Bad times are over, says company chief at annual meeting

Avalon Lakes' golfing memberships have increased by 300 since fall.
& lt;a href=mailto:shilling@vindy.com & gt;By DON SHILLING & lt;/a & gt;
VINDICATOR BUSINESS EDITOR
HOWLAND -- The stock price for Avalon Holdings is up and the company chief executive thinks good times are ahead.
"We're confident that many of the problems we have had over the years are behind us," Ron Klingle said at the Howland-based company's annual meeting Thursday.
The parent company of Avalon Lakes Golf and Country Club and DartAmerica trucking has had so many problems that it has posted financial losses the past four years.
Investors seem upbeat about the company, however. In the past year, the company's stock has increased from $1.80 a share to more than $3 and even pushed over $4 a share earlier this year.
Paul O'Leary, a major shareholder who has expressed disappointment with the company's direction at the past two annual meetings, is upbeat this year.
The stock price may have risen partly because investors have been hunting for bargains, but investors also may be gaining faith in the Avalon's turnaround, O'Leary added.
He said he's encouraged that the company has sold or closed some money-losing businesses, is restructuring Dart, and is expanding its golf business.
O'Leary is general partner of Raffles Associates of New York, which owns 199,000 shares, or 5 percent of Avalon stock.
More golf club members
Klingle said the company's golfing members have increased from 533 to 837 since it announced a combination with Squaw Creek Country Club in Vienna Township in October. Members can play that course or Avalon Lakes in Howland. Klingle said there also are about 130 social members who don't have golfing privileges.
Klingle said it's significant that only 120 of the new golf members came from Squaw Creek, which shows that more people from the general public are interested in Avalon Lakes memberships with two courses available.
Individual memberships range from $1,000 a year to $3,000 a year, depending on how much a golfer wants to pay extra for a round. The lower the annual fee a member selects, the higher the charge he'll pay for playing a round. Those who pay the full $3,000 annual fee pay no per-round charges.
Klingle said he expects to reach full membership by the end of summer, although he wouldn't put a specific number on that limit. It depends on whether members are coming in at the higher dues level or lower one, he added.
Klingle said country clubs across the United States are struggling with declining membership, and Avalon officials could consider later adding more courses to its membership plan.
Avalon's net operating revenues from golf increased to $2.7 million last year from $1.9 million in 2002. Those operations earned $100,000 before taxes last year, compared with a $300,000 loss in 2002.
Trucking company
The bulk of Avalon's revenues come from Dart, which handles hazardous waste and other deliveries.
Klingle said company officials expect to complete a review of Dart's operations in the next year. They are reviewing whether it makes sense for the company to have operations in areas such as New England, New Jersey and Chicago.
Also, Dart operates a variety of trucking services, such as flatbeds, trailers and tankers, and it may not make sense to offer all services in all areas, Klingle said.
"It's not rocket science, but it does take a lot of analysis," he continued.
The company continues to own subsidiaries that handle waste brokering and landfill management, but last year it sold or closed companies based in Monroeville, Pa., that handled waste remediation and environmental consulting. Those businesses had been losing money because there isn't as much demand for those services as there was 10 years ago, he said.
Losses
Avalon Holdings last year lost $3.6 million on revenues of $53.5 million, compared with a loss of $5.8 million on revenues of $56 million in 2002. Revenue figures were adjusted to exclude the businesses that were closed last year.
Klingle said the biggest obstacles to the company have been the weather and bad debt. Rainy weather has reduced interest in its golfing packages, he said.
Also, the company has had major customers in recent years who filed for bankruptcy and didn't pay debts to Avalon ranging from a couple hundred thousand dollars to a couple million dollars, he said.
The strategy for the future is to hope for sunny weather and do a better job of determining if its customers are good credit risks, he said.
& lt;a href=mailto:shilling@vindy.com & gt;shilling@vindy.com & lt;/a & gt;