Drive Shack Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2020

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
Six Months Ended June 30, 2020
Revenues
Golf operations	$	4,672	$	73,628	$	—	$	78,300
Sales of food and beverages	7,235		7,700		—		14,935
Total revenues	11,907		81,328		—		93,235
Operating costs
Operating expenses	10,801		76,790		—		87,591
Cost of sales - food and beverages	1,904		2,580		—		4,484
General and administrative expense (A)	4,529		5,282		4,361		14,172
General and administrative expense - acquisition and transaction expenses (B)	865		155		994		2,014
Depreciation and amortization	6,021		7,311		144		13,476
Pre-opening costs (C)	822		—		—		822
(Gain) Loss on lease terminations and impairment	—		(2,333)		—		(2,333)
Realized and unrealized (gain) on investments	—		—		—		—
Total operating costs	24,942		89,785		5,499		120,226
Operating loss	(13,035)		(8,457)		(5,499)		(26,991)
Other income (expenses)
Interest and investment income	1		38		226		265
Interest expense (D)	(207)		(4,245)		(962)		(5,414)
Capitalized interest (D)	—		22		56		78
Other income (loss), net	—		(166)		(23,889)		(24,055)
Total other income (expenses)	(206)		(4,351)		(24,569)		(29,126)
Income tax expense	—		—		771		771
Net loss	(13,241)		(12,808)		(30,839)		(56,888)
Preferred dividends	—		—		(2,790)		(2,790)
Loss applicable to common stockholders	$	(13,241)	$	(12,808)	$	(33,629)	$	(59,678)


	Entertainment Golf		Traditional Golf		Corporate		Total
Three Months Ended June 30, 2020
Revenues
Golf operations	$	762	$	28,913	$	—	$	29,675
Sales of food and beverages	1,028		1,397		—		2,425
Total revenues	1,790		30,310		—		32,100
Operating costs
Operating expenses	2,629		30,595		—		33,224
Cost of sales - food and beverages	294		535		—		829
General and administrative expense (A)	1,360		2,189		1,983		5,532
General and administrative expense - acquisition and transaction expenses (B)	831		33		(28)		836
Depreciation and amortization	3,001		3,608		73		6,682
Pre-opening costs (C)	270		—		—		270
(Gain) Loss on lease terminations and impairment	—		(3,125)		—		(3,125)
Realized and unrealized loss on investments	—		—		—		—
Total operating costs	8,385		33,835		2,028		44,248
Operating loss	(6,595)		(3,525)		(2,028)		(12,148)
Other income (expenses)
Interest and investment income	—		23		112		135
Interest expense (D)	(102)		(2,098)		(436)		(2,636)
Capitalized interest (D)	—		13		32		45
Other income (loss), net	—		(120)		(24,302)		(24,422)
Total other income (expenses)	(102)		(2,182)		(24,594)		(26,878)
Income tax expense	—		—		500		500
Net loss	(6,697)		(5,707)		(27,122)		(39,526)
Preferred dividends	—		—		(1,395)		(1,395)
Loss applicable to common stockholders	$	(6,697)	$	(5,707)	$	(28,517)	$	(40,921)


	Entertainment Golf		Traditional Golf		Corporate		Total
June 30, 2020
Total assets	158,187		284,874		14,012		457,073
Total liabilities	41,997		343,136		63,272		448,405
Preferred stock	—		—		61,583		61,583
Equity	$	116,190	$	(58,262)	$	(110,843)	$	(52,915)

Additions to property and equipment (including finance leases) during the six months ended June 30, 2020	$	4,297	$	2,982	$	423	$	7,702

Summary segment financial data (continued).


	Entertainment Golf		Traditional Golf		Corporate		Total
Six Months Ended June 30, 2019
Revenues
Golf operations	$	1,288	$	100,804	$	—	$	102,092
Sales of food and beverages	1,911		21,564		—		23,475
Total revenues	3,199		122,368		—		125,567
Operating costs
Operating expenses	3,605		102,838		—		106,443
Cost of sales - food and beverages	501		6,100		—		6,601
General and administrative expense (A)	6,930		8,212		8,510		23,652
General and administrative expense - acquisition and transaction expenses (B)	963		333		278		1,574
Depreciation and amortization	1,670		8,335		41		10,046
Pre-opening costs (C)	2,879		—		—		2,879
(Gain) Loss on lease terminations and impairment	118		4,088		—		4,206
Realized and unrealized (gain) on investments	—		—		—		—
Total operating costs	16,666		129,906		8,829		155,401
Operating (loss) income	(13,467)		(7,538)		(8,829)		(29,834)
Other income (expenses)
Interest and investment income	246		61		301		608
Interest expense (D)	(142)		(4,051)		(1,256)		(5,449)
Capitalized interest (D)	—		413		1,089		1,502
Other income (loss), net	(7)		4,688		933		5,614
Total other income (expenses)	97		1,111		1,067		2,275
Income tax expense	—		—		—		—
Net loss	(13,370)		(6,427)		(7,762)		(27,559)
Preferred dividends	—		—		(2,790)		(2,790)
Loss applicable to common stockholders	$	(13,370)	$	(6,427)	$	(10,552)	$	(30,349)


	Entertainment Golf		Traditional Golf		Corporate		Total
Three Months Ended June 30, 2019
Revenues
Golf operations	$	607	$	56,779	$	—	$	57,386
Sales of food and beverages	872		13,357		—		14,229
Total revenues	1,479		70,136		—		71,615
Operating costs
Operating expenses	1,857		56,863		—		58,720
Cost of sales - food and beverages	251		3,653		—		3,904
General and administrative expense (A)	3,551		4,316		4,565		12,432
General and administrative expense - acquisition and transaction expenses (B)	806		179		190		1,175
Depreciation and amortization	961		4,118		43		5,122
Pre-opening costs (C)	1,700		—		—		1,700
(Gain) Loss on lease terminations and impairment	118		—		—		118

Total operating costs	9,244		69,129		4,798		83,171
Operating loss	(7,765)		1,007		(4,798)		(11,556)
Other income (expenses)
Interest and investment income	114		23		128		265
Interest expense (D)	(142)		(1,861)		(629)		(2,632)
Capitalized interest (D)	—		226		611		837
Other income (loss), net	—		(343)		470		127
Total other income (expenses)	(28)		(1,955)		580		(1,403)
Income tax expense	—		—		—		—
Net loss	(7,793)		(948)		(4,218)		(12,959)
Preferred dividends	—		—		(1,395)		(1,395)
Loss applicable to common stockholders	$	(7,793)	$	(948)	$	(5,613)	$	(14,354)

General and administrative expenses included no severance expense for the three months ended June 30, 2020, severance expense in the amount of $0.7 million for the six months ended June 30, 2020, and $0.7 million and $1.1 million for the three and six months ended June 30, 2019, respectively.

(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 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.

(D)Interest expense included the accretion of membership deposit liabilities in the amount of $1.9 million and $3.8 million for the three and six months ended June 30, 2020, respectively, and $1.6 million and $3.6 million for the three and six months ended June 30, 2019, respectively. Interest expense and capitalized interest are combined in interest expense, net on the Consolidated Statements of Operations.