Mr. Andrew Tamlin reports
TWC ENTERPRISES LIMITED ANNOUNCES 2014 YEAR END RESULTS AND ELIGIBLE STOCK DIVIDEND
TWC Enterprises Ltd. has released its 2014 financial results.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands of dollars, except per share amounts)
Three months ended Year ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2014 2013 2014 2013
Operating revenue $28,967 $27,846 $200,104 $197,425
Net operating income 1,294 2,534 50,734 53,608
Net membership fee
income 2,911 3,803 11,150 14,564
Earnings before other
items and income
taxes 4,205 6,337 61,884 68,172
Net earnings (loss) (8,103) (3,781) 3,465 13,154
Basic and diluted
earnings (loss) per
share (0.31) (0.15) 0.13 0.50
Cash flow from
operations (loss) (5,625) (3,140) 26,822 34,495
Basic and diluted cash
flow from operations
per share (loss) (0.22) (0.12) 1.03 1.32
OPERATING DATA
Three months ended Year ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2014 2013 2014 2013
ClubLink One
Membership More Golf
Championship rounds --
Canada 104,000 100,000 950,000 957,000
18-hole equivalent
championship golf
courses -- Canada 43.5 41.5 43.5 41.5
Championship rounds --
U.S. 94,000 93,000 373,000 358,000
18-hole equivalent
championship golf
courses -- U.S. 12.0 11.0 12.0 11.0
White Pass and Yukon Route
Rail passengers - - 410,000 395,000
Port passengers from
cruise ships - - 820,000 822,000
Cruise ship dockings - - 396 388
2014 consolidated operating highlights
Consolidated operating revenue increased 1.4 per cent to $200,104,000 in 2014 from $197,425,000 in 2013 primarily due to additional operating revenue generated by the rail and port operations segment from 15,000 additional rail passengers offset by lower operating revenue from Canadian golf club operations resulting from 406 less full-privilege golf members.
Consolidated cost of sales and operating expenses increased 3.9 per cent to $149.37-million in 2014 from $143,817,000 in 2013 primarily due to the acquisitions of TPC Eagle Trace and Hidden Lake.
Net operating income for the Canadian golf club operations segment decreased 13.3 per cent to $29,054,000 in 2014 from $33.52-million in 2013. This decline is due to Glen Abbey not hosting the RBC Canadian Open in 2014 as it did in 2013, and the loss of full-privilege golf members.
Net operating income for the U.S. golf club operations segment decreased to $813,000 (U.S.) in 2014 from $1.85-million (U.S.) in 2013 primarily due to poor weather and the absorption of certain head office costs from Canada and completion of staffing the new Florida corporate office.
Net operating income for the rail and port operations increased 6.7 per cent to $21,295,000 (U.S.) from $19,958,000 (U.S.) in 2013 primarily due to the additional passengers.
Net membership fee income decreased 23.4 per cent to $11.15-million from $14,564,000 in 2013 primarily due to the completion of amortization of membership fee revenue for the 1994 to 2001 Canadian member group in 2013.
Consolidated earnings before other items and income taxes decreased 9.2 per cent to $61,884,000 in 2014 from $68,172,000 in 2013. This decrease is due to the decline in net membership fee income and less operating revenue from fewer Canadian full privilege golf members.
Depreciation and amortization increased 4.7 per cent to $24,898,000 in 2014 from $23,769,000 in 2013.
Land lease rent decreased marginally to $5,455,000 in 2014 from $5,457,000 in 2013.
Interest, net increased 0.2 per cent to $20,257,000 in 2014 from $20,216,000 in 2013.
Other expense, net, increased to $6,497,000 in 2014 from $496,000 in 2013 due to several large one-time events including an unrealized foreign exchange loss of $1,438,000, severance of $1.5-million and impairment/loss on assets in the amount of $2,117,000.
The overall effective tax rate for 2014 was 27.5 per cent as compared with 27.9 per cent in 2013.
Consolidated net earnings decreased to $3,465,000 in 2014 from $13,154,000 in 2013 primarily due to the decline in net membership fee income, the lower net operating income from both the Canadian and U.S. golf segments and the increase in other expense.
Basic and diluted earnings per share decreased to 13 cents per share in 2014, compared with 50 cents per share in 2013.
Comparability
The completion of amortization of membership fee revenue for the 1994 to 2001 Canadian member group in 2013 has resulted in a significant decline in earnings, but has minimal cash flow impact.
Other expense includes certain one-time and non-cash items which are not comparable between years.
The impact of these items are as shown in the associated table.
IMPACT OF OTHER EXPENSES
(In thousands of dollars, except per share amounts)
For the year ended
Dec. 31, Dec. 31,
2014 2013
Net earnings as reported $3,465 $13,154
Members that joined from 1994 to 2001
Amortization of membership fees (loss) (517) (4,258)
Membership fees collected 517 592
Differential - (3,666)
Other (expense) 6,497 496
Income tax provision on above
adjustments (loss) (1,892) 1,080
Pro forma net earnings 8,070 11,064
Earnings per share as reported 0.13 0.50
Less impact of amortization of membership
fees (loss) - (0.14)
Add impact of other expense 0.25 0.02
Add impact of income tax provision on above
adjustments (loss) (0.07) 0.04
Pro forma earnings per share 0.31 0.42
Eligible stock dividend
Today, TWC Enterprises Ltd. announced an eligible stock dividend of 7.5 cents per share to be distributed on March 27, 2015, to shareholders of record on March 18, 2015.
The number of TWC common shares to be distributed on March 27, 2015, will be the number of TWC common shares held by each shareholder on March 18, 2015, times 7.5 cents divided by the average closing market price of TWC shares traded between Feb. 27, 2015, and March 26, 2015. Fractional shares will be paid in cash at the average closing market price of TWC shares.
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