AWX 10-K & 10-Q changes, risk factors and insider trading
Avalon Holdings Corp. · NYSE · Refuse Systems · CIK 1061069 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
The profitability of our golf and related operations segment depends on our ability to anticipate and react to changes in commodity costs, including food, supplies, fuel, utilities and other operating costs, including labor. We continuously monitor supply and cost trends of these commodities. Volatility in certain commodity prices and fluctuations in laborsee in full comparisoncosts have adversely affected, and in the future,could adversely affect Avalon’s operating results.AnWeincreasewill continuously monitor labor and commodity prices incommodityordercoststocouldmaintainhavemarginsanandadverse impact on ouroverall profitability.
see in full comparisonThe Federal Reserve has kept its key interest rates at elevated levels as pricing on consumer goods has remained high.Our operations are substantially affected by economic conditions, including inflation, which can impact consumer disposable income levels and spending habits. Although Avalon has not entered into any long-term fixed price contracts that could have a material adverse impact upon its financial performance in periods of inflation, adverse economic conditions could pressure Avalon’s business and operating performance and financial results may suffer. In general, management believes that rising costs resulting from inflation could be passed on to customers; however, Avalon may need to absorb all or a portion of these cost increases depending upon competitive conditions at thetime.time
“Avalon’s golf course operations, The Grand Resort and multipurpose recreation center currently hold liquor licenses for their respective facilities. If, for some reason, any one of these facilities were to lose their liquor license, the financial performance of the golf and related operations would be adversely affected.”see in full comparison
The waste brokerage and management division employs individuals with unique capabilities and knowledge in the handling, disposal and transportation of both hazardous and non-hazardous waste. In addition, the majority of the senior management and sales representatives have been employed by Avalon for many years and are approaching retirement age.see in full comparisonOver the years, the waste brokerage and management division has had difficulty finding qualified individuals with the required expertise in specific geographic areas.Our inability to replace these individuals upon retirement, with the required expertise could have a negative impact on the profitability of the waste brokerage and management division.
Full comparison: every changed paragraph (4)
Avalon’s golf course operations, The Grand Resort and multipurpose recreation center currently hold liquor licenses for their respective facilities. If, for some reason, any one of these facilities were to lose their liquor license, the financial performance of the golf and related operations would be adversely affected.
The waste brokerage and management division employs individuals with unique capabilities and knowledge in the handling, disposal and transportation of both hazardous and non-hazardous waste. In addition, the majority of the senior management and sales representatives have been employed by Avalon for many years and are approaching retirement age. Over the years, the waste brokerage and management division has had difficulty finding qualified individuals with the required expertise in specific geographic areas. Our inability to replace these individuals upon retirement, with the required expertise could have a negative impact on the profitability of the waste brokerage and management division.
The profitability of our golf and related operations segment depends on our ability to anticipate and react to changes in commodity costs, including food, supplies, fuel, utilities and other operating costs, including labor. We continuously monitor supply and cost trends of these commodities. Volatility in certain commodity prices and fluctuations in labor costs have adversely affected, and in the future, could adversely affect Avalon’s operating results. AnWe increasewill continuously monitor labor and commodity prices in commodityorder coststo couldmaintain havemargins anand adverse impact on ouroverall profitability.
The Federal Reserve has kept its key interest rates at elevated levels as pricing on consumer goods has remained high. Our operations are substantially affected by economic conditions, including inflation, which can impact consumer disposable income levels and spending habits. Although Avalon has not entered into any long-term fixed price contracts that could have a material adverse impact upon its financial performance in periods of inflation, adverse economic conditions could pressure Avalon’s business and operating performance and financial results may suffer. In general, management believes that rising costs resulting from inflation could be passed on to customers; however, Avalon may need to absorb all or a portion of these cost increases depending upon competitive conditions at the time.time
Management's Discussion & Analysis (MD&A)
Not available: the section could not be located automatically in both filings (non-standard layout or incorporated by reference). See the original filing. Open the filing on SEC.gov.
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
New heading “2022 Term Loan Agreement”
New heading “Performance in the first six months of 2026 compared with the first six months of 2025”
New heading “Overall Performance”
New heading “Segment Performance”
New heading “Waste Management Services Segment”
New heading “Golf and Related Operations Segment”
New heading “General Corporate Expenses”
New heading “Interest Expense”
Largest changes
“Performance in the first six months of 2026 compared with the first six months of 2025”see in full comparison
“The net operating revenues of the waste disposal brokerage and management services business were approximately $20.0 million in the first six months of 2026 compared to $17.7 million in the first six months of 2025. Continuous work of the waste disposal brokerage business increased by approximately $1.5 million between periods. Net operating revenues related to continuous work were approximately $13.9 million in the first six months of 2026 compared with $12.4 million in the first six months of 2025. …”see in full comparison
Full comparison: every changed paragraph (76)
For the threesix months ended MarchJune 31,30, 2026, Avalon utilized existing cash and cash provided by operations to meet operating needs, fund capital expenditures and make required monthly payments on our term loan facility. Cash in our project fund account were also utilized to fund capital expenditures which included the continued remodeling of The Grand Resort as further described below.
2022 Term Loan Agreement
On August 5, 2022, Avalon and certain direct and indirect wholly owned subsidiaries entered into a loan and security agreement (the “2022 Term Loan Agreement”) with Laurel Capital Corporation which provided for a $31.0 million term loan. At closing, $20.2 million of the proceeds were used to pay off and refinance amounts outstanding and associated interest under our 2019 Term Loan Agreement with Laurel Capital Corporation and $0.4 million of the proceeds were utilized to pay transaction costs. The remaining proceeds of approximately $10.4 million were deposited into a project fund account for which those proceeds are to fund future costs of remodeling and expanding Avalon’s Mortgaged property and can also be used to renovate and expand the swimming pool at Squaw Creek. At MarchJune 31,30, 2026 and December 31, 2025 the balance of “Restricted Cash” is $8.5$8.2 million and $8.7 million, respectively, and presented in the Consolidated Balance Sheets. The monies are earning nominal interest.
Borrowings under the 2022 Term Loan Agreement are secured by certain real property and related business assets as defined in the agreement. The 2022 Term Loan Agreement contains a Fixed Charge Coverage Ratio requirement of at least 1.20 tested on an annual basis on December 31 of each year. The 2022 Term Loan also contains other nonfinancial covenants, customary representations, warranties and events of default. Avalon was in compliance with the 2022 Term Loan Agreement covenants at MarchJune 31,30, 2026 and December 31, 2025.
The Company capitalized approximately $0.6 million of debt issuance costs in connection with the 2022 Term Loan Agreement in accordance with ASC Subtopic 470-50, Debt-Modifications and Extinguishments. The Company is amortizing these costs over the life of the 2022 Term Loan Agreement. In accordance with ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, these costs are presented in the Condensed Consolidated Balance Sheets as a direct reduction from the carrying amount of the term loan liability.
At both MarchJune 31,30, 2026 and December 31, 2025, approximately $3.2 million was outstanding under the Line of Credit Agreement. At MarchJune 31,30, 2026 and December 31, 2025, approximately $1.8 million was available under the Line of Credit Agreement. Outstanding borrowings under the Line of Credit Agreement bear interest at Prime Rate plus .25%. At MarchJune 31,30, 2026, the interest rate on the Line of Credit Agreement was 7.00%.
Borrowings under the Line of Credit Agreement are secured by certain business assets of the Company including accounts receivable, inventory and equipment. The Line of Credit Agreement contains a Fixed Charge Coverage Ratio requirement of at least 1.20 tested on an annual basis on December 31 of each year. The Line of Credit Agreement also contains other nonfinancial covenants, customary representations, warranties and events of default. Avalon was in compliance with the Line of Credit Agreements covenants at MarchJune 31,30, 2026 and December 31, 2025.
During the threesix months ended MarchJune 31,30, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.
During the threesix months ended MarchJune 31,30, 2026, Avalon incurred capital expenditures in the amount of $0.6$1.3 million of which $0.5$1.2 million was paid to vendors during the year.vendors. During the threesix months endedending MarchJune 31,30, 2025, Avalon incurred and paid to vendors capital expenditures in the amount of $0.5$0.7 million of which $0.4 million was paid to vendors during the year.million. For the threesix months ended MarchJune 31,30, 2026,2026 expenditures primarily related to the continued renovationremodeling of The Grand Resort andResort, the initial phase of the Squaw Creek pool renovation.renovation and a new roof on the clubhouse at the Squaw Creek property. For the threesix months ended MarchJune 31,30, 2025,2025 expenditures primarily relatedrelate to the continued renovation of The Grand Resort.
In 2026 and 2025, all hotel rooms at The GrantGrand Resort and other areas of the facility were in the process of being renovated.remodeled. Avalon’s aggregate capital expenditures in 2026 are expected to be in the range of $4.0$3.5 million to $5.0$4.5 million. Capital expenditures principally relate to hotel room renovations at The Grand Resort, building improvements and equipment purchases. Such capital expenditures are expected to be funded with cash from our project fund account and cash generated from operations
At June 30, 2026 and December 31, 2025, there was a working capital surplus of approximately $0.4 million and $0.1 million, respectively. Working capital was positively impacted by an increase in cash, accounts receivable, inventory and a decrease in accounts payable.
At March 31, 2026 there was a working capital deficit of approximately $0.7 million. At December 31, 2025, there was a working capital surplus of approximately $0.1 million. Working capital was negatively impacted primarily by an increase in accrued payroll, deferred membership dues revenue and other accrued liabilities. The negative impact was partially offset by an increase in accounts receivable, unbilled membership dues receivables, inventory and prepaid assets Accounts receivable increased to $11.8 million at March 31, 2026 compared with $9.8 million at December 31, 2025. Accounts receivable related to our waste management services segment increased approximately $0.1 million at March 31, 2026 compared with December 31, 2025 as a result of increased billings and the timing of receipt on the receivables. Accounts receivable related to the golf and related operations segment increased approximately $1.9 million at March 31, 2026 compared to December 31, 2025 due to the associated timing of annual membership renewals.
Unbilled membership dues receivable was approximately $0.7 million at March 31, 2026 compared to $0.5 million at December 31, 2025. The increase was primarily due to an increase in dues and the timing of annual membership renewals related to the Avalon Golf and Country Club and associated monthly billing over the course of the annual agreement.
Inventory was approximately $1.8 million at March 31, 2026 compared to $1.6 million at December 31, 2025. The increase is related to merchandise, food and beverage inventory related to our golf and related operations segment.
Accounts payablereceivable wasincreased approximatelyto $7.7$10.2 million at MarchJune 31,30, 2026 compared towith $8.0$9.8 million at December 31, 2025. The waste management segment decreased accounts payable by approximately $1.0 million between periods. Accounts payablereceivable related to our waste management segment decreased as a result of the associated timing of vendor payments in the ordinary course of business. Accounts payable related to our golf and related operations segment increased $0.7approximately $1.1 million at MarchJune 31,30, 2026 compared to December 31, 2025,2025 due to the associated timing of vendorannual paymentsmembership renewals. Accounts receivable related to our waste management services segment decreased approximately $0.7 million at June 30, 2026 compared to December 31, 2025 as a result of a decrease in billings and the ordinary coursetiming of business.receipts on receivables.
Deferred revenue relating toUnbilled membership dues receivable was approximately $5.1$1.0 million at MarchJune 31,30, 2026 compared to $3.5$0.5 million at December 31, 2025. The increase in deferred revenues was primarily due to the associated timing of annual membership renewals.renewals Therelated numberto the Avalon Golf and Country Club and associated monthly billing over the course of membersthe atannual March 31, 2026 was 4,616 compared to 4,500 at December 31, 2025.agreement.
Accrued payroll and other compensationInventory was approximately $1.5$1.8 million at MarchJune 31,30, 2026 compared to $1.2$1.6 million at December 31, 2025. The increase is primarily duerelated to themerchandise, associatedfood timingand beverage inventory as a result of paymentthe ofincrease certainin earnedbusiness employeeoperations incentives relating tofor our wastegolf managementand servicesrelated operations segment.
Accounts payable was approximately $6.6 million at June 30, 2026 compared to $8.0 million at December 31, 2025. Accounts payable related to our golf and related operations increased $1.0 million at June 30, 2026 compared to December 31, 2025, due to an increase in golf operations along with associated timing of vendor payments in the ordinary course of business. Accounts payable related to the waste management segment decreased $2.4 million due to a decrease in business along with the associated timing of vendor payments in the ordinary course of business.
Deferred revenue relating to membership dues was approximately $5.8 million at June 30, 2026 compared to $3.5 million at December 31, 2025. The increase in deferred revenues was primarily due to the associated timing of annual membership renewals.
Accrued payroll and other compensation was approximately $1.6 million at June 30, 2026 compared to $1.2 million at December 31, 2025. The increase is primarily due to the associated timing of employee payroll payments in the ordinary course of business related to our golf and related operations.
Waste Management Services Segment
In August 2014, the Company acquired The Grand Resort which was integrated into the golf and related operations segment. The acquisition is consistent with the Company's business strategy in that The Grand Resort provides guests with a self-contained vacation experience, offering hotel guests golf packages to all of the golf courses of the Avalon Golf and Country Club and allows its guests to utilize the facilities at each of the clubhouses. Members of the Avalon Golf and Country Club also have access to all of the amenities offered by The Grand Resort. The Grand Resort is open year-round and provides a consistent, comfortable environment where our guests can enjoy our various amenities and activities. Avalon believes that the combination of its four golf facilities and The Grand Resort will result in additional memberships in the Avalon Golf and Country Club. In addition, as of MarchJune 31,30, 2026, the company has entered into a contractual construction project commitments intended to renovate and expand the swimming pool area at Squaw Creek Country Club. The construction will consist of multiple luxurious; Las Vegas style pools. Avalon believes that the combination of its four golf facilities, The Grand Resort and the new luxurious pools at Squaw Creek will result in additional memberships in the Avalon Golf and Country Club.
Performance in the firstsecond quarter of 2026 compared with the firstsecond quarter of 2025
Net operating revenues increased to $17.7$20.9 million in the firstsecond quarter of 2026 compared with $16.1$20.3 million in the firstsecond quarter of 2025. Net operating revenues of the waste management services segment were approximately $11.5$10.1 million in the firstsecond quarter of 2026 compared to $9.7 million in the firstsecond quarter of 2025. The increase in net operating revenues of the waste management services segment was primarily a result of increasesan increase in both continuous work and event work projects during the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025. Net operating revenues of the golf and related operations segment were approximately $6.2$10.8 million in the firstsecond quarter of 2026 compared to $6.4$10.5 million in the firstsecond quarter of 2025. The decreaseincrease in net operating revenues of the golf and related operations segment was a result of aincreased decreasesales inrelated spa,to salonfood and otherbeverage revenue.during the second quarter of 2026 compared to the second quarter of 2025.
Total cost of operations related to the waste management services segment increased to $8.9$7.7 million in the firstsecond quarter of 2026 compared with $7.6$7.5 million in the firstsecond quarter of 2025. The increase in the cost of operations between periods for the waste management services segment is primarily due to an increase 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 weredecreased $5.9to $8.3 million in the firstsecond quarter of 2026 compared to $6.1$8.6 million in the firstsecond quarter of 2025. The decreases in costs are mainly attributed to a decrease in wages compared to the previouscost period.of operations between periods was primarily a result of cost cutting efforts implemented with specific focus on increasing profit margins.
Depreciation and amortization expense decreasedwas toapproximately $0.9 million in the first quarter of 2026 compared toand $1.0 million in the firstsecond quarter of 2025.2026 and 2025, respectively. The decrease is due to the lower depreciable asset base compared to the prior period.
Consolidated selling, general and administrative expenses were approximately $2.7$2.6 million in both the firstsecond quarter of 2026 compared to $2.6$2.5 million in the firstsecond quarter of 2025. The increase was primarily a result of increasesan increase in certain earned employee incentives relating to our waste management services segment.segment Interest expense was approximately $0.5 million in both the second quarter of 2026 and 2025, respectively. During the three months ended June 30, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.
Net income attributable to Avalon Holdings Corporation common shareholders was $0.9 million, or $0.23 per share, in the second quarter of 2026 compared with net income attributable to Avalon Holdings Corporation common shareholders of $0.3 million, or $0.07 per share, in the second quarter of 2025. Avalon recorded a state income tax provision in both the second quarters of 2026 and 2025, which was related entirely to the waste management and brokerage operations. Due to the recording of a full valuation allowance against the Company’s federal net deferred tax assets, the overall effective tax rate in both periods reflect taxes owed in certain U.S state jurisdictions. Avalon’s income tax benefit on the income before taxes was offset by a change in the valuation allowance. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.
Interest expense was approximately $0.5 million for both the first quarter of 2026 and the first quarter of 2025. During the three months ended March 31, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.
Net loss attributable to Avalon Holdings Corporation common shareholders was $1.2 million, or $0.32 per share, in the first quarter of 2026 compared with a net loss attributable to Avalon Holdings Corporation common shareholders of $1.5 million, or $0.38 per share, in the first quarter of 2025.
The net operating revenues of the waste management services segmentwere increasedapproximately to $11.5 million$10.1million in the firstsecond quarter of 2026 compared with $9.7 million in the firstsecond quarter of 2025. The waste management services segment includes waste disposal brokerage and management services, captive landfill management operations and salt water injection well operations.
The net operating revenues of the waste disposal brokerage and management services business were approximately $10.7$9.3 million in the firstsecond quarter of 2026 compared to $8.8$8.9 million in the firstsecond quarter of 2025. EventContinuous work in the waste disposal brokerage business increased by approximately $0.3 million between periods. Net operating revenues related to continuous work were approximately $6.9 million in the second quarter of 2026 compared with $6.6 million in the second quarter of 2025. In addition, event work net operating revenues related to multiple projects increased by approximately $0.7$0.1 million during firstsecond quarter of 2026 when compared to firstsecond quarter of 2025. Event work is defined as bid projects under contract that occurs on a one-time basis over a short period of time. Such work can fluctuate significantly from period to period. Event work net operating revenues were approximately $3.7$2.4 million in the firstsecond quarter of 2026 compared with $3.0$2.3 million in the firstsecond quarter of 2025. In addition, continuous work of the waste disposal brokerage business increased approximately $1.2 million between periods as a result of an increase in work from multiple customers. Net operating revenues related to continuous work were approximately $7.0 million in the first quarter of 2026 compared with $5.8 million in the first quarter of 2025.
The net operating revenues of the captive landfill management operations were approximately $0.8 million in both the firstsecond quarter of 2026 compared to $0.9 million in the first quarter ofand 2025. The net operating revenues of the captive landfill operations are almost entirely dependent upon the volume of waste generated by the owner of the landfill for whom Avalon manages the facility.
Costs of operations related to the waste management services segment decreasedwere toapproximately $8.9$7.7 million in the firstsecond quarter of 2026 compared with $7.6$7.5 million in the firstsecond quarter of 2025. The increase in the cost of operations between periods for the waste management segment is primarily due to thean increase in net operating revenues as these costs vary directly with the associated revenues. The overall gross margin percentage of the waste brokerage and management services business was approximately 23%24% in the firstsecond quarter of 2026 compared to 22%23% in the firstsecond quarter of 2025. The increase in the overall gross margin percentage was primarily attributable to the increasedhigher gross profit associatedgenerated with both continuous andfrom event work performedprojects during firstsecond quarter of 2026.
Income before income taxes for the waste management services segment werewas approximately $1.2$1.0 million in both the firstsecond quarter of 2026 compared with $0.9 million in the first quarterand 2025. Income before income taxes of the waste brokerage and management services business was approximately $1.2$1.0 million forin both the firstsecond quarter of 2026 compared to $0.9 million in the first quarter of and 2025. The increase in income before income taxes was primarily attributable to the increase in revenue and associated gross profit in the first quarter of 2026 compared to the first quarter of 2025. Income before income taxes of the captive landfill operations were approximately $0.1 million in both the firstsecond quarter of 2026 and 2025. During both the firstsecond quarter of 2026 and 2025, the salt water injection wells incurred a loss before income taxes of approximatelyless than $0.1 million primarily due to legal and professional costs.costs incurred relating to Avalon’s appeal and mandamus processes.
Net operating revenues of the golf and related operations segment were approximately $6.2$10.8 million in the firstsecond quarter of 2026 compared to $6.4$10.5 million in the firstsecond quarter of 2025. Avalon’s golf and related operations segment consists of the operation and management of four golf courses and related country clubs which provide dining and banquet facilities, a medical spa, dermatology center, a hotel, The Grand Resort,hotel which provides lodging, dining, banquet and conference facilities and other resort related amenities along withand a multipurpose recreation center.
Food, beverage and merchandise sales were approximately $2.0 million in both the first quarter of 2026 and 2025.
Other net operating revenues related to the golf and related operations were approximately $4.1 million in the first quarter of 2026 compared to $4.4 million in the first quarter of 2025. Membership dues revenue was approximately $1.8 million in both the first quarter of 2026 and 2025. Net operating revenues related to room rental was approximately $1.1 million in both the first quarter of 2026 and 2025. Other revenues consisting of athletic, fitness, salon and spa related activities were approximately $1.1 million in the first quarter of 2026 compared to $1.4 million in the first quarter of 2025. The decrease between periods was primarily due to a decrease in salon and spa revenue. Greens fees and associated cart rentals were approximately $0.1 million in both the first quarter of 2026 and 2025. Due to adverse weather conditions, net operating revenues relating to the golf courses, which are located in northeast Ohio and western Pennsylvania, were minimal during the first three months of 2026 and 2025.
Total cost of operations for the golf and related operations segment were $5.9 million in the first quarter of 2026 compared to $6.1 million in the first quarter of 2025. Cost of food, beverage and merchandise was approximately $1.0 million in both the first quarter of and 2026 and 2025. The cost of food, beverage and merchandise sales was approximately 49% of associated revenue in the first quarter of 2026 compared to 50% in the first quarter of 2025. Golf and related operations operating costs was approximately $4.9 million in both the first quarter of 2026 compared to $5.1 million in the first quarter of 2025. The decreases in costs are mainly attributed to a decrease in wages compared to the previous period.
TheFood, golfbeverage and relatedmerchandise operationssales recordedwere aapproximately loss before income taxes of $1.0$4.1 million in the firstsecond quarter of 2026 compared withto a loss before income taxes of $1.1$3.8 million in the firstsecond quarter of 2025. TheFood, changebeverage and merchandise sales increased between periods was primarilyas a result of a decreasean increase in costsbusiness relatedactivity toat employeeboth wages.The Grand Resort and country clubs.
Other golf and related operation revenues was approximately $6.7 million in the second quarter of 2026 compared to $6.8 million in the second quarter of 2025. Membership dues revenue was approximately $1.8 million in both the second quarter of 2026 and 2025. Net operating revenues related to room rental were approximately $2.2 million in the second quarter of 2026 compared to $2.0 million in the second quarter of 2025. The increase in room revenue was a result of an increase in both occupancy and the average room rates when compared to the prior period. Greens fees and associated cart rentals were approximately $1.2 million in the second quarter of 2026 compared to $1.1 million in the second quarter of 2025. The increase in green fees and associated cart rental was a result of an increase in rounds played in the second quarter of 2026 compared to the second quarter of 2025. Other revenues consisting of athletic, fitness, salon and spa related activities were approximately $1.5 million in the second quarter of 2026 compared to $1.9 million in the second quarter of 2025.
Total cost of operations for the golf and related operations segment were $8.3 million in the second quarter of 2026 compared with $8.6 million in the second quarter of 2025. Cost of food, beverage and merchandise was approximately $1.8 million in the second quarter of 2026 compared to $1.7 million in the second quarter of 2025. The increase in cost of food is a result of increased food, beverage and merchandise sales in the second quarter of 2026 compared to the second quarter of 2025. The cost of food, beverage and merchandise sales was approximately 43% of associated revenue in the second quarter of 2026 compared to 46% in the second quarter of 2025. Golf and related operations operating costs decreased to approximately $6.6 million in the second quarter of 2026 compared with $6.9 million in the second quarter of 2025. The decrease in operating costs between periods is primarily related to a decrease in employee related costs in the second quarter of 2026 compared to the second quarter of 2025.
The golf and related operations recorded income before income taxes of $1.2 million in the second quarter of 2026 compared with income before income taxes of $0.6 million in the second quarter of 2025. The change between periods was primarily a result of a increase in business activity in the second quarter of 2026 compared to the second quarter of 2025.
General corporate expenses were $0.9 million in both the firstsecond quarter of 2026 and second quarter of 2025.
Interest expense was approximately $0.5 million forin both the firstsecond quarter of 2026 and second quarter of 2025. During the three months ended MarchJune 31,30, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.
Net Income
Net income attributable to Avalon Holdings Corporation common shareholders was $0.9 million in the second quarter of 2026 compared to net income attributable to Avalon Holdings Corporation common shareholders of $0.3 million in the second quarter of 2025. Avalon recorded a state income tax provision in both the second quarter of 2026 and 2025, which was related entirely to the waste management and brokerage operations. Due to the recording of a full valuation allowance against the Company’s federal net deferred tax assets, the overall effective tax rate in both periods reflect taxes owed in certain U.S state jurisdictions. Avalon’s income tax on the income before taxes was offset by a change in the valuation allowance. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.
Performance in the first six months of 2026 compared with the first six months of 2025
Overall Performance
Net operating revenues increased to $38.6 million in the first six months of 2026 compared with $36.3 million in the first six months of 2025. Net operating revenues of the waste management services segment were approximately $21.6 million in the first six months of 2026 compared to $19.4 million in the first six months of 2025. The increase in net operating revenues of the waste management services segment was a primarily a result of an increase in both continuous and event work during the first six months of 2026 compared to the first six months of 2025. Net operating revenues of the golf and related operations segment were approximately $16.9 million in both the first six months of 2026 and 2025.
Total cost of operations related to the waste management services segment increased to $16.6 million in the first six months of 2026 compared with $15.1 million in the first six months of 2025. The increase in the cost of operations between periods for the waste management services segment is primarily due to an increase 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 decreased to $14.2 million in the first six months of 2026 compared to $14.7 million in the first six months of 2025. The decrease in costs as a percentage of revenue was primarily a result of cost cutting efforts implements with specific focus on increasing profit margins.
Depreciation and amortization expense was approximately $1.9 million in both the first six months of 2026 and 2025.
Consolidated selling, general and administrative expenses were approximately $5.3 million in the first six months of 2026 compared to $5.0 million in the first six months of 2025. The increase was primarily a result of a decrease in certain earned employee incentives relating to our waste management services segment Interest expense was approximately $1.0 million in both the first six months of 2026 and the first six months of 2025. During the six months ended June 30, 2026 and 2025, the weighted average interest rate on outstanding borrowings was 6.10% and 6.17%, respectively.
Net loss attributable to Avalon Holdings Corporation common shareholders was $0.3 million, or $0.09 per share, in the first six months of 2026 compared with a net loss attributable to Avalon Holdings Corporation common shareholders of $1.2 million, or $0.31 per share, in the first six months of 2025.
Segment Performance
Segment performance should be read in conjunction with Note 13 to the Condensed Consolidated Financial Statements.
Waste Management Services Segment
The net operating revenues of the waste management services segment increased to $21.6 million in the first six months of 2026 compared with $19.4 million in the first six months of 2025.
AWX insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding AWX (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 70,810 | $176.3K | 0.0% | Reduced 7% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 17,855 | $44.5K | 0.0% | New position |