 ) (5,580 ) (5,580 ) Loss Applicable To Common Stockholders $ (4,905 ) $ (25,467 ) $ (44,263 ) $ (47,781 ) Loss Applicable to Common Stock, per share Basic $ (0.07 ) $ (0.38 ) $ (0.66 ) $ (0.71 ) Diluted $ (0.07 ) $ (0.38 ) $ (0.66 ) $ (0.71 ) Weighted Average Number of Shares of Common Stock Outstanding Basic 67,027,104 66,963,297 66,993,543 66,903,457 Diluted 67,027,104 66,963,297 66,993,543 66,903,457
View source version on businesswire.com: https://www.businesswire.com/news/home/20190314005301/en/
For Investor Relations Inquiries:Austin PruittDrive Shack Inc.516-268-7460IR@driveshack.com
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