ClubLink Corporation
TSX : LNK

ClubLink Corporation

May 07, 2008 17:15 ET

ClubLink Announces First Quarter 2008 Results

KING CITY, ONTARIO--(Marketwire - May 7, 2008) - For the three months ended March 30, 2008, ClubLink's (TSX:LNK )operating revenue increased 12.7% to $16,487,000 from $14,628,000 in 2007, and net operating income increased 54.2% to $2,417,000 from $1,567,000 in 2007. Net membership fee income increased 18.4% to $3,046,000 from $2,572,000 in 2007. Net loss increased to $3,735,000 from $3,480,000 in 2007. Loss per share for the three months ended March 30, 2008 increased to $0.22 from $0.21 in 2007. Cash flow from operations per share was nil compared to $0.01 in 2007.



For the 3 Months Ended
March 30, April 1,
Financial Highlights 2008 2007

Operations
Operating revenue ($000) 16,487 14,628
Net operating income ($000)(1) 2,417 1,567
Operating margin (%)(1) 14.7% 10.7%
Net membership fee income ($000)(1) 3,046 2,572
Earnings before interest, taxes,
amortization and other items ($000)(1) 5,463 4,139
Net loss ($000) (3,735) (3,480)
Cash flow from operations ($000)(1) 31 185

Membership Data
Sales and transfer fees ($000) 2,608 3,723
Sales (Members) 165 263
Resignations and terminations ($000) 1,106 871
Resignations and terminations (Members) 238 189
Cash collected, net of origination costs ($000) 2,362 2,372
Deferred membership fees, net at period end ($000) 56,341 47,665
Golf members at period end 16,146 14,576

Per Common Share Data ($)
Basic and diluted loss (0.22) (0.21)
Basic and diluted cash flow from operations(1) - 0.01
Eligible cash dividends 0.06 0.06
Net book value at period end(1) 9.68 9.65

Common Share Data (000)
Shares outstanding at period end 17,012 16,967
Weighted average shares outstanding 17,015 16,964


First Quarter 2008 Operating Highlights

Operating revenue increased 12.7% to $16,487,000 from $14,628,000 in the first quarter of 2007. This is primarily due to an increase of 12.5% in annual dues revenue resulting largely from a 10.8% increase in golf members on a year over year basis.

Operating expenses and cost of goods sold increased 9.2% to $11,627,000 from $10,651,000 in 2007 due to the addition of Eagle Creek Golf Club, Club de Golf Islesmere and Wyndance Golf Club which all opened for play in the second quarter of 2007.

Sales and marketing costs increased 18.0% to $478,000 from $405,000 in 2007. These costs were 2.9% of operating revenue compared to 2.8% in 2007. This increase is due to commencing program spending earlier in 2008 compared to 2007.

General and administrative expenses and provincial capital taxes decreased marginally to $1,965,000 from $2,005,000 in 2007 due to a decline in provincial capital tax rates which caused capital tax expense to decline to $300,000 from $405,000 in 2007. These costs were 11.9% of operating revenue compared to 13.7% in 2007.

Net operating income increased to $2,417,000 from $1,567,000 in 2007 due to the increase in revenue from annual dues.

Total Golf Members increased 10.8% to 16,146 on March 30, 2008 from 14,576 on April 1, 2007. New membership sales during the first quarter of 2008 decreased 36.1% to $1,900,000 (165 members) from $2,973,000 (263 members) during the first quarter in 2007 due to no new golf product being offered in 2008. The average price of a new membership was $11,515 during the first quarter of 2008 compared to $11,304 during the first quarter in 2007. Transfer and upgrade fees during the first quarter of 2008 decreased to $708,000 from $750,000 in 2007. Resignations and terminations increased 27.0% to $1,106,000 (238 members) from $871,000 (189 members) in 2007. Membership fee instalments received in cash decreased 3.0% to $2,602,000 from $2,682,000 in 2007.

Net membership fee income increased 18.4% to $3,046,000 in 2008 from $2,572,000 in 2007 due to a 10.8% increase in golf members on a year over year basis.

Earnings before interest, amortization, taxes and other increased 32.0% to $5,463,000 from $4,139,000 in 2007.

Interest, net has increased 16.7% to $5,147,000 from $4,410,000 in 2007. This results from a decrease in interest capitalized to development projects under construction to nil from $532,000 last year due to no construction activity during the first quarter of 2008 and $374,000 in Canada Revenue Agency ("CRA") refund interest in 2007 compared to nil in 2008.

Net operating income from Golf Club operations increased 15.8% to $5,717,000 from $4,937,000 in 2007.

Net operating loss from Resort operations decreased 13.1% to $773,000 from $890,000 in 2007.

The statutory income tax rate has declined to 28.79% in 2008 from 32.84% in 2007.

Net loss increased 7.3% to $3,735,000 from $3,480,000.

Loss per share increased to 22 cents from 21 cents per share in 2007.

Eligible Dividend

The Board of Directors has declared an eligible dividend of 6 cents per common share payable June 16, 2008 to shareholders of record on May 31, 2008.

Normal Course Issuer Bid

On February 29, 2008, ClubLink announced a normal course issuer bid which expires on March 3, 2009 to purchase up to 850,700 common shares of ClubLink Corporation. As of May 7, 2008, ClubLink has purchased 9,400 common shares for a total purchase price of $92,000 or $9.79 per share including commissions.

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.



ClubLink Corporation
15675 Dufferin Street
King City, Ontario L7B 1K5


(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