−Removed: Management’s Discussion and Analysis of
−Removed: Financial Condition and Results of Operations
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion provides information which management believes is relevant to an assessment and understanding of the operations and financial condition of Avalon Holdings Corporation and its subsidiaries.
3 unchanged sentences
Liquidity and Capital Resources
−Removed: For the six months ended June 30, 2020, Avalon utilized existing cash and cash provided by operations to meet operating needs, make required monthly payments on our term loan facility and to fund capital expenditures which included the continued renovation of The Grand Resort as further described below.
+Added: For the nine months ended September 30, 2020, Avalon utilized existing cash, cash provided by operations and cash proceeds received under the Paycheck Protection Program to meet operating needs and make required monthly payments on our term loan facility.
+Added: Cash in our project fund account was utilized to fund capital expenditures which included the continued renovation of The Grand Resort as further described below.
Financial Impact of COVID-19 Pandemic
−Removed: The continued spread of COVID-19 and related governmental orders adversely impacted our operations and related financial results.
−Removed: Our restaurant operations generated significantly lower revenue as a result of the government mandated restrictions that were placed on in-house dining.
−Removed: Food and beverages sales related to banquets and conferences were minimal during the second quarter of 2020 as a result of government mandated restrictions placed on gatherings and events.
−Removed: In addition, the Company had high levels of room and event cancellations with some re-bookings in the third and fourth quarter of 2020 and into 2021.
−Removed: Our fitness, athletics, salon and spa operations generated no revenue under the mandate.
+Added: During 2020, the governmental orders issued to control the spread of COVID-19 adversely impacted our operations and related financial results.
+Added: During the Stay at Home order, our restaurant operations generated significantly lower revenue as a result of the restrictions that were placed on in-house dining.
+Added: Our restaurant revenue increased during the third quarter of 2020 as certain restrictions on in-house dining were reduced or lifted.
+Added: Food and beverages sales related to banquets and conferences were significantly lower during the second and third quarter of 2020 as a result of restrictions placed on gatherings and events.
+Added: In addition, the Company had high levels of room and event cancellations during the Stay at Home Order with some subsequent re-bookings that occurred in the third quarter of 2020 and into the fourth quarter of 2020 and into 2021.
+Added: Our fitness, athletics, salon and spa operations generated no revenue under the Stay at Home Order.
In addition, our waste management brokerage business has experienced a decline in both continuous and project work due to government restrictions placed on its customers and associated shutdowns.
−Removed: As government restrictions are reduced or lifted, we may experience weakened demand in light of continued travel restrictions or warnings, consumer fears and reduced consumer discretionary spending and general economic uncertainty.
+Added: As government restrictions are reduced or lifted, we may continue to experience weakened demand in light of continued travel restrictions or warnings, consumer fears and reduced consumer discretionary spending and general economic uncertainty.
In light of the foregoing, we are unable to determine when our operations will return to pre-pandemic demand or pricing.
15 unchanged sentences
In the second quarter of 2020, certain wholly-owned subsidiaries of Avalon entered into agreements and received a total of approximately $2.8 million in loans under the Program.
−Removed: The Company is currently utilizing the loan proceeds under the 24 week loan forgiveness period in accordance with Program’s guidelines.
+Added: The Company utilized the loan proceeds under the 24 week loan forgiveness period and subsequently applied for forgiveness in accordance with the Program’s guidelines.
When the debt is forgiven in accordance with the Program, any amount that is forgiven will be recognized as a gain on debt extinguishment.
−Removed: The Company will repay amounts that are not forgiven or utilized.
+Added: The Company will repay amounts that are not forgiven.
New Castle Country C lub Real Property A cquisition
13 unchanged sentences
Capital Expenditures
−Removed: During the six months ended June 30, 2020, Avalon incurred capital expenditures of $3.0 million of which $2.3 million of such expenditures was paid to vendors during the period.
+Added: During the nine months ended September 30, 2020, Avalon incurred capital expenditures of $3.7 million of which $3.2 million of such expenditures was paid to vendors during the period.
Expenditures primarily related to the continued renovation and expansion of The Grand Resort.
−Removed: In addition, approximately $0.4 million of such expenditures related to golf course maintenance equipment acquired under new capital lease agreements.
−Removed: During the six months ended June 30, 2019, Avalon incurred capital expenditures of $4.5 million of which $2.9 million of such expenditures was paid to vendors during the period.
+Added: In addition, approximately $0.4 million of such expenditures related to golf course maintenance equipment acquired under new finance lease agreements.
+Added: During the nine months ended September 30, 2019, Avalon incurred capital expenditures of $6.4 million of which $5.7 million of such expenditures was paid to vendors during the period.
Expenditures primarily related to the continued renovation and expansion of The Grand Resort and, to a lesser extent, the renovation of the Avalon Athletic Club at Boardman.
9 unchanged sentences
The remaining proceeds of approximately $7.2 million were deposited into a project fund account.
−Removed: At June 30, 2020 and December 31, 2019, loan proceeds of $4.9 and $7.2 million, respectively, are presented in the Condensed Consolidated Balance Sheets as “Restricted cash.”
+Added: At September 30, 2020 and December 31, 2019, loan proceeds of $4.2 and $7.2 million, respectively, are presented in the Condensed Consolidated Balance Sheets as “Restricted cash.”
The 2016 Term Loan Agreement, 2019 Term Loan Agreement and the Commercial Mortgage Agreement were terminated in conjunction with the New Term Loan Agreement.
9 unchanged sentences
The New Term Loan also contains other nonfinancial covenants, customary representations, warranties and events of default.
−Removed: Avalon was in compliance with the New Term Loan Agreement covenants at June 30, 2020 and December 31, 2019.
+Added: Avalon was in compliance with the New Term Loan Agreement covenants at September 30, 2020 and December 31, 2019.
Line of Credit Agreement
3 unchanged sentences
At December 20, 2019, the outstanding balance of $1.7 million under the Line of Credit Agreement was paid down with a portion of the proceeds from the New Term Loan Agreement.
−Removed: No amounts were drawn under the Line of Credit Agreement at June 30, 2020 and December 31, 2019.
+Added: No amounts were drawn under the Line of Credit Agreement at September 30, 2020 and December 31, 2019.
Outstanding borrowings under the Line of Credit Agreement bear interest at Prime Rate plus .25%.
−Removed: At June 30, 2020, the interest rate on the Line of Credit Agreement was 3.50%.
+Added: At September 30, 2020, the interest rate on the Line of Credit Agreement was 3.50%.
Borrowings under the Line of Credit Agreement are secured by certain business assets of the Company including accounts receivable, inventory and equipment.
1 unchanged sentence
The Line of Credit Agreement also contains other nonfinancial covenants, customary representations, warranties and events of default.
−Removed: Avalon was in compliance with the Line of Credit Agreements covenants at June 30, 2020 and December 31, 2019.
−Removed: During the three months ended June 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.67% and 5.53%, respectively.
−Removed: During the six months ended June 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.82% and 5.45%, respectively.
+Added: Avalon was in compliance with the Line of Credit Agreements covenants at September 30, 2020 and December 31, 2019.
+Added: During the three months ended September 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.57% and 5.53%, respectively.
+Added: During the nine months ended September 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.74% and 5.48%, respectively.
Squaw Creek Country Club Lease Agreement
5 unchanged sentences
Working Capital
−Removed: At June 30, 2020 and December 31, 2019, there was a working capital deficit of approximately $2.6 million and $3.4 million, respectively.
−Removed: Working capital was primarily positively impacted by an increase in both cash and cash equivalents and unbilled membership dues receivable and a decrease in accounts payable.
+Added: At September 30, 2020 and December 31, 2019, there was a working capital deficit of approximately $2.1 million and $3.4 million, respectively.
+Added: Working capital was primarily positively impacted by an increase in cash and cash equivalents, unbilled membership dues receivable, inventory and a decrease in accounts payable.
This increase was partially offset by a decrease in accounts receivable and an increase in deferred membership dues revenue and the current portion of the Payroll Protection Program loan.
−Removed: Accounts receivable decreased to $7.8 million at June 30, 2020 compared with $12.0 million at December 31, 2019.
−Removed: The decrease was primarily the result of decreased sales related to the waste management services segment in the second quarter of 2020 compared with the fourth quarter of 2019 and the timing of receipt on those associated receivables.
−Removed: Net operating revenues related to the waste management segment were $9.1 million in the second quarter of 2020 compared with $12.8 million in the fourth quarter of 2019.
+Added: Accounts receivable decreased to $8.7 million at September 30, 2020 compared with $12.0 million at December 31, 2019.
+Added: The decrease was primarily the result of decreased sales related to the waste management services segment in the third quarter of 2020 compared with the fourth quarter of 2019 and the timing of receipt on those associated receivables.
+Added: Net operating revenues related to the waste management segment were $9.3 million in the third quarter of 2020 compared with $12.8 million in the fourth quarter of 2019.
This decrease was partially offset by an increase in accounts receivable related to the golf and related operations segment due to the timing of annual membership renewals.
−Removed: Accounts payable was $8.7 million at June 30, 2020 compared to $11.7 million at December 31, 2019.
−Removed: The decrease in accounts payable was primarily due to a decrease in amounts due to disposal facilities and transportation carriers of the waste management services associated with the decrease in the net operating revenues in the second quarter of 2020 compared to the fourth quarter of 2019 and the associated timing of those vendor payments in the ordinary course of business.
−Removed: Deferred revenue relating to membership dues was approximately $4.8 million at June 30, 2020 compared to $3.2 million at December 31, 2019.
−Removed: The increase in deferred revenues was primarily due to the associated timing of annual membership renewals partially offset by a slight decrease in members at June 30, 2020.
−Removed: The number of members at June 30, 2020 was 5,010 compared to 5,051 at December 31, 2019.
−Removed: Management believes that anticipated cash provided from future operations and proceeds from the Paycheck Protection Program will be sufficient to meet operating requirements and make required monthly payments under our term loan facility.
−Removed: Depending on the continued duration the COVID-19 pandemic may have on our business, if business conditions warrant additional monies needed to fund operating requirements, Avalon will take all available actions including borrowing from our line of credit.
+Added: Accounts payable was $8.1 million at September 30, 2020 compared to $11.7 million at December 31, 2019.
+Added: The decrease in accounts payable was primarily due to a decrease in amounts due to disposal facilities and transportation carriers of the waste management services associated with the decrease in the net operating revenues in the third quarter of 2020 compared to the fourth quarter of 2019 and the associated timing of those vendor payments in the ordinary course of business.
+Added: Accounts payable also decreased, to a lesser extent, by a decrease in unpaid construction invoices related to the golf and related operations segment at September 30, 2020 compared to December 31, 2019.
+Added: Deferred revenue relating to membership dues was approximately $4.0 million at September 30, 2020 compared to $3.2 million at December 31, 2019.
+Added: The increase in deferred revenues was primarily due to the associated timing of annual membership renewals partially offset by a slight decrease in members at September 30, 2020.
+Added: The number of members at September 30, 2020 was 4,931 compared to 5,051 at December 31, 2019.
+Added: Management believes that anticipated cash provided from future operations will be sufficient to meet operating requirements and make required monthly payments under our term loan facility.
+Added: Depending on the continued duration the COVID-19 pandemic may have on our business, if business conditions warrant additional monies needed to fund operating requirements, Avalon will take all available actions including borrowing from our existing line of credit.
Growth Strategy
33 unchanged sentences
The golf and related operations segment includes the operation and management of four golf courses and related country clubs and facilities, a hotel and its associated resort amenities, a multipurpose recreation center and a travel agency.
−Removed: Performance in the second quarter of 2020 compared with the second quarter of 2019
+Added: Performance in the third quarter of 2020 compared with the third quarter of 2019
Overall Performance
−Removed: Net operating revenues decreased to $13.1 million in the second quarter of 2020 compared with $18.4 million in the second quarter of 2019.
+Added: Net operating revenues decreased to $16.6 million in the third quarter of 2020 compared with $18.0 million in the third quarter of 2019.
This decrease was primarily due to a decrease in net operating revenues of the waste management services segment.
−Removed: Net operating revenues of the waste management services segment were $9.1 million in the second quarter of 2020 compared with $12.9 million in the second quarter of 2019.
−Removed: In addition, net operating revenues of the golf and related operations segment decreased in the second quarter of 2020 compared to the second quarter of 2019.
−Removed: Net operating revenues of the golf and related operations segment were approximately $4.0 million in the second quarter of 2020 compared to $5.5 million in the second quarter of 2019.
−Removed: Costs of operations related to the waste management segment decreased to $7.2 million in the second quarter of 2020 compared with $10.3 million in the second quarter of 2019.
+Added: Net operating revenues of the waste management services segment were $9.3 million in the third quarter of 2020 compared with $11.6 million in the third quarter of 2019.
+Added: The decrease in net operating revenues of the waste management services segment was partially offset by an increase in net operating revenues of the golf and related operations segment.
+Added: Net operating revenues of the golf and related operations segment were approximately $7.3 million in the third quarter of 2020 compared to $6.4 million in the third quarter of 2019.
+Added: Costs of operations related to the waste management segment decreased to $7.4 million in the third quarter of 2020 compared with $9.2 million in the third quarter of 2019.
The decrease in the cost of operations between periods for the waste management segment is primarily due to the decreased net operating revenues as these costs vary directly with the associated revenues.
−Removed: Cost of operations related to the golf and related operations segment decreased to $3.4 million in the second quarter of 2020 compared to $4.6 million in the second quarter of 2019.
−Removed: The decrease was a result of lower employee related costs and food product costs in the second quarter of 2020 when compared to the second quarter of 2019 due to the decrease in net operating revenues as a result of the government mandated shut down.
−Removed: Depreciation and amortization expense was approximately $0.7 million in the second quarter of 2020 compared to $0.6 million in the second quarter of 2019.
+Added: Cost of operations related to the golf and related operations segment was approximately $5.4 million in both the third quarter of 2020 and 2019.
+Added: Depreciation and amortization expense was approximately $0.7 million in the third quarter of 2020 compared to $0.6 million in the third quarter of 2019.
The increase is due to the higher depreciable asset base primarily due to the renovation and expansion of The Grand Resort.
−Removed: Consolidated selling, general and administrative expenses were approximately $1.9 million in the second quarter of 2020 compared to $2.4 million in the second quarter of 2019.
−Removed: The decrease was attributable to lower employee related costs and, to a lesser extent, a decrease in advertising costs.
−Removed: Interest expense was approximately $0.3 million in the second quarter of 2020 compared to $0.2 million in the second quarter of 2019.
−Removed: The increase in interest expense is due to the higher average outstanding debt during the second quarter of 2020 compared to the prior period.
+Added: Consolidated selling, general and administrative expenses were approximately $2.1 million in the third quarter of 2020 compared to $2.4 million in the third quarter of 2019.
+Added: The decrease was primarily attributable to lower employee related costs, legal and professional costs and advertising costs.
+Added: Interest expense was approximately $0.3 million in the third quarter of 2020 compared to $0.2 million in the third quarter of 2019.
+Added: The increase in interest expense is due to the higher average outstanding debt during the third quarter of 2020 compared to the prior period.
This increase was partially offset by a lower weighted average interest rate on the outstanding borrowings.
−Removed: During the three month periods ended June 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.67% and 5.53%, respectively.
−Removed: Net loss attributable to Avalon Holdings Corporation common shareholders was $0.4 million, or $0.11 per share, in the second quarter of 2020 compared with net income attributable to Avalon Holdings Corporation common shareholders of approximately $0.5 million, or $0.12 per share, in the second quarter of 2019.
+Added: During the three month periods ended September 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.57% and 5.53%, respectively.
+Added: Net income attributable to Avalon Holdings Corporation common shareholders was $0.8 million, or $0.20 per share, in the third quarter of 2020 compared with net income attributable to Avalon Holdings Corporation common shareholders of approximately $0.1 million, or $0.04 per share, in the third quarter of 2019.
Segment Performance
1 unchanged sentence
Waste Management Services Segment
−Removed: The net operating revenues of the waste management services segment decreased to $9.1 million in the second quarter of 2020 compared with $12.9 million in the second quarter of 2019.
+Added: The net operating revenues of the waste management services segment decreased to $9.3 million in the third quarter of 2020 compared with $11.6 million in the third quarter of 2019.
The waste management services segment includes waste disposal brokerage and management services, captive landfill management operations and salt water injection well operations.
−Removed: During the second quarter of 2020, our waste disposal brokerage business experienced a decline in both continuous and project work due to government restrictions placed on its customers and related shutdowns as a result of the COVID-19 pandemic.
−Removed: The net operating revenues of the waste disposal brokerage and management services business decreased to $8.5 million in the second quarter of 2020 from $12.2 million in the second quarter of 2019.
−Removed: Net operating revenues relating to event work related to multiple projects decreased by approximately $2.1 million during the second quarter of 2020 when compared to the second quarter of 2019.
+Added: During the third quarter of 2020, our waste disposal brokerage business experienced a decline in both continuous and event work due to government restrictions placed on its customers and related shutdowns as a result of the COVID-19 pandemic.
+Added: The net operating revenues of the waste disposal brokerage and management services business decreased to $8.8 million in the third quarter of 2020 from $10.9 million in the third quarter of 2019.
+Added: Net operating revenues related to continuous work of the waste disposal brokerage business decreased approximately $1.3 million between periods as a result of decreased work from multiple customers.
+Added: Net operating revenues related to continuous work were approximately $5.0 million in the third quarter of 2020 compared with $6.3 million in the third quarter of 2019.
+Added: In addition, net operating revenues from event work related to multiple projects decreased by approximately $0.8 million during the third quarter of 2020 when compared to the third quarter of 2019.
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 year to year.
−Removed: Net operating revenues related to event work were approximately $3.3 million in the second quarter of 2020 compared with $5.4 million in the second quarter of 2019.
−Removed: In addition, continuous work of the waste disposal brokerage business decreased approximately $1.7 million between periods as a result of decreased work from multiple customers.
−Removed: Net operating revenues related to continuous work were approximately $4.7 million in the second quarter of 2020 compared with $6.4 million in the second quarter of 2019.
−Removed: Net operating revenues related to managerial, consulting and clerical services were approximately $0.5 million in the second quarter of 2020 compared to $0.4 million in the second quarter of 2019.
+Added: Net operating revenues related to event work were approximately $3.7 million in the third quarter of 2020 compared with $4.5 million in the third quarter of 2019.
+Added: Net operating revenues related to managerial, consulting and clerical services were approximately $0.1 million in the third quarter of 2020 and 2019.
Net operating revenue relating to managerial, consulting and clerical services, which is performed for one customer, is entirely dependent on that customer’s needs.
−Removed: The net operating revenues of the captive landfill management operations were approximately $0.6 million in the second quarter of 2020 compared to $0.7 million in the second quarter of 2019.
+Added: The net operating revenues of the captive landfill management operations were approximately $0.5 million in the third quarter of 2020 compared to $0.7 million in the third quarter of 2019.
The net operating revenues of the captive landfill operations are almost entirely dependent upon the volume of waste generated by the owner of the landfill for whom Avalon manages the facility.
−Removed: Operations of the salt water injection wells have been suspended in accordance with the Chief of the Division of Oil and Gas Resources Management order.
−Removed: Due to the suspension of the salt water injections wells, there were no operating revenues during the second quarter of 2020 and 2019.
−Removed: Costs of operations related to the waste management segment decreased to $7.2 million in the second quarter of 2020 compared with $10.3 million in the second quarter of 2019.
+Added: Costs of operations related to the waste management segment decreased to $7.4 million in the third quarter of 2020 compared with $9.2 million in the third quarter of 2019.
The decrease in the cost of operations between periods for the waste management segment is primarily due to the decreased net operating revenues as these costs vary directly with the associated revenues.
−Removed: The overall gross margin percentage of the waste brokerage and management services business was approximately 21% in the second quarter of 2020 compared to 20% in the second quarter of 2019.
−Removed: The increase in the overall gross margin percentage was attributable to the higher gross profit generated from both the continuous and event work projects during the second quarter of 2020.
−Removed: Income before income taxes for the waste management services segment was approximately $0.8 million in the second quarter of 2020 compared to $1.2 million in the second quarter of 2019.
−Removed: Income before income taxes of the waste brokerage and management services business was approximately $0.7 million in the second quarter of 2020 compared to $1.2 million in the second quarter of 2019.
−Removed: The decreased income before income taxes was primarily attributable to lower revenues and associated decreased gross margin related to both continuous and event work during the second quarter of 2020 compared to the second quarter of 2019.
−Removed: Income before income taxes of the captive landfill operations was approximately $0.1 million in both the second quarter of 2020 and 2019.
−Removed: During both the second quarter of 2020 and 2019 the salt water injection wells incurred a loss before income taxes of less than $0.1 million primarily due to legal and professional costs incurred relating to Avalon’s mandamus processes.
+Added: The overall gross margin percentage of the waste brokerage and management services business was approximately 21% in the third quarter of 2020 compared to 20% in the third quarter of 2019.
+Added: The increase in the overall gross margin percentage was attributable to the higher gross profit generated from continuous work during the third quarter of 2020.
+Added: Income before income taxes for the waste management services segment was approximately $0.9 million in the third quarter of 2020 compared to $1.1 million in the third quarter of 2019.
+Added: Income before income taxes of the waste brokerage and management services business was approximately $0.8 million in the third quarter of 2020 compared to $1.0 million in the third quarter of 2019.
+Added: The decreased income before income taxes was primarily attributable to lower revenues during the third quarter of 2020 compared to the third quarter of 2019.
+Added: Income before income taxes of the captive landfill operations was approximately $0.1 million in both the third quarter of 2020 and 2019.
+Added: During both the third quarter of 2020 and 2019 the salt water injection wells incurred a loss before income taxes of less than $0.1 million primarily due to legal and professional costs incurred relating to Avalon’s mandamus processes.
Golf and Related Operations Segment
−Removed: Net operating revenues of the golf and related operations segment were approximately $4.0 million in the second quarter of 2020 compared to $5.5 million in the second quarter of 2019.
+Added: Net operating revenues of the golf and related operations segment were approximately $7.3 million in the third quarter of 2020 compared to $6.4 million in the third quarter of 2019.
Avalon’s golf and related operations segment consists of the operation and management of four golf courses and related country clubs which provide dining and banquet facilities, a hotel that provides lodging, dining, banquet and conference facilities and other resort related amenities, a multipurpose recreation center and a travel agency.
−Removed: Food, beverage and merchandise sales decreased to approximately $1.4 million in the second quarter of 2020 compared to $2.3 million in the second quarter of 2019.
−Removed: Our restaurant operations generated significantly lower revenue as a result of the government mandated restrictions placed on in-house dining as a result of The Ohio Department of Health and The Pennsylvania Department of Health Director's Orders which temporarily closed all bars and restaurants to in-house patrons (collectively the “Orders”) in March 2020 as a result of the COVID-19 pandemic.
−Removed: In accordance with the Orders, the Company continued to provide take-out, but revenues related to these services were not significant.
−Removed: The Order also placed a limit on mass gatherings and large community events.
−Removed: Food and beverages sales related to banquets and conferences were minimal during the second quarter of 2020 as a result of these government mandated restrictions.
−Removed: In late May and June 2020, the states of Ohio and Pennsylvania allowed for both the reopening of dining rooms and limited gatherings under mandated restrictions.
−Removed: Other net operating revenues related to the golf and related operations were approximately $2.6 million in the second quarter of 2020 compared to $3.2 million in the second quarter of 2019.
−Removed: Membership dues revenue was approximately $1.5 million in the second quarter of 2020 compared to $1.4 million in the second quarter of 2019.
−Removed: The increase in membership dues revenue is primarily attributable to the increase in the average number of members between periods.
−Removed: The average number of members during the second quarter of 2020 was 5,002 compared to 4,870 in the second quarter of 2019.
−Removed: Greens fees and associated cart rentals were approximately $0.6 million in both the second quarter of 2020 and 2019.
−Removed: Net operating revenues related to room rental was approximately $0.3 million in the second quarter of 2020 compared to $0.7 million in the second quarter of 2019.
−Removed: During the second quarter of 2020, the Company had significantly lower occupancy compared to the second quarter of 2019 due to customer cancellations of overnight stays in response to the COVID-19 pandemic.
−Removed: Other revenues consisting of athletic, fitness, travel agency, salon and spa related activities decreased to approximately $0.2 million in the second quarter of 2020 compared to $0.5 million in the second quarter of 2019 due to the March 2020 Orders requiring all nonessential business activities, including athletic, fitness, salon and spa activities to temporarily cease operations.
−Removed: These business activities were allowed to resume operating in late May and early June 2020.
−Removed: Cost of operations for the golf and related operations segment was $3.4 million in the second quarter of 2020 compared with $4.6 million in the second quarter of 2019.
−Removed: Cost of food, beverage and merchandise was approximately $0.6 million in the second quarter of 2020 compared to $1.0 million in the second quarter of 2019.
−Removed: The decrease in food, beverage and merchandise costs between periods is primarily attributable to the lower revenues.
−Removed: The cost of food, beverage and merchandise sales was approximately 41% of associated revenue in the second quarter of 2020 compared to 42% in the second quarter of 2019.
−Removed: Golf and related operations operating costs decreased to approximately $2.8 million in the second quarter of 2020 compared with $3.6 million in the second quarter of 2019.
−Removed: The decrease in operating costs between periods was directly attributable to the decreased business operations under the Orders.
−Removed: The golf and related operations recorded a loss before income taxes of $0.2 million in the second quarter of 2020 compared with income before income taxes of $0.2 million in the second quarter of 2019.
−Removed: The change between periods was primarily a result of lower net operating revenues and associated gross profit generated in the second quarter of 2020 to cover the operation’s fixed costs.
+Added: Food, beverage and merchandise sales increased to approximately $2.9 million in the third quarter of 2020 compared to $2.6 million in the third quarter of 2019.
+Added: The increase was primarily due to an increase in food and beverage revenue generated from the new bars and restaurant at The Grand Resort.
+Added: Other net operating revenues related to the golf and related operations were approximately $4.4 million in the third quarter of 2020 compared to $3.8 million in the third quarter of 2019.
+Added: Membership dues revenue was approximately $1.5 million in both the third quarter of 2020 and 2019.
+Added: Greens fees and associated cart rentals were approximately $1.3 million in the third quarter of 2020 compared to $1.1 million in the third quarter of 2019.
+Added: The increase in greens fees and associated cart rental net operating revenues was due to an increase in rounds played during the third quarter of 2020 compared to the third quarter of 2019.
+Added: Net operating revenues related to room rental was approximately $1.1 million in the third quarter of 2020 compared to $0.8 million in the third quarter of 2019.
+Added: The increase in room rental revenue was due to an increase in the average room rate which was slightly offset by a decrease in occupancy during the period.
+Added: Other revenues consisting of athletic, fitness, travel agency, salon and spa related activities was approximately $0.5 million in the third quarter of 2020 compared to $0.4 million in the third quarter of 2019.
+Added: Cost of operations for the golf and related operations segment was $5.4 million in both the third quarter of 2020 and 2019.
+Added: Cost of food, beverage and merchandise was approximately $1.1 million in the third quarter of 2020 compared to $1.2 million in the third quarter of 2019.
+Added: The decrease in food, beverage and merchandise costs between periods is primarily attributable to the lower product cost.
+Added: The cost of food, beverage and merchandise sales was approximately 38% of associated revenue in the third quarter of 2020 compared to 45% in the third quarter of 2019.
+Added: Golf and related operations operating costs increased to approximately $4.3 million in the third quarter of 2020 compared with $4.2 million in the third quarter of 2019.
+Added: The increase in operating costs between periods, primarily employee related costs, was directly attributable to the increased business operations.
+Added: Income before income taxes for the golf and related operations was approximately $1.0 million in the third quarter of 2020 compared with $0.1 million in the third quarter of 2019.
+Added: The change between periods was primarily a result of higher net operating revenues and associated gross profit generated in the third quarter of 2020.
General Corporate Expenses
−Removed: General corporate expenses were $0.8 million in both the second quarter of 2020 and 2019.
+Added: General corporate expenses were $0.8 million in both the third quarter of 2020 and 2019.
Interest Expense
−Removed: Interest expense was approximately $0.3 million in the second quarter of 2020 compared to $0.2 million in the second quarter of 2019.
−Removed: The increase in interest expense is due to the higher average outstanding debt during the second quarter of 2020 compared to the prior period.
+Added: Interest expense was approximately $0.3 million in the third quarter of 2020 compared to $0.2 million in the third quarter of 2019.
+Added: The increase in interest expense is due to the higher average outstanding debt during the third quarter of 2020 compared to the prior period.
This increase was partially offset by a lower weighted average interest rate on the outstanding borrowings.
−Removed: During the three month periods ended June 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.67% and 5.53%, respectively.
−Removed: Net Income ( Loss )
−Removed: During the three months ended June 30, 2020 net loss attributable to Avalon Holdings Corporation common shareholders was $0.4 million compared to net income attributable to Avalon Holdings Corporation common shareholders of $0.5 million for the three months ended June 30, 2019.
−Removed: Avalon recorded a state income tax provision in both the second quarter of 2020 and 2019, which was related entirely to the waste management and brokerage operations.
+Added: During the three month periods ended September 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.57% and 5.53%, respectively.
+Added: During the three months ended September 30, 2020 net income attributable to Avalon Holdings Corporation common shareholders was $0.8 million compared to net income attributable to Avalon Holdings Corporation common shareholders of $0.1 million for the three months ended September 30, 2019.
+Added: Avalon recorded a state income tax provision in both the third quarter of 2020 and 2019, which was related entirely to the waste management and brokerage operations.
Due to the recording of a full valuation allowance against the Company’s federal net deferred tax assets, the overall effective tax rate in both periods reflects taxes owed in certain U.S state jurisdictions.
−Removed: Avalon’s income tax on the income (loss) before taxes was offset by a change in the valuation allowance.
+Added: Avalon’s income tax on the income before taxes was offset by a change in the valuation allowance.
A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized.
Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.
−Removed: P erformance in the first six month of 2020 compared with the first six months of 2019
+Added: P erformance in the first nine months of 2020 compared with the first nine months of 2019
Overall Performance
−Removed: Net operating revenues decreased to $27.5 million in the first six months of 2020 compared with $33.0 million in the first six months of 2019.
+Added: Net operating revenues decreased to $44.1 million in the first nine months of 2020 compared with $51.0 million in the first nine months of 2019.
This decrease was primarily due to a decrease in net operating revenues of the waste management services segment.
−Removed: Net operating revenues of the waste management services segment were $20.2 million in the first six months of 2020 compared with $24.3 million in the first six months of 2019.
−Removed: In addition, net operating revenues of the golf and related operations segment decreased in the first six months of 2020 compared to the first six months of 2019.
−Removed: Net operating revenues of the golf and related operations segment were approximately $7.3 million in the first six months of 2020 compared to $8.7 million in the first six months of 2019.
−Removed: Costs of operations related to the waste management segment decreased to $16.1 million in the first six months of 2020 compared with $19.5 million in the first six months of 2019.
+Added: Net operating revenues of the waste management services segment were $29.5 million in the first nine months of 2020 compared with $35.9 million in the first nine months of 2019.
+Added: In addition, net operating revenues of the golf and related operations segment decreased in the first nine months of 2020 compared to the first nine months of 2019.
+Added: Net operating revenues of the golf and related operations segment were approximately $14.6 million in the first nine months of 2020 compared to $15.1 million in the first nine months of 2019.
+Added: Costs of operations related to the waste management segment decreased to $23.5 million in the first nine months of 2020 compared with $28.8 million in the first nine months of 2019.
The decrease in the cost of operations between periods for the waste management segment is primarily due to the decreased net operating revenues as these costs vary directly with the associated revenues.
−Removed: Cost of operations related to the golf and related operations segment decreased to $6.6 million in the first six months of 2020 compared to $7.6 million in the first six months of 2019.
−Removed: The decrease was a result of lower employee related costs and food product costs during the first six months of 2020 when compared to the first six months of 2019 due to the decrease in net operating revenues as a result of the government mandated shut down.
−Removed: Depreciation and amortization expense was approximately $1.4 million in the first six months of 2020 compared to $1.2 million in the first six months of 2019.
+Added: Cost of operations related to the golf and related operations segment decreased to $12.0 million in the first nine months of 2020 compared to $13.0 million in the first nine months of 2019.
+Added: The decrease was a result of lower employee related costs and food and beverage product costs during the first nine months of 2020 when compared to the first nine months of 2019 due to the decrease in net operating revenues as a result of the government mandated shut downs associated with the COVID-19 pandemic.
+Added: Depreciation and amortization expense was approximately $2.2 million in the first nine months of 2020 compared to $1.8 million in the first nine months of 2019.
The increase is due to the higher depreciable asset base primarily due to the renovation and expansion of The Grand Resort.
−Removed: Consolidated selling, general and administrative expenses were approximately $4.2 million in the first six months of 2020 compared to $4.6 million in the first six months of 2019.
+Added: Consolidated selling, general and administrative expenses were approximately $6.3 million in the first nine months of 2020 compared to $7.0 million in the first nine months of 2019.
The decrease was attributable to lower employee related costs, legal and professional costs and advertising costs.
−Removed: Interest expense was approximately $0.6 million in the first six months of 2020 compared to $0.4 million in the first six months of 2019.
−Removed: The increase in interest expense is due to the higher average outstanding debt during the first six months of 2020 compared to the prior period.
+Added: Interest expense was approximately $0.9 million in the first nine months of 2020 compared to $0.6 million in the first nine months of 2019.
+Added: The increase in interest expense is due to the higher average outstanding debt during the first nine months of 2020 compared to the prior period.
This increase was partially offset by a lower weighted average interest rate on the outstanding borrowings.
−Removed: During the six month periods ended June 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.82% and 5.45%, respectively.
−Removed: Net loss attributable to Avalon Holdings Corporation common shareholders was $1.2 million, or $0.32 per share, in the first six months of 2020 compared with a net loss attributable to Avalon Holdings Corporation common shareholders of approximately $0.2 million, or $0.04 per share, in the first six months of 2019.
+Added: During the nine month periods ended September 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.74% and 5.48%, respectively.
+Added: Net loss attributable to Avalon Holdings Corporation common shareholders was $0.5 million, or $0.12 per share, in the first nine months of 2020 compared with a net loss attributable to Avalon Holdings Corporation common shareholders of less than $0.1 million, or $0.00 per share, in the first nine months of 2019.
Segment Performance
1 unchanged sentence
Waste Management Services Segment
−Removed: The net operating revenues of the waste management services segment decreased to $20.2 million in the first six months of 2020 compared with $24.3 million in the first six months of 2019.
−Removed: During the first six months of 2020, our waste disposal brokerage business experienced a decline in both continuous and project work due to government restrictions placed on its customers and related shutdowns as a result of the COVID-19 pandemic.
−Removed: The net operating revenues of the waste disposal brokerage and management services business decreased to $19.0 million in the first six months of 2020 from $23.0 million in the first six months of 2019.
−Removed: Net operating revenues relating to event work related to multiple projects decreased by approximately $2.3 million during the first six months of 2020 when compared to the first six months of 2019.
+Added: The net operating revenues of the waste management services segment decreased to $29.5 million in the first nine months of 2020 compared with $35.9 million in the first nine months of 2019.
+Added: During the first nine months of 2020, our waste disposal brokerage business experienced a decline in both continuous and event work due to government restrictions placed on its customers and related shutdowns as a result of the COVID-19 pandemic.
+Added: The net operating revenues of the waste disposal brokerage and management services business decreased to $27.8 million in the first nine months of 2020 from $33.9 million in the first nine months of 2019.
+Added: Net operating revenues from event work related to multiple projects decreased by approximately $3.1 million during the first nine months of 2020 when compared to the first nine months of 2019.
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 year to year.
−Removed: Net operating revenues related to event work were approximately $7.4 million in the first six months of 2020 compared with $9.7 million in the first six months of 2019.
+Added: Net operating revenues related to event work were approximately $11.1 million in the first nine months of 2020 compared with $14.2 million in the first nine months of 2019.
In addition, continuous work of the waste disposal brokerage business decreased approximately $3.2 million between periods as a result of decreased work from multiple customers.
−Removed: Net operating revenues related to continuous work were approximately $10.8 million in the first six months of 2020 compared with $12.7 million in the first six months of 2019.
−Removed: Net operating revenues related to managerial, consulting and clerical services were approximately $0.8 million in the first six months of 2020 compared to $0.6 million in the first six months of 2019.
+Added: Net operating revenues related to continuous work were approximately $15.8 million in the first nine months of 2020 compared with $19.0 million in the first nine months of 2019.
+Added: Net operating revenues related to managerial, consulting and clerical services were approximately $0.9 million in the first nine months of 2020 compared to $0.7 million in the first nine months of 2019.
Net operating revenue relating to managerial, consulting and clerical services, which is performed for one customer, is entirely dependent on that customer’s needs.
−Removed: The net operating revenues of the captive landfill management operations were approximately $1.2 million in the first six months of 2020 compared to $1.3 million in the first six months of 2019.
+Added: The net operating revenues of the captive landfill management operations were approximately $1.7 million in the first nine months of 2020 compared to $2.0 million in the first nine months of 2019.
The net operating revenues of the captive landfill operations are almost entirely dependent upon the volume of waste generated by the owner of the landfill for whom Avalon manages the facility.
−Removed: Operations of the salt water injection wells have been suspended in accordance with the Chief of the Division of Oil and Gas Resources Management order.
−Removed: Due to the suspension of the salt water injections wells, there were no operating revenues during the first six months of 2020 and 2019.
−Removed: Costs of operations related to the waste management segment decreased to $16.1 million in the first six months of 2020 compared with $19.5 million in the first six months of 2019.
+Added: Costs of operations related to the waste management segment decreased to $23.5 million in the first nine months of 2020 compared with $28.8 million in the first nine months of 2019.
The decrease in the cost of operations between periods for the waste management segment is primarily due to the decreased net operating revenues as these costs vary directly with the associated revenues.
−Removed: The overall gross margin percentage of the waste brokerage and management services business was approximately 20% in both the first six months of 2020 and 2019.
−Removed: Income before income taxes for the waste management services segment was approximately $1.9 million in the first six months of 2020 compared to $2.2 million in the first six months of 2019.
−Removed: Income before income taxes of the waste brokerage and management services business was approximately $1.8 million in the first six months of 2020 compared to $2.1 million in the first six months of 2019.
−Removed: The decreased income before income taxes was primarily attributable to lower revenues and associated decreased gross margin related to both continuous and event work during the first six months of 2020 compared to the first six months of 2019.
−Removed: Income before income taxes of the captive landfill operations was approximately $0.1 million in the first six months of 2020 compared to $0.2 million in the first six months of 2019.
−Removed: During both the first six months of 2020 and 2019 the salt water injection wells incurred a loss before income taxes of less than $0.1 million primarily due to legal and professional costs incurred relating to Avalon’s mandamus processes.
+Added: The overall gross margin percentage of the waste brokerage and management services business was approximately 21% in the first nine months of 2020 compared to 20% in the first nine months of 2019.
+Added: The increase in the overall gross margin percentage was attributable to the higher gross profit generated from continuous work during the first nine months of 2020.
+Added: Income before income taxes for the waste management services segment was approximately $2.7 million in the first nine months of 2020 compared to $3.3 million in the first nine months of 2019.
+Added: Income before income taxes of the waste brokerage and management services business was approximately $2.6 million in the first nine months of 2020 compared to $3.1 million in the first nine months of 2019.
+Added: The decreased income before income taxes was primarily attributable to lower revenues and associated decreased gross margin related to both continuous and event work during the first nine months of 2020 compared to the first nine months of 2019.
+Added: Income before income taxes of the captive landfill operations was approximately $0.2 million in the first nine months of 2020 compared to $0.3 million in the first nine months of 2019.
+Added: The decrease in primarily attributable to lower net operating revenue.
+Added: During both the first nine months of 2020 and 2019 the salt water injection wells incurred a loss before income taxes of approximately $0.1 million primarily due to legal and professional costs incurred relating to Avalon’s mandamus processes.
Golf and Related Operations Segment
−Removed: Net operating revenues of the golf and related operations segment were approximately $7.3 million in the first six months of 2020 compared to $8.7 million in the first six months of 2019.
−Removed: Food, beverage and merchandise sales decreased to approximately $2.4 million in the first six months of 2020 compared to $3.4 million in the first six months of 2019.
−Removed: Our restaurant operations generated significantly lower revenue as a result of the government mandated restrictions placed on in-house dining as a result of The Ohio Department of Health and The Pennsylvania Department of Health Director's Orders which temporarily closed all bars and restaurants to in-house patrons in March 2020 as a result of the COVID-19 pandemic.
−Removed: In accordance with the Orders, the Company continued to provide take-out, but revenues related to these services were not significant.
+Added: Net operating revenues of the golf and related operations segment were approximately $14.6 million in the first nine months of 2020 compared to $15.1 million in the first nine months of 2019.
+Added: Food, beverage and merchandise sales decreased to approximately $5.3 million in the first nine months of 2020 compared to $6.0 million in the first nine months of 2019.
+Added: Our restaurant operations generated lower revenue in the first nine months of 2020 due to the government mandated restrictions placed on in-house dining as a result of The Ohio Department of Health and The Pennsylvania Department of Health Director's Orders which temporarily closed all bars and restaurants to in-house patrons in March 2020 in response to the COVID-19 pandemic.
+Added: In accordance with the Orders, the Company continued to provide take-out, but revenues related to these services were not significant during that period.
The Order also placed a limit on mass gatherings and large community events.
−Removed: Food and beverages sales related to banquets and conferences were significantly lower during the first six months of 2020 compared to the first six months of 2019 as a result of these government mandated restrictions.
+Added: Food and beverages sales related to banquets and conferences were significantly lower during the first nine months of 2020 compared to the first nine months of 2019 as a result of these government mandated restrictions.
In late May and June 2020, the states of Ohio and Pennsylvania allowed for both the reopening of dining rooms and limited gatherings under mandated restrictions.
−Removed: Other net operating revenues related to the golf and related operations were approximately $4.9 million in the first six months of 2020 compared to $5.3 million in the first six months of 2019.
−Removed: Membership dues revenue was approximately $3.0 million in the first six months of 2020 compared to $2.7 million in the first six months of 2019.
−Removed: The increase in membership dues revenue is primarily attributable to the increase in the average number of members between periods.
−Removed: The average number of members during the first six months of 2020 was 5,061 compared to 4,760 in the first six months of 2019.
−Removed: Net operating revenues related to room rental was approximately $0.6 million in the first six months of 2020 compared to $1.0 million in the first six months of 2019.
−Removed: During the first six months of 2020, the Company had significantly lower occupancy compared to the first six months of 2019 due to customer cancellations of overnight stays in response to the COVID-19 pandemic.
−Removed: Other revenues consisting of athletic, fitness, travel agency, salon and spa related activities decreased to approximately $0.6 million in the first six months of 2020 compared to $0.9 million in the first six months of 2019 due to the March 2020 Orders requiring all nonessential business activities, including athletic, fitness, salon and spa activities to temporarily cease operations.
+Added: Other net operating revenues related to the golf and related operations were approximately $9.3 million in the first nine months of 2020 compared to $9.1 million in the first nine months of 2019.
+Added: Membership dues revenue was approximately $4.6 million in the first nine months of 2020 compared to $4.2 million in the first nine months of 2019.
+Added: The increase in membership dues revenue was attributable to both an increase in annual membership dues rates and an increase in the average number of members between periods.
+Added: The average number of members during the first nine months of 2020 was 5,028 compared to 4,839 in the first nine months of 2019.
+Added: Net operating revenues related to room rental was approximately $1.7 million in the first nine months of 2020 compared to $1.8 million in the first nine months of 2019.
+Added: During the first nine months of 2020, the Company had significantly lower occupancy compared to the first nine months of 2019 due to customer cancellations of overnight stays in response to the COVID-19 pandemic.
+Added: The decrease in room revenue as a result of the lower occupancy was partially offset by an increase in average room rates when compared to the prior period.
+Added: Other revenues consisting of athletic, fitness, travel agency, salon and spa related activities decreased to approximately $1.0 million in the first nine months of 2020 compared to $1.3 million in the first nine months of 2019 due to the March 2020 Orders requiring all nonessential business activities, including athletic, fitness, salon and spa activities to temporarily cease operations.
These business activities were allowed to resume operating in late May and early June 2020.
−Removed: Greens fees and associated cart rentals were approximately $0.7 million in both the first six months of 2020 and 2019.
+Added: Greens fees and associated cart rentals were approximately $2.0 million in the first nine months of 2020 compared to $1.8 million in the first nine months of 2019.
+Added: The increase in greens fees and associated cart rental net operating revenues was due to an increase in rounds played during the first nine months of 2020 compared to the first nine months of 2019.
Due to adverse weather conditions, net operating revenues relating to the golf courses, which are located in northeast Ohio and western Pennsylvania, were minimal during the first three months of 2020 and 2019.
−Removed: Cost of operations for the golf and related operations segment was $6.6 million in the first six months of 2020 compared with $7.6 million in the first six months of 2019.
−Removed: Cost of food, beverage and merchandise was approximately $1.1 million in the first six months of 2020 compared to $1.5 million in the first six months of 2019.
−Removed: The decrease in food, beverage and merchandise costs between periods is attributable to the lower revenues partially offset by higher food product cost.
−Removed: The cost of food, beverage and merchandise sales was approximately 46% of associated revenue in the first six months of 2020 compared to 44% in the first six months of 2019.
−Removed: Golf and related operations operating costs decreased to approximately $5.5 million in the first six months of 2020 compared with $6.1 million in the first six months of 2019.
+Added: Cost of operations for the golf and related operations segment was $12.0 million in the first nine months of 2020 compared with $13.0 million in the first nine months of 2019.
+Added: Cost of food, beverage and merchandise was approximately $2.2 million in the first nine months of 2020 compared to $2.7 million in the first nine months of 2019.
+Added: The decrease in food, beverage and merchandise costs between periods is attributable to both lower revenues and lower food and beverage product cost.
+Added: The cost of food, beverage and merchandise sales was approximately 42% of associated revenue in the first nine months of 2020 compared to 45% in the first nine months of 2019.
+Added: Golf and related operations operating costs decreased to approximately $9.8 million in the first nine months of 2020 compared with $10.3 million in the first nine months of 2019.
The decrease in operating costs between periods was directly attributable to the decreased business operations under the Orders.
−Removed: The golf and related operations recorded a loss before income taxes of $0.9 million in the first six months of 2020 compared with a loss before income taxes of $0.5 million in the first six months of 2019.
−Removed: The change between periods was primarily a result of lower net operating revenues and associated gross profit generated in the first six months of 2020 to cover the operations fixed costs.
+Added: The golf and related operations recorded income before income taxes of $0.1 million in the first nine months of 2020 compared with a loss before income taxes of $0.4 million in the first nine months of 2019.
+Added: The change between periods was primarily a result of higher net operating revenues related to membership dues, greens fees and cart rentals and lower food and beverage products costs.
The ability to attract new members and retain members is very important to the success of the golf and related operations segment.
2 unchanged sentences
General Corporate Expenses
−Removed: General corporate expenses were $1.6 million in both the first six months of 2020 and 2019.
+Added: General corporate expenses were $2.4 million in the first nine months of 2020 and 2019.
Interest Expense
−Removed: Interest expense was approximately $0.6 million in the first six months of 2020 compared to $0.4 million in the first six months of 2019.
−Removed: The increase in interest expense is due to the higher average outstanding debt during the first six months of 2020 compared to the prior period.
+Added: Interest expense was approximately $0.9 million in the first nine months of 2020 compared to $0.6 million in the first nine months of 2019.
+Added: The increase in interest expense is due to the higher average outstanding debt during the first nine months of 2020 compared to the prior period.
This increase was partially offset by a lower weighted average interest rate on the outstanding borrowings.
−Removed: During the six month periods ended June 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.82% and 5.45%, respectively.
−Removed: During the six months ended June 30, 2020 net loss attributable to Avalon Holdings Corporation common shareholders was $1.2 million compared to a net loss attributable to Avalon Holdings Corporation common shareholders of $0.2 million for the six months ended June 30, 2019.
−Removed: Avalon recorded a state income tax provision in both the first six months of 2020 and 2019, which was related entirely to the waste management and brokerage operations.
+Added: During the nine month periods ended September 30, 2020 and 2019, the weighted average interest rate on outstanding borrowings was 4.74% and 5.48%, respectively.
+Added: During the nine months ended September 30, 2020 net loss attributable to Avalon Holdings Corporation common shareholders was $0.5 million compared to a net loss attributable to Avalon Holdings Corporation common shareholders of less than $0.1 million for the nine months ended September 30, 2019.
+Added: Avalon recorded a state income tax provision in both the first nine months of 2020 and 2019, which was related entirely to the waste management and brokerage operations.
Due to the recording of a full valuation allowance against the Company’s federal net deferred tax assets, the overall effective tax rate in both periods reflects taxes owed in certain U.S state jurisdictions.
22 unchanged sentences
The Company’s dining rooms, fitness, athletic, pool, salon and spa services reopened under certain mandatory restrictions including mask protection for employees, decrease in occupancy and other measures to enforce social distancing.
−Removed: The continued spread of COVID-19 and related governmental orders adversely impacted our operations and related financial results.
−Removed: Our restaurant operations generated significantly lower revenue as a result of the government mandated restrictions that were placed on in-house dining.
−Removed: Food and beverages sales related to banquets and conferences were minimal during the second quarter of 2020 as a result of government mandated restrictions placed on gatherings and events.
−Removed: In addition, the Company had high levels of room and event cancellations with some re-bookings in the third and fourth quarter of 2020 and into 2021.
−Removed: Our fitness, athletics, salon and spa operations generated no revenue under the mandate.
+Added: During 2020, the governmental orders issued to control the spread of COVID-19 adversely impacted our operations and related financial results.
+Added: During the Stay at Home order, our restaurant operations generated significantly lower revenue as a result of the restrictions that were placed on in-house dining.
+Added: Our restaurant revenue increased during the third quarter of 2020 as certain restrictions on in-house dining were reduced or lifted.
+Added: Food and beverages sales related to banquets and conferences were significantly lower during the second and third quarter of 2020 as a result of restrictions placed on gatherings and events.
+Added: In addition, the Company had high levels of room and event cancellations during the Stay at Home Order with some subsequent re-bookings that occurred in the third quarter of 2020 and into the fourth quarter of 2020 and into 2021.
+Added: Our fitness, athletics, salon and spa operations generated no revenue under the Stay at Home Order.
In addition, our waste management brokerage business has experienced a decline in both continuous and project work due to government restrictions placed on its customers and associated shutdowns.
−Removed: As government restrictions are reduced or lifted, we may experience weakened demand in light of continued travel restrictions or warnings, consumer fears and reduced consumer discretionary spending and general economic uncertainty.
+Added: As government restrictions are reduced or lifted, we may continue to experience weakened demand in light of continued travel restrictions or warnings, consumer fears and reduced consumer discretionary spending and general economic uncertainty.
In light of the foregoing, we are unable to determine when our operations will return to pre-pandemic demand or pricing.
15 unchanged sentences
In the second quarter of 2020, certain wholly-owned subsidiaries of Avalon entered into agreements and received a total of approximately $2.8 million in loans under the Program.
−Removed: The Company is currently utilizing the loan proceeds under the 24 week loan forgiveness period in accordance with Program’s guidelines.
+Added: The Company utilized the loan proceeds under the 24 week loan forgiveness period and subsequently applied for forgiveness in accordance with the Program’s guidelines.
When the debt is forgiven in accordance with the Program, any amount that is forgiven will be recognized as a gain on debt extinguishment.
−Removed: The Company will repay amounts that are not forgiven or utilized.
+Added: The Company will repay amounts that are not forgiven.
Government r egulations
64 unchanged sentences
On September 12, 2018, the Company appealed the Ohio 10 th District Court of Appeals decision to the Supreme Court of Ohio.
−Removed: On November 21, 2018, Avalon, received notice from the Supreme Court of Ohio that the court would not accept for review the Company’s appeal of the Ohio 10 th District Court of Appeals decision on the Division of Oil and Gas Resources Management’s appeal of the Franklin County Court of Common Pleas February 21, 2017 entry allowing restart of the Company’s AWMS Water Solutions, LLC #2 salt water injection well.
+Added: On November 21, 2018, the Company received notice from the Supreme Court of Ohio that the court would not accept for review the Company’s appeal of the Ohio 10 th District Court of Appeals decision on the Division of Oil and Gas Resources Management’s appeal of the Franklin County Court of Common Pleas February 21, 2017 entry allowing restart of the Company’s AWMS Water Solutions, LLC #2 salt water injection well.
On April 5, 2019, Avalon filed with the Oil and Gas Commission a motion to vacate its prior decisions in this matter.
5 unchanged sentences
The Company appealed that decision to the Franklin County Court of Common Pleas.
−Removed: In April 2020, the Division’s motion to dismiss and the Company’s opposition were reviewed by the Court.
+Added: In April 2020, the Division’s motion to dismiss and the Company’s opposition was reviewed by the Court.
The Company is currently awaiting judgment from the Court.
Concurrently with the filing of the appeal with the Franklin County Court of Common Pleas, the Company filed a writ of mandamus in the 10 th District Court of Appeals on August 30, 2019 to compel the chief of the Division to issue restart orders, or alternative orders that would allow the Company to either restart the AWMS #2 well, or appeal said orders to the Oil and Gas Commission in accordance with Ohio Law.
+Added: On October 6, 2020 and in response to a motion from the Division, the Court dismissed this complaint for writ of mandamus.
In addition, on August 26, 2016, Avalon filed a complaint in the 11 th Appellate District Court in Trumbull County, Ohio for a Peremptory Writ of Mandamus to compel the Director of the ODNR to initiate appropriations procedures to determine damages from the illegal regulatory taking of the Company’s property, or issue an alternative remedy at law.
6 unchanged sentences
Oral arguments in the case occurred on April 7, 2020.
−Removed: The Company is currently awaiting judgment from the Supreme Court of Ohio.
+Added: On September 23, 2020, the Supreme Court of Ohio ruled in favor of the Company.
+Added: The Supreme Court of Ohio reversed the decision of the 11 th Appellate District Court and remanded back to that court for a trial on the merits.
+Added: The Company is currently preparing for that trial.
Golf memberships and liquor licenses
7 unchanged sentences
The ability to retain current members and attract new members has been an ongoing challenge.
−Removed: Although Avalon was able to increase the number of members of the Avalon Golf and Country Club, as of June 30, 2020, Avalon has not attained its membership goals.
+Added: Although Avalon was able to increase the number of members of the Avalon Golf and Country Club, as of September 30, 2020, Avalon has not attained its membership goals.
There can be no assurance as to when such goals will be attained and when the golf and related operations will ultimately become profitable.
7 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.