In June of this year, coinciding with the release of the first quarter LLC's Financials, a document was released summarizing and explaining how the golf courses operations performed. The document covered April's performance as well.
Reading the document, we were amazed at the scope of the misinformation being presented. We documented the absurd cash reporting and the outright falsehoods being reported in terms of financial results. The author of the document, whoever that may be, but was likely management, went to great length to describe "how good results might have been" if it weren't for the repayment of a large loan. We showed that only a small fraction of the loan was actually repaid during the first quarter, again highlighting the misinformation presented by the document.
One falsehood repeated throughout the document was no funds were transferred from the HOA to the LLC during the first quarter. Specifically, no funds from the second Special Assessment were transferred. According to the document, SPA 2 Funds were to be used later in the off-season to "keep the doors open".
I draw readers' attention to the minutes of the LLC Board Meeting held on January 16, 2024, at 3:00 PM. It states:
"It was noted a relatively small transfer of funds from the "new" SPA account would need to go to the golf course to make sure payments to the [Landscaping Co.] and [Marketing Firm] would be covered."
Relatively small? Looking at the January Financial Statements, it shows [Landscaping Co.] is owed $46,564.53 and is 30 - 60 days past due.
As many have begun to believe, and is my opinion as well, a person is much better off, if they believe nothing that is stated by management, regarding our community's accounting or finances. Given past events, and now this Q1 doc, management has lost all credibility. That is my opinion.
But lets look at operations. How successful have the courses really been? Key statistics are presented below.
Revenue has been in-line with previous seasonal periods, for example January 2023 revenue after adjusting for Food & Beverage Sales was $177,392. But January 2023 Revenue did not include any non-cash Prepaids. The 2024 Revenue numbers include $17,867 of Prepaids.
So a more honest comparison would be 2024 actually experienced (170,051 - 17,867) = $152,184 of revenue as compared to $177,392 in 2023, a 14.2% reduction. March the strongest month, in 2023 reported $196,365, while in 2024, reported revenue of (226,826 - 17,799) = $209,027, a seemingly 6.5% increase.
That is not correct. In March there appeared UNCATEGORIZED REVENUE of $29,519. Attempts to identify this revenue have failed. The President of the LLC was asked and after hemming and hawing, stated that it was "Uncategorized".
So, obviously, LLC Management does not want people to find out what $29,519 of Revenue for March 2024. They will not acknowledge if it is real or not.
Not knowing what it is or even if it is real, then we need to remove it. Revenue for March 2024 was actually (226,826 - 17,799 - 29,519) = $179,508. This is a 8.6% drop in Revenue from March 2023.
The courses are exhibiting negative trends and comparisons. That is why the Board wants to assimilate the courses into the HOA. The courses are sinking, management has been unable to produce positive results so in order to save the courses, they are throwing it in the laps of residents. It is a fleecing of our community.
Every number can be manipulated and "non-cash items", such as Prepaids, can have an impact on financial results. My belief is examining CASH FROM OPERATIONS as an indicator of profitability is superior then NET INCOME because it removes non-cash items.
Using only the data as provided in each month's financials, and taking the Cash from Operations as provided by the Statement of Cash Flows, we can see that after four months of operations in 2024, during the best months of the season, the Golf Course Operation generated only $3,156 of positive cash flow.
If a person was going to measure profitability, using this number as compared to Total Capital, you would have to go out four decimal places to find a meaningful digit.
After four months of operation, during the strongest months of the year, the results are only $3,156 in cash. Our community would have been better off with our money in CDs.
That number is taken directly from the financial statements. But an adjustment needs to be made. Again, UNCATEGORIZED REVENUE has not been identified so must be removed from the equation. This is $29,519 for March and $14,531 for April.
Removing UNCATEGORIZED REVENUE from the calculations results in a decrease of ($40,894) in cash for the period ending April 2024. This means after four months of operation, during the strongest seasonal period, the Golf Course Operation ended up with ($40,894) less cash than when we started on January 1, 2024.
Despite the tournaments and all the incentive pricing, the courses still lost money in the first four months of 2024. The courses experienced "Negative Cash Flow".
Management believes they can turn it around. But this is the fourth management team and so far they have accomplished little except spending money while being deceitful to residents.
Again, the individuals behind the Q1 document as originally reported are not being truthful. But then, when have they ever? It seems like there is much finger pointing by management as to misinformation. But based on what we can derive from the Q1 document, it is management that is the source of the misinformation. The courses are not performing well. The courses are experiencing an accelerating decrease in demand for the game of golf.
Cost must be cut in order for the courses to survive. 18 holes must be closed and expenses must be curtailed.
Evidence to managements complicity in misinforming residents is available on-line. I ask everyone to visit the website where the LLC financials are found. There you can find the Q1 document. But the document has been stripped bare of all its contents. Originally, when released, the document was six full pages of bellicose statements describing the financial success of the courses.
Now, readers will find a single page document, with only the partial answers to the six questions supposedly posed by readers. The document has been scrubbed clean.
I think that says something.
As always, the above analysis and conclusions are my opinion and are based on the information provided by management. I urge readers to do their own analysis and form their own conclusions.
Thank you. Stay healthy. Stay strong and keep the faith.
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