Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.21.1
SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
 
The Company currently has three reportable segments: (i) Entertainment Golf, (ii) Traditional Golf and (iii) corporate. The Company has determined that its chief operating decision maker (“CODM”) is the Chief Executive Officer and President, who reviews discrete financial information, including resource allocation and performance assessment, for each reportable segment to manage the Company.

The Company's Entertainment Golf segment, launched in 2018, is comprised of Drive Shack venues that feature tech-enabled hitting bays with in-bay dining, full-service restaurants, bars, and event spaces and the Company's new Puttery sites. As of March 31, 2021, the Company operated four Drive Shack venues across three states which are located in Orlando, Florida; West Palm Beach, Florida; Raleigh, North Carolina; and Richmond, Virginia. Puttery remains under development and the first two venues are expected to debut in Dallas and Charlotte in summer 2021.

The Company's Traditional Golf business is one of the largest operators of golf courses and country clubs in the United States. As of March 31, 2021, the Company owned, leased or managed 60 Traditional Golf properties across nine 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).
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:
  Entertainment Golf Traditional Golf Corporate Total
Three Months Ended March 31, 2021        
Revenues
Golf operations $ 3,421  $ 49,740  $ —  $ 53,161 
Sales of food and beverages 4,802  3,128  —  7,930 
Total revenues 8,223  52,868  —  61,091 
Operating costs
Operating expenses 5,133  43,737  —  48,870 
Cost of sales - food and beverages 1,085  1,019  —  2,104 
General and administrative expense (A) 2,198  2,378  3,210  7,786 
General and administrative expense - acquisition and transaction expenses (B) 192  —  4  196 
Depreciation and amortization 2,952  3,221  72  6,245 
Pre-opening costs (C) 556  —  —  556 
Loss on lease terminations and impairment 22  —  3,187  3,209 
Total operating costs 12,138  50,355  6,473  68,966 
Operating (loss) income (3,915) 2,513  (6,473) (7,875)
Other income (expenses)
Interest and investment income —  20  133  153 
Interest expense (D) (82) (2,251) (316) (2,649)
Capitalized interest (D) —  8  15  23 
Other income (loss), net —  (114) 53  (61)
Total other income (expenses) (82) (2,337) (115) (2,534)
Income tax expense —  —  495  495 
Net income (loss) (3,997) 176  (7,083) (10,904)
Preferred dividends —  —  (1,395) (1,395)
Loss applicable to common stockholders $ (3,997) $ 176  $ (8,478) $ (12,299)
Entertainment Golf Traditional Golf Corporate Total
March 31, 2021
Total assets 176,618  261,310  61,933  499,861 
Total liabilities 44,951  339,447  63,081  447,479 
Preferred stock —  —  61,583  61,583 
Equity $ 131,667  $ (78,137) $ (62,731) $ (9,201)
Additions to property and equipment (including finance leases) during the three months ended March 31, 2021 $ 3,789  $ 1,135  $ —  $ 4,924 
Entertainment Golf Traditional Golf Corporate Total
Three Months Ended March 31, 2020
Revenues
Golf operations $ 3,910  $ 44,715  $ —  $ 48,625 
Sales of food and beverages 6,207  6,303  —  12,510 
Total revenues 10,117  51,018  —  61,135 
Operating costs
Operating expenses 8,172  46,195  —  54,367 
Cost of sales - food and beverages 1,610  2,045  —  3,655 
General and administrative expense (A) 3,169  3,093  2,378  8,640 
General and administrative expense - acquisition and transaction expenses (B) 34  122  1,022  1,178 
Depreciation and amortization 3,020  3,703  71  6,794 
Pre-opening costs (C) 552  —  —  552 
Loss on lease terminations and impairment —  792  —  792 
Total operating costs 16,557  55,950  3,471  75,978 
Operating (loss) income (6,440) (4,932) (3,471) (14,843)
Other income (expenses)
Interest and investment income 1  15  114  130 
Interest expense (D) (105) (2,147) (526) (2,778)
Capitalized interest (D) —  9  24  33 
Other income (loss), net —  (46) 413  367 
Total other income (expenses) (104) (2,169) 25  (2,248)
Income tax expense —  —  271  271 
Net loss (6,544) (7,101) (3,717) (17,362)
Preferred dividends —  —  (1,395) (1,395)
Loss applicable to common stockholders $ (6,544) $ (7,101) $ (5,112) $ (18,757)
General and administrative expenses included severance expenses of $0.1 million for the three months ended March 31, 2021, and $0.7 million for the three months ended March 31, 2020.
(B)Acquisition and transaction expenses include costs related to completed and potential acquisitions and transactions and strategic initiatives which may include advisory, legal, accounting and other professional or consulting fees.
(C)Pre-opening costs are expensed as incurred and consist primarily of venue-related marketing expenses, lease expense, employee payroll, travel and related expenses, training costs, food, beverage and other operating expenses incurred prior to opening an Entertainment Golf venue.
(D)Interest expense included the accretion of membership deposit liabilities in the amount of $2.0 million for the three months ended March 31, 2021, and $1.9 million for the three months ended March 31, 2020. Interest expense and capitalized interest are combined in interest expense, net on the Consolidated Statements of Operations.