ClubCorp Holdings (MYCC) Misses Q3 EPS by 6c

ClubCorp Holdings (NYSE: MYCC) reported Q3 EPS of $0.02, $0.06 worse than the analyst estimate of $0.08. Revenue for the quarter came in at $259.3 million versus the consensus estimate of $264.83 million.

• Same Store Clubs revenue was up $1.1 million, up 0.5% to $242.1 million, driven by increases in dues revenue up 2.6% and a la carte and private events food & beverage revenue up 0.5%. This result was offset by golf operations revenue down (3.0)% impacted by lower rounds played.
• Same-store adjusted EBITDA grew $1.7 million, up 2.7% to $65.0 million, due to increased revenue and favorable operating expenses as a percentage of revenue. Same-store Adjusted EBITDA margin increased 50 bps to 26.8%.

Quotes:

Eric Affeldt, chief executive officer: "We delivered our tenth quarter of consecutive revenue and adjusted EBITDA growth. Since going public we have grown revenue and adjusted EBITDA by over 30% by implementing a successful three pronged strategy focused on organic growth, reinvention and acquisitions. Part of this strategy anticipated reinvention of clubs we acquired in 2014 and 2015. Much of this planned investment is now complete. As a result, the Company is now prepared to de-lever its balance sheet below 4.0x. We plan to de-lever our balance sheet by continuing to grow adjusted EBITDA, reducing capital spend, including fewer planned same-store reinventions in 2017, and using excess cash to pay down debt."

Mark Burnett, president and chief operating officer: "We delivered another quarter of adjusted EBITDA growth benefiting from improved performance at recently reinvented and acquired clubs. The Sequoia portfolio continues to perform very well and our results there are meeting our underwriting expectations. We are pleased by the early member response and increased member activity at these clubs. Likewise, our O.N.E. offering continues to appeal to our members with approximately 54% of our memberships now enrolled in our O.N.E. offering."

Curt McClellan, chief financial officer: "Year-to-date consolidated same-store adjusted EBITDA has grown 5.5% and adjusted EBITDA margins have improved 100 bps to 28%. Nevertheless, same-store revenue in the third quarter was slower than we anticipated driven by weather related issues affecting golf playability and negatively impacting rounds played and a la carte food and beverage spend at multiple clubs. Based on our performance year-to-date, we are narrowing our full-year fiscal 2016 outlook accordingly. Our leverage is currently 4.4x and we are initiating a strategy to de-lever the Company below 4x over the next 12-18 months. We will continue to pursue value enhancing acquisitions including individually-owned and member-owned clubs, yet we do not anticipate any near term levering event for the Company. Additionally, we have actively taken steps towards this objective by lowering future interest expense by refinancing certain of our mortgage debt and repricing our term loan facility this quarter."

Company Outlook:
The following guidance is based on current management expectations. All financial guidance amounts are estimates and subject to change, including as a result of matters discussed under the "Forward-Looking Statements" cautionary language which follows, and the Company undertakes no duty to update its guidance. For fiscal year 2016, the Company is reducing its revenue outlook and narrowing its adjusted EBIDTA outlook. The Company reduces its anticipated revenue to a range of $1,080 million to $1,090 million and narrows its anticipated adjusted EBITDA to a range of $245 million to $249 million, while maintaining the midpoint at $247 million. This outlook implies year-over-year revenue growth of approximately 2.5 to 3.5 percent, and adjusted EBITDA growth of approximately 5.0 to 6.5 percent.

For earnings history and earnings-related data on ClubCorp Holdings (MYCC) click here.

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