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Chief Financial Officer’s Column
from the chief financial officer
February marked the end of the first six months of the Club’s fiscal year. While the first half of our fiscal year posted strong financial results, the club is thoughtfully planning for what will be a challenging second half of our fiscal year. The club’s administration and board made the tough decision to close both clubhouses and furlough 325 employees as of March 20 due to COVID-19. Since that time, another 50 employees have been furloughed. While it was hoped that the closure would be short-lived, staff began to develop a cash flow model to estimate the effect the closure would have on our financial stability under various scenarios. All expenses were reviewed; many were suspended or minimized. Factored into the model was six months of principal forbearance and interest savings, negotiated with our long-time banking partner, Jefferson Bank & Trust. They also agreed to an increase in the availability on our line of credit. Through our comprehensive cash flow model, we are projecting negative cash flow going forward based on a reduction in member headcount, member concessions, and the loss of all operating revenue. At the same time, we are ensuring our ability to return to normal operations and welcome our members back when the time comes. Throughout this process, the staff and board have been determined to do whatever possible to provide relief to our members. This resulted in the following concessions that were rolled out April 1: F No Food & Beverage minimums for
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Platinum Partner and ala carte members F Credit to Diamond Club members for the F&B minimum portion of their dues F No Athletic or locker fees for ala carte members F Credit to Diamond Club and Platinum
Partner members for the Athletic fee portion of their dues F No Capital fees for any members
On average these initiatives represent approximately $100 per month. Further concessions may be considered if the closure continues. We are striving to find the right balance as we realize that every member is wrestling with their own business, employees, and family. The good news is that the club generated strong cash flow during the first half of our fiscal year due to record performance in several areas. This allowed us to complete Phase II of the West Fitness Renovation as planned and gives us a solid footing to weather this storm. During the first half our fiscal year, the club experienced record performance in the following areas: F Overnight Rooms revenue F Rooms departmental profit F Downtown Banquet revenue F Total Downtown Food & Beverage revenue F West Banquet revenue
Other benchmarks include: F Total dues-paying members of 2,403, up 19 from last year’s 2,384 F Net operating cash flow (net income before depreciation) of $1,233,000, second only to last year F The line of credit balance was zero F The Club’s long-term bank debt was $6,079,000
We look forward to welcoming you and your families back to the club as soon as possible! In the meantime, Keep the Club Spirit Alive! If you have any questions regarding the Club’s finances, please contact the Club’s Chief Financial Officer, Pam Roth, at 314-539-4400 or proth@mac-stl.org.
Pam Roth, Chief Financial Officer
1055 CASSENS INDUSTRIAL CT. FENTON, MISSOURI 63026
P: 636.680.2100 10501 SOUTH HARDWICK LANE COLUMBIA, MISSOURI 65201
P: 573.442.6100
