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DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
 6 Months Ended
Jun. 30, 2011
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION  
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

(3) DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

 

The Company’s three principal lines of business are Membership Services, Media, and Retail.  The Membership Services segment operates the Good Sam Club, the Coast to Coast Club, the President’s Club, the Camp Club USA and assorted membership products and services for recreational vehicles (“RV”) owners, campers and outdoor vacationers, and the Golf Card Club for golf enthusiasts.  The Media segment publishes a variety of publications for selected markets in the recreation and leisure industry, including general circulation periodicals, directories and RV and powersports industry trade magazines.  In addition, the Media segment operates consumer outdoor recreation shows primarily focused on the RV and powersports markets.  The Retail segment sells specialty retail merchandise and services for RV owners primarily through retail supercenters, mail order catalogs and internet sales.  The Company evaluates performance based on profit or loss from operations before income taxes and unusual items.  Segment profit as presented herein excludes intercompany fees by which interest expense attributable to the Senior Notes is allocated to such segments as management evaluates its lines of business performance before such allocation and this interest expense is evaluated on a consolidated level.

 

The reportable segments are strategic business units that offer different products and services.  They are managed separately because each business requires different technology, management expertise and marketing strategies.

 

Financial information by reportable business segment is summarized as follows (in thousands):

 

 

 

Membership

 

 

 

 

 

 

 

 

 

Services

 

Media

 

Retail

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

THREE MONTHS ENDED JUNE 30, 2011

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

39,067

 

$

7,373

 

$

82,650

 

$

129,090

 

Depreciation and amortization

 

321

 

952

 

2,069

 

3,342

 

Gain on sale of assets

 

5

 

270

 

—

 

275

 

Interest income

 

727

 

2

 

—

 

729

 

Interest expense

 

—

 

—

 

594

 

594

 

Segment operating profit (loss)

 

15,032

 

(601

)

5,485

 

19,916

 

 

 

 

 

 

 

 

 

 

 

THREE MONTHS ENDED JUNE 30, 2010

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

38,661

 

8,009

 

84,412

 

131,082

 

Depreciation and amortization

 

477

 

948

 

2,356

 

3,781

 

Interest income

 

789

 

—

 

—

 

789

 

Interest expense

 

—

 

(18

)

586

 

568

 

Segment operating profit

 

13,408

 

30

 

4,451

 

17,889

 

 

 

 

 

 

 

 

 

 

 

SIX MONTHS ENDED JUNE 30, 2011

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

74,301

 

22,759

 

136,597

 

233,657

 

Depreciation and amortization

 

746

 

1,933

 

4,248

 

6,927

 

Gain (loss) on sale of property and equipment

 

5

 

520

 

(28

)

497

 

Interest income

 

1,471

 

2

 

—

 

1,473

 

Interest expense

 

—

 

1

 

1,179

 

1,180

 

Segment operating profit

 

29,117

 

1,152

 

2,196

 

32,465

 

 

 

 

 

 

 

 

 

 

 

SIX MONTHS ENDED JUNE 30, 2010

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

75,735

 

22,692

 

138,589

 

237,016

 

Depreciation and amortization

 

1,118

 

1,891

 

4,620

 

7,629

 

Gain on sale of property and equipment

 

—

 

—

 

23

 

23

 

Interest income

 

1,595

 

—

 

—

 

1,595

 

Interest expense

 

—

 

(8

)

1,118

 

1,110

 

Segment operating profit (loss)

 

28,596

 

942

 

(97

)

29,441

 

 

The following is a reconciliation of profit from operations to the Company’s consolidated financial statements for the three and six months ended June 30, 2011 and 2010 (in thousands):

 

 

 

THREE MONTHS ENDED

 

SIX MONTHS ENDED

 

 

 

6/30/2011

 

6/30/2010

 

6/30/2011

 

6/30/2010

 

 

 

 

 

 

 

 

 

 

 

Income (loss) Before Income Taxes

 

 

 

 

 

 

 

 

 

Total income for reportable segments

 

$

19,916

 

$

17,889

 

$

32,465

 

$

29,441

 

Unallocated G & A expense

 

(3,333

)

(5,015

)

(7,278

)

(8,715

)

Unallocated depreciation and amortization expense

 

(661

)

(835

)

(1,298

)

(1,815

)

Unallocated gain (loss) on derivative instrument

 

632

 

(144

)

1,478

 

(520

)

Unallocated financing charges

 

—

 

(244

)

19

 

(6,905

)

Elimination of intercompany interest income

 

(604

)

(665

)

(1,223

)

(1,345

)

Unallocated interest expense, net of intercompany elimination

 

(10,734

)

(9,206

)

(21,446

)

(17,945

)

Income (loss) before income taxes

 

$

5,216

 

$

1,780

 

$

2,717

 

$

(7,804

)

 

The following is a reconciliation of assets of reportable segments to the Company’s consolidated financial statements as of June 30, 2011 and December 31, 2010 (in thousands):

 

 

 

6/30/2011

 

12/31/2010

 

Membership services segment

 

$

252,077

 

$

252,080

 

Media segment

 

17,318

 

20,904

 

Retail segment

 

103,511

 

90,753

 

Total assets for reportable segments

 

372,906

 

363,737

 

Intangible assets not allocated to segments

 

11,797

 

12,409

 

Corporate unallocated assets

 

6,487

 

6,415

 

Elimination of intersegment receivable

 

(159,094

)

(160,543

)

Total assets

 

$

232,096

 

$

222,018