FORM 10-Q
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 April 30, 1997, 12,497,122 shares of the registrant's common stock were
outstanding.
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
INDEX
<CAPTION>
Page
Number
------
<S> <C>
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
</TABLE>
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
<CAPTION>
March 31 December 31
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents......................... $ 9,924 $ 16,534
Installment contracts receivable, less
allowance for doubtful receivables
and cancellations of $45,291 and
$48,471.................................... 136,710 153,235
Retained interest in sold installment
contracts receivable....................... 16,872
Other current assets......................... 28,314 24,075
----------- -----------
Total current assets....................... 191,820 193,844
Installment contracts receivable, less
allowance for doubtful receivables
and cancellations of $28,238 and
$37,624...................................... 89,901 146,972
Retained interest in sold installment
contracts receivable......................... 43,528
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.......................... 19,321 15,974
Other assets................................... 24,988 25,506
----------- -----------
$ 794,823 $ 813,480
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................. $ 44,077 $ 41,565
Income taxes payable......................... 414 350
Deferred income taxes........................ 29,353 26,006
Deferred revenues............................ 54,005 55,927
Accrued liabilities.......................... 49,625 55,063
Current maturities of long-term debt......... 8,387 8,401
----------- -----------
Total current liabilities.................. 185,861 187,312
Long-term debt, less current maturities........ 357,740 376,397
Other liabilities and deferred credits......... 32,186 33,264
Stockholders' equity........................... 219,036 216,507
----------- -----------
$ 794,823 $ 813,480
=========== ===========
<FN>
See accompanying notes.
</FN>
</TABLE>
1
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months
ended March 31
----------------------
1997 1996
---------- ----------
<S> <C> <C>
Net revenues:
Membership revenues -
New............................................. $ 114,854 $ 112,424
Dues............................................ 49,600 45,768
Finance charges earned............................ 9,269 9,595
Fees and other.................................... 3,598 3,294
---------- ----------
177,321 171,081
Operating costs and expenses:
Fitness center operations......................... 96,450 96,299
Member processing and collection centers.......... 9,661 12,212
Advertising....................................... 12,686 12,611
General and administrative........................ 5,921 5,789
Provision for doubtful receivables................ 25,537 20,902
Depreciation and amortization..................... 13,065 13,676
---------- ----------
163,320 161,489
---------- ----------
Operating income.................................... 14,001 9,592
Interest expense.................................... 11,379 11,849
---------- ----------
Income (loss) before income taxes................... 2,622 (2,257)
Income tax provision ............................... 100 200
---------- ----------
Net income (loss)................................... $ 2,522 $ (2,457)
========== ==========
Net income (loss) per common share.................. $ .19 $ (.20)
========== ==========
<FN>
See accompanying notes.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands, except share data)
(Unaudited)
<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 $ 306,811 $ (88,378) $ (2,051) $ 216,507
Net income............................. 2,522 2,522
Issuance of common stock upon
exercise of stock options............. 1,814 7 7
---------- ----- ---------- --------- --------- ----------
Balance at March 31, 1997.............. 12,496,975 $ 125 $ 306,818 $ (85,856) $ (2,051) $ 219,036
========== ===== ========== ========= ========= ==========
<FN>
See accompanying notes.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
Three months
ended March 31
----------------------
1997 1996
---------- ----------
<S> <C> <C>
OPERATING:
Net income (loss).................................. $ 2,522 $ (2,457)
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 20,902
Deferred income taxes............................. (450)
Change in operating assets and
liabilities..................................... (52,562) (47,685)
---------- ----------
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-(CONTINUED)
(In thousands)
(Unaudited)
<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) $ (31,601)
Increase in other current and other assets.... (4,414) (747)
Increase (decrease) in accounts payable....... 2,512 (8,344)
Increase (decrease) in income taxes payable... 64 (430)
Decrease in accrued and other liabilities..... (5,550) (4,753)
Decrease in deferred revenues................. (2,833) (1,810)
---------- ----------
$ (52,562) $ (47,685)
========== ==========
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 -
Sale of installment contracts receivable to H&T Master Trust under
securitization facility, net of retained interest
therein...................................... $ 30,000 $
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
(All dollar amounts in thousands, except share data)
(Unaudited)
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 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. In addition,
certain reclassifications have been made to prior period financial statements to
conform with the 1997 presentation.
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.
EARNINGS PER SHARE
Net income (loss) per common share is computed by dividing net income (loss)
applicable to common stock by the weighted average number of shares of common
stock and common stock equivalents (when applicable) outstanding during each
period, which totaled 14,074,455 shares and 12,170,161 shares for the three
months ended March 31, 1997 and 1996, respectively. Common stock equivalents
increased the weighted average number of shares outstanding by 1,795,324 shares
for the three months ended March 31, 1997, and represent the dilutive effect of
the assumed exercise of outstanding warrants and stock options. Restrictions
applicable to 216,645 shares of restricted stock awarded by the Company in 1996
have yet to lapse because the market price of the common stock has not reached a
targeted stock price and, as a result, these contingent shares are not common
stock equivalents for the three months ended March 31, 1997. The assumed
exercise of outstanding warrants and stock options and the dilutive effect of
restricted stock were not applicable for the three months ended March 31, 1996.
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("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 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 earnings per share
for the three months ended March 31, 1997 would have been $.21 per share and
$.18 per share, respectively.
6
<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(All dollar amounts in thousands, except share data)
(Unaudited)
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.
In December 1996, the Company completed a private placement of asset-backed
securities (the "Securitization") pursuant to which $160,000 of trust
certificates were issued as undivided interests in the H&T Master Trust (the
"Trust"). The Trust was created for the issuance of asset-backed securities and
was formed pursuant to a pooling and servicing agreement. The Trust includes a
portfolio of substantially all of the Company's installment contracts receivable
from membership sales and the proceeds thereof. The amount by which installment
contracts receivable in the Trust exceed the $160,000 principal amount of
certificates issued by the Trust is generally retained by the Company. The
Company services the installment contracts receivable held by the Trust and
earns a servicing fee which approximates the servicing costs incurred by the
Company. Through July 1999, the principal amount of the certificates remains
fixed and collections of installment contracts receivable flow through to the
Company in exchange for the securitization of additional installment contracts
receivable, except that collections are first used to fund interest
requirements. The amortization period commences in August 1999, after which
collections of installment contracts receivable will be used first to fund
interest requirements and then to repay principal on the certificates. The
amortization period ends upon the earlier to occur of the certificates being
repaid in full or August 2002.
Accounting standards in effect in December 1996 treated this type of
securitization as indebtedness, with related interest expense. However, in June
1996, the Financial Accounting Standards Board issued SFAS No. 125, "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments 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.
Effective January 1, 1997, the Company adopted the requirements of SFAS No. 125.
Although SFAS No. 125 could only be applied prospectively, SFAS No. 125 had an
impact on the accounting for the Securitization because its provisions apply to
the sale of installment contracts receivable to the Trust after December 31,
1996. As a result of applying the new requirements, net installment contracts
receivable decreased by approximately $90,000 and long-term debt decreased by
approximately $30,000 through March 31, 1997, and finance charges earned and
interest expense decreased by approximately $500 for the three months ended
March 31, 1997. The Company's interest in the securitized receivables
(approximately $60,000 at March 31, 1997) has been presented on the condensed
consolidated balance sheet as "retained interest in sold installment contracts
receivable", and no gain or loss has been recognized in connection with the sale
of installment contracts receivable to the Trust during the three months ended
March 31, 1997. The Company expects further decreases in installment contracts
receivable and long-term debt (and, accordingly, related decreases in finance
charges earned and interest expense) in future quarters under SFAS No. 125 as
installment contracts receivable outstanding at December 31, 1996 are collected
and additional installment contracts receivable are sold to the Trust pursuant
to the Securitization.
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 $177.3 million compared to
$171.1 million in 1996, an increase of $6.2 million (4%). Net revenues for the
same fitness centers selling memberships throughout both quarters increased $5.1
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. New membership revenues increased $2.4 million (2%)
primarily due to a change in the mix of contracts sold (more premium memberships
and fewer lower-end memberships were sold in 1997), 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 revenues increased $3.8 million (8%) over 1996,
reflecting the Company's continuing strategy of increasing renewal dues. Finance
charges earned decreased $.3 million (3%) in the 1997 quarter and fees and other
revenues increased $.3 million (9%) from 1996.
Operating income for the first quarter of 1997 was $14.0 million compared to
$9.6 million in 1996. The increase of $4.4 million (46%) is due to the
aforementioned increase in revenues offset, in part, by a $1.8 million (1%)
increase in operating costs and expenses, which includes a $4.6 million increase
in the provision for doubtful receivables. Excluding the provisions for doubtful
receivables, operating costs and expenses decreased $2.8 million (2%) from 1996.
Fitness center operating expenses for the first quarter of 1997 increased $.2
million (less than 1%) from 1996. As a percentage of net revenues, fitness
center operating expenses decreased from 56% in the 1996 period to 54% in 1997.
Member processing and collection center expenses decreased $2.6 million (21%)
primarily due to 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. Member processing and
collection center expenses as a percentage of net revenues decreased from 7% in
the 1996 period to 5% in 1997.
Advertising costs for the first quarter of 1997 increased $.1 million (1%) over
1996 and as a percentage of net revenues was 7% in both periods.
General and administrative expenses increased $.1 million (2%) and, as a
percentage of net revenues, were 3% for each period.
The provision for doubtful receivables for the first quarter of 1997 was $25.5
million compared to $20.9 million for 1996, an increase of $4.6 million (22%)
reflecting management's desire to maintain the conservative estimation levels
applied in the prior quarter.
Depreciation and amortization expense decreased $.6 million (4%) from 1996. As a
percentage of net revenues, depreciation and amortization expense decreased from
8% in the 1996 period to 7% in 1997.
Interest expense, net of capitalized interest, was $11.4 million for the first
quarter of 1997 compared to $11.8 million in 1996, a decrease of $.4 million
(3%) principally reflecting the accounting for the Company's securitization
facility required by SFAS No. 125.
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 provision or benefit has been
provided due to the availability of tax loss carryforwards and/or 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
Securitization 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. 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.
Management plans to make capital expenditures of approximately $10 million to
$12 million over the next twelve months to maintain, and in many cases upgrade,
its existing facilities. 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 in March 1997 to offer additional shares of its common stock with an
aggregate offering price of approximately $35 million (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 upgrade
approximately 25% of its facilities over the next two years, (ii) as much as $3
million to support the introduction of new initiatives and (iii) the balance 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 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; 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. 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.
9
<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS-(CONTINUED)
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. 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>
Income (loss) before income taxes....................... $ 2.6 $ (2.3)
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 20.9
Increase in installment contracts
receivable.......................................... (42.3) (31.6)
Decrease in deferred revenues......................... (2.8) (1.8)
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 Financial Data Schedule (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: May 14, 1997
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT MARCH 31, 1997, THE CONSOLIDATED
STATEMENT OF OPERATIONS AND THE CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 9,924
<SECURITIES> 0
<RECEIVABLES> 300,140<F1>
<ALLOWANCES> 73,529
<INVENTORY> 0
<CURRENT-ASSETS> 191,820
<PP&E> 633,294
<DEPRECIATION> 312,628
<TOTAL-ASSETS> 794,823
<CURRENT-LIABILITIES> 185,861
<BONDS> 357,740
0
0
<COMMON> 125
<OTHER-SE> 218,911
<TOTAL-LIABILITY-AND-EQUITY> 794,823
<SALES> 0
<TOTAL-REVENUES> 177,321
<CGS> 0
<TOTAL-COSTS> 109,136<F2>
<OTHER-EXPENSES> 9,661<F3>
<LOSS-PROVISION> 25,537
<INTEREST-EXPENSE> 11,379
<INCOME-PRETAX> 2,622
<INCOME-TAX> 100
<INCOME-CONTINUING> 2,522
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,522
<EPS-PRIMARY> .19
<EPS-DILUTED> 0
<FN>
<F1>THIS AMOUNT IS INCLUDED IN THE SHORT-TERM AND LONG-TERM INSTALLMENT
CONTRACTS RECEIVABLE LINES IN THE CONDENSED CONSOLIDATED BALANCE SHEET AT
MARCH 31, 1997 AND IS NET OF UNEARNED FINANCE CHARGES.
<F2>THIS AMOUNT IS INCLUDED IN THE FITNESS CENTER OPERATIONS LINE AND THE
ADVERTISING LINE IN THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE
THREE MONTHS ENDED MARCH 31, 1997.
<F3>THIS AMOUNT IS INCLUDED IN THE MEMBER PROCESSING AND COLLECTION CENTERS
LINE ON THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1997.
</FN>
</TABLE>
