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Good Sam Enterprises Reports Q3 Results

November 10, 2011 by   - () Leave a Comment

Good Sam Enterprises LLC reported an increase in revenues for the third quarter ending Sept. 30.

Highlights of the company’s report on Form 10-Q follow. For the complete report click here.

Revenues of $128.6 million for the quarter increased by $4.0 million, or 3.2%, from the comparable period in 2010.

By segment:

  • Membership Services revenues of $39.2 million for the third quarter of 2011 increased $1.1 million, or 3.0%, from the comparable period in 2010. This revenue increase was largely attributable to a $1.2 million increase in extended vehicle warranty program revenue due to a contract price increase, $0.9 million of license fees received from FreedomRoads Holding LLC and a $0.2 million increase in emergency road service revenue, partially offset by a $0.6 million decrease in membership services revenue primarily attributable to reduced advertising revenue in the Good Sam Club publication, a $0.4 million decrease in other ancillary product revenue and a $0.2 million reduction in dealer program marketing revenue.
  • Media revenues of $7.3 million for the third quarter of 2011 decreased $0.1 million, or 1.4%, from the comparable period in 2010. This decrease was primarily attributable to the sale of three non-core publications in the second quarter partially offset by increased revenue from consumer shows and from book sales.
  • Retail revenues of $82.2 million for the third quarter of 2011 increased by $2.9 million, or 3.7%, from the comparable period in 2010. Store merchandise sales decreased $1.2 million from the third quarter of 2010 due to a same store sales decrease of $1.5 million, or 2.5%, compared to a 1.8% decrease for the third quarter of 2010, and decreased revenue from discontinued stores of $0.5 million, were partially offset by a $0.8 million increase due to the opening of four new stores over the last twenty-one months. Two stores were closed in the last 21 months in order to reduce fixed operating costs and to consolidate operations within the respective trade areas. Same store sale calculations for a given period include only those stores that were open both at the end of that period and at the beginning of the preceding fiscal year. Also, mail order and Internet sales increased $4.0 million, supplies and other revenue increased $0.4 million, and installation and service fees decreased $0.3 million.

Income from operations for the third quarter of 2011 totaled $12.0 million compared to $11.8 million for the third quarter of 2010. This increase of approximately $0.3 million from the third quarter of 2010 was primarily the result of the following favorable changes in the third quarter of 2011 compared to the third quarter of 2010: an increase in gross profit for the Membership Services segment of $2.7 million, and reduced financing expense of $0.2 million for the third quarter of 2011, that were partially offset by a $2.2 million increase in operating expenses for the third quarter of 2011, and a decrease in gross profit for the Media and Retail segment of $0.3 million and $0.1 million, respectively.

Non-operating expenses of $10.0 million for the third quarter of 2011 increased $0.1 million compared to the third quarter of 2010 due to a $1.4 million increase in interest expense relating to higher interest rates on the Company’s debt, partially offset by a $1.3 million positive change in the loss/gain on derivative instrument related to the interest rate swap agreements.

Net income in the third quarter of 2011 was $2.0 million compared to $1.8 million for the same period in 2010.

9-Month Results

Revenues of $362.3 million for the first nine months of 2011 increased by $0.6 million, or 0.2%, from the comparable period in 2010.

  • Membership Services revenues of $113.5 million for the first nine months of 2011 decreased $0.3 million, or 0.3%, from the comparable period in 2010. This revenue decrease was largely attributable to a $3.1 million decrease in vehicle insurance program revenue primarily from the $2.5 million fee received in the first nine months of 2010 as a result of waiving our right of first refusal regarding the sale of the third party provider of vehicle insurance, a $1.1 million reduction in membership services revenue primarily attributable to a membership reduction in the Good Sam Club, Coast Club and Golf Card Club, a $1.0 million reduction in dealer program marketing revenue, a $0.3 million reduction in emergency road service revenue and a $0.3 million reduction in member events revenue, partially offset by a $2.8 million increase in license fees received from FreedomRoads, and a $2.7 million increase in extended vehicle warranty program revenue, resulting from an increase in the average price per contract.
  • Media revenues of $30.0 million for the first nine months of 2011 remained unchanged from the comparable period in 2010. Revenue increases from corporate sponsorships, and increased book and annual directory sales were offset by the sale of three publications in the first six months of 2011 and two fewer issues published in the motorcycle group.
  • Retail revenues of $218.8 million for the first nine months of 2011 increased $0.9 million, or 0.4%, from the comparable period in 2010. Store merchandise sales decreased $4.1 million from the first nine months of 2010 due to a same store sales decrease of $4.8 million, or 2.9%, compared to a 1.5% increase in same store sales for the first nine months of 2010, and decreased revenue from discontinued stores of $1.3 million were partially offset by a $2.0 million increase due to the opening of four new stores over the last twenty-one months. Two stores were closed in the last 21 months in order to reduce fixed operating costs and to consolidate operations within the respective trade areas. Same store sale calculations for a given period include only those stores that were open both at the end of that period and at the beginning of the preceding fiscal year. Also, mail order and internet sales increased $4.3 million, and supplies and other revenues increased $0.7 million.

Income from operations for the first nine months of 2011 totaled $35.1 million compared to $23.3 million for the first nine months of 2010. This change of $11.9 million from the first nine months of 2010 was primarily the result of the following favorable changes in the first nine months of 2011 compared to the first nine months of 2010: reduced financing expense of $7.6 million for the first nine months of 2011, a $1.9 million reduction in operating expenses for the first nine months of 2011,and increases in gross profit for the Membership Services and Retail segments of $2.9 million and $0.3 million, respectively, for the first nine months of 2011, that were only partially offset by an $0.8 million decrease in gross profit for the Media segment.

Net income in the first nine months of 2011 was $4.6 million compared to a net loss of $6.2 million for the same period in 2010.

Good Sam Enterprises LLC is the parent company of Woodall’s Campground Management and www.woodallscm.com.

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