Nevada | 001-36074 | 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) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 7.01 | Regulation FD Disclosure. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit Number | Description | |
99.1 | Press release, dated February 22, 2017, of ClubCorp Holdings, Inc. |
Date: February 22, 2017 | CLUBCORP HOLDINGS, INC. | |
By: | /s/ Curtis D. McClellan | |
Curtis D. McClellan | ||
Chief Financial Officer and Treasurer |
Exhibit Number | Description | |
99.1 | Press release, dated February 22, 2017, of ClubCorp Holdings, Inc. |
• | Fiscal 2016 revenue was $1.1 billion, up 3.4%, net income increased $13.6 million to $4.0 million, and adjusted EBITDA was $247.7 million, up 6.2% |
• | Fourth quarter revenue was $345.3 million, up 4.1%, net income increased $11.7 million to $5.4 million, and adjusted EBITDA was $83.3 million, up 4.7% |
• | ClubCorp acquires North Hills Country Club in Glenside, Pennsylvania |
• | Revenue increased $13.6 million to $345.3 million, up 4.1%. |
• | Net Income increased $11.7 million to $5.4 million. |
• | Adjusted EBITDA(1) increased $3.8 million to $83.3 million, up 4.7%, driven by increased revenue and effectively managing and controlling variable operating expenses. |
• | Same Store Combined Clubs(2) revenue increased $6.7 million to $321.4 million, up 2.1%, driven by increases in all three major revenue streams, dues up 2.4%, food & beverage up 3.2% and golf operations up 0.3%. |
• | Same-store Combined Clubs Adjusted EBITDA increased $2.1 million to $98.0 million, up 2.2%, due to increased revenue, and favorable variable payroll and payroll related expenses as a percentage of revenue. Same-store Adjusted EBITDA margin was 30.5%. |
• | New or Acquired Clubs.(2) New clubs opened or acquired in 2015 and 2016 contributed revenue of $17.2 million and adjusted EBITDA of $3.3 million. |
• | Revenue increased $35.6 million to $1.1 billion, up 3.4%. |
• | Net Income improved to $4.0 million, an increase of $13.6 million. |
• | Adjusted EBITDA(1) increased $14.4 million to $247.7 million, up 6.2%, driven by higher revenue and improved margin performance across both same-store and new and recently acquired clubs. |
• | Same Store Clubs revenue increased $18.8 million to $1.0 billion, up 1.9%, driven by increases in dues up 3.1% and food & beverage up 2.4%, and offset by golf operations down (0.7)%. |
• | Same-store adjusted EBITDA grew $12.6 million to $294.6 million, up 4.5%, due to increased revenue and favorable variable payroll expenses and improved operating expenses as a percentage of revenue. Same-store Adjusted EBITDA margin increased 80 bps to 28.9%. |
ClubCorp FY16 Q4 Earnings Release | 1 | Page |
• | New or Acquired Clubs.(2) New clubs opened or acquired in 2015 and 2016 contributed revenue of $51.3 million and adjusted EBITDA of $7.6 million. |
Fourth quarter ended | Year ended | ||||||||||||||||||||
(In thousands, except for percentages and membership data) | December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | % Change | December 27, 2016 (52 weeks) | December 29, 2015 (52 weeks) | % Change | |||||||||||||||
Total Revenue | $ | 345,301 | $ | 331,688 | 4.1 | % | $ | 1,088,480 | $ | 1,052,867 | 3.4 | % | |||||||||
Net income (loss) | $ | 5,406 | $ | (6,259 | ) | 186.4 | % | $ | 4,025 | $ | (9,573 | ) | 142.0 | % | |||||||
Golf and Country Clubs Adjusted EBITDA | $ | 84,413 | $ | 81,189 | 4.0 | % | $ | 260,595 | $ | 245,696 | 6.1 | % | |||||||||
Business, Sports and Alumni Clubs Adjusted EBITDA | $ | 16,882 | $ | 17,004 | (0.7 | )% | $ | 41,592 | $ | 39,712 | 4.7 | % | |||||||||
Corporate expenses and other operations (3) | $ | (17,957 | ) | $ | (18,615 | ) | 3.5 | % | $ | (54,499 | ) | $ | (52,090 | ) | (4.6 | )% | |||||
Adjusted EBITDA (1) | $ | 83,338 | $ | 79,578 | 4.7 | % | $ | 247,688 | $ | 233,318 | 6.2 | % | |||||||||
Total memberships, excluding managed club memberships | 174,348 | 171,283 | 1.8 | % |
• | Eric Affeldt, chief executive officer: “We are incredibly proud of what we accomplished in 2016. The success of our O.N.E. offering, reinventions and acquisitions embody the core competencies that are at the essence of who we are as a company… a successful membership business and a growing network of private lifestyle clubs that cater to our members' needs and wants. As a result, ClubCorp has produced six consecutive years of record revenue and adjusted EBITDA growth. Since 2010, revenue and adjusted EBITDA have grown 8.0% and 8.9%, respectively, compounded annually. To celebrate our 60th anniversary, we will be launching some exciting new product offerings that will expand our addressable market reaching even more prospective members.” |
• | Mark Burnett, president and chief operating officer: “We capped off the year with a strong finish in the fourth quarter, as Q4 revenue increased 4.1%, and adjusted EBITDA grew 4.7%. For the full-year, we achieved solid same-store revenue growth in two of our three major revenue streams, namely dues and food & beverage revenue. Despite a decline in full-year same-store golf ops revenue, we experienced positive year-over-year growth in the fourth quarter. We also reached record full-year adjusted EBITDA margins in both segments, and anticipate margins at recently acquired clubs to continue to improve. We completed 16 major reinvention projects in 2016, and we look forward to another year of continued growth from these investments in 2017.” |
ClubCorp FY16 Q4 Earnings Release | 2 | Page |
• | Curt McClellan, chief financial officer: “We are pleased with our full-year and fourth quarter performance. In particular, we delivered meaningful solid year-over-year gains at both our reinvented and recently acquired clubs. Reinventions and acquisitions are key components of our growth strategy, and investments in these areas will continue. We are excited to have recently added two new clubs our portfolio--Eagle's Nest Country Club in Maryland and North Hills Country Club in Pennsylvania--both highlighting our commitment to growth via acquisition. Additionally, in 2017, we anticipate investing approximately $40 million on reinvention and expansion projects, including approximately $26 million at same-store clubs and approximately $14 million to reinvent recently acquired clubs. We continue to balance growth capital with cash distributions to shareholders and lenders. In 2016, we paid $34 million in dividends, repurchased $2.3 million in stock and voluntarily paid down $24 million towards our senior secured term loans. We have now lowered our total leverage ratio from 4.5x to 4.2x.” |
• | Fourth quarter, GCC revenue was up $12.2 million to $271.7 million, up 4.7%. |
• | Fourth quarter, GCC adjusted EBITDA increased $3.2 million to $84.4 million, up 4.0%, and GCC adjusted EBITDA margin declined 20 basis points to 31.1%. |
• | Fourth quarter, GCC same-store revenue increased $6.2 million, up 2.5%. Dues revenue was up 2.8%, food & beverage revenue increased 5.1% and golf operations revenue increased 0.3%. |
• | Fourth quarter, GCC same-store adjusted EBITDA increased $2.3 million, up 2.9%, due largely to favorable operating expenses and improved variable payroll and payroll related expenses as a percentage of revenue. |
• | Fourth quarter, GCC same-store adjusted EBITDA margin improved 20 basis points to 31.9%. |
• | Clubs acquired in 2015 and 2016 contributed fourth quarter, GCC revenue of $17.1 million and GCC adjusted EBITDA of $3.3 million. |
• | Full-year 2016, GCC revenue was $879.1 million, up 4.5%. |
• | Full-year 2016, GCC adjusted EBITDA was $260.6 million, up 6.1%, and GCC adjusted EBITDA margin increased 40 basis points to 29.6%. |
• | Fourth quarter, BSA revenue was up $0.5 million to $66.9 million, up 0.8% driven by increases in dues revenue and food & beverage revenue. |
• | Fourth quarter, BSA adjusted EBITDA declined $0.1 million to $16.9 million, down 0.7% largely due to an increase in cost of sales and an increase in variable payroll expenses as a percentage of revenue. |
• | Fourth quarter, BSA adjusted EBITDA margin decreased 40 basis points to 25.2%. |
• | Full-year 2016, BSA revenue was $193.4 million, up 1.3%. |
• | Full-year 2016, BSA adjusted EBITDA was $41.6 million, up 4.7%, and BSA adjusted EBITDA margin improved 70 basis points to 21.5%. |
ClubCorp FY16 Q4 Earnings Release | 3 | Page |
• | O.N.E. and Other Upgrades. As of December 27, 2016, approximately 54% of memberships were enrolled in O.N.E. or similar upgrade programs, as compared to approximately 50% of memberships that were enrolled in similar upgrade programs as of December 29, 2015. As of December 27, 2016, the Company offered O.N.E. at 153 clubs. |
• | Reinvention. For 2017, the Company expects ROI expansion capital to be approximately $40 million. Of this amount, ClubCorp plans to invest approximately $26 million on same-store clubs and approximately $14 million on recently acquired clubs, including the two clubs acquired in 2017. |
• | Acquisitions. In February, ClubCorp acquired two clubs: Eagle's Nest Country Club in Phoenix, Maryland (part of the greater Baltimore MSA), and North Hills Country Club in Glenside, Pennsylvania. In fiscal year 2016, ClubCorp acquired three clubs: Heritage Golf and Country Club in Hilliard, Ohio; Santa Rosa Country Club in Santa Rosa, California; and Marsh Creek Country Club in St. Augustine, Florida. In addition, ClubCorp entered a management agreement to operate the Country Club of Columbus in Columbus, Georgia. As of December 27, 2016, ClubCorp owned or operated 159 golf and country clubs representing approximately 200 18-hole equivalents, of which nine are managed clubs. Additionally, the Company owned or operated 47 business, sports and alumni clubs, of which three are managed clubs. |
• | Membership. Membership totals exclude membership count from managed clubs. As of December 27, 2016, total memberships increased 3,065 to 174,348, up 1.8%, over memberships at December 29, 2015. Total golf and country club memberships increased 3.9%, while total business, sports and alumni club memberships declined 2.6%. |
• | Capital Structure. At the end of the fourth quarter, the Company had $84.6 million in cash and cash equivalents and total liquidity of approximately $230 million. Additionally, the Company voluntarily paid $24 million towards its senior secured term loans. ClubCorp's total leverage ratio was 4.2x at the end of fiscal 2016, down from 4.5x at the end of fiscal 2015. |
ClubCorp FY16 Q4 Earnings Release | 4 | Page |
ClubCorp FY16 Q4 Earnings Release | 5 | Page |
ClubCorp FY16 Q4 Earnings Release | 6 | Page |
ClubCorp FY16 Q4 Earnings Release | 7 | Page |
(1) | Adjusted EBITDA is not calculated in accordance with accounting principles generally accepted in the U.S. (“GAAP”). See the “Statement Regarding Non-GAAP Financial Measures” section of this press release for the definition of Adjusted EBITDA and the reconciliation later in this press release to the most comparable financial measure calculated in accordance with GAAP. |
(2) | Clubs are considered same store once they have been fully operational for one fiscal year. Newly acquired or opened clubs, clubs added under management agreements and divested clubs are not classified as same store. Once a club has been divested, it is removed from the same store classification for all periods presented. New or Acquired Clubs include those clubs that the Company is currently operating as of December 27, 2016, that were opened, acquired or added under management agreements in the fiscal year ended December 27, 2016 and the fiscal year ended December 29, 2015 consisting of: Ravinia Green Country Club, Rolling Green Country Club, Bermuda Run Country Club, Brookfield Country Club, Firethorne Country Club, Temple Hills Country Club, Ford's Colony Country Club, Bernardo Heights Country Club, Santa Rosa Golf and Beach Club, Marsh Creek Country Club and Santa Rosa Golf and Country Club, Country Club of Columbus, Heritage Golf Club and West Lake Mansion at Meilu Legend Hotel. |
(3) | Consists of other business activities including ancillary revenues related to alliance arrangements, a portion of the revenue associated with upgrade offerings, reimbursements for certain costs of operations at managed clubs, corporate overhead expenses and shared services. |
ClubCorp FY16 Q4 Earnings Release | 8 | Page |
Fourth quarter ended | Year ended | ||||||||||||||||||||
GCC | December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | % Change (1) | December 27, 2016 (52 weeks) | December 29, 2015 (52 weeks) | % Change (1) | |||||||||||||||
Same Store Clubs (2) | |||||||||||||||||||||
Revenue | |||||||||||||||||||||
Dues | $ | 125,251 | $ | 121,853 | 2.8 | % | $ | 404,380 | $ | 391,207 | 3.4 | % | |||||||||
Food and Beverage | 60,940 | 58,001 | 5.1 | % | 188,111 | 182,387 | 3.1 | % | |||||||||||||
Golf Operations | 52,185 | 52,017 | 0.3 | % | 178,042 | 179,220 | (0.7 | )% | |||||||||||||
Other | 16,174 | 16,500 | (2.0 | )% | 57,378 | 58,647 | (2.2 | )% | |||||||||||||
Revenue | $ | 254,550 | $ | 248,371 | 2.5 | % | $ | 827,911 | $ | 811,461 | 2.0 | % | |||||||||
Club operating costs and expenses exclusive of depreciation | $ | 173,426 | $ | 169,516 | 2.3 | % | $ | 574,773 | $ | 569,153 | 1.0 | % | |||||||||
Adjusted EBITDA | $ | 81,124 | $ | 78,855 | 2.9 | % | $ | 253,138 | $ | 242,308 | 4.5 | % | |||||||||
Adjusted EBITDA Margin | 31.9 | % | 31.7 | % | 20 bps | 30.6 | % | 29.9 | % | 70 bps | |||||||||||
New or Acquired Clubs (2) | |||||||||||||||||||||
Revenue | $ | 17,125 | $ | 11,113 | NM | $ | 51,174 | $ | 29,880 | NM | |||||||||||
Club operating costs and expenses exclusive of depreciation | $ | 13,836 | $ | 8,779 | NM | $ | 43,717 | $ | 26,492 | NM | |||||||||||
Adjusted EBITDA | $ | 3,289 | $ | 2,334 | NM | $ | 7,457 | $ | 3,388 | NM | |||||||||||
Total Golf and Country Clubs | |||||||||||||||||||||
Revenue | $ | 271,675 | $ | 259,484 | 4.7 | % | $ | 879,085 | $ | 841,341 | 4.5 | % | |||||||||
Club operating costs and expenses exclusive of depreciation | $ | 187,262 | $ | 178,295 | 5.0 | % | $ | 618,490 | $ | 595,645 | 3.8 | % | |||||||||
Adjusted EBITDA | $ | 84,413 | $ | 81,189 | 4.0 | % | $ | 260,595 | $ | 245,696 | 6.1 | % | |||||||||
Adjusted EBITDA Margin | 31.1 | % | 31.3 | % | (20) bps | 29.6 | % | 29.2 | % | 40 bps | |||||||||||
Total memberships, excluding managed club memberships | 120,804 | 116,303 | 3.9 | % |
(1) | Percentage changes that are not meaningful are denoted by “NM.” |
(2) | Clubs are considered same store once they have been fully operational for one fiscal year. Newly acquired or opened clubs, clubs added under management agreements and divested clubs are not classified as same store. Once a club has been divested, it is removed from the same store classification for all periods presented. New or Acquired Clubs include those clubs that the Company is currently operating as of December 27, 2016, that were acquired, opened or added under management agreements during the fiscal year ended December 27, 2016 and the fiscal year ended December 29, 2015 consisting of: Ravinia Green Country Club, Rolling Green Country Club, Bermuda Run Country Club, Brookfield Country Club, Firethorne Country Club, Temple Hills Country Club, Ford's Colony Country Club, Bernardo Heights Country Club, Santa Rosa Golf and Beach Club, Marsh Creek Country Club, Santa Rosa Golf and Country Club, Country Club of Columbus and Heritage Golf Club. |
ClubCorp FY16 Q4 Earnings Release | 9 | Page |
Fourth quarter ended | Year ended | ||||||||||||||||||||
BSA | December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | % Change (1) | December 27, 2016 (52 weeks) | December 29, 2015 (52 weeks) | % Change (1) | |||||||||||||||
Same Store Clubs (2) | |||||||||||||||||||||
Revenue | |||||||||||||||||||||
Dues | $ | 24,733 | $ | 24,686 | 0.2 | % | $ | 81,036 | $ | 79,732 | 1.6 | % | |||||||||
Food and Beverage | 38,399 | 38,213 | 0.5 | % | 100,293 | 99,274 | 1.0 | % | |||||||||||||
Other | 3,747 | 3,494 | 7.2 | % | 11,901 | 11,845 | 0.5 | % | |||||||||||||
Revenue | $ | 66,879 | $ | 66,393 | 0.7 | % | $ | 193,230 | $ | 190,851 | 1.2 | % | |||||||||
Club operating costs and expenses exclusive of depreciation | $ | 50,039 | $ | 49,398 | 1.3 | % | $ | 151,761 | $ | 151,125 | 0.4 | % | |||||||||
Adjusted EBITDA | $ | 16,840 | $ | 16,995 | (0.9 | )% | $ | 41,469 | $ | 39,726 | 4.4 | % | |||||||||
Adjusted EBITDA Margin | 25.2 | % | 25.6 | % | (40) bps | 21.5 | % | 20.8 | % | 70 bps | |||||||||||
New or Acquired Clubs (2) | |||||||||||||||||||||
Revenue | $ | 59 | $ | 25 | NM | $ | 160 | $ | 25 | NM | |||||||||||
Club operating costs and expenses exclusive of depreciation | $ | 17 | $ | 16 | NM | $ | 37 | $ | 39 | NM | |||||||||||
Adjusted EBITDA | $ | 42 | $ | 9 | NM | $ | 123 | $ | (14 | ) | NM | ||||||||||
Total Business, Sports and Alumni Clubs | |||||||||||||||||||||
Revenue | $ | 66,938 | $ | 66,418 | 0.8 | % | $ | 193,390 | $ | 190,876 | 1.3 | % | |||||||||
Club operating costs and expenses exclusive of depreciation | $ | 50,056 | $ | 49,414 | 1.3 | % | $ | 151,798 | $ | 151,164 | 0.4 | % | |||||||||
Adjusted EBITDA | $ | 16,882 | $ | 17,004 | (0.7 | )% | $ | 41,592 | $ | 39,712 | 4.7 | % | |||||||||
Adjusted EBITDA Margin | 25.2 | % | 25.6 | % | (40) bps | 21.5 | % | 20.8 | % | 70 bps | |||||||||||
Total memberships, excluding managed club memberships | 53,544 | 54,980 | (2.6 | )% |
(2) | Clubs are considered same store once they have been fully operational for one fiscal year. Newly acquired or opened clubs, clubs added under management agreements and divested clubs are not classified as same store. Once a club has been divested, it is removed from the same store classification for all periods presented. New or Acquired Clubs include those clubs that the Company is currently operating as of December 27, 2016, that were opened or added under management agreements during the fiscal year ended December 27, 2016 and the fiscal year ended December 29, 2015 consisting of West Lake Mansion at Meilu Legend Hotel. |
ClubCorp FY16 Q4 Earnings Release | 10 | Page |
Fourth quarter ended | Year ended | ||||||||||||||
December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | December 27, 2016 (52 weeks) | December 29, 2015 (52 weeks) | ||||||||||||
Net income (loss) | $ | 5,406 | $ | (6,259 | ) | $ | 4,025 | $ | (9,573 | ) | |||||
Interest expense | 26,658 | 22,085 | 87,188 | 70,672 | |||||||||||
Income tax expense | 1,224 | 1,816 | 1,348 | 1,629 | |||||||||||
Interest and investment income | (194 | ) | (1,701 | ) | (608 | ) | (5,517 | ) | |||||||
Depreciation and amortization | 33,462 | 32,328 | 107,200 | 103,944 | |||||||||||
EBITDA | $ | 66,556 | $ | 48,269 | $ | 199,153 | $ | 161,155 | |||||||
Impairments and disposition of assets (1) | 7,950 | 9,123 | 16,974 | 24,546 | |||||||||||
Loss from divested clubs (2) | 209 | 64 | 751 | 25 | |||||||||||
Loss on extinguishment of debt (3) | — | 2,599 | — | 2,599 | |||||||||||
Non-cash adjustments (4) | 362 | 619 | 255 | 2,008 | |||||||||||
Acquisition related costs (5) | 310 | 1,268 | 1,409 | 4,965 | |||||||||||
Capital structure costs (6) | 790 | 8,196 | 1,840 | 10,047 | |||||||||||
Centralization and transformation costs (7) | 2,679 | 3,705 | 9,806 | 8,495 | |||||||||||
Other adjustments (8) | 845 | 2,308 | 5,076 | 7,397 | |||||||||||
Equity-based compensation expense (9) | 2,128 | 1,460 | 7,005 | 4,970 | |||||||||||
Deferred revenue adjustment (10) | 1,509 | 1,967 | 5,419 | 7,111 | |||||||||||
Adjusted EBITDA | $ | 83,338 | $ | 79,578 | $ | 247,688 | $ | 233,318 |
Fourth quarter ended | Year ended | ||||||||||||||
December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | December 27, 2016 (52 weeks) | December 29, 2015 (52 weeks) | ||||||||||||
Net cash provided by operating activities | $ | 59,783 | $ | 53,656 | $ | 157,654 | $ | 152,270 | |||||||
Interest expense | 26,658 | 22,085 | 87,188 | 70,672 | |||||||||||
Income tax expense | 1,224 | 1,816 | 1,348 | 1,629 | |||||||||||
Interest and investment income | (194 | ) | (1,701 | ) | (608 | ) | (5,517 | ) | |||||||
Loss from divested clubs (2) | 209 | 64 | 751 | 25 | |||||||||||
Loss on extinguishment of debt (3) | — | 2,599 | — | 2,599 | |||||||||||
Non-cash adjustments (4) | 362 | 619 | 255 | 2,008 | |||||||||||
Acquisition related costs (5) | 310 | 1,268 | 1,409 | 4,965 | |||||||||||
Capital structure costs (6) | 790 | 8,196 | 1,840 | 10,047 | |||||||||||
Centralization and transformation costs (7) | 2,679 | 3,705 | 9,806 | 8,495 | |||||||||||
Other adjustments (8) | 845 | 2,308 | 5,076 | 7,397 | |||||||||||
Deferred revenue adjustment (10) | 1,509 | 1,967 | 5,419 | 7,111 | |||||||||||
Certain adjustments to reconcile net income (loss) to operating cash flows (11) | (10,837 | ) | (17,004 | ) | (22,450 | ) | (28,383 | ) | |||||||
Adjusted EBITDA | $ | 83,338 | $ | 79,578 | $ | 247,688 | $ | 233,318 |
ClubCorp FY16 Q4 Earnings Release | 11 | Page |
Fourth quarter ended | Year ended | ||||||||||||||
December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | December 27, 2016 (52 weeks) | December 29, 2015 (52 weeks) | ||||||||||||
Golf and Country Clubs Adjusted EBITDA | $ | 84,413 | $ | 81,189 | $ | 260,595 | $ | 245,696 | |||||||
Business, Sports and Alumni Clubs Adjusted EBITDA | 16,882 | 17,004 | 41,592 | 39,712 | |||||||||||
Interest expense | (26,658 | ) | (22,085 | ) | (87,188 | ) | (70,672 | ) | |||||||
Interest and investment income | 194 | 1,701 | 608 | 5,517 | |||||||||||
Depreciation and amortization | (33,462 | ) | (32,328 | ) | (107,200 | ) | (103,944 | ) | |||||||
Impairments and disposition of assets (1) | (7,950 | ) | (9,123 | ) | (16,974 | ) | (24,546 | ) | |||||||
Loss from divested clubs (2) | (209 | ) | (64 | ) | (751 | ) | (25 | ) | |||||||
Loss on extinguishment of debt (3) | — | (2,599 | ) | — | (2,599 | ) | |||||||||
Non-cash adjustments (4) | (362 | ) | (619 | ) | (255 | ) | (2,008 | ) | |||||||
Acquisition related costs (5) | (310 | ) | (1,268 | ) | (1,409 | ) | (4,965 | ) | |||||||
Capital structure costs (6) | (790 | ) | (8,196 | ) | (1,840 | ) | (10,047 | ) | |||||||
Centralization and transformation costs (7) | (2,679 | ) | (3,705 | ) | (9,806 | ) | (8,495 | ) | |||||||
Other adjustments (8) | (845 | ) | (2,308 | ) | (5,076 | ) | (7,397 | ) | |||||||
Equity-based compensation expense (9) | (2,128 | ) | (1,460 | ) | (7,005 | ) | (4,970 | ) | |||||||
Deferred revenue adjustment (10) | (1,509 | ) | (1,967 | ) | (5,419 | ) | (7,111 | ) | |||||||
Corporate expenses and other operations (12) | (17,957 | ) | (18,615 | ) | (54,499 | ) | (52,090 | ) | |||||||
Income (loss) before income taxes | $ | 6,630 | $ | (4,443 | ) | $ | 5,373 | $ | (7,944 | ) |
(1) | Includes non-cash impairment charges related to property and equipment and intangible assets and loss on disposals of assets (including property and equipment disposed of in connection with renovations). |
(2) | Net loss from divested clubs that do not qualify as discontinued operations in accordance with GAAP. |
(3) | Includes loss on extinguishment of debt calculated in accordance with GAAP. |
(4) | Includes non-cash items related to purchase accounting associated with the acquisition of ClubCorp, Inc. (“CCI”) in 2006 by affiliates of KSL Capital Partners, LLC (“KSL”). |
(5) | Represents legal and professional fees related to the acquisition of clubs. |
(6) | Represents legal and professional fees related to our capital structure, including debt issuance and amendment costs and equity offering costs. |
(7) | Includes fees and expenses associated with initial compliance with Section 404(b) of the Sarbanes-Oxley Act, which were primarily incurred in fiscal year 2015 and the twelve weeks ended March 22, 2016, and related centralization and transformation of administrative processes, finance processes and related IT systems. |
(8) | Represents adjustments permitted by the credit agreement governing the 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 and expenses paid to an affiliate of KSL. |
(9) | Includes equity-based compensation expense, calculated in accordance with GAAP, related to awards held by certain employees, executives and directors. |
(10) | Represents estimated deferred revenue, calculated 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 and the acquisition of Sequoia Golf on September 30, 2014. |
ClubCorp FY16 Q4 Earnings Release | 12 | Page |
(11) | Includes the following adjustments to reconcile net income (loss) to net cash provided by operating activities from our Unaudited Consolidated Condensed Statements of Cash Flows: Net change in prepaid expenses and other assets, net change in receivables and membership notes, net change in accounts payable and accrued liabilities, net change in other current liabilities, bad debt expense, equity in loss (earnings) from unconsolidated ventures, gain on investment in unconsolidated ventures, distribution from investment in unconsolidated ventures, debt issuance costs and term loan discount, accretion of discount on member deposits, net change in deferred tax assets and liabilities and net change in other long-term liabilities. Certain other adjustments to reconcile net income (loss) to net cash provided by operating activities are not included as they are excluded from both net cash provided by operating activities and Adjusted EBITDA. |
(12) | Includes other business activities including ancillary revenues related to alliance arrangements, a portion of the revenue associated with upgrade offerings, costs of operations at managed clubs, corporate overhead expenses and shared services expenses. |
ClubCorp FY16 Q4 Earnings Release | 13 | Page |
Fourth quarter ended | Year ended | ||||||||||||||
December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | December 27, 2016 (52 weeks) | December 29, 2015 (52 weeks) | ||||||||||||
Revenues | |||||||||||||||
Golf and Country Clubs (1) | $ | 271,675 | $ | 259,484 | $ | 879,085 | $ | 841,341 | |||||||
Business, Sports and Alumni Clubs (1) | 66,938 | 66,418 | 193,390 | 190,876 | |||||||||||
Other operations | 9,958 | 6,712 | 25,016 | 19,853 | |||||||||||
Elimination of intersegment revenues and segment reporting adjustments | (4,010 | ) | (4,265 | ) | (13,137 | ) | (14,383 | ) | |||||||
Revenues relating to divested clubs (2) | 740 | 3,339 | 4,126 | 15,180 | |||||||||||
Total consolidated revenues | $ | 345,301 | $ | 331,688 | $ | 1,088,480 | $ | 1,052,867 | |||||||
Golf and Country Clubs Adjusted EBITDA | $ | 84,413 | $ | 81,189 | $ | 260,595 | $ | 245,696 | |||||||
Business, Sports and Alumni Clubs Adjusted EBITDA | $ | 16,882 | $ | 17,004 | $ | 41,592 | $ | 39,712 |
(1) | Includes segment reporting adjustments representing estimated deferred revenue, calculated 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 and the acquisition of Sequoia Golf on September 30, 2014. |
(2) | When clubs are divested, the associated revenues are excluded from segment results for all periods presented. |
ClubCorp FY16 Q4 Earnings Release | 14 | Page |
Fourth quarter ended | Year ended | ||||||||||||||||||||
December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | % Change | December 27, 2016 (52 weeks) | December 29, 2015 (52 weeks) | % Change | ||||||||||||||||
REVENUES: | |||||||||||||||||||||
Club operations | $ | 238,966 | $ | 230,506 | 3.7 | % | $ | 781,000 | $ | 757,472 | 3.1 | % | |||||||||
Food and beverage | 104,316 | 99,797 | 4.5 | % | 302,510 | 291,582 | 3.7 | % | |||||||||||||
Other revenues | 2,019 | 1,385 | 45.8 | % | 4,970 | 3,813 | 30.3 | % | |||||||||||||
Total revenues | 345,301 | 331,688 | 4.1 | % | 1,088,480 | 1,052,867 | 3.4 | % | |||||||||||||
DIRECT AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: | |||||||||||||||||||||
Club operating costs exclusive of depreciation | 213,924 | 207,215 | 3.2 | % | 695,990 | 681,989 | 2.1 | % | |||||||||||||
Cost of food and beverage sales exclusive of depreciation | 32,674 | 30,786 | 6.1 | % | 100,490 | 96,103 | 4.6 | % | |||||||||||||
Depreciation and amortization | 33,462 | 32,328 | 3.5 | % | 107,200 | 103,944 | 3.1 | % | |||||||||||||
Provision for doubtful accounts | 754 | 675 | 11.7 | % | 3,141 | 2,551 | 23.1 | % | |||||||||||||
Loss on disposals of assets | 5,594 | 6,093 | (8.2 | )% | 12,320 | 19,402 | (36.5 | )% | |||||||||||||
Impairment of assets | 2,356 | 3,030 | (22.2 | )% | 4,654 | 5,144 | (9.5 | )% | |||||||||||||
Equity in (earnings) loss from unconsolidated ventures | (1,717 | ) | 374 | (559.1 | )% | (5,013 | ) | 1,308 | (483.3 | )% | |||||||||||
Selling, general and administrative | 25,160 | 32,647 | (22.9 | )% | 77,745 | 82,616 | (5.9 | )% | |||||||||||||
OPERATING INCOME | 33,094 | 18,540 | 78.5 | % | 91,953 | 59,810 | 53.7 | % | |||||||||||||
Interest and investment income | 194 | 1,701 | (88.6 | )% | 608 | 5,517 | (89.0 | )% | |||||||||||||
Interest expense | (26,658 | ) | (22,085 | ) | (20.7 | )% | (87,188 | ) | (70,672 | ) | (23.4 | )% | |||||||||
Loss on extinguishment of debt | — | (2,599 | ) | 100.0 | % | — | (2,599 | ) | 100.0 | % | |||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 6,630 | (4,443 | ) | 249.2 | % | 5,373 | (7,944 | ) | 167.6 | % | |||||||||||
INCOME TAX (EXPENSE) BENEFIT | (1,224 | ) | (1,816 | ) | 32.6 | % | (1,348 | ) | (1,629 | ) | 17.2 | % | |||||||||
NET INCOME (LOSS) | 5,406 | (6,259 | ) | 186.4 | % | 4,025 | (9,573 | ) | 142.0 | % | |||||||||||
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (182 | ) | (87 | ) | (109.2 | )% | (448 | ) | 61 | (834.4 | )% | ||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO CLUBCORP | $ | 5,224 | $ | (6,346 | ) | 182.3 | % | $ | 3,577 | $ | (9,512 | ) | 137.6 | % | |||||||
WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC | 64,538 | 64,409 | 0.2 | % | 64,517 | 64,364 | 0.2 | % | |||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING, DILUTED | 64,627 | 64,409 | 0.3 | % | 64,584 | 64,364 | 0.3 | % | |||||||||||||
INCOME (LOSS) PER COMMON SHARE: | |||||||||||||||||||||
Net income (loss) attributable to ClubCorp, Basic | $ | 0.08 | $ | (0.10 | ) | 180.0 | % | $ | 0.05 | $ | (0.15 | ) | 133.3 | % | |||||||
Net income (loss) attributable to ClubCorp, Diluted | $ | 0.08 | $ | (0.10 | ) | 180.0 | % | $ | 0.05 | $ | (0.15 | ) | 133.3 | % | |||||||
Cash dividends declared per common share | $ | 0.26 | $ | 0.13 | 100.0 | % | $ | 0.53 | $ | 0.52 | 1.9 | % |
ClubCorp FY16 Q4 Earnings Release | 15 | Page |
Fourth quarter ended | Year ended | ||||||||||||||||||||
December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | % Change | December 27, 2016 (52 weeks) | December 29, 2015 (52 weeks) | % Change | ||||||||||||||||
NET INCOME (LOSS) | $ | 5,406 | $ | (6,259 | ) | 186.4 | % | $ | 4,025 | $ | (9,573 | ) | 142.0 | % | |||||||
Foreign currency translation | (1,204 | ) | 504 | (338.9 | )% | (2,389 | ) | (2,959 | ) | 19.3 | % | ||||||||||
OTHER COMPREHENSIVE LOSS | (1,204 | ) | 504 | (338.9 | )% | (2,389 | ) | (2,959 | ) | 19.3 | % | ||||||||||
COMPREHENSIVE INCOME (LOSS) | 4,202 | (5,755 | ) | 173.0 | % | 1,636 | (12,532 | ) | 113.1 | % | |||||||||||
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (182 | ) | (87 | ) | (109.2 | )% | (448 | ) | 61 | (834.4 | )% | ||||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CLUBCORP | $ | 4,020 | $ | (5,842 | ) | 168.8 | % | $ | 1,188 | $ | (12,471 | ) | 109.5 | % |
ClubCorp FY16 Q4 Earnings Release | 16 | Page |
December 27, 2016 | December 29, 2015 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 84,601 | $ | 116,347 | |||
Receivables, net of allowances | 79,115 | 68,671 | |||||
Inventories | 22,743 | 20,929 | |||||
Prepaids and other assets | 16,116 | 19,907 | |||||
Total current assets | 202,575 | 225,854 | |||||
Investments | 1,569 | 3,005 | |||||
Property and equipment, net | 1,553,382 | 1,534,520 | |||||
Notes receivable, net of allowances | 8,161 | 7,448 | |||||
Goodwill | 312,811 | 312,811 | |||||
Intangibles, net | 29,348 | 31,252 | |||||
Other assets | 16,615 | 16,634 | |||||
Long-term deferred tax asset | 4,253 | 3,727 | |||||
TOTAL ASSETS | $ | 2,128,714 | $ | 2,135,251 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Current maturities of long-term debt | $ | 19,422 | $ | 20,414 | |||
Membership initiation deposits - current portion | 170,355 | 152,996 | |||||
Accounts payable | 39,260 | 39,487 | |||||
Accrued expenses | 42,539 | 37,441 | |||||
Accrued taxes | 19,256 | 15,473 | |||||
Other liabilities | 71,092 | 69,192 | |||||
Total current liabilities | 361,924 | 335,003 | |||||
Long-term debt | 1,067,071 | 1,079,320 | |||||
Membership initiation deposits | 205,076 | 204,305 | |||||
Deferred tax liability, net | 209,347 | 214,184 | |||||
Other liabilities | 132,909 | 123,657 | |||||
Total liabilities | 1,976,327 | 1,956,469 | |||||
EQUITY | |||||||
Common stock, $0.01 par value, 200,000,000 shares authorized; 65,498,897 and 64,740,736 issued and outstanding at December 27, 2016 and December 29, 2015, respectively | 655 | 647 | |||||
Additional paid-in capital | 235,871 | 263,921 | |||||
Accumulated other comprehensive loss | (9,638 | ) | (7,249 | ) | |||
Accumulated deficit | (82,260 | ) | (88,955 | ) | |||
Treasury stock, at cost (192,989 shares at December 27, 2016) | (2,258 | ) | — | ||||
Total stockholders’ equity | 142,370 | 168,364 | |||||
Noncontrolling interests in consolidated subsidiaries and variable interest entities | 10,017 | 10,418 | |||||
Total equity | 152,387 | 178,782 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 2,128,714 | $ | 2,135,251 |
ClubCorp FY16 Q4 Earnings Release | 17 | Page |
Fourth quarter ended | Year ended | ||||||||||||||
December 27, 2016 (16 weeks) | December 29, 2015 (16 weeks) | December 29, 2015 (52 weeks) | December 30, 2014 (52 weeks) | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net income (loss) | $ | 5,406 | $ | (6,259 | ) | $ | 4,025 | $ | (9,573 | ) | |||||
Adjustments to reconcile net income (loss) to cash flows from operating activities: | |||||||||||||||
Depreciation | 33,077 | 31,460 | 105,437 | 101,037 | |||||||||||
Amortization | 385 | 867 | 1,763 | 2,907 | |||||||||||
Asset impairments | 2,356 | 3,030 | 4,654 | 5,144 | |||||||||||
Bad debt expense | 754 | 668 | 3,141 | 2,605 | |||||||||||
Equity in (earnings) loss from unconsolidated ventures | (1,717 | ) | 374 | (5,013 | ) | 1,308 | |||||||||
Gain on investment in unconsolidated ventures | — | (1,575 | ) | — | (5,082 | ) | |||||||||
Distribution from investment in unconsolidated ventures | 1,988 | 1,810 | 5,950 | 5,845 | |||||||||||
Loss on disposals of assets | 5,594 | 6,090 | 12,320 | 19,399 | |||||||||||
Debt issuance costs and term loan discount | 1,756 | 12,316 | 5,204 | 15,600 | |||||||||||
Accretion of discount on member deposits | 6,553 | 6,244 | 20,416 | 20,307 | |||||||||||
Equity-based compensation | 2,128 | 1,460 | 7,005 | 4,970 | |||||||||||
Net change in deferred tax assets and liabilities | (2,834 | ) | (2,344 | ) | (3,048 | ) | (7,082 | ) | |||||||
Net change in prepaid expenses and other assets | 4,068 | (4,185 | ) | 368 | (7,636 | ) | |||||||||
Net change in receivables and membership notes | 30,140 | 35,888 | (3,931 | ) | 6,619 | ||||||||||
Net change in accounts payable and accrued liabilities | 2,592 | 4,466 | (2,577 | ) | 2,499 | ||||||||||
Net change in other current liabilities | (33,189 | ) | (35,110 | ) | 3,078 | (555 | ) | ||||||||
Net change in other long-term liabilities | 726 | (1,544 | ) | (1,138 | ) | (6,042 | ) | ||||||||
Net cash provided by operating activities | 59,783 | 53,656 | 157,654 | 152,270 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Purchase of property and equipment | (35,242 | ) | (29,134 | ) | (108,770 | ) | (105,244 | ) | |||||||
Acquisition of clubs | — | (2,705 | ) | (9,793 | ) | (58,582 | ) | ||||||||
Proceeds from dispositions | 334 | 3,186 | 370 | 3,764 | |||||||||||
Proceeds from insurance | 7,756 | — | 12,190 | — | |||||||||||
Net change in restricted cash and capital reserve funds | 157 | (120 | ) | 631 | (183 | ) | |||||||||
Net cash used in investing activities | (26,995 | ) | (28,773 | ) | (105,372 | ) | (160,245 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Repayments of long-term debt | (30,293 | ) | (235,267 | ) | (79,636 | ) | (247,313 | ) | |||||||
Proceeds from new debt borrowings | — | 350,000 | 37,000 | 350,000 | |||||||||||
Repayments of revolving credit facility borrowings | — | (47,000 | ) | — | (57,000 | ) | |||||||||
Proceeds from revolving credit facility borrowings | — | — | — | 57,000 | |||||||||||
Debt issuance and modification costs | (811 | ) | (16,032 | ) | (3,106 | ) | (17,525 | ) | |||||||
Dividends to owners | (8,495 | ) | (8,400 | ) | (33,972 | ) | (33,583 | ) | |||||||
Repurchases of common stock | (721 | ) | — | (2,258 | ) | — | |||||||||
Equity offering costs | — | (887 | ) | — | (887 | ) | |||||||||
Share repurchases for tax withholdings related to certain equity-based awards | — | — | (226 | ) | (1,443 | ) | |||||||||
Excess tax benefit from equity-based awards | — | 1,055 | — | 1,055 | |||||||||||
Distributions to noncontrolling interest | — | — | (849 | ) | (1,071 | ) | |||||||||
Proceeds from new membership initiation deposits | 90 | 229 | 205 | 749 | |||||||||||
Repayments of membership initiation deposits | (639 | ) | (418 | ) | (2,189 | ) | (1,496 | ) | |||||||
Net cash (used in) provided by financing activities | (40,869 | ) | 43,280 | (85,031 | ) | 48,486 | |||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 595 | 1,051 | 1,003 | 789 | |||||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (7,486 | ) | 69,214 | (31,746 | ) | 41,300 | |||||||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 92,087 | 47,133 | 116,347 | 75,047 | |||||||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 84,601 | $ | 116,347 | $ | 84,601 | $ | 116,347 | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||||||
Cash paid for interest | $ | 23,419 | $ | 19,936 | $ | 56,949 | $ | 51,368 | |||||||
Cash paid for income taxes | $ | 2,358 | $ | 6,782 | $ | 5,721 | $ | 11,297 |
ClubCorp FY16 Q4 Earnings Release | 18 | Page |