Note 13 - Business Segment Information

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 13. Business Segment Information

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.” Using the criteria of FASB ASC 280 Segment Reporting, 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 periods presented.

Avalon’s primary business segment, the waste management services segment, provides hazardous and nonhazardous brokerage and management services to industrial, commercial, municipal and governmental customers, captive landfill management for an industrial customer and salt water injection well operations.

Avalon’s golf and related operations segment consists of four golf courses and associated clubhouses which provide dining and banquet facilities, a hotel which provides lodging and resort related amenities including dining, banquet and conference facilities, a multipurpose recreation center and a travel agency. Revenue for the golf and related operations segment consists primarily of membership dues, greens fees, cart rentals, room rentals, merchandise sales, tennis and fitness activities, salon and spa services and food and beverage sales.

Avalon does not have operations located outside the United States and, accordingly, geographical segment information is not presented. For the six months ended June 30, 2022, one customer accounted for 10% of the waste management services segment’s net operating revenues to external customers and 6% of the consolidated net operating revenues. For the six months ended June 30, 2021, one customer accounted for 11% of the waste management services segment’s net operating revenues to external customers and 7% of the consolidated 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 included in Avalon’s 2021 Annual Report to Shareholders. Avalon measures segment profit for internal reporting purposes as income (loss) before income taxes.

Business segment information including the reconciliation of segment income (loss) to consolidated income (loss) before taxes is as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Net operating revenues from:
Waste management services:
External customer revenues	$	10,717		$	8,685		$	20,056		$	19,835
Intersegment revenues		-			-			-			-
Total waste management services		10,717			8,685			20,056			19,835
Golf and related operations:
External customer revenues		8,805			7,705			13,775			11,668
Intersegment revenues		30			9			31			17
Total golf and related operations		8,835			7,714			13,806			11,685
Segment operating revenues		19,552			16,399			33,862			31,520
Intersegment eliminations		(30	)		(9	)		(31	)		(17	)
Total net operating revenues	$	19,522		$	16,390		$	33,831		$	31,503

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Income (loss) before income taxes:
Waste management services	$	1,035		$	676		$	1,689		$	1,819
Golf and related operations		589			1,626			(247	)		1,826
Segment income before income taxes		1,624			2,302			1,442			3,645
Corporate interest expense		(266	)		(280	)		(535	)		(563	)
Corporate gain on debt extinguishment		-			-			-			502
Corporate other income, net		-			7			1			8
General corporate expenses		(921	)		(1,290	)		(1,851	)		(2,122	)
Income (loss) before income taxes	$	437		$	739		$	(943	)	$	1,470
Gain on debt extinguishment:
Waste management services	$	-		$	-		$	-		$	-
Golf and related operations		-			877			-			1,462
Corporate		-			-			-			502
Total gain on debt extinguishment	$	-		$	877		$	-		$	1,964

	June 30,			December 31,
	2022			2021
Identifiable assets:
Waste management services	$	34,779		$	34,203
Golf and related operations		64,798			59,700
Corporate		53,975			55,027
Subtotal		153,552			148,930
Elimination of intersegment receivables		(73,160	)		(70,893	)
Total	$	80,392		$	78,037

In comparing total assets at June 30, 2022 with those at December 31, 2021, the increase in the total assets of the waste management services segment of approximately $0.6 million was primarily a result of an increase in intersegment transactions, which are eliminated in consolidation, partially offset by a decrease in accounts receivable. The increase in total assets of the golf and related operations segment of $5.1 million was primarily due to an increase in accounts receivable and capital expenditures associated with The Grand Resort and Avalon Field Club at New Castle and, to a lesser extent, an increase in inventory, partially offset by current year depreciation on property and equipment. The decrease in corporate total assets of approximately $1.1 million was primarily due to a decrease in restricted cash utilized for the renovation of The Grand Resort and Avalon Field Club at New Castle, partially offset by an increase in intersegment transactions, which are eliminated in consolidation.