Note 14 - Business Segment Information

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 14. Business Segment Information

In determining the segment information, Avalon considered its operating and management structure and the types of information subject to regular review by its “chief operating decision maker.” Using the criteria of FASB ASC 280 Segment Reporting, Avalon’s reportable segments include waste management services and golf and related operations. Avalon accounts for intersegment net operating revenues as if the transactions were to third parties. The segment disclosures are presented on this basis for all periods presented.

Avalon’s primary business segment, the waste management services segment, provides hazardous and nonhazardous brokerage and management services to industrial, commercial, municipal and governmental customers, captive landfill management for an industrial customer and salt water injection well operations.

Avalon’s golf and related operations segment consists of four golf courses and associated clubhouses which provide dining and banquet facilities, a hotel which provides lodging and resort related amenities including dining, banquet and conference facilities, a multipurpose recreation center and a travel agency. Revenue for the golf and related operations segment consists primarily of membership dues, greens fees, cart rentals, room rentals, merchandise sales, tennis and fitness activities, salon and spa services and food and beverage sales.

Avalon does not have significant operations located outside the United States and, accordingly, geographical segment information is not presented.

For the six months ended June 30, 2021, one customer accounted for 11% of the waste management services segment’s net operating revenues to external customers and 7% of the consolidated net operating revenues. For the six months ended June 30, 2020, no one customer accounted for 10% of Avalon’s consolidated or reportable segment net operating revenues.

The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies included in Avalon’s 2020 Annual Report to Shareholders. Avalon measures segment profit for internal reporting purposes as income (loss) before income taxes.

Business segment information including the reconciliation of segment income before taxes to income (loss) before taxes is as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Net operating revenues from:
Waste management services:
External customer revenues	$	8,685		$	9,088		$	19,835		$	20,221
Intersegment revenues		-			-			-			-
Total waste management services		8,685			9,088			19,835			20,221
Golf and related operations:
External customer revenues		7,705			3,979			11,668			7,249
Intersegment revenues		9			2			17			30
Total golf and related operations		7,714			3,981			11,685			7,279
Segment operating revenues		16,399			13,069			31,520			27,500
Intersegment eliminations		(9	)		(2	)		(17	)		(30	)
Total net operating revenues	$	16,390		$	13,067		$	31,503		$	27,470

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Income (loss) before income taxes:
Waste management services	$	676		$	807		$	1,819		$	1,855
Golf and related operations		1,626			(186	)		1,826			(917	)
Segment income before income taxes		2,302			621			3,645			938
Corporate interest expense		(280	)		(293	)		(563	)		(590	)
Corporate gain on debt extinguishment		-			-			502			-
Corporate other income, net		7			11			8			13
General corporate expenses		(1,290	)		(762	)		(2,122	)		(1,570	)
Income (loss) before income taxes	$	739		$	(423	)	$	1,470		$	(1,209	)
Gain on debt extinguishment:
Waste management services	$	-		$	-		$	-		$	-
Golf and related operations		877			-			1,462			-
Corporate		-			-			502			-
Total gain on debt extinguishment	$	877		$	-		$	1,964		$	-

	June 30,			December 31,
	2021			2020
Identifiable assets:
Waste management services	$	31,862		$	31,875
Golf and related operations		59,768			57,863
Corporate		58,423			59,425
Subtotal		150,053			149,163
Elimination of intersegment receivables		(71,333	)		(71,213	)
Total	$	78,720		$	77,950

Total assets of the waste management services segment were approximately $31.9 million at both June 30, 2021 and December 31, 2020. The decrease in waste management services accounts receivable were offset by an increase in intersegment transactions, which are eliminated in consolidation. The increase in total assets of the golf and related operations segment of $1.9 million was primarily due to an increase in accounts receivable and capital expenditures related to The Grand Resort and Avalon Field Club at New Castle partially offset by current year depreciation on property and equipment. The decrease in corporate total assets of approximately $1.0 million is primarily due to a decrease in restricted cash utilized for the expansion of The Grand Resort and Avalon Field Club at New Castle and intersegment transactions, which are eliminated in consolidation partially offset by an increase in operating cash and cash equivalents.