SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] - Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1997
or
[ ] - Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-21089
GOLDEN BEAR GOLF, INC.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
FLORIDA 65-0680880
- ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
11780 U.S. HIGHWAY ONE, NORTH PALM BEACH, FLORIDA 33408
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(561) 626-3900
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by 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 X No
---- ---
The Registrant had outstanding 2,744,962 shares of Class A Common Stock (par
value $.01 per share) and 2,760,000 shares of Class B Common Stock (par value
$.01 per share) as of August 8, 1997.
<PAGE>
GOLDEN BEAR GOLF, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets as of
June 30, 1997 (Unaudited) and December 31, 1996..................3
Consolidated Condensed Statements of Operations (Unaudited) for
the Three Months and Six Months Ended June 30, 1997 and 1996.....4
Consolidated Condensed Statements of Cash Flows (Unaudited)
for the Six Months Ended June 30, 1997 and 1996..................5
Notes to Consolidated Condensed Financial Statements (Unaudited)....7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...................13
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders................18
Item 6. Exhibits and Reports on Form 8-K...................................18
Signatures...................................................................19
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
GOLDEN BEAR GOLF, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
JUNE 30, DECEMBER 31,
1997 1996
----------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,158,913 $ 16,477,420
Accounts receivable, net of allowances 9,481,575 5,352,224
Due from International 404,366 843,235
Costs and estimated earnings in excess of billings on uncompleted contracts 3,068,248 3,341,500
Inventory 3,073,346 1,953,857
Prepaid expenses and other current assets 1,440,463 221,800
----------------- -----------------
Total current assets 21,626,911 28,190,036
PROPERTY AND EQUIPMENT, net 25,685,902 18,347,927
INTANGIBLES AND OTHER ASSETS 9,032,873 4,868,919
----------------- -----------------
Total assets $ 56,345,686 $ 51,406,882
================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,411,305 $ 3,542,187
Accrued liabilities and other 3,400,664 1,871,915
Billings in excess of costs and estimated earnings on uncompleted contracts 990,006 419,705
Deferred revenue 959,705 449,515
Current portion of notes payable and capital leases 2,817,701 1,313,383
----------------- -----------------
Total current liabilities 11,579,381 7,596,705
----------------- -----------------
NOTES PAYABLE AND CAPITAL LEASES, net of current portion 8,105,540 5,556,667
----------------- -----------------
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 20,000,000 shares authorized,
no shares issued and outstanding
Common stock-
Class A, $.01 par value, 70,000,000 shares authorized, 2,744,962 and
2,744,812 shares issued and outstanding at June 30, 1997
and December 31, 1996, respectively 27,450 27,448
Class B, $.01 par value, 10,000,000 shares authorized, 2,760,000
shares issued and outstanding 27,600 27,600
Additional paid-in capital 40,856,943 40,850,358
Retained earnings (deficit) (4,251,228) (2,651,896)
----------------- -----------------
Total shareholders' equity 36,660,765 38,253,510
----------------- -----------------
Total liabilities and shareholders' equity $ 56,345,686 $ 51,406,882
================= =================
</TABLE>
The accompanying notes are an integral part of these unaudited statements.
3
<PAGE>
<TABLE>
<CAPTION>
GOLDEN BEAR GOLF, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------------- ----------------------------------
REVENUES: 1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Golf Division-
Golf centers and academy fees
and royalties $ 5,580,486 $ 596,596 $ 8,553,417 $ 748,049
Related party commissions 393,584 388,127 752,977 687,666
--------------- --------------- --------------- ---------------
Total golf division 5,974,070 984,723 9,306,394 1,435,715
--------------- --------------- --------------- ---------------
Construction Division 12,929,712 5,116,729 14,200,210 7,172,623
--------------- --------------- --------------- ---------------
Marketing Division-
Golf instruction revenues 1,716,000 1,182,121 2,643,160 2,143,158
Licensing and other revenues 1,215,177 777,622 1,942,350 1,238,855
Income from operations of JNAI 338,590 273,286 744,514 597,993
Related party management fees 125,000 108,750 282,500 187,500
--------------- --------------- --------------- ---------------
Total marketing division 3,394,767 2,341,779 5,612,524 4,167,506
--------------- --------------- --------------- ---------------
Total revenues 22,298,549 8,443,231 29,119,128 12,775,844
--------------- --------------- --------------- ---------------
OPERATING COSTS AND EXPENSES:
Construction and shaping costs 11,889,210 4,481,026 13,471,352 5,986,557
Operating expenses 8,136,145 2,528,784 14,308,920 4,503,544
Compensation recorded on sale of
shares to management --- 3,000,000 --- 3,000,000
Corporate overhead 1,313,973 911,267 2,619,933 1,661,734
Depreciation and amortization 690,113 91,579 979,808 163,786
--------------- --------------- --------------- ---------------
Total operating costs and expenses 22,029,441 11,012,656 31,380,013 15,315,621
--------------- --------------- --------------- ---------------
Income (loss) from operations 269,108 (2,569,425) (2,260,885) (2,539,777)
--------------- --------------- --------------- ---------------
OTHER INCOME (EXPENSE):
Interest income 65,930 3,120 204,838 7,476
Interest expense (244,568) (32,728) (421,144) (45,070)
Other (50,000) (686) 6,509 11,430
--------------- --------------- --------------- ---------------
Total other expense (228,638) (30,294) (209,797) (26,164)
--------------- --------------- --------------- ---------------
Income (loss) before income taxes 40,470 (2,599,719) (2,470,682) (2,565,941)
PROVISION (BENEFIT) FOR
INCOME TAXES 37,160 24,790 (871,350) 25,376
--------------- --------------- --------------- ---------------
Income (loss) before pro forma
income taxes 3,310 (2,624,509) (1,599,332) (2,591,317)
PRO FORMA INCOME TAX
PROVISION (BENEFIT) (Note 1) --- 30,984 --- (14,616)
--------------- --------------- --------------- ---------------
Pro forma net income (loss) $ 3,310 $ (2,655,493) $ (1,599,332) $ (2,576,701)
=============== =============== =============== ===============
Pro forma net income (loss) per share $ 0.00 $ (0.89) $ (0.29) $ (0.86)
=============== =============== =============== ===============
Weighted average common and common
equivalent shares outstanding 5,504,962 3,000,000 5,505,437 3,000,000
=============== =============== =============== ===============
</TABLE>
The accompanying notes are an integral part of these unaudited statements.
4
<PAGE>
<TABLE>
<CAPTION>
GOLDEN BEAR GOLF, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 30,
----------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 1997 1996
--------------- ---------------
<S> <C> <C>
Net loss $ (1,599,332) $ (2,591,317)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 979,808 163,786
Depreciation included in construction and shaping costs 55,970 47,173
Provision for uncollectibles 76,692 7,886
Compensation recorded on sale of shares to management --- 3,000,000
Changes in assets and liabilities:
Accounts receivable (4,206,043) (1,785,988)
Due from International 438,869 784,073
Costs and estimated earnings in excess of billings on
uncompleted contracts 273,252 (770,202)
Inventory (1,119,489) (4,389)
Prepaid expenses and other current assets (1,218,663) (123,828)
Deferred income taxes, net (940,067) ---
Other assets (1,016,811) (696,100)
Accounts payable (130,882) 600,805
Accrued liabilities and other 1,528,749 675,617
Billings in excess of costs and estimated earnings on uncompleted contracts 570,301 411,874
Deferred revenue 510,190 233,736
--------------- ---------------
Net cash used in operating activities (5,797,456) (46,874)
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of golf centers (1,465,236) (2,924,777)
Capital expenditures, net (5,009,980) (436,199)
--------------- ---------------
Net cash used in investing activities (6,475,216) (3,360,976)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock --- 1,500,000
Proceeds from exercise of stock options 50,400 ---
Proceeds from note payable - shareholder --- 1,625,000
Payments on notes payable and capital leases (241,605) (35,862)
Proceeds from revolving credit facility, net 189,183 453,220
Divisional transfers to International --- (392,690)
Other (43,813) ---
--------------- ---------------
Net cash (used in) provided by financing activities (45,835) 3,149,668
--------------- ---------------
Net decrease in cash and cash equivalents (12,318,507) (258,182)
CASH AND CASH EQUIVALENTS, beginning of period 16,477,420 347,010
--------------- ---------------
CASH AND CASH EQUIVALENTS, end of period $ 4,158,913 $ 88,828
=============== ===============
</TABLE>
The accompanying notes are an integral part of these unaudited statements.
5
<PAGE>
<TABLE>
<CAPTION>
GOLDEN BEAR GOLF, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) - (CONTINUED)
FOR THE SIX MONTHS ENDED
JUNE 30,
----------------------------------
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING 1997 1996
--------------- ---------------
<S> <C> <C>
AND INVESTING ACTIVITIES:
Compensation recorded on sale of shares to management $ --- $ 3,000,000
Notes payable issued in connection with the acquisition of golf centers $ 2,899,000 $ ---
Golf center acquisition accounted for as a capital lease $ --- $ 1,226,344
Acquisitions of equipment and furniture accounted for as capital leases $ 1,163,145 $ ---
Notes payable issued in connection with the acquisition of equipment $ 43,468 $ ---
</TABLE>
The accompanying notes are an integral part of these unaudited statements.
6
<PAGE>
GOLDEN BEAR GOLF, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND BASIS OF PRESENTATION
The accompanying unaudited Consolidated Condensed Financial Statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. For further information, refer to the audited Consolidated
Financial Statements and Notes thereto included in Golden Bear Golf, Inc.'s
("Golden Bear" or the "Company") Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, as filed with the Securities and Exchange Commission.
The results of operations and cash flows for the three and six-month periods
ended June 30, 1997 are not necessarily indicative of the results of operations
or cash flows which may be reported for the remainder of fiscal 1997.
Golden Bear was formed on June 7, 1996 to enter into an exchange agreement which
was consummated on August 1, 1996 upon the closing of an initial public offering
of Golden Bear's Class A Common Stock. Parties to the plan of reorganization
included, among others, Golden Bear's affiliates, Golden Bear Golf Centers, Inc.
("Golf Centers"), Paragon Construction International, Inc. ("Paragon")
(collectively, the "Constituent Companies") and Golden Bear International, Inc.
("International"), a privately owned company controlled by Jack Nicklaus.
Pursuant to the exchange agreement, Golden Bear acquired all of the outstanding
common stock of the Constituent Companies in exchange for an aggregate of
1,668,000 shares of its Class A and Class B Common Stock. In addition, Golden
Bear acquired certain assets and assumed certain liabilities of International
("International Carve-out") in exchange for 1,332,000 shares of Class B Common
Stock. The transaction was accounted for on a historical cost basis in a manner
similar to a pooling of interests as Golden Bear and the Constituent Companies
had common stockholders and management. Therefore, the financial statements of
Golden Bear and the Constituent Companies for all periods prior to the
reorganization are presented in a combined format.
In order to maintain consistency and comparability between periods presented,
certain amounts have been reclassified from the previously reported financial
statements in order to conform with the financial statement presentation of the
current period.
DEFERRED INCOME TAXES
Included in intangibles and other assets on the accompanying Consolidated
Condensed Balance Sheet as of June 30, 1997 is a net deferred income tax asset
of $940,067, comprised primarily of net operating loss carryforwards generated
by the operating loss incurred for the first six months of fiscal 1997.
Management believes the Company will generate sufficient taxable income in
future periods to absorb the net operating loss carryforwards and it is more
likely than not that the net deferred tax asset as of June 30, 1997 will be
realized. Accordingly, no valuation allowance was established against the net
deferred tax asset as of such date. Management's estimates of future taxable
income are subject to revision due to, among other things, the Company's ability
to achieve continued growth, obtain sufficient financing to fund such growth and
successfully integrate the operations of the golf centers acquired to-date. Such
factors are further discussed in Management's Discussion and Analysis of
Financial Condition and Results of Operations.
7
<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
PRO FORMA INCOME TAXES
Prior to becoming a C Corporation upon the reorganization of the Company on
August 1, 1996, Golf Centers and Paragon were S Corporations for Federal and
state income tax reporting purposes and International Carve-out was a division
of International, which was also an S Corporation. As S corporations prior to
the reorganization, Golf Centers, Paragon and International have historically
only paid foreign income taxes and have not paid United States Federal and state
income taxes. Accordingly, pro forma income taxes have been reflected in the pro
forma net income (loss) and pro forma net income (loss) per share data presented
in the accompanying Consolidated Condensed Statements of Operations to show the
effects on the Company's operations as if the relevant entities had been C
Corporations during all of the periods presented. The pro forma taxes reflect
consideration of all permanent differences between book and tax income at the
Company's estimated effective tax rate of 39%.
PRO FORMA NET INCOME (LOSS) PER SHARE
Pro forma net income (loss) per share is computed by dividing pro forma net
income (loss) by the weighted average common and dilutive common equivalent
shares outstanding for each period. Common stock equivalents include the
dilutive effect of all outstanding stock options using the treasury stock
method. The calculations used in the accompanying Consolidated Condensed
Statements of Operations are based upon 5,504,962 and 5,505,437 average common
shares outstanding, respectively, during the three and six-month periods ended
June 30, 1997, and 3,000,000 average common shares outstanding for the three and
six-month periods ended June 30, 1996. Effective December 15, 1997, the Company
will be required to adopt Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earnings per Share," which among other changes, will require that
basic earnings per share be computed without regard to any outstanding common
equivalent shares. Basic earnings per share as computed under SFAS No. 128 would
not differ from the pro forma net income (loss) per share amounts presented in
the accompanying Consolidated Condensed Statements of Operations.
2. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
Costs and estimated earnings on uncompleted construction and shaping contracts
consist of the following for contracts recognized under the
percentage-of-completion method of accounting:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------------- -----------------
<S> <C> <C>
Costs incurred on uncompleted contracts $ 30,247,112 $ 23,604,746
Estimated earnings 3,045,380 2,446,337
---------------- -----------------
33,292,492 26,051,083
Less billings to date 31,214,250 23,129,288
---------------- -----------------
$ 2,078,242 $ 2,921,795
================ =================
</TABLE>
The amounts associated with costs and estimated earnings on uncompleted
construction and shaping costs are included in the accompanying Consolidated
Condensed Balance Sheets under the following captions:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------------- -----------------
<S> <C> <C>
Costs and estimated earnings in excess of
billings on uncompleted contracts $ 3,068,248 $ 3,341,500
Billings in excess of costs and estimated
earnings on uncompleted contracts (990,006) (419,705)
---------------- -----------------
$ 2,078,242 $ 2,921,795
================ =================
</TABLE>
8
<PAGE>
3. NOTES PAYABLE AND CAPITAL LEASES
Notes payable and capital leases consist of the following:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------------- -----------------
<S> <C> <C>
Note payable to financial institution, due in monthly principal
installments of $10,000 plus interest at prime + 3/4%, with
balloon payment due at maturity in August, 2003 $ 1,700,000 $ 1,760,000
Notes payable to sellers of golf centers, with interest ranging
from 0% to prime +1/2%, maturing through August, 2001(1) 4,194,788 1,367,008
Capital lease obligations secured by certain golf center facilities,
maturing through April, 2025 2,441,147 2,454,457
Deferred profit participation obligation, payable quarterly,
discounted at an effective rate of 9%, matures December, 2006 405,809 419,097
Capital lease obligations secured by equipment and furniture,
maturing through May, 2002(2) 1,115,940 ---
Revolving credit note with a bank, with interest at 8 1/2%
payable monthly, matures in May, 1998(3) 1,015,159 825,976
Notes payable, with principal and interest ranging from
9% to 9 1/2% payable monthly, matures in June, 2000 43,468 ---
Secured credit note, with principal and interest at 9 1/2%
payable monthly, matured in July, 1997 6,930 43,512
----------------- -----------------
10,923,241 6,870,050
Less current portion (2,817,701) (1,313,383)
----------------- -----------------
$ 8,105,540 $ 5,556,667
================= =================
</TABLE>
(1) Notes payable to sellers is comprised of certain notes associated with the
acquisition of golf centers. In September 1996, the Company issued
non-interest bearing notes payable of $600,000 in connection with the
purchase of East Coast Facilities, secured by certain property and
equipment. The outstanding principal on these notes was $216,608 and
$267,008 at June 30, 1997 and December 31, 1996, respectively. Such notes
have certain defined payment terms and any remaining principal on the notes
is due in September 1997. Also in September 1996, the Company issued a note
payable for $750,000 in connection with its acquisition of Highlander
Facilities. The note is secured by certain property and equipment of the
golf center and bears interest at 8% payable monthly, with the entire
principal due in August 2001. In December 1996, the Company issued a note
payable for $350,000 in connection with the purchase of MacDivott's Golf
Center. The note is secured by certain property and equipment of the golf
center and bears interest at prime + 1/2% payable quarterly, with the
entire principal due in December 1999.
In January 1997, the Company incurred certain secured indebtedness
aggregating approximately $2.1 million in connection with the purchase of
Oasis Golf Center. Such obligations are comprised of a non-interest bearing
installment of $200,000 due in August 1997, an $899,000 installment due in
May 1998 with interest imputed at 9%, together with a $1 million promissory
note due in two $500,000 installments each in January 1999 and 2001 with
interest at 9% payable quarterly. See Note 7, Acquisitions.
In February 1997, the Company issued a note payable for $800,000 in
connection with the purchase of Caddy-Shack Golf Dome. The note is secured
by certain property and equipment of the golf center and requires quarterly
payments of $38,820 representing the amortization of principal and interest
at 9%. Based on such required quarterly payments, the note will be fully
amortized in March 2004. The outstanding principal balance on the note was
$779,180 at June 30, 1997. See Note 7, Acquisitions.
9
<PAGE>
3. NOTES PAYABLE AND CAPITAL LEASES - (CONTINUED)
(2) During May and June of 1997, the Company acquired certain construction
equipment, office furniture and phone systems equipment by entering into
financing arrangements that were accounted for as capital leases. Such
capital lease obligations have terms of up to five years and require
monthly payments representing principal and interest at rates ranging from
9% to 9.6%.
(3) The Company amended the terms of its revolving credit note to provide for a
one year extension of the former maturity due in May, 1997.
4. ARBITRATION CLAIMS
In August 1995, Paragon brought an arbitration claim against a customer for
breach of contract. Paragon alleges it has properly completed the construction
relating to the renovation of the customer's golf course and is seeking final
payment of retainage and related amounts due, together with additional damages,
totaling approximately $350,000. Simultaneous to this claim of arbitration, the
customer filed a counterclaim of arbitration against Paragon for alleged
construction defects in the renovation of its golf course. Although the customer
recently claims its damages are in excess of $1.2 million, the initial claim
submitted by the customer in arbitration was for $750,000. The ultimate outcome
of this matter is not determinable at this time; accordingly no provision for
loss regarding this matter had been established at June 30, 1997.
5. OPERATIONS OF JNAI
The apparel licensing activities of the Company in the Far East are conducted
through Jack Nicklaus Apparel International ("JNAI") and its various
partnerships. The Company serves as a 50% general partner and is generally
entitled to receive 50% to 66-2/3% of the cash distributions of the various
partnerships' operations. The Company's investment in JNAI is recorded on the
equity method.
The following is a summary of the operating results of JNAI:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------------- ----------------------------------
1997 1996 1997 1996
--------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Licensing revenues $ 865,823 $ 888,644 $ 1,631,073 $ 1,769,951
Operating expenses 177,647 225,508 260,915 362,016
Provision (benefit) for income taxes 10,996 116,564 (118,870) 211,949
=============== ============== =============== ===============
Net income $ 677,180 $ 546,572 $ 1,489,028 $ 1,195,986
=============== ============== =============== ===============
</TABLE>
6. RELATED PARTY TRANSACTIONS
The amounts included in the accompanying Consolidated Condensed Balance Sheets
under the caption "Due from International" consist of amounts due to the
following:
JUNE 30, DECEMBER 31,
1997 1996
---------------- -----------------
Golden Bear Golf, Inc. $ 393,995 $ 807,231
Paragon --- 22,329
International Carve-out 10,371 13,675
---------------- -----------------
$ 404,366 $ 843,235
================ =================
10
<PAGE>
6. RELATED PARTY TRANSACTIONS - (CONTINUED)
The $393,995 balance due Golden Bear Golf, Inc. at June 30, 1997 is comprised
primarily of International's allocable portion of certain costs associated with
maintaining shared office space in Singapore and commissions on specific design
related revenues collected by Nicklaus Design, a division of International. The
balance also includes amounts owed by International in connection with the
reimbursement of certain allocated payroll and other costs which are paid by the
Company.
Pursuant to an office sharing agreement, the Company subleases its corporate
office facilities from International. The rent expense incurred under such
sublease for the six months ended June 30, 1997 was $305,655. The Company also
has an office staff sharing agreement with International which provides for the
sharing of the services of certain specifically identified office staff and
personnel that can effectively serve the needs of both organizations. During the
first six months of fiscal 1997, a total of $290,400 attributable to payroll and
related costs associated with such shared employees was allocated to
International.
In addition, the Company maintains certain office space in Singapore that is
shared with International. During the six months ended June 30, 1997, a total of
$164,000 of costs associated with maintaining such facilities was allocated to
International.
International has retained the Company as the exclusive manager and
representative to market the personal endorsement services of Jack Nicklaus,
pursuant to which the Company is generally entitled to approximately 20% - 30%
of the personal endorsement fees received by Mr. Nicklaus. During the six months
ended June 30, 1997 and 1996, the Company earned revenues for services provided
in this capacity of $282,500 and $187,500, respectively.
Pursuant to a design services marketing agreement, the Company markets golf
course designs worldwide for Nicklaus Design for which it generally receives 10%
of the gross design fees collected by International. During the six months ended
June 30, 1997 and 1996, the Company earned commissions for such services of
$752,977 and $687,666, respectively.
7. ACQUISITIONS
Effective January 1, 1997, the Company entered into a long-term lease agreement
for certain assets and the underlying real property utilized in connection with
the Sunset Golf Center, an existing golf practice and instruction facility
located in Beaverton, Oregon. The lease term is for a period of 20 years and
provides for annual rentals equal to the greater of a minimum base rent or a
percentage rent calculated based on the gross revenues of the project. Under the
terms of the lease agreement, the Company is required to invest at least
$500,000 in improvements to the property prior to the end of the second lease
year.
On January 31, 1997, the Company purchased the Oasis Golf Center, an existing
"dome" type golf practice and instruction facility located in Plymouth,
Michigan, for $3.2 million of which $1.0 million was paid in cash at the closing
and the remainder was evidenced by a $1.0 million secured promissory note and
certain other obligations to pay $1.2 million. The cash portion of the purchase
price was funded from the proceeds of the Company's initial public offering. The
fair value of net assets acquired (substantially all property and equipment) was
approximately $1.8 million, resulting in the recording of goodwill in the amount
of $1.4 million which will be amortized over the 20 year term of the related
ground lease for the underlying property.
On February 28, 1997, the Company purchased Caddy-Shack Golf Dome, an existing
golf practice and instruction facility located in Williamsville, New York, for
approximately $1.1 million of which $300,000 was paid in cash at the closing and
$800,000 was evidenced by certain secured promissory notes. The $300,000 paid at
the closing was funded from the proceeds of the Company's initial public
offering. The fair value of net assets acquired (substantially all property and
equipment) was approximately $500,000, resulting in the recording of goodwill in
the amount of $600,000 which will be amortized over the expected 20 year term
(including renewal options) of the related ground lease for the underlying
property.
11
<PAGE>
7. ACQUISITIONS - (CONTINUED)
All of the foregoing acquisitions were accounted for under the purchase method
of accounting. Accordingly, the results of operations of these golf centers are
included in the accompanying Consolidated Condensed Statements of Operations for
all periods starting with their respective acquisition dates. Had these
acquisitions occurred as of January 1, 1997, the Company's summarized unaudited
pro forma results of operations for the six months ended June 30, 1997 would
have been as follows.
Total revenues $ 29,477,962
Loss from operations $ (2,190,681)
Pro forma net loss $ (1,569,047)
Pro forma net loss per share $ (0.28)
8. SUBSEQUENT EVENT
To provide for additional liquidity, the Company entered into a letter agreement
in August 1997 for a $10 million revolving credit facility with a financial
institution. The commitment from the financial institution provides for advances
of up to $10 million to be used to finance the working capital requirements
needed to fund the Company's continued growth as well as for general corporate
purposes. Under the terms of the commitment, the credit facility would mature in
two years with an option for a one year extension, and borrowings thereunder
would be secured by Company assets excluding various golf center properties and
certain other assets pledged to secure other long-term indebtedness. Outstanding
borrowings would bear interest at the prime rate payable quarterly. Funding of
the credit facility will be subject to a number of conditions, including
negotiation of a definitive credit agreement. The credit agreement will contain
customary conditions and covenants with respect to the conduct of the Company's
business, including dividend payment limitations, and require the maintenance of
various financial ratios, which could limit amounts available to be borrowed
under the facility.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company operates its business through three divisions: the Golf Division,
the Construction Division and the Marketing Division. The Golf Division owns,
operates and licenses the Company's golf practice and instruction facilities
under the JACK NICKLAUS GOLF CENTER, JACK NICKLAUS ACADEMY OF GOLF and GOLDEN
BEAR GOLF CENTER brand names, is involved in the marketing of golf course design
services on behalf of designers, primarily Nicklaus Design, and provides golf
course management and consulting services throughout the world. The Construction
Division provides technical construction services principally in connection with
the construction and renovation of golf courses. The Marketing Division is
involved primarily in the licensing of NICKLAUS, JACK NICKLAUS and GOLDEN BEAR
branded products throughout the world, the operation of the NICKLAUS/FLICK GOLF
SCHOOLS and the generation of marketing fees related to Jack Nicklaus' personal
endorsements.
The Company was formed on June 7, 1996 to enter into a reorganization agreement
which was consummated on August 1, 1996 upon the closing of an initial public
offering of the Company's Class A Common Stock. Parties to the plan of
reorganization included, among others, the Company's affiliates, Golf Centers,
Paragon and International, a privately owned company controlled by Jack
Nicklaus. Pursuant to the agreement, the Company acquired all of the outstanding
common stock of Golf Centers and Paragon in exchange for shares of its Class A
and Class B Common Stock. In addition, the Company acquired certain assets and
assumed certain liabilities of International in exchange for shares of its Class
B Common Stock. The transaction was accounted for on a historical cost basis in
a manner similar to a pooling of interests as Golden Bear, Golf Centers and
Paragon had common stockholders and management.
Consistent with the Company's strategy to increase its ownership and operation
of golf practice and instruction facilities, the Company has entered into
purchase and lease agreements pursuant to which it has acquired a total of 14
facilities to-date. Upon acquisition, the Company attempts to develop a business
plan tailored to the specific markets and renovation requirements of each golf
center facility that is acquired. Many of the existing facilities acquired by
the Company required extensive renovations and the construction of additional
features such as miniature golf and pro shops to upgrade such facilities to the
Company's standards. Delays associated with the completion of the conversion
process at certain acquired golf centers unfavorably impacted the ability of
such facilities to generate revenues commensurate with expense levels and a
number of these golf center facilities are not expected to contribute to the
Company's operating performance through the remainder of the current fiscal
year.
The Company currently intends to continue it's strategy of increasing the number
of golf center facilities that it owns and operates. However, any new
acquisitions will be deferred until the last quarter of the current fiscal year
as the Company focuses on the remaining renovations at its existing golf centers
and on improving the profitability of such centers. In addition to the
acquisition of existing golf center facilities, the Company is also evaluating
the construction of new facilities rather than acquire existing facilities. Any
future additions of golf center facilities will be subject to obtaining
sufficient financing and the successful integration of the operations of the
golf centers acquired to-date. Moreover, there is no assurance that the Company
will obtain appropriate financing on favorable terms, or at all.
With respect to its construction activities, the Company believes that a
recently completed restructuring of its Paragon subsidiary will support the
future growth of this segment, which has received new project awards at levels
significantly in excess of historical rates.
In addition, the Company's Marketing Division recently entered into a strategic
marketing alliance with VISA USA, Inc. which management expects will contribute
to the operating performance of this division over the five year term of the
agreement.
13
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1996
Total revenues for the three months ended June 30, 1997 increased 164.1% over
the comparable period of 1996. All of the Company's operating divisions
contributed to the increase in total revenues, with the Golf, Construction and
Marketing Divisions posting revenue growth of 506.7%, 152.7% and 45.0%,
respectively, for the current quarter. Golf Division revenues increased to $6.0
million during the second quarter of fiscal 1997 from $1.0 million for the
second quarter of 1996, due to the 14 golf centers that were owned and operated
by the Company during the current quarterly period in contrast to only two such
centers that were both acquired during the second quarter of the prior year.
Revenues of the Construction Division increased to $13.0 million for the current
quarterly period from $5.1 million during the comparable period of last year as
the Company commenced work on several new large projects comprising a portion of
its project awards obtained during 1997. Such new project awards exceeded $90
million as of June 30, 1997. Marketing Division revenues increased to $3.4
million during the three months ended June 30, 1997 compared to $2.3 million for
the same quarterly period of 1996 due primarily to an increase in golf
instruction activities and other revenues associated with a new corporate
marketing alliance that the Company recently entered into with VISA USA, Inc.
Operating income increased to $0.3 million for the three months ended June 30,
1997 compared to a loss of $2.6 million for the comparable period of the prior
year, which included a one-time, non-cash charge of $3.0 million representing
compensation deemed to have been received by certain executive officers in
connection with their purchase of shares in Golf Centers prior to the Company's
initial public offering. Exclusive of the effects of the $3.0 million charge,
the $0.1 million decrease in operating income for the current quarter was
primarily attributable to an increase in the level of certain expenses
associated with supporting the Company's growth. Certain start-up costs
associated with the significant revenue growth in the Golf and Construction
divisions contributed to the increase in operating expenses, which as a
percentage of total revenues, increased to 36.5% for the second quarter of the
current year from 30.0% for the comparable quarter of last year.
Corporate overhead, which is comprised primarily of personnel related costs
associated with the Company's officers and employees, increased to $1.3 million
for the three months ended June 30, 1997 from $0.9 million for the three months
ended June 30, 1996. The increase in corporate overhead was attributable to
additions of personnel and planned systems upgrades, together with the increased
costs associated with the expansion of the Company's businesses and operating
the Company as a separate public company.
Depreciation and amortization expenses increased to $0.7 million during the
second quarter of 1997 from $0.1 million for the second quarter of 1996 due to
the sizable increase in property and equipment associated with the acquisition
and conversion of the twelve golf center facilities acquired since June 30,
1996.
Interest expense for the second quarter of the current year was approximately
$0.2 million attributable primarily to indebtedness associated with the
Company's acquisition of golf practice and instruction facilities. Interest
expense for the comparable period of 1996 was not material to the Company's
results of operations.
Prior to becoming a C Corporation upon the reorganization of the Company on
August 1, 1996, the various entities that comprised its operations were S
Corporations and therefore not subject to United States Federal and state income
taxes. Prior to the reorganization, such entities generally paid only foreign
income taxes. Accordingly, a pro forma income tax provision has been included in
the pro forma net loss and pro forma net loss per share amounts presented for
the three months ended June 30, 1996 to show the effects on the Company's
operations as if the relevant entities had been C Corporations for both of the
three-month periods presented. The pro forma taxes reflect consideration of all
permanent differences between book and tax income at the Company's estimated
effective tax rate of 39%. Such pro forma taxes do not reflect a deduction for
the $3.0 million non-cash charge, which was not deductible for Federal and state
income tax purposes.
14
<PAGE>
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1996
Total revenues for the six months ended June 30, 1997 increased 127.9% over the
comparable period of 1996. The $16.3 million increase in total revenues during
the current six-month period was principally the result of a $7.9 million or
548.2% increase in Golf Division revenues, coupled with a $7.0 million or 98.0%
increase in Construction Division revenues. The increase in Golf Division
revenues was attributable to the acquisition of 14 golf centers since April 15,
1996, which contributed to revenues starting with their respective acquisition
dates. In contrast, the Company operated only two golf centers during the first
six months of 1996, both of which where acquired during the second quarter of
the prior year. Construction Division revenues almost doubled during the current
six-month period as the Company commenced work on several new large projects
that were obtained during the six months ended June 30, 1997. Marketing Division
revenues increased by $1.4 million or 34.7% for the six months ended June 30,
1997 compared to the same six-month period of 1996, due primarily to an increase
in golf instruction activities and other revenues associated with a new
strategic marketing alliance with VISA USA, Inc.
The Company incurred net operating losses of $2.3 million and $2.5 million
during the first six months of 1997 and 1996, respectively. The operating loss
incurred for the first six months of 1996 included a one-time, non-cash charge
of $3.0 million representing compensation deemed to have been received by
certain executive officers in connection with their purchase of shares in Golf
Centers prior to the Company's initial public offering. Exclusive of the effects
of the $3.0 million charge, the $2.8 million increase in the net operating loss
incurred during the current six-month period was primarily attributable to an
increase in the level of certain expenses associated with supporting the
Company's growth. Such operating expenses included (i) start-up costs associated
with converting and upgrading acquired golf centers to Company standards without
commensurate revenues during the conversion process, (ii) expenses attributable
to the reorganization and expansion of the staffing and other resources in the
Construction Division that were necessary to accommodate increased levels of
construction activities, and (iii) a one-time severance charge of $0.6 million
relating to personnel changes made in connection with the Company's appointment
of new presidents in both its Golf Centers and Paragon subsidiaries.
Accordingly, operating expenses as a percentage of total revenues were 49.1% and
35.3% for the six months ended June 30, 1997 and 1996, respectively.
The increase in the operating loss incurred during the first six months of 1997
was also impacted by a decrease in the gross margin realized by the Construction
Division, an increase in the level of spending on corporate overhead, together
with an increase in the amounts charged to depreciation and amortization
expense. The decrease in the gross margin realized by the Construction Division
during the current six-month period was primarily attributable to costs
associated with the completion of specific construction projects that were
contracted for in previous years.
Corporate overhead, which is comprised primarily of personnel related costs
associated with the Company's officers and employees, increased to $2.6 million
for the six months ended June 30, 1997 from $1.7 million for the six months
ended June 30, 1996. The increase in corporate overhead was attributable to
additions of personnel and planned systems upgrades, together with the increased
costs associated with the expansion of the Company's businesses and operating
the Company as a separate public company.
Charges to depreciation and amortization increased to $1.0 million during the
first six months of 1997 from $0.2 million for the comparable period of 1996 due
to the increases in property and equipment associated with the acquisition and
conversion of the twelve golf center facilities acquired since June 30, 1996.
Interest income of $0.2 million for the first six months of 1997 was primarily
attributable to earnings on the unexpended proceeds from the Company's initial
public offering invested in short-term commercial paper instruments and
repurchase agreements. Interest expense for the first six months of the current
year was approximately $0.4 million attributable primarily to indebtedness
associated with the Company's acquisition of golf practice and instruction
facilities. Interest income and interest expense for the first six months of
1996 were not material to the Company's results of operations.
15
<PAGE>
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1996 -
(CONTINUED)
Prior to becoming a C Corporation upon the reorganization of the Company on
August 1, 1996, the various entities that comprised its operations were S
Corporations and therefore not subject to United States Federal and state income
taxes. Prior to the reorganization, such entities generally paid only foreign
income taxes. Accordingly, a pro forma income tax benefit has been included in
the pro forma net loss and pro forma net loss per share amounts presented for
the six months ended June 30, 1996 to show the effects on the Company's
operations as if the relevant entities had been C Corporations for both of the
six-month periods presented. The pro forma taxes reflect consideration of all
permanent differences between book and tax income at the Company's estimated
effective tax rate of 39%. Such pro forma taxes do not reflect a deduction for
the $3.0 million non-cash charge which was not deductible for Federal and state
income tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
On August 1, 1996, Golden Bear closed an initial public offering of 2,484,000
shares of its Class A Common Stock and received net proceeds (after deducting
underwriting discounts and offering costs) of approximately $35.2 million. The
net proceeds have been utilized by the Company through June 30, 1997 for the
following purposes, (i) approximately $13.6 million has been used to fund the
acquisition of golf centers, (ii) approximately $10.1 million has been utilized
for working capital purposes, (iii) approximately $7.5 million has been used for
capital improvements to the recently acquired golf center facilities and other
capital expenditures, (iv) approximately $1.6 million was utilized to repay
indebtedness incurred by the Company in connection with the acquisition of the
Cool Springs Golf Center which had been funded by Jack Nicklaus and (v)
approximately $0.3 million was used for the repayment of other indebtedness. The
remaining proceeds, which have been invested in short-term commercial paper
instruments and repurchase agreements, will be used for working capital and
general corporate purposes including the conversion of existing golf practice
and instruction facilities, additional advertising and expansion of the
Company's product development efforts, both domestically and internationally. As
of June 30, 1997 and December 31, 1996, the Company had working capital of $10.0
million and $20.6 million, respectively.
Subject to obtaining sufficient financing, the Company intends to continue its
plan to add additional golf practice and instruction facilities by the
acquisition of existing facilities or the development of new facilities. Such
acquisitions or development would primarily be funded by mortgage financing
secured by the facilities acquired or constructed. The Company may also finance
acquisitions by entering into leasing arrangements or by utilizing seller
financing with deferred payment terms which would reduce the initial up-front
cash requirements on the part of the Company. Leasing arrangements and seller
financing have been used by the Company to fund all or a portion of the purchase
price associated with certain golf centers that it has already acquired.
However, there is no assurance any additional facilities will be acquired or
that such financing will be available.
Actual spending on the acquisition or construction of additional golf centers
will depend on, among other things, the availability of funds, the
identification and availability of suitable properties or facilities on terms
satisfactory to the Company, the location and condition of existing facilities
(i.e. whether significant capital improvements are necessary), whether the
Company acquires or leases the related land, competitive developments and
strategic marketing decisions.
To provide for additional liquidity, the Company entered into a letter agreement
in August 1997 for a $10 million revolving credit facility with a financial
institution. The commitment from the financial institution provides for advances
of up to $10 million to be used to finance the working capital requirements
needed to fund the Company's continued growth as well as for general corporate
purposes. Under the terms of the commitment, the credit facility would mature in
two years with an option for a one year extension, and borrowings thereunder
would be secured by Company assets excluding various golf center properties and
certain other assets pledged to secure other long-term indebtedness. Outstanding
borrowings would bear interest at the prime rate payable quarterly. Funding of
the credit facility will be subject to a number of conditions, including
negotiation of a definitive credit agreement. The credit agreement will contain
customary conditions and covenants with respect to the conduct of the Company's
business, including dividend payment limitations, and require the maintenance of
various financial ratios, which could limit amounts available to be borrowed
under the facility.
16
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES - (CONTINUED)
In addition, the Company amended the terms of an existing revolving credit note
to extend the maturity of borrowings thereunder one year to May 1998 (see Note 3
of the Consolidated Condensed Financial Statements included herein under Part I,
Item 1).
The Company believes that its current cash position, together with cash provided
by operations will be sufficient to meet its operating needs through the end of
1997. However, the acquisition or development of additional golf centers will be
subject to obtaining additional financing. Such funds may be raised by the
issuance of additional equity or by incurring additional indebtedness. There is
no assurance that the Company will be able to obtain additional financing in a
timely manner, on favorable terms, or at all. To the extent that the Company is
not able to obtain additional funds, the Company may be required to delay or
reduce its acquisition and expansion strategy. If the Company successfully
negotiates a definitive credit agreement for the $10 million revolving credit
facility discussed above, borrowings thereunder would be used primarily to fund
the expansion of the Company's construction operations and to meet seasonal
working capital requirements attributable to the anticipated growth of its golf
centers and licensing operations. A portion of the proceeds may also be used to
fully complete certain pending renovations at existing golf centers and for
bridge financing associated with the acquisition or development of new golf
center facilities.
CURRENCY FLUCTUATIONS
Although substantially all of the Company's contracts are denominated in United
States dollars, fluctuations in the value of foreign currencies relative to the
United States dollar impact the Company's results of operations. A substantial
portion of the revenues of the Company's overseas licensees are generated in
foreign currencies and accordingly, fluctuations in the value of these
currencies relative to the United States dollar could have a material adverse
effect on the Company's profitability. Royalty payments received by the Company
or by its JNAI equity investee relating to foreign licensing arrangements are
generally based on the exchange rate at the time of payment. In addition, the
Company's construction contracts outside of the United States are also generally
denominated in United States dollars and accordingly, the effective cost to
customers for construction services performed overseas will increase or decrease
as foreign currencies fluctuate relative to the United States dollar, unless the
Company changes its United States dollar prices to reflect the fluctuations in
currency. During the second quarter of 1997, the Company's JNAI joint venture
entered into futures contracts to hedge its anticipated receipt of certain
royalty payments denominated in Japanese Yen. Apart from these futures contracts
on the part of JNAI which were not material to the Company's results of
operations, the Company does not currently engage in hedging activities with
respect to currency fluctuations, but may do so in the future.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
This Quarterly Report on Form 10-Q contains forward-looking statements made
pursuant to the safe harbor provisions of the Securities Litigation Reform Act
of 1995. These forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and uncertainties, many of
which are beyond the Company's control, including but not limited to, economic,
competitive and other factors affecting the Company's operations, markets,
products and services, expansion strategies and other factors discussed
elsewhere in this report and the documents filed by the Company with the
Securities and Exchange Commission. Actual results could differ materially from
these forward-looking statements. In light of these risks and uncertainties,
there can be no assurance that the forward-looking information contained in this
report will in fact prove accurate. The Company does not undertake any
obligation to revise these forward-looking statements to reflect future events
or circumstances.
17
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held on July 21, 1997, the Company's
shareholders voted to elect two Class I Directors to serve one-year terms
expiring at the 1998 Annual Meeting of Shareholders, to elect two Class II
Directors to serve two-year terms expiring at the 1999 Annual Meeting of
Shareholders and to elect three Class III Directors to serve three-year terms
expiring at the 2000 Annual Meeting of Shareholders. The results of the voting
were as follows.
<TABLE>
<CAPTION>
CLASS OF VOTES VOTES TOTAL
NAME OF NOMINEE DIRECTOR FOR WITHHELD VOTES
------------------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
Mark F. Hesemann Class I 29,868,951 3,753 29,872,704
Roger E. Birk Class I 29,869,389 3,315 29,872,704
Thomas P. Hislop Class II 29,869,879 2,825 29,872,704
Richard F. Chapdelaine Class II 29,869,699 3,005 29,872,704
Jack W. Nicklaus Class III 29,869,399 3,305 29,872,704
Richard P. Bellinger Class III 29,869,431 3,273 29,872,704
John F. McGovern Class III 29,869,589 3,115 29,872,704
</TABLE>
As of the record date of June 5, 1997, the Company had outstanding 2,744,962
shares of Class A Common Stock and 2,760,000 shares of Class B Common Stock
entitled to vote at the Annual Meeting of Shareholders. Each share of Class A
Common Stock entitled the holder to one vote on each matter voted upon at the
Annual Meeting and each share of Class B Common Stock entitled the holder to ten
votes on each such matter, including the election of Directors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three-month period
ended June 30, 1997.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GOLDEN BEAR GOLF, INC.
By: /S/ RICHARD P. BELLINGER
--------------------------------------------------
Richard P. Bellinger
President and Chief Executive Officer
By: /S/ JACK P. BATES
--------------------------------------------------
Jack P. Bates
Senior Vice President and Chief Financial Officer
Date: August 8, 1997
19
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GOLDEN
BEAR GOLF, INC.'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,158,913
<SECURITIES> 0
<RECEIVABLES> 9,883,319
<ALLOWANCES> 401,744
<INVENTORY> 3,073,346
<CURRENT-ASSETS> 22,566,978
<PP&E> 28,177,180
<DEPRECIATION> 2,491,278
<TOTAL-ASSETS> 56,345,686
<CURRENT-LIABILITIES> 11,579,381
<BONDS> 8,105,540
0
0
<COMMON> 55,050
<OTHER-SE> 36,605,715
<TOTAL-LIABILITY-AND-EQUITY> 56,345,686
<SALES> 14,200,210
<TOTAL-REVENUES> 29,119,128
<CGS> 13,471,352
<TOTAL-COSTS> 27,780,272
<OTHER-EXPENSES> 3,599,741
<LOSS-PROVISION> 76,692
<INTEREST-EXPENSE> 421,144
<INCOME-PRETAX> (2,470,682)
<INCOME-TAX> (871,350)
<INCOME-CONTINUING> (1,599,332)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,599,332)
<EPS-PRIMARY> (0.29)
<EPS-DILUTED> (0.29)
</TABLE>
