TWC Enterprises Limited Announces 2016 Year End Results and Eligible Cash Dividend

KING CITY, ONTARIO–(Marketwired – Feb. 28, 2017) – TWC Enterprises Limited (TSX:TWC)

Consolidated Financial Highlights (unaudited)

Three months endedYear ended
(in thousands of dollars except per share amounts)December 31,
2016
December 31,
2015
December 31,
2016
December 31,
2015
Net earnings (loss)(1,457)(10,772)16,5584,259
Basic and diluted earnings (loss) per share(0.05)(0.39)0.610.16

Operating Data

Three months endedYear ended
December 31,
2016
December 31,
2015
December 31,
2016
December 31,
2015
ClubLink
Canadian Full Privilege Golf Members15,07715,015
Championship rounds – Canada125,000142,0001,063,0001,040,000
18-hole equivalent championship golf courses – Canada42.542.542.542.5
Championship rounds – U.S.93,00097,000373,000395,000
18-hole equivalent championship golf courses – U.S.11.012.011.012.0
White Pass and Yukon Route
Rail passengers408,000402,000
Port passengers from cruise ships816,000816,000
Cruise ship dockings363378

The following is a breakdown of net operating income by segment.

(thousands of Canadian dollars)20162015
Net operating income by segment
Canadian golf club operations$31,763$31,361
US golf club operations (2016 – US $1,330,000; 2015 – US $1,477,000)1,8641,841
Rail and port operations (2016 – US $21,829,000; 2015 – US $21,318,000)28,15527,281
Corporate operations(2,886)(2,810)
Net operating income (1)$58,896$57,673

The following is an analysis of net earnings:

(thousands of Canadian dollars)20162015
OPERATING REVENUE$217,835$216,147
DIRECT OPERATING EXPENSES (1)158,972158,474
NET OPERATING INCOME (1)58,86357,673
Amortization of membership fees11,21011,162
Depreciation and amortization(26,414)(26,387)
Land lease rent(5,303)(5,489)
Interest, net(18,151)(19,362)
Impairment charge(5,381)
Unrealized foreign exchange loss(3,188)
Other expenses(795)(1,688)
Income taxes(2,852)(3,081)
NET EARNINGS$16,558$4,259

Direct operating expenses are calculated as follows:

(thousands of Canadian dollars)20162015
Cost of sales$23,778$23,131
Labour and employee benefits82,05681,888
Utilities9,4649,621
Selling, general and administrative expenses6,5366,533
Property taxes4,8984,916
Repairs and maintenance4,7804,853
Insurance4,5694,666
Fertilizers and pest control products2,9013,430
Fuel and oil2,1742,686
Other operating expenses17,81616,750
DIRECT OPERATING EXPENSES (1)$158,972$158,474

(1) Please see Non-IFRS Measures on page following.

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.

2016 Consolidated Highlights

Consolidated net earnings increased to $16,558,000 in 2016 from $4,259,000 in 2015. Consolidated net earnings in 2015 were subject to an impairment charge of property, plant and equipment and intangibles in the amount of $5,381,000, and a foreign exchange translation loss recorded on the USD mortgage facility in the amount of $3,188,000. In 2016, this translation gain or loss is now being reflected in accumulated other comprehensive income.

The exchange rate used for translating US denominated earnings has changed 3.7% to a yearly average of 1.3256 in 2016 from 1.2788 in 2015 due to the declining Canadian dollar.

Net operating income for the Canadian golf club operations segment increased 1.3% to $31,763,000 in 2016 from $31,361,000 in 2015, primarily due to higher guest and green fee revenue associated with an increase of 2.2% in championship golf rounds.

Net operating income for the US golf club operations segment decreased to US$1,330,000 in 2016 from US$1,477,000 in 2015 primarily due to a decrease of 5.6% in championship golf rounds. The foreign exchange rate served as a deterrent to Canadian golfers visiting Florida in the 2016 winter season, and was further impacted by the poor weather in that market.

Net operating income for the rail and port operations increased 2.4% to US$21,829,000 from US$21,318,000 in 2015 due to an increase of approximately 6,000 rail passengers.

Interest, net decreased 6.3% to $18,151,000 in 2016 from $19,362,000 in 2015 primarily due to a lower debt level in 2016.

The overall effective tax rate for 2016 was 14.7% as compared to 42.0% in 2015 due to a change in mix of earnings.

Basic and diluted earnings per share increased to 61 cents per share in 2016, compared to 16 cents per share in 2015.

Eligible Cash Dividend

Today, TWC Enterprises Limited announced an eligible cash dividend of 2 cents per common share to be paid on March 15, 2017 to shareholders of record as at March 31, 2017.

Corporate Development

On January 25, 2017, ClubLink sold the property that was formerly known as Grandview Resort in Huntsville, Ontario for proceeds of $5,600,000. This property has been closed since February 2012.

Corporate Profile

TWC is engaged in golf club operations under the trademark, “ClubLink One Membership More Golf.” TWC is Canada’s largest owner and operator of golf clubs with 53.5 18-hole equivalent championship and 3.5 18-hole equivalent academy courses at 41 locations in Ontario, Quebec and Florida.

TWC is also engaged in rail and port operations based in Skagway, Alaska, which operate under the trade name “White Pass & Yukon Route.” The railway stretches approximately 110 kilometres (67.5 miles) from Skagway, Alaska, to Carcross, Yukon. In addition, White Pass operates three docks, primarily for cruise ships.

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.

TWC Enterprises Limited
Andrew Tamlin
Chief Financial Officer
905-841-5372
905-841-8488 (FAX)
atamlin@clublink.ca
www.twcenterprises.ca