Town Sports International Holdings Inc. has a market cap of $65.35 million; its shares were traded at around $2.89 with a P/E ratio of 57.8 and P/S ratio of 0.13. CLUB is in the portfolios of Jim Simons of Renaissance Technologies LLC.
This is the annual revenues and earnings per share of CLUB over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CLUB.
Highlight of Business Operations:We have developed and refined our fitness club model through our clustering strategy, offering fitness clubs close to our members workplaces and homes. We target all individuals within each of our regions who aspire to a healthy lifestyle. We believe that the majority of our members have annual household income levels between $50,000 and $150,000. We believe that the upper value segment is not only the broadest segment of the market, but also the segment with the greatest growth opportunities. Our goal is to be the most recognized health club network in each of the four major metropolitan regions we serve. We believe that our strategy of clustering clubs provides significant benefits to our members and allows us to achieve strategic operating advantages. In each of our markets, we have developed clusters by initially opening or acquiring clubs located in the more central urban markets of the region and then branching out from these urban centers to suburbs and neighboring communities.
Revenue decreased 5.2% in the three months ended June 30, 2010 compared to the three months ended June 30, 2009. This decrease in revenue was driven primarily by a decline in membership revenue. There was a decrease in member count and therefore less dues collected when comparing the three months ended June 30, 2010 to the same period in 2009. There was also less initiation fees revenue recognized due to a decrease in initiation fees collected and deferred in 2009. For the three months ended June 30, 2010, revenues increased $1.2 million compared to the three months ended June 30, 2009 at the eight clubs opened or acquired subsequent to June 30, 2008. For the three months ended June 30, 2010, revenue decreased 5.4%, or $6.4 million, at our clubs opened or acquired prior to June 30, 2008 and $1.3 million at the 10 clubs that were closed subsequent to June 30, 2008.
Impairment of fixed assets. In the three months ended June 30, 2010, we recorded fixed asset impairment charges totaling $2.9 million, representing $1.2 million of fixed assets at an underperforming club and $1.7 million related to the planned closure of one club prior to its lease expiration date. There were no fixed asset impairment charges recorded in the three months ended June 30, 2009.
We recorded a benefit for corporate income taxes of $1.4 million for the three months ended June 30, 2010 compared to a provision of $1.4 million for the three months ended June 30, 2009. Our effective tax rate was (63%) in the three months ended June 30, 2010 compared to 35% in the three months ended June 30, 2009. The expected benefits from our Captive Insurance arrangement increased our effective tax rate on our pre-tax loss in the three months ended June 30, 2010 and decreased the provision on the pre-tax income in the three months ended June 30, 2009.
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