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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 28, 1998
BALLY TOTAL FITNESS HOLDING CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-27478 36-3228107
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of 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
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ITEM 5. OTHER EVENTS.
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On April 28, 1998, Bally Total Fitness Holding Corporation announced
results for the quarter ended March 31, 1998. A copy of the press release
relating to the results for the quarter is attached as Exhibit 99.1 hereto and
is incorporated herein by reference. All adjustments have been recorded which
are, in the opinion of management, necessary for a fair presentation of the
information included in the press release. All such adjustments were of a
normal recurring nature.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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c. Exhibits
99.1 Press Release dated April 28, 1998
SIGNATURES
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 hereunto duly authorized.
BALLY TOTAL FITNESS HOLDING
CORPORATION
(Registrant)
Dated: May 7, 1998 /s/ Cary A. Gaan
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Cary A. Gaan
Senior Vice President, General Counsel
and Secretary
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EXHIBIT 99.1
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FROM: BALLY TOTAL FITNESS HOLDING CORPORATION
8700 West Bryn Mawr Avenue
Chicago, IL 60631
Contact: Dave Southern - Tel. (773) 399-7611
Vice President, Public & Investor Relations
THE MWW GROUP
Public Relations - Tel. (201) 507-9500
Contact: Laurie Terry - Email: [email protected]
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FOR IMMEDIATE RELEASE
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BALLY TOTAL FITNESS TURNS PROFITABLE
WITH 1998 FIRST QUARTER RESULTS
CHICAGO, April 28, 1998 -- Bally Total Fitness Holding Corporation
(NYSE: BFT), today announced results for the quarter ended March 31, 1998. Lee
S. Hillman, President and CEO stated, "Operating income of $11.9 million and net
income of $2.1 million ($.10 a share) represent clear indications that the
programs we have implemented have allowed us to turn around the business and put
us in a position to return to profitability." The quarterly results exceeded all
published Wall Street estimates.
For the first quarter of 1998, revenues improved 10% to $184.5 million
from $168.4 million last year. Deferred revenue accounting reduced revenues by
$10.1 million in the 1998 quarter compared to a $5.7 million reduction in 1997.
Exclusive of the change in deferred revenues, revenues for the first quarter of
1998 increased 12%. Initial membership fees originated increased 11% from the
1997 quarter, demonstrating the strength of the Company's strategy to emphasize
popular all-club memberships, which are typically financed, and minimizing the
sale of single-club memberships. Dues collected during the first quarter of 1998
increased 8% from the prior year. Revenues from other sources grew by almost 80%
to more than $6 million.
Operating income before depreciation and amortization ("EBITDA")
improved 28% to $24.7 million in the 1998 quarter versus $19.2 million in the
comparable year ago quarter. Net income was
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$2.1 million ($.10 a share) for the 1998 period compared to a net loss of $5.7
million ($.46 a share) for 1997.
Mr. Hillman added, "Our first quarter results showed strengthening
performance in our core business built on the operating strategies we initiated
in 1997. We achieved strong growth in initial membership fees during the first
quarter. In addition to continuing the recent trend of improving price-mix and
credit quality of these memberships, unit sales of memberships grew for the
first time in many years. We're also happy with the contribution of our newest
initiatives. In the first quarter, we achieved strong growth in revenues from
personal training, sales of Bfit Nutritionals(TM) and in-club Bfit
Essentials(sm) retail stores. Additionally, we expect to open several more of
our Bfit Rehab(sm) rehabilitative and physical therapy centers during 1998."
Bally Total Fitness is the largest, and only nationwide, commercial
operator of fitness centers in the United States, with approximately four
million members and 320 facilities in 27 states and Canada.
###
Forward-looking statements in this release 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 that 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 described in filings
of the Company with the Securities and Exchange Commission. 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.
-table follows-
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BALLY TOTAL FITNESS HOLDING CORPORATION
CONSOLIDATED OPERATION SUMMARY
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31
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1998 1997
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<S> <C> <C>
Revenues:
Initial membership fees originated.................................... $125,557,000 $113,043,000
Dues collected........................................................ 51,573,000 47,788,000
Change in deferred revenues........................................... (10,147,000) (5,665,000)
Finance charges and other............................................. 17,505,000 13,239,000
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$184,488,000 $168,405,000
Operating income before depreciation and amortization ("EBITDA") $24,670,000 $ 19,236,000
Operating income........................................................... 11,927,000 6,171,000
Net income (loss).......................................................... 2,072,000 (5,680,000)
Basic earnings (loss) per common share..................................... $.10 $ (.46)
Average common shares outstanding........................................ 20,579,571 12,279,131
Diluted earnings (loss) per common share .................................. $.09 $ (.46)
Average diluted common shares outstanding (includes 3,685,457 24,265,028 12,279,131
common equivalent shares in 1998) ...................................
</TABLE>
NOTES:
A. Interest income for the 1997 period has been reclassified to conform with
the 1998 presentation.
B. Excluding the non-cash effects of changes in deferred revenues and related
deferred membership organization costs, EBITDA for the three months ended
March 31, 1998 was $28.7 million compared to $24.6 million for 1997, an
increase of $4.1 million (17%). The change in deferred membership
origination costs decreased operating costs and expenses by $6.1 million
and $.3 million for the three months ended March 31, 1998 and 1997,
respectively.
C. In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share". SFAS
No. 128 replaced the calculation of primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings
per share, basic earnings per share excludes any dilutive effects of
options, warrants and convertible securities. Diluted earnings per share is
computed similarly to fully diluted earnings per share pursuant to APB
Opinion No. 15. Earnings (loss) per share amounts for all periods have been
presented, and where appropriate restated, to conform to SFAS No. 128.
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