ClubCorp Announces Its Eighth Straight Quarter of Record Results
Posted: April 27, 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 2016 first quarter ended March 22, 2016. The first quarter of fiscal 2016 and fiscal 2015 consisted of 12 weeks. All growth percentages refer to year-over-year progress:
- First quarter revenue was $214.9 million, up 6.3% due to solid increases in dues, F&B and golf ops revenue;
- First quarter adjusted EBITDA was $42.1 million, up 8.2%;
- ClubCorp reiterates 2016 adjusted EBITDA expected to be between $242 and $252 million.
First Quarter Results:
Revenue increased $12.8 million, or 6.3%, to $214.9 million for the first quarter of 2016.
Adjusted EBITDA increased $3.2 million to $42.1 million, up 8.2%, driven by higher revenue and improved margin performance across both same-store and new and recently acquired clubs.
Same Store Clubs revenue was up $7.9 million, up 4.0% to $206.4 million, driven by increases across all three major revenue streams: dues revenue up 3.8%, a la carte and private events food & beverage revenue up 5.2%, and golf operations revenue 3.1%. Same-store adjusted EBITDA grew $3.9 million, up 7.4% to $56.6 million, due to increased revenue and favorable operating expenses as a percentage of revenue. Adjusted EBITDA margin increased 90 bps to 27.4% for same-store combined clubs.
New or Acquired Clubs. New clubs opened or acquired in 2015 and 2016 contributed revenue of $7.7 million and adjusted EBITDA of $0.9 million.
Eric Affeldt, president and chief executive officer: “This is our eighth consecutive quarter of record financial results. Our golf and country club division delivered revenue growth in all three major revenue streams. We benefited from increased member activity across our network of clubs and improved golf and food & beverage revenue. Our results this quarter demonstrate strong member demand for our differentiated leisure product, newly reinvented clubs and our O.N.E. offering. We are confident that our three pronged growth strategy of organic growth, reinvention and acquisitions continues to deliver consistent growth and will continue to add long-term value to our members and shareholders.”
Curt McClellan, chief financial officer: “We are very happy with our first quarter results. We grew revenue in both segments and delivered excellent adjusted EBITDA performance in our Golf and Country club division where increased member activity elevated performance. Same-store combined clubs dues revenue increased 3.8%. Penetration of our O.N.E. offering continues to grow and member acceptance increased to 51%. Our recently completed reinvention projects are performing as expected, significantly increasing member usage. We completed two more acquisitions this quarter and our pipeline for potential acquisitions remains strong. Reinventions and acquisitions continue to deliver superior returns on capital and we continue to believe this is the best way to deliver long-term shareholder value. We are positioned to deliver solid financial results in 2016 consistent with our outlook for the year.”
Golf and country clubs (GCC):
First quarter, GCC revenue was up $13.9 million to $172.8 million, up 8.8%.
First quarter, GCC adjusted EBITDA increased $5.2 million to $50.1 million, up 11.6%, and GCC adjusted EBITDA margin increased 70 basis points to 29.0%.
First quarter, GCC same-store revenue increased $7.1 million, up 4.5%, driven by increases across all three major revenue streams: dues up 3.9%, food & beverage up 9.1%, and golf operations up 3.1% benefiting from good weather leading to more golf rounds, cart rental revenue, and a la carte food & beverage spend.
First quarter, GCC same-store adjusted EBITDA increased $4.1 million, up 9.1%, due largely to increased revenue, and favorable operating expenses and improved variable payroll expenses as a percentage of revenue.
First quarter, GCC same-store adjusted EBITDA margin improved 130 basis points to 29.9%.
Clubs acquired in 2015 and 2016 contributed first quarter, GCC revenue of $7.7 million and GCC adjusted EBITDA of $0.9 million.
Business, sports and alumni clubs (BSA):
First quarter, BSA revenue was up $0.8 million to $41.3 million, up 2.0% driven by increases in dues revenue.
First quarter, BSA adjusted EBITDA decreased $0.2 million to $7.3 million, down 2.1% largely due to higher variable payroll expenses and other operating expenses. BSA same-store adjusted EBITDA margin declined 80 basis points to 17.7%.
There was no material contribution from new clubs in the business, sports and alumni segment.
O.N.E. and Other Upgrades. As of March 22, 2016, approximately 51% of our memberships were enrolled in O.N.E. or similar upgrade programs, as compared to approximately 50% of our memberships that were enrolled in similar upgrade programs as of December 29, 2015. As of March 22, 2016, the Company offered O.N.E. at 153 clubs.
Reinvention. In total, for 2016, the Company expects ROI expansion capital to be approximately $45 million. In 2016, ClubCorp plans to invest approximately $21 million on 10 same-store clubs and approximately $24 million on recently acquired clubs.
Acquisitions. In 2016, ClubCorp has acquired two clubs: Marsh Creek Country Club in St. Augustine, Florida and Santa Rosa Country Club in Santa Rosa, California. As of March 22, 2016, ClubCorp owns or operates 159 golf and country clubs representing approximately 200 18-hole equivalents, of which nine are managed clubs. Additionally, the Company owns or operates 48 business, sports and alumni clubs, of which three are managed clubs.
Membership. Membership totals exclude membership count from managed clubs. As of March 22, 2016, total memberships increased 4,380 to 173,130, up 2.6%, over memberships at March 24, 2015. Total golf and country club memberships increased 4.4%, while total business, sports and alumni club memberships declined 1.0%.
Levered Free Cash Flow. Levered free cash flow over the last four quarters was $101.2 million.
Capital Structure. During the quarter the Company increased its revolving credit facility to $175 million from $135 million previously. At the end of the first quarter, the Company had $97.3 million in cash and cash equivalents and total liquidity of approximately $242 million.
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.
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%.