Note 14 - Business Segment Information

9 Months Ended

Sep. 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 nine months ended September 30, 2021, one customer accounted for 12% of the waste management services segment’s net operating revenues to external customers and 7% of the consolidated net operating revenues. For the nine months ended September 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						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
Net operating revenues from:
Waste management services:
External customer revenues	$	11,444		$	9,326		$	31,279		$	29,547
Intersegment revenues		-			-			-			-
Total waste management services		11,444			9,326			31,279			29,547
Golf and related operations:
External customer revenues		9,857			7,299			21,525			14,548
Intersegment revenues		15			7			32			37
Total golf and related operations		9,872			7,306			21,557			14,585
Segment operating revenues		21,316			16,632			52,836			44,132
Intersegment eliminations		(15	)		(7	)		(32	)		(37	)
Total net operating revenues	$	21,301		$	16,625		$	52,804		$	44,095

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
Income (loss) before income taxes:
Waste management services	$	672		$	855		$	2,491		$	2,710
Golf and related operations		1,412			1,018			3,238			101
Segment income before income taxes		2,084			1,873			5,729			2,811
Corporate interest expense		(282	)		(293	)		(845	)		(883	)
Corporate gain on debt extinguishment		-			-			502			-
Corporate other income, net		2			9			10			22
General corporate expenses		(962	)		(789	)		(3,084	)		(2,359	)
Income (loss) before income taxes	$	842		$	800		$	2,312		$	(409	)

Gain on debt extinguishment:
Waste management services	$	-	$	-	$	-	$	-
Golf and related operations		-		-		1,462		-
Corporate		-		-		502		-
Total gain on debt extinguishment	$	-	$	-	$	1,964	$	-

	September 30,			December 31,
	2021			2020
Identifiable assets:
Waste management services	$	32,624		$	31,875
Golf and related operations		59,484			57,863
Corporate		56,835			59,425
Subtotal		148,943			149,163
Elimination of intersegment receivables		(70,349	)		(71,213	)
Total	$	78,594		$	77,950

In comparing total assets at September 30, 2021 with those at December 31, 2020, the increase in the total assets of the waste management services segment of approximately $0.7 million was primarily a result of an increase in accounts receivable and, to a lesser extent, an increase in intersegment transactions, which are eliminated in consolidation. The increase in total assets of the golf and related operations segment of $1.6 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 $2.6 million was 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.