HAMPTON, N.H., Feb. 22, 2018 /PRNewswire/ -- Planet
Fitness, Inc. (NYSE: PLNT) today reported financial results for its
fourth quarter and fiscal year ended December 31, 2017 and
announced full year 2018 outlook.
Fourth Quarter Fiscal 2017 Highlights
- Total revenue increased from the prior year period by 15.1% to
$134.0 million.
- System-wide same store sales increased 11.6%.
- Net loss attributable to Planet Fitness, Inc. was $3.5 million, or $0.04 per diluted share, which includes the net
negative impact of approximately $17.2
million related to the remeasurement of the Company's
deferred tax assets and tax benefit arrangements due to recent tax
reform, compared to net income attributable to Planet Fitness, Inc.
of $10.6 million, or $0.18 per diluted share in the prior year
period.
- Net income was $0.8 million,
which includes the net negative impact of approximately
$17.2 million related to the
remeasurement of the Company's deferred tax assets and tax benefit
arrangements due to recent tax reform, compared to $21.9 million in the prior year period.
- Adjusted net income(1) increased 19.1% to
$23.5 million, or $0.24 per diluted share, compared to $19.7 million, or $0.20 per diluted share in the prior year
period.
- Adjusted EBITDA(1) increased 16.0% to $51.2 million from $44.1
million in the prior year period.
- 88 new Planet Fitness stores were opened system-wide during the
period, bringing system-wide total stores to 1,518 at December 31, 2017.
Fiscal Year 2017 Highlights
- Total revenue increased from the prior year by 13.7% to
$429.9 million.
- System-wide same store sales increased 10.2%.
- Net income attributable to Planet Fitness, Inc. was
$33.1 million, or $0.42 per diluted share, which includes the net
negative impact of approximately $17.2
million related to the remeasurement of the Company's
deferred tax assets and tax benefit arrangements due to recent tax
reform, compared to $21.5 million, or
$0.50 per diluted share, in the prior
year period.
- Net income was $55.6 million,
which includes the net negative impact of approximately
$17.2 million related to the
remeasurement of the Company's deferred tax assets and tax benefit
arrangements due to recent tax reform, compared to $71.2 million in the prior year.
- Adjusted net income(1) increased 21.8% to
$82.3 million, or $0.84 per diluted share, compared to $67.6 million, or $0.69 per diluted share in the prior year.
- Adjusted EBITDA(1) increased 22.7% to $184.7 million from $150.6
million in the prior year.
- 210 new Planet Fitness stores were opened system-wide during
the year, bringing system-wide total stores to 1,518 at
December 31, 2017.
(1) Adjusted net income and Adjusted EBITDA are non-GAAP
measures. For reconciliations of Adjusted EBITDA and Adjusted net
income to U.S. GAAP ("GAAP") net income see "Non-GAAP Financial
Measures" accompanying this release.
Christopher Rondeau, Chief
Executive Officer, commented, "We completed our 11th consecutive
year of positive system-wide same store sales growth with a fourth
quarter gain of 11.6%, our largest quarterly percentage increase of
2017. Our business has continued to accelerate, which is a
testament to the growing strength of our brand and the appeal of
our affordable, non-intimidating fitness offering, especially with
casual and first-time gym users. With the addition of 1.7 million
net new members and a record 210 new store openings system-wide in
2017, we've continued to build on our leading market share position
through effective national and local advertising programs and
expanding our geographic footprint in new and existing markets. We
begin the New Year with great brand momentum and numerous
opportunities to further grow our business in the near and
long-term, including significant store development opportunities,
increased brand and marketing investments, and using technology to
enhance member experiences."
Operating Results for the Fourth Quarter Ended
December 31, 2017
For the fourth quarter of 2017, total revenue increased
$17.6 million or 15.1% to
$134.0 million from $116.4 million in the prior year period. By
segment:
- Franchise segment revenue, which includes commission income,
increased $7.9 million or 24.6% to
$40.0 million from $32.1 million in the prior year period;
- Corporate-owned stores segment revenue increased $2.3 million or 8.7% to $28.2 million from $26.0
million in the prior year period; and
- Equipment segment revenue increased $7.5
million or 12.8% to $65.8
million from $58.3
million.
System-wide same store sales increased 11.6%. By segment,
franchisee-owned same store sales increased 11.9% and
corporate-owned same store sales increased 5.6%.
For the fourth quarter of fiscal 2017, net income was
$0.8 million and net income
attributable to Planet Fitness Inc. was a loss of $3.5 million, or $0.04 per diluted share, compared to net income
of $21.9 million and net income
attributable to Planet Fitness Inc. of $10.6
million, or $0.18 per diluted
share in the prior year period. Both amounts in 2017 include the
net negative impact of approximately $17.2
million related to the remeasurement of the Company's
deferred tax assets and tax benefit arrangements due to recent tax
reform. Adjusted net income (see "Non-GAAP Financial Measures")
increased 19.1% to $23.5 million, or
$0.24 per diluted share, from
$19.7 million, or $0.20 per diluted share, in the prior year
period. Adjusted net income has been adjusted to reflect a
normalized federal income tax rate of 39.5% for the current and
comparable prior year period and excludes certain non-cash and
other items that we do not consider in the evaluation of ongoing
operational performance (see "Non-GAAP Financial
Measures").
Adjusted EBITDA, which is defined as net income before interest,
taxes, depreciation and amortization, adjusted for the impact of
certain non-cash and other items that we do not consider in the
evaluation of ongoing operational performance (see "Non-GAAP
Financial Measures"), increased 16.0% to $51.2 million from $44.1
million in the prior year period.
Segment EBITDA represents our Total Segment EBITDA broken down
by the Company's reportable segments. Total Segment EBITDA is equal
to EBITDA, which is defined as net income before interest, taxes,
depreciation and amortization (see "Non-GAAP Financial
Measures").
- Franchise segment EBITDA increased $6.1
million or 23.4% to $32.0
million driven by royalties from both new stores and higher
same store sales;
- Corporate-owned stores segment EBITDA increased $0.7 million or 6.5% to $11.3 million driven by higher same store sales
and annual fee revenue, partially offset by higher pre-opening
costs associated with four corporate-owned stores opened during the
fourth quarter; and
- Equipment segment EBITDA decreased $0.2
million or 1.0% to $15.0
million. In the fourth quarter of 2016, equipment segment
EBITDA included a gain of $1.8
million recorded in connection with the write-off of a
previously accrued equipment discount.
Operating Results for the Fiscal Year Ended December 31,
2017
For the fiscal year ended December 31, 2017, total revenue
increased $51.7 million or 13.7% to
$429.9 million from $378.2 million in the prior year. By segment:
- Franchise segment revenue, which includes commission income,
increased $33.7 million or 28.9% to
$150.2 million from $116.5 million in the prior year;
- Corporate-owned stores segment revenue increased $7.4 million or 7.1% to $112.1 million from $104.7
million in the prior year; and
- Equipment segment revenue increased $10.6 million or 6.8% to $167.7 million from $157.0
million in the prior year.
System-wide same store sales increased 10.2% from the prior
year. By segment, franchisee-owned same store sales increased 10.5%
and corporate-owned same store sales increased 4.9% from the prior
year.
For full year fiscal 2017, net income was $55.6 million and net income attributable to
Planet Fitness Inc. was $33.1
million, or $0.42 per diluted
share, compared to net income of $71.2
million and net income attributable to Planet Fitness, Inc.
of $21.5 million, or $0.50 per diluted share in the prior year. Both
amounts in 2017 include the net negative impact of approximately
$17.2 million related to the
remeasurement of the Company's deferred tax assets and tax benefit
arrangements due to recent tax reform. Adjusted net income
(see "Non-GAAP Financial Measures") increased 21.8% to $82.3 million, or $0.84 per diluted share, from $67.6 million, or $0.69 per diluted share, in the prior year.
Adjusted net income has been adjusted to reflect a normalized
federal income tax rate of 39.5% for the current year and
comparable prior year period and excludes certain non-cash and
other items that we do not consider in the evaluation of ongoing
operational performance (see "Non-GAAP Financial Measures").
Adjusted EBITDA (see "Non-GAAP Financial Measures") increased
$34.1 million or 22.7% to
$184.7 million in 2017 from
$150.6 million in the prior year.
Segment EBITDA represents our Total Segment EBITDA broken down
by the Company's reportable segments. Total Segment EBITDA is equal
to EBITDA, which is defined as net income before interest, taxes,
depreciation and amortization (see "Non-GAAP Financial
Measures").
- Franchise segment EBITDA increased $29.2
million or 30.0% to $126.5
million;
- Corporate-owned stores segment EBITDA increased $6.0 million or 14.7% to $46.9 million; and
- Equipment segment EBITDA increased $2.1
million or 5.8% to $38.5
million. In 2016, equipment segment EBITDA included a gain
of $1.8 million recorded in
connection with the write-off of a previously accrued equipment
discount.
Share Repurchase Program
The Company announced that its Board of Directors approved an
increase of $80 million to its
current $20 million share repurchase
program, bringing the total authorized amount available for
repurchase to $100 million. The
timing of the purchases and the amount of stock repurchased is
subject to the Company's discretion and will depend on market and
business conditions, the Company's general working capital needs,
stock price, applicable legal requirements and other factors. Our
ability to repurchase shares at any particular time is also subject
to continued compliance with the terms of our credit agreement.
Purchases may be effected through one or more open market
transactions, privately negotiated transactions, transactions
structured through investment banking institutions, or a
combination of the foregoing. Planet Fitness is not obligated under
the program to acquire any particular amount of stock and can
suspend or terminate the program at any time.
2018 Outlook
For the year ending December 31, 2018, the Company
expects:
- Total revenue increase of approximately 20%;
- System-wide same store sales growth in the high single digit
percentage range; and
- Adjusted net income and adjusted net income per diluted share
to increase approximately 40%.
Presentation of Financial Measures
Planet Fitness, Inc. (the "Company") was formed in March 2015 for the purpose of facilitating the
initial public offering (the "IPO") and related recapitalization
transactions that occurred in August
2015, and in order to carry on the business of Pla-Fit
Holdings, LLC ("Pla-Fit Holdings") and its subsidiaries. As the
sole managing member of Pla-Fit Holdings, the Company operates and
controls all of the business and affairs of Pla-Fit Holdings, and
through Pla-Fit Holdings, conducts its business. As a result, the
Company consolidates Pla-Fit Holdings' financial results and
reports a non-controlling interest related to the portion of
Pla-Fit Holdings not owned by the Company. The financial results in
periods prior to the IPO and related recapitalization transactions
are of Pla-Fit Holdings, as the predecessor to the Company for
accounting and reporting purposes. Accordingly, these historical
results do not purport to reflect what the results of operations of
the Company or Pla-Fit Holdings would have been had the IPO and
related recapitalization transactions occurred prior to
August 2015.
The financial information presented in this release includes
non-GAAP financial measures such as EBITDA, Segment EBITDA,
Adjusted EBITDA, Adjusted net income and Adjusted net income per
share, diluted to provide measures that we believe are useful to
investors in evaluating the Company's performance. These non-GAAP
financial measures are supplemental measures of the Company's
performance that are neither required by, nor presented in
accordance with GAAP. These financial measures should not be
considered as substitutes for GAAP financial measures such as net
income or any other performance measures derived in accordance
with, GAAP. In addition, in the future, the Company may incur
expenses or charges such as those added back to calculate Adjusted
EBITDA, Adjusted net income and Adjusted net income per share,
diluted. The Company's presentation of Adjusted EBITDA, Adjusted
net income and Adjusted net income per share, diluted should not be
construed as an inference that the Company's future results will be
unaffected by similar amounts or other unusual or nonrecurring
items. See the tables at the end of this press release for a
reconciliation of EBITDA, Adjusted EBITDA, Total Segment EBITDA,
Adjusted net income, and Adjusted net income per share, diluted, to
their most directly comparable GAAP financial measure.
The non-GAAP financial measures used in our full-year outlook
will differ from net income and net income per share, diluted,
determined in accordance with GAAP in ways similar to those
described in the reconciliations at the end of this press release.
We do not provide guidance for net income or net income per share,
diluted, determined in accordance with GAAP or a reconciliation of
guidance for Adjusted net income and Adjusted net income per share,
diluted, to the most directly comparable GAAP measure because we
are not able to predict with reasonable certainty the amount or
nature of all items that will be included in our net income and net
income per share, diluted, for the year ended December 31, 2018. These items are uncertain,
depend on many factors and could have a material impact on our net
income and net income per share, diluted, for the year ended
December 31, 2018.
Investor Conference Call
The Company will hold a conference call at 4:30 pm (ET) on February
22, 2018 to discuss the news announced in this press
release. A live webcast of the conference call will be accessible
at www.planetfitness.com via the "Investor Relations" link.
The webcast will be archived on the website for one year.
About Planet Fitness
Founded in 1992 in Dover, N.H.,
Planet Fitness is one of the largest and fastest-growing
franchisors and operators of fitness centers in the United States by number of members and
locations. As of December 31, 2017,
Planet Fitness had approximately 10.6 million members and more than
1,500 stores in all 50 states, the District of Columbia, Puerto Rico, Canada, the Dominican Republic and Panama. The Company's mission is to enhance
people's lives by providing a high-quality fitness experience in a
welcoming, non-intimidating environment, which we call the
Judgement Free ZoneĀ®. More than 95% of Planet Fitness stores are
owned and operated by independent business men and women.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the federal securities laws, which involve risks and
uncertainties. Forward-looking statements include the
Company's statements with respect to expected future performance
presented under the heading "2018 Outlook," those attributed to the
Company's Chief Executive Officer in this press release and other
statements, estimates and projections that do not relate solely to
historical facts.. Forward-looking statements can be identified by
words such as "expect," "goal," plan," "will," "strategy" and
similar references to future periods, although not all
forward-looking statements include these identifying words.
Forward-looking statements are not assurances of future
performance. Instead, they are based only on the Company's current
beliefs, expectations and assumptions regarding the future of the
business, future plans and strategies, projections, anticipated
events and trends, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside of the
Company's control. Actual results and financial condition may
differ materially from those indicated in the forward-looking
statements. Important factors that could cause our actual results
to differ materially include risks and uncertainties associated
with competition in the fitness industry, the Company's and
franchisees' ability to attract and retain new members, changes in
consumer demand, changes in equipment costs, the Company's ability
to expand into new markets domestically and internationally,
operating costs for the Company and franchisees generally,
availability and cost of capital for franchisees, acquisition
activity, developments and changes in laws and regulations, our
substantial indebtedness, our corporate structure and tax
receivable agreements, general economic conditions and the other
factors described in the Company's annual report on Form 10-K for
the year ended December 31, 2016, and
the Company's other filings with the Securities and Exchange
Commission. In light of the significant risks and uncertainties
inherent in forward-looking statements, investors should not place
undue reliance on forward-looking statements, which reflect the
Company's views only as of the date of this press release. Except
as required by law, neither the Company nor any of its affiliates
or representatives undertake any obligation to provide additional
information or to correct or update any information set forth in
this release, whether as a result of new information, future
developments or otherwise.
Planet Fitness,
Inc. and subsidiaries Consolidated Statements of
Operations (Unaudited) (Amounts in
thousands, except per share amounts)
|
|
|
|
|
For the quarter
ended
December 31,
|
|
|
For the year
ended
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise
|
|
$
|
37,498
|
|
|
$
|
27,332
|
|
|
$
|
131,983
|
|
|
$
|
97,374
|
|
Commission
income
|
|
|
2,504
|
|
|
|
4,776
|
|
|
|
18,172
|
|
|
|
19,114
|
|
Corporate-owned
stores
|
|
|
28,228
|
|
|
|
25,965
|
|
|
|
112,114
|
|
|
|
104,721
|
|
Equipment
|
|
|
65,798
|
|
|
|
58,346
|
|
|
|
167,673
|
|
|
|
157,032
|
|
Total
revenue
|
|
|
134,028
|
|
|
|
116,419
|
|
|
|
429,942
|
|
|
|
378,241
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
50,871
|
|
|
|
44,952
|
|
|
|
129,266
|
|
|
|
122,317
|
|
Store
operations
|
|
|
15,318
|
|
|
|
14,448
|
|
|
|
60,657
|
|
|
|
60,121
|
|
Selling, general and
administrative
|
|
|
17,710
|
|
|
|
13,539
|
|
|
|
60,369
|
|
|
|
50,008
|
|
Depreciation and
amortization
|
|
|
7,779
|
|
|
|
8,375
|
|
|
|
31,761
|
|
|
|
31,502
|
|
Other loss
(gain)
|
|
|
73
|
|
|
|
(963)
|
|
|
|
353
|
|
|
|
(1,369)
|
|
Total operating costs
and expenses
|
|
|
91,751
|
|
|
|
80,351
|
|
|
|
282,406
|
|
|
|
262,579
|
|
Income from
operations
|
|
|
42,277
|
|
|
|
36,068
|
|
|
|
147,536
|
|
|
|
115,662
|
|
Other expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(8,572)
|
|
|
|
(8,306)
|
|
|
|
(35,283)
|
|
|
|
(27,125)
|
|
Other income
(expense), net
|
|
|
316,771
|
|
|
|
1,343
|
|
|
|
316,928
|
|
|
|
1,371
|
|
Total other income
(expense), net
|
|
|
308,199
|
|
|
|
(6,963)
|
|
|
|
281,645
|
|
|
|
(25,754)
|
|
Income before income
taxes
|
|
|
350,476
|
|
|
|
29,105
|
|
|
|
429,181
|
|
|
|
89,908
|
|
Provision for income
taxes
|
|
|
349,647
|
|
|
|
7,157
|
|
|
|
373,580
|
|
|
|
18,661
|
|
Net income
|
|
|
829
|
|
|
|
21,948
|
|
|
|
55,601
|
|
|
|
71,247
|
|
Less net income
attributable to non-controlling interests
|
|
|
4,282
|
|
|
|
11,373
|
|
|
|
22,455
|
|
|
|
49,747
|
|
Net income (loss)
attributable to Planet Fitness, Inc.
|
|
$
|
(3,453)
|
|
|
$
|
10,575
|
|
|
$
|
33,146
|
|
|
$
|
21,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of Class A common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.04)
|
|
|
$
|
0.19
|
|
|
$
|
0.42
|
|
|
$
|
0.50
|
|
Diluted
|
|
$
|
(0.04)
|
|
|
$
|
0.18
|
|
|
$
|
0.42
|
|
|
$
|
0.50
|
|
Weighted-average
shares of Class A common stock
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
86,386
|
|
|
|
54,933
|
|
|
|
78,910
|
|
|
|
43,300
|
|
Diluted
|
|
|
86,386
|
|
|
|
98,598
|
|
|
|
78,972
|
|
|
|
43,305
|
|
Planet Fitness,
Inc. and subsidiaries
Consolidated Balance Sheets
(Unaudited) (Amounts in thousands, except per share
amounts)
|
|
|
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
Assets
|
|
2017
|
|
|
2016
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
113,080
|
|
|
$
|
40,393
|
|
Accounts receivable,
net of allowance for bad debts of $32 and $687 at
December 31, 2017 and 2016,
respectively
|
|
|
37,272
|
|
|
|
26,873
|
|
Due from related
parties
|
|
|
3,020
|
|
|
|
2,864
|
|
Inventory
|
|
|
2,692
|
|
|
|
1,802
|
|
Restricted assets ā
NAF
|
|
|
499
|
|
|
|
3,074
|
|
Prepaid
expenses
|
|
|
3,929
|
|
|
|
3,591
|
|
Other
receivables
|
|
|
9,562
|
|
|
|
7,935
|
|
Income tax
receivable
|
|
|
6,947
|
|
|
|
4,693
|
|
Total current
assets
|
|
|
177,001
|
|
|
|
91,225
|
|
Property and
equipment, net
|
|
|
83,327
|
|
|
|
61,238
|
|
Intangible assets,
net
|
|
|
235,657
|
|
|
|
253,862
|
|
Goodwill
|
|
|
176,981
|
|
|
|
176,981
|
|
Deferred income
taxes
|
|
|
407,782
|
|
|
|
410,407
|
|
Other assets,
net
|
|
|
11,717
|
|
|
|
7,729
|
|
Total
assets
|
|
$
|
1,092,465
|
|
|
$
|
1,001,442
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current maturities of
long-term debt
|
|
$
|
7,185
|
|
|
$
|
7,185
|
|
Accounts
payable
|
|
|
28,648
|
|
|
|
28,507
|
|
Accrued
expenses
|
|
|
18,590
|
|
|
|
19,190
|
|
Equipment
deposits
|
|
|
6,498
|
|
|
|
2,170
|
|
Restricted liabilities
ā NAF
|
|
|
490
|
|
|
|
134
|
|
Deferred revenue,
current
|
|
|
19,083
|
|
|
|
17,780
|
|
Payable pursuant to
tax benefit arrangements, current
|
|
|
31,062
|
|
|
|
8,072
|
|
Other current
liabilities
|
|
|
474
|
|
|
|
235
|
|
Total current
liabilities
|
|
|
112,030
|
|
|
|
83,273
|
|
Long-term debt, net
of current maturities
|
|
|
696,576
|
|
|
|
702,003
|
|
Deferred rent, net of
current portion
|
|
|
6,127
|
|
|
|
5,108
|
|
Deferred revenue, net
of current portion
|
|
|
8,440
|
|
|
|
8,351
|
|
Deferred tax
liabilities
|
|
|
1,629
|
|
|
|
1,238
|
|
Payable pursuant to
tax benefit arrangements, net of current portion
|
|
|
400,298
|
|
|
|
410,999
|
|
Other
liabilities
|
|
|
4,302
|
|
|
|
5,225
|
|
Total noncurrent
liabilities
|
|
|
1,117,372
|
|
|
|
1,132,924
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Class A common stock,
$.0001 par value - 300,000 shares authorized, 87,188 and
61,314
shares issued and outstanding as of December 31,
2017 and 2016, respectively
|
|
|
9
|
|
|
|
6
|
|
Class B common stock,
$.0001 par value - 100,000 shares authorized, 11,193 and
37,185
shares issued and outstanding as of December 31,
2017 and 2016, respectively
|
|
|
1
|
|
|
|
4
|
|
Accumulated other
comprehensive loss
|
|
|
(648)
|
|
|
|
(1,174)
|
|
Additional paid in
capital
|
|
|
12,118
|
|
|
|
34,467
|
|
Accumulated
deficit
|
|
|
(130,966)
|
|
|
|
(164,062)
|
|
Total stockholders'
deficit attributable to Planet Fitness, Inc.
|
|
|
(119,486)
|
|
|
|
(130,759)
|
|
Non-controlling
interests
|
|
|
(17,451)
|
|
|
|
(83,996)
|
|
Total stockholders'
deficit
|
|
|
(136,937)
|
|
|
|
(214,755)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
1,092,465
|
|
|
$
|
1,001,442
|
|
Planet Fitness,
Inc. and subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
|
|
|
|
|
|
|
|
Year ended
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
55,601
|
|
|
$
|
71,247
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
31,761
|
|
|
|
31,502
|
|
Amortization of
deferred financing costs
|
|
|
1,935
|
|
|
|
1,544
|
|
Amortization of
favorable leases and asset retirement obligations
|
|
|
334
|
|
|
|
392
|
|
Amortization of
interest rate caps
|
|
|
1,755
|
|
|
|
797
|
|
Deferred tax
expense
|
|
|
372,422
|
|
|
|
15,606
|
|
Loss (gain) on
re-measurement of tax benefit arrangement
|
|
|
(317,354)
|
|
|
|
72
|
|
Provision for bad
debts
|
|
|
(19)
|
|
|
|
59
|
|
Gain on disposal of
property and equipment
|
|
|
(159)
|
|
|
|
(514)
|
|
Loss on extinguishment
of debt
|
|
|
79
|
|
|
|
606
|
|
Third party debt
refinancing expense
|
|
|
1,021
|
|
|
|
3,001
|
|
Equity-based
compensation
|
|
|
2,531
|
|
|
|
1,728
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(10,481)
|
|
|
|
(7,754)
|
|
Notes receivable and
due from related parties
|
|
|
(604)
|
|
|
|
1,897
|
|
Inventory
|
|
|
(890)
|
|
|
|
2,755
|
|
Other assets and other
current assets
|
|
|
(2,981)
|
|
|
|
(7,944)
|
|
Accounts payable and
accrued expenses
|
|
|
4,210
|
|
|
|
7,428
|
|
Other liabilities and
other current liabilities
|
|
|
(470)
|
|
|
|
2,747
|
|
Income
taxes
|
|
|
(3,027)
|
|
|
|
(5,993)
|
|
Payable pursuant to
tax benefit arrangements
|
|
|
(11,446)
|
|
|
|
(6,922)
|
|
Equipment
deposits
|
|
|
4,328
|
|
|
|
(3,417)
|
|
Deferred
revenue
|
|
|
1,276
|
|
|
|
(652)
|
|
Deferred
rent
|
|
|
1,199
|
|
|
|
632
|
|
Net cash provided by
operating activities
|
|
|
131,021
|
|
|
|
108,817
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(37,722)
|
|
|
|
(15,377)
|
|
Proceeds from sale of
property and equipment
|
|
|
680
|
|
|
|
683
|
|
Net cash used in
investing activities
|
|
|
(37,042)
|
|
|
|
(14,694)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of long-term debt
|
|
|
ā
|
|
|
|
230,000
|
|
Proceeds from issuance
of Class A common stock
|
|
|
480
|
|
|
|
136
|
|
Principal payments on
capital lease obligations
|
|
|
(22)
|
|
|
|
(46)
|
|
Repayment of long-term
debt
|
|
|
(7,185)
|
|
|
|
(5,621)
|
|
Payment of deferred
financing and other debt-related costs
|
|
|
(1,278)
|
|
|
|
(5,220)
|
|
Premiums paid for
interest rate caps
|
|
|
(366)
|
|
|
|
ā
|
|
Repurchase and
retirement of Class B common stock
|
|
|
ā
|
|
|
|
(1,583)
|
|
Dividends paid to
holders of Class A common stock
|
|
|
ā
|
|
|
|
(169,282)
|
|
Dividend equivalents
paid to members of Pla-Fit Holdings
|
|
|
(1,974)
|
|
|
|
(101,729)
|
|
Distributions to
Members of Pla-Fit Holdings
|
|
|
(11,358)
|
|
|
|
(31,838)
|
|
Net cash used in
financing activities
|
|
|
(21,703)
|
|
|
|
(85,183)
|
|
Effects of exchange
rate changes on cash and cash equivalents
|
|
|
411
|
|
|
|
23
|
|
Net increase in cash
and cash equivalents
|
|
|
72,687
|
|
|
|
8,963
|
|
Cash and cash
equivalents, beginning of period
|
|
|
40,393
|
|
|
|
31,430
|
|
Cash and cash
equivalents, end of period
|
|
$
|
113,080
|
|
|
$
|
40,393
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Net cash paid for
income taxes
|
|
$
|
3,722
|
|
|
$
|
7,040
|
|
Cash paid for
interest
|
|
$
|
31,418
|
|
|
$
|
24,302
|
|
Non-cash investing
activities:
|
|
|
|
|
|
|
|
|
Non-cash additions to
property and equipment
|
|
$
|
861
|
|
|
$
|
2,203
|
|
Non-cash financing
activities:
|
|
|
|
|
|
|
|
|
Accrued dividend
equivalents
|
|
$
|
ā
|
|
|
$
|
3,899
|
|
Planet Fitness, Inc. and subsidiaries
Non-GAAP Financial Measures
(Unaudited)
(Amounts in thousands, except per share
amounts)
To supplement its consolidated financial statements, which are
prepared and presented in accordance with GAAP, the Company uses
the following non-GAAP financial measures: EBITDA, Segment EBITDA,
Adjusted EBITDA, Adjusted net income and Adjusted net income per
share, diluted (collectively, the "non-GAAP financial measures").
The Company believes that these non-GAAP financial measures, when
used in conjunction with GAAP financial measures, are useful to
investors in evaluating our operating performance. These non-GAAP
financial measures are supplemental measures of the Company's
performance that are neither required by, nor presented in
accordance with GAAP. These financial measures should not be
considered as substitutes for GAAP financial measures such as net
income or any other performance measures derived in accordance with
GAAP. In addition, in the future, the Company may incur expenses or
charges and recognize income or gains such as those added back to
calculate Adjusted EBITDA, Adjusted net income and Adjusted net
income per share, diluted. The Company's presentation of Adjusted
EBITDA, Adjusted net income, and Adjusted net income per share,
diluted, should not be construed as an inference that the Company's
future results will be unaffected by unusual or nonrecurring
items.
EBITDA, Segment EBITDA and Adjusted EBITDA
We refer to EBITDA and Adjusted EBITDA as we use these measures
to evaluate our operating performance and we believe these measures
provide useful information to investors in evaluating our
performance. We have also disclosed Segment EBITDA as an important
financial metric utilized by the Company to evaluate performance
and allocate resources to segments in accordance with ASC 280,
Segment Reporting. We define EBITDA as net income before
interest, taxes, depreciation and amortization. Segment EBITDA for
each of our segments sums to Total Segment EBITDA which is equal to
the Non-GAAP financial metric EBITDA. We believe that EBITDA, which
eliminates the impact of certain expenses that we do not believe
reflect our underlying business performance, provides useful
information to investors to assess the performance of our segments
as well as the business as a whole. Our Board of Directors also
uses EBITDA as a key metric to assess the performance of
management. We define Adjusted EBITDA as net income before
interest, taxes, depreciation and amortization, adjusted for the
impact of certain additional non-cash and other items that we do
not consider in our evaluation of ongoing performance of the
Company's core operations. These items include certain purchase
accounting adjustments, acquisition transaction fees, stock
offering-related costs, pre-opening costs, tax benefit arrangement
remeasurement and certain other charges and gains. We believe that
Adjusted EBITDA is an appropriate measure of operating performance
in addition to EBITDA because it eliminates the impact of other
items that we believe reduce the comparability of our underlying
core business performance from period to period and is therefore
useful to our investors in comparing the core performance of our
business from period to period.
A reconciliation of EBITDA and Adjusted EBITDA to net income,
the most directly comparable GAAP measure, is set forth below:
|
|
For the quarter
ended
December
31,
|
|
|
For the year
ended
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net income (loss)
attributable to Planet Fitness, Inc.
|
|
$
|
(3,453)
|
|
|
$
|
10,575
|
|
|
$
|
33,146
|
|
|
$
|
21,500
|
|
Net income
attributable to non-controlling interests
|
|
|
4,282
|
|
|
|
11,373
|
|
|
|
22,455
|
|
|
|
49,747
|
|
Net income
|
|
$
|
829
|
|
|
$
|
21,948
|
|
|
$
|
55,601
|
|
|
$
|
71,247
|
|
Interest expense,
net(1)
|
|
|
8,572
|
|
|
|
8,306
|
|
|
|
35,283
|
|
|
|
27,125
|
|
Provision for income
taxes(2)
|
|
|
349,647
|
|
|
|
7,157
|
|
|
|
373,580
|
|
|
|
18,661
|
|
Depreciation and
amortization
|
|
|
7,779
|
|
|
|
8,375
|
|
|
|
31,761
|
|
|
|
31,502
|
|
EBITDA
|
|
$
|
366,827
|
|
|
$
|
45,786
|
|
|
$
|
496,225
|
|
|
$
|
148,535
|
|
Purchase accounting
adjustments-revenue(3)
|
|
|
416
|
|
|
|
29
|
|
|
|
1,532
|
|
|
|
487
|
|
Purchase accounting
adjustments-rent(4)
|
|
|
164
|
|
|
|
197
|
|
|
|
725
|
|
|
|
861
|
|
Transaction
fees(5)
|
|
|
9
|
|
|
|
3,001
|
|
|
|
1,030
|
|
|
|
3,001
|
|
Stock offering-related
costs(6)
|
|
|
-
|
|
|
|
499
|
|
|
|
977
|
|
|
|
2,604
|
|
Severance
costs(7)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
423
|
|
Pre-opening
costs(8)
|
|
|
596
|
|
|
|
-
|
|
|
|
1,017
|
|
|
|
-
|
|
Early lease
termination costs(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
719
|
|
|
|
-
|
|
Equipment
discount(10)
|
|
|
-
|
|
|
|
(1,754)
|
|
|
|
(107)
|
|
|
|
(1,754)
|
|
Indemnification
receivable(11)
|
|
|
-
|
|
|
|
(2,772)
|
|
|
|
-
|
|
|
|
(2,772)
|
|
Tax benefit
arrangement remeasurement(12)
|
|
|
(316,813)
|
|
|
|
-
|
|
|
|
(317,354)
|
|
|
|
72
|
|
Other(13)
|
|
|
-
|
|
|
|
(840)
|
|
|
|
(32)
|
|
|
|
(840)
|
|
Adjusted
EBITDA
|
|
$
|
51,199
|
|
|
$
|
44,146
|
|
|
$
|
184,732
|
|
|
$
|
150,617
|
|
|
|
(1)
|
Includes $606 of loss
on extinguishment of debt in the quarter and year ended December
31, 2016.
|
(2)
|
Includes $334,022 in
the quarter and year ended December 31, 2017 related to the
remeasurement of our deferred tax assets pursuant to the 2017 Tax
Act.
|
(3)
|
Represents the impact
of revenue-related purchase accounting adjustments associated with
the 2012 acquisition of Pla-Fit Holdings on November 8, 2012 (the
"2012 Acquisition") by investment funds associated with TSG
Consumer Partners, LLC. At the time of the 2012 Acquisition, the
Company maintained a deferred revenue account, which consisted of
deferred area development agreement fees, deferred franchise fees,
and deferred enrollment fees that the Company billed and collected
up front but recognizes for GAAP purposes at a later date. In
connection with the 2012 Acquisition, it was determined that the
carrying amount of deferred revenue was greater than the fair value
assessed in accordance with ASC 805āBusiness Combinations, which
resulted in a write-down of the carrying value of the deferred
revenue balance upon application of acquisition push-down
accounting under ASC 805. For the quarters ended December 31, 2017
and 2016 and the years ended December 31, 2017 and 2016, these
amounted to $416, $29, $1,532 and $487, respectively, representing
the amount of additional revenue that would have been recognized in
those periods if the write-down to deferred revenue had not
occurred in connection with the application of acquisition pushdown
accounting.
|
(4)
|
Represents the impact
of rent related purchase accounting adjustments. In accordance with
guidance in ASC 805 ā Business Combinations, in connection with the
2012 Acquisition, the Company's deferred rent liability was
required to be written off as of the acquisition date and rent is
being recorded on a straight-line basis from the acquisition date
through the end of the lease term. This resulted in higher overall
rent expense each period than would have otherwise been recorded
had the deferred rent liability not been written off as a result of
the acquisition push down accounting applied in accordance with ASC
805. Adjustments of $89, $103, $395 and $475 in the quarters ending
December 31, 2017 and 2016 and the years ending December 31, 2017
and 2016, respectively, reflect the difference between the higher
rent expense recorded in accordance with GAAP since the acquisition
and the rent expense that would have been recorded had the 2012
Acquisition not occurred. Adjustments of $75, $94, $329 and $386
for the quarters ending December 31, 2017 and 2016 and the years
ending December 31, 2017 and 2016, respectively, are due to the
amortization of favorable and unfavorable lease intangible assets
which were recorded in connection with the 2012 Acquisition and the
acquisition of eight franchisee-owned stores on March 31, 2014. All
of the rent related purchase accounting adjustments are adjustments
to rent expense, which is included in store operations on our
consolidated statements of operations.
|
(5)
|
Represents
transaction fees and expenses related to the amendment of our
credit facility in the quarters and years ended December 31, 2017
and 2016.
|
(6)
|
Represents legal,
accounting and other costs incurred in connection with offerings of
the Company's Class A common stock.
|
(7)
|
Represents severance
expense recorded in connection with an equity award
modification.
|
(8)
|
Represents costs
associated with new corporate-owned stores incurred prior to the
store opening, including payroll-related costs, rent and occupancy
expenses, marketing and other store operating supply
expenses.
|
(9)
|
Represents charges
and expenses incurred in connection with the early termination of
the lease for our previous headquarters.
|
(10)
|
Represents a gain
recorded in connection with the write-off of a previously accrued
equipment discount that is no longer expected to be utilized. This
amount was originally recognized through purchase accounting in
connection with the acquisition of eight franchisee-owned stores on
March 31, 2014.
|
(11)
|
Represents a
receivable recorded in connection with a contractual obligation of
the Company's co-founders to indemnify the Company with respect to
pre-IPO tax liabilities pursuant to the 2012
Acquisition.
|
(12)
|
Represents gains
(losses) related to the adjustment of our tax benefit arrangements
primarily due to changes in our effective tax rate. In the quarter
and year ended December 31, 2017, includes expense of $316,813
related to the remeasurement of the Company's tax benefit
arrangement liabilities pursuant to the recent tax
reform.
|
(13)
|
Represents certain
other charges and gains that we do not believe reflect our
underlying business performance. In 2016, the net gain primarily
related to proceeds received from an insurance
settlement.
|
A reconciliation of Segment EBITDA to Total Segment EBITDA is
set forth below.
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Segment
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise
|
$
|
32,015
|
|
|
$
|
25,948
|
|
|
$
|
126,459
|
|
|
$
|
97,256
|
|
Corporate-owned
stores
|
|
11,276
|
|
|
|
10,588
|
|
|
|
46,855
|
|
|
|
40,847
|
|
Equipment
|
|
14,952
|
|
|
|
15,109
|
|
|
|
38,539
|
|
|
|
36,439
|
|
Corporate and
other
|
|
308,584
|
|
|
|
(5,859)
|
|
|
|
284,372
|
|
|
|
(26,007)
|
|
Total Segment
EBITDA(1)
|
$
|
366,827
|
|
|
$
|
45,786
|
|
|
$
|
496,225
|
|
|
$
|
148,535
|
|
|
|
(1)
|
Total
Segment EBITDA is equal to EBITDA.
|
Adjusted Net Income and Adjusted Net Income per Diluted
Share
As a result of the recapitalization transactions that occurred
prior to our IPO, the Company was designated as the sole managing
member of Pla-Fit Holdings. As the sole managing member, the
Company exclusively operates and controls the business and affairs
of Pla-Fit Holdings. As a result of the recapitalization
transactions, the Company consolidates Pla-Fit Holdings, and
Pla-Fit Holdings is considered the predecessor to the Company for
accounting purposes. Our presentation of Adjusted net income and
Adjusted net income per share, diluted, gives effect to the
consolidation of Pla-Fit Holdings with the Company resulting from
the recapitalization transactions as if they had occurred on
January 1, 2016. In addition,
Adjusted net income assumes that all net income is attributable to
the Company, which assumes the full exchange of all outstanding
common units of Pla-Fit Holdings for shares of the Company's Class
A common stock, adjusted for certain non-recurring items that we do
not believe directly reflect our core operations. Adjusted net
income per share, diluted, is calculated by dividing Adjusted net
income by the total shares of Class A common stock outstanding plus
any dilutive options and restricted stock units as calculated in
accordance with GAAP and assuming the full exchange of all
outstanding common units of Pla-Fit Holdings and corresponding
Class B common stock as of the beginning of each period presented.
Adjusted net income and Adjusted net income per share, diluted, are
supplemental measures of operating performance that do not
represent, and should not be considered, alternatives to net income
and earnings per share, as calculated in accordance with GAAP. We
believe Adjusted net income and Adjusted net income per share,
diluted, supplement GAAP measures and enable us to more effectively
evaluate our performance period-over-period.
A reconciliation of Adjusted net income to net income, the most
directly comparable GAAP measure, and the computation of Adjusted
net income per share, diluted, are set forth below.
|
|
For the quarter
ended
December
31,
|
|
|
For the year
ended
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net income (loss)
attributable to Planet Fitness, Inc.
|
|
$
|
(3,453)
|
|
|
$
|
10,575
|
|
|
$
|
33,146
|
|
|
$
|
21,500
|
|
Net income
attributable to non-controlling interests
|
|
|
4,282
|
|
|
|
11,373
|
|
|
|
22,455
|
|
|
|
49,747
|
|
Net income
|
|
$
|
829
|
|
|
$
|
21,948
|
|
|
$
|
55,601
|
|
|
$
|
71,247
|
|
Provision for income
taxes, as reported(1)
|
|
|
349,647
|
|
|
|
7,157
|
|
|
|
373,580
|
|
|
|
18,661
|
|
Purchase accounting
adjustments-revenue(2)
|
|
|
416
|
|
|
|
29
|
|
|
|
1,532
|
|
|
|
487
|
|
Purchase accounting
adjustments-rent (3)
|
|
|
164
|
|
|
|
197
|
|
|
|
725
|
|
|
|
861
|
|
Transaction
fees(4)
|
|
|
9
|
|
|
|
3,001
|
|
|
|
1,030
|
|
|
|
3,001
|
|
Stock offering-related
costs(5)
|
|
|
-
|
|
|
|
499
|
|
|
|
977
|
|
|
|
2,604
|
|
Severance costs
(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
423
|
|
Pre-opening
costs(7)
|
|
|
596
|
|
|
|
-
|
|
|
|
1,017
|
|
|
|
-
|
|
Early lease
termination costs(8)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,143
|
|
|
|
-
|
|
Equipment
discount(9)
|
|
|
-
|
|
|
|
(1,754)
|
|
|
|
(107)
|
|
|
|
(1,754)
|
|
Indemnification
receivable(10)
|
|
|
-
|
|
|
|
(2,772)
|
|
|
|
-
|
|
|
|
(2,772)
|
|
Tax benefit
arrangement remeasurement(11)
|
|
|
(316,813)
|
|
|
|
-
|
|
|
|
(317,354)
|
|
|
|
72
|
|
Other(12)
|
|
|
-
|
|
|
|
(522)
|
|
|
|
(32)
|
|
|
|
(522)
|
|
Purchase accounting
amortization(13)
|
|
|
4,009
|
|
|
|
4,843
|
|
|
|
17,876
|
|
|
|
19,371
|
|
Adjusted income
before income taxes
|
|
$
|
38,857
|
|
|
$
|
32,626
|
|
|
$
|
135,988
|
|
|
$
|
111,679
|
|
Adjusted income
taxes(14)
|
|
|
15,349
|
|
|
|
12,887
|
|
|
|
53,715
|
|
|
|
44,113
|
|
Adjusted net
income
|
|
$
|
23,508
|
|
|
$
|
19,739
|
|
|
$
|
82,273
|
|
|
$
|
67,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
per share, diluted
|
|
$
|
0.24
|
|
|
$
|
0.20
|
|
|
$
|
0.84
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
weighted-average shares outstanding,
diluted(15)
|
|
|
98,570
|
|
|
|
98,598
|
|
|
|
98,455
|
|
|
|
98,611
|
|
|
|
(1)
|
Includes $334,022 in
the quarter and year ended December 31, 2017 related to the
remeasurement of our deferred tax assets pursuant to the 2017 Tax
Act.
|
(2)
|
Represents the impact
of revenue-related purchase accounting adjustments associated with
the 2012 Acquisition. At the time of the 2012 Acquisition, the
Company maintained a deferred revenue account, which consisted of
deferred area development agreement fees, deferred franchise fees,
and deferred enrollment fees that the Company billed and collected
up front but recognizes for GAAP purposes at a later date. In
connection with the 2012 Acquisition, it was determined that the
carrying amount of deferred revenue was greater than the fair value
assessed in accordance with ASC 805āBusiness Combinations, which
resulted in a write-down of the carrying value of the deferred
revenue balance upon application of acquisition push-down
accounting under ASC 805. For the quarters ended December 31, 2017
and 2016 and the years ended December 31, 2017 and 2016, these
amounted to $416, $29, $1,532 and $487, respectively, representing
the amount of additional revenue that would have been recognized in
those periods if the write-down to deferred revenue had not
occurred in connection with the application of acquisition pushdown
accounting.
|
(3)
|
Represents the impact
of rent related purchase accounting adjustments. In accordance with
guidance in ASC 805 ā Business Combinations, in connection with the
2012 Acquisition, the Company's deferred rent liability was
required to be written off as of the acquisition date and rent is
being recorded on a straight-line basis from the acquisition date
through the end of the lease term. This resulted in higher overall
rent expense each period than would have otherwise been recorded
had the deferred rent liability not been written off as a result of
the acquisition push down accounting applied in accordance with ASC
805. Adjustments of $89, $103, $395 and $475 in the quarters ending
December 31, 2017 and 2016 and the years ending December 31, 2017
and 2016, respectively, reflect the difference between the higher
rent expense recorded in accordance with GAAP since the acquisition
and the rent expense that would have been recorded had the 2012
Acquisition not occurred. Adjustments of $75, $94, $329 and $386
for the quarters ending December 31, 2017 and 2016 and the years
ending December 31, 2017 and 2016, respectively, are due to the
amortization of favorable and unfavorable lease intangible assets
which were recorded in connection with the 2012 Acquisition and the
acquisition of eight franchisee-owned stores on March 31, 2014. All
of the rent related purchase accounting adjustments are adjustments
to rent expense, which is included in store operations on our
consolidated statements of operations.
|
(4)
|
Represents
transaction fees and expenses related to the amendment of our
credit facility in the quarters and years ended December 31, 2017
and 2016.
|
(5)
|
Represents legal,
accounting and other costs incurred in connection with offerings of
the Company's Class A common stock.
|
(6)
|
Represents severance
expense recorded in connection with an equity award
modification.
|
(7)
|
Represents costs
associated with new corporate-owned stores incurred prior to the
store opening, including payroll-related costs, rent and occupancy
expenses, marketing and other store operating supply
expenses.
|
(8)
|
Represents charges
and expenses incurred in connection with the early termination of
the lease for our previous headquarters.
|
(9)
|
Represents a gain
recorded in connection with the write-off of a previously accrued
equipment discount that is no longer expected to be utilized. This
amount was originally recognized through purchase accounting in
connection with the acquisition of eight franchisee-owned stores on
March 31, 2014.
|
(10)
|
Represents a
receivable recorded in connection with a contractual obligation of
the Company's co-founders to indemnify the Company with respect to
pre-IPO tax liabilities pursuant to the 2012
Acquisition.
|
(11)
|
Represents gains
(losses) related to the adjustment of our tax benefit arrangements
primarily due to changes in our effective tax rate. In the quarter
and year ended December 31, 2017, includes expense of $316,813
related to the remeasurement of the Company's tax benefit
arrangement liabilities pursuant to the recent tax
reform.
|
(12)
|
Represents certain
other charges and gains that we do not believe reflect our
underlying business performance. In 2016, the gain primarily
related to proceeds received from an insurance
settlement.
|
(13)
|
Includes $3,473,
$4,218, $15,731 and $16,873 of amortization of intangible assets,
other than favorable leases, for the quarters ended December 31,
2017 and 2016 and the years ended December 31, 2017 and 2016,
respectively recorded in connection with the 2012 Acquisition,
which consisted of the purchase of interests in Pla-Fit Holdings by
investment funds affiliated with TSG Consumer Partners, LLC and
$536, $624, $2,145 and $2,498 of amortization of intangible assets
for the quarters ended December 31, 2017 and 2016, and the years
ended December 31, 2017 and 2016, respectively, created in
connection with the acquisition of eight franchisee-owned stores on
March 31, 2014. The adjustment represents the amount of actual
non-cash amortization expense recorded, in accordance with GAAP, in
each period.
|
(14)
|
Represents corporate
income taxes at an assumed effective tax rate of 39.5% for the
quarters and years ended December 31, 2017 and 2016 applied to
adjusted income before income taxes.
|
(15)
|
Assumes the full
exchange of all outstanding Holdings Units and corresponding shares
of Class B common stock for shares of Class A common stock of
Planet Fitness, Inc.
|
A reconciliation of net income per share, diluted, to Adjusted
net income per share, diluted is set forth below for the three
months and years ended December 31,
2017 and 2016:
|
|
For the quarter
ended
December 31,
2017
|
|
|
For the year
ended
December 31,
2017
|
|
|
Amount
|
|
|
Weighted
average shares,
diluted
|
|
|
Per share,
diluted
|
|
|
Amount
|
|
|
Weighted
average
shares, diluted
|
|
|
Per share,
diluted
|
|
Net income (loss)
attributable to Planet Fitness Inc.(1)
|
$
|
(3,453)
|
|
|
|
86,583
|
|
|
$
|
(0.04)
|
|
|
$
|
33,146
|
|
|
|
78,972
|
|
|
$
|
0.42
|
|
Assumed exchange of
shares(2)
|
|
4,282
|
|
|
|
11,987
|
|
|
|
|
|
|
|
22,455
|
|
|
|
19,483
|
|
|
|
|
|
Net Income
|
|
829
|
|
|
|
|
|
|
|
|
|
|
|
55,601
|
|
|
|
|
|
|
|
|
|
Adjustments to arrive
at adjusted income
before income taxes(3)
|
|
38,028
|
|
|
|
|
|
|
|
|
|
|
|
80,387
|
|
|
|
|
|
|
|
|
|
Adjusted income before
income taxes
|
|
38,857
|
|
|
|
|
|
|
|
|
|
|
|
135,988
|
|
|
|
|
|
|
|
|
|
Adjusted income
taxes(4)
|
|
15,349
|
|
|
|
|
|
|
|
|
|
|
|
53,715
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
|
23,508
|
|
|
|
98,570
|
|
|
$
|
0.24
|
|
|
$
|
82,273
|
|
|
|
98,455
|
|
|
$
|
0.84
|
|
|
|
(1)
|
Represents net income
(loss) attributable to Planet Fitness, Inc. and the associated
weighted average shares, diluted of Class A common stock
outstanding.
|
(2)
|
Assumes the full
exchange of all outstanding Holdings Units and corresponding shares
of Class B common stock for shares of Class A common stock of
Planet Fitness, Inc. Also assumes the addition of net income
attributable to non-controlling interests corresponding with the
assumed exchange of Holdings Units and Class B common shares for
shares of Class A common stock.
|
(3)
|
Represents the total
impact of all adjustments identified in the adjusted net income
table above to arrive at adjusted income before income
taxes.
|
(4)
|
Represents corporate
income taxes at an assumed effective tax rate of 39.5% applied to
adjusted income before income taxes.
|
|
For the quarter
ended
December 31,
2016
|
|
|
For the year
ended
December 31,
2016
|
|
|
Amount
|
|
|
Weighted
average shares,
diluted
|
|
|
Per share,
diluted
|
|
|
Amount
|
|
|
Weighted
average shares,
diluted
|
|
|
Per share,
diluted
|
|
Net income
attributable to Planet Fitness, Inc.(1)
|
$
|
10,575
|
|
|
|
98,598
|
|
|
$
|
0.18
|
|
|
$
|
21,500
|
|
|
|
43,305
|
|
|
$
|
0.50
|
|
Assumed exchange of
shares(2)
|
|
11,373
|
|
|
|
-
|
|
|
|
|
|
|
|
49,747
|
|
|
|
55,306
|
|
|
|
|
|
Net Income
|
|
21,948
|
|
|
|
|
|
|
|
|
|
|
|
71,247
|
|
|
|
|
|
|
|
|
|
Adjustments to arrive
at adjusted income
before income taxes(3)
|
|
10,678
|
|
|
|
|
|
|
|
|
|
|
|
40,432
|
|
|
|
|
|
|
|
|
|
Adjusted income before
income taxes
|
|
32,626
|
|
|
|
|
|
|
|
|
|
|
|
111,679
|
|
|
|
|
|
|
|
|
|
Adjusted income
taxes(4)
|
|
12,887
|
|
|
|
|
|
|
|
|
|
|
|
44,113
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
|
19,739
|
|
|
|
98,598
|
|
|
$
|
0.20
|
|
|
$
|
67,566
|
|
|
|
98,611
|
|
|
$
|
0.69
|
|
|
|
(1)
|
Represents net income
attributable to Planet Fitness, Inc. and the associated weighted
average shares, diluted of Class A common stock outstanding. For
the three months ended December 31, 2016, the numerator used to
calculate diluted earnings per share was $17,511, which was
calculated in accordance with GAAP using the if-converted method to
quantify the dilutive effect of the hypothetical exchange of the
weighted average outstanding Holdings Units for shares of Class A
common stock.
|
(2)
|
Assumes the full
exchange of all outstanding Holdings Units and corresponding shares
of Class B common stock for shares of Class A common stock of
Planet Fitness, Inc. Also assumes the addition of net income
attributable to non-controlling interests corresponding with the
assumed exchange of Holdings Units and Class B common shares for
shares of Class A common stock.
|
(3)
|
Represents the total
impact of all adjustments identified in the adjusted net income
table above to arrive at adjusted income before income
taxes.
|
(4)
|
Represents corporate
income taxes at an assumed effective tax rate of 39.5% applied to
adjusted income before income taxes.
|
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SOURCE Planet Fitness, Inc.