Town Sports International Holdings, Inc. (“TSI”) (NASDAQ: CLUB)
today reported results for the third
quarter of 2017.
TSI’s earnings for the third quarter of 2017 are summarized
below. To become fully apprised of our results, shareholders are
urged to read our Form 10-Q for the quarterly period ended
September 30, 2017 posted at http://investor.mysportsclubs.com. The limited information that follows in this
press release is not adequate for making informed investment
decisions. The unaudited condensed consolidated Statements of
Operations are included below.
Dollar amounts in this release are in thousands, except for
share and per share amounts. Amounts are unaudited.
Condensed Consolidated Statements of
Operations
Third Quarter 2017 2016
Revenues: Club operations $ 97,022 $ 96,846 Fees and other
1,619 1,688 98,641 98,534
Operating
Expenses: Payroll and related 37,072 37,643 Club operating
46,087 45,952 General and administrative 5,380 5,806 Depreciation
and amortization 9,874 11,015 Impairment of fixed assets 6,497
742 104,910 101,158 Operating loss
(6,269 ) (2,624 ) Loss on extinguishment of debt — 604 Interest
expense 3,192 3,177 Interest income (36 ) (2 ) Equity in earnings
of investee (77 ) (55 ) Loss before provision (benefit) for
corporate income taxes (9,348 ) (6,348 ) Provision (benefit) for
corporate income taxes 3,928 (842 ) Net loss $ (13,276 ) $
(5,506 ) Basic and diluted loss per share $ (0.50 ) $ (0.21
) Weighted average number of shares used in calculating loss
per share 26,683,425 25,748,400
Reconciliation of Net Loss to EBITDA
and Adjusted EBITDA
Third Quarter 2017 2016
Net loss $ (13,276 ) $ (5,506 ) Interest expense, net of interest
income 3,156 3,175 Provision (benefit) for corporate income taxes
3,928 (842 ) Depreciation and amortization 9,874 11,015
EBITDA 3,682 7,842 Loss on extinguishment of debt — 604
Impairment of fixed assets 6,497 742 Separation expense related to
headcount reductions and former executive officers 676 1,657 Net
costs related to closing clubs and other cost savings initiatives
188 190 Adjusted EBITDA $ 11,043 $ 11,035
Non-GAAP Financial Measures - EBITDA and Adjusted
EBITDA
EBITDA consists of net income (loss) plus interest expense (net
of interest income), provision (benefit) for corporate income
taxes, and depreciation and amortization. Adjusted EBITDA is TSI’s
EBITDA excluding certain items, such as any fixed asset or goodwill
impairments, gain (loss) on extinguishment of debt, separation
expense related to headcount reduction and former executive
officers, and net costs related to closing clubs and other
cost-savings initiatives. EBITDA is not a measure of liquidity or
financial performance presented in accordance with GAAP. EBITDA, as
we define it, may not be identical to similarly titled measures
used by some other companies.
EBITDA has material limitations as an analytical tool and should
not be considered in isolation or as a substitute for net income
(loss), operating income (loss), cash flows from operating
activities or other cash flow data prepared in accordance with
GAAP. The items excluded from EBITDA, but included in the
calculation of reported net income and operating income, are
significant and must be considered in performing a comprehensive
assessment of our performance.
Investors or prospective investors in TSI regularly request
EBITDA as a supplemental analytical measure to, and in conjunction
with, our GAAP financial data. We understand that these investors
use EBITDA, among other things, to assess our ability to service
our existing debt and to incur debt in the future, to evaluate our
executive compensation programs, to assess our ability to fund our
capital expenditure program, and to gain insight into the manner in
which TSI’s management and board of directors analyze our
performance. We believe that investors find the inclusion of EBITDA
in our press releases to be useful and helpful to them.
Our management and board of directors also use EBITDA as a
supplemental measure to our GAAP financial data for purposes
broadly similar to those used by investors.
Adjusted EBITDA has similar uses and limitations as EBITDA. We
have excluded additional items in the calculation of Adjusted
EBITDA because management believes that this metric is useful in
making period to period comparisons of our performance. We do not,
and investors should not, place undue reliance on EBITDA or
Adjusted EBITDA as a measure of our performance.
Forward-Looking Statements
This release may contain “forward-looking” statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, without limitation, statements regarding future
financial results and performance, potential club closures, results
of cost-savings initiatives, and other statements that are
predictive in nature or depend upon or refer to events or
conditions, or that include words such as “may,” “should,” or the
negative version of these words or other comparable words.
Forward-looking statements speak only as of the date when made, and
TSI undertakes no obligation to update these statements in light of
subsequent events or developments. Actual results may differ
materially from anticipated results or outcomes discussed in any
forward-looking statement.
About Town Sports International Holdings, Inc.
Town Sports International Holdings, Inc. is one of the leading
owners and operators of fitness clubs in the Northeast and
mid-Atlantic regions of the United States and, through its
subsidiaries, owned and operated 164 fitness clubs as of
September 30, 2017, comprising 118 clubs in the New York
metropolitan market (102 of which were under the “New York Sports
Clubs” brand name and 16 of which were under the “Lucille Roberts”
brand name), 28 clubs in the Boston metropolitan region under our
“Boston Sports Clubs” brand name, 10 clubs (one of which is
partly-owned) in the Washington, D.C. metropolitan region under our
“Washington Sports Clubs” brand name, five clubs in the
Philadelphia metropolitan region under our “Philadelphia Sports
Clubs” brand name, and three clubs in Switzerland. These clubs
collectively served approximately 588,000 members as of
September 30, 2017.
Until further notice, TSI will not be hosting conference calls
to discuss quarterly results. TSI intends to continue to issue
press releases reporting quarterly earnings.
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version on businesswire.com: http://www.businesswire.com/news/home/20171026006440/en/
Town Sports International Holdings, Inc.Investor
Contact:917-765-9974Investor.relations@town-sports.com
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