KING CITY, Ontario, Aug. 04, 2022 (GLOBE NEWSWIRE) --
Consolidated Financial Highlights (unaudited)
| (in thousands of dollars except per share amounts) | Three months ended | Six months ended | ||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |
| Net earnings | 3,594 | 4,472 | 2,501 | 4,927 |
| Basic and diluted earnings per share | 0.15 | 0.18 | 0.10 | 0.20 |
Operating Data
| Three months ended | Six months ended | |||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |
| Canadian Full Privilege Golf Members | 15,583 | 15,097 | ||
| Championship rounds – Canada | 444,000 | 362,000 | 444,000 | 362,000 |
| 18-hole equivalent championship golf courses – Canada | 37.5 | 39.5 | ||
| 18-hole equivalent managed championship golf courses – Canada | 2.0 | 2.0 | ||
| Championship rounds – U.S. | 55,000 | 63,000 | 167,000 | 156,000 |
| 18-hole equivalent championship golf courses – U.S. | 8.0 | 8.0 | ||
The following is an analysis of net earnings:
| For the three months ended | ||||||
| (thousands of Canadian dollars) | June 30, 2022 | June 30, 2021 | ||||
| Operating revenue | $ | 52,736 | $ | 34,059 | ||
| Direct operating expenses (1) | 39,569 | 25,023 | ||||
| Net operating income (1) | 13,167 | 9,036 | ||||
| Amortization of membership fees | 1,081 | 1,037 | ||||
| Depreciation and amortization | (4,458 | ) | (4,788 | ) | ||
| Interest, net and investment income | 422 | (384 | ) | |||
| Other items | (3,582 | ) | (303 | ) | ||
| Income taxes | (3,036 | ) | (126 | ) | ||
| Net earnings | $ | 3,594 | $ | 4,472 | ||
| For the six months ended | ||||||
| (thousands of Canadian dollars) | June 30, 2022 | June 30, 2021 | ||||
| Operating revenue | $ | 90,668 | $ | 48,168 | ||
| Direct operating expenses (1) | 72,523 | 41,389 | ||||
| Net operating income (1) | 18,145 | 6,779 | ||||
| Amortization of membership fees | 2,020 | 1,995 | ||||
| Depreciation and amortization | (8,882 | ) | (9,543 | ) | ||
| Interest, net and investment income | 698 | (820 | ) | |||
| Other items | (6,152 | ) | 5,337 | |||
| Income taxes | (3,328 | ) | 1,179 | |||
| Net earnings | $ | 2,501 | $ | 4,927 | ||
The following is a breakdown of net operating income (loss) by segment:
| For the three months ended | ||||||
| (thousands of Canadian dollars) | June 30, 2022 | June 30, 2021 | ||||
| Net operating income (loss) by segment | ||||||
| Canadian golf club operations | $ | 12,675 | $ | 9,065 | ||
| US golf club operations (2022 - US $421,000; 2021 - US $585,000) | 529 | 723 | ||||
| Corporate and other | (37 | ) | (752 | ) | ||
| Net operating income (1) | $ | 13,167 | $ | 9,036 | ||
| For the six months ended | ||||||
| (thousands of Canadian dollars) | June 30, 2022 | June 30, 2021 | ||||
| Net operating income (loss) by segment | ||||||
| Canadian golf club operations | $ | 16,583 | $ | 6,178 | ||
| US golf club operations (2022 - US $2,857,000; 2021 - US $1,716,000) | 3,613 | 2,156 | ||||
| Corporate and other | (2,051 | ) | (1,555 | ) | ||
| Net operating income (1) | $ | 18,145 | $ | 6,779 | ||
Operating revenue is calculated as follows:
| For the three months ended | ||||||
| (thousands of Canadian dollars) | June 30, 2022 | June 30, 2021 | ||||
| Annual dues | $ | 17,286 | $ | 13,992 | ||
| Golf | 13,842 | 12,299 | ||||
| Corporate events | 2,573 | 426 | ||||
| Food and beverage | 10,382 | 3,577 | ||||
| Merchandise | 4,301 | 2,945 | ||||
| Real estate | 3,037 | - | ||||
| Rooms and other | 1,315 | 820 | ||||
| Operating Revenue | $ | 52,736 | $ | 34,059 | ||
| For the six months ended | ||||||
| (thousands of Canadian dollars) | June 30, 2022 | June 30, 2021 | ||||
| Annual dues | $ | 34,088 | $ | 21,934 | ||
| Golf | 19,680 | 16,489 | ||||
| Corporate events | 2,597 | 497 | ||||
| Food and beverage | 11,325 | 4,150 | ||||
| Merchandise | 5,521 | 4,008 | ||||
| Real estate | 15,811 | - | ||||
| Rooms and other | 1,646 | 1,090 | ||||
| Operating revenue | $ | 90,668 | $ | 48,168 | ||
Direct operating expenses are calculated as follows:
| For the three months ended | ||||||
| (thousands of Canadian dollars) | June 30, 2022 | June 30, 2021 | ||||
| Operating cost of sales | $ | 5,974 | $ | 3,350 | ||
| Real estate cost of sales | 2,370 | - | ||||
| Labour and employee benefits | 18,822 | 11,568 | ||||
| Utilities | 1,966 | 1,716 | ||||
| Selling, general and administrative expenses | 1,460 | 1,312 | ||||
| Property taxes | 695 | 724 | ||||
| Repairs and maintenance | 1,556 | 1,253 | ||||
| Insurance | 903 | 802 | ||||
| Turf operating expenses | 2,108 | 1,883 | ||||
| Fuel and oil | 621 | 335 | ||||
| Other operating expenses | 3,094 | 2,080 | ||||
| Direct Operating Expenses (1) | $ | 39,569 | $ | 25,023 | ||
| For the six months ended | ||||||
| (thousands of Canadian dollars) | June 30, 2022 | June 30, 2021 | ||||
| Operating cost of sales | $ | 7,302 | $ | 4,303 | ||
| Real estate cost of sales | 16,394 | - | ||||
| Labour and employee benefits | 27,498 | 19,392 | ||||
| Utilities | 3,640 | 3,171 | ||||
| Selling, general and administrative expenses | 2,884 | 2,402 | ||||
| Property taxes | 2,335 | 2,652 | ||||
| Repairs and maintenance | 1,781 | 1,602 | ||||
| Insurance | 2,626 | 1,974 | ||||
| Turf operating expenses | 2,358 | 1,980 | ||||
| Fuel and oil | 735 | 418 | ||||
| Other operating expenses | 4,970 | 3,495 | ||||
| Direct Operating Expenses (1) | $ | 72,523 | $ | 41,389 | ||
(1) Please see Non-IFRS Measures
Second Quarter 2022 Consolidated Operating Highlights
As required by IFRS, ClubLink recognizes its annual dues revenue on a straight-line basis throughout the year based on when its properties are allowed to open and services are provided. As a result of COVID-19 lockdowns in 2021, annual dues revenue was not recognized during certain periods. There were 56 days in the second quarter of 2021 that ClubLink was allowed to operate in Ontario. There have been no COVID-19 lockdowns to date in 2022. Canadian annual dues revenue increased 24.7% to $15,649,000 for the three month period ended June 30, 2022 from $12,547,000 in 2021 due to this policy and the increase in members. This deferral in 2021 was recognized into revenue throughout the remainder of the year on a straight-line basis.
Operating revenue increased 54.8% to $52,736,000 for the three month period ended June 30, 2022 from $34,059,000 in 2021 due to closures in 2021 as a result of COVID-19 lockdowns and less COVID-19 operating restrictions in 2022, allowing the Company to operate on a more normal pace.
Direct operating expenses increased 58.1% to $39,569,000 for the three month period ended June 30, 2022 from $25,023,000 in 2021 due to the fact that certain activities were reduced in 2021 due to lockdowns and restrictions. High inflation is also impacting most expense categories.
Net operating income for the Canadian golf club operations segment increased to $12,675,000 for the three month period ended June 30, 2022 from $9,065,000 in 2021 due to the change in annual dues revenue described above.
Net operating income for the US golf club operations decreased to US$421,000 for the three month period ended June 30, 2022 from US$585,000 in 2021 due to decreased rounds.
Interest, net and investment income increased to income of $422,000 for the three month period ended June 30, 2022 from an expense of $384,000 in 2021 due to a decrease in borrowings and an increase in distributions from the Company’s investment in Automotive Properties REIT.
Other items consist of the following income (loss) items:
| For the three months ended | ||||||
| June 30, 2022 | June 30, 2021 | |||||
| Unrealized foreign exchange gain (loss) | $ | 481 | $ | (432 | ) | |
| Unrealized gain (loss) on investment in marketable securities | (8,366 | ) | 6,808 | |||
| Gain on real estate fund investments | 4,370 | - | ||||
| Insurance proceeds | - | 2,603 | ||||
| Equity income (loss) from investments in joint ventures | (62 | ) | 404 | |||
| Glen Abbey redevelopment charge | - | (9,500 | ) | |||
| Other | (5 | ) | (186 | ) | ||
| Other items | $ | (3,582 | ) | $ | (303 | ) |
The exchange rate used for translating US denominated assets has changed from 1.2496 at March 31, 2022 to 1.2886 at June 30, 2022. This has resulted in a foreign exchange gain of $481,000 for the three month period ended June 30, 2022 on the translation of the Company’s US denominated financial instruments.
Net earnings decreased to $3,594,000 for the three month period ended June 30, 2022 from $4,472,000 in 2021 due to an unrealized loss on the Company’s investment in Automotive Properties REIT. Basic and diluted earnings per share decreased to 15 cents per share in 2022, compared to basic and diluted earnings per share of 18 cents in 2021.
Non-IFRS Measures
TWC uses non-IFRS measures as a benchmark measurement of our own operating results and as a benchmark relative to our competitors. We consider these non-IFRS measures to be a meaningful supplement to net earnings. We also believe these non-IFRS measures are commonly used by securities analysts, investors and other interested parties to evaluate our financial performance. These measures, which included direct operating expenses and net operating income do not have standardized meaning under IFRS. While these non-IFRS measures have been disclosed herein to permit a more complete comparative analysis of the Company’s operating performance and debt servicing ability relative to other companies, readers are cautioned that these non-IFRS measures as reported by TWC may not be comparable in all instances to non-IFRS measures as reported by other companies.
The glossary of financial terms is as follows:
Direct operating expenses = expenses that are directly attributable to company’s business units and are used by management in the assessment of their performance. These exclude expenses which are attributable to major corporate decisions such as impairment.
Net operating income = operating revenue – direct operating expenses
Net operating income is an important metric used by management in evaluating the Company’s operating performance as it represents the revenue and expense items that can be directly attributable to the specific business unit’s ongoing operations. It is not a measure of financial performance under IFRS and should not be considered as an alternative to measures of performance under IFRS. The most directly comparable measure specified under IFRS is net earnings.
Eligible Dividend
Today, TWC Enterprises Limited announced an eligible cash dividend of 5 cents per common share to be paid on September 15, 2022 to shareholders of record as at August 31, 2022. This is an increase from 2 cents per common share.
Corporate Profile
TWC is engaged in golf club operations under the trademark, “ClubLink One Membership More Golf.” TWC is Canada’s largest owner, operator and manager of golf clubs with 47.5 18-hole equivalent championship and 2.5 18-hole equivalent academy courses (including two managed properties) at 36 locations in Ontario, Quebec and Florida.
For further information please contact:
Andrew Tamlin
Chief Financial Officer
15675 Dufferin Street
King City, Ontario L7B 1K5
Tel: 905-841-5372 Fax: 905-841-8488
atamlin@clublink.ca
Management’s discussion and analysis, financial statements and other disclosure information relating to the Company is available through SEDAR and at www.sedar.com and on the Company website at www.twcenterprises.ca
