<PAGE> 1
- --------------------------------------------------------------------------------
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM TO .
COMMISSION FILE NUMBER 333-40907
TOWN SPORTS INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<CAPTION>
NEW YORK 13-2749906
<S> <C>
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
888 SEVENTH AVENUE
NEW YORK, NEW YORK 10106
TELEPHONE: (212) 246-6700
(ADDRESS, ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANTS PRINCIPAL EXECUTIVE OFFICE.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 and 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. 1,005,698.
- --------------------------------------------------------------------------------
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<PAGE> 2
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2000
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
a) Condensed Consolidated Balance Sheets as of December
31, 1999 and March 31, 2000......................... 2
b) Condensed Consolidated Statements of Operations for
the three months ended March 31, 1999 and 2000...... 3
c) Condensed Consolidated Statements of Cash Flow for
the three months ended March 31, 1999 and 2000...... 4
d) Notes to Condensed Consolidated Financial
Statements.......................................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............... 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................. 9
Item 2. Changes in Securities............................. 9
Item 3. Defaults upon Senior Securities................... 9
Item 4. Submission of Matters to a Vote of Security
Holders................................................ 9
Item 5. Other Information................................. 9
Item 6. Exhibits and Reports on Form 8-K.................. 9
SIGNATURES.................................................. 10
Exhibit Index............................................... 11
</TABLE>
1
<PAGE> 3
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND MARCH 31, 2000
ALL FIGURES $'000, EXCEPT SHARE DATA
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
------------ -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 27,125 $ 24,854
Accounts receivable....................................... 576 848
Inventory................................................. 1,070 968
Prepaid expenses and other current assets................. 1,475 1,494
-------- --------
Total current assets............................... 30,246 28,164
Fixed assets, net of accumulated depreciation of $36,388 and
$39,955 at December 31, 1999 and March 31, 2000,
respectively.............................................. 123,894 133,154
Intangible assets, net of accumulated amortization of
$12,939 and $14,742 at December 31, 1999 and March 31,
2000, respectively........................................ 37,648 39,902
Deferred tax asset.......................................... 11,829 12,511
Deferred membership costs................................... 10,841 11,713
Other assets................................................ 1,220 1,326
-------- --------
Total assets....................................... $215,678 $226,770
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt and capital lease
obligations............................................. $ 2,276 $ 2,617
Accounts payable.......................................... 3,146 2,419
Accrued expenses and Corporate income taxes payable....... 10,116 15,751
Deferred revenue.......................................... 15,723 19,478
-------- --------
Total current liabilities.......................... 31,261 40,265
-------- --------
Long-term debt and capital lease obligations................ 129,926 130,005
Deferred lease liabilities.................................. 13,852 14,878
Deferred revenue............................................ 2,049 2,418
Other liabilities........................................... 2,121 2,090
-------- --------
Total liabilities.................................. 179,209 189,656
-------- --------
Redeemable senior preferred stock, $1.00 par value;
liquidation value $45,478 and $46,829 at December 31,
1999, and March 31, 2000, respectively; authorized 100,000
shares; 40,000 shares issued and outstanding at December
31, 1999 and March 31, 2000............................... 42,066 43,503
-------- --------
Stockholders' deficit:
Series A preferred stock, $1.00 par value; at liquidation
value, authorized 200,000 shares, 153,637 shares issued
and outstanding at December 31, 1999 and March 31,
2000.................................................... 23,216 24,029
Series B preferred stock, $1.00 par value; at liquidation
value authorized 200,000 shares, 3,855 and 3,822 shares
issued and outstanding at December 31, 1999 and
March 31, 2000 respectively............................. 204 209
Class A voting common stock, $.001 par value; 1,014,086
and 1,005,698 shares issued and outstanding at December
31, 1999 and March 31, 2000, respectively............... 1 1
Paid-in capital........................................... 8,556 8,377
Unearned compensation..................................... (1,240) (1,240)
Accumulated deficit....................................... (36,334) (37,765)
-------- --------
Total stockholders' deficit........................ (5,597) (6,389)
-------- --------
Total liabilities and stockholders' deficit........ $215,678 $226,770
======== ========
</TABLE>
See notes to the condensed consolidated financial statements.
2
<PAGE> 4
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 2000
ALL FIGURES $'000
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
1999 2000
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Revenues:
Club operations........................................... $35,548 $48,724
Fees and other............................................ 591 545
------- -------
36,139 49,269
------- -------
Operating expenses:
Payroll and related....................................... 13,790 19,811
Club operating............................................ 12,532 15,332
General and administrative................................ 2,261 3,222
Depreciation and amortization............................. 4,629 6,026
Compensation expense in connection with stock options..... 190 209
------- -------
33,402 44,600
------- -------
Operating income.......................................... 2,737 4,669
Interest expense............................................ 2,168 3,614
Interest income............................................. (250) (556)
------- -------
Income before provision for corporate income tax.......... 819 1,611
Provision for corporate income tax.......................... 395 784
------- -------
Net Income................................................ 424 827
Accreted dividends on preferred stock....................... (1,933) (2,170)
------- -------
Net loss attributable to common stockholders.............. $(1,509) $(1,343)
======= =======
</TABLE>
See notes to the condensed consolidated financial statements.
3
<PAGE> 5
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 2000
ALL FIGURES $'000
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
1999 2000
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 424 $ 827
-------- --------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 4,629 6,026
Compensation expense in connection with stock options..... 190 209
Noncash rental expense, net of noncash rental income...... 933 1,026
Share of net income in affiliated companies............... (47) (112)
Amortization of debt issuance costs....................... 157 371
Change in certain working capital components.............. 6,001 9,871
Increase in deferred tax asset............................ (702) (682)
Increase in deferred membership costs..................... (1,108) (872)
Other..................................................... 44 (11)
-------- --------
Total adjustments...................................... 10,097 15,826
-------- --------
Net cash provided by operating activities.............. 10,521 16,653
-------- --------
Cash flows from investing activities:
Capital expenditures, net of effects of acquired
businesses............................................. (11,371) (12,768)
Acquisition of businesses................................. (1,050) (5,090)
Intangible and other assets............................... (128) (77)
Landlord contributions.................................... 87 120
-------- --------
Net cash used in investing activities.................. (12,462) (17,815)
-------- --------
Cash Flows from Financing Activities:
Repayments of borrowings.................................. (396) (718)
Repurchase of stock and other............................. -- (391)
-------- --------
Net cash used in financing activities.................. (396) (1,109)
-------- --------
Net decrease in cash and cash equivalents.............. (2,337) (2,271)
Cash and cash equivalents at beginning of period............ 19,154 27,125
-------- --------
Cash and cash equivalents at end of period............. $ 16,817 $ 24,854
======== ========
Summary of change in certain working capital components, net
of effects of acquired businesses:
Increase in accounts receivable........................... $ (387) (394)
Decrease in inventory..................................... 98 118
Increase in prepaid expenses and other current assets..... (189) 11
Increase in accounts payable and accrued expenses......... 3,673 6,012
Increase in deferred revenue.............................. 2,806 4,124
-------- --------
Net changes in working capital......................... $ 6,001 $ 9,871
======== ========
Supplemental disclosures of cash flow information:
Noncash investing and financing activities:
</TABLE>
The Company assumed $1,138 of long term debt in connection with club
acquisitions during the three month period ended March 31, 2000.
See notes to the condensed consolidated financial statements.
4
<PAGE> 6
TOWN SPORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND MARCH 31, 2000
ALL FIGURES $'000 (UNAUDITED)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC"). The condensed consolidated financial statements
should be read in conjunction with the Company's December 31, 1999 consolidated
financial statements and notes thereto, included on Form 10-K. The year-end
condensed balance sheet data was derived from audited financial statements, but
does not include all disclosures required by accounting principles generally
accepted in the United States. Certain information and footnote disclosures
which are normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to SEC rules and regulations. The Company believes that the disclosures made are
adequate to make the information presented not misleading. The information
reflects all adjustments which, in the opinion of Management, are necessary for
a fair presentation of the financial position and results of operations for the
interim periods set forth herein. All such adjustments are of a normal and
recurring nature. The results for the quarter ended March 31, 2000 are not
necessarily indicative of the results for the entire fiscal year ending December
31, 2000.
2. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
------------ ---------
<S> <C> <C>
Series B 9 3/4% Senior Notes, due 2004...................... $125,000 $125,000
Notes payable for acquired businesses....................... 3,777 4,474
Capital lease obligations................................... 3,425 3,148
-------- --------
132,202 132,622
Less, Current portion due within one year................... 2,276 2,617
-------- --------
Long-term portion........................................... $129,926 $130,005
======== ========
</TABLE>
As of March 31, 2000, the Company has a line of credit, with its principal
banks for direct borrowings and letters of credit of up to $25.0 million. The
line of credit carries interest at the Company's option, based upon the
Eurodollar borrowing rate plus 2.50% or the bank's prime rate plus 1.50%, as
defined. There were no outstanding borrowings against this line of credit as of
March 31, 2000 and outstanding letters of credit issued totaled $1.6 million.
The unutilized portion of the line of credit as of March 31, 2000, was $23.4
million. This line of credit expires on October 15, 2002.
The line of credit contains various covenants including interest coverage
(as defined) and a leverage ratio as well as restrictions on the payment of
dividends.
5
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
We are one of the two leading owners and operators of fitness clubs in the
Northeast and Mid-Atlantic regions of the United States. As of March 31, 2000,
we operated 86 clubs that collectively served approximately 230,000 members. We
develop clusters of clubs to serve densely populated major metropolitan regions
in which a high percentage of the population commutes to work. We service such
populations by clustering clubs near the highest concentrations of its target
customers' areas of both employment and residence. Our target customer is
college-educated, typically between the ages of 20 and 44 and earns an annual
income of approximately $50,000.
Our goal is to develop the premier health club network in each of the major
metropolitan regions we enter. We believe that clustering clubs allows us to
achieve strategic operating advantages that enhance our ability to achieve this
goal. In entering new regions, we develop these clusters by initially opening or
acquiring clubs located in the more central urban markets of the region and then
branching out from these urban centers to suburbs and ancillary communities.
Capitalizing on this clustering of clubs, as of March 31, 2000, approximately
half of our members participated in a membership plan that allows unlimited
access to all of our clubs for a higher membership fee.
We have executed this strategy successfully in the New York region through
the network of clubs we operate under its New York Sports Club "NYSC" brand
name. We are the largest fitness club operator in Manhattan with 26 locations
and operate a total of 65 clubs under the NYSC name within a defined radius of
New York City. We operate 11 clubs surrounding Washington, DC under our
Washington Sports Club brand name and have begun establishing similar clusters
surrounding Boston and Philadelphia under our Boston Sports Club and
Philadelphia Sports Club brand names, respectively. The Company employs
localized brand names for its clubs to create an image and atmosphere consistent
with the local community, and to foster the recognition as a local network of
quality fitness clubs rather than a national chain.
Our operating and selling expenses are comprised of both fixed and variable
costs. The fixed costs include salary expense, rent, utilities, janitorial
expenses and depreciation. Variable costs are primarily related to sales
commissions, advertising and supplies. As clubs mature and increase their
membership base, fixed costs are typically spread over an increasing revenue
base and operating margins tend to improve.
HISTORICAL CLUB GROWTH
The following table sets for our club growth during each of the quarters in
1999 and the quarter ended March 31, 2000.
<TABLE>
<CAPTION>
1999 2000
--------------------------------- ----
Q1 Q2 Q3 Q4 TOTAL Q1
--- --- --- --- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Clubs operated at beginning of period............... 69 74 79 83 69 86
Greenfield clubs.................................... 4 4 3 3 14 0
Acquired clubs...................................... 2 1 1 0 4 1
Relocated clubs..................................... (1) 0 0 0 0 (1)
--- --- --- --- -- ----
Clubs operated at end of period..................... 74 79 83 86 86 86
Number of managed clubs included at end of period... 4 4 4 4 4 2(a)
</TABLE>
- ---------------
(a) In March 2000, two clubs previously managed by the Company were purchased by
the Company.
6
<PAGE> 8
RESULTS OF OPERATIONS
The following table sets forth certain operating data as a percentage of
revenue for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
--------------
1999 2000
----- -----
<S> <C> <C>
Revenue..................................................... 100.0% 100.0%
----- -----
Operating expenses
Payroll and related....................................... 38.2 40.2
Club operating............................................ 34.6 31.1
General and administrative................................ 6.3 6.6
Depreciation and amortization............................. 12.8 12.2
Compensation expense in connection with stock options..... 0.5 0.4
----- -----
Operating income.......................................... 7.6 9.5
Interest expense............................................ 6.0 7.3
Interest income............................................. (0.7) (1.1)
----- -----
Income before provision for corporate income tax.......... 2.3 3.3
Provision for corporate income tax.......................... 1.1 1.6
----- -----
Net income................................................ 1.2 1.7
Accreted dividend on preferred stock........................ (5.4) (4.4)
----- -----
Net loss attributable to common stockholders.............. (4.2)% (2.7)%
===== =====
</TABLE>
Three Months Ended March 31, 2000 Compared to Three Months Ended March 31,
1999
Revenues. Revenues increased approximately $13.1 million, or 36.3%, to
$49.3 million during the quarter ended March 31, 2000 from $36.1 million in the
quarter ended March 31, 1999. This increase resulted from the 27 clubs opened or
acquired the last three quarters of 1998 (approximately $3.0 million), 18 opened
or acquired during 1999 (approximately $5.1 million) and the three clubs
acquired in the first quarter of 2000 (approximately $1.3 million). In addition,
revenues increased during the quarter by approximately $3.7 million at the
Company's mature clubs (clubs owned and operated for at least 24 months)
resulting from increased membership and dues.
Operating Expenses. Operating expenses increased $11.2 million, or 33.5%,
to $44.6 million in the quarter ended March 31, 2000, from $33.4 million in the
quarter ended March 31, 1999. The increase was primarily due to a 22.6% increase
in total months of club operations (the aggregate number of full months of
operation during a given period for the clubs open at the end of such period) to
247 in the quarter ended March 31, 2000 from 202 in the quarter ended March 31,
1999, in addition to the following factors:
Payroll and related increased by $6.0 million, or 43.7% to $19.8
million in the quarter ended March 31, 2000, from $13.8 million in the
quarter ended March 31, 1999. This increase was principally attributable to
the acquisition or opening of 18 clubs in 1999 and one of the acquired
clubs in the first quarter of 2000. Payroll and related as a percent of
revenue increased from 38.2% to 40.2%. This increase is principally due to
increases in private training payroll.
Club operating increased by $2.8 million or 22.3% to $15.3 million in
the quarter ended March 31, 2000, from $12.5 million in the quarter ended
March 31, 1999. This increase is attributable to the acquisition or opening
of 18 clubs in 1999 and one of the acquired clubs in the first quarter of
2000.
General and administrative increased by $961,000, or 42.5% to $3.2
million in the quarter ended March 31, 2000, from $2.3 million, in the
quarter ended March 31, 1999. This increase is attributable to expenses
associated with the Company's expansion, including the expansion of the
Company's corporate office and upgrade of the Company's management
information systems. In March 1999 the Company
7
<PAGE> 9
moved its membership billing processing center to a purpose-built location
separated from its corporate office.
Depreciation and amortization increased by $1.4 million, or 30.2% to
$6.0 million in the quarter ended March 31, 2000, from $4.6 million in the
quarter ended March 31, 1999 This increase is attributable primarily to a
full period of depreciation and amortization for fixed asset additions,
acquisitions or club openings since the quarter ended March 31, 1999 and
the increased fixed and intangible assets arising out of one of the club
acquisitions during the first quarter of 2000.
Compensation expense in connection with stock options increased
$19,000 or 10.0% to $209,000 for the quarter ended March 31, 2000 from
$190,000 in the quarter ended March 31, 1999 and relates to preferred stock
options. The increase is attributable to the compounding of dividends on
these preferred stock options.
Interest Expense. Interest expense increased $1.4 million to $3.6 million
during the quarter ended March 31, 2000, from $2.2 million in the quarter ended
March 31, 1999. This increase was primarily due to increased borrowings
associated with the completion of the $40 million Senior Note issuance in June
of 1999.
Interest Income. Interest income increased $306,000 to $556,000 during the
quarter ended March 31, 2000 from $250,000 in the quarter ended March 31, 1999.
The increased level of interest income was primarily due to higher levels of
cash on hand and slightly higher interest rates earned during the quarter ended
March 31, 2000.
Provision for Income Tax. The income tax provision for the quarter ended
March 31, 2000 was $784,000 compared to a tax provision of $395,000 for the
quarter ended March 31, 1999.
Accreted Dividends on Preferred Stock. Accreted dividends on the preferred
stock increased $237,000 to $2.2 million during the quarter ended March 31,
2000, from $1.9 million in the quarter ended March 31, 1999. This increase is
primarily a result of the compounding of accreted dividends previously recorded.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has satisfied its liquidity needs through cash
from operations and various borrowing arrangements. Principal liquidity needs
have included the acquisition and development of new clubs, debt service
requirements and other capital expenditures necessary to maintain existing
clubs.
Operating Activities. Net cash provided by operating activities for the
quarter ended March 31, 2000 was $16.7 million compared to $10.5 million for the
quarter ended March 31, 1999, an increase of $6.2 million. Cash flows from
operations has improved as the profitability of the mature club base and the
clubs opened or acquired during the last three quarters of 1998, continues to
improve. The balance of the increase is principally due to an increase in the
working capital deficit of the Company. Excluding cash and cash equivalents, the
Company normally operates with a working capital deficit because it receives
dues or fee revenue either (I) during the month services are rendered, or (ii)
when paid-in-full, 12 months in advance. As a result, the Company has no
material accounts receivable. In addition, because initiation fees are received
at enrollment and are recognized over the estimated average term of membership,
the Company records a deferred revenue liability. Management believes that the
Company's working capital deficit is an important source of cash flow from
operating activities that it believes will continue to grow as the Company's
membership revenues increase.
Investing Activities. The Company invested $12.8 million and $5.1 million
in capital expenditures and business acquisitions, respectively during the
quarter ended March 31, 2000. The Company currently estimates total capital
expenditure and asset acquisition requirements for the remaining three quarters
of 2000 to approximate $33.0 million, which includes $2.1 million that
management intends to renovate and expand certain existing clubs, $5.2 million
to maintain certain existing clubs and $3.0 million to further upgrade its
management information systems.
Financing Activities. The Company has a line of credit with its principal
bank for direct borrowings and letters of credit of up to $25 million. The line
of credit contains restrictive covenants, including a leverage ratio and
interest coverage ratio and dividend payment restrictions and is collateralized
by all the assets of the
8
<PAGE> 10
Company. As of March 31, 2000, the Company has approximately $23.4 million
available under the line of credit, which matures in October 2002, and has no
scheduled amortization requirements. The Credit Facility was amended to allow
for maximum borrowings or $25.0 million. Although management believes that the
Company will be able to obtain or generate sufficient funds to finance the
Company's current operating and growth plans through the end of 2000, any
material acceleration or expansion of that plan through additional greenfields
or acquisitions (to the extent such acquisitions include cash payments) may
require the Company to pursue additional sources of financing prior to the end
of 2000. There can be no assurance that such financing will be available or that
it will be available on acceptable terms. The inability to finance such further
or accelerated expansion on acceptable terms may negatively impact the Company's
competitive position and or materially adversely affect the Company's business,
results of operations or financial condition. The Credit Facility accrues
interest at variable rates based on market conditions, accordingly, future
increase in interest rates could have a negative impact on net income.
FORWARD-LOOKING STATEMENTS
Certain statements in this report on Form 10-Q of the Company for the three
month period ended March 31, 2000 are forward-looking statements, including,
without limitation, statements regarding future financial results and
performance, and potential sales revenue. These statements are subject to
various risks and uncertainties, many of which are outside the control of the
Company, including the level of market demand for the Company's services,
competitive pressures, the ability to achieve reductions in operating costs and
to continue to integrate acquisitions, the application of Federal and state tax
laws and regulations, and other specific factors discussed herein and in other
Securities and Exchange Commission filings by the Company. The information
contained herein represents management's best judgement as of the date hereof
based on information currently available; however, the Company does not intend
to update this information to reflect development or information obtained after
the date hereof and disclaims any legal obligation to the contrary.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Not applicable
9
<PAGE> 11
SIGNATURES
Pursuant to requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
TOWN SPORTS INTERNATIONAL, INC.
(Registrant)
DATE: May 8, 2000 By: /s/ RICHARD PYLE
----------------------------------------------------
Richard Pyle
Chief Financial Officer
(principal financial and accounting officer)
DATE: May 8, 2000 By: /s/ MARK SMITH
----------------------------------------------------
Mark Smith
Chief Executive Officer
(principal executive officer)
</TABLE>
10
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<C> <S>
(27) Financial Data Schedule (to be filed electronically).
</TABLE>
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheet as of March 31, 2000, the Condensed
Consolidated Statement of Operations for the three months ended March 31, 2000
and is qualified in its entirety by reference to such statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 24,854
<SECURITIES> 0
<RECEIVABLES> 848
<ALLOWANCES> 0
<INVENTORY> 968
<CURRENT-ASSETS> 28,164
<PP&E> 173,109
<DEPRECIATION> 39,955
<TOTAL-ASSETS> 226,770
<CURRENT-LIABILITIES> 40,265
<BONDS> 132,622
43,503
1
<COMMON> 24,238
<OTHER-SE> (30,628)
<TOTAL-LIABILITY-AND-EQUITY> 226,770
<SALES> 0
<TOTAL-REVENUES> 49,269
<CGS> 0
<TOTAL-COSTS> 44,600
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,614
<INCOME-PRETAX> 1,611
<INCOME-TAX> 784
<INCOME-CONTINUING> 827
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 827
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
