Town Sports International Holdings Inc. (CLUB, Financial) filed Quarterly Report for the period ended 2010-03-31.
Town Sports International Holdings Inc. has a market cap of $93.6 million; its shares were traded at around $4.14 with a P/E ratio of 19.7 and P/S ratio of 0.2.
Operating Activities. Net cash provided by operating activities for the three months ended March 31, 2010 decreased 22.0% to $17.6 million compared to $22.6 million for the three months ended March 31, 2009. This decrease was primarily related to a decrease in overall earnings and the increase in cash paid for interest of $7.2 million. During the three months ended March 31, 2010, we made a semi-annual interest payment of $7.6 million on the 11% Senior Discount Notes. These cash interest payments commenced in August 2009 and accordingly, there were no cash interest payments made during the three months ended March 31, 2009.
For the year ending December 31, 2010, we estimate we will invest a total of $32.0 million to $35.0 million in capital expenditures. This amount will include $23.5 million to continue to upgrade existing clubs, $7.0 million related to major renovations at clubs with recent lease renewals and upgrading our in-club entertainment system network and $1.5 million to $2.5 million to enhance our management information systems. These expenditures will be funded by cash flow provided by operations, available cash on hand and, to the extent needed, borrowings from the $63.8 million Revolving Loan Facility.
Financing Activities. Net cash used in financing activities decreased $6.2 million for the three months ended March 31, 2010 compared to the three months ended March 31, 2009. In the three months ended March 31, 2009, we paid $5.4 million related to repurchases of 2.1 million shares of our common stock and had net repayments on the Revolving Loan Facility of $1.0 million. There were no common stock repurchases or Revolving Loan Facility repayments in the three months ended March 31, 2010. In both three month periods ended March 31, 2010 and 2009, we made $462,500 of principal payments on our outstanding Term Loan Facility.
As of March 31, 2010, TSI LLC had $179.5 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, 2010, TSI LLC had elected the Eurodollar rate option, equal to 2.1% as of March 31, 2010. Interest calculated under the base rate option would have equaled 4.0% as of March 31, 2010, if TSI LLC had elected this option. TSI LLC is required to repay 0.25% of principal, or $462,500, per quarter. Total principal payments of $5.6 million have been made as of March 31, 2010.
As of March 31, 2010, there were no outstanding borrowings on the Revolving Loan Facility. There were outstanding letters of credit issued at that date of $15.1 million. The unutilized portion of the Revolving Loan Facility as of March 31, 2010 was $48.7 million. As a result of an amendment to the 2007 Senior Credit Facility on July 15, 2009 (the Amendment), the total amount of borrowings under the Revolving Loan Facility was reduced by 15% from $75.0 million to $63.8 million.
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Town Sports International Holdings Inc. has a market cap of $93.6 million; its shares were traded at around $4.14 with a P/E ratio of 19.7 and P/S ratio of 0.2.
Highlight of Business Operations:
Interest expense decreased $93,000 or 1.8%, from $5.3 million in the three months ended March 31, 2009 to $5.2 million for the three months ended March 31, 2010. This decrease results from the lower variable rate of interest recorded on a lower principal amount for our Term Loan Facility during the three months ended March 31, 2010. For the three months ended March 31, 2009, the average variable interest rate on the Term Loan Facility was approximately 2.4%, while the average variable interest rate for the three months ended March 31, 2010 was approximately 2.1%. Each year we repay $1.9 million of the principal on the Term Loan Facility. In addition, we had outstanding borrowings on our Revolving Loan facility throughout the three months ended March 31, 2009, on which interest rates ranged from 2.7% to 4.5% and in the three months ended March 31, 2010 we had no such borrowings.Operating Activities. Net cash provided by operating activities for the three months ended March 31, 2010 decreased 22.0% to $17.6 million compared to $22.6 million for the three months ended March 31, 2009. This decrease was primarily related to a decrease in overall earnings and the increase in cash paid for interest of $7.2 million. During the three months ended March 31, 2010, we made a semi-annual interest payment of $7.6 million on the 11% Senior Discount Notes. These cash interest payments commenced in August 2009 and accordingly, there were no cash interest payments made during the three months ended March 31, 2009.
For the year ending December 31, 2010, we estimate we will invest a total of $32.0 million to $35.0 million in capital expenditures. This amount will include $23.5 million to continue to upgrade existing clubs, $7.0 million related to major renovations at clubs with recent lease renewals and upgrading our in-club entertainment system network and $1.5 million to $2.5 million to enhance our management information systems. These expenditures will be funded by cash flow provided by operations, available cash on hand and, to the extent needed, borrowings from the $63.8 million Revolving Loan Facility.
Financing Activities. Net cash used in financing activities decreased $6.2 million for the three months ended March 31, 2010 compared to the three months ended March 31, 2009. In the three months ended March 31, 2009, we paid $5.4 million related to repurchases of 2.1 million shares of our common stock and had net repayments on the Revolving Loan Facility of $1.0 million. There were no common stock repurchases or Revolving Loan Facility repayments in the three months ended March 31, 2010. In both three month periods ended March 31, 2010 and 2009, we made $462,500 of principal payments on our outstanding Term Loan Facility.
As of March 31, 2010, TSI LLC had $179.5 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, 2010, TSI LLC had elected the Eurodollar rate option, equal to 2.1% as of March 31, 2010. Interest calculated under the base rate option would have equaled 4.0% as of March 31, 2010, if TSI LLC had elected this option. TSI LLC is required to repay 0.25% of principal, or $462,500, per quarter. Total principal payments of $5.6 million have been made as of March 31, 2010.
As of March 31, 2010, there were no outstanding borrowings on the Revolving Loan Facility. There were outstanding letters of credit issued at that date of $15.1 million. The unutilized portion of the Revolving Loan Facility as of March 31, 2010 was $48.7 million. As a result of an amendment to the 2007 Senior Credit Facility on July 15, 2009 (the Amendment), the total amount of borrowings under the Revolving Loan Facility was reduced by 15% from $75.0 million to $63.8 million.
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