ClubCorp Reports Record Full Year and Fourth Quarter Results, Publishes 2016 Outlook and Announces $50 Million Share Repurchase Program
Posted: February 25, 2016 in Chains
ClubCorp – The World Leader In Private Clubs
DALLAS, TX — ClubCorp — The World Leader in Private Clubs (NYSE: MYCC) — announced financial results for its fiscal-year 2015 fourth quarter ended December 29, 2015. The fourth quarter of fiscal 2015 and fiscal 2014 consisted of 16 weeks. Year-to-date results of fiscal 2015 and fiscal 2014 consisted of 52 weeks. All growth percentages refer to year-over-year progress.
- Full-year revenue was $1.1 billion, up 19.1%, while adjusted EBITDA was $233.7 million, up 19.0%;
- Fourth quarter revenue was $331.7 million, up 9.6%, while adjusted EBITDA was $79.6 million, up 14.8%;
- ClubCorp anticipates 2016 adjusted EBITDA to be between $242 and $252 million;
- ClubCorp’s Board of Directors has authorized the Company to repurchase up to $50 million of its common stock by December 31, 2017.
Fourth Quarter Results:
Revenue increased $29.1 million, or 9.6%, to $331.7 million for the fourth quarter of 2015.
Adjusted EBITDA increased $10.2 million to $79.6 million, up 14.8%, driven by higher revenue and improved margin performance across both same-store and new and recently acquired clubs.
Same Store Clubs. Same-store revenue was up $7.1 million, up 2.7%, driven primarily by higher dues revenue, record private events revenue, and improved golf operations revenue. Same-store adjusted EBITDA grew $5.9 million, up 8.0%, due to increased revenue and favorable operating expenses as a percentage of revenue.
New or Acquired Clubs. New clubs opened or acquired in 2014 and 2015 contributed revenue of $61.0 million and adjusted EBITDA of $18.4 million.
Full Year 2015 Results:
Revenue increased $168.7 million to $1,052.9 million, up 19.1%, reflecting solid same-store revenue growth, and the addition of Sequoia Golf and several other recently acquired clubs.
Adjusted EBITDA increased $37.3 million to $233.7 million, up 19.0%, driven by an increase in dues and food & beverage revenue and favorable operating expenses as a percentage of revenue at same-store clubs, and additional revenue contribution from new and recently acquired clubs.
Same Store Clubs. Same-store revenue was up $20.5 million, up 2.5%, driven primarily by higher dues revenue up 3.7% and food & beverage revenue up 3.2%, offset by golf operations revenue down 0.2%. Same-store adjusted EBITDA grew $14.3 million, up 6.3%. For the full-year, same-store golf and country clubs (GCC) and business, sports and alumni clubs (BSA) adjusted EBITDA margins increased 110 basis points in each segment to 30.6% and 20.5%, respectively.
New or Acquired Clubs. New clubs opened or acquired in 2014 and 2015 contributed revenue $186.4 million and adjusted EBITDA of $44.6 million.
Quotes:
Eric Affeldt, President and Chief Executive Officer: “We delivered another year of record revenues and adjusted EBITDA and are positioned for excellent results again in 2016. The fundamentals of our business remain intact and continue to support our growth and investment strategies, which have driven five consecutive years of solid growth in both revenue and adjusted EBITDA, with our investments in reinventions and acquisitions delivering positive NPV returns in 2015. Our Board and management remain dedicated to a balanced approach of capital allocation aligned with the Company’s growth strategy and focused on building long-term shareholder value. This approach is reflected in our plans to continue investing in our business. To that end, our Board has authorized, for the first time, a share repurchase program of up to $50 million of our stock over the next two years.”
Curt McClellan, Chief Financial Officer: “Our strong results not only speak to the stability of our membership model, but also the strength and steadiness of our cash flows. Since 2010, we’ve grown revenues by 53% and adjusted EBITDA by 56% and, in 2015, we delivered full-year revenue and adjusted EBITDA growth that was north of 19%, despite a 100-year rain event in Texas. During 2015, we acquired nine new clubs, signed two management contracts, and completed reinventions at 21 clubs, and we saw adoption of our O.N.E. offering increase to 50% and private events revenue reach an all-time record. We are pleased that the strength and stability of our cash flow is allowing us to support our growth strategies as well as the repurchase program and our current dividend of $0.52 a share, which represents an almost 5% dividend yield at today’s stock price.”
Segment Highlights:
Golf and country clubs (GCC):
Fourth quarter, GCC revenue was up $24.8 million to $259.9 million, up 10.6%.
Fourth quarter, GCC adjusted EBITDA increased $11.1 million to $81.3 million, up 15.9%, and GCC adjusted EBITDA margin increased 140 basis points to 31.3%.
Fourth quarter, GCC same-store revenue increased $4.0 million, up 2.0%, driven by increases across all three major revenue streams: dues up 3.3%, food & beverage up 2.1%, and golf operations up 1.1%.
Fourth quarter, GCC same-store adjusted EBITDA increased $4.1 million, up 7.0%, due largely to increased revenue, and favorable cost of sales and variable payroll expenses as a percentage of revenue. Additionally, GCC same-store adjusted EBITDA margin improved 150 basis points to 31.5%.
Clubs acquired in 2014 and 2015 contributed fourth quarter, GCC revenue of $58.5 million and GCC adjusted EBITDA of $17.9 million.
Full-year 2015, GCC revenue was up 21.3% to $842.6 million, while GCC adjusted EBITDA was up 21.1% to $246.1 million. For the full-year, GCC adjusted EBITDA margin was flat at 29.2%.
Business, sports and alumni clubs (BSA):
Fourth quarter, BSA revenue was up $4.0 million to $67.8 million, up 6.2%.
Fourth quarter, BSA adjusted EBITDA increased $2.2 million to $16.9 million, up 14.9%, and BSA adjusted EBITDA margin increased 190 basis points to 25.0%.
Fourth quarter, BSA same-store revenue increased $3.1 million to $65.2 million, up 5.0%, driven by increases in dues revenue and record private events revenue.
Fourth quarter, BSA same-store adjusted EBITDA increased $1.8 million to $16.5 million, up 11.9% due largely to increased dues and food & beverage revenue, and favorable cost of sales and variable payroll expenses as a percentage of revenue. Additionally, BSA same-store adjusted EBITDA margin improved 160 basis points to 25.3%.
New clubs opened in 2014 contributed fourth quarter, BSA revenue of $2.6 million and BSA adjusted EBITDA of $0.5 million.
Full-year 2015, BSA revenue was up 6.4% to $195.3 million, while BSA adjusted EBITDA was up 13.4% to $39.6 million. For the full-year, BSA adjusted EBITDA margin improved 130 basis points to 20.3%.
Other Data:
O.N.E. and Other Upgrades. As of December 29, 2015, approximately 50% of our memberships were enrolled in O.N.E. or similar upgrade programs, as compared to approximately 39% of our memberships that were enrolled in similar upgrade programs as of December 30, 2014. As of December 29, 2015, the Company offered O.N.E. at 152 clubs.
Reinvention. During 2015, the Company completed reinventions at 21 existing and recently acquired clubs. In total, for 2016, the Company expects ROI expansion capital to be approximately $41 million. In 2016, ClubCorp plans to invest approximately $21 million on 11 same-store clubs and $20 million on recently acquired clubs.
Acquisitions. In 2015, ClubCorp acquired nine clubs, these include: Ravinia Green Country Club and Rolling Green Country Club, just north of Chicago, Illinois; Bermuda Run Country Club in Bermuda Run, North Carolina; Brookfield Country Club in Roswell, Georgia; Firethorne Country Club in Marvin, North Carolina; Ford’s Colony Country Club in Williamsburg, Virginia; Temple Hills Country Club in Franklin, Tennessee; The Legacy Golf Club in Bradenton, Florida and Bernardo Heights Country Club in North Country San Diego, California. The Legacy Golf Club is a public golf course that was subsequently sold in November of 2015. Additionally, in 2016, ClubCorp recently purchased Marsh Creek Country Club in St. Augustine, Florida. As of December 29, 2015, ClubCorp owns or operates 158 golf and country clubs representing approximately 200 18-hole equivalents, of which 10 are managed clubs. Additionally, the Company owns or operates 49 business, sports and alumni clubs, of which three are managed clubs.
Membership. Membership totals exclude membership count from managed clubs. As of December 29, 2015, total memberships increased 4,766 to 172,939, up 2.8%, over memberships at December 30, 2014. Same-store GCC memberships increased 0.4%, and total GCC memberships increased 4.3%. Same-store BSA memberships declined 1.2%, while total BSA memberships decreased 0.1%.
Levered Free Cash Flow. Levered free cash flow over the last four quarters was $104.9 million, a decrease from $109.8 million a year ago.
Texas. Additional data on clubs the Company owns and operates in Texas is available in the Company’s earnings presentation that can be found online at ir.clubcorp.com.
Company Outlook:
The following guidance is based on current management expectations. All financial guidance amounts are estimates and 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 2016, the Company anticipates revenue in the range of $1,085 to $1,105 million and adjusted EBITDA in the range of $242 million to $252 million. The current outlook implies year-over-year revenue growth of 3-5% and year-over-year adjusted EBITDA growth of 4-8%.
Stock Repurchase:
The board of directors of ClubCorp has authorized the Company to repurchase up $50 million of its common stock, commencing the first quarter 2016. The repurchase program is expected to be executed over two years, and is expected to be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market or privately negotiated transactions, including through Rule 10b5-1.
