Note 9 - Business Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 9. Business Segment Information

Avalon’s reportable segments include waste management services and golf and related operations. In determining the segment information, Avalon considered its operating and management structure and the types of information subject to regular review by its “chief operating decision maker.” On this basis, Avalon’s reportable segments include waste management services and golf and related operations. Avalon accounts for intersegment net operating revenues as if the transactions were to third parties. The segment disclosures are presented on this basis for all years presented.

Avalon’s primary business segment, the waste management services segment, provides hazardous and nonhazardous waste disposal brokerage and management services to industrial, commercial, municipal and governmental customers, manages a captive landfill for an industrial customer and sells construction mats. During the second quarter of 2014, Avalon began operating salt water injection wells for the disposal of brine water. These operations are included in the waste management services segment.

The golf and related operations segment includes the operations of golf courses, clubhouses that provide dining and banquet facilities, indoor and outdoor tennis courts, swimming pools, fitness and spa facilities and a travel agency. Revenue for the golf and related operations segment consists primarily of membership dues, green fees, cart rentals, merchandise, and food and beverage sales. Revenue related to membership dues are recognized proportionately over twelve months. The unrecognized or deferred revenues relating to membership dues at September 30, 2014 and December 31, 2013 were $2.6 million and $2.3 million, respectively. On August 1, 2014, Avalon acquired the Magnuson Grand Hotel. The name of the hotel was changed to The Avalon Resort and Spa. In addition to providing hotel rooms, The Avalon Resort and Spa will have dining and banquet facilities, indoor and outdoor swimming pools, indoor tennis courts, a fitness center and a spa facility. The Avalon Resort and Spa will offer hotel guests golf packages to all of the golf courses of the Avalon Golf and Country Club and allow its guests to utilize the facilities at each of the clubhouses. As such, the operations of the resort and hotel are included in the golf and related operations segment.

Avalon does not have significant operations located outside the United States and, accordingly, geographical segment information is not presented.

For the nine months ended September 30, 2014, one customer accounted for approximately 7.4% of Avalon’s consolidated net operating revenues and 10.1% of the waste management services segment’s net operating revenues. For the nine months ended September 30, 2013, one customer accounted for approximately 14.2%% of Avalon’s consolidated net operating revenues and 18.9% of the waste management services segment’s net operating revenues.

The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies. Avalon measures segment profit for internal reporting purposes as income (loss) before taxes. Business segment information including the reconciliation of segment income before taxes to income (loss) before taxes is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net operating revenues from:
Waste management services:
External customers revenues	$	10,391		$	12,487		$	27,567		$	37,148
Intersegment revenues		—			—			—			—
Total waste management services		10,391			12,487			27,567			37,148
Golf and related operations:
External customers revenues		4,046			3,899			9,869			9,640
Intersegment revenues		26			13			59			51
Total golf and related operations		4,072			3,912			9,928			9,691
Segment operating revenues		14,463			16,399			37,495			46,839
Intersegment eliminations		(26	)		(13	)		(59	)		(51	)
Total net operating revenues	$	14,437		$	16,386		$	37,436		$	46,788
Income (loss) before taxes:
Waste management services	$	996		$	1,064		$	2,186		$	2,932
Golf and related operations		(68	)		170			(721	)		18
Segment income before taxes		928			1,234			1,465			2,950
Corporate interest expense		(16	)		—			(16	)		—
Corporate interest income		1			—			1			1
Corporate other income, net		7			8			24			26
General corporate expenses		(758	)		(791	)		(2,120	)		(2,152	)
Income (loss) before taxes	$	162		$	451		$	(646	)	$	825
Interest expense:
Waste management services	$	2		$	2		$	5		$	6
Golf and related operations		3			4			10			10
Corporate		16			—			16			—
Total	$	21		$	6		$	31		$	16
Interest income:
Waste management services	$	—		$	—		$	—		$	—
Golf and related operations		—			—			—			—
Corporate		1			—			1			1
Total	$	1		$	—		$	1		$	1

	September 30, 2014			December 31, 2013
Identifiable assets:
Waste management services	$	19,963		$	16,252
Golf and related operations		34,055			29,821
Corporate		43,341			43,997
Subtotal		97,359			90,070
Elimination of intersegment receivables		(39,244	)		(34,491	)
Total	$	58,115		$	55,579

In comparing the identifiable assets at September 30, 2014 with those at December 31, 2013, the increase in identifiable assets of the waste management services segment of $3.7 million is primarily due to capital expenditures of $3.1 million for the salt water injection wells operations and an increase in intersegment transactions, which are eliminated in consolidation, partially offset by a decrease in accounts receivable. The increase in identifiable assets of the golf and related operations segment of $4.2 million is primarily due to the acquisition of The Magnuson Grand Hotel on August 1, 2014 and capital expenditures for building improvements and equipment.