Drive Shack Inc. Announces Fourth Quarter and Full Year 2020 Results and Preferred Stock Dividends for First Quarter 2021
Drive Shack reported a strong fourth quarter for 2020, with positive Adjusted EBITDA of $5.3 million, a significant improvement from a loss of $2.1 million a year earlier. Revenue for its entertainment golf venues reached $7.2 million despite a decline due to pandemic restrictions. American Golf saw notable gains, with new membership sales up 20% and revenue from public courses increasing by 44%. The company declared dividends for preferred stock, payable on April 30, 2021, with amounts of $0.609375, $0.503125, and $0.523438 per share.
- Adjusted EBITDA improved by $7.4 million YoY to $5.3 million.
- New full golf membership sales increased by 20% compared to Q4 2019.
- American Golf's green and cart fee revenue rose by 44% YoY.
- Total revenue for the entertainment golf venues decreased by $5.7 million compared to Q4 2019.
- Event revenue declined by approximately $9.5 million YoY, affecting overall revenue.
Drive Shack Inc. (the “Company”) (NYSE: DS), a leading owner and operator of golf-related leisure and entertainment businesses, today reported its financial results for the fourth quarter and full year ended December 31, 2020.
“We are very pleased with our fourth quarter results as we continue to see strong momentum in both our Drive Shack and American Golf businesses,” said President and Chief Executive Officer Hana Khouri. “In December, we successfully reopened our Orlando entertainment golf venue and launched an online platform for single-bay reservations across all of our entertainment golf venues, both of which continue to generate solid and encouraging sales results. Our revenue driving initiatives and continued expense control discipline contributed to the positive Adjusted EBITDA results of
Khouri continued, “As we look ahead into 2021, our focus remains on strategic priorities to drive growth and profitability, including the launch and expansion of Puttery, capturing market share using data and analytics, growing brand awareness and advancing technology and innovation to remain at the forefront in our space. With our currently liquidity position and relatively unlevered balance sheet, we can maintain flexibility and optimize our capital stricture to be better positioned to react to future business needs. We believe 2021 will be a momentous year for us that is carried by a team that sets us apart and will drive us forward.”
Business Update
The Company’s four entertainment Drive Shack golf venues, including Orlando which reopened on December 18, 2020, generated total revenue of
The strong momentum and demand for traditional golf continued for American Golf throughout the fourth quarter of 2020. New full golf membership sales increased
Financial Liquidity Update
As of February 28, 2021, the Company had approximately
Financial Results
Three Months and Full Year Ended December 31, 2020 |
|||||||||||||||
compared to the Three Months and Full Year Ended December 31, 2019 |
|||||||||||||||
($ in thousands, except for per share data) (Unaudited): |
|||||||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
December 31, 2020 |
December 31, 2019 |
|
December 31, 2020 |
|
December 31, 2019 |
||||||||||
Total revenues |
$ |
60,287 |
|
$ |
71,815 |
|
|
$ |
219,987 |
|
|
$ |
272,064 |
|
|
Operating Loss |
$ |
(3,648 |
) |
|
$ |
(20,121 |
) |
|
$ |
(36,635 |
) |
|
$ |
(67,284 |
) |
Net Income/(Loss) |
$ |
9,946 |
|
|
$ |
(15,276 |
) |
|
$ |
(56,354 |
) |
|
$ |
(54,854 |
) |
Net Income/(Loss)
|
$ |
8,551 |
|
$ |
(16,671 |
) |
|
$ |
(61,934 |
) |
|
$ |
(60,434 |
) |
|
Net Income/(Loss)
|
|
|
|
|
|||||||||||
Basic |
$ |
0.13 |
|
$ |
(0.25 |
) |
|
$ |
(0.92 |
) |
|
$ |
(0.90 |
) |
|
Diluted |
$ |
0.13 |
|
|
$ |
(0.25 |
) |
|
$ |
(0.92 |
) |
|
$ |
(0.90 |
) |
Adjusted EBITDA1 |
$ |
5,301 |
|
|
$ |
(2,064 |
) |
|
$ |
(3,106 |
) |
|
$ |
(11,951 |
) |
For the three months ended December 31, 2020, the Company reported an operating loss of (
For the twelve months ended December 31, 2020, the Company reported an operating loss of (
1 Adjusted EBITDA is a non-GAAP financial measure. For definitions and reconciliations of non-GAAP results please refer to the exhibit to this press release.
Preferred Stock Dividends
The Board of Directors of the Company declared dividends on the Company’s preferred stock for the period beginning February 1, 2021 and ending April 30, 2021. The dividends are payable on April 30, 2021, to holders of record of preferred stock on April 1, 2021, in an amount equal to
2020 Fourth Quarter and Full Year Earnings Conference Call Details
Management will host a live conference call and webcast to discuss the Company’s 2020 fourth quarter and full year results today starting at 9:00 a.m. Eastern Time. The webcast will be made available to the public on a listen-only basis, along with the associated slide presentation, on the Company’s investor relations website at http://ir.driveshack.com. 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 and referencing conference ID 5779120.
A telephonic replay of the conference call will also be available approximately two hours following the conclusion of the call through 11:59 P.M. Eastern Time on Friday, March 26, 2021 and may be accessed by dialing 1-800-585-8367 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.) and referencing conference ID 5779120.
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 statements regarding Drive Shack Inc. (together with its subsidiaries, “Drive Shack”, “we” or “us”) in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “by”, “approaches”, “nearly”, “potential”, “continues”, “may”, “will”, “should”, “could”, “seeks”, “approximately”, “predicts”, “intends”, “plans”, “estimates”, “anticipates”, “target”, “goal”, “projects”, “contemplates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this release, including statements regarding the expected development schedule and timing of specific milestones for our facilities, including The Puttery and Drive Shack venues, our expected and the remaining cost for our development projects (both individually and in the aggregate), the expected capabilities of our development projects once completed, our intentions to make use of capital or free cash flow and our future financial position and liquidity are based upon our limited historical performance and on our current plans, estimates and expectations in light of information (including industry data) currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by the Company or any other person that the future plans, estimates or expectations contemplated by us will be achieved. These statements are subject to a number of factors that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control. We can give no assurance that its expectations regarding any forward-looking statements will be attained. Accordingly, you should not place undue reliance on any forward-looking statements made in this release. Factors that could cause or contribute to such differences include, but are not limited to, the risk that our construction schedules will take longer than we expect, that our expectations about the consumer demand for our product will not prove accurate, that our operating or other costs will increase or our expected remaining costs for development projects underway increases and the effect of the COVID-19 pandemic on our business and financial results. For a discussion of some of the risks and important factors that could affect 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 Annual Report on Form 10-K and Quarterly Report on Form 10-Q. In addition, 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 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 the Company's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
Non-GAAP Financial Measure
Adjusted EBITDA is not a measurement of financial performance under generally accepted accounting principles in the United States ("GAAP") and should not be considered in isolation or as an alternative to GAAP financial measures. We believe this non-GAAP financial measure, as we have defined it, provides a supplemental measure of financial performance of our current operations at our entertainment and traditional golf venues. This measure excludes items that we believe are unrelated to the day-to-day performance of our current golf entertainment or traditional golf venues, including one-time pre-opening costs associated with new venue openings, corporate severance payments, (gain) loss on lease terminations and impairment, stock-based compensation, depreciation and amortization and other income (which does not include revenue from golf entertainment or traditional golf venues). This non-GAAP financial measure is presented so that investors have the same type of financial data that management uses in evaluating the financial performance of the Company.
The principal limitation of this non-GAAP measure is that it excludes significant expenses and income that are required by GAAP to be recorded in our financial statements. A reconciliation is provided for the non-GAAP financial measure to our GAAP net income/(loss). Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measure to our GAAP net income/(loss), and not to rely on any single financial measure to evaluate our business.
Adjusted EBITDA. We define Adjusted EBITDA as GAAP net income (loss), adjusted for income tax expenses, other income (loss), interest expenses, interest and investment income, depreciation and amortization, gain (loss) on lease terminations, impairment and other losses, pre-opening costs and certain other non-recurring items (including corporate severance payments, transactional G&A and stock-based compensation).
Consolidated Balance Sheets (Unaudited)
(dollars in thousands, except share data) |
||||||||
December 31, 2020 |
December 31, 2019 |
|||||||
Assets |
||||||||
Current assets |
|
|||||||
Cash and cash equivalents |
$ |
47,786 |
|
$ |
28,423 |
|
||
Restricted cash |
|
2,252 |
|
|
3,103 |
|
||
Accounts receivable, net |
|
4,446 |
|
|
5,249 |
|
||
Real estate assets, held-for-sale, net |
|
--- |
|
|
16,948 |
|
||
Real estate securities, available-for-sale |
|
3,223 |
|
|
3,052 |
|
||
Other current assets |
|
14,410 |
|
|
17,521 |
|
||
Total current assets |
|
72,117 |
|
|
74,296 |
|
||
Restricted cash, noncurrent |
|
795 |
|
|
438 |
|
||
Property and equipment, net of accumulated depreciation |
|
169,425 |
|
|
179,641 |
|
||
Operating lease right-of-use assets |
|
192,828 |
|
|
215,308 |
|
||
Intangibles, net of accumulated amortization |
|
15,124 |
|
|
17,565 |
|
||
Other investments |
|
--- |
|
|
24,020 |
|
||
Other assets |
|
6,765 |
|
|
4,723 |
|
||
Total assets |
$ |
457,054 |
|
$ |
515,991 |
|
||
Liabilities and Equity |
||||||||
Current liabilities |
||||||||
Obligations under finance leases |
$ |
6,470 |
|
$ |
6,154 |
|
||
Membership deposit liabilities |
|
14,692 |
|
|
10,791 |
|
||
Accounts payable and accrued expenses |
|
29,596 |
|
|
25,877 |
|
||
Deferred revenue |
|
23,010 |
|
|
26,268 |
|
||
Other current liabilities |
|
28,217 |
|
|
23,968 |
|
||
Total current liabilities |
|
101,985 |
|
|
93,058 |
|
||
Credit facilities and obligations under finance leases - noncurrent |
|
12,751 |
|
|
13,125 |
|
||
Operating lease liabilities - noncurrent |
|
167,837 |
|
|
187,675 |
|
||
Junior subordinated notes payable |
|
51,182 |
|
|
51,192 |
|
||
Membership deposit liabilities, noncurrent |
|
|||||||
FAQ
What is Drive Shack's stock symbol?
What were Drive Shack's fourth quarter financial results?
When will Drive Shack's preferred stock dividends be paid?
What is the amount of the preferred stock dividends declared?
How did Drive Shack's revenue compare year-over-year?
