FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the period ended March 31, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
Commission file number: 0-27478
BALLY TOTAL FITNESS HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3228107
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
8700 West Bryn Mawr Avenue, Chicago, Illinois 60631
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (773) 380-3000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes: X No:
As of June 30, 1997, 12,510,380 shares of the registrant's common stock were
outstanding.
<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial statements:
Condensed consolidated balance sheet (unaudited)
March 31, 1997 and December 31, 1996.......................... 1
Consolidated statement of operations (unaudited)
Three months ended March 31, 1997 and 1996.................... 2
Consolidated statement of stockholders' equity (unaudited)
Three months ended March 31, 1997............................. 3
Consolidated statement of cash flows (unaudited)
Three months ended March 31, 1997 and 1996.................... 4
Notes to condensed consolidated financial statements
(unaudited)................................................... 6
Item 2. Management's discussion and analysis of financial
condition and results of operations.................... 8
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K.......................... 11
SIGNATURE PAGE....................................................... 12
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In thousands)
(As restated)
<CAPTION>
March 31 December 31
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents......................... $ 9,924 $ 16,534
Installment contracts receivable, less
unearned finance charges of $26,887 and
$24,467 and allowance for doubtful
receivables and cancellations of $51,587
and $48,471................................ 161,962 153,235
Other current assets......................... 28,314 24,075
----------- -----------
Total current assets....................... 200,200 193,844
Installment contracts receivable, less
unearned finance charges of $12,508 and
$11,382 and allowance for doubtful
receivables and cancellations of $40,042
and $37,624 ................................. 155,049 146,972
Property and equipment, less accumulated
depreciation and amortization of $312,628
and $304,865................................. 320,666 325,459
Intangible assets, less accumulated
amortization of $50,745 and $49,619.......... 104,599 105,725
Deferred income taxes ......................... 17,003 13,656
Deferred membership origination costs.......... 82,442 82,140
Other assets................................... 24,988 25,506
----------- -----------
$ 904,947 $ 893,302
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................. $ 44,077 $ 41,565
Income taxes payable......................... 2,322 2,258
Deferred income taxes........................ 18,492 15,145
Accrued liabilities.......................... 49,631 55,063
Current maturities of long-term debt......... 8,387 8,401
Deferred revenues............................ 267,456 265,465
----------- -----------
Total current liabilities.................. 390,365 387,897
Long-term debt, less current maturities........ 387,740 376,397
Other liabilities.............................. 6,657 6,824
Deferred revenues.............................. 101,706 98,032
Stockholders' equity........................... 18,479 24,152
----------- -----------
$ 904,947 $ 893,302
=========== ===========
<FN>
See accompanying notes.
</FN>
</TABLE>
1
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
(As restated)
<CAPTION>
Three months
ended March 31
----------------------
1997 1996
---------- ----------
<S> <C> <C>
Net revenues:
Membership revenues -
Initial membership fees on paid-in-full
memberships originated........................ $ 17,475 $ 21,157
Initial membership fees on financed
memberships originated........................ 95,568 87,178
Dues collected.................................. 47,788 43,416
Change in deferred revenues..................... (5,665) (748)
---------- ----------
155,166 151,003
Finance charges earned............................ 9,769 9,595
Fees and other.................................... 3,598 3,294
---------- ----------
168,533 163,892
Operating costs and expenses:
Fitness center operations......................... 95,924 95,214
Member processing and collection centers.......... 9,403 11,589
Advertising....................................... 12,686 12,611
General and administrative........................ 5,921 5,789
Provision for doubtful receivables................ 25,537 24,478
Depreciation and amortization..................... 13,065 13,676
Change in deferred membership origination costs... (302) 492
---------- ----------
162,234 163,849
---------- ----------
Operating income.................................... 6,299 43
Interest expense.................................... 11,879 11,849
---------- ----------
Loss before income taxes............................ (5,580) (11,806)
Income tax provision ............................... 100 150
---------- ----------
Net loss............................................ $ (5,680) $ (11,956)
========== ==========
Net loss per common share........................... $ (.46) $ (.98)
========== ==========
<FN>
See accompanying notes.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
(In thousands, except share data)
(As restated)
<CAPTION>
Common stock Unearned
------------------ compensation Total
Number Par Contributed Accumulated (restricted stockholders'
of shares value capital deficit stock) equity
---------- ----- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996........... 12,495,161 $ 125 $ 303,811 $(277,733) $ (2,051) $ 24,152
Net loss .............................. (5,680) (5,680)
Issuance of common stock upon
exercise of stock options............. 1,814 7 7
---------- ----- ---------- ---------- ---------- ----------
Balance at March 31, 1997.............. 12,496,975 $125 $ 303,818 $(283,413) $ (2,051) $ 18,479
========== ===== ========== ========== ========== ==========
<FN>
See accompanying notes.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In thousands)
(As restated)
<CAPTION>
Three months
ended March 31
----------------------
1997 1996
---------- ----------
<S> <C> <C>
OPERATING:
Net loss........................................... $ (5,680) $ (11,956)
Adjustments to reconcile to cash used -
Depreciation and amortization, including
amortization included in interest expense........ 13,624 14,552
Provision for doubtful receivables................ 25,537 24,478
Change in operating assets and liabilities........ (44,360) (42,212)
---------- ---------
Cash used in operating activities.............. (10,879) (15,138)
INVESTING:
Purchases and construction of property
and equipment..................................... (6,842) (7,172)
Other, net......................................... (55) 747
---------- ----------
Cash used in investing activities ............. (6,897) (6,425)
FINANCING:
Debt transactions -
Net borrowings under revolving credit
agreement........................................ 12,000 9,000
Proceeds from other long-term borrowings.......... 1,500
Repayments of other long-term debt................ (834) (310)
Debt issuance costs............................... (7) (144)
---------- ----------
Cash provided by debt transactions............. 11,159 10,046
Equity transaction -
Proceeds from issuance of common stock upon
exercise of stock options........................ 7
---------- ----------
Cash provided by financing activities.......... 11,166 10,046
---------- ----------
Decrease in cash and equivalents.................... (6,610) (11,517)
Cash and equivalents, beginning of period........... 16,534 21,263
---------- ----------
Cash and equivalents, end of period................. $ 9,924 $ 9,746
========== ==========
<FN>
(continued)
</FN>
</TABLE>
4
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - (CONTINUED)
(In thousands)
(As restated)
<CAPTION>
Three months
ended March 31
----------------------
1997 1996
---------- ----------
<S> <C> <C>
SUPPLEMENTAL CASH FLOWS INFORMATION:
Changes in operating assets and liabilities
were as follows -
Increase in installment contracts
receivable................................... $ (42,341) $ (28,678)
Increase in other current and other assets.... (4,414) (747)
(Increase) decrease in deferred
membership origination costs................. (302) 492
Increase (decrease) in accounts payable....... 2,512 (8,344)
Increase (decrease) in income taxes payable... 64 (930)
Decrease in accrued and other liabilities..... (5,544) (4,753)
Increase in deferred revenues................. 5,665 748
---------- ----------
$ (44,360) $ (42,212)
========== ==========
Cash payments for interest and income taxes
were as follows -
Interest paid................................. $ 17,823 $ 17,352
Interest capitalized.......................... (288) (55)
Income taxes paid, net........................ 36 1,080
Investing and financing activities exclude the
following non-cash transactions -
Acquisition of property and equipment
through capital leases....................... $ 163 $ 1,999
<FN>
See accompanying notes.
</FN>
</TABLE>
5
<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(All dollar amounts in thousands, except share data)
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of Bally Total Fitness Holding Corporation (the "Company") and the
subsidiaries which it controls. The Company, through its subsidiaries, is a
nationwide commercial operator of fitness centers with approximately 320
facilities concentrated in 27 states and Canada. The Company operates in one
industry segment, and all significant revenues arise from the commercial
operation of fitness centers, primarily in major metropolitan markets in the
United States. Unless otherwise specified in the text, references to the Company
include the Company and its subsidiaries. These condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements included in the Company's Annual Report on Form 10-K/A for the year
ended December 31, 1996.
All adjustments have been recorded which are, in the opinion of management,
necessary for a fair presentation of the condensed consolidated balance sheet of
the Company at March 31, 1997, its consolidated statements of operations and
cash flows for the three months ended March 31, 1997 and 1996, and its
consolidated statement of stockholders' equity for the three months ended March
31, 1997. All such adjustments were of a normal recurring nature.
The accompanying condensed consolidated financial statements have been prepared
in conformity with generally accepted accounting principles which require the
Company's management to make estimates and assumptions that affect the amounts
reported therein.
Actual results could vary from such estimates.
RESTATEMENT
As more fully described in the "Summary of significant accounting policies
Restatement and Membership revenue recognition" notes to the consolidated
financial statements included in the Company's Annual Report on Form 10-K/A for
the year ended December 31, 1996, following a series of extensive discussions
with the Staff of the Securities and Exchange Commission (the "SEC Staff"), the
Company has agreed to restate its condensed consolidated financial statements
for all periods presented to reflect a change in the method of recognizing
membership revenue. Summarized financial information illustrating the effect of
the restatement on the Company's condensed consolidated financial statements is
as follows:
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
---------------------- ---------------------
As As
originally As originally As
reported restated reported restated
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Financial position -
Deferred membership origination
costs............................. $ -- $ 82,442
Current deferred revenues........... 54,005 267,456
Long-term deferred revenues......... 25,529 101,706
Stockholders' equity................ 219,036 18,479
Results of operations -
Net revenues........................ $177,321 $168,033 $171,081 $163,892
Operating income.................... 14,001 5,799 9,592 43
Net income (loss).................... 2,522 (5,680) (2,457) (11,956)
Net income (loss) per common
share.............................. .19 (.46) (.20) (.98)
</TABLE>
6
<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
(ALL DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
In addition, the Company changed its first quarter 1997 application of Statement
of Financial Accounting Standards ("SFAS") No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishment of Liabilities", which
provides new accounting and reporting standards for sales, securitizations, and
servicing of receivables and other financial assets, secured borrowing and
collateral transactions, and extinguishments of liabilities occurring after
December 31, 1996. SFAS No. 125 addresses whether a transfer of financial assets
constitutes a sale and, if so, the determination of any resulting gain or loss.
SFAS No. 125 is based on a "financial- components approach" that focuses on
control. Under this approach, following a transfer of financial assets
(including portions of financial assets), an entity recognizes the assets it
controls and liabilities it has incurred, and derecognizes financial assets for
which control has been surrendered and financial liabilities that have been
extinguished. The Company, based upon a series of consultations with its
independent auditors, initially believed that under the Company's securitization
facility, installment contracts receivable originating and being sold to a
special purpose entity after December 31, 1996 qualified for "sale treatment"
under SFAS No. 125. However, based upon Emerging Issues Task Force Issue 96-20
guidance, the Company and its independent auditors now believe that sales of
installment contracts receivable after December 31, 1996 do not qualify for
"sale treatment" under SFAS No. 125. As a result of this additional restatement
of the Company's first quarter 1997 condensed consolidated financial statements,
assets relating to installment contracts receivable and long-term debt each
increased by approximately $30,000 at March 31, 1997, and finance charges earned
and interest expense each increased by approximately $500 for the three months
ended March 31, 1997.
SEASONAL FACTORS
The Company's operations are subject to seasonal factors and, therefore, the
results of operations for the three months ended March 31, 1997 and 1996 are not
necessarily indicative of the results of operations for the full year.
LOSS PER COMMON SHARE
Loss per common share is computed by dividing net loss by the weighted average
number of shares of common stock outstanding during each period, which totaled
12,279,131 shares and 12,170,161 shares for the three months ended March 31,
1997 and 1996, respectively. Certain restricted stock was issued subject to
forfeiture unless certain conditions are met. These contingent shares are
considered common stock equivalents and are excluded from the loss per share
computation until the conditions are met because their effect would be
anti-dilutive.
In February 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings per Share", which establishes new standards for computing and
presenting earnings per share. SFAS No. 128 requires a dual presentation of
basic earnings per share (computed by dividing income (loss) available to common
stockholders by the weighted-average number of common shares outstanding for the
period) and diluted earnings per share (computed similarly to fully diluted
earnings per share pursuant to APB Opinion No. 15) on the face of the Company's
statement of operations. The Company will adopt SFAS No. 128 in the fourth
quarter of 1997; earlier application is not permitted. As computed under SFAS
No. 128, basic and diluted loss per share for the three months ended March 31,
1997 each would have been $(.46) per share.
LONG-TERM DEBT
The Company's revolving credit agreement was amended in February 1997 to provide
for a $20,000 line of credit, which is reduced by the amount of any outstanding
letters of credit in excess of $10,000 (which excess may not exceed $10,000).
The maximum amount available under this revolving credit agreement, including
letters of credit, is $30,000. At March 31, 1997, outstanding letters of credit
totaled approximately $13,600 and borrowings on the credit line totaled $12,000.
7
<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
Net revenues for the first quarter of 1997 were $168.5 million compared to
$163.9 million in 1996, an increase of $4.6 million (3%). The average number of
fitness centers selling memberships decreased from 324 in the first quarter of
1996 to 319 in the first quarter of 1997, reflecting the closure of 12 older,
typically smaller and less profitable facilities offset, in part, by the opening
of 6 new, larger facilities between January 1996 and March 1997. Initial
membership fees originated increased $4.7 million (4%) in the 1997 quarter,
consisting of an $8.4 million (10%) increase in financed memberships originated
offset, in part, by a $3.7 million (17%) decrease in paid-in-full memberships
originated. These results generally reflect management's current strategy of
selling more financed membership plans and fewer discounted paid- in-full
membership plans, which resulted in an 18% increase in the average selling price
of contracts sold and a 14% decline in the number of contracts sold. Dues
collected increased $4.4 million (10%) over 1996, reflecting the Company's
continuing strategy of increasing renewal dues. Finance charges earned increased
$.2 million (2%) in the 1997 quarter and fees and other revenues increased $.3
million (9%) from 1996.
Operating income for the first quarter of 1997 was $6.3 million compared to
approximately break-even in 1996. The improvement of $6.3 million is due to the
aforementioned increase in revenues and a $1.6 million (1%) decrease in
operating costs and expenses, which is net of a $1.0 million increase in the
provision for doubtful receivables. Excluding the provision for doubtful
receivables, operating costs and expenses decreased $2.6 million (2%) from 1996
primarily due to a $2.2 million (19%) decrease in member processing and
collection center expenses, which includes the realization in 1997 of the full
effect of cost reductions achieved in connection with the completion of the
primary phase of a computer conversion in late 1995. In addition, telephone
expenses decreased as a result of renegotiated rates and fewer member service
calls. Operating costs and expenses are expected to include a non-recurring
charge during the second quarter or later in 1997, principally amortization,
relating to the restricted stock awards issued in conjunction with the spin-off
of the Company for which restrictions lapsed and vesting has yet to occur. The
charge, which is based in part on the price of the Company's common stock at the
time of future vesting, is not yet determinable.
The provision for doubtful receivables for the first quarter of 1997 was $25.5
million compared to $24.5 million in 1996, an increase of $1.0 million (4%)
primarily due to the increase in initial membership fees originated on financed
memberships. The rate of the Company's provision for doubtful receivables can
vary from period to period. The Company estimates the ultimate realization of
initial membership fees originated on financed memberships based upon a number
of factors such as method of payment (EFT vs. coupon books) and amount of
downpayment, among others. The Company continually analyzes the provision
because initial membership fees can be paid to the Company in installments.
Updated collection experience trends are reviewed each reporting period and, if
necessary, the allowance is adjusted accordingly. Changes in the allowance as a
percentage of gross receivables may result from various factors including
significant near-term fluctuations in amounts of initial membership fees
originated for financed memberships (historically, approximately 50% of financed
memberships that default do so within 120 days of origination) or the timing or
acceleration of write-offs. The Company believes the qualitative profile of its
receivables portfolio at March 31, 1997 is generally improved from that in
recent years due to more accounts paying by EFT and higher average downpayments.
Interest expense, net of capitalized interest, was $11.9 million for the first
quarter of 1997 compared to $11.8 million in 1996, an increase of $.1 million
(1%).
The income tax provision for the first quarter of 1997 and 1996 has been
determined using the estimated annual effective tax rate for each year and
reflects state income taxes only, as no federal benefit has been provided due to
the uncertainty of tax loss realization.
8
<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS-(CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
The Company has no scheduled principal payments under its $200 million principal
amount of 13% Senior Subordinated Notes due 2003 (the "13% Notes") until January
2003. Through July 1999, the principal amount of the certificates under the
Company's securitization facility remains fixed at $160 million. In addition,
the Company's revolving credit agreement, which provides for borrowings of up to
$20 million, expires in June 1998. Accordingly, debt service requirements of the
Company for the next twelve months are principally for interest and are expected
to be approximately $51 million.
The Company's recent losses and the terms of its revolving credit agreement have
limited the Company's ability to borrow significant amounts of additional funds.
Consequently, the Company has been dependent on availability under its revolving
credit agreement ($4.4 million at March 31, 1997) and its operations to provide
for cash needs. The Company has managed liquidity requirements in recent years
by utilizing membership plan discounting techniques designed to increase its
cash sales and down- payments and to accelerate collections and dues payments to
increase available cash reserves and, to a lesser extent, sales of non-strategic
assets and sale/leaseback arrangements. Management believes use of these
discounting techniques has had a negative impact on both current and long term
results and, if needed in the future, such discounting and acceleration
techniques may be increasingly costly and less effective.
The Company intends to expand and upgrade its facilities in order to increase
its membership base and more effectively capitalize on its streamlined marketing
and administrative functions. Using cash generated by operations and through
leasing arrangements, management plans to make capital expenditures of
approximately $10 million to $12 million over the next twelve months to maintain
and make minor upgrades to the Company's existing facilities, which include
exercise equipment upgrades, HVAC and other operating equipment upgrades and
replacements, and locker room and workout area refurbishments, among others. For
the last several years, the Company has spent $6 million to $15 million
annually, as funds were available, to open new or replacement facilities. The
Company expects to continue those expenditures as funds are available.
The Company filed a Registration Statement with the Securities and Exchange
Commission to offer additional shares of its common stock which has not yet been
declared effective (the "Offering"). The Company intends to use (i)
approximately $20 million to $30 million of the proceeds of the Offering for
capital expenditures to develop 15 to 25 new facilities over the next three
years and more extensively refurbish and make major upgrades to approximately
25% of its facilities over the next two years, (ii) $7.5 million to repay a loan
to an affiliate of an underwriter of the Offering, (iii) as much as $3 million
to support the introduction of new initiatives and (iv) the balance, if any, for
general corporate and working capital purposes. The Company expects that
completion of the Offering will alleviate the need to use the discounting
techniques described above. Pending such uses, the Company may temporarily
invest available funds from the Offering in short-term securities and/or reduce
indebtedness under its revolving credit agreement.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Form 10-Q/A including, without limitation,
statements relating to the Company's plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve known and unknown risks, uncertainties,
and other factors which 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: general economic
and business conditions; competition; success of operating initiatives,
advertising and promotional efforts; existence of adverse publicity or
litigation; acceptance of new product offerings; changes in business strategy or
plans;
9
<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS-(CONTINUED)
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 mentioned
in this Form 10-Q/A. The Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
CASH EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
("CASH EBITDA")
The indenture governing the 13% Notes requires the disclosure of information
with respect to Cash EBITDA (as calculated using accounting principles in effect
in January 1993, when the 13% Notes were issued) in this Form 10-Q/A. Cash
EBITDA should not be considered as an alternative to any measure of performance
or liquidity as promulgated under generally accepted accounting principles (such
as net income/loss or cash provided by/used in operating, investing and
financing activities), nor should it be considered as an indicator of the
Company's overall financial performance.
<TABLE>
Cash EBITDA is calculated as follows (in millions):
<CAPTION>
Three months
ended March 31
----------------------
1997 1996
---------- ----------
<S> <C> <C>
Loss before income taxes................................ $ (5.6) $ (11.8)
Adjustments to reconcile to Cash EBITDA:
Interest expense (excluding $3.5
million and $3.6 million of interest
on the securitization facilities)................... 7.9 8.3
Depreciation and amortization......................... 13.1 13.7
Provision for doubtful receivables.................... 25.5 24.5
Increase in installment contracts
receivable.......................................... (42.3) (28.7)
Increase in deferred revenues......................... 5.7 .7
(Increase) decrease in deferred membership
origination costs................................... (.3) .5
Other non-cash items.................................. .1
---------- ----------
Cash EBITDA............................................. $ 4.1 $ 7.2
========== ==========
</TABLE>
Cash EBITDA was $4.1 million for the first quarter of 1997 compared to $7.2
million for 1996, a decrease of $3.1 million primarily attributed to decreased
collections and decreased accelerations on installment contracts receivable
offset, in part, by an increase in renewal dues and a decrease in cash expenses.
10
<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits:
27 Restated Financial Data Schedule for March 31, 1997 and 1996 (filed
electronically only).
(b) Reports on Form 8-K:
None.
11
<PAGE>
SIGNATURE PAGE
Pursuant to the 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.
BALLY TOTAL FITNESS HOLDING CORPORATION
------------------------------------------------------------
Registrant
/s/ John W. Dwyer
------------------------------------------------------------
John W. Dwyer
Senior Vice President, Chief Financial Officer and Treasurer
(principal financial officer)
Dated: July 16, 1997
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THESE SCHEDULES CONTAIN SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT MARCH 31, 1997 AND 1996, THE
CONSOLIDATED STATEMENT OF OPERATIONS AND THE CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-END> MAR-31-1997 MAR-31-1996
<CASH> 9,924 9,746
<SECURITIES> 0 0
<RECEIVABLES> 408,640<F1> 423,716<F1>
<ALLOWANCES> 91,629 116,106
<INVENTORY> 0 0
<CURRENT-ASSETS> 200,200 198,609
<PP&E> 633,294 638,839
<DEPRECIATION> 312,628 294,390
<TOTAL-ASSETS> 904,947 931,711
<CURRENT-LIABILITIES> 390,365 402,715
<BONDS> 387,740 363,817
0 0
0 0
<COMMON> 125 125
<OTHER-SE> 18,354 19,694
<TOTAL-LIABILITY-AND-EQUITY> 904,947 931,711
<SALES> 0 0
<TOTAL-REVENUES> 168,533 163,892
<CGS> 0 0
<TOTAL-COSTS> 108,308<F2> 108,317<F2>
<OTHER-EXPENSES> 9,403<F3> 11,589<F3>
<LOSS-PROVISION> 25,537 24,478
<INTEREST-EXPENSE> 11,879 11,849
<INCOME-PRETAX> (5,580) (11,806)
<INCOME-TAX> 100 150
<INCOME-CONTINUING> (5,680) (11,956)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (5,680) (11,956)
<EPS-PRIMARY> (.46) (.98)
<EPS-DILUTED> 0 0
<FN>
<F1>THIS AMOUNT IS INCLUDED IN THE SHORT-TERM AND LONG-TERM INSTALLMENT
CONTRACTS RECEIVABLE LINES OF THE CONDENSED CONSOLIDATED BALANCE SHEET AT
MARCH 31, 1997 AND 1996 AND IS NET OF UNEARNED FINANCE CHARGES.
<F2>THIS AMOUNT IS INCLUDED IN THE FITNESS CENTER OPERATIONS LINE, THE
ADVERTISING LINE AND THE CHANGE IN DEFERRED MEMBERSHIP ORIGINATION COSTS
LINE OF THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1997 AND 1996.
<F3>THIS AMOUNT IS INCLUDED IN THE MEMBER PROCESSING AND COLLECTION CENTERS
LINE OF THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1997 AND 1996.
</FN>
</TABLE>
