| SEGMENT REPORTING |
SEGMENT REPORTING
The Company currently has four reportable segments: (i) Traditional Golf properties, (ii) Entertainment Golf venues, (iii) Debt Investments, and (iv) corporate. The Company's Traditional Golf business is one of the largest owners and operators of golf properties in the United States. As of March 31, 2018, the Company owned, leased or managed 74 Traditional Golf properties across 12 states. Additionally, the Company opened its inaugural Entertainment Golf venue in Orlando, Florida on April 7, 2018 and expects to continue opening a chain of next-generation Entertainment Golf venues across the United States and internationally, which combine golf, competition, dining and fun.
The Debt Investment segment consists primarily of loans and securities which the Company has substantially monetized as part of its transformation to a leisure and entertainment company. The corporate segment consists primarily of interest income on short-term investments, general and administrative expenses, interest expense on the junior subordinated notes payable (Note 7), management fees pursuant to the Management Agreement prior to the Internalization effective January 1, 2018 (Note 12) and income tax expense (Note 14).
Summary financial data on the Company’s segments is given below, together with a reconciliation to the same data for the Company as a whole:
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Traditional Golf |
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Entertainment Golf |
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Debt Investments |
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Corporate |
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Total |
Three Months Ended March 31, 2018 |
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Revenues |
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Golf course operations |
$ |
53,554 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
53,554 |
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Sales of food and beverages |
13,106 |
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— |
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— |
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— |
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13,106 |
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Total revenues |
66,660 |
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— |
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— |
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— |
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66,660 |
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Operating costs |
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Operating expenses (A) |
57,379 |
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— |
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— |
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— |
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57,379 |
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Cost of sales - food and beverages |
4,040 |
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— |
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— |
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— |
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4,040 |
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General and administrative expense |
4,153 |
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1,102 |
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6 |
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2,074 |
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|
7,335 |
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General and administrative expense - acquisition and transaction expenses (B) |
307 |
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1,253 |
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— |
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297 |
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|
1,857 |
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Depreciation and amortization |
5,513 |
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30 |
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— |
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5 |
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5,548 |
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Pre-opening costs (C) |
— |
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1,556 |
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— |
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— |
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1,556 |
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Impairment |
1,326 |
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— |
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147 |
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— |
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1,473 |
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Realized and unrealized loss on investments |
(242 |
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— |
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— |
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— |
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(242 |
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Total operating costs |
72,476 |
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|
3,941 |
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153 |
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2,376 |
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78,946 |
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Operating loss |
(5,816 |
) |
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(3,941 |
) |
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(153 |
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(2,376 |
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(12,286 |
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Other income (expenses) |
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Interest and investment income |
51 |
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28 |
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59 |
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|
308 |
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|
446 |
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Interest expense, net (D) |
(3,555 |
) |
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— |
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— |
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(494 |
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(4,049 |
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Other (loss) income, net |
(938 |
) |
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— |
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532 |
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— |
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(406 |
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Total other income (expenses) |
(4,442 |
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28 |
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591 |
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(186 |
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(4,009 |
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Income tax expense |
— |
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— |
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— |
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— |
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— |
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Net (loss) income |
(10,258 |
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(3,913 |
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438 |
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(2,562 |
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(16,295 |
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Preferred dividends |
— |
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— |
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— |
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(1,395 |
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(1,395 |
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(Loss) income applicable to common stockholders |
$ |
(10,258 |
) |
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$ |
(3,913 |
) |
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$ |
438 |
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$ |
(3,957 |
) |
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$ |
(17,690 |
) |
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Traditional Golf |
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Entertainment Golf |
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Debt Investments (E) |
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Corporate |
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Total |
March 31, 2018 |
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Total assets |
320,491 |
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81,575 |
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24,306 |
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87,604 |
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513,976 |
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Total liabilities |
290,553 |
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9,160 |
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79 |
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55,703 |
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355,495 |
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Preferred stock |
— |
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— |
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— |
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61,583 |
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61,583 |
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Equity attributable to common stockholders |
$ |
29,938 |
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$ |
72,415 |
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$ |
24,227 |
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$ |
(29,682 |
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$ |
96,898 |
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Additions to property and equipment (including capital leases) during the three months ended March 31, 2018 |
$ |
4,040 |
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$ |
9,498 |
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$ |
— |
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$ |
— |
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$ |
13,538 |
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Summary segment financial data (continued).
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Traditional Golf |
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Entertainment Golf |
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Debt Investments |
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Corporate |
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Total |
Three Months Ended March 31, 2017 |
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Revenues |
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Golf course operations |
$ |
46,296 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
46,296 |
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Sales of food and beverages |
12,845 |
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— |
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— |
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— |
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12,845 |
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Total revenues |
59,141 |
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— |
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— |
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— |
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59,141 |
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Operating costs |
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Operating expenses (A) |
50,509 |
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— |
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— |
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— |
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50,509 |
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Cost of sales - food and beverages |
4,032 |
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— |
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— |
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— |
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4,032 |
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General and administrative expense |
4,222 |
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15 |
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1 |
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1,595 |
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|
5,833 |
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General and administrative expense - acquisition and transaction expenses (B) |
276 |
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|
1,261 |
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— |
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117 |
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1,654 |
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Management fee to affiliate |
— |
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— |
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— |
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2,677 |
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2,677 |
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Depreciation and amortization |
5,793 |
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— |
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— |
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— |
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5,793 |
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Realized and unrealized loss on investments |
120 |
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— |
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3,269 |
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— |
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|
3,389 |
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Total operating costs |
64,952 |
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1,276 |
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3,270 |
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4,389 |
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73,887 |
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Operating loss |
(5,811 |
) |
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(1,276 |
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(3,270 |
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(4,389 |
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(14,746 |
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Other income (expenses) |
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Interest and investment income |
39 |
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— |
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7,802 |
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47 |
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|
7,888 |
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Interest expense, net (D) |
(3,817 |
) |
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— |
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(1,206 |
) |
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(411 |
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(5,434 |
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Other (loss) income, net |
(624 |
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— |
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|
501 |
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— |
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(123 |
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Total other income (expenses) |
(4,402 |
) |
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— |
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7,097 |
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(364 |
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2,331 |
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Income tax expense |
— |
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— |
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— |
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|
539 |
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|
539 |
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Net (loss) income |
(10,213 |
) |
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(1,276 |
) |
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3,827 |
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(5,292 |
) |
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(12,954 |
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Preferred dividends |
— |
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— |
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— |
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(1,395 |
) |
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(1,395 |
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(Loss) income applicable to common stockholders |
$ |
(10,213 |
) |
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$ |
(1,276 |
) |
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$ |
3,827 |
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$ |
(6,687 |
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$ |
(14,349 |
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(A) |
Operating expenses includes rental expenses recorded under operating leases for carts and equipment in the amount of $0.6 million and $0.8 million for the three months ended March 31, 2018 and 2017, respectively. Operating expenses also includes amortization of favorable and unfavorable lease intangibles in the amount of $1.0 million and $1.0 million for the three months ended March 31, 2018 and 2017, respectively.
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(B) |
Acquisition and transaction expenses include costs related to completed and potential acquisitions and transactions which may include advisory, legal, accounting, valuation and other professional or consulting fees. |
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(C) |
Pre-opening costs are expensed as incurred and consist primarily of site-related marketing expenses, pre-opening rent, employee payroll, travel and related expenses, training costs, food, beverage and other restaurant operating expenses incurred prior to opening an Entertainment Golf venue. |
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(D) |
Interest expense, net includes the accretion of membership deposit liabilities in the amount of $1.7 million and $1.6 million for the three months ended March 31, 2018 and 2017, respectively. Interest expense is net of $0.4 million related to capitalized interest for Entertainment Golf for the three months ended March 31, 2018.
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(E) |
Total assets in the Debt Investments segment includes an equity method investment in the amount of $21.5 million as of March 31, 2018 recorded in other investments on the Consolidated Balance Sheets. See Note 2 for additional information.
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