- Total member count decreased 10,000 to 497,000 in Q4 2013 and decreased by 13,000 for the full-year 2013.
- Membership monthly attrition averaged 3.4% per month in Q4 2013 compared to 3.5% per month in Q4 2012.
- Revenue was $113.9 million in Q4 2013, a decrease of 0.3% compared to Q4 2012.
- Comparable club revenue decreased 1.3% in Q4 2013.
- Diluted loss per share was $0.03 in Q4 2013 compared to diluted loss per share of $0.02 in Q4 2012.
- Q4 2013 results included a favorable out of period rental income adjustment, a loss related to debt extinguishment, severance related to the departure of an executive officer, legal and consulting expenses related to the pending sale of our 86 th Street building in Manhattan, a payroll bonus in connection with the quarterly dividend paid, and fixed asset impairment charges for one underperforming club. These items amounted to an aggregate net charge of approximately $1.2 million before taxes (approximately $738,000, net of taxes), or approximately $0.03 per diluted share.
- Q4 2012 results included fixed asset write-offs related to four clubs that sustained damage as a result of Hurricane Sandy, administration and incremental compensation expenses related to the special dividend payment and related stock option modifications and discrete tax benefits. These items amounted to an aggregate net charge of approximately $6.3 million before taxes (approximately $3.4 million net of taxes) or approximately $0.14 per diluted share.
- Adjusted EBITDA was $18.4 million in Q4 2013, a decrease of $4.8 million, or 20.6%, when compared to Adjusted EBITDA of $23.2 million in Q4 2012 (Refer to the reconciliation below).
- Following the end of the quarter, the Company announced a quarterly cash dividend of $0.16 per share payable on March 5, 2014 to shareholders of record at the close of business on February 24, 2014. The aggregate amount to be paid will be approximately $3.9 million, based on shares outstanding as of February 18, 2014.
- In Q4 2013, the Company refinanced its credit facility with a new $325.0 million Term Loan Facility and a $45.0 million revolving loan facility. The Company expects annual interest savings of approximately $3.0 million as a result of this refinancing.
- The Company entered into an agreement to sell its property located at 151 East 86th Street, New York to an affiliate of Stillman Development International, LLC for a price of $82.0 million, subject to certain adjustments. The transaction is subject to various closing conditions, and the parties expect the transaction to be completed on or about March 31, 2014.
|Fourth Quarter Ended December 31, 2013 Financial Results:|
|Revenue (in thousands):|
|Quarter Ended December 31,|
|Revenue||% Revenue||Revenue||% Revenue||% Variance|
|Personal training revenue||15,920||14.0||%||14,772||12.9||%||7.8||%|
|Other ancillary club revenue||4,758||4.2||%||5,997||5.3||%||(20.7||)||%|
|Ancillary club revenue||20,678||18.2||%||20,769||18.2||%||(0.4||)||%|
|Fees and other revenue||2,235||2.0||%||942||0.8||%||137.3||%|
|Expense % of||Increase|
|Payroll and related||37.7||%||39.7||%||(5.4||)||%|
|General and administrative||6.5||%||5.6||%||15.8||%|
|Depreciation and amortization||10.5||%||10.5||%||0.2||%|
|Impairment of fixed assets||0.1||%||2.8||%||(95.4||)||%|
- Revenue for Q1 2014 is expected to be between $116.5 million and $117.5 million versus $119.2 million for Q1 2013. As percentages of revenue, we expect Q1 2014 payroll and related expenses to approximate 38.3% and club operating expenses to approximate 41.4%. We expect general and administrative expenses to approximate $7.5 million, depreciation and amortization to approximate $12.0 million and net interest expense to approximate $4.7 million.
- We expect net income for Q1 2014 to be between $0 and $250,000, and diluted earnings per share to be in the range of $0.0 per share to $0.01 per share, assuming a 39% effective tax rate and 24.5 million weighted average fully diluted shares outstanding.
- We estimate that EBITDA will approximate $17.0 million in Q1 2014.