AVALON HOLDINGS CORPORATION ANNOUNCES 2023 FULL YEAR AND FOURTH QUARTER RESULTS
- None.
- Decrease in net operating revenues for Q4 and FY 2023 compared to the previous year
- Net loss recorded for Q4 and FY 2023, with a decrease in net income compared to the previous year
- Basic net loss per share increased for Q4 and FY 2023 compared to the previous year
Insights
The reported financials by Avalon Holdings Corporation indicate a contraction in net operating revenues from $21.6 million in Q4 2022 to $17.6 million in Q4 2023, alongside a year-over-year decrease from $81.2 million to $80.5 million. This decline reflects a possible reduction in demand for their services or increased competition. The net loss of $0.8 million in Q4 2023, albeit improved from the $1.0 million loss in the corresponding period of the previous year, suggests cost management efforts may be underway, yet the company still faces challenges to achieving profitability.
From a stock market perspective, investors might react to these figures with caution. The shift from a net income of $0.6 million in 2022 to a net loss of $1.8 million for the full year of 2023 could lead to a negative sentiment, potentially impacting the stock's performance. However, the reduced loss per share in Q4 2023 compared to Q4 2022 might be seen as a positive signal of management's ability to control expenses in a difficult environment.
Analyzing the sector-specific performance, waste management services, which is a core operation of Avalon Holdings, saw a significant drop in revenues, from nearly $14.7 million in Q4 2022 to about $9.9 million in Q4 2023. This is a substantial decrease and could be indicative of operational challenges or shifts in the industry landscape, such as increased regulatory pressures or shifts in industrial output affecting demand. On the other hand, the golf and related operations have shown an increase, which might suggest a diversification strategy that could stabilize revenue streams.
Understanding the market dynamics within the waste management and leisure sectors could provide further insights into the long-term viability of Avalon's business model. This information would be particularly relevant for investors considering the potential for growth in the environmental services industry and the leisure market, especially considering the current economic climate and consumer spending habits.
Given Avalon's involvement in waste management and salt water injection well operations, environmental regulations and sustainability trends are likely to have a significant impact on its operations and financial performance. The observed revenue decline in their waste management segment could be partially attributed to stricter environmental regulations or shifts towards more sustainable practices that reduce waste generation. It is essential to monitor regulatory developments, as they can present both risks and opportunities for companies in this sector.
The long-term implications for stakeholders include the need to invest in cleaner technologies and practices, which may incur additional costs but could also open up new revenue streams. For instance, increased investment in recycling and waste-to-energy solutions could provide Avalon with a competitive edge. As investors become more environmentally conscious, companies that proactively adapt to regulatory changes and demonstrate a commitment to sustainability may also benefit from enhanced investor confidence and potentially higher valuations.
Net operating revenues in the fourth quarter of 2023 were
For the year ended December 31, 2023, net operating revenues were
Avalon Holdings Corporation provides waste management services to industrial, commercial, municipal and governmental customers in selected northeastern and midwestern
AVALON HOLDINGS CORPORATION AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||
(in thousands, except for per share amounts) | |||||||
Three Months Ended | Year Ended | ||||||
December 31, | December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Net operating revenues: | |||||||
Waste management services | $ 9,917 | $ 14,671 | $ 44,611 | $ 49,763 | |||
Food, beverage and merchandise sales | 2,914 | 2,832 | 13,491 | 12,137 | |||
Other golf and related operations | 4,786 | 4,133 | 22,413 | 19,280 | |||
Total golf and related operations | 7,700 | 6,965 | 35,904 | 31,417 | |||
Total net operating revenues | 17,617 | 21,636 | 80,515 | 81,180 | |||
Costs and expenses: | |||||||
Waste management services operating costs | 7,776 | 12,137 | 35,642 | 40,380 | |||
Cost of food, beverage and merchandise | 1,500 | 1,506 | 6,318 | 5,500 | |||
Golf and related operations operating costs | 5,433 | 5,040 | 24,775 | 21,337 | |||
Depreciation and amortization expense | 968 | 930 | 3,826 | 3,483 | |||
Selling, general and administrative expenses | 2,381 | 2,615 | 10,227 | 10,133 | |||
Operating (loss) income | (441) | (592) | (273) | 347 | |||
Other income (expense): | |||||||
Interest expense | (525) | (504) | (2,098) | (1,464) | |||
Other income, net | 61 | 26 | 384 | 231 | |||
Loss before income taxes | (905) | (1,070) | (1,987) | (886) | |||
Provision for income taxes | (36) | (14) | 57 | 94 | |||
Net loss | (869) | (1,056) | (2,044) | (980) | |||
Less net loss attributable to non-controlling interest in subsidiaries | (38) | (83) | (269) | (397) | |||
Net loss attributable to Avalon Holdings Corporation common shareholders | $ (831) | $ (973) | $ (1,775) | $ (583) | |||
Loss per share attributable to Avalon Holdings Corporation common shareholders: | |||||||
Basic net loss per share | $ (0.21) | $ (0.25) | $ (0.46) | $ (0.15) | |||
Weighted average shares outstanding - basic | 3,899 | 3,899 | 3,899 | 3,899 | |||
AVALON HOLDINGS CORPORATION AND SUBSIDIARIES | |||
Condensed Consolidated Balance Sheets (Unaudited) | |||
(in thousands) | |||
December 31, | December 31, | ||
2023 | 2022 | ||
Assets | |||
Current Assets: | |||
Cash and cash equivalents | $ 1,187 | $ 1,624 | |
Accounts receivable, net | 9,499 | 11,127 | |
Unbilled membership dues receivable | 567 | 599 | |
Inventories | 1,662 | 1,461 | |
Prepaid expenses | 1,116 | 1,172 | |
Other current assets | 14 | 105 | |
Total current assets | 14,045 | 16,088 | |
Property and equipment, net | 56,630 | 56,805 | |
Property and equipment under finance leases, net | 5,711 | 5,001 | |
Operating lease right-of-use assets | 1,270 | 1,386 | |
Restricted cash | 10,265 | 10,426 | |
Noncurrent deferred tax asset | 8 | 8 | |
Other assets, net | 36 | 36 | |
Total assets | $ 87,965 | $ 89,750 | |
Liabilities and Equity | |||
Current liabilities: | |||
Current portion of long term debt | $ 538 | $ 503 | |
Current portion of obligations under finance leases | 198 | 115 | |
Current portion of obligations under operating leases | 432 | 424 | |
Accounts payable | 9,657 | 10,995 | |
Accrued payroll and other compensation | 1,277 | 989 | |
Other taxes | 539 | 643 | |
Deferred membership dues revenue | 3,443 | 3,643 | |
Other liabilities and accrued expenses | 1,825 | 1,544 | |
Total current liabilities | 17,909 | 18,856 | |
Long term debt, net of current portion | 29,220 | 29,758 | |
Line of credit | 3,200 | 1,550 | |
Obligations under finance leases, net of current portion | 598 | 381 | |
Obligations under operating leases, net of current portion | 838 | 962 | |
Asset retirement obligation | 100 | 100 | |
Equity: | |||
Total Avalon Holdings Corporation Shareholders' Equity | 36,716 | 38,490 | |
Non-controlling interest in subsidiaries | (616) | (347) | |
Total shareholders' equity | 36,100 | 38,143 | |
Total liabilities and equity | $ 87,965 | $ 89,750 | |
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SOURCE Avalon Holdings Corporation
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