ClubLink Corporation
TSX : LNK

ClubLink Corporation

March 05, 2009 10:21 ET

ClubLink Announces Year End Results

KING CITY, ONTARIO--(Marketwire - March 5, 2009) - ClubLink Corporation (TSX:LNK) announced operating results for the fourth quarter and year ended December 31, 2008. For the year ended December 31, 2008, operating revenue increased 1.3% to $155.1 million from $153.2 million in 2007, and net operating income increased 0.3% to $36.7 million from $36.6 million in 2007. Net membership fee income increased 13.8% to $12.3 million from $10.8 million. Earnings decreased to $3.2 million from $4.9 million in 2007. Earnings per share for the year ended December 31, 2008 was 19 cents compared to earnings of 29 cents in 2007. Cash flow from operations per share was $1.61 compared to $1.88 in 2007.



For the Quarter Ended For the Year Ended
December 31, December 31, December 31, December 31,
Financial Highlights 2008 2007 2008 2007

Operations
Operating revenue
($000) 26,455 25,116 155,137 153,193
Net operating income
($000)(1) 4,682 3,888 36,689 36,584
Operating margin (%)(1) 17.7 15.5 23.6 23.9

Net membership fee
income ($000)(1) 3,287 3,232 12,327 10,835

Earnings before
interest, taxes,
amortization and other
($000)(1) 7,969 7,120 49,016 47,419

Net income (loss)
($000) (2,739) (1,808) 3,231 4,877

Cash flow from
operations ($000)(1) 2,372 2,490 27,258 31,963

Membership Data
Sales and transfer fees
($000) 715 2,802 15,225 23,399
Sales (Members) 51 120 1,194 2,230
Resignations and
terminations ($000) 1,367 809 3,685 2,893
Resignations and
terminations (Members) 290 161 766 513
Cash collected, net of
origination costs
($000) 2,014 3,585 15,514 19,995
Deferred membership
fees, net at year end
($000) 60,212 57,025
Golf members at
year end 16,647 16,219

Per Common Share Data ($)
Basic and diluted
earnings (loss)
per share (0.16) (0.10) 0.19 0.29
Basic and diluted cash
flow from operations
per share(1) 0.15 0.15 1.61 1.88
Eligible cash dividends 0.06 0.06 0.24 0.24
Net book value at
year end(1) 9.94 9.96
Common Share Data (000)
Shares outstanding at
year end 16,735 17,016
Weighted average common
shares outstanding 16,956 16,996


2008 Operating Highlights

Total championship rounds of golf played in 2008 decreased 2.9% to 988,000 rounds from 1,018,000 rounds in 2007 due to wet weather conditions in 2008 compared to 2007. The average number of championship rounds per 18-hole equivalent golf course decreased to 25,013 rounds from 25,772 in 2007.

Operating revenue increased 1.3% to $155.1 million from $153.2 million in 2007, primarily due to a 7.2% increase in annual dues revenue resulting from the 2.6% increase in members since December 31, 2007 and increases in food and beverage and merchandise sales from the 2008 RBC Canadian Open hosted by Glen Abbey Golf Club. These increases were offset by a decline in guest fees and related discretionary merchandise and food and beverage revenue resulting from the wet weather.

Operating expenses and cost of goods sold increased 1.8% to $107.4 million in 2007 from $105.8 million in 2007 due to a full year of expenses for Eagle Creek, Wyndance and Islesmere Golf Clubs compared to 10.5, 9 and 6 months of expenses incurred in respect of these properties in 2007, respectively.

Sales and marketing expenses remained unchanged at $2.4 million. These costs were 1.6% of operating revenue in 2008, the same as in 2007.

General and administrative expenses and provincial capital taxes remained unchanged at $8.6 million in 2008. These costs were 5.5% of operating revenue in 2008 compared to 5.6% in 2007.

Net operating income increased 0.3% to $36.7 million in 2008 from $36.6 million in 2007. The operating margin decreased to 23.6% in 2008 from 23.9% in 2007.

Total Golf Members increased 2.6% to 16,647 on December 31, 2008 from 16,219 on December 31, 2007. Membership sales decreased to $12.7 million (1,194 members) from $20.2 million (2,230 members) in 2007. The decrease in membership sales is due to no new product being available for sale compared to the 2007 additions of Eagle Creek and Islesmere Golf Clubs. The average price of a new membership sold increased to $10,652 compared to $9,047 in 2007. Transfer and upgrade fees generated by existing members decreased to $2.5 million from $3.2 million in 2007. Resignations and terminations increased to $3.7 million (766 members) from $2.9 million (513 members) in 2007. Resignations increased to 4.7% of total golf members at the beginning of 2008 from 3.5% of total golf members at the beginning of 2007. Membership fee installments received in cash decreased to $17.2 million in 2008 from $22.2 million in 2007 due to $2.8 million in fully paid Islesmere and Lakeside at Rocky Crest memberships being recorded in 2007.

Net membership fee income increased 13.8% to $12.3 million in 2007 from $10.8 million in 2007 and is the result of a 7.4% increase in amortization of membership fees.

Earnings before interest, taxes, amortization and other increased 3.3% to $49.0 million from $47.4 million in 2007.

Gross interest expense decreased 3.8% to $23.0 million from $23.9 million in 2007 due to a decline in average debt levels throughout the year. Interest capitalized to development projects under construction decreased to nil from $1.9 million in 2007 due to the absence of any construction activity. Net interest expense increased to $23.0 million from $22.0 million in 2007.

Other expense of $1.1 million in 2008 compares to income of $0.5 million in 2007. The major component of other expense was a real estate loss of $0.8 million in 2008 compared to a gain of $1.8 million in 2007.

Net operating income from Golf Club operations increased 1.5% to $48.2 million from $47.4 million in 2007.

Net operating income from Resort operations decreased to $1.3 million from $1.8 million in 2007 due to the wet and cool summer weather conditions which negatively impacted room bookings.

Net income declined to $3.2 million in 2008 from $4.9 million in 2007 primarily due to the change in other expense to real estate loss of $0.8 million incurred in 2008 compared to the gain of $1.8 million recognized in 2007.

Earnings per share in 2008 was 19 cents per share compared to 29 cents per share in 2007.

Eligible Dividend

The Board of Directors has declared an eligible dividend of six cents per common share payable March 31, 2009 to shareholders of record on March 16, 2009.

Normal Course Issuer Bid

On February 29, 2008, ClubLink announced a normal course issuer bid which expired on March 3, 2009 to purchase up to 850,700 common shares of ClubLink Corporation. ClubLink purchased 320,700 common shares for a total purchase price of $2,525,000 or $7.87 per share including commissions 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 and operator 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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