ClubCorp, Dallas, reported record first quarter results Thursday.
First quarter 2015 revenue was up $36.3 million to $202.1 million when compared to 2014 first quarter revenue. The company experienced year-over-year revenue growth of 21.9 percent and an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) growth of 21.4 percent.
Adjusted EBITDA increased $6.9 million to $38.9 million in the first quarter due to increased revenue, lower club payroll and operating expenses as a percent of revenue.
Curt McClellan, ClubCorp’s chief financial officer, said in the earnings release that record results were due to strategic execution “while driving revenue and prudently managing operating expenses.”
The company attributed the revenue growth to “solid increases” in same store clubs and growth from new or acquired clubs. First quarter year-over-year same store revenue was up $4.6 million (2.8 percent) due to higher dues revenue, and increased food and beverage spending. Same store EBITDA grew $3.7 million (8.6 percent) due to increased revenue and favorable operating expenses as a part of revenue.
New or acquired clubs in 2014 and the first quarter of 2015 contributed revenue growth of $29.3 million and adjusted EBITDA growth of $6.1 million. ClubCorp acquired eight clubs in first quarter 2015. Those acquisitions are part of a strategy to consolidate market share across a fragmented industry, Eric Affeldt, president and CEO of ClubCorp, said in the earnings release.
In the conference call with analysts on Thursday, Affeldt said northern California is an area ClubCorp “follows closely” for potential acquisitions because of its market, population density and affluence.
ClubCorp is raising its full-year guidance to an adjusted EBITDA of $230-$240 million and expects to deliver revenue in the range of $1.03-$1.06 billion for the year.
ClubCorp also announced a drive to $300 million in annual adjusted EBITDA for 2018.
“We believe this objective can be achieved from our existing portfolio of clubs and recent acquisitions, by implementing our existing plans for reinvention and from continued execution of our organic growth initiatives,” Affeldt said. “Achieving this objective does not assume any further acquisitions.”
Affeldt pointed to the 2014 acquisition of The Clubs of Prestonwood in Dallas as a model in the conference call with analysts. He said ClubCorp reinvented the clubhouses, venues for dining and socializing, tennis and junior golf programs. Membership is up 50 percent to almost 500 additional members and nearly 40 percent of the new members are under age 40, he said.
The golf and country clubs division of ClubCorp generated a total revenue of $159 million in the first quarter, up $31.2 million (24.5 percent) from 2014.
Part of that increase was from the October 2014 purchase of Sequoia Golf, which added 50 clubs to ClubCorp's portfolio.
“We are very pleased with the continued progress of our Sequoia Golf acquisition, and now believe we have achieved approximately $5 million of the $4 to $6 million in projected annualized cost synergies,” McClellan said.
The company's business, sports and alumni clubs (BSA) generated revenue of $41 million in the first quarter, marking a year-over-year increase of $2.6 million (6.9 percent). The BSA adjusted EBITDA was $7.5 million, an increase of $1.1 million (17.9 percent) over 2014.
ClubCorp’s total club memberships, excluding managed clubs, increased 21.4 percent year-over-year to a total of 169,601. Total club memberships, including managed clubs as of March 24 were 180,081.
ClubCorp owns and operates a portfolio of more than 200 golf and country clubs, business clubs, sports clubs and alumni clubs in 26 states, the District of Columbia and two foreign countries. Many of those clubs include a fitness center.