Note 14 - Business Segment Information

3 Months Ended

Mar. 31, 2022

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 operations located outside the United States and, accordingly, geographical segment information is not presented. For the three months ended March 31, 2022, two customers accounted for 20% of the waste management services segment’s net operating revenues to external customers and 13% of the consolidated net operating revenues. For the three months ended March 31, 2021, one customer accounted for 20% of the waste management services segment’s net operating revenues to external customers and 15% of the consolidated 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 2021 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 (loss) to consolidated income (loss) before taxes is as follows (in thousands):

	Three Months Ended March 31,
	2022			2021
Net operating revenues from:
Waste management services:
External customer revenues	$	9,339		$	11,150
Intersegment revenues		-			-
Total waste management services		9,339			11,150
Golf and related operations:
External customer revenues		4,970			3,963
Intersegment revenues		2			8
Total golf and related operations		4,972			3,971
Segment operating revenues		14,311			15,121
Intersegment eliminations		(2	)		(8	)
Total net operating revenues	$	14,309		$	15,113
Income (loss) before income taxes:
Waste management services	$	654		$	1,143
Golf and related operations		(836	)		200
Segment income before income taxes		(182	)		1,343
Corporate interest expense		(269	)		(283	)
Corporate gain on debt extinguishment		-			502
Corporate other income, net		1			1
General corporate expenses		(930	)		(832	)
Income (loss) before income taxes	$	(1,380	)	$	731
Gain on debt extinguishment:
Waste management services	$	-		$	-
Golf and related operations		-			585
Corporate		-			502
Total gain on debt extinguishment	$	-		$	1,087

	March 31, 2022			December 31, 2021
Identifiable assets:
Waste management services	$	34,650		$	34,203
Golf and related operations		63,273			59,700
Corporate		53,526			55,027
Subtotal		151,449			148,930
Elimination of intersegment receivables		(72,836	)		(70,893	)
Total	$	78,613		$	78,037

In comparing total assets at March 31, 2022 with those at December 31, 2021, the increase in the total assets of the waste management services segment of approximately $0.4 million was primarily a result of an increase in intersegment transactions, which are eliminated in consolidation, partially offset by a decrease in accounts receivable. The increase in total assets of the golf and related operations segment of $3.6 million was primarily due to an increase in accounts receivable and capital expenditures associated with The Grand Resort and Avalon Field Club at New Castle and, to a lesser extent, an increase in inventory and prepaid expenses, partially offset by current year depreciation on property and equipment. The decrease in corporate total assets of approximately $1.5 million was primarily due to a decrease in operating and restricted cash utilized for the renovation of The Grand Resort and Avalon Field Club at New Castle, partially offset by an increase in intersegment transactions, which are eliminated in consolidation.