KING CITY, Ontario, March 02, 2023 (GLOBE NEWSWIRE) --
Consolidated Financial Highlights
| (in thousands of dollars except per share amounts) | Three months ended | Year ended | ||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | |
| Net earnings | 4,245 | 61,963 | 18,666 | 89,647 |
| Basic and diluted earnings per share | 0.17 | 2.52 | 0.76 | 3.64 |
Operating Data
| Three months ended | Year ended | |||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | |
| Canadian Full Privilege Golf Members | 15,417 | 15,545 | ||
| Championship rounds – Canada | 150,000 | 198,000 | 1,177,000 | 1,191,000 |
| 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. | 70,000 | 68,000 | 269,000 | 261,000 |
| 18-hole equivalent championship golf courses – U.S. | 8.0 | 8.0 | ||
The following is an analysis of net earnings:
| Year Ended | Year Ended | ||||||
| (thousands of Canadian dollars) | December 31, 2022 | December 31, 2021 | |||||
| Operating revenue | $ | 186,512 | $ | 174,013 | |||
| Direct operating expenses (1) | 137,936 | 121,601 | |||||
| Net operating income (1) | 48,576 | 52,412 | |||||
| Amortization of membership fees | 4,294 | 4,404 | |||||
| Depreciation and amortization | (17,856 | ) | (19,440 | ) | |||
| Interest, net and investment income | 806 | (1,204 | ) | ||||
| Other items | (7,998 | ) | 74,763 | ||||
| Income taxes | (9,156 | ) | (21,288 | ) | |||
| Net earnings | $ | 18,666 | $ | 89,647 | |||
The following is a breakdown of net operating income (loss) by segment:
| Year Ended | Year Ended | ||||||
| (thousands of Canadian dollars) | December 31, 2022 | December 31, 2021 | |||||
| Net operating income (loss) by segment | |||||||
| Canadian golf club operations | $ | 48,521 | $ | 54,660 | |||
| US golf club operations | |||||||
| (2022 - US $2,940,000; 2021 - US $1,854,000) | 3,742 | 2,354 | |||||
| Corporate and other - including Highland Gate | (3,687 | ) | (4,602 | ) | |||
| Net operating income (1) | $ | 48,576 | $ | 52,412 | |||
Operating revenue is calculated as follows:
| Year Ended | Year Ended | ||||||
| (thousands of Canadian dollars) | December 31, 2022 | December 31, 2021 | |||||
| Annual dues | $ | 68,105 | $ | 62,460 | |||
| Golf | 44,594 | 45,599 | |||||
| Corporate events | 7,850 | 3,542 | |||||
| Food and beverage | 31,057 | 19,400 | |||||
| Merchandise | 13,547 | 11,647 | |||||
| Real estate sales | 15,811 | 26,572 | |||||
| Rooms and other | 5,548 | 4,793 | |||||
| $ | 186,512 | $ | 174,013 | ||||
Direct operating expenses are calculated as follows:
| Year Ended | Year Ended | ||||||
| (thousands of Canadian dollars) | December 31, 2022 | December 31, 2021 | |||||
| Operating cost of sales | $ | 18,686 | $ | 14,543 | |||
| Real estate cost of sales | 16,394 | 28,338 | |||||
| Labour and employee benefits | 60,927 | 44,387 | |||||
| Utilities | 7,707 | 5,908 | |||||
| Selling, general and administrative expenses | 5,616 | 4,574 | |||||
| Property taxes | 3,116 | 2,251 | |||||
| Repairs and maintenance | 5,150 | 4,051 | |||||
| Insurance | 3,650 | 3,103 | |||||
| Turf operating expenses | 4,312 | 3,953 | |||||
| Fuel and oil | 1,746 | 1,233 | |||||
| Other operating expenses | 10,632 | 9,260 | |||||
| Direct Operating Expenses (1) | $ | 137,936 | $ | 121,601 | |||
(1) Please see Non-IFRS Measures on following page
2022 Consolidated Highlights
Operating revenue increased 7.2% to $186,512,000 in 2022 from $174,013,000 in 2021 due to less COVID-19 operating restrictions in 2022, allowing the Company to operate on a more normal pace. Canadian annual dues revenue increased to $61,521,000 in 2022 from $56,508,000 in 2021 due to an increase in members. This was offset by the fact that ClubLink did not operate the 36 hole Bond Head leased property in 2022.
Direct operating expenses increased 13.4% to $137,936,000 in 2022 from $121,601,000 in 2021 due to the fact that certain activities were reduced in 2021 due to lockdowns and restrictions. Revenue has been more normalized in 2022 and so have expenses. Higher than normal inflation is also impacting most expense categories.
Net operating income for the Canadian golf club operations segment decreased 11.2% to $48,521,000 in 2022 from $54,660,000 in 2021 as a result of the Canada Emergency Wage Subsidy received in 2021.
Interest, net and investment income changed to income of $806,000 in 2022 from an expense of $1,204,000 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 several 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 loss (income) items:
| Year Ended | Year Ended | ||||||
| (thousands of Canadian dollars) | December 31, 2022 | December 31, 2021 | |||||
| Gain on sale of property, plant and equipment | $ | 376 | $ | 40,304 | |||
| Unrealized gain (loss) on investment in marketable securities | (15,754 | ) | 30,360 | ||||
| Gain on real estate fund investments | 6,356 | 9,311 | |||||
| Insurance proceeds | 580 | 3,812 | |||||
| Equity income from investments in joint ventures | 457 | 1,270 | |||||
| Foreign exchange gain (loss) | 247 | (207 | ) | ||||
| Glen Abbey redevelopment charge | - | (9,785 | ) | ||||
| Other | (260 | ) | (302 | ) | |||
| Other items | $ | (7,998 | ) | $ | 74,763 | ||
On October 8, 2021, the Company sold Heron Bay Golf Club in Florida for net proceeds of $40,235,000 (US$31,736,000). A gain of $39,425,000 (US$31,661,000) was recorded on this sale. This represents the vast majority of the total gain on property, plant and equipment recorded for 2021.
At December 31, 2022, the Company recorded unrealized losses of $15,754,000 on its investment in marketable securities (December 31, 2021 - gain of $30,360,000). This loss is attributable to the fair market value adjustments of the Company's investment in Automotive Properties REIT. The Company also recorded gains of $6,356,000 (December 31, 2021 - $9,311,000) on real estate fund investments in relation to Florida and southeastern US real estate.
The exchange rate used for translating US denominated assets has changed from 1.2678 at December 31, 2021 to 1.3544 at December 31, 2022. This has resulted in a foreign exchange gain of $247,000 in 2022 on the translation of the Company’s US denominated financial instruments.
Net earnings decreased to $18,666,000 in 2022 from $89,647,000 in 2021 due to the change in other items as described above. Basic and diluted earnings per share decreased to 76 cents per share in 2022, compared to $3.64 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 dividend of 5 cents per common share to be paid on March 31, 2023 to shareholders of record as at March 15, 2023.
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 45.5 18-hole equivalent championship and 2.0 18-hole equivalent academy courses (including two managed properties) at 35 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
