ClubLink Corporation
TSX : LNK

ClubLink Corporation

February 27, 2008 09:22 ET

ClubLink Announces Year End Results

KING CITY, ONTARIO--(Marketwire - Feb. 27, 2008) - ClubLink Corporation (TSX:LNK) announced operating results for the fourth quarter and year ended December 31, 2007. For the year ended December 31, 2007, operating revenue increased 11.2% to $153.2 million from $137.8 million in 2006, and net operating income increased 10.8% to $36.6 million from $33.0 million in 2006. Net membership fee income increased 9.2% to $10.8 million from $9.9 million. Earnings increased to $4.9 million from $0.4 million in 2006. Earnings per share for the year ended December 31, 2007 was 29 cents compared to earnings of 2 cents in 2006. Cash flow from operations per share was $1.88 compared to $1.63 in 2006.



For the Quarter Ended For the Year Ended
December 31, December 31, December 31, December 31,
Financial Highlights 2007 2006 2007 2006

Operations
Operating revenue ($000) 25,116 22,057 153,193 137,804
Net operating
income ($000) (1) 3,888 3,286 36,584 33,005
Operating margin (%) (1) 15.5 14.9 23.9 24.0
Net membership fee
income ($000) (1) 3,232 2,847 10,835 9,921
Earnings before
interest, taxes,
amortization and
other ($000) (1) 7,120 6,133 47,419 42,926
Net income (loss) ($000) (1,808) (2,383) 4,877 416
Cash flow from
operations ($000) (1) 2,490 1,502 31,963 27,773

Membership Data
Sales and transfer
fees ($000) 2,802 2,354 23,399 18,182
Sales (Members) 120 151 2,230 1,001
Resignations and
terminations ($000) 809 435 2,893 2,624
Resignations and
terminations (Members) 161 127 513 599
Cash collected, net of
origination costs ($000) 3,585 2,286 19,995 18,348
Deferred membership fees,
net at year end ($000) 57,025 47,865
Golf members at year end 16,219 14,502

Per Common Share Data ($)
Basic and diluted
earnings (loss) per share (0.10) (0.14) 0.29 0.02
Basic and diluted cash
flow from operations per
share (1) 0.15 0.09 1.88 1.63
Eligible cash dividends 0.06 0.05 0.24 0.20
Net book value at year
end (1) 9.96 9.91

Common Share Data (000)
Shares outstanding at
year end 17,016 16,965
Weighted average common
shares outstanding 16,996 17,040


2007 Operating Highlights

Total championship rounds of golf played in 2007 increased 13.2% to 1,018,000 rounds from 899,000 rounds in 2006 due to the additions of Eagle Creek, Islesmere and Wyndance Golf Clubs. The average number of championship rounds per 18-hole equivalent golf course increased 3.2% to 25,772 rounds from 24,972 in 2006.

Operating revenue increased 11.2% to $153.2 million from $137.8 million in 2006, primarily due to the additions of Eagle Creek, Islesmere and Wyndance Golf Clubs.

Operating expenses and cost of goods sold increased 12.5% to $105.8 million in 2007 from $94.1 million in 2006 due to the new golf course properties added in 2007.

Sales and marketing expenses remained unchanged at $2.2 million. These costs were 1.4% of operating revenue in 2007 and 1.6% in 2006.

General and administrative expenses and provincial capital taxes remained unchanged at $8.6 million in 2007. These costs were 5.6% of operating revenue in 2007 compared to 6.2% in 2006.

Net operating income increased 10.8% to $36.6 million in 2007 from $33.0 million in 2006. The operating margin declined slightly to 23.9% in 2007 from 24.0% in 2006.

Total Golf Members increased 11.8% to 16,219 on December 31, 2007 from 14,502 on December 31, 2006. Membership sales increased to $20.2 million (2,230 members) from $13.6 million (1,001 members) in 2006. The increase in membership sales is due to the new members that have joined at Eagle Creek and Islesmere Golf Clubs which were acquired in 2007 and the successful member referral programs at Cherry Downs and Caledon Woods Golf Clubs. The average price of a new membership decreased to $9,047 compared to $13,541 in 2006. Transfer and upgrade fees generated by existing members decreased to $3.2 million from $4.6 million in 2006. Resignations and terminations increased to $2.9 million (513 members) from $2.6 million (599 members) in 2006. Resignations decreased to 3.5% of total golf members at the beginning of 2007 from 4.2% of total golf members at the beginning of 2006. Membership fee installments received in cash increased to $22.2 million in 2007 from $19.7 million in 2006.

Net membership fee income increased 9.2% to $10.8 million in 2007 from $9.9 million in 2006 and is the result of a 14.9% increase in amortization of membership fees offset by a 55.3% increase in direct costs of originating membership fees.

Earnings before interest, taxes, amortization and other increased 10.5% to $47.4 million from $42.9 million in 2006. Other income of $0.5 million in 2007 compares to an expense of $1.2 million in 2006.

Net operating income from Golf Club operations increased 8.1% to $47.2 million from $43.7 million in 2006.

Net operating income from Resort operations increased to $1.8 million from $1.7 million in 2006.

Earnings per share in 2007 was 29 cents per share compared to 2 cents per share in 2006.

Dividend

The Board of Directors has declared a dividend of 6 cents per common share payable April 15, 2008 to shareholders of record on March 31, 2008. This qualifies as an eligible dividend for Canada Revenue Agency purposes.

On February 23, 2007, ClubLink announced a normal course issuer bid, which expires on March 1, 2008 to purchase up to 848,100 common shares of ClubLink. No shares have been purchased as part of this bid.

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 (deficiency) from operations, cash flow (deficiency) from operations per share and net book value per share are not recognized measures under Canadian generally accepted accounting principles (GAAP). Management believes that 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. The Company's method of calculating these measures is consistent from year to year, but may be different than those used by other companies.

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