Bally Total Fitness Reports Third Quarter 2004 Operating Highlights.CHICAGO -- Bally Total Fitness Bally Total Fitness is an American health club chain with 400 gyms in 70 cities, and claims 4 million customers [1]. The chain has recently opened gyms in South Korea, China & the Bahamas. Holding Corporation (NYSE NYSE See: New York Stock Exchange : BFT (Binary File Transfer) An extension to the fax protocol that allows transmission of raw data. A page of text is transmitted faster than a bitmap of the page and is displayed at normal printer resolution at the receiving side. ): Operating Highlights: --Gross committed membership fees grew 11% in the third quarter 2004 vs. 2003 --Number of new joining members increased 14% in the third quarter over the prior year quarter --Same club gross committed membership fees grew 4% during the third quarter, 10% for the nine months ended September 30, 2004 --Company expects to report net loss for the third quarter 2004 Bally Total Fitness Holding Corporation (NYSE: BFT) today announced selected operating data for the third quarter ended September 30, 2004. Membership sales trends continued to show improvement during the quarter with gross committed membership fees growing 11% during the third quarter of 2004 and 16% for the nine months ended September 30, 2004 over the comparable prior year periods. New membership joins increased 14% during the third quarter of 2004 and grew 23% for the nine months ended September 30, 2004 over the comparable prior year periods. October 2004 gross committed membership fees increased 12% over the prior year period while the number of new joining members increased 21%. The Company expects to report a net loss for the three and nine months ended September 30, 2004. Total members grew 2% to 4,040,000 at September 30, 2004 from 3,956,000 at December 31, 2003. As of November 18, 2004, the Company had no outstanding advances under the $100 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. portion of its $275 million credit facility, except for $8.7 million in letters of credit. Selected Operating Data The following operating data reflect membership sales and cash flow data. Since this data is not affected by the Company's revenue recognition policy, the Company does not expect these items to change as a result of the recently announced restatements. In addition, the following operating data has not been reviewed by KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen LLP LLP - Lower Layer Protocol and therefore is subject to change, which changes may be material individually or in the aggregate. The following table shows new membership originations and other key data for the three and nine months ended September 30, 2004 and 2003:
Three months ended Nine months ended
Operating Data September 30 September 30
------------------------ ------------------------
(in thousands except % %
monthly data) 2004 2003 Chg 2004 2003 Chg
--------- --------- ---- --------- --------- ----
New joining members 260 229 14% 873 710 23%
Average committed
monthly fee
(dollars) $37.99 $37.98 0% $38.27 $39.72 -4%
Average committed
duration (in months) 29.7 30.8 -4% 29.6 30.6 -3%
Gross committed
membership fees:
Total Company $293,430 $264,586 11% $989,620 $852,620 16%
Same club $272,130 $260,854 4% $917,970 $836,016 10%
Members (end of
period) 4,040 3,975 2% 4,040 3,975 2%
Gross committed membership fees is a measure which includes the total potential future value of all initial membership fee revenue, dues revenue, earned finance charges and membership-related products and services revenue from new membership sales originations in a period. It is measured on a gross basis before consideration of any uncollectible amounts. We track gross committed membership revenue as an indicator of the success of our current sales activities and believe it to be a useful measure to allow investors to understand current trends in membership sales. The following table shows selected cash flow and balance sheet data:
(in thousands) 2004
--------------------------------------
Cash flow Nine
months
Three months ended ended
----------------------------- --------
March 31 June 30 Sept. 30 Sept. 30
--------- --------- --------- --------
Cash provided by operating
activities $9,373 $16,674 $808 $26,855
Cash used in investing
activities (10,081) (11,351) (8,087) (29,519)
--------- --------- --------- --------
Free cash flow (deficit) $(708) $5,323 $(7,279) $(2,664)
========= ========= ========= ========
Selected balance sheet data As of
-----------------------------
March 31 June 30 Sept. 30
--------- --------- ---------
Cash & equivalents $13,113 $12,520 $25,331
Total debt 731,751 723,363 747,734
--------- --------- ---------
Net debt $718,638 $710,843 $722,403
========= ========= =========
The variance in cash provided by operating activities between the second and third quarters of 2004 is largely due to the fluctuation Fluctuation A price or interest rate change. in accounts payable and accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. . On November 15, 2004, the Company announced that it has commenced the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of consents to waivers of defaults from holders of its $235 million 10-1/2% Senior Notes due 2011 and $300 million 9-7/8% Senior Subordinated Notes due 2007 under the indentures governing the notes. These defaults relate to the Company's failure to timely file its financial statements with the Securities and Exchange Commission and deliver such financial statements to the trustee under the indentures. No assurances can be given that the Company will obtain the requested waivers or a default under the indentures will not occur in the future. The lenders under the Company's $275 million secured credit facility have foregone fore·gone v. Past participle of forego1. adj. Having gone before; previous. Usage Note: The word foregone has recently developed a new meaning as a truncation of the phrase any requirement for receipt from the Company of financial statements filed with the SEC. However, the credit agreement provides for a cross-default 10 days after delivery to Bally bally Adjective, adv Brit old-fashioned, slang extreme or extremely: a bally nuisance, he's too bally charming for his own good Adj. 1. of a default notice under its indentures. As a result, the delivery of a default notice under its indentures to Bally could ultimately result in acceleration of the Company's obligations under the credit facility and the indentures. Bally will be hosting a conference call on Thursday, November 18, 2004, at 3:30 p.m. Central Time. The conference call and the replay can be accessed through the Company's web site at www.ballyfitness.com. About Bally Total Fitness Bally Total Fitness is the largest and only nationwide commercial operator of fitness centers, with approximately four million members and 440 facilities located in 29 states, Mexico, Canada, China, Korea and the Caribbean under the Bally Total Fitness(R), Crunch (1) To process data. See number crunching. (2) To compress data. See data compression. 1. (jargon) crunch - To process, usually in a time-consuming or complicated way. Fitness(SM), Gorilla gorilla, an ape, Gorilla gorilla, native to the lowland and mountain forests of western and central equatorial Africa. It is the largest of the apes, the males reaching a height of 5 to 6 ft (150–190 cm) with a 9-ft (144–cm) arm spread. Sports(SM), Pinnacle pinnacle (pĭn`ĭkəl), minor architectural motif of vertical tapering shape, usually crowning a pier, buttress, or gable. Although sometimes it appears in Renaissance design, as in the Certosa di Pavia, it is almost exclusively a medieval Fitness(R), Bally Sports Clubs A sports club, athletics club or sports association is an eclectic institution oriented to multiple sports, which fields many teams and has varied sports departments in several sports, working under the same umbrella organization. (R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. For more information, visit http://www.ballyfitness.com. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this release including, without limitation, statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's plans, strategies, objectives, expectations, intentions, and adequacy of resources, are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, the following: the outcome of the SEC investigation and Bally's internal investigation, including review and restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of its previously announced or filed financial results; the audit of the restated financial statements; Bally's ability to secure consents under its debt instruments, including waivers of existing and future reporting covenant defaults under its public note indentures; the identification of one or more other issues that require restatement of one or more prior period financial statements; the communication by Bally's management and independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. of the existence of material weaknesses in internal controls over financial reporting; general economic and business conditions; competition; success of operating initiatives, advertising and promotional efforts; existence of adverse publicity or litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; acceptance of new product and service offerings; changes in business strategy or plans; quality of management; availability, terms, and development of capital; business abilities and judgment of personnel; changes in, or the failure to comply with, government regulations; regional weather conditions and other factors described in prior filings of the Company with the Securities and Exchange Commission. |
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