0001577095-14-000063.txt : 20141016 0001577095-14-000063.hdr.sgml : 20141016 20141016070625 ACCESSION NUMBER: 0001577095-14-000063 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20141016 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20141016 DATE AS OF CHANGE: 20141016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ClubCorp Holdings, Inc. CENTRAL INDEX KEY: 0001577095 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEMBERSHIP SPORTS & RECREATION CLUBS [7997] IRS NUMBER: 205818205 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36074 FILM NUMBER: 141158783 BUSINESS ADDRESS: STREET 1: 3030 LBJ FREEWAY, SUITE 500 CITY: DALLAS STATE: TX ZIP: 75234 BUSINESS PHONE: 972-406-4112 MAIL ADDRESS: STREET 1: 3030 LBJ FREEWAY, SUITE 500 CITY: DALLAS STATE: TX ZIP: 75234 8-K 1 q3-14xearningsrelease8k.htm 8-K Q3-14-Earnings Release 8k


 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 16, 2014

ClubCorp Holdings, Inc.
(Exact name of registrant as specified in its charter)


Nevada
 
333-189912
 
20-5818205
(State or other
 
(Commission File Number)
 
(IRS Employer
jurisdiction of incorporation)
 
 
 
Identification No.)
 

3030 LBJ Freeway, Suite 600
Dallas, Texas
 
75234
(Address of Principal Executive Offices)
 
(Zip Code)

(972) 243-6191
Registrant's Telephone Number, Including Area Code

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b))

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



 





This Current Report on Form 8-K (this “Form 8-K”) is filed by ClubCorp Holdings, Inc., a Nevada corporation (the “Company”), in connection with the matters described herein.
Item 2.02
Results of Operations and Financial Condition.

On October 16, 2014, the Company issued a press release announcing the results of the Company’s operations for the twelve and thirty-six weeks ended September 9, 2014. The full text of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference in this Item 2.02.

The information in this Form 8-K and Exhibit 99.1 is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01
Financial Statements and Exhibits.

Exhibit
Number
 
Description
99.1
 
Press release, dated October 16, 2014, of ClubCorp Holdings, Inc.









SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: October 16, 2014
CLUBCORP HOLDINGS, INC.
 
 
 
By:
/s/ Curtis D. McClellan
 
 
Curtis D. McClellan
 
 
Chief Financial Officer and Treasurer
 



 EX-99.1 2 q3-14xearningsreleasexnon1.htm EXHIBIT 99.1 Q3-14-Earnings Release-NON 10Q
Exhibit 99.1

ClubCorp Delivers Record Third Quarter Results and Increases Portfolio by 30%
•
Revenue up 4.9% largely due to increases in membership dues and food and beverage revenue
•
Adjusted EBITDA up 9.4% from increased revenue, improved margins and timing of cash distribution
•
Company raises full year fiscal FY14 guidance to reflect the acquisition of Sequoia Golf

DALLAS, Texas (October 16, 2014) - ClubCorp, The World Leader in Private Clubs® (NYSE: MYCC). ClubCorp announces financial results for its fiscal-year 2014 third quarter ended September 9, 2014. The third quarter of fiscal 2014 and fiscal 2013 consisted of 12 weeks. All growth percentages refer to year-over-year progress.

As a reminder, ClubCorp closed its acquisition of Sequoia Golf on September 30, 2014. Sequoia Golf results will not be consolidated until the fourth quarter, and as such have no bearing on ClubCorp's third quarter operating results.

Third Quarter Results:
•
Revenue increased $9.6 million to $204.5 million for the third quarter of 2014. Revenue was up 4.9% compared to the third quarter of 2013 due to revenue growth from both same store and newly acquired clubs.
•
Adjusted EBITDA(1) increased $3.9 million to $45.4 million. Adjusted EBITDA was up 9.4% from increased revenue, improved variable labor expenses as a percent of revenue and the timing of a cash distribution from an equity investment.
•
Same Store sales grew $4.7 million, up 2.5% versus the prior year; while same store adjusted EBITDA grew $4.1 million, up 8.6% driven largely by stronger operating results at reinvented clubs and increased dues, a la carte and private event revenue.
•
Newly Acquired Clubs, clubs acquired in 2013 or 2014, contributed incremental revenue of $6.4 million and adjusted EBITDA of $0.7 million.
•
Reinvention. Since 2007, ClubCorp has reinvented 24 golf and country clubs and 18 business, sports and alumni clubs. Reinvention is still underway at one same store golf and country club and two business, sports and alumni clubs. Also, reinvention elements at two newly acquired clubs, Oak Tree and Cherry Valley, are now complete, while reinvention projects at Chantilly, the two Prestonwood properties and both TPC properties are underway and should be delivered next year.
•
Acquisitions. This year, ClubCorp has added more than 50 golf and country clubs, including the acquisition of Prestonwood Country Club in Dallas and Plano, Texas, TPC Piper Glen in Charlotte, North Carolina, TPC Michigan in Dearborn, Michigan and Sequoia Golf, a multi course owner-operator based in Atlanta, Georgia. Additionally, this quarter ClubCorp opened an alumni club at the new Baylor University football stadium in Waco, Texas. In total, ClubCorp’s expanded portfolio now exceeds 200 owned or operated clubs.
•
Membership. Total memberships as of September 9, 2014 were 153,249, an increase of 5,734, up 3.9% over memberships at September 3, 2013. Same store golf and country club memberships increased 1.0%, while total golf and country club memberships including newly acquired clubs increased 5.3%. Same store business,

 
 
 
ClubCorp FY14 Q3 Earnings Release
1
Page

sports and alumni memberships grew 0.1%, while total business, sports and alumni club memberships increased 1.9%.
•
O.N.E. and Other Upgrade Products. Participation has steadily increased with approximately 46% of our memberships now enrolled in one or more of our upgrade programs, compared to 42% a year ago and up from 35% in 2010 when O.N.E. program was first introduced.
•
Capital Structure. The Company has amended its secured credit facilities creating one fungible term loan tranche of $901.1 million priced at L+350 bps, with a 1% LIBOR floor.
•
Free Cash Flow(1). Free cash flow over the last four quarters was $99.6 million, an increase from $70.7 million a year ago.

2014 Third Quarter and Year to Date Summary:

(Unaudited financial information)
 
Third quarter ended
 
 
 
Year to date ended
 
 
(In thousands, except for membership)
September 9, 2014
(12 weeks)
 
September 3, 2013
(12 weeks)
 
%
Change
 
September 9, 2014
(36 weeks)
 
September 3, 2013
(36 weeks)
 
%
Change
 
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
$
204,475

 
$
194,835

 
4.9
 %
 
$
581,616

 
$
545,514

 
6.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA (1)
 
 
 
 
 
 
 
 
 
 
 
Golf and Country Clubs
$
46,860

 
$
43,153

 
8.6
 %
 
$
133,115

 
$
122,540

 
8.6
 %
Business, Sports and Alumni Clubs
$
5,785

 
$
4,712

 
22.8
 %
 
$
20,446

 
$
18,849

 
8.5
 %
Other
$
(7,213
)
 
$
(6,333
)
 
(13.9
)%
 
$
(26,287
)
 
$
(24,316
)
 
(8.1
)%
Adjusted EBITDA (1)
$
45,432

 
$
41,532

 
9.4
 %
 
$
127,274

 
$
117,073

 
8.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
Membership
153,249

 
147,515

 
3.9
 %
 
153,249

 
147,515

 
3.9
 %
______________________

(1)
This earnings release includes metrics entitled Adjusted EBITDA and Free Cash Flow that are not calculated in accordance with Generally Accepted Accounting Principles in the U.S. ("GAAP"). See "Statement Regarding Non-GAAP Financial Measures" section for the definition of Adjusted EBITDA and Free Cash Flow and the reconciliation later in this earnings release to the most comparable financial measure calculated in accordance with GAAP.


Segment Highlights:
Golf and country clubs (GCC):
•
GCC total revenue of $164.8 million for the third quarter of 2014 increased $8.8 million, up 5.6%, compared to the third quarter of 2013.
•
GCC adjusted EBITDA was $46.9 million, an increase of $3.7 million, up 8.6%.
•
GCC adjusted EBITDA margin was 28.4%, up 70 basis points versus the third quarter of 2013.
•
Same store revenue increased $2.8 million, up 1.8%, driven by increases in base and upgrade dues revenue, a la carte and private events revenue, partially offset by declines in golf operations and other revenue.
•
Same store adjusted EBITDA increased $2.8 million, up 6.6%.

 
 
 
ClubCorp FY14 Q3 Earnings Release
2
Page

•
Same store adjusted EBITDA margin was 29.4%, up 130 basis points versus prior year due to improved variable labor expenses as a percent of revenue and a reduction in property tax expense due to tax credits recognized in 2014.
•
Newly acquired golf and country clubs contributed incremental revenue of $6.0 million and adjusted EBITDA of $0.9 million.

Business, sports and alumni clubs (BSA):
•
BSA revenue of $39.0 million for the third quarter of 2014 increased $2.3 million, up 6.4%, compared to the third quarter 2013 due largely to an increase in private events revenue, membership dues and a la carte revenue.
•
BSA adjusted EBITDA was $5.8 million, increased $1.1 million, up 22.8%.
•
BSA adjusted EBITDA margin was 14.8%, an increase of 190 basis points versus the prior year, primarily due to improved variable labor expenses as a percent of revenue and a favorable reduction in rent expense due to consolidation and relocation of City Club of LA during its reinvention last year.

Quotes:
Eric Affeldt, president and chief executive officer: “By implementing our three pronged growth strategy we have delivered five consecutive quarters of record financial results. Our results this quarter again demonstrate our ability to grow organically, reinvent our clubs and add new clubs via acquisition. We have grown the business organically - not only have membership sales continued to accelerate in our golf and country club business, but also now in our business, sports and alumni clubs. These results are a testament to the value members place on our lifestyle product and the capital invested to reinvent our clubs. We continue to deliver superior returns on all of our reinventions and acquisitions. We are very excited to have closed the acquisition of Sequoia Golf and the additional positive momentum we believe this will create for our business.”

Curt McClellan, chief financial officer: “We would like to thank our employee partners for delivering another strong quarter amidst the backdrop of the most significant acquisition we have ever made. Our results this quarter would not be possible without their professionalism and ability to execute. As we continue to execute our growth strategies, we appreciate lenders for their support and confidence resulting in additional financial flexibility for the acquisition of Sequoia Golf. The return on incremental capital invested in our reinvention and acquisition strategies has delivered excellent results to date, and we expect nothing different from Sequoia Golf. The acquisition of Sequoia Golf represents a significant inflection point in our company’s history as we look forward to continued progress in each of our business segments.”

Company Outlook:
The following guidance is based on current management expectations. All financial guidance amounts are estimates subject to change, including as a result of matters discussed under the "Forward-Looking Statements" cautionary language which follows, and the Company undertakes no duty to update its guidance. With the

 
 
 
ClubCorp FY14 Q3 Earnings Release
3
Page

acquisition of Sequoia Golf, the Company is raising its full fiscal year guidance. For fiscal year 2014, the Company now expects to deliver revenue in the range of $860.0 million to $880.0 million and adjusted EBITDA in the range of $191.0 million to $196.0 million. As a reminder, ClubCorp's full year fiscal 2014 results consist of 52 weeks versus fiscal 2013 results that consisted of 53 weeks. Thus, fourth quarter fiscal 2014 will have one less week than than the prior comparable quarter from fiscal 2013.

About ClubCorp Holdings:
Since its founding in 1957, Dallas-based ClubCorp has operated with the central purpose of Building Relationships and Enriching Lives®. ClubCorp is a leading owner-operator of private golf and country clubs and private business clubs in North America. With its recent acquisition of Sequoia Golf, ClubCorp now owns or operates a portfolio of over 200 golf and country clubs, business clubs, sports clubs, and alumni clubs in 26 states, the District of Columbia and two foreign countries that serve over 430,000 members, with approximately 20,000 peak-season employees. ClubCorp Holdings, Inc. is a publicly traded company on the New York Stock Exchange (NYSE: MYCC). ClubCorp properties include: Firestone Country Club (Akron, Ohio); Mission Hills Country Club (Rancho Mirage, California); The Woodlands Country Club (The Woodlands, Texas); Capital Club Beijing; and Metropolitan Club Chicago. You can find ClubCorp on Facebook at facebook.com/clubcorp and on Twitter at @ClubCorp.

Conference Call:
The Company will hold a conference call, October 16, 2014 at 10:00 a.m. CDT (11:00 a.m. EDT) to discuss its third quarter fiscal 2014 financial results. The conference call will be broadcast live and can be accessed via the Company's website at ir.clubcorp.com. To participate in the teleconference, please call in a few minutes before the start time: 877-317-6789 for U.S. callers, 866-605-3852 for Canadian callers and 412-317-6789 for international callers and reference the ClubCorp third quarter conference call (confirmation code 10053156) when prompted. For those unable to participate in the live call, a webcast replay will be available at ir.clubcorp.com one hour after completion of the call.

Statement Regarding Non-GAAP Financial Measures
EBITDA is defined as net income before interest expense, income taxes, interest and investment income, and
depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus or minus impairments, gain or loss on disposition and acquisition of assets, losses from discontinued operations, loss on extinguishment of debt, non-cash and other adjustments, equity-based compensation expense and an acquisition adjustment. Adjusted EBITDA is based on the definition of Consolidated EBITDA as defined in the credit agreement governing ClubCorp's secured credit facilities and may not be comparable to similarly titled measures reported by other companies.

We began using Adjusted EBITDA as our measurement of segment profit and loss in fiscal year 2014. Prior to this change, we utilized Segment EBITDA (“Segment EBITDA”) as our measurement of segment profit and loss, but we also presented Adjusted EBITDA on a consolidated basis. These two measurements are not materially different. This

 
 
 
ClubCorp FY14 Q3 Earnings Release
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Page

change was made to align our internal measurement of segment profit and loss with the measurement used to evaluate our performance on a consolidated basis and to reduce the number of non-GAAP measurements we report, thus simplifying our financial reporting. The manner in which we calculate Adjusted EBITDA has not changed.

In addition to Adjusted EBITDA, we are providing a Free Cash Flow (FCF) metric as an additional non-GAAP measure. We believe a FCF metric aids investors in their evaluation of the Company's ability to generate cash, and determine the amount of capital available for general corporate purposes including, but not limited to discretionary growth CAPEX (e.g. reinventions or acquisitions), or cash dividends.

This earnings release and accompanying financial tables include supplemental non-GAAP financial measures titled Adjusted EBITDA and Free Cash Flow. Adjusted EBITDA and Free Cash Flow are not determined in accordance with GAAP and should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP and is not indicative of net income or loss as determined under GAAP. Non-GAAP financial measures have limitations that should be considered before using as a measure to evaluate the Company's financial performance. Adjusted EBITDA and Free Cash Flow, as presented, may not be comparable to similarly titled measures reported by other companies due to varying methods of calculation.

The financial statement tables that accompany this press release include a reconciliation of non-GAAP financial measure to the applicable and most comparable GAAP financial measure.


Special Note on Forward-Looking Statements
In addition to historical information, this press release contains statements relating to future results (including certain projections and business trends) that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. The Company generally uses the words "may", "will", "could", "expect", "anticipate", "believe", "estimate", "plan", "intend", and similar expressions in this press release and any attachment to identify forward-looking statements. All statements, other than statements of historical facts included in this press release, including statements concerning plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position and business outlook, earnings guidance, business trends and other information are forward-looking statements. The forward-looking statements are not historical facts, and are based upon current expectations, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond management's control. All expectations, beliefs and projections are expressed in good faith and the Company believes there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.


 
 
 
ClubCorp FY14 Q3 Earnings Release
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Page

These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained in this press release, including among others: various factors beyond management's control adversely affecting discretionary spending, membership count and facility usage and other risks, uncertainties and factors set forth in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and in the Company's Form 10-Q for the third fiscal quarter ended September 9, 2014.

Although the Company believes that these statements are based upon reasonable assumptions, it cannot guarantee future results and readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date of this press release. There can be no assurance that (i) the Company has correctly measured or identified all of the factors affecting its business or the extent of these factors' likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) the Company's strategy, which is based in part on this analysis, will be successful. Except as required by law, the Company undertakes no obligation to update or revise forward-looking statements to reflect new information or events or circumstances that occur after the date of this press release or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review the Company's filings with the SEC (which are available from the SEC's EDGAR database at www.sec.gov and via the Company's website at ir.clubcorp.com/SEC).


Statement Regarding Definitions and Financial Measures
The definitions and basis of presentation for financial measures used in this release, including EBITDA, Adjusted EBITDA and same store measures, are discussed more fully in the Company's Quarterly Report on Form 10-Q for the fiscal third quarter ended September 9, 2014. This release should be read in conjunction with the 2014 third quarter Form 10-Q.


# # #


(Financial Tables Follow)









 
 
 
ClubCorp FY14 Q3 Earnings Release
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Page

CLUBCORP HOLDINGS, INC.
SELECTED FINANCIAL DATA—GOLF AND COUNTRY CLUBS
(In thousands, except for membership, dues per average same store membership,
revenue per average same store membership and percentages)
(Unaudited financial information)
 
Third quarter ended
 
 
 
Year to date ended
 
 
GCC
September 9, 2014
(12 weeks)
 
September 3, 2013
(12 weeks)
 
%
Change (1)
 
September 9, 2014
(36 weeks)
 
September 3, 2013
(36 weeks)
 
%
Change (1)
 
 
 
 
 
 
 
 
 
 
 
 
Same Store Clubs
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
Dues
$
68,990

 
$
66,047

 
4.5
 %
 
$
202,732

 
$
193,819

 
4.6
 %
Food and Beverage
34,454

 
33,696

 
2.2
 %
 
98,141

 
92,976

 
5.6
 %
Golf Operations
38,081

 
38,493

 
(1.1
)%
 
101,358

 
100,070

 
1.3
 %
Other
13,324

 
13,837

 
(3.7
)%
 
34,816

 
36,052

 
(3.4
)%
Revenue
$
154,849

 
$
152,073

 
1.8
 %
 
$
437,047

 
$
422,917

 
3.3
 %
Adjusted EBITDA
$
45,494

 
$
42,690

 
6.6
 %
 
$
129,840

 
$
121,868

 
6.5
 %
Adjusted EBITDA Margin
29.4
%
 
28.1
%
 
130 bps
 
29.7
%
 
28.8
%
 
90 bps
 
 
 
 
 
 
 
 
 
 
 
 
New or Acquired Clubs (2)
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
9,955

 
$
3,957

 
NM (1)

 
$
22,719

 
$
4,381

 
NM (1)

Adjusted EBITDA
$
1,366

 
$
463

 
NM (1)

 
$
3,275

 
$
672

 
NM (1)

 
 
 
 
 
 
 
 
 
 
 
 
Total Golf and Country Clubs
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
164,804

 
$
156,030

 
5.6
 %
 
$
459,766

 
$
427,298

 
7.6
 %
Adjusted EBITDA
$
46,860

 
$
43,153

 
8.6
 %
 
$
133,115

 
$
122,540

 
8.6
 %
Adjusted EBITDA Margin
28.4
%
 
27.7
%
 
70 bps
 
29.0
%
 
28.7
%
 
30 bps
 
 
 
 
 
 
 
 
 
 
 
 
Same Store Memberships
84,917

 
84,060

 
1.0
 %
 
84,917

 
84,060

 
1.0
 %
Total Memberships
90,179

 
85,633

 
5.3
 %
 
90,179

 
85,633

 
5.3
 %
Same Store Average Membership (3)
84,666

 
83,771

 
1.1
 %
 
83,698

 
82,902

 
1.0
 %
Dues per Average Same Store Membership (4)
$
815

 
$
788

 
3.4
 %
 
$
2,422

 
$
2,338

 
3.6
 %
Revenue per Average Same Store Membership (4)
$
1,829

 
$
1,815

 
0.8
 %
 
$
5,222

 
$
5,101

 
2.4
 %
____________________

(1)
Percentage changes that are not meaningful are denoted by "NM."

(2)
New or Acquired Clubs include those clubs which were acquired, opened or added under management agreements in the thirty-six weeks ended September 9, 2014 and fiscal year ended December 31, 2013 consisting of: Oak Tree Country Club, Cherry Valley Country Club, Chantilly National Golf and Country Club, Prestonwood Country Club, Tournament Players Club (“TPC”) Michigan and TPC Piper Glen.

(3)
Same store average membership is calculated using the same store membership count at the beginning and end of the period indicated.

(4)
Same store dues or revenue divided by same store average membership.




 
 
 
ClubCorp FY14 Q3 Earnings Release
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Page

CLUBCORP HOLDINGS, INC.
SELECTED FINANCIAL DATA—BUSINESS, SPORTS AND ALUMNI CLUBS
(In thousands, except for membership, dues per average same store membership,
revenue per average same store membership and percentages)
(Unaudited financial information)

 
Third quarter ended
 
 
 
Year to date ended
 
 
BSA
September 9, 2014
(12 weeks)
 
September 3, 2013
(12 weeks)
 
%
Change (1)
 
September 9, 2014
(36 weeks)
 
September 3, 2013
(36 weeks)
 
%
Change (1)
 
 
 
 
 
 
 
 
 
 
 
 
Same Store Clubs
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
Dues
$
17,942

 
$
17,580

 
2.1
 %
 
$
53,631

 
$
52,770

 
1.6
 %
Food and Beverage
17,933

 
16,354

 
9.7
 %
 
58,178

 
55,281

 
5.2
 %
Other
2,694

 
2,694

 
—
 %
 
7,863

 
8,073

 
(2.6
)%
Revenue
$
38,569

 
$
36,628

 
5.3
 %
 
$
119,672

 
$
116,124

 
3.1
 %
Adjusted EBITDA
$
5,990

 
$
4,712

 
27.1
 %
 
$
20,722

 
$
18,849

 
9.9
 %
Adjusted EBITDA Margin
15.5
%
 
12.9
%
 
260 bps
 
17.3
%
 
16.2
%
 
110 bps
 
 
 
 
 
 
 
 
 
 
 
 
New or Acquired Clubs (2)
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
391

 
$
—

 
NM (1)

 
$
394

 
$
—

 
NM (1)

Adjusted EBITDA
$
(205
)
 
$
—

 
NM (1)

 
$
(276
)
 
$
—

 
NM (1)

 
 
 
 
 
 
 
 
 
 
 
 
Total Business, Sports and Alumni Clubs
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
38,960

 
$
36,628

 
6.4
 %
 
$
120,066

 
$
116,124

 
3.4
 %
Adjusted EBITDA
$
5,785

 
$
4,712

 
22.8
 %
 
$
20,446

 
$
18,849

 
8.5
 %
Adjusted EBITDA Margin
14.8
%
 
12.9
%
 
190 bps
 
17.0
%
 
16.2
%
 
80 bps
 
 
 
 
 
 
 
 
 
 
 
 
Same Store Memberships
61,950

 
61,882

 
0.1
 %
 
61,950

 
61,882

 
0.1
 %
Total Memberships (3)
63,070

 
61,882

 
1.9
 %
 
63,070

 
61,882

 
1.9
 %
Same Store Average Membership (4)
61,848

 
61,952

 
(0.2
)%
 
61,678

 
61,964

 
(0.5
)%
Dues per Average Same Store Membership (5)
$
290

 
$
284

 
2.1
 %
 
$
870

 
$
852

 
2.1
 %
Revenue per Average Same Store Membership (6)
$
624

 
$
591

 
5.6
 %
 
$
1,940

 
$
1,874

 
3.5
 %
______________________

(1)    Percentage changes that are not meaningful are denoted by "NM."

(2)
New or Acquired Clubs include those clubs which are under development or were acquired, opened or added under management agreements in the thirty-six weeks ended ended September 9, 2014 and fiscal year ended December 31, 2013 consisting of the Paragon Club of Hefei and Baylor Club.

(3)
Does not include certain international club memberships.
 
(4)
Same store average membership is calculated using the same store membership count at the beginning and end of the period indicated.

(5)
Same store dues or revenue divided by same store average membership.





 
 
 
ClubCorp FY14 Q3 Earnings Release
8
Page

CLUBCORP HOLDINGS, INC.
RECONCILIATION OF NON-GAAP MEASURES TO CLOSEST GAAP MEASURE
(In thousands)
(Unaudited financial information)

 
Third quarter ended
 
Year to date ended
 
Four quarters ended
 
September 9, 2014
(12 weeks)
 
September 3, 2013
(12 weeks)
 
September 9, 2014
(36 weeks)
 
September 3, 2013
(36 weeks)
 
September 9, 2014
Net income (loss)
$
3,273

 
$
(5,034
)
 
$
(17,992
)
 
$
(8,403
)
 
$
(50,269
)
Interest expense
12,944

 
19,499

 
44,242

 
58,646

 
69,265

Income tax expense (benefit)
5,802

 
3,793

 
(3,028
)
 
1,150

 
(2,497
)
Interest and investment income
(1,366
)
 
(80
)
 
(1,535
)
 
(224
)
 
(1,656
)
Depreciation and amortization
17,160

 
17,030

 
50,405

 
49,497

 
72,981

EBITDA
$
37,813

 
$
35,208

 
$
72,092

 
$
100,666

 
87,824

Impairments, disposition of assets and income (loss) from discontinued operations and divested clubs (1)
1,745

 
2,737

 
7,166

 
8,170

 
13,360

Loss on extinguishment of debt (2)
—

 
—

 
31,498

 
—

 
48,354

Non-cash adjustments (3)
464

 
1,120

 
1,389

 
2,773

 
2,545

Other adjustments (4)
3,506

 
2,248

 
9,064

 
4,266

 
14,932

Equity-based compensation expense (5)
949

 
—

 
3,037

 
—

 
17,254

Acquisition adjustment (6)
955

 
219

 
3,028

 
1,198

 
3,136

Adjusted EBITDA
$
45,432

 
$
41,532

 
$
127,274

 
$
117,073

 
$
187,405

______________________

(1)
Includes non-cash impairment charges related to property and equipment, loss on disposals of assets and net loss or income from discontinued operations and divested clubs that do not quality as discontinued operations.

(2)
Includes loss on extinguishment of debt calculated in accordance with GAAP.

(3)
Includes non-cash items related to purchase accounting associated with the acquisition of ClubCorp, Inc. ("CCI") in 2006 by affiliates of KSL and expense recognized for our long-term incentive plan related to fiscal years 2011 through 2013.

(4)
Represents adjustments permitted by the credit agreement governing ClubCorp's secured credit facilities including cash distributions from equity method investments less equity in earnings recognized for said investments, income or loss attributable to non-controlling equity interests of continuing operations, franchise taxes, adjustments to accruals for unclaimed property settlements, acquisition costs, debt amendment costs, equity offering costs, other charges incurred in connection with the ClubCorp Formation (as defined in our Annual Report on Form 10-K filed with the SEC on March 21, 2014) and management fees, termination fee and expenses paid to an affiliate of KSL.

(5)
Includes equity-based compensation expense, calculated in accordance with GAAP, related to awards held by certain employees, executives and directors.

(6)
Represents estimated deferred revenue using current membership life estimates related to initiation payments that would have been recognized in the applicable period but for the application of purchase accounting in connection with the acquisition of CCI in 2006.


 
 
 
ClubCorp FY14 Q3 Earnings Release
9
Page

CLUBCORP HOLDINGS, INC.
CALCULATION OF FREE CASH FLOW
(In thousands)
(Unaudited financial information)

 
Four quarters ended
 
September 9, 2014
(53 weeks)
 
September 3, 2013
(52 weeks)
Adjusted EBITDA (1)
$
187,405

 
$
174,713

LESS:
 
 
 
Interest expense and principal amortization on long-term debt (2)
44,370

 
64,758

Cash paid for income taxes
2,796

 
3,521

Maintenance capital expenditures
28,162

 
24,135

Capital lease principal & interest expense
12,436

 
11,644

Free Cash Flow
$
99,641

 
$
70,655

_____________________

(1)
See the Adjusted EBITDA reconciliation in the preceding "Reconciliation of Non-GAAP Measures to Closest GAAP Measure" table.

(2)
Interest on long-term debt excludes accretion of discount on member deposits, amortization of debt issuance costs, amortization of term loan discount and interest on notes payable related to certain realty interests which we define as “Non-Core Development Entities”.

 
 
 
ClubCorp FY14 Q3 Earnings Release
10
Page

CLUBCORP HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Twelve and Thirty-Six Weeks Ended September 9, 2014 and September 3, 2013
(In thousands of dollars)
(Unaudited financial information)

 
Third quarter ended
 
 
 
Year to date ended
 
 
 
September 9, 2014
(12 weeks)
 
September 3, 2013
(12 weeks)
 
%
Change
 
September 9, 2014
(36 weeks)
 
September 3, 2013
(36 weeks)
 
%
Change
REVENUES:
 

 
 

 
 
 
 

 
 

 
 
Club operations
$
149,373

 
$
143,487

 
4.1
 %
 
$
418,443

 
$
394,696

 
6.0
 %
Food and beverage
54,684

 
50,809

 
7.6
 %
 
161,045

 
148,615

 
8.4
 %
Other revenues
418

 
539

 
(22.4
)%
 
2,128

 
2,203

 
(3.4
)%
Total revenues
204,475

 
194,835

 
4.9
 %
 
581,616

 
545,514

 
6.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
DIRECT AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
 
 
 
 
 
 
 

 
 

 
 
Club operating costs exclusive of depreciation
132,774

 
127,741

 
3.9
 %
 
377,204

 
354,598

 
6.4
 %
Cost of food and beverage sales exclusive of depreciation
18,400

 
17,185

 
7.1
 %
 
53,338

 
49,179

 
8.5
 %
Depreciation and amortization
17,160

 
17,030

 
0.8
 %
 
50,405

 
49,497

 
1.8
 %
Provision for doubtful accounts
850

 
1,102

 
(22.9
)%
 
996

 
2,004

 
(50.3
)%
Loss on disposals of assets
1,744

 
2,745

 
(36.5
)%
 
6,347

 
6,376

 
(0.5
)%
Impairment of assets
—

 
24

 
(100.0
)%
 
895

 
1,905

 
(53.0
)%
Equity in earnings from unconsolidated ventures
(660
)
 
(424
)
 
(55.7
)%
 
(1,493
)
 
(966
)
 
(54.6
)%
Selling, general and administrative
13,553

 
11,250

 
20.5
 %
 
40,737

 
31,747

 
28.3
 %
OPERATING INCOME
20,654

 
18,182

 
13.6
 %
 
53,187

 
51,174

 
3.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
Interest and investment income
1,366

 
80

 
1,607.5
 %
 
1,535

 
224

 
585.3
 %
Interest expense
(12,944
)
 
(19,499
)
 
33.6
 %
 
(44,242
)
 
(58,646
)
 
24.6
 %
Loss on extinguishment of debt
—

 
—

 
—
 %
 
(31,498
)
 
—

 
100.0
 %
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
9,076

 
(1,237
)
 
833.7
 %
 
(21,018
)
 
(7,248
)
 
(190.0
)%
INCOME TAX (EXPENSE) BENEFIT
(5,802
)
 
(3,793
)
 
(53.0
)%
 
3,028

 
(1,150
)
 
363.3
 %
INCOME (LOSS) FROM CONTINUING OPERATIONS
3,274

 
(5,030
)
 
165.1
 %
 
(17,990
)
 
(8,398
)
 
(114.2
)%
Loss from discontinued clubs, net of income tax
(1
)
 
(4
)
 
75.0
 %
 
(2
)
 
(5
)
 
60.0
 %
NET INCOME (LOSS)
3,273

 
(5,034
)
 
165.0
 %
 
(17,992
)
 
(8,403
)
 
(114.1
)%
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(63
)
 
(129
)
 
51.2
 %
 
(137
)
 
(131
)
 
(4.6
)%
NET INCOME (LOSS) ATTRIBUTABLE TO CLUBCORP
$
3,210

 
$
(5,163
)
 
162.2
 %
 
$
(18,129
)
 
$
(8,534
)
 
(112.4
)%
 
 
 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
3,273

 
$
(5,034
)
 
165.0
 %
 
$
(17,992
)
 
$
(8,403
)
 
(114.1
)%
Foreign currency translation, net of tax
(140
)
 
(1,430
)
 
90.2
 %
 
7

 
(988
)
 
100.7
 %
OTHER COMPREHENSIVE (LOSS) INCOME
(140
)
 
(1,430
)
 
90.2
 %
 
7

 
(988
)
 
100.7
 %
COMPREHENSIVE INCOME (LOSS)
3,133

 
(6,464
)
 
148.5
 %
 
(17,985
)
 
(9,391
)
 
(91.5
)%
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(63
)
 
(129
)
 
51.2
 %
 
(137
)
 
(131
)
 
(4.6
)%
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CLUBCORP
$
3,070

 
$
(6,593
)
 
146.6
 %
 
$
(18,122
)
 
$
(9,522
)
 
(90.3
)%



 
 
 
ClubCorp FY14 Q3 Earnings Release
11
Page

CLUBCORP HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
As of September 9, 2014 and December 31, 2013
(In thousands of dollars, except share and per share amounts)
(Unaudited financial information)

 
September 9, 2014
 
December 31, 2013
ASSETS
 

 
 

CURRENT ASSETS:
 

 
 

Cash and cash equivalents
$
65,801

 
$
53,781

Receivables, net of allowances
84,339

 
83,161

Inventories
18,173

 
15,819

Prepaids and other assets
14,406

 
13,339

Deferred tax assets, net
7,249

 
10,403

Total current assets
189,968

 
176,503

Investments
6,385

 
8,032

Property and equipment, net
1,271,572

 
1,234,903

Notes receivable, net of allowances
5,115

 
4,756

Goodwill
258,459

 
258,459

Intangibles, net
26,932

 
27,234

Other assets
34,886

 
26,330

TOTAL ASSETS
$
1,793,317

 
$
1,736,217

 
 
 
 
LIABILITIES AND EQUITY
 

 
 

CURRENT LIABILITIES:
 

 
 

Current maturities of long-term debt
$
13,571

 
$
11,567

Membership initiation deposits - current portion
129,937

 
112,212

Accounts payable
29,184

 
26,764

Accrued expenses
28,661

 
36,772

Accrued taxes
21,493

 
20,455

Other liabilities
79,667

 
79,300

Total current liabilities
302,513

 
287,070

Long-term debt
720,249

 
638,112

Membership initiation deposits
202,620

 
204,152

Deferred tax liability, net
201,227

 
210,989

Other liabilities
166,893

 
157,944

Total liabilities
1,593,502

 
1,498,267

 
 
 
 
EQUITY
 

 
 

Common stock of ClubCorp Holdings, Inc., $0.01 par value, 200,000,000 shares authorized; 64,428,380 and 63,789,730 issued and outstanding at September 9, 2014 and December 31, 2013, respectively
644

 
638

Additional paid-in capital
300,118

 
320,274

Accumulated other comprehensive loss
(1,063
)
 
(1,070
)
Retained deficit
(110,798
)
 
(92,669
)
Total stockholders’ equity
188,901

 
227,173

Noncontrolling interests in consolidated subsidiaries and variable interest entities
10,914

 
10,777

Total equity
199,815

 
237,950

TOTAL LIABILITIES AND EQUITY
$
1,793,317

 
$
1,736,217



 
 
 
ClubCorp FY14 Q3 Earnings Release
12
Page

CLUBCORP HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
For the Thirty-Six Weeks Ended September 9, 2014 and September 3, 2013
(In thousands of dollars)
(Unaudited financial information)

 
Year to date ended
 
September 9, 2014
(36 weeks)
 
September 3, 2013
(36 weeks)
CASH FLOWS FROM OPERATING ACTIVITIES:
 

 
 

Net loss
$
(17,992
)
 
$
(8,403
)
Adjustments to reconcile net loss to cash flows from operating activities:
 

 
 

Depreciation
50,103

 
47,521

Amortization
302

 
1,977

Asset impairments
895

 
1,905

Bad debt expense
1,012

 
2,014

Equity in earnings from unconsolidated ventures
(1,493
)
 
(966
)
Gain on investment in unconsolidated ventures
(1,276
)
 
—

Distribution from investment in unconsolidated ventures
4,290

 
2,429

Loss on disposals of assets
6,343

 
6,376

Amortization and write-off of debt issuance costs and amortization of term loan discount
5,784

 
1,550

Accretion of discount on member deposits
14,211

 
14,149

Amortization of above and below market rent intangibles
(236
)
 
115

Equity-based compensation
3,037

 
—

Redemption premium payment included in loss on extinguishment of debt
27,452

 
—

Net change in deferred tax assets and liabilities
(8,098
)
 
(3,819
)
Net change in prepaid expenses and other assets
(4,390
)
 
(5,241
)
Net change in receivables and membership notes
3,462

 
(28,659
)
Net change in accounts payable and accrued liabilities
(8,204
)
 
7,104

Net change in other current liabilities
(443
)
 
30,548

Net change in other long-term liabilities
3,594

 
(1,780
)
Net cash provided by operating activities
78,353

 
66,820

CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Purchase of property and equipment
(55,087
)
 
(42,066
)
Acquisitions of clubs
(17,187
)
 
(10,785
)
Acquisition of Sequoia Golf, including escrow deposit
(10,000
)
 
—

Proceeds from dispositions
314

 
90

Net change in restricted cash and capital reserve funds
(287
)
 
34

Return of capital in equity investments
126

 
592

Net cash used in investing activities
(82,121
)
 
(52,135
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 

 
 

Repayments of long-term debt
(278,668
)
 
(21,999
)
Proceeds from new debt borrowings, net of loan discount
348,250

 
10,713

Repayments of revolving credit facility borrowings
(11,200
)
 
—

Proceeds from revolving credit facility borrowings
11,200

 
—

Redemption premium payment
(27,452
)
 
—

Debt issuance and modification costs
(2,930
)
 
(6,684
)
Distribution to owners
(22,980
)
 
(35,000
)
Proceeds from new membership initiation deposits
635

 
760

Repayments of membership initiation deposits
(1,075
)
 
(1,030
)
Net cash provided by (used in) financing activities
15,780

 
(53,240
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
8

 
(110
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
12,020

 
(38,665
)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
53,781

 
81,965

CASH AND CASH EQUIVALENTS - END OF PERIOD
$
65,801

 
$
43,300

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
 
Cash paid for interest
$
28,683

 
$
34,648

Cash paid for income taxes
$
1,956

 
$
2,347

Non-cash investing and financing activities are as follows:
 
 
 
Capital lease
14,057

 
10,075


 
 
 
ClubCorp FY14 Q3 Earnings Release
13
Page