Le Lézard
Classified in: Tourism and vacations, Business, Covid-19 virus
Subjects: EARNINGS, SPORTS

TWC Enterprises Limited Announces Third Quarter 2022 Results and Eligible Dividend


KING CITY, Ontario, Oct. 31, 2022 (GLOBE NEWSWIRE) --


Consolidated Financial Highlights (unaudited)

(in thousands of dollars except per share
amounts)		Three months endedNine months ended
September 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
Net earnings11,92022,75714,42127,684
Basic and diluted earnings per share0.490.930.591.12


Operating Data

 Three months endedNine months ended
 September 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
Canadian Full Privilege Golf Members  16,01415,714
Championship rounds ? Canada583,000631,0001,027,000993,000
18-hole equivalent championship golf courses ? Canada  37.539.5
18-hole equivalent managed championship golf courses ? Canada  2.02.0
Championship rounds ? U.S.32,00037,000199,000193,000
18-hole equivalent championship golf courses ? U.S.  8.08.0


The following is an analysis of net earnings:

  For the three months ended
(thousands of Canadian dollars) September 30, 2022September 30, 2021
Operating revenue $ 65,009 $63,245 
Direct operating expenses (1)  42,687  36,292 
Net operating income (1)  22,322  26,953 
Amortization of membership fees  1,329  1,324 
Depreciation and amortization  (4,493) (4,712)
Interest, net and investment income  (1,510) (263)
Other items  (1,517) 5,109 
Income taxes  (4,211) (5,654)
Net earnings $ 11,920 $22,757 


  For the nine months ended
(thousands of Canadian dollars) September 30, 2022September 30, 2021
Operating revenue $ 155,677 $111,413 
Direct operating expenses (1)  115,210  77,681 
Net operating income (1)  40,467  33,732 
Amortization of membership fees  3,349  3,319 
Depreciation and amortization  (13,375) (14,255)
Interest, net and investment income  (812) (1,083)
Other items  (7,669) 10,446 
Income taxes  (7,539) (4,475)
Net earnings $ 14,421 $27,684 


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

  For the three months ended
(thousands of Canadian dollars) September 30, 2022September 30, 2021
Net operating income (loss) by segment   
Canadian golf club operations $ 23,626 $28,016 
US golf club operations   
(2022 - US loss $375,000; 2021 - US loss $294,000)  (493) (370)
Corporate and other  (811) (693)
Net operating income (1) $ 22,322 $26,953 


  For the nine months ended
(thousands of Canadian dollars) September 30, 2022September 30, 2021
Net operating income (loss) by segment   
Canadian golf club operations $ 40,209 $34,194 
US golf club operations   
(2022 - US $2,482,000; 2021 - US $1,422,000)  3,120  1,786 
Corporate and other  (2,862) (2,248)
Net operating income (1)  $ 40,467 $33,732 


Operating revenue is calculated as follows:

  For the three months ended
(thousands of Canadian dollars) September 30, 2022September 30, 2021
Annual dues $ 16,967 $19,598 
Golf  17,965  21,161 
Corporate events  4,855  2,347 
Food and beverage  16,035  12,134 
Merchandise  5,760  4,799 
Rooms and other  3,427  3,206 
Operating revenue $ 65,009 $63,245 


  For the nine months ended
(thousands of Canadian dollars) September 30, 2022September 30, 2021
Annual dues $ 51,055 $41,532 
Golf  37,645  37,650 
Corporate events  7,452  2,844 
Food and beverage  27,360  16,284 
Merchandise  11,281  8,807 
Real estate  15,811  - 
Rooms and other  5,073  4,296 
Operating revenue $ 155,677 $111,413 


Direct operating expenses are calculated as follows:

  For the three months ended 
(thousands of Canadian dollars) September 30, 2022September 30, 2021 
Operating cost of sales $ 8,868 $7,242 
Labour and employee benefits  22,092  18,881 
Utilities  2,506  2,059 
Selling, general and administrative expenses  1,382  1,092 
Property taxes  441  206 
Repairs and maintenance  924  768 
Insurance  1,252  1,116 
Turf operating expenses  1,159  1,178 
Fuel and oil  681  511 
Other operating expenses  3,382  3,239 
        
Direct Operating Expenses (1) $ 42,687 $36,292 


  For the nine months ended 
(thousands of Canadian dollars) September 30, 2022September 30, 2021 
Operating cost of sales $ 16,170 $11,545 
Real estate cost of sales  16,394  - 
Labour and employee benefits  49,590  38,273 
Utilities  6,146  5,230 
Selling, general and administrative expenses  4,266  3,494 
Property taxes  2,776  2,858 
Repairs and maintenance  2,705  2,370 
Insurance  3,878  3,090 
Turf operating expenses  3,517  3,158 
Fuel and oil  1,416  929 
Other operating expenses  8,352  6,734 
     
Direct Operating Expenses (1) $ 115,210 $77,681 

(1) Please see Non-IFRS Measures

Third 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 no COVID-19 lockdowns in the third quarter of 2021. There have been no COVID-19 lockdowns to date in 2022. Canadian annual dues revenue decreased 15.5% to $15,317,000 for the three month period ended September 30, 2022 from $18,133,000 in 2021. Due to this policy, the deferral of 2021 annual dues from lockdowns during the first six months were recognized into revenue throughout the third and fourth quarter on a straight-line basis.

Operating revenue increased 2.8% to $65,009,000 for the three month period ended September 30, 2022 from $63,245,000 in 2021 due to less COVID-19 operating restrictions in 2022, allowing the Company to operate on a more normal pace. This was offset by the decline in annual dues revenue as described above and the fact that ClubLink has not operated the Bond Head property in 2022.

Direct operating expenses increased 17.6% to $42,687,000 for the three month period ended September 30, 2022 from $36,292,000 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 decreased to $23,626,000 for the three month period ended September 30, 2022 from $28,016,000 in 2021 due to the change in annual dues revenue described above.

Interest, net and investment income increased to an expense of $1,510,000 for the three month period ended September 30, 2022 from an expense of $263,000 in 2021 due to a decrease in borrowings and an increase in distributions from the Company's investment in Automotive Properties REIT. The Company paid off certain non-revolving mortgages in advance of their due dates resulting in an expense of $2,604,000 which includes prepayment penalties and other costs.

Other items consist of the following income (loss) items:

 For the three months ended
 September 30, 2022September 30, 2021
   
Unrealized foreign exchange gain (loss)$ (440)$708 
Unrealized gain (loss) on investment in marketable securities (1,915) 2,067 
Insurance proceeds 220  - 
Equity income (loss) from investments in joint ventures 623  (340)
Glen Abbey redevelopment charge -  (189)
Impairment reversal (Heron Bay) -  2,628 
Other (5) 235 
   
Other items$ (1,517)$5,109 

The exchange rate used for translating US denominated assets has changed from 1.2886 at June 30, 2022 to 1.3707 at September 30, 2022. This has resulted in a foreign exchange loss of $440,000 for the three month period ended September 30, 2022 on the translation of the Company's US denominated financial instruments.

Net earnings decreased to $14,421,000 for the three month period ended September 30, 2022 from $22,757,000 in 2021 due to a $6,626,000 change in other items as analyzed above. Basic and diluted earnings per share decreased to 49 cents per share in 2022, compared to basic and diluted earnings per share of 93 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 December 15, 2022 to shareholders of record as at November 30, 2022.

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
[email protected]

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        



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