LOS ANGELES--(BUSINESS WIRE)--The Sports Club Company, Inc. (Pink Sheets: SCYL) today announced financial results for the third quarter and nine months ended September 30, 2011.
Revenues from operations for the third quarter ended September 30, 2011 were $13,956,000 compared to $13,019,000 for the third quarter ended September 30, 2010, an increase of $937,000 or 7.2%. After Preferred Stock dividends of $299,000 for the third quarter ended September 30, 2011 and the third quarter ended September 30, 2010, the net income attributable to common stockholders for the third quarter ended September 30, 2011 was $519,000 or $0.02 per basic and diluted share, compared to a net loss attributable to common stockholders for the third quarter ended September 30, 2010 of $478,000 or $0.02 per basic and diluted share. The weighted average number of basic and diluted shares outstanding for the third quarter ended September 30, 2011 and third quarter ended September 30, 2010, was 21,907,000 shares.
Revenues from operations for the nine months ended September 30, 2011 were $41,959,000 compared to $39,682,000 for the nine months ended September 30, 2010, an increase of $2,277,000 or 5.7%. After Preferred Stock dividends of $894,000 for the nine months ended September 30, 2011 and the nine months ended September 30, 2010, the net income attributable to common stockholders for the nine months ended September 30, 2011 was $982,000 or $0.04 per basic and diluted share, compared to a net loss attributable to common stockholders for the nine months ended September 30, 2010 of $2,152,000 or $0.10 per basic and diluted share. The weighted average number of basic and diluted shares outstanding for the nine months ended September 30, 2011 and nine months ended September 30, 2010, was 21,907,000 shares.
The Company also announced that on October 18, 2011, it concluded the sale of its four The Sports Club/LA Clubs located in Los Angeles, Orange County and Beverly Hills, California, and at Rockefeller Center in New York City to Equinox Holdings, Inc.
All statements in this press release other than statements of historical fact are forward looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in this press release. The forward looking statements speak only as of the date of this press release, and the Company expressly disclaims any obligations to release publicly, update or revise any forward looking statement contained herein if there are changes in the Company’s expectations or if any events, conditions or circumstances on which any such forward looking statement is based.
-Tables to Follow-
| THE SPORTS CLUB COMPANY, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| December 31, 2010 and September 30, 2011 | ||||||||
| (in thousands, except share and per share amounts) | ||||||||
| ASSETS | ||||||||
| Dec. 31, | Sept. 30, | |||||||
| 2010 | 2011 | |||||||
| (Audited) |
(Unaudited) |
|||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,504 | $ | 4,338 | ||||
| Restricted cash | 1,148 | 1,855 | ||||||
|
Accounts receivable, net of allowance for doubtful accounts of $284 and $258 at December 31, 2010 and September 30, 2011, respectively |
1,019 | 1,026 | ||||||
| Inventories | 335 | 316 | ||||||
| Prepaid expenses and other current assets | 401 | 1,106 | ||||||
| Total current assets | 4,407 | 8,641 | ||||||
| Property and equipment, net | 51,330 | 51,132 | ||||||
| Goodwill | 7,315 | 7,315 | ||||||
| Restricted cash | 50 | - | ||||||
| Other assets | 1,480 | 1,424 | ||||||
| $ | 64,582 | $ | 68,512 | |||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Current installments of notes payable and equipment financing loans | $ | 1,684 | $ | 2,432 | ||||
| Accounts payable | 591 | 287 | ||||||
| Accrued liabilities | 4,096 | 6,889 | ||||||
| Deferred lease obligations | 374 | 374 | ||||||
| Deferred revenues | 4,576 | 4,292 | ||||||
|
Redeemable Convertible Preferred Stock, Series B, $.01 par value, 10,500 shares authorized; 9,252 shares issued and outstanding at December 31, 2010 and September 30, 2011 |
12,823 | 13,448 | ||||||
| Total current liabilities | 24,144 | 27,722 | ||||||
| Notes payable and equipment financing loans, less current installments | 72,958 | 72,443 | ||||||
| Deferred lease obligations, less current portion | 5,437 | 5,317 | ||||||
| Deferred revenues, less current portion | 265 | - | ||||||
| Total liabilities | 102,804 | 105,482 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit: | ||||||||
|
Convertible Preferred Stock, Series C, $.01 par value, 5,000 shares authorized; 4,005 shares issued and outstanding at December 31, 2010 and September 30, 2011 (liquidation preference of $5,660 and $5,930 at December 31, 2010 and September 30, 2011, respectively) |
5,660 | 5,930 | ||||||
|
Common Stock, $.01 par value, 80,000,000 shares authorized; 21,907,210 shares issued and outstanding at December 31, 2010 and September 30, 2011 |
219 | 219 | ||||||
| Additional paid-in capital | 103,554 | 102,660 | ||||||
| Accumulated deficit | (147,655 | ) | (145,779 | ) | ||||
| Total Stockholders’ deficit | (38,222 | ) | (36,970 | ) | ||||
| $ | 64,582 | $ | 68,512 | |||||
| THE SPORTS CLUB COMPANY, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| Three Months Ended and Nine Months Ended September 30, 2010 and 2011 | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2011 | 2010 | 2011 | |||||||||||||
| Revenue: | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
| Membership revenue | $ | 9,329 | $ | 10,183 | $ | 27,924 | $ | 30,162 | ||||||||
| Products and services | 3,690 | 3,773 | 11,758 | 11,797 | ||||||||||||
| Total revenue | 13,019 | 13,956 | 39,682 | 41,959 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Club operating costs | 6,314 | 6,563 | 19,425 | 19,721 | ||||||||||||
| Cost of products and services | 2,871 | 2,846 | 8,861 | 8,953 | ||||||||||||
| Selling and marketing | 419 | 309 | 1,511 | 1,153 | ||||||||||||
| General and administrative | 1,168 | 989 | 3,835 | 2,962 | ||||||||||||
| Impairment charge | 12 | - | 72 | 22 | ||||||||||||
| Depreciation and amortization | 968 | 924 | 2,920 | 2,816 | ||||||||||||
| Total operating expenses | 11,752 | 11,631 | 36,624 | 35,627 | ||||||||||||
| Income from operations | 1,267 | 2,325 | 3,058 | 6,332 | ||||||||||||
| Other expense: | ||||||||||||||||
| Interest, net | (1,409 | ) | (1,398 | ) | (4,204 | ) | (4,167 | ) | ||||||||
| Minority interests | (37 | ) | (38 | ) | (112 | ) | (113 | ) | ||||||||
| Net income (loss) before provision for income taxes |
(179 |
) |
889 |
(1,258 |
) |
2,052 |
||||||||||
| Provision for income taxes | -- | 71 | -- | 176 | ||||||||||||
| Net income (loss) | (179 | ) | 818 | (1,258 | ) | 1,876 | ||||||||||
| Dividends on Preferred Stock | 299 | 299 | 894 | 894 | ||||||||||||
| Net Income (loss) attributable to common stockholders | $ | (478 | ) | $ | 519 | $ | (2,152 | ) | $ | 982 | ||||||
| Net Income (loss) per share attributable to common stockholders: | ||||||||||||||||
| Basic and diluted | $ | (0.02 | ) | $ | 0.02 | $ | (0.10 | ) | $ | 0.04 | ||||||
|
Weighted average number of common shares outstanding: |
||||||||||||||||
| Basic and diluted | 21,907 | 21,907 | 21,907 | 21,907 | ||||||||||||