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TWC Enterprises Limited Announces Third Quarter 2019 Results and Eligible Cash Dividend

KING CITY, Ontario, Nov. 04, 2019 (GLOBE NEWSWIRE) --

Consolidated Financial Highlights (unaudited)

(in thousands of dollars except per share
 amounts)
Three months ended Nine months ended
September 30,
2019
September 30,
2018
September 30,
2019
September 30,
2018
Net earnings (continuing) 7,322 8,846 45 5,770
Net earnings (discontinued operations) - 211,587 - 214,434
Net earnings 7,322 220,433 45 220,204
Basic and diluted earnings per share (continuing) 0.27 0.32 0.00 0.21
Basic and diluted earnings per share
(discontinued operations)
- 7.74 - 7.84
Basic and diluted earnings per share 0.27 8.06 0.00 8.05

Operating Data

  Three months ended Nine months ended
  September 30,
 2019
September 30,
 2018
September 30,
 2019
September 30,
 2018
ClubLink
Canadian Full Privilege Golf Members     14,755 15,588
Championship rounds – Canada 607,000 558,000 954,000 926,000
18-hole equivalent championship golf courses – Canada     41.5 42.5
18-hole equivalent managed championship golf courses – Canada     1.0  
Championship rounds – U.S. 43,000 44,000 254,000 252,000
18-hole equivalent championship golf courses – U.S.     11.0 11.0


The following is a breakdown of net operating income by segment: 

  For the three months ended
(thousands of Canadian dollars)  September 30, 2019 September 30, 2018
       
Net operating income (loss) by segment    
Canadian golf club operations $   17,346 $   16,913
US golf club operations    
 (2019 - US loss $930,000; 2018 - US loss $926,000)   (1,231)   (1,210)
 Corporate operations   (939)   (940)
       
Net operating income (1)   $   15,176 $   14,763

 


    For the nine months ended
(thousands of Canadian dollars)  September 30, 2019 September 30, 2018
       
Net operating income (loss) by segment    
Canadian golf club operations $   25,668 $   27,878
US golf club operations    
 (2019 - US $828,000; 2018 - US $158,000)   1,106   147
 Corporate operations   (2,673)   (2,472)
       
Net operating income (1)   $   24,101 $   25,553


The following is an analysis of net earnings:

  For the three months ended
(thousands of Canadian dollars) September 30 2019,   September 30, 2018
 
     
Operating revenue $ 65,260   $ 65,351  
Direct operating expenses (1)   50,084     50,588  
Net operating income (1)   15,176     14,763  
Amortization of membership fees   1,480     1,807  
Depreciation and amortization   (4,993 )   (4,040 )
Land lease rent   -     (1,097 )
Interest, net and investment income   (1,317 )   (2,522 )
Other items   357     3,169  
Income taxes   (3,381 )   (3,234 )
Net earnings (continuing)   7,322     8,846  
Net earnings (discontinued operations)   -     211,587  
Net earnings $ 7,322   $ 220,433  

 

  For the nine months ended
(thousands of Canadian dollars) September 30, 2019
  September 30, 2018
 
     
Operating revenue $ 134,496   $ 136,906  
Direct operating expenses (1)   110,395     111,353  
Net operating income (1)   24,101     25,553  
Amortization of membership fees   4,033     5,145  
Depreciation and amortization   (15,177 )   (12,153 )
Land lease rent   -     (3,292 )
Interest, net and investment income   (4,126 )   (10,030 )
Other items   (7,594 )   3,105  
Income taxes   (1,192 )   (2,558 )
Net earnings (continuing)   45     5,770  
Net earnings (discontinued operations)   -     214,434  
Net earnings $ 45   $ 220,204  
     

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. 

Third Quarter 2019 Consolidated Operating Highlights

On June 6, 2018, TWC announced that it entered into a purchase and sale agreement to sell the White Pass rail and port operations to a joint venture for proceeds of US$290,000,000. Closing on July 31, 2018, the transaction represented a sale of the complete operations of White Pass. Consequently, this segment is being presented as discontinued operations in the financial statements.

On December 14, 2018, the Company sold Club de Golf Le Fontainebleau to the shareholders of Club de Golf Rosemère for net proceeds of $8,589,000. ClubLink retains a management fee arrangement of Fontainebleau. This sale has resulted in a decrease of 458 members.

As of January 1, 2019, the Company adopted IFRS 16, Leases. As part of this guidance, land lease rent for operating leases will no longer be expensed directly. Instead, these leases are set up on the balance sheet and right-of-use depreciation expense and interest expense is reflected instead.

Consolidated operating revenue decreased 0.1% to $65,260,000 for the three month period ended September 30, 2019 from $65,351,000 in 2018.

Direct operating expenses decreased 1.0% to $50,084,000 for the three month period ended September 30, 2019 from $50,588,000 in 2018.

Net operating income increased 2.8% to $15,176,000 for the three month period ended September 30, 2019 from $14,763,000 in 2018 due to improvements in golf net operating income resulting from higher guest and green fee revenue for the quarter.

Amortization of membership fees decreased 18.1% to $1,480,000 from $1,807,000 in 2018.

Interest, net and investment income decreased 47.8% to an expense of $1,317,000 for the three month period ended September 30, 2019 from $2,522,000 in 2018 due to interest income earned on funds from the sale of White Pass and a decrease in borrowings.

Other items have decreased to income of $357,000 for the three month period ended September 30, 2019 from income of $3,169,000 in 2018 due to insurance proceeds received in 2018 for the insurance claim relating to the clubhouse at Le Maître.

Net earnings decreased to $7,322,000 for the three month period ended September 30, 2019 from earnings of $220,433,000 in 2018 due to the disposition of White Pass. Basic and diluted loss per share changed to 27 cents per share in 2019, compared to basic and diluted earnings per share of $8.06 in 2018.

Eligible Dividend

Today, TWC Enterprises Limited announced an eligible cash dividend of 2 cents per common share to be paid on December 13, 2019 to shareholders of record as at November 29, 2019.

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 53.5 18-hole equivalent championship and 3.5 18-hole equivalent academy courses (including one managed property) at 41 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