Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.19.2
SEGMENT REPORTING
6 Months Ended
Jun. 30, 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, 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 June 30, 2019, the Company owned, leased or managed 61 Traditional Golf properties across 10 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
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 (A)
 
3,605

 
102,838

 

 
106,443

Cost of sales - food and beverages
 
501

 
6,100

 

 
6,601

General and administrative expense (B)
 
6,930

 
8,212

 
8,510

 
23,652

General and administrative expense - acquisition and transaction expenses (C)
 
963

 
333

 
278

 
1,574

Depreciation and amortization
 
1,670

 
8,335

 
41

 
10,046

Pre-opening costs (D)
 
2,879

 

 

 
2,879

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
 
(13,467
)
 
(7,538
)
 
(8,829
)
 
(29,834
)
Other income (expenses)
 
 
 
 
 
 
 
 
Interest and investment income
 
246

 
61

 
301

 
608

Interest expense (E)
 
(142
)
 
(4,051
)
 
(1,256
)
 
(5,449
)
Capitalized interest (E)
 

 
413

 
1,089

 
1,502

Other (loss) income, 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
)
Summary segment financial data (continued).
 
 
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 (A)
 
1,857

 
56,863

 

 
58,720

Cost of sales - food and beverages
 
251

 
3,653

 

 
3,904

General and administrative expense (B)
 
3,551

 
4,316

 
4,565

 
12,432

General and administrative expense - acquisition and transaction expenses (C)
 
806

 
179

 
190

 
1,175

Depreciation and amortization
 
961

 
4,118

 
43

 
5,122

Pre-opening costs (D)
 
1,700

 

 

 
1,700

Impairment
 
118

 

 

 
118

Realized and unrealized loss on investments
 

 

 

 

Total operating costs
 
9,244

 
69,129

 
4,798

 
83,171

Operating (loss) income
 
(7,765
)
 
1,007

 
(4,798
)
 
(11,556
)
Other income (expenses)
 
 
 
 
 
 
 
 
Interest and investment income
 
114

 
23

 
128

 
265

Interest expense (E)
 
(142
)
 
(1,861
)
 
(629
)
 
(2,632
)
Capitalized interest (E)
 

 
226

 
611

 
837

Other (loss) income, 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
)

 
 
Entertainment Golf
 
Traditional Golf
 
Corporate (F)
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
Total assets
 
180,343

 
336,484

 
42,248

 
559,075

Total liabilities
 
46,035

 
354,116

 
61,802

 
461,953

Preferred stock
 

 

 
61,583

 
61,583

Equity attributable to common stockholders
 
$
134,308

 
$
(17,632
)
 
$
(81,137
)
 
$
35,539

 
 
 
 
 
 
 
 
 
Additions to property and equipment (including finance leases) during the six months ended June 30, 2019
 
$
47,249

 
$
6,490

 
$
1,648

 
$
55,387


Summary segment financial data (continued).

 
 
Entertainment Golf
 
Traditional Golf
 
Corporate
 
Total
Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
Golf operations
 
$
855

 
$
121,849

 
$

 
$
122,704

Sales of food and beverages
 
952

 
34,008

 

 
34,960

Total revenues
 
1,807

 
155,857

 

 
157,664

Operating costs
 
 
 
 
 
 
 
 
Operating expenses (A)
 
1,835

 
122,586

 

 
124,421

Cost of sales - food and beverages
 
228

 
10,005

 

 
10,233

General and administrative expense (B)
 
2,638

 
8,467

 
6,257

 
17,362

General and administrative expense - acquisition and transaction expenses (C)
 
1,454

 
508

 
138

 
2,100

Depreciation and amortization
 
535

 
9,320

 
8

 
9,863

Pre-opening costs (D)
 
1,803

 

 

 
1,803

Impairment
 

 
1,326

 
147

 
1,473

Realized and unrealized (gain) on investments
 

 
(331
)
 

 
(331
)
Total operating costs
 
8,493

 
151,881

 
6,550

 
166,924

Operating (loss) income
 
(6,686
)
 
3,976

 
(6,550
)
 
(9,260
)
Other income (expenses)
 
 
 
 
 
 
 
 
Interest and investment income
 
112

 
96

 
707

 
915

Interest expense (E)
 

 
(8,099
)
 
(1,064
)
 
(9,163
)
Capitalized interest (E)
 

 
342

 
171

 
513

Other (loss) income, net
 

 
(5,166
)
 
1,061

 
(4,105
)
Total other income (expenses)
 
112

 
(12,827
)
 
875

 
(11,840
)
Income tax expense
 

 

 

 

Net loss
 
(6,574
)
 
(8,851
)
 
(5,675
)
 
(21,100
)
Preferred dividends
 

 

 
(2,790
)
 
(2,790
)
Loss applicable to common stockholders
 
$
(6,574
)
 
$
(8,851
)
 
$
(8,465
)
 
$
(23,890
)


Summary segment financial data (continued).
 
 
Entertainment Golf
 
Traditional Golf
 
Corporate
 
Total
Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
Golf operations
 
$
855

 
$
68,295

 
$

 
$
69,150

Sales of food and beverages
 
952

 
20,902

 

 
21,854

Total revenues
 
1,807

 
89,197

 

 
91,004

Operating costs
 
 
 
 
 
 
 
 
Operating expenses (A)
 
1,835

 
65,207

 

 
67,042

Cost of sales - food and beverages
 
228

 
5,965

 

 
6,193

General and administrative expense (B)
 
1,535

 
4,313

 
3,961

 
9,809

General and administrative expense - acquisition and transaction expenses (C)
 
200

 
200

 
59

 
459

Depreciation and amortization
 
504

 
3,808

 
3

 
4,315

Pre-opening costs (D)
 
247

 

 

 
247

Impairment
 

 

 

 

Realized and unrealized (gain) on investments
 

 
(89
)
 

 
(89
)
Total operating costs
 
4,549

 
79,404

 
4,023

 
87,976

Operating (loss) income
 
(2,742
)
 
9,793

 
(4,023
)
 
3,028

Other income (expenses)
 
 
 
 
 
 
 
 
Interest and investment income
 
84

 
45

 
340

 
469

Interest expense (E)
 

 
(4,161
)
 
(570
)
 
(4,731
)
Capitalized interest (E)
 

 
87

 
43

 
130

Other (loss) income, net
 

 
(4,228
)
 
529

 
(3,699
)
Total other income (expenses)
 
84

 
(8,257
)
 
342

 
(7,831
)
Income tax expense
 

 

 

 

Net (loss) income
 
(2,658
)
 
1,536

 
(3,681
)
 
(4,803
)
Preferred dividends
 

 

 
(1,395
)
 
(1,395
)
(Loss) income applicable to common stockholders
 
$
(2,658
)
 
$
1,536

 
$
(5,076
)
 
$
(6,198
)
(A)
Operating expenses include rental expenses recorded under operating leases for carts and equipment in the amount of $0.2 million and $0.5 million for the three and six months ended June 30, 2019, respectively, and $0.6 million and $1.1 million for the three and six months ended June 30, 2018, respectively.
(B)
General and administrative expenses include severance expense in the amount of $0.7 million and $1.1 million for the three and six months ended June 30, 2019, respectively, and zero and $0.1 million for the three and six months ended June 30, 2018.
(C)
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.
(D)
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 operating expenses incurred prior to opening an Entertainment Golf venue.
(E)
Interest expense includes the accretion of membership deposit liabilities in the amount of $1.6 million and $3.6 million for the three and six months ended June 30, 2019, respectively, and $1.7 million and $3.4 million for the three and six months ended June 30, 2018, respectively. Interest expense and capitalized interest are combined in interest expense, net on the Consolidated Statements of Operations.
(F)
Total assets in the corporate segment include an equity method investment in the amount of $23.3 million as of June 30, 2019 recorded in other investments on the Consolidated Balance Sheets.