AVALON HOLDINGS CORP

Overall Performance

Net operating revenues decreased to $80.5 million in 2023 compared with $81.2 million in 2022. Net operating revenues of the waste management services segment were approximately $44.6 million in 2023 compared to $49.8 million in 2022. The decrease in net operating revenues of the waste management services segment was a result of a marginal increase in continuous work but a significant decrease in event work projects in 2023 compared to 2022. Net operating revenues of the golf and related operations segment were approximately $35.9 million in 2023 compared to $31.4 million in 2022. The increase in net operating revenues of the golf and related operations was a result of an increase in business and higher selling prices related to both The Grand Resort and the country clubs during 2023 compared to 2022.

Total cost of operations related to the waste management services segment increased to $35.6 million in 2023 compared with $40.4 million in 2022. The decrease in the cost of operations between years for the waste management services segment is primarily due to a decrease in net operating revenues as these costs vary directly with the associated revenues.

Total cost of operations related to the golf and related operations segment increased to $31.1 million in 2023 compared to $26.8 million in 2022. The increase between years was primarily due to higher product costs and employee related costs associated with an increase in business operations and wage increases during the year.

Depreciation and amortization expense was approximately $3.8 million in 2023 compared to $3.5 million in 2022. The increase is due to a higher depreciable asset base primarily related to the renovation of the Avalon Field Club at New Castle and The Grand Resort.

Consolidated selling, general and administrative expenses were approximately $10.2 million in 2023 compared to $10.1 million in 2022. The increase was primarily attributable to higher employee related costs during the year.

Interest expense was approximately $2.1 million in 2023 compared to $1.5 million in 2022. During 2023, the increase in interest expense was due to higher average debt outstanding and the increased weighted average interest rate on the associated borrowings. The weighted average debt outstanding during 2023 was approximately $32.9 million compared to $26.7 million in 2022. During the years ended December 31, 2023 and 2022, the weighted average interest rate on outstanding borrowings was 6.17% and 5.50%, respectively.

Net loss attributable to Avalon Holdings Corporation common shareholders was $1.8 million, or $0.46 per share, in 2023 compared with a net loss attributable to Avalon Holdings Corporation common shareholders of $0.6 million, or $0.15 per share, in 2022.