KING CITY, Ontario, Nov.  02, 2023  (GLOBE NEWSWIRE) --

Consolidated Financial Highlights (unaudited)

(in thousands of dollars except per share
amounts)Three months endedNine months endedSeptember 30, 2023September 30, 2022September 30, 2023September 30, 2022Net earnings17,69011,92017,75314,421Basic and diluted earnings per share0.720.490.720.59

Operating Data

Three months endedNine months ended September 30, 2023September 30, 2022September 30, 2023September 30, 2022Canadian Full Privilege Golf Members  15,53016,014Championship rounds – Canada567,000583,000958,0001,027,00018-hole equivalent championship golf courses – Canada  35.537.518-hole equivalent managed championship golf courses – Canada  2.02.0Championship rounds – U.S.33,00032,000202,000199,00018-hole equivalent championship golf courses – U.S.  6.58.0

The following is an analysis of net earnings:

For the three months ended(thousands of Canadian dollars)September 30, 2023September 30, 2022 Operating revenue$67,635 $65,009 Direct operating expenses(1) 47,264  42,687  Net operating income(1) 20,371  22,322  Amortization of membership fees 1,469  1,329  Depreciation and amortization (3,607) (4,493) Interest, net and investment income 2,327  (1,510) Other items 2,610  (1,517) Income taxes (5,480) (4,211) Net earnings$17,690 $11,920

For the nine months ended(thousands of Canadian dollars)September 30, 2023September 30, 2022 Operating revenue$158,798 $155,677 Direct operating expenses(1) 122,237  115,210  Net operating income(1) 36,561  40,467  Amortization of membership fees 3,582  3,349  Depreciation and amortization (10,561) (13,375) Interest, net and investment income 6,608  (812) Other items (10,962) (7,669) Income taxes (7,475) (7,539) Net earnings$17,753 $14,421

The following is a breakdown of net operating income (loss) by segment:

For the three months ended(thousands of Canadian dollars)September 30, 2023September 30, 2022 Net operating income (loss) by segment Canadian golf club operations$21,173 $23,626 US golf club operations (2023 - US $259,000: 2022 - US loss $375,000) 347  (493)Corporate and other (1,149) (811) Net operating income(1)$20,371 $22,322

For the nine months ended(thousands of Canadian dollars)September 30, 2023September 30, 2022 Net operating income (loss) by segment Canadian golf club operations$34,314 $40,209 US golf club operations (2023 - US $3,398,000: 2022 - US $2,482,000) 4,585  3,120 Corporate and other (2,338) (2,862) Net operating income(1)$36,561 $40,467

Operating revenue is calculated as follows:

For the three months ended(thousands of Canadian dollars)September 30, 2023September 30, 2022 Annual dues$17,230$16,967Golf 18,570 17,965Corporate events 4,322 4,855Food and beverage 15,714 16,035Merchandise 5,611 5,760Real estate 3,291 -Rooms and other 2,897 3,427 Operating revenue$67,635$65,009

For the nine months ended(thousands of Canadian dollars)September 30, 2023September 30, 2022 Annual dues$51,906$51,055Golf 38,343 37,645Corporate events 6,939 7,452Food and beverage 27,153 27,360Merchandise 11,531 11,281Real estate 18,821 15,811Rooms and other 4,105 5,073 Operating revenue$158,798$155,677

Direct operating expenses are calculated as follows:

For the three months ended(thousands of Canadian dollars)September 30, 2023September 30, 2022 Operating cost of sales$9,232$8,868 Real estate cost of sales 3,816 - Labour and employee benefits 22,429 22,092 Utilities 2,193 2,506 Selling, general and administrative expenses 1,246 1,382 Property taxes 463 441 Insurance 1,099 924 Repairs and maintenance 1,623 1,252 Turf operating expenses 1,120 1,159 Fuel and oil 676 681 Other operating expenses 3,367 3,382 Direct Operating Expenses(1)$47,264$42,687

For the nine months ended(thousands of Canadian dollars)September 30, 2023September 30, 2022 Operating cost of sales$ 17,012$16,170 Real estate cost of sales 19,093 16,394 Labour and employee benefits 51,807 49,590 Utilities 5,771 6,146 Selling, general and administrative expenses 4,058 4,266 Property taxes 2,999 2,776 Insurance 3,298 2,705 Repairs and maintenance 4,456 3,878 Turf operating expenses 3,484 3,517 Fuel and oil 1,215 1,416 Other operating expenses 9,044 8,352 Direct Operating Expenses (1)$ 122,237$115,210

(1) Please see Non-IFRS Measures

Third Quarter 2023 Consolidated Operating Highlights

Operating revenue increased 4.0% to $67,635,000 for the three month period ended September 30, 2023 from $65,009,000 in 2022 due to the revenue from the two Highland Gate home sales in 2023 as compared to none in 2022.

Direct operating expenses increased 10.7% to $47,264,000 for the three month period ended September 30, 2023 from $42,687,000 in 2022 due to the cost of sales from the two Highland Gate home sales in 2023 as compared to none in 2022, as well as above normal increases in labour and certain operating expenses. It continues to be a challenging environment in being able to manage labour costs due to the above normal minimum wage increases and a competitive environment for hiring staff.

Net operating income for the Canadian golf club operations segment decreased to $21,173,000 for the three month period ended September 30, 2023 from $23,626,000 in 2022 due to the conclusion of ClubLink’s lease of The Country Club which expired as of December 31, 2023, as well as above normal increases in labour and certain operating expenses. There has also been a noticeable decline in traffic in the Muskoka, Ontario tourist region this summer which has affected the results of the Company’s resorts which operate in this area.

Depreciation and amortization decreased 19.7% to $3,607,000 in 2023 from $4,493,000 in 2022 due to the conclusion of The Country Club lease which has also resulted in a decline in depreciation of right-of-use assets.

Interest, net and investment income increased to $2,327,000 for the three month period ended September 30, 2023 from an expense of $1,510,000 in 2022 due to a decrease in borrowings and an increase in distributions from the Company’s investment in Automotive Properties REIT. In 2022, the Company paid off several non-revolving mortgages in advance of their due dates. The payoff amounts totaled $46,303,000 (US$35,169,000) and resulted in prepayment penalties totaling $2,604,000.

Other items consist of the following income (loss) items:

For the three months ended September 30, 2023September 30, 2022 Foreign exchange loss$(165)$(440)Unrealized loss on investment in marketable securities (9,859) (1,915)Contingent contractual obligation 6,620  - Gain on sale of investments in joint venture 6,521  - Loss on real estate fund investments (679) - Equity income from investments in joint ventures 97  623 Insurance proceeds 188  220 Other (113) (5) Other items$2,610 $(1,517)

At September 30, 2023, the Company recorded unrealized losses of $9,859,000 on its investment in marketable securities (September 30, 2022 - $1,915,000). This loss is attributable to the fair market value adjustments of the Company's investment in Automotive Properties REIT.

The contingent contractual obligation of USD$5,000,000 (CDN$6,620,000) originating from the sale of White Pass in 2018 expired in July 2023 and as such has been reversed since it had not been expended.

On September 20, 2023, the Company completed the divestiture of its investment in the Geranium real estate management company along with other non-Highland Gate joint ventures in which it was a co-investor with the Geranium Group. These assets were purchased by the Company’s co-investors with Geranium. Total proceeds for the transaction were $12,500,000 including deferred proceeds of $5,300,000. A gain of $6,521,000 was recorded as a result of the transaction.

Net earnings increased to $17,690,000 for the three month period ended September 30, 2023 from $11,920,000 in 2022 due to the change in other items described above. Basic and diluted earnings per share increased to 72 cents per share in 2023, compared to basic and diluted earnings per share of 49 cents in 2022.

Non-IFRS Measures

TWC uses non-IFRS measures as a benchmark measurement of our own operating results and as a benchmark relative to our competitors. We consider these non-IFRS measures to be a meaningful supplement to net earnings. We also believe these non-IFRS measures are commonly used by securities analysts, investors and other interested parties to evaluate our financial performance. These measures, which included direct operating expenses and net operating income do not have standardized meaning under IFRS. While these non-IFRS measures have been disclosed herein to permit a more complete comparative analysis of the Company’s operating performance and debt servicing ability relative to other companies, readers are cautioned that these non-IFRS measures as reported by TWC may not be comparable in all instances to non-IFRS measures as reported by other companies.

The glossary of financial terms is as follows:

Direct operating expenses = expenses that are directly attributable to company’s business units and are used by management in the assessment of their performance. These exclude expenses which are attributable to major corporate decisions such as impairment.

Net operating income = operating revenue – direct operating expenses

Net operating income is an important metric used by management in evaluating the Company’s operating performance as it represents the revenue and expense items that can be directly attributable to the specific business unit’s ongoing operations. It is not a measure of financial performance under IFRS and should not be considered as an alternative to measures of performance under IFRS. The most directly comparable measure specified under IFRS is net earnings.

Eligible Dividend

Today, TWC Enterprises Limited announced an eligible cash dividend of 5 cents per common share to be paid on December 15, 2023 to shareholders of record as at November 30, 2023.

Corporate Profile

TWC is engaged in golf club operations under the trademark, “ClubLink One Membership More Golf.” TWC is Canada’s largest owner, operator and manager of golf clubs with 44 18-hole equivalent championship and 2 18-hole equivalent academy courses (including two managed properties) at 34 locations in Ontario, Quebec and Florida.

For further information please contact:

Andrew Tamlin 
 Chief Financial Officer 
 15675 Dufferin Street 
 King City, Ontario L7B 1K5 
 Tel: 905-841-5372 Fax: 905-841-8488 
[email protected]

Management’s discussion and analysis, financial statements and other disclosure information relating to the Company is available through SEDAR and at www.sedar.com and on the Company website at www.twcenterprises.ca