KING CITY, ONTARIO–(Marketwired – May 4, 2017) – TWC Enterprises Limited (TSX:TWC) –
Consolidated Financial Highlights (unaudited)
| (in thousands of dollars except per share amounts) | Three months ended | |
| March 31, 2017 |
March 31, 2016 |
|
| Net loss | (3,608) | (5,720) |
| Basic and diluted loss per share | (0.13) | (0.21) |
Operating Data
| Three months ended | ||
| March 31, 2017 |
March 31, 2016 |
|
| ClubLink | ||
| Canadian Full Privilege Golf Members | 14,907 | 14,739 |
| Championship rounds – Canada | 3,000 | 3,000 |
| 18-hole equivalent championship golf courses – Canada | 42.5 | 42.5 |
| Championship rounds – U.S. | 144,000 | 146,000 |
| 18-hole equivalent championship golf courses – U.S. | 11.0 | 12.0 |
| White Pass and Yukon Route | ||
| Rail passengers | Nil | Nil |
| Port passengers from cruise ships | Nil | Nil |
| Cruise ship dockings | Nil | Nil |
The following is a breakdown of net operating income by segment.
| For the three months ended | |||||||||
| (thousands of Canadian dollars) | March 31, 2017 | March 31, 2016 | |||||||
| Net operating income by segment | |||||||||
| Canadian golf club operations | $ | 2,397 | $ | 2,923 | |||||
| US golf club operations | |||||||||
| (2017 – US $1,926,000; 2016 – US $1,708,000) | 2,548 | 2,349 | |||||||
| Rail and port operations | |||||||||
| (2017 – US -$2,601,000; 2016 – US -$2,509,000) | (3,442 | ) | (3,449 | ) | |||||
| Corporate operations | (745 | ) | (694 | ) | |||||
| Net operating income (1) | $ | 758 | $ | 1,129 | |||||
The following is an analysis of net loss:
| For the three months ended | ||||||||
| (thousands of Canadian dollars) | March 31, 2017 | March 31, 2016 | ||||||
| Operating revenue | $ | 24,109 | $ | 24,622 | ||||
| Direct operating expenses (1) | 23,351 | 23,493 | ||||||
| Net operating income (1) | 758 | 1,129 | ||||||
| Amortization of membership fees | 1,927 | 2,741 | ||||||
| Depreciation and amortization | (6,514 | ) | (6,714 | ) | ||||
| Land lease rent | (1,304 | ) | (1,329 | ) | ||||
| Interest, net | (4,078 | ) | (4,605 | ) | ||||
| Real estate gain | 2,104 | – | ||||||
| Other expenses | 8 | (118 | ) | |||||
| Income taxes | 3,491 | 3,176 | ||||||
| Net loss | $ | (3,608 | ) | $ | (5,720 | ) | ||
Direct operating expenses are calculated as follows:
| For the three months ended | ||||||
| (thousands of Canadian dollars) | March 31, 2017 | March 31, 2016 | ||||
| Cost of sales | $ | 1,270 | $ | 1,139 | ||
| Labour and employee benefits | 10,968 | 11,192 | ||||
| Utilities | 1,959 | 1,902 | ||||
| Selling, general and administrative expenses | 1,732 | 1,434 | ||||
| Property taxes | 2,738 | 2,864 | ||||
| Repairs and maintenance | 877 | 885 | ||||
| Insurance | 1,076 | 1,167 | ||||
| Fertilizers and pest control products | 203 | 217 | ||||
| Fuel and oil | 130 | 122 | ||||
| Other operating expenses | 2,398 | 2,571 | ||||
| Direct operating expenses (1) | $ | 23,351 | $ | 23,493 | ||
(1) Please see Non-IFRS Measures on page following
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.
First Quarter 2017 Consolidated Operating Highlights
Net loss decreased to $3,608,000 for the three month period ended March 31, 2017 from $5,720,000 in 2016 primarily due to a $2,104,000 gain on the sale of Grandview Resort.
Basic and diluted loss per share was 13 cents per share for the three month period ended March 31, 2017, compared to a loss of 21 cents per share in 2016.
The exchange rate used for translating US denominated earnings has changed 3.8% to a quarterly average of 1.3230 for the three months ended March 31, 2017 from 1.3748 for the three month period ended March 31, 2016 due to the improvement in the Canadian dollar over the one year period.
Consolidated operating revenue decreased 2.1% to $24,109,000 for the three month period ended March 31, 2017 from $24,622,000 in 2016, due in part to the stronger Canadian dollar used to translate the US based revenue.
Consolidated operating expenses decreased 0.6% to $23,351,000 for the three month period ended March 31, 2017 from $23,493,000 in 2016.
Net operating income for the Canadian golf club operations segment decreased 18.0% to $2,397,000 in 2017 from $2,923,000 in 2016.
Net operating income for US golf club operations segment increased 12.8% to US $1,926,000 in 2017 from US $1,708,000 in 2016.
Net operating loss for the rail and port operations increased 3.7% to US$2,601,000 from US$2,509,000 in 2016.
Consolidated net operating income decreased 32.9% to $758,000 for the three month period ended March 31, 2017 from $1,129,000 in 2016.
Amortization of membership fees decreased 29.7% to $1,927,000 from $2,741,000 in 2016 due to the completion of the amortization periods of revenue for members that joined in 2003 and 2005. This was completed in 2016.
Interest, net decreased 11.4% to $4,078,000 for the three month period ended March 31, 2017 from $4,605,000 in 2016 due primarily to a 6.8% decline in borrowings year over year.
On January 25, 2017, ClubLink sold the property that was formerly known as Grandview Resort in Huntsville, Ontario for net proceeds of $5,074,000. A gain of $2,104,000 was recognized for this sale.
Eligible Dividend
Today, TWC Enterprises Limited announced an eligible cash dividend of 2 cents per share to be paid on June 15, 2017 to shareholders of record as at May 31, 2017.
Corporate Profile
TWC is engaged in golf club operations under the trademark, “ClubLink One Membership More Golf.” TWC is Canada’s largest owner and operator of golf clubs with 53.5 18-hole equivalent championship and 3.5 18-hole equivalent academy courses at 41 locations in Ontario, Quebec and Florida.
TWC is also engaged in rail and port operations based in Skagway, Alaska, which operate under the trade name “White Pass & Yukon Route.” The railway stretches approximately 110 kilometres (67.5 miles) from Skagway, Alaska, to Carcross, Yukon. In addition, White Pass operates three docks, primarily for cruise ships.
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.
Chief Financial Officer
Tel: 905-841-5372
Fax: 905-841-8488
atamlin@clublink.ca