Avalon Holdings Corp (AWX, Financial) filed Quarterly Report for the period ended 2009-03-31.
AVALON HOLDINGS CORP is a holding company. Through its subsidiaries they are engaged in providing transportation services technical environmental services and waste disposal brokerage and management services to industrial commercial municipal and governmental customers primarily in selected northeastern and midwestern U.S. markets. They also own and operate a public golf course and travel agency. Avalon Holdings Corp has a market cap of $6 million; its shares were traded at around $1.9 with and P/S ratio of 0.1.
Net operating revenues in the first quarter of 2009 decreased to $8.8 million from $10.4 million in the prior years first quarter. The decrease is primarily the result of lower net operating revenues of the waste management services segment, partially offset by an increase in the net operating revenues of the golf and related operations segment. Costs of operations decreased to $7.3 million in the first quarter of 2009 compared with $8.5 million in the prior years first quarter. The decrease is primarily due to the lower net operating revenues of the waste management services segment, which resulted in lower transportation and disposal costs, as these
costs vary directly with the associated net operating revenues. Fixed costs relating to depreciation and amortization expense increased to $.4 million in the first quarter of 2009 from $.3 million in the prior years first quarter. Due to such increased costs, the gross profit percentage declined to 13% in the first quarter of 2009 compared with 14.6% in the prior year quarter. Consolidated selling, general and administrative expenses decreased to $1.6 million in the first quarter of 2009 compared with $1.7 million in the first quarter of 2008 primarily due to slightly lower payroll and employee costs. Avalon recorded a net loss of $.4 million or $.11 per share, in the first quarter of 2009 compared with a net loss of $60,000 or $.02 per share, in the first quarter of 2008.
Net operating revenues of the waste management services segment decreased approximately 19% to $7.2 million in the first quarter of 2009 compared with $8.9 million in the first quarter of the prior year. For the first quarter of 2009, net operating revenues of the waste brokerage and management services business were $6.6 million compared with $8.2 million in the first quarter of 2008, while the net operating revenues of the captive landfill management operations were $.6 million in the first quarter of 2009 compared with $.7 million in the first quarter of 2008. The decrease in the net operating revenues of the waste brokerage and management services business was primarily due to a decrease of 32% in continuous or ongoing work, partially offset by a 5% increase in event work. Event work is defined as bid projects under contract that occurs on a one-time basis over a short period of time. Such work can fluctuate significantly from quarter to quarter. The decrease in continuous work is primarily the result of a slowdown in the economy which negatively affected the production and manufacturing of industrial customers of the waste brokerage and management services business. The decrease in net operating revenues of the captive landfill operations was primarily the result of a decrease in the volume of waste disposed of at the captive landfill. The volume of waste disposed of at the captive landfill is entirely dependent upon the amount of waste generated by the owner of the landfill for whom Avalon manages the facility.
Income before taxes for the waste management services segment decreased to $.6 million in the first quarter of 2009 compared with $.8 million in the first quarter of the prior year. Income before taxes of the waste brokerage and management services business was $.5 million for the first quarter of 2009 compared with $.6 million for the first quarter of 2008. Gross margins of the waste brokerage and management services business improved to 19.7% in the first quarter of 2009 compared with 18.4% in the prior year quarter. Income before taxes of the captive landfill operations decreased to $.1 million in the first quarter of 2009 compared with $.2 million in the first quarter of 2008 primarily due to the decrease in the volume of waste disposed.
western Pennsylvania, were unavailable for play during the first quarter of 2009 and 2008 due to adverse weather conditions. As such, net operating revenues were negatively affected by the adverse weather conditions. Net operating revenues for the golf and related operations were $1.6 million in the first quarter of 2009 compared with $1.4 million in the first quarter of the prior year. The increase in net operating revenues is primarily due to higher food and beverage sales and increased membership dues. In the first quarter of 2009 the dining and banquet facilities at the Sharon club were open for the entire quarter as compared with the first quarter of 2008 when such facilities were only open for the month of March following the completion of the renovation and construction of the Sharon club. The average number of members during the first quarter of 2009 increased to 2,633 compared with 2,398 in the prior years first quarter. The ability to attract and retain members is very important to the success of the golf and related operations segment. Avalon is continually using different marketing strategies to attract and retain members, such as local television advertising and various membership promotions. However, due to the state of the economy, retaining members and attracting new members is becoming more difficult. A significant decline in members could adversely impact the financial results of the golf and related operations segment. The golf and related operations segment incurred a loss before taxes of $373,000 in the first quarter of 2009 compared with a loss before taxes of $206,000 in the first quarter of the prior year. The increased loss before taxes is primarily due to increased depreciation expense and higher operating expenses.
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AVALON HOLDINGS CORP is a holding company. Through its subsidiaries they are engaged in providing transportation services technical environmental services and waste disposal brokerage and management services to industrial commercial municipal and governmental customers primarily in selected northeastern and midwestern U.S. markets. They also own and operate a public golf course and travel agency. Avalon Holdings Corp has a market cap of $6 million; its shares were traded at around $1.9 with and P/S ratio of 0.1.
Highlight of Business Operations:
Avalon entered into a long-term agreement with Squaw Creek Country Club to lease and operate its golf course and related facilities. The lease, which commenced November 1, 2003, has an initial term of ten (10) years with four (4) consecutive ten (10) year renewal term options unilaterally exercisable by Avalon. Under the lease, Avalon is obligated to pay $15,000 in annual rent and make leasehold improvements of $150,000 per year. Amounts expended by Avalon for leasehold improvements during a given year in excess of $150,000 will be carried forward and applied to future leasehold improvement obligations. Avalon has made approximately $7.3 million of leasehold improvements as of March 31, 2009. Based upon the amount of leasehold improvements already made and leasehold improvements anticipated to be made in the future, Avalon expects to exercise all of its renewal options.Net operating revenues in the first quarter of 2009 decreased to $8.8 million from $10.4 million in the prior years first quarter. The decrease is primarily the result of lower net operating revenues of the waste management services segment, partially offset by an increase in the net operating revenues of the golf and related operations segment. Costs of operations decreased to $7.3 million in the first quarter of 2009 compared with $8.5 million in the prior years first quarter. The decrease is primarily due to the lower net operating revenues of the waste management services segment, which resulted in lower transportation and disposal costs, as these
costs vary directly with the associated net operating revenues. Fixed costs relating to depreciation and amortization expense increased to $.4 million in the first quarter of 2009 from $.3 million in the prior years first quarter. Due to such increased costs, the gross profit percentage declined to 13% in the first quarter of 2009 compared with 14.6% in the prior year quarter. Consolidated selling, general and administrative expenses decreased to $1.6 million in the first quarter of 2009 compared with $1.7 million in the first quarter of 2008 primarily due to slightly lower payroll and employee costs. Avalon recorded a net loss of $.4 million or $.11 per share, in the first quarter of 2009 compared with a net loss of $60,000 or $.02 per share, in the first quarter of 2008.
Net operating revenues of the waste management services segment decreased approximately 19% to $7.2 million in the first quarter of 2009 compared with $8.9 million in the first quarter of the prior year. For the first quarter of 2009, net operating revenues of the waste brokerage and management services business were $6.6 million compared with $8.2 million in the first quarter of 2008, while the net operating revenues of the captive landfill management operations were $.6 million in the first quarter of 2009 compared with $.7 million in the first quarter of 2008. The decrease in the net operating revenues of the waste brokerage and management services business was primarily due to a decrease of 32% in continuous or ongoing work, partially offset by a 5% increase in event work. Event work is defined as bid projects under contract that occurs on a one-time basis over a short period of time. Such work can fluctuate significantly from quarter to quarter. The decrease in continuous work is primarily the result of a slowdown in the economy which negatively affected the production and manufacturing of industrial customers of the waste brokerage and management services business. The decrease in net operating revenues of the captive landfill operations was primarily the result of a decrease in the volume of waste disposed of at the captive landfill. The volume of waste disposed of at the captive landfill is entirely dependent upon the amount of waste generated by the owner of the landfill for whom Avalon manages the facility.
Income before taxes for the waste management services segment decreased to $.6 million in the first quarter of 2009 compared with $.8 million in the first quarter of the prior year. Income before taxes of the waste brokerage and management services business was $.5 million for the first quarter of 2009 compared with $.6 million for the first quarter of 2008. Gross margins of the waste brokerage and management services business improved to 19.7% in the first quarter of 2009 compared with 18.4% in the prior year quarter. Income before taxes of the captive landfill operations decreased to $.1 million in the first quarter of 2009 compared with $.2 million in the first quarter of 2008 primarily due to the decrease in the volume of waste disposed.
western Pennsylvania, were unavailable for play during the first quarter of 2009 and 2008 due to adverse weather conditions. As such, net operating revenues were negatively affected by the adverse weather conditions. Net operating revenues for the golf and related operations were $1.6 million in the first quarter of 2009 compared with $1.4 million in the first quarter of the prior year. The increase in net operating revenues is primarily due to higher food and beverage sales and increased membership dues. In the first quarter of 2009 the dining and banquet facilities at the Sharon club were open for the entire quarter as compared with the first quarter of 2008 when such facilities were only open for the month of March following the completion of the renovation and construction of the Sharon club. The average number of members during the first quarter of 2009 increased to 2,633 compared with 2,398 in the prior years first quarter. The ability to attract and retain members is very important to the success of the golf and related operations segment. Avalon is continually using different marketing strategies to attract and retain members, such as local television advertising and various membership promotions. However, due to the state of the economy, retaining members and attracting new members is becoming more difficult. A significant decline in members could adversely impact the financial results of the golf and related operations segment. The golf and related operations segment incurred a loss before taxes of $373,000 in the first quarter of 2009 compared with a loss before taxes of $206,000 in the first quarter of the prior year. The increased loss before taxes is primarily due to increased depreciation expense and higher operating expenses.
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