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DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
9 Months Ended
Sep. 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 Secured 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 SEPTEMBER 30, 2011

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

39,151

 

$

7,288

 

$

82,166

 

$

128,605

 

Depreciation and amortization

 

276

 

924

 

2,001

 

3,201

 

Loss on sale of property and equipment

 

(7

)

—

 

—

 

(7

)

Interest income

 

710

 

1

 

—

 

711

 

Interest expense

 

—

 

—

 

524

 

524

 

Segment operating profit (loss)

 

14,307

 

(381

)

3,191

 

17,117

 

 

 

 

 

 

 

 

 

 

 

THREE MONTHS ENDED SEPTEMBER 30, 2010

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

38,010

 

7,395

 

79,235

 

124,640

 

Depreciation and amortization

 

604

 

1,010

 

2,400

 

4,014

 

Gain on sale of property and equipment

 

—

 

4

 

—

 

4

 

Interest income

 

776

 

—

 

—

 

776

 

Interest expense

 

—

 

3

 

655

 

658

 

Segment operating profit (loss)

 

11,361

 

(487

)

5,907

 

16,781

 

 

 

 

 

 

 

 

 

 

 

NINE MONTHS ENDED SEPTEMBER 30, 2011

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

113,452

 

30,047

 

218,763

 

362,262

 

Depreciation and amortization

 

1,022

 

2,857

 

6,249

 

10,128

 

Gain (loss) on sale of property and equipment

 

(2

)

520

 

(28

)

490

 

Interest income

 

2,181

 

3

 

—

 

2,184

 

Interest expense

 

—

 

1

 

1,703

 

1,704

 

Segment operating profit

 

43,424

 

771

 

5,387

 

49,582

 

 

 

 

 

 

 

 

 

 

 

NINE MONTHS ENDED SEPTEMBER 30, 2010

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

113,745

 

30,087

 

217,824

 

361,656

 

Depreciation and amortization

 

1,722

 

2,901

 

7,020

 

11,643

 

Gain on sale of property and equipment

 

—

 

4

 

23

 

27

 

Interest income

 

2,371

 

—

 

—

 

2,371

 

Interest expense

 

—

 

(5

)

1,773

 

1,768

 

Segment operating profit

 

40,382

 

455

 

5,810

 

46,647

 

 

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

 

 

 

THREE MONTHS ENDED

 

NINE MONTHS ENDED

 

 

 

9/30/2011

 

9/30/2010

 

9/30/2011

 

9/30/2010

 

 

 

 

 

 

 

 

 

 

 

Income (loss) Before Income Taxes

 

 

 

 

 

 

 

 

 

Total operating profit for reportable segments

 

$

17,117

 

$

16,781

 

$

49,582

 

$

46,647

 

Unallocated G & A expense

 

(3,900

)

(3,959

)

(11,178

)

(13,099

)

Unallocated depreciation and amortization expense

 

(1,009

)

(691

)

(2,307

)

(2,506

)

Unallocated gain (loss) on derivative instrument

 

1,198

 

(178

)

2,676

 

(698

)

Unallocated financing charges

 

—

 

(248

)

19

 

(6,874

)

Unallocated gain on debt restructure

 

—

 

—

 

—

 

(279

)

Elimination of intercompany interest income

 

(587

)

(652

)

(1,810

)

(1,997

)

Unallocated interest expense, net of intercompany elimination

 

(10,797

)

(9,237

)

(32,243

)

(27,182

)

Income (loss) before income taxes

 

$

2,022

 

$

1,816

 

$

4,739

 

$

(5,988

)

 

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

 

 

 

9/30/2011

 

12/31/2010

 

Membership services segment

 

$

264,998

 

$

252,080

 

Media segment

 

18,359

 

20,904

 

Retail segment

 

91,346

 

90,753

 

Total assets for reportable segments

 

374,703

 

363,737

 

Intangible assets not allocated to segments

 

11,415

 

12,409

 

Corporate unallocated assets

 

6,196

 

6,415

 

Elimination of intersegment receivable

 

(158,345

)

(160,543

)

Total assets

 

$

233,969

 

$

222,018