Town Sports International Holdings Inc. Reports Operating Results (10-K)
Town Sports International Holdings Inc. has a market cap of $102.2 million; its shares were traded at around $4.51 with a P/E ratio of 112.8 and P/S ratio of 0.2. Hedge Fund Gurus that owns CLUB: Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations: Total United States fitness club industry revenues increased at a compound annual growth rate of 5.9% from $11.6 billion in 2000 to $19.5 billion in 2009, according to the most recent information released by the International Health, Racquet and Sportsclub Association (IHRSA). Total U.S. fitness club memberships increased at a compound annual growth rate of 3.7% from 32.8 million in 2000 to 45.3 million in 2009, and total number of fitness clubs increased at a compound annual growth rate of 6.4% from 16,983 in 2000 to 29,750 in 2009, according to IHRSA.
In 2009, health club members visited clubs at an all-time high of 102 days on average, with approximately 42% visiting their clubs at least 100 times during the year, according to IHRSA. From 2008 to 2009, the number of people attending a club at least six times per year decreased 2.5%; however, in the last ten years the number has increased nearly 60% from 24.1 million to 38.3 million.
for Disease Control and Prevention found that 68% of U.S. adults were considered overweight or obese in 2007-2008, an increase from 64.5% in 1999-2000. As healthcare costs rise in the United States, some of the focus in combating obesity and other diseases is being directed at prevention. Both government and medical research has shown that exercise and other physical activity plays a critical role in preventing obesity and other health conditions, thereby reducing healthcare costs.
Drive comparable club revenue and profitability growth by implementing our business strategy. Our near-term financial performance will depend largely on the growth of revenue at clubs that we have operated for more than 12 months. We define comparable club revenue as revenue at those clubs that were operated by us for over 12 months and comparable club revenue growth as revenue for the 13th month and thereafter as compared to the same period in the prior year. Historically, comparable club revenue growth has been a contributing factor in our revenue growth, with comparable club revenue growth for each of the three years from 2006 to 2008, ranging between 2.2% to 7.9%. For the years ended December 31, 2010 and December 31, 2009, however, our comparable club revenue declined 4.3% and 5.6%, respectively. Although comparable club revenue continued to decline throughout the year ended December 31, 2010 compared with the prior year, we began to see signs of recovery. In 2009, in part as a result of the state of the economy and the impact on consumer spending, we experienced higher member attrition and, therefore, a lower member base for most reporting periods in the year ended December 31, 2010. The lower beginning member counts in 2010 resulted in decreased revenue recognized throughout the year. In the fourth quarter of 2010, we experienced a comparable club revenue decrease of 1.7% compared to a decrease of 7.1% in the fourth quarter of 2009. In 2011, we expect modest improvement and to have slight comparable club revenue increases in the second half of the year when compared to the same periods in 2010.
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