ClubCorp reported a record year in fiscal 2014 with increases across the board: in full-year revenue, adjusted EBITDA and membership counts.
“We reported record 2014 results that are ahead of our growth objectives,” says Eric Affeldt, president and chief executive officer, on today’s earnings call. “We were able to grow the business through strategic acquisitions, including the largest acquisition in our company’s 58-year history. We also were able to expand our core business, had record membership growth, and successfully executed our club reinvention strategy.”
In the company’s first full fiscal year as a public company, ClubCorp did exactly what it set out to do at its IPO—deliver on its commitment to grow the business organically, through reinvention and strategic acquisitions, Affeldt says. For example, ClubCorp acquired Sequoia Golf clubs, reinvented 54 clubs, and made plans to reinvent another 29 clubs next year.
The addition of new or acquired clubs, as well as sustained same-store growth, led to an EBITDA increase of 15.6 percent, to $69.5 million. For 2014, the full-year adjusted EBITDA rose 11 percent, to $884.2 million; revenue is up 8.5 percent, to $884.2 million. Fourth-quarter revenue increased 12.2 percent, to $302.5 million, and the membership counts increased 23.9 percent, because of the acquisition of Sequoia Golf and growth of same-store clubs. For example, on a normalized 52-week basis, the same-store sales increased by 2.8 percent, or $22 million, and the EBITDA rose 6.5 percent, or $13.5 million.
During the earnings call, ClubCorp also shared news about the success of its Optimal Network Experience (O.N.E) program. By enrolling in the program, ClubCorp members can receive benefits such as a 15 percent discount at their home club, preferred access to clubs in the community, access to other business, sporting and athletic clubs, and discounts to resorts and entertainment venues. Curt McClellan, chief financial officer for ClubCorp, says the acceptance of the O.N.E. program is climbing.
“While still in the early stages of rolling out O.N.E. at our newly acquired clubs, the results have been promising,” McClellan says.
Along with working to continue to increase participation in the O.N.E. program, ClubCorp also is looking to grow in the markets where it already has concentrations.
“We like to own and operate clubs in clusters, which gives us some marketing advantage,” Affeldt says. “While we are not slowing down our appetite for acquisitions, we want to continue to be prudently aggressive relative to our acquisition profile. We don’t want to get big for big’s sake.”
In 2015, Affeldt says, he expects the company to continue to deliver solid financial results.
“Our club and member benefits remain unmatched, and our focus on acquisitions continues to drive long-term shareholder value that positions us for growth,” he says. “I’m optimistic about 2015, and I’m confident in our ability to execute our strategies, grow our business, and deliver another year of financial performance.”