ClubLink Corporation
TSX : LNK

ClubLink Corporation

November 06, 2007 17:01 ET

ClubLink Announces Third Quarter 2007 Results

KING CITY, ONTARIO--(Marketwire - Nov. 6, 2007) - ClubLink Corporation (TSX:LNK) -

For the three months ended September 30, 2007, ClubLink's operating revenue increased 11.0% to $65,903,000 from $59,384,000 in 2006, and net operating income increased 4.5% to $21,421,000 from $20,496,000 in 2006. Net membership fee income increased 5.0% to $2,626,000 from $2,502,000 in 2006. Net income for the three months ended September 30, 2007 increased 5.7% to $8,852,000 from $8,378,000 in 2006. Earnings per share for the three months ended September 30, 2007 increased to $0.52 from $0.49 in 2006. Cash flow from operations per share was $1.09 compared to $1.07 in 2006.



For the 3 Months Ended For the 9 Months Ended
September 30, October 1, September 30, October 1,
Financial Highlights 2007 2006 2007 2006

Operations
Operating revenue ($000) 65,903 59,384 128,077 115,747
Net operating income
($000)(1) 21,421 20,496 32,696 29,719
Operating margin (%)(1) 32.5 34.5 25.5 25.7

Net membership fee income
($000)(1) 2,626 2,502 7,603 7,074

Earnings before interest,
taxes, amortization and
other ($000)(1) 24,047 22,998 40,299 36,793

Net income ($000) 8,852 8,378 6,685 2,799

Cash flow from operations
($000)(1) 18,663 18,282 29,473 26,271

Membership Data
Sales and transfer fees
($000) 7,110 3,811 20,597 15,828
Sales (Members) 634 198 2,110 850
Resignations and
terminations ($000) 177 379 2,084 2,189
Resignations and
terminations (Members) (23) 40 352 472
Cash collected, net of
origination costs ($000) 6,888 7,235 16,410 16,062
Deferred membership fees,
net at period end ($000) 56,672 48,426
Golf members at period
end 16,260 14,478

Per Common Share Data ($)
Basic and diluted
earnings 0.52 0.49 0.39 0.16
Basic and diluted cash
flow from operations(1) 1.09 1.07 1.73 1.54
Eligible cash dividends 0.06 0.05 0.18 0.15
Net book value at end of
period(1) 10.13 10.12

Common Share Data (000)
Shares outstanding at end
of period 17,016 17,004
Weighted average shares
outstanding 16,989 17,073


Third Quarter 2007 Operating Highlights

Championship golf rounds increased 14.7% to 527,327 from 459,718 in the third quarter of 2006. The number of rounds per 18-hole golf course increased 4.5% to 13,350 from 12,770 in 2006.

Operating revenue increased 11.0% to $65,903,000 from $59,384,000 in the third quarter of 2006. This increase is primarily the result of adding Eagle Creek, Islesmere and Wyndance Golf Clubs.

Operating expenses and costs of goods sold increased 15.9% to $41,555,000 from $35,842,000 in 2006.

Sales and marketing costs decreased 18.3% to $585,000 from $716,000 in 2006 due to fewer marketing campaigns undertaken in 2007. These costs were 0.9% of operating revenue compared to 1.2% in 2006.

General and administrative expenses and provincial capital taxes increased 0.5% to $2,342,000 from $2,330,000 in 2006 and were 3.6% of operating revenue compared to 3.9% in 2006.

Net operating income increased 4.5% to $21,421,000 from $20,496,000 in 2006.

Total Golf Members increased 12.3% to 16,260 on September 30, 2007 from 14,478 on October 1, 2006. New membership sales during the third quarter of 2007 increased to $6,216,000 (634 members) from $2,655,000 (198 members) during the third quarter of 2006. This increase is primarily due to successful member referral programs at Cherry Downs and Caledon Woods. The average price of a new membership was $9,804 during the third quarter of 2007 compared to $13,409 during the third quarter in 2006. Transfer fees during the third quarter of 2007 decreased to $894,000 from $1,156,000 in 2006. Resignations and terminations decreased to $177,000 (net reinstatement of 23 members) from $379,000 (40 members) in 2006. Membership fee instalments received in cash increased to $7,727,000 from $7,663,000 in 2006.

Direct costs of originating membership fees increased 96.0% to $839,000 from $428,000 in 2006 primarily due to costs associated with the successful member referral programs at Cherry Downs and Caledon Woods.

Net membership fee income increased 5.0% to $2,626,000 from $2,502,000.

Earnings before interest, amortization, taxes and other increased 4.6% to $24,047,000 from $22,998,000 in 2006.

Net operating income from Golf Club operations increased 4.9% to $22,450,000 from $21,410,000 in 2006.

Net operating income from Resort operations decreased 5.8% to $2,709,000 from $2,875,000 in 2006.

Net income increased 5.7% to $8,852,000 from $8,378,000 in 2006.

Earnings per share increased 6.1% to 52 cents from 49 cents in 2006.

Cash flow from operations per share increased 1.9% to $1.09 from $1.07 in 2006.

Eligible cash dividends per common share increased to six cents from five cents in 2006.

Eligible Dividend

The Board of Directors has declared an eligible dividend of six cents per common share payable December 17, 2007 to shareholders of record on November 30, 2007.

Normal Course Issuer Bid

On February 23, 2007, ClubLink announced a normal course issuer bid, expiring on March 1, 2008 to purchase up to 848,100 common shares of ClubLink. As of November 6, 2007, ClubLink has not repurchased any common shares for cancellation under this bid. As of November 6, 2007, the number of common shares issued and outstanding is 17,015,707.

6% Convertible Debenture

On August 29, 2007 ClubLink announced that it will redeem on November 15, 2007, the outstanding 6% convertible unsecured subordinated debentures (the "Debentures") due May 15, 2008. The record date for the redemption is November 12, 2007. The aggregate amount of outstanding 6% convertible unsecured debentures as of November 6, 2007 is $10,092,000. The Debentures will be redeemed at the Redemption Price which is equal to the outstanding principal amount of the Debentures to be redeemed, together with all accrued and unpaid interest thereon up to the redemption date, being in aggregate $1,030.00 per $1,000 principal amount of the Debentures.

Tri-White Corporation

ClubLink has been advised that Tri-White does not intend to make a follow-up offer to purchase the remaining common shares of ClubLink that Tri-White does not own on the same terms upon which it acquired 6,635,300 ClubLink common shares from 2126521 Ontario Inc. on June 1, 2007.

Additional Information

Additional information concerning ClubLink is available on the SEDAR website (www.sedar.com) and the investor relations section of ClubLink's website (www.clublink.ca).

ClubLink is Canada's largest owner, operator and developer of member golf clubs.

(1) Net operating income, operating margin, net membership fee income, earnings before interest, taxes, amortization and other, cash flow from operations, basic and diluted cash flow from operations per share and net book value per share are not recognized measures under Canadian generally accepted accounting principles (GAAP). Management believes these measures are useful supplemental information. Investors should be cautioned, however, that these measures should not be construed as an alternative to net income (loss) determined in accordance with GAAP as an indicator of the Company's performance or to cash flows from operating, investing and financing activities, as a measure of liquidity and cash flows. ClubLink's method of calculating these measures is consistent from year to year, but may be different than those used by other companies.

Contact Information

  • ClubLink Corporation
    Mr. Robert Visentin
    Chief Financial Officer
    (905) 841-3730
    Email: rvisentin@clublink.ca
    or
    ClubLink Corporation
    Mr. K. (Rai) Sahi
    President & CEO
    (905) 841-3730
    Email: rsahi@clublink.ca
    or
    ClubLink Corporation
    15675 Dufferin Street
    King City, Ontario L7B 1K5
    (905) 841-3730
    Website: www.clublink.ca