Avalon(US:AWX)2025-11-07 22:02Financial Performance - Net operating revenues increased to $25.7 million in Q3 2025, up from $24.2 million in Q3 2024, with the waste management services segment contributing approximately $12.9 million, an increase from $11.5 million [154]. - Net income attributable to Avalon Holdings Corporation common shareholders was $1.9 million, or $0.49 per share, in Q3 2025, compared to $1.8 million, or $0.47 per share, in Q3 2024, reflecting a 5.6% increase in net income [159]. - Net operating revenues decreased to $62.1 million in the first nine months of 2025 from $66.2 million in the first nine months of 2024, a decrease of 6.2% [174]. - Net income attributable to Avalon Holdings Corporation common shareholders for the first nine months of 2025 was $0.7 million, or $0.17 per share, down from $1.8 million, or $0.47 per share, in the first nine months of 2024, a decline of 61.1% [180]. - Net income attributable to Avalon Holdings Corporation common shareholders was $0.7 million in the first nine months of 2025, down from $1.8 million in the same period of 2024 [195]. Revenue Segments - Net operating revenues of the waste management services segment were approximately $12.9 million in Q3 2025, up from $11.5 million in Q3 2024, representing a 12.1% increase [161]. - Net operating revenues from waste disposal brokerage and management services were approximately $12.2 million in Q3 2025, compared to $10.8 million in Q3 2024, an increase of 12.9% [162]. - Event work net operating revenues increased to approximately $5.3 million in Q3 2025 from $3.7 million in Q3 2024, a growth of 43.2% [162]. - Net operating revenues of the golf and related operations segment were approximately $12.8 million in both Q3 2025 and Q3 2024, indicating no growth [166]. - Other net operating revenues related to golf operations were approximately $19.4 million for both the first nine months of 2025 and 2024 [189]. Costs and Expenditures - Total cost of operations for the waste management services segment rose to $10.3 million in Q3 2025, compared to $8.9 million in Q3 2024, primarily due to increased revenues [155]. - Total cost of operations for the waste management services segment rose to approximately $10.3 million in Q3 2025 from $8.9 million in Q3 2024, an increase of 15.7% [164]. - Total cost of operations for the golf and related operations segment was $9.4 million in Q3 2025, slightly up from $9.3 million in Q3 2024 [169]. - Total cost of operations for the golf segment increased to $24.1 million in the first nine months of 2025 from $23.6 million in 2024, primarily due to higher utility costs [190]. - The cost of food, beverage, and merchandise sales was approximately 45% of associated revenue in the first nine months of 2025, up from 44% in the same period of 2024 [190]. Working Capital and Financing - Working capital improved to approximately $0.3 million at September 30, 2025, from a deficit of approximately $0.9 million at December 31, 2024, driven by increased cash and accounts receivable [140]. - Accounts receivable increased to $12.5 million at September 30, 2025, compared to $8.6 million at December 31, 2024, with significant contributions from both the golf operations and waste management services segments [141]. - Deferred revenue related to membership dues rose to approximately $4.6 million at September 30, 2025, up from $3.5 million at December 31, 2024, reflecting the timing of annual membership renewals [145]. - Capital expenditures for the nine months ended September 30, 2025, totaled $1.4 million, with expectations for 2025 expenditures ranging from $1.5 million to $2.5 million, primarily for remodeling and improvements [138][139]. - The Line of Credit Agreement allows for borrowings up to $5.0 million, with approximately $3.2 million outstanding as of September 30, 2025, and an interest rate of 7.50% [133][134]. Strategic Initiatives - Avalon is exploring acquisition opportunities in the northeast Ohio area, particularly targeting private country clubs facing economic difficulties [152]. - The company aims to enhance its waste management services segment through increased sales and marketing efforts, focusing on customer retention and new business acquisition [148][149]. Challenges and Risks - Avalon is facing challenges in attracting and retaining members, which is critical for the success of its golf operations [192]. - Economic conditions, including inflation and potential recessions, could adversely affect consumer discretionary spending, impacting Avalon’s financial performance [202]. - The profitability of the golf segment is sensitive to changes in commodity costs, which are expected to remain elevated throughout 2025 due to inflationary pressures [205]. - Avalon’s business is significantly dependent on the sale and renewal of memberships in the Avalon Golf and Country Club on a year-to-year basis [209]. - The Company's operations are seasonal, significantly dependent on weather conditions during the golf season, which can adversely affect financial performance [230]. - The Federal Reserve's elevated interest rates and high consumer goods pricing impact the Company's operations, with inflation potentially affecting consumer spending habits [231].