| 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 March 31, 2020, the Company owned, leased or managed 61 Traditional Golf 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 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, 2020 |
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Revenues |
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Golf operations |
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$ |
3,910 |
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$ |
44,715 |
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$ |
— |
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$ |
48,625 |
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Sales of food and beverages |
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6,207 |
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|
6,303 |
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— |
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|
12,510 |
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Total revenues |
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10,117 |
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|
51,018 |
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— |
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|
61,135 |
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Operating costs |
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Operating expenses |
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8,172 |
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|
46,195 |
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— |
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54,367 |
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Cost of sales - food and beverages |
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1,610 |
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|
2,045 |
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— |
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|
3,655 |
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General and administrative expense (A) |
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3,169 |
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3,093 |
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|
2,378 |
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|
8,640 |
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General and administrative expense - acquisition and transaction expenses (B) |
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34 |
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|
122 |
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|
1,022 |
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|
1,178 |
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Depreciation and amortization |
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3,020 |
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3,703 |
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71 |
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6,794 |
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Pre-opening costs (C) |
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552 |
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— |
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— |
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|
552 |
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Impairment and other losses |
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— |
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792 |
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— |
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|
792 |
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Total operating costs |
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16,557 |
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|
55,950 |
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|
3,471 |
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|
75,978 |
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Operating loss |
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(6,440 |
) |
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(4,932 |
) |
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(3,471 |
) |
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(14,843 |
) |
Other income (expenses) |
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Interest and investment income |
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1 |
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15 |
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|
114 |
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|
130 |
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Interest expense (D) |
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(105 |
) |
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(2,147 |
) |
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(526 |
) |
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(2,778 |
) |
Capitalized interest (D) |
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— |
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9 |
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|
24 |
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|
33 |
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Other (loss) income, net |
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— |
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(46 |
) |
|
413 |
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|
367 |
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Total other income (expenses) |
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(104 |
) |
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(2,169 |
) |
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25 |
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(2,248 |
) |
Income tax expense |
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— |
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— |
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|
271 |
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|
271 |
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Net (loss) income |
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(6,544 |
) |
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(7,101 |
) |
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(3,717 |
) |
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(17,362 |
) |
Preferred dividends |
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— |
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— |
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(1,395 |
) |
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(1,395 |
) |
(Loss) income applicable to common stockholders |
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$ |
(6,544 |
) |
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$ |
(7,101 |
) |
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$ |
(5,112 |
) |
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$ |
(18,757 |
) |
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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, 2020 |
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Total assets |
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164,212 |
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299,573 |
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37,638 |
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501,423 |
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Total liabilities |
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41,182 |
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349,105 |
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|
63,225 |
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|
453,512 |
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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 |
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$ |
123,030 |
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$ |
(49,532 |
) |
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$ |
(87,170 |
) |
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$ |
(13,672 |
) |
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Additions to property and equipment (including finance leases) during the three months ended March 31, 2020 |
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$ |
4,240 |
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$ |
1,894 |
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$ |
403 |
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$ |
6,537 |
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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 |
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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 |
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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 (A) |
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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) |
|
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 and other losses |
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— |
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|
4,088 |
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— |
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|
4,088 |
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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 |
) |
|
(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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(A) |
General and administrative expenses include severance expense in the amount of $0.7 million for the three months ended March 31, 2020, and $0.4 million for the three months ended March 31, 2019.
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(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. |
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(C) |
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. |
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(D) |
Interest expense includes the accretion of membership deposit liabilities in the amount of $1.9 million for the three months ended March 31, 2020, and $1.9 million for the three months ended March 31, 2019. Interest expense and capitalized interest are combined in 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 $24.4 million as of March 31, 2020 recorded in other investments on the Consolidated Balance Sheets.
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