ClubCorp Reports Record Third Quarter Results, Tightens 2015 Outlook and Accelerates Club Reinvention
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/EINPresswire.com/ -- DALLAS, TX--(Marketwired - October 15, 2015) -
- Revenue was up 24.9%, while adjusted EBITDA increased 21.2%
- ClubCorp tightens its 2015 adjusted EBITDA range to be between $232 and $236 million
- ClubCorp is accelerating capital investment on reinvention at several acquired Sequoia Golf clubs
ClubCorp -- The World Leader in Private Clubs® (NYSE: MYCC) -- announces financial results for its fiscal-year 2015 third quarter ended September 8, 2015. The third quarter of fiscal 2015 and fiscal 2014 consisted of 12 weeks. Year-to-date results of fiscal 2015 and fiscal 2014 consisted of 36 weeks. All growth percentages refer to year-over-year progress.
Third Quarter Results:
- Revenue increased $50.9 million, or 24.9%, to $255.4 million for the third quarter of 2015.
-
Adjusted EBITDA
1 increased $9.6 million to $54.9 million, up 21.2%, driven by solid performance at same-store clubs and from increased revenue at new and recently acquired clubs. - Same Store Clubs. Same-store revenue was up $3.3 million, or 1.7%, driven primarily by higher dues revenue; while same-store adjusted EBITDA grew $1.9 million, or 3.6%, due to increased revenue and favorable operating expenses as a percentage of revenue. Same-store flow-through was 57%.
-
New or Acquired Clubs.
2 New clubs opened in 2014 or clubs acquired in 2014 and 2015 contributed revenue growth of $44.6 million and adjusted EBITDA growth of $9.7 million.
FY15 Year-to-date Results:
- Revenue increased $139.6 million to $721.2 million, up 24.0%, reflecting solid same-store revenue growth, and the addition of Sequoia Golf and several other recently acquired clubs.
-
Adjusted EBITDA
1 increased $27.1 million to $154.0 million, up 21.3%, driven by an increase in dues and upgrade revenue at same-store clubs and favorable operating expenses as a percentage of revenue at same-store clubs, and additional revenue contribution from new and recently acquired clubs. - Same Store Clubs. Same-store revenue was up $13.4 million, or 2.3%, driven primarily by higher dues revenue up 3.9% and food & beverage revenue up 2.8%, offset by golf operations revenue down 0.7% year-to-date. Same-store adjusted EBITDA grew $8.4 million, or 5.5%, resulting in same-store flow-through of 62%. Additionally, year-to-date, same-store golf and country clubs (GCC) and business, sports and alumni clubs (BSA) adjusted EBITDA margins are up 80 basis points and 100 basis points to 30.1% and 18.1%, respectively.
-
New or Acquired Clubs.
2 New clubs opened in 2014 or clubs acquired in 2014 and 2015 contributed revenue growth of $118.1 million and adjusted EBITDA growth of $25.9 million.
2015 Third Quarter and Year to Date Summary:
(Unaudited financial information)
Third quarter ended Year to date ended
------------------- --------------------
September September September September
(In thousands, 8, 9, 8, 9,
except for 2015 2014 2015 2014
membership (12 (12 % (36 (36 %
data) weeks) weeks) Change weeks) weeks) Change
------------------------- --------- ------ --------- --------- ------
Total Revenue $255,360 $ 204,475 24.9% $ 721,179 $ 581,616 24.0%
Adjusted EBITDA
(1)
Golf and
Country
Clubs $ 58,146 $ 46,830 24.2% $ 164,823 $ 133,016 23.9%
Business,
Sports and
Alumni Clubs $ 5,989 $ 5,702 5.0% $ 22,692 $ 20,198 12.3%
Other $ (9,203) $ (7,213) (27.6)% $ (33,504) $ (26,287) (27.5)%
-------- --------- ------ --------- --------- ------
Adjusted EBITDA
(1) $ 54,932 $ 45,319 21.2% $ 154,011 $ 126,927 21.3%
======== ========= ====== ========= ========= ======
Total Club
Memberships,
excluding
managed clubs 175,162 145,634 20.3% 175,162 145,634 20.3%
Total Club
Memberships,
including
managed clubs 184,891 151,823 21.8% 184,891 151,823 21.8%
Quotes:
- Eric Affeldt, president and chief executive officer: "We delivered another record quarter with strong same-store growth in both dues and food and beverage revenue, and our golf operations revenue improved slightly after two consecutive quarters of decline. Our acquisitions are performing well with revenue surpassing our underwriting estimates, and we anticipate performance at these clubs to continue to ramp. Additionally, we have decided to accelerate our reinvention at several clubs acquired with Sequoia Golf. We are not increasing the total reinvention capital committed to Sequoia clubs, but instead we are pulling forward investments that we had planned for 2016. We believe this added investment in 2015 will minimize member disruption as we head into 2016 and continue to build on a sound foundation for future growth. We look forward to a strong finish to this year, and continued execution by all members of our team."
- Curt McClellan, chief financial officer: "We delivered strong revenue and adjusted EBITDA growth this quarter driven by continued execution of our three-pronged strategy. On the organic growth front, we continue to see expansion of our O.N.E. offering and similar programs with increased member participation now at 49%. We continue to execute our reinvention strategy and we are accelerating reinvention at several of our Sequoia clubs in anticipation of next spring's golf season. Total 2015 ROI and expansion capital of $60 million includes approximately $10 million of accelerated capital investment for the reinvention of Sequoia clubs. Our drive to $300 million in adjusted EBITDA by the end of 2018 remains unchanged. As a reminder, this target hinges on our ability to achieve 10-15% cash on cash returns on nearly $390 million of capital employed on our 2014 and 2015 acquisitions. Additionally, this target assumes no incremental acquisitions. We have seen nothing to change our assumptions here, and remain confident in the execution of this strategy."
Segment Highlights:
Golf and country clubs (GCC):
- GCC total revenue of $211.0 million for the third quarter of 2015 increased $46.2 million, up 28.0%, compared to the third quarter of 2014.
- GCC adjusted EBITDA was $58.1 million, an increase of $11.3 million, up 24.2%.
- GCC adjusted EBITDA margin was 27.6%, a decline of 80 basis points versus the third quarter of 2014 due primarily to lower adjusted EBITDA margins at recently acquired clubs.
- Same-store revenue increased $2.5 million, up 1.5%, driven primarily by increases in dues revenue up 3.4%, and food & beverage revenue up 1.4%, offset by a decline in other revenue. Golf operations revenue was up 0.1% year-over-year.
- Same-store adjusted EBITDA increased $1.9 million, up 4.1%, due largely to increased dues and food and beverage revenue, and favorable variable payroll expenses as a percentage of revenue.
- Same-store adjusted EBITDA margin improved 80 basis points to 29.6%.
- Recently acquired GCC clubs contributed revenue growth of $43.7 million and adjusted EBITDA growth of $9.4 million.
Business, sports and alumni clubs (BSA):
- BSA revenue of $40.6 million for the third quarter of 2015 increased $1.7 million, up 4.3%, compared to the third quarter, 2014 driven by growth in both same-store and new and acquired clubs.
- BSA adjusted EBITDA was $6.0 million, an increase $0.3 million, up 5.0%.
- BSA adjusted EBITDA margin was 14.8%, a 10 basis point margin improvement versus the third quarter 2014.
- Same-store revenue increased $0.8 million, up 2.2%, driven by increases in dues revenue and a slight increase in food and beverage revenue.
- Same-store adjusted EBITDA was flat versus the third quarter 2014.
- Same-store adjusted EBITDA margin declined 30 basis points to 15.0% due primarily to higher payroll related expenses as a percentage of revenue.
- New or recently acquired BSA clubs contributed revenue of $0.9 million and adjusted EBITDA of $0.3 million.
Other Data:
- O.N.E. and Other Upgrades. Including memberships acquired with the Sequoia Golf acquisition, as of September 8, 2015, approximately 49% of our memberships were enrolled in O.N.E. or similar upgrade programs, as compared to approximately 39% of our memberships that were enrolled in similar upgrade programs as of December 30, 2014. As of September 8, 2015, the Company offered O.N.E. at 152 clubs.
- Reinvention. In 2015, ClubCorp plans to invest a total of approximately $60 million on ROI and expansion capital. This amount includes approximately $10 million of planned reinvention capital for Sequoia clubs that is being pulled forward from 2016 into 2015. As of September 30, 2015, the Company had completed reinvention elements at 19 existing and recently acquired clubs, and has another 13 clubs in active construction, and several more in design or awaiting permitting. Combined, the Company is on track to add reinvention elements at approximately 30 clubs in 2015.
- Acquisitions. Year-to-date in 2015, ClubCorp has added eight clubs via acquisition with two properties just north of Chicago, Illinois: Ravinia Green Country Club and Rolling Green Country Club; and six clubs in the southeast United States: Bermuda Run Country Club in Bermuda Run, North Carolina, Brookfield Country Club in Roswell, Georgia, Firethorne Country Club in Marvin, North Carolina, Ford's Colony Country Club in Williamsburg, Virginia, Temple Hills Country Club in Franklin, Tennessee, and Legacy Golf Club at Lakewood Ranch in Bradenton, Florida. As of September 8, 2015, ClubCorp owns or operates 158 golf and country clubs representing approximately 200 18-hole equivalents. Additionally, the Company owns or operates 48 business, sports and alumni clubs.
- Membership. Total club memberships, excluding managed clubs, as of September 8, 2015 were 175,162, an increase of 29,528, up 20.3%, over memberships at September 9, 2014. Same-store golf and country club memberships, excluding managed clubs, decreased 0.1%, while total golf and country club memberships, excluding managed clubs, increased 32.8%. Same-store business, sports and alumni club memberships, excluding managed clubs, declined 1.4%, while total business, sports and alumni club memberships, excluding managed clubs, increased 0.5%. Total club memberships, including managed clubs, as of September 8, 2015 were 184,891.
-
Levered Free Cash Flow.
1 Levered free cash flow over the last four quarters was $108.2 million, an increase from $99.2 million a year ago.
Company Outlook:
The following guidance is based on current management expectations. All financial guidance amounts are estimates and 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. For fiscal year 2015, the Company is tightening its outlook on revenue and adjusted EBITDA. The Company now anticipates revenue in the range of $1.04 billion to $1.06 billion and adjusted EBITDA in the range of $232.0 million to $236.0 million. The current outlook implies year-over-year revenue growth of 18-20% and year-over-year adjusted EBITDA growth of 18-20%.
As a reminder, the Company has a stated objective to reach $300.0 million in annual adjusted EBITDA by the end of 2018 through the combination of organic growth and reinvention. Additionally, this target assumes no incremental acquisitions. The Company continues to reaffirm this target with no changes to the underlying assumptions as presented on our first quarter earnings release, dated April 30, 2015, and represented in today's earnings presentation that may be found on our investor relations website at ir.clubcorp.com.
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. ClubCorp 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's earnings presentation is available at ir.clubcorp.com. The Company will hold a conference call on Thursday, October 15, 2015 at 10:00 a.m. CDT (11:00 a.m. EDT) to discuss its third quarter 2015 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 10072885) when prompted. For those unable to participate in the live call, a replay of the earnings conference call will be available approximately one hour after the call through November 15, 2015. To access the replay dial: 877-344-7529 for U.S. callers, 855-669-9658 for Canadian callers and 412-317-0088 for international callers (confirmation code 10072885). Additionally, a webcast replay will be available at ir.clubcorp.com.
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. The acquisition adjustment to revenues and Adjusted EBITDA within each segment 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 ClubCorp, Inc. in 2006 by affiliates of KSL and the acquisition of Sequoia Golf on September 30, 2014. Adjusted EBITDA is based on the definition of Consolidated EBITDA as defined in the credit agreement governing the Secured Credit Facilities and may not be comparable to similarly titled measures reported by other companies.
In addition to Adjusted EBITDA, we are providing a Levered 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 Levered Free Cash Flow. Adjusted EBITDA and Levered Free Cash Flow are not determined in accordance with GAAP and should not be considered in isolation, more meaningful than or as a substitute for a measure of performance prepared in accordance with GAAP and are not indicative of net income or loss as determined under GAAP. Non-GAAP financial measures have limitations that should be considered before used as measures to evaluate the Company's financial performance. Adjusted EBITDA and Levered 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 historical non-GAAP financial measures to the applicable and most comparable GAAP financial measure. The Company has not reconciled Adjusted EBITDA guidance included in this press release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort.
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. These forward-looking statements can be identified by the fact that they do not relate strictly to current or historical facts and often include words such as "may", "should", "expect", "intend", "will", "estimate", "anticipate", "believe", "predict", "potential" or "continue", or the negatives of these terms or variations of them or similar terminology 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.
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 sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2014 and "Risk Factors" and "Forward-Looking Statements" in its Quarterly Report on Form 10-Q for the period ended September 8, 2015.
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 press release, including EBITDA, Adjusted EBITDA and same-store measures, are discussed more fully in the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2014 and in its Quarterly Report on Form 10-Q for the period ended September 8, 2015. This press release should be read in conjunction with such Annual Report and Quarterly Report.
Notes:
- This press release includes metrics entitled Adjusted EBITDA and Levered Free Cash Flow that are 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 Levered Free Cash Flow and the reconciliation later in this press release to the most comparable financial measure calculated in accordance with GAAP.
- New or Acquired Clubs include those clubs that the Company is currently operating as of September 8, 2015, that were opened, acquired or added under management agreements in the thirty-six weeks ended September 8, 2015 and the fiscal year ended December 30, 2014 consisting of: The Clubs of Prestonwood, Tournament Players Club ("TPC") Michigan, TPC Piper Glen, Baylor Club, Oro Valley Country Club, River Run Golf & Country Club, Sequoyah National Golf Club, 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, Legacy Golf Club at Lakewood Ranch and 30 owned golf and country clubs, three leased golf and country clubs, seven managed golf and country clubs and one leased sports club acquired through the Sequoia Golf acquisition.
(Financial Tables Follow)
CLUBCORP HOLDINGS, INC.
SELECTED FINANCIAL DATA -- GOLF AND COUNTRY CLUBS (GCC)
(In thousands, except for memberships, dues per average same-store
membership, revenue per average same-store membership and percentages)
(Unaudited financial information)
Third quarter
ended Year to date ended
------------------- -------------------
September September September September
8, 9, 8, 9,
2015 2014 % 2015 2014 %
(12 (12 Change (36 (36 Change
GCC weeks) weeks) (1) weeks) weeks) (1)
-------------------------------- --------- ------ --------- --------- ------
Same Store Clubs
Revenue
Dues $ 74,183 $ 71,758 3.4% $218,574 $210,598 3.8%
Food and Beverage 36,467 35,955 1.4% 104,049 101,828 2.2%
Golf Operations 39,275 39,221 0.1% 103,095 103,770 (0.7)%
Other 13,307 13,823 (3.7)% 35,092 35,973 (2.4)%
-------- -------- ---- -------- -------- ----
Revenue $163,232 $160,757 1.5% $460,810 $452,169 1.9%
Club operating costs
and expenses
exclusive of
depreciation $114,981 $114,395 0.5% $321,908 $319,689 0.7%
-------- -------- ---- -------- -------- ----
Adjusted EBITDA $ 48,251 $ 46,362 4.1% $138,902 $132,480 4.8%
80 80
Adjusted EBITDA Margin 29.6% 28.8% bps 30.1% 29.3% bps
New or Acquired Clubs
(2)
Revenue
Dues $ 22,132 $ 1,891 NM $ 59,273 $ 3,449 NM
Food and Beverage 10,395 863 NM 26,222 1,848 NM
Golf Operations 12,380 1,084 NM 29,330 1,918 NM
Other 2,827 177 NM 7,830 283 NM
-------- -------- -------- --------
Revenue $ 47,734 $ 4,015 NM $122,655 $ 7,498 NM
Club operating costs
and expenses
exclusive of
depreciation $ 37,839 $ 3,547 NM $ 96,734 $ 6,962 NM
-------- -------- -------- --------
Adjusted EBITDA $ 9,895 $ 468 NM $ 25,921 $ 536 NM
Total Golf and Country
Clubs
Revenue $210,966 $164,772 28.0% $583,465 $459,667 26.9%
Club operating costs
and expenses
exclusive of
depreciation $152,820 $117,942 29.6% $418,642 $326,651 28.2%
-------- -------- ---- -------- -------- ----
Adjusted EBITDA $ 58,146 $ 46,830 24.2% $164,823 $133,016 23.9%
Adjusted EBITDA (80) (70)
Margin 27.6% 28.4% bps 28.2% 28.9% bps
Same-store
memberships,
excluding managed
club memberships 86,482 86,563 (0.1)% 86,482 86,563 (0.1)%
Same-store average
membership, excluding
managed club
memberships (3) 86,308 86,259 0.1% 85,683 85,046 0.7%
Dues per average same-
store membership,
excluding managed
club memberships (4) $ 860 $ 832 3.4% $ 2,551 $ 2,476 3.0%
Revenue per average
same-store
membership, excluding
managed club
memberships (4) $ 1,891 $ 1,864 1.4% $ 5,378 $ 5,317 1.1%
(1) Percentage changes that are not meaningful are denoted by "NM."
(2) New or Acquired Clubs include those clubs that the Company is currently
operating as of September 8, 2015, that were acquired, opened or added
under management agreements during the thirty-six weeks ended September
8, 2015 and the fiscal year ended December 30, 2014 consisting of: The
Clubs of Prestonwood, Tournament Players Club ("TPC") Michigan, TPC
Piper Glen, Oro Valley Country Club, River Run Golf & Country Club,
Sequoyah National Golf Club, 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, Legacy Golf Club at Lakewood Ranch and 30 owned golf and
country clubs, three leased golf and country clubs and seven managed
golf and country clubs acquired through the Sequoia Golf acquisition.
(3) Same-store average membership, excluding managed club memberships, is
calculated using the same-store membership count, excluding managed
clubs, at the beginning and end of the period indicated.
(4) Same-store dues or revenue divided by same-store average membership,
excluding managed club memberships.
CLUBCORP HOLDINGS, INC.
SELECTED FINANCIAL DATA-BUSINESS, SPORTS AND ALUMNI CLUBS (BSA)
(In thousands, except for memberships, dues per average same-store
membership, revenue per average same-store membership and percentages)
(Unaudited financial information)
Third quarter
ended Year to date ended
------------------- -------------------
September September September September
8, 9, 8, 9,
2015 2014 % 2015 2014 %
(12 (12 Change (36 (36 Change
BSA weeks) weeks) (1) weeks) weeks) (1)
-------------------------------- --------- ------ --------- --------- ------
Same Store Clubs
Revenue
Dues $ 18,642 $ 17,942 3.9% $ 55,867 $ 53,631 4.2%
Food and Beverage 18,021 17,933 0.5% 60,438 58,178 3.9%
Other 2,652 2,612 1.5% 7,864 7,615 3.3%
-------- -------- ---- -------- -------- ----
Revenue $ 39,315 $ 38,487 2.2% $124,169 $119,424 4.0%
Club operating costs
and expenses
exclusive of
depreciation $ 33,409 $ 32,580 2.5% $101,754 $ 98,949 2.8%
-------- -------- ---- -------- -------- ----
Adjusted EBITDA $ 5,906 $ 5,907 -% $ 22,415 $ 20,475 9.5%
(30) 100
Adjusted EBITDA Margin 15.0% 15.3% bps 18.1% 17.1% bps
New or Acquired
Clubs(2)
Revenue $ 1,241 $ 391 NM $ 3,373 $ 394 NM
Club operating costs
and expenses
exclusive of
depreciation $ 1,158 $ 596 NM $ 3,096 $ 671 NM
-------- -------- -------- --------
Adjusted EBITDA $ 83 $ (205) NM $ 277 $ (277) NM
Total Business, Sports
and Alumni Clubs
Revenue $ 40,556 $ 38,878 4.3% $127,542 $119,818 6.4%
Club operating costs
and expenses
exclusive of
depreciation $ 34,567 $ 33,176 4.2% $104,850 $ 99,620 5.2%
-------- -------- ---- -------- -------- ----
Adjusted EBITDA $ 5,989 $ 5,702 5.0% $ 22,692 $ 20,198 12.3%
Adjusted EBITDA 10 90
Margin 14.8% 14.7% bps 17.8% 16.9% bps
Same-store
memberships,
excluding managed
club memberships 54,490 55,281 (1.4)% 54,490 55,281 (1.4)%
Same-store average
membership, excluding
managed club
memberships (3) 54,499 55,207 (1.3)% 54,777 55,007 (0.4)%
Dues per average same-
store membership,
excluding managed
club memberships (4) $ 342 $ 325 5.2% $ 1,020 $ 975 4.6%
Revenue per average
same-store
membership, excluding
managed club
memberships (4) $ 721 $ 697 3.4% $ 2,267 $ 2,171 4.4%
(1) Percentage changes that are not meaningful are denoted by "NM."
(2) New or Acquired Clubs include those clubs that the Company is currently
operating as of September 8, 2015, that were opened or added under
management agreements during the twelve and thirty-six weeks ended
September 8, 2015 and the fiscal year ended December 30, 2014 consisting
of Baylor Club and one leased sports club which was acquired through the
acquisition of Sequoia Golf.
(3) Same-store average membership, excluding managed club memberships, is
calculated using the same-store membership count, excluding managed
clubs, at the beginning and end of the period indicated.
(4) Same-store dues or revenue divided by same-store average membership,
excluding managed club memberships.
CLUBCORP HOLDINGS, INC.
RECONCILIATION OF NON-GAAP MEASURES TO CLOSEST GAAP MEASURE
(In thousands)
(Unaudited financial information)
Four
Quarters
Third quarter ended Year to date ended Ended
--------------------- --------------------- ----------
September September September September September
8, 9, 8, 9, 8,
2015 2014 2015 2014 2015
(12 weeks) (12 weeks) (36 weeks) (36 weeks) (52 weeks)
---------- ---------- ---------- ---------- ----------
Net income (loss) $ 1,185 $ 3,273 $ (3,314) $ (17,992) $ 28,007
Interest expense 16,170 12,944 48,587 44,242 69,554
Income tax expense
(benefit) 2,018 5,802 (187) (3,028) (38,628)
Interest and
investment income (2,139) (1,366) (3,818) (1,535) (4,868)
Depreciation and
amortization 24,562 17,160 71,616 50,405 102,003
--------- --------- --------- --------- ---------
EBITDA $ 41,796 $ 37,813 $ 112,884 $ 72,092 $ 156,068
Impairments and
disposition of
assets (1) 4,631 1,744 15,423 7,242 21,024
Loss (income) from
discontinued
operations and
divested clubs (2) 3 (112) 211 (423) (120)
Loss on
extinguishment of
debt (3) - - - 31,498 -
Non-cash
adjustments (4) 463 464 1,389 1,389 2,007
Other adjustments
(5) 5,160 3,506 15,450 9,064 31,701
Equity-based
compensation
expense (6) 1,295 949 3,510 3,037 4,776
Acquisition
adjustment (7) 1,584 955 5,144 3,028 7,760
--------- --------- --------- --------- ---------
Adjusted EBITDA $ 54,932 $ 45,319 $ 154,011 $ 126,927 $ 223,216
========= ========= ========= ========= =========
(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 or income from discontinued operations and divested clubs that
do not qualify as discontinued operations.
(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
and expense recognized for our long-term incentive plan related to
fiscal years 2011 through 2013.
(5) 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, fees and expenses associated with
readiness efforts for Section 404(b) of the Sarbanes-Oxley Act and
related centralization of administrative processes, 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 12, 2015) and management fees,
termination fee and expenses paid to an affiliate of KSL.
(6) Includes equity-based compensation expense, calculated in accordance
with GAAP, related to awards held by certain employees, executives and
directors.
(7) 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 and the acquisition of
Sequoia Golf on September 30, 2014.
CLUBCORP HOLDINGS, INC.
CALCULATION OF LEVERED FREE CASH FLOW
(In thousands)
(Unaudited financial information)
Four quarters ended
-----------------------------------
September 8, 2015 September 9, 2014
(52 weeks) (53 weeks)
----------------- -----------------
Adjusted EBITDA (1) $ 223,216 $ 186,917
LESS:
Interest expense and principal
amortization on long-term debt (2) 45,078 44,370
Cash paid for income taxes 5,282 2,796
Maintenance capital expenditures 47,508 28,162
Capital lease principal & interest
expense 17,111 12,436
----------------- -----------------
Levered Free Cash Flow $ 108,237 $ 99,153
================= =================
(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 HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
For the Twelve and Thirty-Six Weeks Ended September 8, 2015 and September 9,
2014
(In thousands of dollars)
(Unaudited financial information)
Third quarter
ended Year to date ended
------------------- -------------------
September September September September
8, 9, 8, 9,
2015 2014 2015 2014
(12 (12 % (36 (36 %
weeks) weeks) Change weeks) weeks) Change
--------- --------- ---------- --------- --------- -----------
REVENUES:
Club
operations $189,705 $149,373 27.0% $526,966 $418,443 25.9%
Food and
beverage 65,102 54,684 19.1% 191,785 161,045 19.1%
Other revenues 553 418 32.3% 2,428 2,128 14.1%
-------- -------- -------- -------- -------- ---------
Total
revenues 255,360 204,475 24.9% 721,179 581,616 24.0%
DIRECT AND
SELLING,
GENERAL AND
ADMINISTRATIVE
EXPENSES:
Club operating
costs
exclusive of
depreciation 168,542 132,774 26.9% 474,774 377,204 25.9%
Cost of food
and beverage
sales
exclusive of
depreciation 23,191 18,400 26.0% 65,317 53,338 22.5%
Depreciation
and
amortization 24,562 17,160 43.1% 71,616 50,405 42.1%
Provision for
doubtful
accounts 1,373 850 61.5% 1,876 996 88.4%
Loss on
disposals of
assets 3,587 1,744 105.7% 13,309 6,347 109.7%
Impairment of
assets 1,044 - 100.0% 2,114 895 136.2%
Equity in loss
(earnings)
from
unconsolidated
ventures 479 (660) 172.6% 934 (1,493) 162.6%
Selling,
general and
administrative
15,348 13,553 13.2% 49,969 40,737 22.7%
-------- -------- -------- -------- -------- ---------
OPERATING
INCOME 17,234 20,654 (16.6)% 41,270 53,187 (22.4)%
Interest and
investment
income 2,139 1,366 56.6% 3,818 1,535 148.7%
Interest
expense (16,170) (12,944) (24.9)% (48,587) (44,242) (9.8)%
Loss on
extinguishment
of debt - - -% - (31,498) 100.0%
-------- -------- -------- -------- -------- ---------
INCOME (LOSS)
FROM
CONTINUING
OPERATIONS
BEFORE INCOME
TAXES 3,203 9,076 (64.7)% (3,499) (21,018) 83.4%
INCOME TAX
(EXPENSE)
BENEFIT (2,018) (5,802) 65.2% 187 3,028 (93.8)%
-------- -------- -------- -------- -------- ---------
INCOME (LOSS)
FROM
CONTINUING
OPERATIONS 1,185 3,274 (63.8)% (3,312) (17,990) 81.6%
Loss from
discontinued
clubs, net of
income tax
benefit - (1) 100.0% (2) (2) -%
-------- -------- -------- -------- -------- ---------
NET INCOME
(LOSS) 1,185 3,273 (63.8)% (3,314) (17,992) 81.6%
NET LOSS
(INCOME)
ATTRIBUTABLE
TO
NONCONTROLLING
INTERESTS 67 (63) 206.3% 148 (137) 208.0%
-------- -------- -------- -------- -------- ---------
NET INCOME
(LOSS)
ATTRIBUTABLE
TO CLUBCORP $ 1,252 $ 3,210 (61.0)% $ (3,166) $(18,129) 82.5%
======== ======== ======== ======== ======== =========
NET INCOME
(LOSS) $ 1,185 $ 3,273 (63.8)% $ (3,314) $(17,992) 81.6%
Foreign
currency
translation,
net of tax (2,196) (140) (1,468.6)% (3,463) 7 (49,571.4)%
-------- -------- -------- -------- -------- ---------
OTHER
COMPREHENSIVE
(LOSS) INCOME (2,196) (140) (1,468.6)% (3,463) 7 (49,571.4)%
-------- -------- -------- -------- -------- ---------
COMPREHENSIVE
(LOSS) INCOME (1,011) 3,133 (132.3)% (6,777) (17,985) 62.3%
COMPREHENSIVE
LOSS (INCOME)
ATTRIBUTABLE
TO
NONCONTROLLING
INTERESTS 67 (63) 206.3% 148 (137) 208.0%
-------- -------- -------- -------- -------- ---------
COMPREHENSIVE
(LOSS) INCOME
ATTRIBUTABLE
TO CLUBCORP $ (944) $ 3,070 (130.7)% $ (6,629) $(18,122) 63.4%
======== ======== ======== ======== ======== =========
CLUBCORP HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
As of September 8, 2015 and December 30, 2014
(In thousands of dollars, except share and per share amounts)
(Unaudited financial information)
September 8, December 30,
2015 2014
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 47,133 $ 75,047
Receivables, net of allowances 102,753 65,337
Inventories 23,667 20,931
Prepaids and other assets 16,539 15,776
Deferred tax assets, net 26,145 26,574
------------- -------------
Total current assets 216,237 203,665
Investments 4,311 5,774
Property and equipment, net 1,538,218 1,474,763
Notes receivable, net of allowances 5,908 8,262
Goodwill 312,811 312,811
Intangibles, net 32,622 34,960
Other assets 23,549 24,836
------------- -------------
TOTAL ASSETS $ 2,133,656 $ 2,065,071
============= =============
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 17,409 $ 18,025
Membership initiation deposits - current
portion 147,961 135,583
Accounts payable 32,152 31,948
Accrued expenses 40,563 44,424
Accrued taxes 24,384 21,903
Other liabilities 95,383 59,550
------------- -------------
Total current liabilities 357,852 311,433
Long-term debt 1,021,864 965,187
Membership initiation deposits 204,175 203,062
Deferred tax liability, net 238,946 244,113
Other liabilities 120,988 120,417
------------- -------------
Total liabilities 1,943,825 1,844,212
EQUITY
Common stock of ClubCorp Holdings, Inc., $0.01
par value, 200,000,000 shares authorized;
64,744,547 and 64,443,332 issued and
outstanding at September 8, 2015 and December
30, 2014, respectively 647 644
Additional paid-in capital 269,823 293,006
Accumulated other comprehensive loss (7,753) (4,290)
Retained deficit (82,609) (79,443)
------------- -------------
Total stockholders' equity 180,108 209,917
------------- -------------
Noncontrolling interests in consolidated
subsidiaries and variable interest entities 9,723 10,942
------------- -------------
Total equity 189,831 220,859
------------- -------------
TOTAL LIABILITIES AND EQUITY $ 2,133,656 $ 2,065,071
============= =============
CLUBCORP HOLDINGS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
For the Thirty-Six Weeks Ended September 8, 2015 and September 9, 2014
(In thousands of dollars)
(Unaudited financial information)
Year to date ended
----------------------------
September 8, September 9,
2015 2014
(36 weeks) (36 weeks)
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,314) $ (17,992)
Adjustments to reconcile net loss to cash
flows from operating activities:
Depreciation 69,577 50,103
Amortization 2,040 302
Asset impairments 2,114 895
Bad debt expense 1,937 1,012
Equity in loss (earnings) from
unconsolidated ventures 934 (1,493)
Gain on investment in unconsolidated
ventures (3,507) (1,276)
Distribution from investment in
unconsolidated ventures 4,035 4,290
Loss on disposals of assets 13,309 6,343
Debt issuance costs and amortization of
term loan discount 3,284 5,784
Accretion of discount on member deposits 14,063 14,211
Amortization of above and below market
rent intangibles (245) (236)
Equity-based compensation 3,510 3,037
Redemption premium payment included in
loss on extinguishment of debt - 27,452
Net change in deferred tax assets and
liabilities (4,738) (8,098)
Net change in prepaid expenses and other
assets (3,206) (4,390)
Net change in receivables and membership
notes (29,269) 3,462
Net change in accounts payable and accrued
liabilities (1,967) (8,204)
Net change in other current liabilities 34,555 (443)
Net change in other long-term liabilities (4,498) 3,594
------------- -------------
Net cash provided by operating
activities 98,614 78,353
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (76,110) (55,087)
Acquisition of clubs (55,877) (17,187)
Acquisition of Sequoia Golf (escrow
deposit) - (10,000)
Proceeds from dispositions 578 314
Net change in restricted cash and capital
reserve funds (63) (287)
Return of capital in equity investments - 126
------------- -------------
Net cash used in investing activities (131,472) (82,121)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (12,046) (278,668)
Proceeds from new debt borrowings, net of
loan discount - 348,250
Repayments of revolving credit facility
borrowings (10,000) (11,200)
Proceeds from revolving credit facility
borrowings 57,000 11,200
Redemption premium payment - (27,452)
Debt issuance and modification costs (1,493) (2,930)
Distribution to owners (25,183) (22,980)
Share repurchases for tax withholdings
related to certain equity-based awards (1,443) -
Distributions to noncontrolling interest (1,071) -
Proceeds from new membership initiation
deposits 520 635
Repayments of membership initiation
deposits (1,078) (1,075)
------------- -------------
Net cash provided by financing
activities 5,206 15,780
------------- -------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (262) 8
------------- -------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (27,914) 12,020
CASH AND CASH EQUIVALENTS - BEGINNING OF
PERIOD 75,047 53,781
------------- -------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 47,133 $ 65,801
============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 31,432 $ 28,683
============= =============
Cash paid for income taxes $ 4,515 $ 1,956
============= =============
Non-cash investing and financing activities
are as follows:
Capital lease $ 20,881 $ 14,057
Image Available: http://www.marketwire.com/library/MwGo/2015/10/14/11G067522/Images/The-Woodlands-Golf-293196836736.jpg
Patty Jerde
Communications Manager
972-888-7790
Frank Molina
Vice President, Investor Relations and Treasury
972-888-6206
ClubCorp Holdings Inc.
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