awx20230930_10q.htm

2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2023

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from _______________ to ________________

Commission file number 1-14105

__________________________________

AVALON HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	34-1863889
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One American Way, Warren, Ohio	44484-5555
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (330) 856-8800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value	AWX	NYSE American

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☑

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The registrant had 3,287,647 shares of its Class A Common Stock and 611,784 shares of its Class B Common Stock outstanding as of November 9, 2023.

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

INDEX

	Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)	1

Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022 (Unaudited)	2

Condensed Consolidated Statements of Shareholders’ Equity for the Three Months Ended September 30, 2023 and 2022 (Unaudited)	3

Condensed Consolidated Statements of Shareholders’ Equity for the Nine Months Ended September 30, 2023 and 2022 (Unaudited)	4

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (Unaudited)	5

Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3. Quantitative and Qualitative Disclosures about Market Risk	36

Item 4. Controls and Procedures	36

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	37

Item 2. Changes in Securities and Use of Proceeds	37

Item 3. Defaults upon Senior Securities	37

Item 4. Mine Safety Disclosures	37

Item 5. Other Information	37

Item 6. Exhibits and Reports on Form 8-K	37

SIGNATURE	38

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022

Net operating revenues:
Waste management services	$	11,744		$	15,036		$	34,694		$	35,092
Food, beverage and merchandise sales		4,609			4,077			10,577			9,305
Other golf and related operations		7,550			6,600			17,627			15,147
Total golf and related operations		12,159			10,677			28,204			24,452
Total net operating revenues		23,903			25,713			62,898			59,544

Costs and expenses:
Waste management services operating costs		9,262			12,173			27,866			28,243
Cost of food, beverage and merchandise		1,984			1,721			4,818			3,994
Golf and related operations operating costs		7,519			6,511			19,342			16,297
Depreciation and amortization expense		963			882			2,858			2,553
Selling, general and administrative expenses		2,815			2,913			7,846			7,518
Operating income		1,360			1,513			168			939

Other income (expense):
Interest expense		(530	)		(408	)		(1,573	)		(960	)
Other income, net		37			22			323			205
Income (loss) before income taxes		867			1,127			(1,082	)		184

Provision for income taxes		39			55			93			108
Net income (loss)		828			1,072			(1,175	)		76

Less net loss attributable to non-controlling interest in subsidiaries		(57	)		(96	)		(231	)		(314	)
Net income (loss) attributable to Avalon Holdings Corporation common shareholders	$	885		$	1,168		$	(944	)	$	390

Income per share attributable to Avalon Holdings Corporation common shareholders:
Basic net income (loss) per share	$	0.23		$	0.30		$	(0.24	)	$	0.10
Diluted net income (loss) per share	$	0.23		$	0.30		$	(0.24	)	$	0.10

Weighted average shares outstanding - basic		3,899			3,899			3,899			3,899
Weighted average shares outstanding - diluted		3,899			3,919			3,899			3,922

See accompanying notes to unaudited condensed consolidated financial statements.

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except per share amounts)

	September 30,		December 31,
	2023		2022
Assets
Current Assets:
Cash and cash equivalents	$	673	$	1,624
Accounts receivable, less allowance for credit losses		11,603		11,127
Unbilled membership dues receivable		813		599
Inventories		1,716		1,461
Prepaid expenses		948		1,172
Other current assets		14		105
Total current assets		15,767		16,088

SEC Form 10-Q filed by Avalon Holdings Corporation