Golf Entertainment Group Inc. (GLFE) Earnings Call Transcript & Summary

Good morning, and welcome to Drive Shack's 2025 Annual Meeting of Shareholders. Please note that this meeting is being recorded. [Operator Instructions]. I will now turn the meeting over to Matt Maron, Drive Shack's General Counsel and Secretary.

Good morning, everyone. Thank you, operator. It is 10:00 a.m. Eastern Time, 9:00 a.m. Central Time on Monday, June 16, 2025. I now call this meeting to order. I'm joined today by Mike Compton, our Chief Executive Officer; and Kyle Rickman, our President and Chief Operating Officer. In a moment, I will walk through the 2 matters of business at this meeting. We welcome shareholders to submit questions during this meeting. Should you wish to submit a question during the meeting, please check on the messaging icon at the top of the left side of your screen, type your question into the text box, then click the send icon at the right of that text box. Please note that in the interest of all shareholders, we will only address those questions that are pertinent to the business of the meeting. You are also invited to reach out to us through our IR e-mail address via [email protected]. with additional questions.

Thank you, Matt. Good morning, everyone. We're glad you could join us here for the annual meeting. 2024 was a strong year for Drive Shack Inc. We reported the highest annual adjusted EBITDA since the transition of the company from a REIT in 2017 with $343 million of revenue and $41 million of adjusted EBITDA, which is a $5 million improvement from 2023 and a $35 million improvement from 2022. 2024 was a good year for the American Golf segment, which we increased same-store sales by $25 million. In addition, we were focused on driving operational efficiencies, and we're able to expand the EBITDA margin by 3%. On our Entertainment Golf business, it was challenged in 2024 with several factors, including competition in the market, most notably in Raleigh and weakness in the consumer and corporate spending. We did open 2 new locations in 2024 in both Miami and New York. Last month, we announced our Q1 financial results with the company generating $74 million of revenue, which is slightly below last year. And total company adjusted EBITDA of $7.5 million, mainly driven by the performance of the American Golf business. We remain on budget for the full year 2025. Since the management team has taken over the operations of Drive Shack Inc. in the last few years, we've been focused on rightsizing the operations, establishing a business model to consistently drive positive cash flow from operations, which we've accomplished. This year, we've shifted our focus to growth in the American Golf segment, and we are aggressively exploring opportunities to lease, manage and acquire additional golf courses and driving ranges across the company. We've already renewed and extended agreements in 4 courses this year and have submitted RFPs to gain additional courses and actively pursuing in our pipeline. I'll now turn it back over to Matt to proceed with the business portion of the meeting.

Thanks, Mike. We have 2 proposals before us today. The first proposal is to elect William J. Clifford as a Class III director serving until 2026. Benjamin M. Crane and Keith Sbarbaro as Class II directors serving until 2027 and Michael Compton and Wesley R. Edens as Class I directors serving until 2028. The second proposal is brought forth by vote of holders of the company's parity preferred stock and is to elect Michael Choo and George W. Hebard III as preferred directors. Each director is to hold office until all accumulated current distributions of each series of preferred stock have been paid in full were authorized and set aside for payment. David Cary is here on the line representing Equiniti as the inspector of elections for this meeting. Equiniti has provided to me an affidavit that the mailing of our proxy materials commenced on June 7, 2025, to shareholders of record on May 19, 2025. I will now address the proposals for the shareholders' meeting. Proposal #1 is for common directors. 67.61% of the voting power of our common directors is represented at this meeting by proxy, representing a quorum under our charter and our bylaws. At this time, we will conduct a shareholder vote with respect to proposal #1. If you are a common shareholder and have already voted your shares and do not wish to change your vote, no action is required at this time. If you have not yet voted or would like to change your vote. This is the final opportunity to vote. [Voting]

The voting has concluded. I'm pleased to announce that pursuant to proposal #1, each of the 5 director nominees has received a plurality of the votes cast, and therefore, each has been elected. I will now turn to proposal 2 for the preferred directors. We will now conduct a shareholder vote with respect to Proposal 2 to elect Michael Choo and George W. Hebard III as preferred directors. 59.65% of the voting power of our parity preferred stock is represented at this meeting by proxy, representing a quorum under our charter and our bylaws. If you are a preferred shareholder and have already voted your shares and do not wish to change your vote, no action is required at this time. If you have not yet voted or would like to change your vote, you may do so by clicking the proxy voting site link on the left side of your screen. I will now pause for 1 minute to allow shareholders to vote. Voting has concluded. I'm pleased to announce that pursuant to proposal 2, each of the preferred director nominees has received a plurality of the votes cast, and therefore, each has been elected. The business portion of the meeting is hereby concluded. We will now entertain questions from our shareholders. So that everyone wishing to do so will have an opportunity to ask a question, I request that you ask only one question. And if you have another, you wait until other people have asked their questions. As I mentioned earlier, we will follow up with you directly afterward. If you submit a question that is either not related to today's business at hand or not within the realm of questions that we would address in between our quarterly results period.

Seeing that there are no questions that relates to today's business, we would like to thank you again for participating in today's meeting. Have a great week.