Town Sports International Holdings (CLUB) Reports Q1 Loss of $15c/sh, Offers Guidance

Town Sports International Holdings (NASDAQ: CLUB) reported Q1 EPS of ($0.15), $0.16 worse than the analyst estimate of $0.01. Revenue for the quarter came in at $115 million versus the consensus estimate of $117 million.

Town Sports International Holdings sees Q2 2014 EPS of $0.0, versus the consensus of $0.07. Town Sports International Holdings sees Q2 2014 revenue of $116-117 million, versus the consensus of $118.37 million.

Second Quarter 2014 Financial Outlook:

Based on the current business environment, recent performance and current trends in the marketplace and subject to the risks and uncertainties inherent in forward-looking statements, our outlook for the second quarter of 2014 includes the following:

Revenue for Q2 2014 is expected to be between $116.0 million and $117.0 million versus $120.1 million for Q2 2013. As percentages of revenue, we expect Q2 2014 payroll and related expenses to be approximately 38.3% and club operating expenses to approximate 41.3%. We expect general and administrative expenses to approximate $7.3 million, depreciation and amortization to approximate $12.1 million and net interest expense to approximate $4.8 million.
We expect net results to be breakeven, and diluted earnings per share to be approximately $0.00 per share, assuming a 43% effective tax rate and approximately 24.7 million weighted average fully diluted shares outstanding.
We estimate that Adjusted EBITDA will approximate $17.0 million in Q2 2014.

In addition, over the course of the next quarter, we plan to review our club portfolio and will likely target approximately 5% of our lower performing clubs for closure. This will enable us to absorb a portion of these members into other existing clubs while saving on certain club operating expenses such as payroll and utilities. We may incur certain charges in connection with these closings.

For earnings history and earnings-related data on Town Sports International Holdings (CLUB) click here.

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