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Drive Shack Inc. (DSHK) reported strong financial results for Q3 2023, with an adjusted EBITDA of $10 million and $29 million in the first nine months of 2023. Revenue reached $100 million in Q3 and $276 million in the first nine months, marking a 13% and 14% increase from the same periods in 2022. Traditional golf segment revenue grew by 10% in Q3 and 13% in the first nine months, while entertainment golf segment revenue saw a 27% and 33% increase, driven by new Puttery locations in various cities.
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DALLAS--(BUSINESS WIRE)--
Drive Shack Inc. (the “Company”) (OTCQX: DSHK), a leading owner and operator of golf-related leisure and entertainment businesses, has reported its financial results for the third quarter of 2023.
Summary Highlights
- Adjusted EBITDA(1) of $10 million in the third quarter of 2023 and $29 million in the first nine months of 2023, compared to $7 million and $13 million for the corresponding periods in 2022
-Revenue of $100 million in the third quarter of 2023 and $276 million in the first nine months of 2023, up 13% and 14% from the corresponding periods in 2022
- Segment revenue for traditional golf (American Golf) in the third quarter of 2023 of $79 million and $213 in the first nine months of 2023, up 10% and 13% from the corresponding periods in 2022
- Segment revenue for entertainment golf (Drive Shack and Puttery) in the third quarter of 2023 of $21 million and $62 million in the first 9 months of 2023, up 27% and 33% for each of the comparative periods in 2022
The Company attributed the revenue growth at American Golf primarily to an average increase in ADR (average daily rounds) for Greens fees and Cart Fees of 6.5% at existing courses and the addition of 3 leased courses at the beginning of 2023 - Marshall Canyon Golf Course (La Verne, CA), Allondra Golf Course (Lawndale, CA), and Don Knabe Golfing Center (Norwalk, CA)
The entertainment golf revenue increase primarily reflected the addition of new Puttery locations in Chicago, IL (November 2022), Pittsburgh, PA (February 2023), Minneapolis, MN (July 2023), and Kansas City, MO (August 2023).
A full discussion and analysis of the Company’s results and other business information is available in the Company’s full quarterly report, which is available on the Company’s OTCQX landing page, www.otcmarkets.com/stock/DSHK, and on the Company’s investor relations website, https://ir.driveshack.com.
About Drive Shack Inc.
Drive Shack Inc. is a leading owner and operator of golf-related leisure and entertainment businesses focused on bringing people together through competitive socializing. Today, our portfolio consists of American Golf, Drive Shack and Puttery.
Exhibit – Adjusted EBITDA Reconciliation
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 operating income/(loss). Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measure to our GAAP operating income/(loss), and not to rely on any single financial measure to evaluate our business.
We define Adjusted EBITDA as GAAP operating income (loss), adjusted for 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).
Reconciliation to Adjusted EBITDA
$'s in $1,000s
Q3 2023
Q3 2022
YTD
September
2023
YTD
September
2022
Operating Income (loss)
(847
)
(5,192
)
1,091
(29,942
)
Add: Depreciation & Amortization
8,572
6,819
21,998
19,144
Add: Pre-opening Costs
1,957
2,145
4,869
4,830
Add: Loss on Lease Terminations or Impairment
36
1,318
70
16,350
EBITDA
9,718
5,090
28,028
10,382
Add: Non-recurring Items (1)
539
1,953
519
2,266
Add: Overhead expense in General and Administrative
3,416
6,513
15,643
26,336
Adjusted Venue Level EBITDA
13,673
13,556
44,189
38,984
Less: Corporate Overhead
(3,416
)
(6,513
)
(15,643
)
(26,336
)
Adjusted EBITDA
10,257
7,043
28,547
12,648
(1) Non-Recurring Items represents adjustments for items such as Severance, out of period accounting adjustments, dead deal expenses, and other one time expenses.
What were the adjusted EBITDA figures for Drive Shack Inc. in Q3 2023?
Drive Shack Inc. reported an adjusted EBITDA of $10 million in Q3 2023.
How much did the revenue increase in the first nine months of 2023 compared to 2022 for Drive Shack Inc.?
Drive Shack Inc.'s revenue increased by 14% in the first nine months of 2023 compared to 2022.
What contributed to the revenue growth at American Golf for Drive Shack Inc.?
The revenue growth at American Golf was primarily attributed to an average increase in ADR for Greens fees and Cart Fees of 6.5% at existing courses and the addition of 3 leased courses.
What was the primary driver of the entertainment golf revenue increase for Drive Shack Inc.?
The entertainment golf revenue increase primarily reflected the addition of new Puttery locations in various cities.
drive shack is where players of every slice or fade can kick back, kick it up, or kick aside everything they know about the game. it’s where you can play the game your way, with your friends, the kids, or just with a couple of beers. it’s the place where fun is bound to happen, no matter your drive. drive shack is an entertainment company that combines golf, competition, dining, and fun. those who want to enjoy the facility, but not play, can spectate from one of drive shack’s bar and restaurant areas, or spend time in the game lounge. drive shack is poised to become the go-to entertainment outlet for golfers and non-golfers alike. drive shack is a leading owner and operator of leisure and entertainment businesses. today, the company's portfolio primarily consists of: * drive shack | operator and owner of innovative golf entertainment venues * american golf | operator and owner of golf properties
