Treasurer's Report

November/December, 2005
By Tong Lee

Waugh and Associates completed its annual audit of USATT and issued its report on September 19, 2005. The report consists of a management letter, financial statements ending December 31, and IRS Form 990 for filing USATT’s tax return. Form 990 will be available online.

Revenues totaled $1,244,000 against expenses of $1,155,000, resulting in a net income of $90,000. The net income would have been higher by an additional $25,000 if not for arbitration expenses. Nevertheless, this exceeded the projected of $48,000 in the 2004 budget by $42,000. Net assets increased by $90,000 from $294,000 to $384,000.

The balance sheet shows that USATT had current assets of $447,000 and long-term assets in property and equipment of $119,000 for a total of $566,000. Current liabilities total $181,000 and net assets total $385,000. The $385,000 is a liquid asset and can be considered an equity of USATT that the Board could use for to carry out its mission, if it so chooses.

1. Although $65,000 was collected from 3-year memberships from adults, juniors and clubs, only $44,000 was recognized. The $22,000 that was deferred is cash and will be recognized over the next three years.

2. Total membership fees totaled $310,000 and exceeded the projected amount of $286,000 by $24,000.

3. The Killerspin Open and Pro Tour U.S. suffered a loss of $12,000. However, if arbitration expenses associated with these events – $6,000 in legal expenses and $19,000 of $80,000 for convention hall expenses claimed by USATT, but not awarded by the arbitration – were excluded, there was a profit of $13,000 from operations. The U.S. Nationals showed a profit of $18,000. The three primary sources of revenue are from membership fees, USOC and the U.S. tournaments – the Open, the Nationals and the Open Teams that will be re-introduced after nearly 10 years. The 2004 combined income from operations for the Open and Nationals shows that our tournaments are not run profitably and more attention needs to be directed to improve the profitability of these events by getting more sponsorship revenue.

4. USOC revenues including $41,000 of VIK accounted for $301,000 or 24.2% total revenue. It was 20.9% if VIK is excluded. Spending of elite athlete programs and associated elite development totaled $271,000 representing 21.8% of total revenue, 90.0% of total USOC funding and 104.2% of USOC cash funding.

2. 2005 U.S. Open Results
The 2005 U.S. Open generated revenues of $230,649 against expenses of $261,607, resulting in an operating loss of $30,958. It should be noted that in January 2005, USATT committed to a Pro Tour that it was obligated to run under the Licensing and Sponsorship Agreement (LSA), and under which Killerspin would pay for TV production, sponsorship fees and other expenses. As a result of USATT’s declaration of a breach of contract by Killerspin, there was a loss of sponsorship revenue and an increase in expenses, including $49,472 for TV production. There would have been a profit had the U.S. Open-Pro Tour been run under LSA.

In 2005, the Association incurred $90,813 in expenses associated with the continuation of the arbitration of the Killerspin U.S. Open and Pro Tour that began in 2004. USATT is negotiating with its insurance carrier for partial reimbursement of these expenses. Depending on the amount reimbursement by the insurance carrier, the overall financial results for 2005 may be significantly impacted. Financial details of the 2005 U.S. Open will later be made available to the membership.