Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING

v3.19.3.a.u2
SEGMENT REPORTING
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
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 and President, who reviews discrete financial information for each reportable segment to manage the Company, including resource allocation and performance assessment.

The Company opened its first Entertainment Golf venue in Orlando, Florida, in April 2018. During the second half of 2019, the Company opened three Generation 2.0 core Entertainment Golf venues in Raleigh, North Carolina; Richmond, Virginia and West Palm Beach, Florida.
 
Additionally, the Company’s Traditional Golf business is one of the largest operators of golf properties in the United States. As of December 31, 2019, the Company owned, leased or managed 59 properties across 9 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 reconciliation to the same data for the Company as a whole:
 
Entertainment Golf
 
Traditional Golf
 
Corporate
 
Total
Year Ended December 31, 2019
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 


Golf operations
$
7,806

 
$
208,691

 
$

 
$
216,497

Sales of food and beverages
11,974

 
43,593

 

 
55,567

Total revenues
19,780

 
252,284

 

 
272,064

Operating costs
 
 
 
 
 
 
 
Operating expenses (A)
16,403

 
212,903

 

 
229,306

Cost of sales - food and beverages
2,984

 
12,233

 

 
15,217

General and administrative expense (B)
14,081

 
16,812

 
12,008

 
42,901

General and administrative expense - acquisition and transaction expenses (C)
3,490

 
798

 
787

 
5,075

Depreciation and amortization
5,935

 
16,266

 
195

 
22,396

Pre-opening costs (D)
9,040

 

 

 
9,040

Impairment and other losses
10,196

 
5,217

 

 
15,413

Realized and unrealized loss on investments

 

 

 

Total operating costs
62,129

 
264,229

 
12,990

 
339,348

Operating loss
(42,349
)
 
(11,945
)
 
(12,990
)
 
(67,284
)
Other income (expenses)
 
 
 
 
 
 
 
Interest and investment income
321

 
105

 
529

 
955

Interest expense (E)
(355
)
 
(8,238
)
 
(2,415
)
 
(11,008
)
Capitalized interest (E)

 
586

 
1,662

 
2,248

Other income (loss), net

 
19,069

 
1,807

 
20,876

Total other income (expenses)
(34
)
 
11,522

 
1,583

 
13,071

Income tax expense
62

 
8

 
571

 
641

Net loss
(42,445
)
 
(431
)
 
(11,978
)
 
(54,854
)
Preferred dividends

 

 
(5,580
)
 
(5,580
)
Loss applicable to common stockholders
$
(42,445
)
 
$
(431
)
 
$
(17,558
)
 
$
(60,434
)


 
Entertainment Golf
 
Traditional Golf
 
Corporate (F)
 
Total
December 31, 2019
 
 
 
 
 
 
 
Total assets
163,583

 
308,456

 
43,952

 
515,991

Total liabilities
36,375

 
350,968

 
63,073

 
450,416

Preferred stock

 

 
61,583

 
61,583

Equity (loss) attributable to common stockholders
$
127,208

 
$
(42,512
)
 
$
(80,704
)
 
$
3,992

 
 
 
 
 
 
 
 
Additions to property and equipment (including finance leases) during the year ended December 31, 2019
$
62,543

 
$
14,966

 
$
1,764

 
$
79,273



Summary segment financial data (continued).
 
Entertainment Golf
 
Traditional Golf
 
Corporate
 
Total
Year Ended December 31, 2018
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
Golf operations
$
2,191

 
$
242,455

 
$

 
$
244,646

Sales of food and beverages
2,713

 
67,010

 

 
69,723

Total revenues
4,904

 
309,465

 

 
314,369

Operating costs
 
 
 
 
 
 
 
Operating expenses (A)
5,398

 
246,396

 

 
251,794

Cost of sales - food and beverages
640

 
19,513

 

 
20,153

General and administrative expense (B)
6,382

 
16,702

 
11,271

 
34,355

General and administrative expense - acquisition and transaction expenses (C)
2,679

 
1,024

 
502

 
4,205

Depreciation and amortization
1,886

 
17,814

 
4

 
19,704

Pre-opening costs (D)
2,483

 

 

 
2,483

Impairment and other losses

 
8,093

 
147

 
8,240

Realized and unrealized loss on investments

 
(131
)
 

 
(131
)
Total operating costs
19,468

 
309,411

 
11,924

 
340,803

Operating (loss) income
(14,564
)
 
54

 
(11,924
)
 
(26,434
)
Other income (expenses)
 
 
 
 
 
 
 
Interest and investment income
281

 
194

 
1,319

 
1,794

Interest expense (E)

 
(16,046
)
 
(2,274
)
 
(18,320
)
Capitalized interest (E)

 
1,121

 
560

 
1,681

Other income, net

 
846

 
2,034

 
2,880

Total other income (expenses)
281

 
(13,885
)
 
1,639

 
(11,965
)
Income tax expense

 

 
284

 
284

Net loss
(14,283
)
 
(13,831
)
 
(10,569
)
 
(38,683
)
Preferred dividends

 

 
(5,580
)
 
(5,580
)
Loss applicable to common stockholders
$
(14,283
)
 
$
(13,831
)
 
$
(16,149
)
 
$
(44,263
)


 
Entertainment Golf
 
Traditional Golf
 
Corporate (F)
 
Total
December 31, 2018
 
 
 
 
 
 
 
Total assets
117,416

 
225,904

 
58,627

 
401,947

Total liabilities
13,561

 
196,836

 
56,883

 
267,280

Preferred stock

 

 
61,583

 
61,583

Equity attributable to common stockholders
$
103,855

 
$
29,068

 
$
(59,839
)
 
$
73,084

 
 
 
 
 
 
 
 
Additions to property and equipment (including finance leases) during the year ended December 31, 2018
$
55,924

 
$
14,042

 
$

 
$
69,966


Summary segment financial data (continued).
 
 
 
 
 
 
 
 
 
Entertainment Golf
 
Traditional Golf
 
Corporate
 
Total
Year Ended December 31, 2017
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
Golf operations
$

 
$
221,737

 
$

 
$
221,737

Sales of food and beverages

 
70,857

 

 
70,857

Total revenues

 
292,594

 

 
292,594

Operating costs
 
 
 
 
 
 
 
Operating expenses (A)

 
232,796

 

 
232,796

Cost of sales - food and beverages

 
20,959

 

 
20,959

General and administrative expense (B)
147

 
16,073

 
6,456

 
22,676

General and administrative expense - acquisition and transaction expenses (C)
7,139

 
677

 
921

 
8,737

Management fee and termination payment to affiliate

 

 
21,410

 
21,410

Depreciation and amortization
44

 
24,260

 

 
24,304

Pre-opening costs (D)
320

 

 

 
320

Impairment and other losses

 

 
60

 
60

Realized and unrealized loss on investments

 
199

 
6,044

 
6,243

Total operating costs
7,650

 
294,964

 
34,891

 
337,505

Operating loss
(7,650
)
 
(2,370
)
 
(34,891
)
 
(44,911
)
Other income (expenses)
 
 
 
 
 
 
 
Interest and investment income

 
159

 
23,003

 
23,162

Interest expense (E)

 
(15,523
)
 
(4,304
)
 
(19,827
)
Capitalized interest (E)

 
246

 

 
246

Other (loss) income, net

 
(1,762
)
 
1,856

 
94

Total other income (expenses)

 
(16,880
)
 
20,555

 
3,675

Income tax expense

 

 
965

 
965

Net loss
(7,650
)
 
(19,250
)
 
(15,301
)
 
(42,201
)
Preferred dividends

 

 
(5,580
)
 
(5,580
)
Loss applicable to common stockholders
$
(7,650
)
 
$
(19,250
)
 
$
(20,881
)
 
$
(47,781
)
 
 
 
 
 
 
 
 
Additions to property and equipment (including finance leases) during the year ended December 31, 2017
$
27,295

 
$
16,284

 
$
67

 
$
43,646


(A)
Operating expenses includes rental expenses recorded under operating leases for carts and equipment in the amount of $0.9 million, $1.9 million and $3.0 million for the years ended December 31, 2019, 2018 and 2017, respectively.
(B)
General and administrative expenses include severance expense in the amount of $2.3 million, $0.1 million and zero for the years ended December 31, 2019, 2018 and 2017, respectively.
(C)
Acquisition and transaction expense includes costs related to completed and potential acquisitions and transactions and strategic initiatives which may include advisory, legal, accounting and other professional or consulting fees.
(D)
Pre-opening costs are expensed as incurred and consist primarily of site-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.
(E)
Interest expense includes the accretion of membership deposit liabilities in the amount of $7.2 million, $6.9 million and $6.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. Interest expense and capitalized interest total to interest expense, net on the Consolidated Statements of Operations.
(F)
Total assets in the corporate segment includes an equity method investment in the amount of $24.0 million and $22.6 million as of December 31, 2019 and 2018, respectively, recorded in other investments on the Consolidated Balance Sheets. See Note 2 for additional information.