ClubCorp39s Country Club of the South in Alpharetta Georgia Photo by ClubCorp

ClubCorp's Country Club of the South in Alpharetta, Georgia. (Photo by ClubCorp.)

ClubCorp Reports $269 Million Q2 Revenue, Reaffirms 2016 Guidance

ClubCorp reported $269 million in second quarter revenue, noting that the year-over-year growth in the quarter was due to a "solid increase" in dues and food and beverage revenue.

ClubCorp, Dallas, reported an increase in second quarter revenue to $269 million and reaffirmed 2016 revenue guidance in the range of $1.08 billion to $1.10 billion in its quarterly financial release Thursday.

The year-over-year 2 percent growth in the second quarter was credited due to "solid increase" in dues and food and beverage revenue, according to the earnings release. Second quarter net income increased $6.0 million to $5.8 million and second quarter adjusted EBITDA increased 5.3 percent to $63.3 million.

ClubCorp's same store clubs revenue increased 1.2 percent to $253.7 million, which the company said was driven by increases in dues revenue (up 3.8 percent), and a la carte and private events food and beverage revenue (up 0.8 percent). The revenue was offset by a decline in golf operations revenue (1.7 percent) impacted by rain and flooding at several Houston-area clubs.

"We are very happy with our continued progress and growth," Eric Affeldt, CEO, ClubCorp, said in a statement. "Our results represent the ninth consecutive quarter of record revenue and adjusted EBITDA resulting from the continued execution on our organic growth, reinvention and acquisition growth strategies. We are seeing increased activity levels at several of our recently reinvented properties. Additionally, we are seeing increased usage across all membership types, experiencing higher acceptance of our O.N.E. product, higher dining utilization and more guest visits and guest rounds. These results are strong indicators that our reinvention strategy continues to work and resonate with our members and guests."

ClubCorp's new or acquired clubs in 2015 and 2016 contributed revenue of $20.4 million. Through the first two quarters of 2016, ClubCorp revenue increased $18 million (3.9 percent) to $438 million compared to the same period in 2015.

"Member turnout across all geographies continues to be strong," Curt McClellan, chief financial officer, ClubCorp, said in a statement. "Our three-pronged growth strategy is predicated on improving amenities and delivering a private club experience that appeals to all members of the family. Our recently reinvented clubs are experiencing higher a la carte food and beverage covers, increased food and beverage revenue, increased private event and banquet business, more golf tournaments, and higher member rounds and guest rounds."

McClellan noted the strategy's impact on the performance of ClubCorp's Sequoia properties acquired in 2014, which he said are delivering on track with the company's underwriting projections.

"Both the Sequoia portfolio and our other recently acquired clubs continue to mature under this strategy where revenue and profitability growth continue post reinvention," McClellan added. "We believe our acquisition and reinvention growth strategies continue to work and remain a significant driver toward creating long-term shareholder value. We also believe that we can primarily fund these growth strategies from operating free cash flow, and as such do not see any significant changes to capital structure or an additional levering event for the company."

As of June 14, 2016, ClubCorp owns or operates 160 golf and country clubs representing approximately 200 18-hole equivalents, of which 10 are managed clubs. Additionally, the company owns or operates 48 business, sports and alumni (BSA) clubs, of which three are managed clubs. ClubCorp has acquired two clubs so far this year: Marsh Creek Country Club, St. Augustine, Florida, and Santa Rosa Country Club, Santa Rosa, California. It also has entered into a management agreement to operate the Country Club of Columbus, Columbus, Georgia.

ClubCorp's total membership count in the second quarter increased one percent to 175,430, while total golf and country club memberships increased 2.1 percent and BSA clubs declined 1.4 percent. As of June 14, ClubCorp's O.N.E. premium membership accounted for 52 percent of memberships compared to approximately 50 percent as of Dec. 29, 2015.

Burnett Promoted

ClubCorp promoted Mark Burnett, adding president to his existing COO title on Thursday. He will continue to report to Affeldt.

As COO, Burnett led the acquisition, integration and reinvention of Sequoia Golf. He led efforts and oversaw the acquisition of 25 additional acquired golf and country clubs, and the reinvention of 55 legacy golf and country and BSA clubs in his ClubCorp career.

Burnett joined ClubCorp in 2006 and has over 25 years of experience managing and operating private clubs. He was promoted to COO in 2013. Prior to ClubCorp, Burnett served as an executive at American Golf Corp. and KSL Fairways Golf Corp. 

"Mark's promotion to president is the result of his excellent performance and contributions to the company during his tenure and demonstrates our commitment to developing talent and promoting from within," Affeldt said. "The board and I feel fortunate to have someone of Mark's skill and industry experience as we continue to pursue our growth strategies and drive the company's operational and financial performance. I look forward to working with Mark in his expanded role and responsibilities, which will also allow me to devote more time to business development and our strategic initiatives."

One World Trade Center Club

ClubCorp announced Thursday that it will manage China Center's private business club on the 89th floor of One World Trade Center in New York City. The development of the venture is in conjunction with affiliates of the Vantone Holdings Co. Ltd., who will construct and lease the space.

The 32,000-square-foot club will offer a variety of dining, social and business amenities and is expected to open in late 2017. It will provide a cultural and business exchange setting for U.S. and Chinese business professionals, politicians, entrepreneurs and a venue for international business events and forums.

"We are very excited to be a part of this extraordinary private business club in the heart of New York City," Affeldt said in a statement. "The new club will serve as a confluence for Sino-American relations in the cultural and financial capital of the world and an amazing benefit to our many members who visit New York. We look forward to providing exceptional experiences and opportunities to the club's members and guests."

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