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Good Sam Enterprises Reports Q1 Financial Results

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May 14, 2012 by   - () Leave a Comment

Good Sam Enterprises LLC reported that revenues of $110.1 million for the first quarter ending March 31, 2012, increased $5.5 million, or 5.3 percent, from the comparable period in 2011. Net income in the quarter was $4,000 compared to a loss of $2.6 million for the same period in 2011.

According to the company's 10-Q filing with the Securities and Exchange Commission (SEC), Membership Services revenues of $37.2 million for the quarter increased $2 million, or 5.6 percent, from the comparable period in 2011. This revenue increase was largely attributable to a $1.6 million increase in member events revenue due to the timing of the Good Sam Club annual rally, which occurred in the first quarter of 2012 versus the third quarter of 2011, an $$800,000 increase in extended vehicle warranty program revenue due to contract price increases, a $300,000 increase in marketing fee revenue from RV financing, and a $200,000 increase in emergency road service revenue, partially offset by a $600,000 decrease in advertising revenue from the RV View magazine, which was replaced with the Highways magazine in 2011, and a $300,000 decrease in the Coast to Coast and Golf Card Club revenue due to decreased membership and the sale of the Golf Card Club in March 2012.

Media revenues of $11.8 million for the first quarter of 2012 decreased $3.6 million, or 23.2 percent, from the comparable period in 2011. This decrease was primarily attributable to a $2.2 million revenue reduction resulting from the sale or closure of non-core media businesses in 2011, a $700,000 reduction in annual directory revenues due to reduced marketing and phasing out the cd-rom version, a $300,000 reduction in consumer show revenue, and a $400,000 reduction in magazine revenue.

Retail revenues of $61 million for the first quarter of 2012 increased by $7.1 million, or 13.2 percent, from the comparable period in 2011. Store merchandise sales increased $4.7 million from the first quarter of 2011 due to a same store sales increase of $3.7 million, or 9.3 percent, compared to a 1.4 percent decrease for the first quarter of 2011, and a $1.4 million increase due to the opening of 10 new stores over the last 15 months, which were partially offset by decreased revenue from discontinued stores of $400,000.

One store was closed in the last 15 months in order to consolidate operations within that area. 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 $3.2 million, installation and service fees decreased $0.5 million, and supplies and other revenue decreased $0.3 million.

Costs Applicable to Revenues

Costs applicable to revenues totaled $65.4 million for the first quarter of 2012, an increase of $2.6 million, or 4.1 percent, from the comparable period in 2011.

Membership Services costs applicable to revenues of $19.8 million for the first quarter of 2012 increased $0.1 million, or 0.6 percent, from the comparable period in 2011.

This increase consisted of a $2.1 million expense increase due to the timing of member events, a $500,000 increase in extended vehicle warranty program costs resulting from increased revenue for those programs, and a $400,000 increase in emergency road service marketing costs, partially offset by a $1.5 million decrease in Good Sam Club expenses primarily attributable to combining the President’s Club and the Good Sam Club publication in the second quarter of 2011 and reduced direct mail efforts, a $500,000 reduction in Camp Club USA costs, a $400,000 reduction in overhead, a $300,000 decrease in wage-related costs primarily due to headcount reductions, and a $200,000 expense reduction from the Coast to Coast and Golf Card clubs.

Media costs applicable to revenues of $8.4 million for the first quarter of 2012 decreased $3.4 million, or 29.0 percent, from the comparable period in 2011 primarily due to the $1.9 million decrease from to the sale or closure of non-core media businesses in 2011, a $800,000 decrease in wage-related costs primarily due to headcount reductions, a $400,000 reduction in annual directory marketing and production costs and phasing out the cd-rom version, and a $300,000 reduction in consumer show costs.

Retail costs applicable to revenues for the first quarter of 2012 increased $5.9 million, or 18.7 percent, to $37.3 million. The retail gross profit margin of 39.0 percent for the first quarter of 2012 decreased from 41.8 percent for the comparable period in 2011 due to incremental merchandise discounts and markdowns, and increased shipping and freight-in costs.

Operating Expenses

Selling, general and administrative expenses of $31.1 million for the first quarter of 2012 increased $1.2 million compared to the first quarter of 2011. This increase was primarily due to a $1.4 million increase in retail selling, general and administrative expenses, primarily related to increased labor, rent and selling expense, and $300,000 of other general and administrative expenses, partially offset by a $500,000 reduction in wage-related expenses.

Depreciation and amortization expense of $3.5 million decreased $700,000 from the prior year primarily due to reduced capital expenditures in prior years.

Income from Operations

Income from operations for the first quarter of 2012 totaled $10 million compared to $7.6 million for the first quarter of 2011. This increase of $2.4 million from the first quarter of 2011 was primarily the result of an increase in gross profit for the Membership Services and Retail segments of $1.8 million and $1.2 million, respectively, that was partially offset by a $500,000 increase in operating expenses for the first quarter of 2012, and a decrease in gross profit for the Media segment of $100,000.

Income (Loss) before Income Tax

Income before income tax for the first quarter of 2012 was $100,000, compared to a loss of $2.5 million for the first quarter of 2011. This $2.6 million favorable change was attributable to the $2.4 million increase in income from operations in the first quarter of 2012 and the decrease in non-operating items of $200,000 mentioned above.

Income Tax Expense

The company recorded income tax expense of $100,000 for the first quarter of 2012, compared to $100,000 income tax expense for the first quarter of 2011.

Click here to read the entire report.

Good Sam Enterprises LLC is the parent company of Woodall's Campground Management and www.woodallsc,.com.

 

 

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