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Town Sports International Holdings Inc (CLUB) SEC Filing 8-K Material Event for the period ending Thursday, October 25, 2018

Town Sports International Holdings Inc

CIK: 1281774 Ticker: CLUB


Exhibit 99.1
TOWN SPORTS INTERNATIONAL HOLDINGS, INC.
REPORTS THIRD QUARTER 2018 RESULTS

New York, NY - October 25, 2018 - Town Sports International Holdings, Inc. (“TSI”) (NASDAQ: CLUB) today reported results for the third quarter of 2018.
TSI’s earnings for the third quarter of 2018 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, 2018 posted at https://www.townsportsinternational.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
 
2018
 
2017
Revenues:
 
 
 
Club operations
$
108,709

 
$
97,022

Fees and other
1,464

 
1,619

 
110,173

 
98,641

Operating Expenses:
 
 
 
Payroll and related
42,108

 
37,072

Club operating
50,107

 
46,087

General and administrative
6,700

 
5,380

Depreciation and amortization
9,188

 
9,874

Impairment of fixed assets
2,082

 
6,497

 
110,185

 
104,910

Operating loss
(12
)
 
(6,269
)
Interest expense
3,493

 
3,192

Interest income
(46
)
 
(36
)
Equity in earnings of investee
(79
)
 
(77
)
Loss before provision for corporate income taxes
(3,380
)
 
(9,348
)
Provision for corporate income taxes
562

 
3,928

Net loss
(3,942
)
 
(13,276
)
Net income attributable to non-controlling interests
4

 

Net loss attributable to Town Sports International Holdings, Inc. and subsidiaries
$
(3,946
)
 
$
(13,276
)
 
 
 
 
Loss per share:
 
 
 
Basic
$
(0.15
)
 
$
(0.53
)
Diluted
$
(0.15
)
 
$
(0.53
)
Weighted average number of shares used in calculating loss per share:
 
 
 
Basic
25,849,800

 
25,245,262

Diluted
25,849,800

 
25,245,262






Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
 
Third Quarter
 
2018
 
2017
Net loss
$
(3,942
)
 
$
(13,276
)
Interest expense, net of interest income
3,447

 
3,156

Provision for corporate income taxes
562

 
3,928

Depreciation and amortization
9,188

 
9,874

EBITDA (2)
9,255

 
3,682

Impairment of fixed assets
2,082

 
6,497

Net costs related to closing clubs and other cost-savings initiatives
403

 
188

Incremental expense related to the adoption of ASC 606 (1)
264

 

Separation expense related to headcount reductions and former executive officers
57

 
676

Adjusted EBITDA (2)
$
12,061

 
$
11,043

(1) On January 1, 2018, the Company adopted FASB Accounting Standards Codification Topic 606 and all the related amendments (“ASC 606”) which requires the Company to defer costs related to obtaining members and expense those costs over the estimated membership life. Under previous guidance, these membership costs were expensed at the time of the respective sale.
(2) EBITDA and Adjusted EBITDA for the third quarters of 2018 and 2017 include costs related to acquisitions of $722 and $250, respectively.
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, net costs related to closing clubs and other cost-savings initiatives, incremental expense related to the adoption of ASC 606, and separation expense related to headcount reductions and former executive officers. 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 a diversified holding company with subsidiaries engaged in a number of business and investment activities. The Company’s largest operating subsidiary has been involved in the fitness industry since 1973 and has grown to become one of the largest owners and operators of fitness clubs in the Northeast region of the United States. TSI’s corporate structure provides flexibility to make investments across a broad spectrum of industries in order to create long-term value for shareholders.
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.
Investor Contact:
(917) 765-9974
Investor.relations@town-sports.com




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Town Sports International Holdings Inc provided additional information to their SEC Filing as exhibits

Ticker: CLUB
CIK: 1281774
Form Type: 8-K Corporate News
Accession Number: 0001281774-18-000039
Submitted to the SEC: Thu Oct 25 2018 4:01:21 PM EST
Accepted by the SEC: Thu Oct 25 2018
Period: Thursday, October 25, 2018
Industry: Membership Sports And Recreation Clubs
Events:
  1. Earnings Release
  2. Financial Exhibit

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