Note 13 - Business Segment Information

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 13. 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 and a multipurpose recreation center. 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 nine months ended September 30, 2022, one customer accounted for 10% of the waste management services segment’s net operating revenues to external customers and 6% of the consolidated net operating revenues. 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.

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						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Net operating revenues from:
Waste management services:
External customer revenues	$	15,036		$	11,444		$	35,092		$	31,279
Intersegment revenues		-			-			-			-
Total waste management services		15,036			11,444			35,092			31,279
Golf and related operations:
External customer revenues		10,677			9,857			24,452			21,525
Intersegment revenues		25			15			56			32
Total golf and related operations		10,702			9,872			24,508			21,557
Segment operating revenues		25,738			21,316			59,600			52,836
Intersegment eliminations		(25	)		(15	)		(56	)		(32	)
Total net operating revenues	$	25,713		$	21,301		$	59,544		$	52,804
Income (loss) before income taxes:
Waste management services	$	1,454		$	672		$	3,143		$	2,491
Golf and related operations		1,223			1,412			976			3,238
Segment income before income taxes		2,677			2,084			4,119			5,729
Corporate interest expense		(402	)		(282	)		(937	)		(845	)
Corporate gain on debt extinguishment		-			-			-			502
Corporate other income, net		-			2			1			10
General corporate expenses		(1,148	)		(962	)		(2,999	)		(3,084	)
Income before income taxes	$	1,127		$	842		$	184		$	2,312
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,
	2022			2021
Identifiable assets:
Waste management services	$	35,822		$	34,203
Golf and related operations		63,469			59,700
Corporate		64,243			55,027
Subtotal		163,534			148,930
Elimination of intersegment receivables		(71,854	)		(70,893	)
Total	$	91,680		$	78,037

In comparing total assets at September 30, 2022 with those at December 31, 2021, the increase in the total assets of the waste management services segment of approximately $1.6 million was primarily a result of an increase accounts receivable partially offset by a decrease in intersegment transactions, which are eliminated in consolidation. The increase in total assets of the golf and related operations segment of $3.8 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 partially offset by current year depreciation on property and equipment. The increase in corporate total assets of approximately $9.2 million was primarily due to an increase in restricted cash received in conjunction with our 2022 Term Loan Agreement and an increase in intersegment transactions, which are eliminated in consolidation, partially offset by a decrease in operating cash and cash equivalents.