Consolidated Financial Highlights
(unaudited)
|
(in thousands of dollars except per
shareamounts) |
Three months ended |
Nine months ended |
|
September 30,2023 |
September 30,2022 |
September 30,2023 |
September 30,2022 |
|
Net earnings |
17,690 |
11,920 |
17,753 |
14,421 |
|
Basic and diluted earnings per share |
0.72 |
0.49 |
0.72 |
0.59 |
Operating Data
|
|
Three months ended |
Nine months ended |
|
|
September 30,2023 |
September 30,2022 |
September 30,2023 |
September 30,2022 |
|
Canadian Full Privilege Golf Members |
|
|
15,530 |
16,014 |
|
Championship rounds – Canada |
567,000 |
583,000 |
958,000 |
1,027,000 |
|
18-hole equivalent championship golf courses – Canada |
|
|
35.5 |
37.5 |
|
18-hole equivalent managed championship golf courses – Canada |
|
|
2.0 |
2.0 |
|
Championship rounds – U.S. |
33,000 |
32,000 |
202,000 |
199,000 |
|
18-hole equivalent championship golf courses – U.S. |
|
|
6.5 |
8.0 |
The following is an analysis of net earnings:
| |
For the three months
ended |
|
(thousands of Canadian dollars) |
September
30, 2023 |
September 30,
2022 |
|
|
|
|
|
Operating revenue |
$ |
67,635 |
|
$ |
65,009 |
|
| Direct
operating expenses(1) |
|
47,264 |
|
|
42,687 |
|
|
|
|
|
| Net
operating income(1) |
|
20,371 |
|
|
22,322 |
|
| |
|
|
| Amortization
of membership fees |
|
1,469 |
|
|
1,329 |
|
| |
|
|
| Depreciation
and amortization |
|
(3,607 |
) |
|
(4,493 |
) |
| |
|
|
| Interest,
net and investment income |
|
2,327 |
|
|
(1,510 |
) |
| |
|
|
| Other
items |
|
2,610 |
|
|
(1,517 |
) |
| |
|
|
|
Income taxes |
|
(5,480 |
) |
|
(4,211 |
) |
| |
|
|
|
Net earnings |
$ |
17,690 |
|
$ |
11,920 |
|
| |
For the nine months
ended |
|
(thousands of Canadian dollars) |
September
30, 2023 |
September 30,
2022 |
|
|
|
|
|
Operating revenue |
$ |
158,798 |
|
$ |
155,677 |
|
| Direct
operating expenses(1) |
|
122,237 |
|
|
115,210 |
|
|
|
|
|
| Net
operating income(1) |
|
36,561 |
|
|
40,467 |
|
| |
|
|
| Amortization
of membership fees |
|
3,582 |
|
|
3,349 |
|
| |
|
|
| Depreciation
and amortization |
|
(10,561 |
) |
|
(13,375 |
) |
| |
|
|
| Interest,
net and investment income |
|
6,608 |
|
|
(812 |
) |
| |
|
|
| Other
items |
|
(10,962 |
) |
|
(7,669 |
) |
| |
|
|
|
Income taxes |
|
(7,475 |
) |
|
(7,539 |
) |
| |
|
|
|
Net earnings |
$ |
17,753 |
|
$ |
14,421 |
|
The following is a breakdown of net operating
income (loss) by segment:
| |
For the three months
ended |
|
(thousands of Canadian dollars) |
September
30, 2023 |
September 30,
2022 |
|
|
|
|
| Net
operating income (loss) by segment |
|
|
|
Canadian golf club operations |
$ |
21,173 |
|
$ |
23,626 |
|
|
US golf club operations |
|
|
|
(2023 - US $259,000: 2022 - US loss $375,000) |
|
347 |
|
|
(493 |
) |
|
Corporate and other |
|
(1,149 |
) |
|
(811 |
) |
|
|
|
|
|
Net operating income(1) |
$ |
20,371 |
|
$ |
22,322 |
|
|
|
|
|
| |
For the nine months
ended |
|
(thousands of Canadian dollars) |
September
30, 2023 |
September 30,
2022 |
|
|
|
|
| Net
operating income (loss) by segment |
|
|
|
Canadian golf club operations |
$ |
34,314 |
|
$ |
40,209 |
|
|
US golf club operations |
|
|
|
(2023 - US $3,398,000: 2022 - US $2,482,000) |
|
4,585 |
|
|
3,120 |
|
|
Corporate and other |
|
(2,338 |
) |
|
(2,862 |
) |
|
|
|
|
|
Net operating income(1) |
$ |
36,561 |
|
$ |
40,467 |
|
|
|
|
|
Operating revenue is calculated as follows:
| |
For the three months
ended |
|
(thousands of Canadian dollars) |
September 30, 2023 |
September 30, 2022 |
|
|
|
|
|
Annual dues |
$ |
17,230 |
$ |
16,967 |
| Golf |
|
18,570 |
|
17,965 |
| Corporate
events |
|
4,322 |
|
4,855 |
| Food and
beverage |
|
15,714 |
|
16,035 |
|
Merchandise |
|
5,611 |
|
5,760 |
| Real
estate |
|
3,291 |
|
- |
| Rooms and
other |
|
2,897 |
|
3,427 |
|
|
|
|
| Operating
revenue |
$ |
67,635 |
$ |
65,009 |
|
|
|
|
| |
For the nine months
ended |
|
(thousands of Canadian dollars) |
September 30, 2023 |
September 30, 2022 |
|
|
|
|
|
Annual dues |
$ |
51,906 |
$ |
51,055 |
| Golf |
|
38,343 |
|
37,645 |
| Corporate
events |
|
6,939 |
|
7,452 |
| Food and
beverage |
|
27,153 |
|
27,360 |
|
Merchandise |
|
11,531 |
|
11,281 |
| Real
estate |
|
18,821 |
|
15,811 |
| Rooms and
other |
|
4,105 |
|
5,073 |
|
|
|
|
| Operating
revenue |
$ |
158,798 |
$ |
155,677 |
|
|
|
|
Direct operating expenses are calculated as
follows:
| |
For the three months
ended |
|
(thousands of Canadian dollars) |
September
30, 2023 |
September 30,
2022 |
|
|
|
|
|
Operating cost of sales |
$ |
9,232 |
$ |
8,868 |
| |
|
|
| Real estate
cost of sales |
|
3,816 |
|
- |
| |
|
|
| Labour and
employee benefits |
|
22,429 |
|
22,092 |
| |
|
|
|
Utilities |
|
2,193 |
|
2,506 |
| |
|
|
| Selling,
general and administrative expenses |
|
1,246 |
|
1,382 |
| |
|
|
| Property
taxes |
|
463 |
|
441 |
| |
|
|
|
Insurance |
|
1,099 |
|
924 |
| |
|
|
| Repairs and
maintenance |
|
1,623 |
|
1,252 |
| |
|
|
| Turf
operating expenses |
|
1,120 |
|
1,159 |
| |
|
|
| Fuel and
oil |
|
676 |
|
681 |
| |
|
|
|
Other operating expenses |
|
3,367 |
|
3,382 |
| |
|
|
|
Direct Operating Expenses(1) |
$ |
47,264 |
$ |
42,687 |
| |
For the nine months
ended |
|
(thousands of Canadian dollars) |
September
30, 2023 |
September 30,
2022 |
|
|
|
|
|
Operating cost of sales |
$ |
17,012 |
$ |
16,170 |
| |
|
|
| Real estate
cost of sales |
|
19,093 |
|
16,394 |
| |
|
|
| Labour and
employee benefits |
|
51,807 |
|
49,590 |
| |
|
|
|
Utilities |
|
5,771 |
|
6,146 |
| |
|
|
| Selling,
general and administrative expenses |
|
4,058 |
|
4,266 |
| |
|
|
| Property
taxes |
|
2,999 |
|
2,776 |
| |
|
|
|
Insurance |
|
3,298 |
|
2,705 |
| |
|
|
| Repairs and
maintenance |
|
4,456 |
|
3,878 |
| |
|
|
| Turf
operating expenses |
|
3,484 |
|
3,517 |
| |
|
|
| Fuel and
oil |
|
1,215 |
|
1,416 |
| |
|
|
|
Other operating expenses |
|
9,044 |
|
8,352 |
| |
|
|
|
Direct Operating Expenses (1) |
$ |
122,237 |
$ |
115,210 |
(1) Please see Non-IFRS Measures
Third Quarter 2023 Consolidated Operating
Highlights
Operating revenue increased 4.0% to $67,635,000
for the three month period ended September 30, 2023 from
$65,009,000 in 2022 due to the revenue from the two Highland Gate
home sales in 2023 as compared to none in 2022.
Direct operating expenses increased 10.7% to
$47,264,000 for the three month period ended September 30, 2023
from $42,687,000 in 2022 due to the cost of sales from the two
Highland Gate home sales in 2023 as compared to none in 2022, as
well as above normal increases in labour and certain operating
expenses. It continues to be a challenging environment in being
able to manage labour costs due to the above normal minimum wage
increases and a competitive environment for hiring staff.
Net operating income for the Canadian golf club
operations segment decreased to $21,173,000 for the three month
period ended September 30, 2023 from $23,626,000 in 2022 due to the
conclusion of ClubLink’s lease of The Country Club which expired as
of December 31, 2023, as well as above normal increases in labour
and certain operating expenses. There has also been a noticeable
decline in traffic in the Muskoka, Ontario tourist region this
summer which has affected the results of the Company’s resorts
which operate in this area.
Depreciation and amortization decreased 19.7% to
$3,607,000 in 2023 from $4,493,000 in 2022 due to the conclusion of
The Country Club lease which has also resulted in a decline in
depreciation of right-of-use assets.
Interest, net and investment income increased to
$2,327,000 for the three month period ended September 30, 2023 from
an expense of $1,510,000 in 2022 due to a decrease in borrowings
and an increase in distributions from the Company’s investment in
Automotive Properties REIT. In 2022, the Company paid off several
non-revolving mortgages in advance of their due dates. The payoff
amounts totaled $46,303,000 (US$35,169,000) and resulted in
prepayment penalties totaling $2,604,000.
Other items consist of the following income
(loss) items:
| |
For the
three months ended |
| |
September 30, 2023 |
September 30, 2022 |
|
|
|
|
|
Foreign exchange loss |
$ |
(165 |
) |
$ |
(440 |
) |
| Unrealized
loss on investment in marketable securities |
|
(9,859 |
) |
|
(1,915 |
) |
| Contingent
contractual obligation |
|
6,620 |
|
|
- |
|
| Gain on sale
of investments in joint venture |
|
6,521 |
|
|
- |
|
| Loss on real
estate fund investments |
|
(679 |
) |
|
- |
|
| Equity
income from investments in joint ventures |
|
97 |
|
|
623 |
|
| Insurance
proceeds |
|
188 |
|
|
220 |
|
| Other |
|
(113 |
) |
|
(5 |
) |
|
|
|
|
| Other
items |
$ |
2,610 |
|
$ |
(1,517 |
) |
|
|
|
|
At September 30, 2023, the Company recorded
unrealized losses of $9,859,000 on its investment in marketable
securities (September 30, 2022 - $1,915,000). This loss is
attributable to the fair market value adjustments of the Company's
investment in Automotive Properties REIT.
The contingent contractual obligation of
USD$5,000,000 (CDN$6,620,000) originating from the sale of White
Pass in 2018 expired in July 2023 and as such has been reversed
since it had not been expended.
On September 20, 2023, the Company completed the
divestiture of its investment in the Geranium real estate
management company along with other non-Highland Gate joint
ventures in which it was a co-investor with the Geranium Group.
These assets were purchased by the Company’s co-investors with
Geranium. Total proceeds for the transaction were $12,500,000
including deferred proceeds of $5,300,000. A gain of $6,521,000 was
recorded as a result of the transaction.
Net earnings increased to $17,690,000 for the
three month period ended September 30, 2023 from $11,920,000 in
2022 due to the change in other items described above. Basic and
diluted earnings per share increased to 72 cents per share in 2023,
compared to basic and diluted earnings per share of 49 cents in
2022.
Non-IFRS Measures
TWC uses non-IFRS measures as a benchmark
measurement of our own operating results and as a benchmark
relative to our competitors. We consider these non-IFRS measures to
be a meaningful supplement to net earnings. We also believe these
non-IFRS measures are commonly used by securities analysts,
investors and other interested parties to evaluate our financial
performance. These measures, which included direct operating
expenses and net operating income do not have standardized meaning
under IFRS. While these non-IFRS measures have been disclosed
herein to permit a more complete comparative analysis of the
Company’s operating performance and debt servicing ability relative
to other companies, readers are cautioned that these non-IFRS
measures as reported by TWC may not be comparable in all instances
to non-IFRS measures as reported by other companies.
The glossary of financial terms is as
follows:
Direct operating expenses =
expenses that are directly attributable to company’s business units
and are used by management in the assessment of their performance.
These exclude expenses which are attributable to major corporate
decisions such as impairment.
Net operating income =
operating revenue – direct operating expenses
Net operating income is an important metric used
by management in evaluating the Company’s operating performance as
it represents the revenue and expense items that can be directly
attributable to the specific business unit’s ongoing operations. It
is not a measure of financial performance under IFRS and should not
be considered as an alternative to measures of performance under
IFRS. The most directly comparable measure specified under IFRS is
net earnings.
Eligible Dividend
Today, TWC Enterprises Limited announced an
eligible cash dividend of 5 cents per common share to be paid on
December 15, 2023 to shareholders of record as at November 30,
2023.
Corporate Profile
TWC is engaged in golf club operations under the
trademark, “ClubLink One Membership More Golf.” TWC is Canada’s
largest owner, operator and manager of golf clubs with 44 18-hole
equivalent championship and 2 18-hole equivalent academy courses
(including two managed properties) at 34 locations in Ontario,
Quebec and Florida.
For further information please contact:
Andrew Tamlin Chief Financial Officer 15675
Dufferin Street King City, Ontario L7B 1K5 Tel: 905-841-5372 Fax:
905-841-8488 atamlin@clublink.ca
Management’s discussion and analysis, financial
statements and other disclosure information relating to the Company
is available through SEDAR and at www.sedar.com and on the Company
website at www.twcenterprises.ca
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