| SEGMENT REPORTING |
SEGMENT REPORTING
The Company currently has three reportable segments: (i) Entertainment Golf venues, (ii) Traditional Golf properties and (iii) corporate. The chief operating decision maker (“CODM”) for each segment is our Chief Executive Officer, who reviews discrete financial information for each reportable segment to manage the Company, including resource allocation and performance assessment.
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.
Additionally, the Company's Traditional Golf business is one of the largest operators of golf properties in the United States. As of March 31, 2019, the Company owned, leased or managed 64 Traditional Golf properties across 11 states.
The corporate segment consists primarily of investments in loans and securities, interest income on short-term investments, general and administrative expenses as a public company, interest expense on the junior subordinated notes payable (Note 8) and income tax expense (Note 14).
Beginning as of the Company’s second fiscal quarter in 2018, the Company changed its reportable segments to reflect the manner in which our CODM manages our businesses, including resource allocation and performance assessment. As a result, the former Debt Investments segment was combined with the corporate segment, to reflect the ongoing reduction in size of the Debt Investments segment.
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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Entertainment Golf |
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Traditional Golf |
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Corporate |
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Total |
Three Months Ended March 31, 2019 |
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Revenues |
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Golf operations |
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$ |
681 |
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$ |
44,025 |
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$ |
— |
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$ |
44,706 |
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Sales of food and beverages |
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1,040 |
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|
8,206 |
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— |
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|
9,246 |
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Total revenues |
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1,721 |
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|
52,231 |
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— |
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|
53,952 |
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Operating costs |
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Operating expenses (A) |
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1,747 |
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|
45,976 |
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— |
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|
47,723 |
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Cost of sales - food and beverages |
|
251 |
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2,447 |
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— |
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|
2,698 |
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General and administrative expense |
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3,379 |
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3,897 |
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|
3,944 |
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|
11,220 |
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General and administrative expense - acquisition and transaction expenses (B) |
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157 |
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|
153 |
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|
89 |
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|
399 |
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Depreciation and amortization |
|
709 |
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|
4,217 |
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(2 |
) |
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4,924 |
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Pre-opening costs (C) |
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1,179 |
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— |
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— |
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1,179 |
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Impairment |
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— |
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4,088 |
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— |
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|
4,088 |
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Realized and unrealized (gain) on investments |
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— |
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— |
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— |
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— |
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Total operating costs |
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7,422 |
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|
60,778 |
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|
4,031 |
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|
72,231 |
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Operating loss |
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(5,701 |
) |
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(8,547 |
) |
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(4,031 |
) |
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(18,279 |
) |
Other income (expenses) |
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Interest and investment income |
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132 |
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|
38 |
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|
174 |
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|
344 |
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Interest expense (D) |
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(3 |
) |
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(2,190 |
) |
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(626 |
) |
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(2,819 |
) |
Capitalized interest (D) |
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— |
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|
188 |
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|
478 |
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|
666 |
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Other (loss) income, net |
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(7 |
) |
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5,030 |
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|
465 |
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|
5,488 |
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Total other income (expenses) |
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122 |
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|
3,066 |
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|
491 |
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|
3,679 |
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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 |
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(5,579 |
) |
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(5,481 |
) |
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(3,540 |
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(14,600 |
) |
Preferred dividends |
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— |
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— |
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(1,395 |
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(1,395 |
) |
Loss applicable to common stockholders |
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$ |
(5,579 |
) |
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$ |
(5,481 |
) |
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$ |
(4,935 |
) |
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$ |
(15,995 |
) |
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Entertainment Golf |
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Traditional Golf |
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Corporate (E) |
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Total |
March 31, 2019 |
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Total assets |
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164,907 |
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351,877 |
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47,207 |
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|
563,991 |
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Total liabilities |
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42,054 |
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349,987 |
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61,887 |
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|
453,928 |
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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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Noncontrolling interest |
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— |
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— |
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— |
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— |
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Equity attributable to common stockholders |
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$ |
122,853 |
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$ |
1,890 |
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$ |
(76,263 |
) |
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$ |
48,480 |
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Additions to property and equipment (including finance leases) during the three months ended March 31, 2019 |
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$ |
28,037 |
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$ |
2,106 |
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$ |
800 |
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$ |
30,943 |
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Summary segment financial data (continued).
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Entertainment Golf |
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Traditional Golf |
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Corporate (F) |
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Total |
Three Months Ended March 31, 2018 |
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Revenues |
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Golf operations |
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$ |
— |
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$ |
53,554 |
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$ |
— |
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$ |
53,554 |
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Sales of food and beverages |
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— |
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|
13,106 |
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— |
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|
13,106 |
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Total revenues |
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— |
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66,660 |
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— |
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|
66,660 |
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Operating costs |
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Operating expenses (A) |
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— |
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|
57,379 |
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— |
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|
57,379 |
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Cost of sales - food and beverages |
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— |
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|
4,040 |
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— |
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|
4,040 |
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General and administrative expense |
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1,102 |
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|
4,153 |
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|
2,080 |
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|
7,335 |
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General and administrative expense - acquisition and transaction expenses (B) |
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1,253 |
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|
307 |
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|
297 |
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|
1,857 |
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Depreciation and amortization |
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30 |
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|
5,513 |
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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 |
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— |
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|
1,326 |
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|
147 |
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|
1,473 |
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Realized and unrealized (gain) on investments |
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— |
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(242 |
) |
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— |
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(242 |
) |
Total operating costs |
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3,941 |
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|
72,476 |
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|
2,529 |
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|
78,946 |
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Operating loss |
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(3,941 |
) |
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(5,816 |
) |
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(2,529 |
) |
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(12,286 |
) |
Other income (expenses) |
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Interest and investment income |
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28 |
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51 |
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|
367 |
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|
446 |
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Interest expense (D) |
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— |
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(3,938 |
) |
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(494 |
) |
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(4,432 |
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Capitalized interest (D) |
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— |
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|
383 |
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— |
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|
383 |
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Other (loss) income, net |
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— |
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(938 |
) |
|
532 |
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(406 |
) |
Total other income (expenses) |
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28 |
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(4,442 |
) |
|
405 |
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(4,009 |
) |
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 |
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(3,913 |
) |
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(10,258 |
) |
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(2,124 |
) |
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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 |
) |
|
(1,395 |
) |
Loss applicable to common stockholders |
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$ |
(3,913 |
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$ |
(10,258 |
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$ |
(3,519 |
) |
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$ |
(17,690 |
) |
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(A) |
Operating expenses include rental expenses recorded under operating leases for carts and equipment in the amount of $0.3 million and $0.6 million for the three months ended March 31, 2019 and 2018, 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 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 includes the accretion of membership deposit liabilities in the amount of $1.9 million and $1.7 million for the three months ended March 31, 2019 and 2018, respectively. Interest expense and capitalized interest total to interest expense, net on the Consolidated Statements of Operations.
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(E) |
Total assets in the corporate segment include an equity method investment in the amount of $23.0 million as of March 31, 2019 recorded in other investments on the Consolidated Balance Sheets.
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(F) |
The Debt Investments segment and corporate segment as reported previously are combined to conform to the current period's presentation. |
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