Town Sports International Holdings Inc. (CLUB, Financial) filed Quarterly Report for the period ended 2011-03-31.
Town Sports International Holdings Inc. has a market cap of $121.3 million; its shares were traded at around $5.35 with a P/E ratio of 53.5 and P/S ratio of 0.3.
Joining fees collected in the three months ended March 31, 2011 were $3.0 million compared to $687,000 in the same period in 2010. However, since joining fees revenue is recognized over the estimated average membership life, joining fee revenue decreased in the three months ended March 31, 2011 due to the decline in joining fees collected in 2009 relative to fees collected in prior periods.
Operating Activities. Net cash provided by operating activities for the three months ended March 31, 2011 increased 44.2%, or $7.8 million compared to the three months ended March 31, 2010. This increase was partially related to the increase in overall earnings. In the three months ended March 31, 2011, due to the timing of payments, prepaid rent decreased $5.0 million, while in the three months ended March 31, 2010 there was no cash flow effect related to prepaid rent. The effect of the change in deferred revenue and deferred membership costs increased cash $1.5 million in the aggregate compared to the three months ended March 31, 2010 from the increase in joining fees collected. In addition, income tax refunds, net of cash paid for income taxes, increased $1.4 million in the three months ended March 31, 2011, compared to the same period in 2010.
Investing Activities. Net cash used in investing activities increased $2.5 million in the three months ended March 31, 2011 compared to the three months ended March 31, 2010. Investing activities in both three month periods consisted of expanding and remodeling existing clubs, and the purchase of new fitness equipment. In the three months ended March 31, 2011, the Company also began construction on two clubs, which we expect to open in the second half of the year. There were no future clubs under construction in three months ended March 31, 2010. For the year ending December 31, 2011, we estimate we will invest $29.0 million to $32.0 million in capital expenditures, which represents an increase from $22.0 million of capital expenditures in 2010. This amount includes approximately $7.5 million to $8.5 million related to the two planned club openings in the second half of 2011, approximately $15.5 million to continue to upgrade existing clubs and $4.3 million principally related to major renovations at clubs with recent lease renewals and upgrading our in-club entertainment system network. We also expect to invest $2.0 million to $3.0 million to enhance our management information and communication systems. These expenditures will be funded by cash flow provided by operations, available cash on hand and, to the extent needed, borrowings from our revolving credit facility.
Financing Activities. Net cash used in financing activities increased $13.5 million for the three months ended March 31, 2011 compared to the three months ended March 31, 2010. In the three months ended March 31, 2011, we made principal payments of $14.1 million on our outstanding Term Loan Facility and in the three months ended March 31, 2010, we made principal payments of $462,500. The principal payment made in the three months ended March 31, 2011 primarily consisted of the required Excess Cash Flow payment of $13.6 million. See Note 3 Long-Term Debt to the condensed consolidated financial statements in this Form 10-Q for further details of the Excess Cash Flow payment.
As of March 31, 2011, TSI LLC had $164.0 million outstanding under the Term Loan Facility. Borrowings under the Term Loan Facility, at TSI LLCs option, bear interest at either the administrative agents base rate plus 0.75% or its Eurodollar rate plus 1.75%, each as defined in the 2007 Senior Credit Facility. As of March 31, 2011, TSI LLC had elected the Eurodollar rate option, equal to 2.1%. Interest calculated under the base rate option would have equaled 4.0% as of March 31, 2011, if TSI LLC had elected this option. TSI LLC is required to repay 0.25% of principal, or $462,500, per quarter.
Read the The complete Report
Town Sports International Holdings Inc. has a market cap of $121.3 million; its shares were traded at around $5.35 with a P/E ratio of 53.5 and P/S ratio of 0.3.
Highlight of Business Operations:
As part of our efforts to drive member sales, in April 2010 we began offering a new, favorably-priced, restricted-use month-to-month membership available to students. In prior years, we offered a three-month summer membership targeted at students generally priced at $199.00 for the entire summer. The new membership is a month-to-month membership with dues of $20.00 per month and $119.00 for initiation fees at the time of enrollment. As of March 31, 2011, we had approximately 19,000 student members.Joining fees collected in the three months ended March 31, 2011 were $3.0 million compared to $687,000 in the same period in 2010. However, since joining fees revenue is recognized over the estimated average membership life, joining fee revenue decreased in the three months ended March 31, 2011 due to the decline in joining fees collected in 2009 relative to fees collected in prior periods.
Operating Activities. Net cash provided by operating activities for the three months ended March 31, 2011 increased 44.2%, or $7.8 million compared to the three months ended March 31, 2010. This increase was partially related to the increase in overall earnings. In the three months ended March 31, 2011, due to the timing of payments, prepaid rent decreased $5.0 million, while in the three months ended March 31, 2010 there was no cash flow effect related to prepaid rent. The effect of the change in deferred revenue and deferred membership costs increased cash $1.5 million in the aggregate compared to the three months ended March 31, 2010 from the increase in joining fees collected. In addition, income tax refunds, net of cash paid for income taxes, increased $1.4 million in the three months ended March 31, 2011, compared to the same period in 2010.
Investing Activities. Net cash used in investing activities increased $2.5 million in the three months ended March 31, 2011 compared to the three months ended March 31, 2010. Investing activities in both three month periods consisted of expanding and remodeling existing clubs, and the purchase of new fitness equipment. In the three months ended March 31, 2011, the Company also began construction on two clubs, which we expect to open in the second half of the year. There were no future clubs under construction in three months ended March 31, 2010. For the year ending December 31, 2011, we estimate we will invest $29.0 million to $32.0 million in capital expenditures, which represents an increase from $22.0 million of capital expenditures in 2010. This amount includes approximately $7.5 million to $8.5 million related to the two planned club openings in the second half of 2011, approximately $15.5 million to continue to upgrade existing clubs and $4.3 million principally related to major renovations at clubs with recent lease renewals and upgrading our in-club entertainment system network. We also expect to invest $2.0 million to $3.0 million to enhance our management information and communication systems. These expenditures will be funded by cash flow provided by operations, available cash on hand and, to the extent needed, borrowings from our revolving credit facility.
Financing Activities. Net cash used in financing activities increased $13.5 million for the three months ended March 31, 2011 compared to the three months ended March 31, 2010. In the three months ended March 31, 2011, we made principal payments of $14.1 million on our outstanding Term Loan Facility and in the three months ended March 31, 2010, we made principal payments of $462,500. The principal payment made in the three months ended March 31, 2011 primarily consisted of the required Excess Cash Flow payment of $13.6 million. See Note 3 Long-Term Debt to the condensed consolidated financial statements in this Form 10-Q for further details of the Excess Cash Flow payment.
As of March 31, 2011, TSI LLC had $164.0 million outstanding under the Term Loan Facility. Borrowings under the Term Loan Facility, at TSI LLCs option, bear interest at either the administrative agents base rate plus 0.75% or its Eurodollar rate plus 1.75%, each as defined in the 2007 Senior Credit Facility. As of March 31, 2011, TSI LLC had elected the Eurodollar rate option, equal to 2.1%. Interest calculated under the base rate option would have equaled 4.0% as of March 31, 2011, if TSI LLC had elected this option. TSI LLC is required to repay 0.25% of principal, or $462,500, per quarter.
Read the The complete Report
