McGladrey Annual Report on Financial Status of Private Clubs in Florida Shows Increases in Positive Working Capital, Expected Capital Improvements

FORT LAUDERDALE (August 24, 2011) – RSM McGladrey, Inc. and McGladrey & Pullen LLP, which combined operate under the McGladrey brand as the fifth largest provider of assurance, tax and consulting services, recently released the 2011 edition of Florida Trends in Private Clubs, their 37th annual report on the financial trends in private clubs throughout Florida, the state with the largest concentration of clubs.

The report highlights trends uncovered through the last audit season as McGladrey & Pullen audited its more than 200 private club clients in Florida. Findings are presented from the statewide and regional perspectives, and are segmented by type of club (i.e. golf versus yacht, etc.). Club managers use findings in strategic planning and benchmarking. Customized reports are available as a service that pairs a client's information with smaller sample groups.

"The more than 200 private, member-owned clubs included in our report have withstood the worst of the recession and indicate that they are positioned for better days ahead," says Philip Newman, partner with McGladrey & Pullen. "Managers and boards of private clubs have taken the need to operate more like a business seriously. Over the last few years, they have been challenged to reduce expenses while maintaining a commitment to member service—a lesson companies in every industry can appreciate. What we are seeing is a commitment to discovering what it means to be a well-managed club. Our clients are faring well, emerging from a recessionary stance with more solid business models, and are making significant investments in the amenity offerings that current and future members expect."

"As a general manager and consultant, I find the McGladrey annual Trends report to be an invaluable tool and source of information. With the number of clubs represented and that McGladrey works with, Trends helps me keep my finger on the pulse of the industry," says Jack Sullivan, CCM, Vice President and General Manager of Hamilton Harbor Yacht Club in Naples, Florida. "The ability to take this report and work with the McGladrey team to customize it further for a closer representation of our peer group adds even greater value for me as I make operating and planning decisions."

Key findings include:

• Fifty-seven percent of clubs reported positive working capital (up from 45 percent only four years earlier). This marked increase is attributed to the need for greater fiscal prudence during the recession and consistent operating surpluses.
• There has been a marked increase in capital improvements—a trend expected to continue as 24 percent of clubs in the state plan significant capital improvements 2011.
• Third-party debt is now held by 65 percent of clubs throughout the state, with the average statewide debt per member totaling $6,000.
• More than 41 percent of clubs reported resigned member waiting lists. Adjusted for mandatory membership, the percentage increases to more than 80 percent.
• Payroll remains the largest component of club operating expense, accounting for 52 percent of total operating expenses and approximately half of total operating revenue.
• In food and beverage operations, approximately 80 percent of clubs either held or reduced their menu prices in 2010, and of the remaining 20 percent that increased their prices, the average price increase was five percent.
• Golf course maintenance costs mostly held steady around $76,000 for both 18-hole and multiple-course clubs. Eighteen-hole clubs experienced the first decline in cost per hole in 10 years, albeit a minimal $1,000 per hole decrease.

For more information on McGladrey's private club services visit mcgladrey.com/privateclubs.

About McGladrey^®
McGladrey is the brand under which RSM McGladrey, Inc., and McGladrey & Pullen, LLP, serve clients' business needs. Together, they rank as the fifth largest U.S. provider of assurance, tax and consulting services, with 7,000 professionals and associates in nearly 80 offices. The two firms operate as separate legal entities in an alternative practice structure. McGladrey & Pullen is a licensed CPA firm that provides assurance services. RSM McGladrey is a leading professional services firm providing tax and consulting services. Both firms are members of RSM International, the sixth largest global network of independent accounting, tax and consulting firms. For more information join our Facebook fan page at McGladrey News and/or follow us on Twitter @McGladrey.