ClubCorp Delivers Record Full Year Results Ahead of Long-Term Growth Objective
Posted: March 12, 2015 in Chains
ClubCorp – The World Leader In Private Clubs
DALLAS, TX – ClubCorp – The World Leader in Private Clubs (NYSE: MYCC) – announces its fiscal-year 2014 financial results for the fourth quarter and full-year ended December 30, 2014.
The fourth quarter of fiscal 2014 consisted of 16 weeks, whereas the fourth quarter of fiscal 2013 consisted of 17 weeks. Total revenue, total adjusted EBITDA, new or acquired clubs revenue and new or acquired clubs adjusted EBITDA are presented on a fiscal quarter or fiscal year basis. However, to aid evaluation of same-store club performance, same-store clubs revenue and same-store clubs adjusted EBITDA are presented on a normalized basis to indicate the difference between the fourth quarter fiscal 2014 (16 weeks) versus a normalized fourth quarter fiscal 2013 (16-week basis) whereby the last week of 2013 is removed from the comparison. Similarly, year-over-year comparisons of same-store clubs for the full year, compares full-year fiscal 2014 (52 weeks) versus normalized full-year fiscal 2013 (52-week basis).
Fourth Quarter Results:
Revenue increased $33.0 million to $302.5 million for the fourth quarter of 2014. Revenue was up 12.2% compared to the fourth quarter of 2013 due to revenue growth from newly acquired and same-store clubs.
Adjusted EBITDA increased $9.4 million to $69.5 million. Adjusted EBITDA was up 15.6% from increased revenue and improved variable labor expenses as a percent of revenue.
Same-store Clubs. On a normalized 16-week basis(2), same-store sales increased $4.3 million, up 1.8%. On a normalized 16-week basis, same-store adjusted EBITDA increased $3.7 million, up 5.4%.
New or Acquired Clubs. Clubs acquired in 2013 and 2014, contributed incremental revenue of $40.9 million and adjusted EBITDA of $11.8 million.
Fiscal 2014 Results:
Revenue increased $69.1 million to $884.2 million for the full-year fiscal full-year 2014. Revenue was up 8.5% compared to fiscal full-year 2013 due to revenue growth from newly acquired and same-store clubs.
Adjusted EBITDA increased $19.6 million to $196.8 million. Adjusted EBITDA was up 11.0% from increased revenue and improved variable labor expenses as a percent of revenue.
Same-store Clubs. On a normalized 52-week basis(2), same-store sales increased $22.0 million, up 2.8%. On a normalized 52-week basis, same-store adjusted EBITDA increased $13.5 million, up 6.5%.
New or Acquired Clubs. Clubs acquired in 2013 and 2014, contributed incremental revenue of $59.7 million and adjusted EBITDA of $14.2 million.
Quotes:
Eric Affeldt, president and chief executive officer: “Fiscal 2014 was an outstanding year for us. In our first full fiscal year as a public company, we did exactly what we set out to do at our IPO – namely, deliver on our commitment to grow the business organically, through reinvention and via strategic acquisitions. Membership sales remain strong, acceptance of our O.N.E. product continues to climb, and our reinvented clubs and recent acquisitions continue to drive results. Including recent acquisitions, our results significantly exceed our long-term growth objective of 5% to 7% adjusted EBITDA growth. We now believe continued strong operating performance and recent acquisitions puts us on a five-year compound annual EBITDA growth rate between 8% and 9% by the end of 2015. We are optimistic about 2015, and are confident in our ability to execute our strategy, grow the business, and deliver another strong year of financial performance.”
Curt McClellan, chief financial officer: “We are proud of our performance in 2014. This represents the fourth consecutive year of revenue and adjusted EBITDA growth. Since 2010, revenue has grown at a compound annual growth rate of 6.5%, while adjusted EBITDA has grown at a compound annual growth rate of 7%. We delivered another record year in overall membership growth. We have now reinvented 54 of our clubs, and have plans to reinvent another 29 clubs in 2015. The integration of Sequoia clubs is going extremely well, with many of our planned cost synergies now realized. While still in the early stages of rolling out O.N.E. at our newly acquired clubs, the results have been very promising. Again, the acquisition of Sequoia Golf represents a significant inflection point in the company’s history. Our continued execution of our growth strategy and disciplined approach to investment capital positions us to deliver solid financial results in 2015.”
Segment Highlights:
Golf and country clubs (GCC):
Fourth quarter GCC results:
GCC total revenue increased $34.1 million to $235.3 million, up 16.9% versus the prior year; and GCC total adjusted EBITDA increased $12.8 million to $70.4 million, up 22.1%.
On a normalized 16-week basis(2), GCC same-store sales increased $3.4 million, up 1.8%, driven by an increase in same-store dues revenue up $3.8 million, or 4.4%, and same-store food & beverage revenue up $0.7 million, or 1.5%, offset by same-store golf operations revenue that declined $0.3 million, down (0.8)%. Additionally, same-store adjusted EBITDA increased $3.7 million, up 6.8% in the fourth quarter.
Newly acquired golf and country clubs contributed incremental revenue of $39.2 million and incremental adjusted EBITDA of $11.8 million.
Full-year 2014 GCC results:
GCC total revenue increased $66.6 million to $695.0 million, up 10.6% versus the prior year, and GCC total adjusted EBITDA increased $23.3 million to $203.5 million, up 12.9%.
On a normalized 52-week basis(2), GCC same-store sales increased $17.5 million, up 2.9%, driven by an increase in all three major revenue streams. Same-store dues revenue increased $12.7 million, up 4.5%, same-store food & beverage revenue increased $5.9 million, up 4.2%, and same-store golf operations revenue increased $1.0 million, up 0.7%. Additionally, same-store adjusted EBITDA increased $11.6 million, up 6.6%.
Newly acquired golf and country clubs contributed incremental revenue of $57.5 million and incremental adjusted EBITDA of $14.4 million.
Business, sports and alumni clubs (BSA):
Fourth quarter BSA results:
BSA total revenue decreased $0.4 million to $63.9 million, down (0.6)% versus the prior year; and BSA total adjusted EBITDA declined $0.8 million to $14.9 million, down (5.0)%.
On a normalized 16-week basis(2), BSA same-store sales increased $1.0 million, up 1.6%, driven by an increase in both same-store sales dues up $0.7 million, or 3.1%, and same-store food & beverage revenue up $0.5 million, or 1.6%. Additionally, same-store adjusted EBITDA was flat.
New clubs contributed incremental revenue of $1.7 million and nominal incremental adjusted EBITDA.
Full-year 2014 BSA results:
BSA total revenue increased $3.6 million to $184.0 million, up 2.0% versus the prior year; and BSA total adjusted EBITDA increased $0.8 million to $35.3 million, up 2.3%.
On a normalized 52-week basis(2), same-store sales increased $4.5 million, up 2.6%, driven increases in both dues and food & beverage revenue. Same-store dues revenue increased $1.6 million, up 2.1%, and same-store food & beverage revenue increased $3.4 million, up 3.8%. Additionally, same-store adjusted EBITDA increased $1.9 million, up 5.6%.
New clubs contributed incremental revenue of $2.1 million and nominal incremental adjusted EBITDA.
Other Data:
Reinvention. Since 2007, ClubCorp has reinvented 33 golf and country clubs and 21 business, sports and alumni clubs, or approximately 25% of ClubCorp’s current portfolio of clubs. In 2015, ClubCorp plans to invest a total of $42.1 million on reinvention projects, including $20.0 million on major reinventions projects across nine same-store golf and country clubs and four same-store business, sports and alumni clubs, approximately $15.0 million to reinvent nine clubs obtained in the acquisition of Sequoia Golf, and $7.1 million to reinvent seven recent single-club acquisitions.
Acquisitions. In 2014, ClubCorp added more than 50 golf and country clubs, including the single-store acquisitions of Prestonwood Country Club in Dallas and Plano, Texas, TPC Piper Glen in Charlotte, North Carolina, TPC Michigan in Dearborn, Michigan, Oro Valley Country Club in Oro Valley, Arizona. ClubCorp also acquired Sequoia Golf, a multi course owner-operator based in Atlanta, Georgia. Additionally, ClubCorp opened an alumni club at the new Baylor University football stadium in Waco, Texas. Thus far in 2015, ClubCorp has acquired Ravinia Green Country Club and Rolling Green Country Club both just north of Chicago, Illinois. As of March 5, 2015, ClubCorp’s expanded portfolio includes 203 owned or operated clubs, of which 15 clubs are managed.
Membership. Total memberships as of December 30, 2014 were 180,686, an increase of 34,843, up 23.9% over memberships at December 31, 2013. Same-store golf and country club memberships excluding managed clubs increased 0.9%, while total golf and country club memberships including newly acquired clubs and managed clubs increased 38.8.%. Same-store business, sports and alumni memberships excluding managed clubs grew 0.6%, while total business, sports and alumni club memberships increased 3.4%.
O.N.E. and Other Upgrade Products. As of December 30, 2014, approximately 46% of memberships, excluding Sequoia Golf memberships, were enrolled in one or more of our upgrade programs compared to approximately 43% enrolled at the end of fiscal 2013. Incremental dues revenue related to upgrade programs accounted for approximately $37.6 million of total dues revenue for the fiscal year ended December 30, 2014, compared to approximately $34.5 million for the fiscal year ended December 31, 2013.
Free Cash Flow. Free cash flow over the last four quarters was $110.3 million, an increase from $77.0 million a year ago.
Capital Structure. On October 1, 2014, ClubCorp closed its acquisition of Sequoia Golf for which it paid $265 million. With the acquisition of Sequoia Golf, the company has amended its secured credit facilities and created one fungible term loan tranche of approximately $900 million at LIBOR plus 350 basis points with a 1% LIBOR floor.
Company Outlook:
The following guidance is based on current management expectations. All financial guidance amounts are estimates subject to change, including as a result of matters discussed under the “Forward-Looking Statements” cautionary language which follows, and the Company undertakes no duty to update its guidance. For fiscal year 2015, the Company expects to deliver revenue in the range of $1.00 billion to $1.03 billion and adjusted EBITDA in the range of $225.0 million to $235.0 million. This outlook fully integrates our acquisition of Sequoia Golf and results in year-over-year revenue growth of 13-16% and year-over-year adjusted EBITDA growth of 14-19%.
