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Previous: TRUMPS CASTLE FUNDING INC, 10-Q, EX-27.3, 2000-11-14 |
Next: BALLY TOTAL FITNESS HOLDING CORP, 10-Q, EX-27.1, 2000-11-14 |
| [X] | Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the period ended September 30, 2000 |
| [ ] | Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 |
| Delaware | 36-3228107 |
| ---------------------------------------------------------------- | -------------------------------------- |
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
| 8700 West Bryn Mawr Avenue, Chicago, Illinois | 60631 |
| ---------------------------------------------------------------- | -------------------------------------- |
| (Address of principal executive offices) | (Zip Code) |
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 October 31, 2000, 24,310,787 shares of the registrant's common stock were outstanding.
| Page | |||
| Number |
| Item 1. Financial statements: |
| Condensed consolidated balance sheet (unaudited) |
| September 30, 2000 and December 31, 1999 | 1 |
| Consolidated statement of operations (unaudited) |
| Three months ended September 30, 2000 and 1999 | 2 |
| Consolidated statement of operations (unaudited) |
| Nine months ended September 30, 2000 and 1999 | 3 |
| Consolidated statement of stockholders' equity (unaudited) |
| Nine months ended September 30, 2000 | 4 |
| Consolidated statement of cash flows (unaudited) |
| Nine months ended September 30, 2000 and 1999 | 5 |
| Notes to condensed consolidated financial statements |
| (unaudited) | 7 |
| Item 2. Management's discussion and analysis of financial |
| condition and results of operations | 10 |
| Item 6. Exhibits and reports on Form 8-K | 14 |
| SIGNATURE PAGE | 15 |
| Item 1. | Financial Statements |
BALLY TOTAL FITNESS HOLDING CORPORATION
Condensed Consolidated Balance Sheet
(Unaudited)
September 30 December 31
2000 1999
------------ ------------
(In thousands)
ASSETS
Current assets:
Cash and equivalents $ 12,401 $ 23,450
Installment contracts receivable, net 275,327 241,450
Other current assets 53,824 46,185
------------ ------------
Total current assets 341,552 311,085
Installment contracts receivable, net 282,461 244,693
Property and equipment, less accumulated
depreciation and amortization of
$421,318 and $382,897 535,837 473,111
Intangible assets, less accumulated
amortization of $69,497 and $64,554 153,368 137,156
Deferred income taxes 56,607 39,444
Deferred membership origination costs 114,532 106,195
Other assets 40,546 36,873
------------ ------------
$ 1,524,903 $ 1,348,557
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 55,926 $ 49,629
Income taxes payable 3,051 3,063
Deferred income taxes 37,704 40,933
Accrued liabilities 75,435 59,197
Current maturities of long-term debt 16,327 9,505
Deferred revenues 311,398 290,123
------------ ------------
Total current liabilities 499,841 452,450
Long-term debt, less current maturities 639,585 593,903
Other liabilities 7,502 6,531
Deferred revenues 92,025 83,214
Stockholders' equity 285,950 212,459
------------ ------------
$ 1,524,903 $ 1,348,557
============ ============
See accompanying notes.
1
BALLY TOTAL FITNESS HOLDING CORPORATION
Consolidated Statement of Operations
(Unaudited)
Three months ended
September 30
--------------------------
2000 1999
------------ ------------
(In thousands, except per share data)
Net revenues:
Membership revenues--
Initial membership fees on financed
memberships originated $ 133,014 $ 118,768
Initial membership fees on paid-in-full
memberships originated 6,084 5,816
Dues collected 70,422 58,672
Change in deferred revenues (4,585) 897
------------ ------------
204,935 184,153
Finance charges earned 17,285 15,086
Products and services 29,209 17,384
Miscellaneous revenue 3,383 2,434
------------ ------------
254,812 219,057
Operating costs and expenses:
Fitness center operations 119,859 106,552
Products and services 18,831 10,957
Member processing and collection centers 10,638 9,962
Advertising 11,339 11,941
General and administrative 6,854 6,975
Provision for doubtful receivables 40,368 35,719
Depreciation and amortization 16,954 13,232
Change in deferred membership origination costs (2,425) (1,421)
------------ ------------
222,418 193,917
------------ ------------
Operating income 32,394 25,140
Interest income 474 415
Interest expense (16,680) (13,062)
------------ ------------
Income before income taxes 16,188 12,493
Income tax benefit (provision) 19,750 (250)
------------ ------------
Net income $ 35,938 $ 12,243
============ ============
Basic earnings per common share $ 1.50 $ 0.52
============ ============
Diluted earnings per common share $ 1.30 $ 0.45
============ ============
See accompanying notes.
2
BALLY TOTAL FITNESS HOLDING CORPORATION
Consolidated Statement of Operations
(Unaudited)
Nine months ended
September 30
--------------------------
2000 1999
------------ ------------
(In thousands, except per share data)
Net revenues:
Membership revenues--
Initial membership fees on financed
memberships originated $ 410,902 $ 364,389
Initial membership fees on paid-in-full
memberships originated 18,425 17,921
Dues collected 208,866 173,994
Change in deferred revenues (26,768) (13,379)
------------ ------------
611,425 542,925
Finance charges earned 50,762 44,546
Products and services 82,585 42,317
Miscellaneous revenue 10,161 7,182
------------ ------------
754,933 636,970
Operating costs and expenses:
Fitness center operations 350,045 318,118
Products and services 53,865 27,751
Member processing and collection centers 32,519 30,310
Advertising 40,249 37,526
General and administrative 20,673 19,866
Provision for doubtful receivables 124,127 107,410
Depreciation and amortization 47,901 38,276
Change in deferred membership origination costs (8,337) (6,872)
------------ ------------
661,042 572,385
------------ ------------
Operating income 93,891 64,585
Interest income 1,409 1,829
Interest expense (47,500) (37,805)
------------ ------------
Income before income taxes and cumulative effect
of a change in accounting principle 47,800 28,609
Income tax benefit (provision) 19,275 (580)
------------ ------------
Income before cumulative effect of a change in
accounting principle 67,075 28,029
Cumulative effect of a change in accounting
principle, net of income tax (262)
------------ ------------
Net income $ 67,075 $ 27,767
============ ============
Basic earnings per common share:
Income before cumulative effect of a change
in accounting principle $ 2.82 $ 1.20
Cumulative effect of a change in accounting
principle (0.01)
------------ ------------
Net income per common share $ 2.82 $ 1.19
============ ============
Diluted earnings per common share:
Income before cumulative effect of a change
in accounting principle $ 2.44 $ 1.03
Cumulative effect of a change in accounting
principle (0.01)
------------ ------------
Net income per common share $ 2.44 $ 1.02
============ ============
See accompanying notes.
3
BALLY TOTAL FITNESS HOLDING CORPORATION
Consolidated Statement of Stockholders' Equity
(Unaudited)
Common stock Unearned
----------------- compensation Common Total
Par Contributed Accumulated (restricted stock in stockholders'
Shares value capital deficit stock) treasury equity
---------- ----- ----------- ----------- ------------ ---------- -------------
(In thousands, except share data)
Balance at December 31, 1999 23,755,394 $ 243 $ 498,093 $(267,124) $ (7,978) $ (10,775) $ 212,459
Net income 67,075 67,075
Issuance of common stock for
acquisitions of businesses 295,151 3 4,691 4,694
Issuance/(cancellation) of
common stock under long-term
incentive plan (net) 90,000 1 3,779 (3,779) 1
Issuance of common stock under
stock purchase and option plans 168,069 2 1,719 1,721
---------- ----- --------- --------- --------- --------- ---------
Balance at September 30, 2000 24,308,614 $ 249 $ 508,282 $(200,049) $ (11,757) $ (10,775) $ 285,950
========== ===== ========= ========= ========= ========= =========
See accompanying notes.
4
BALLY TOTAL FITNESS HOLDING CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Nine months ended
September 30
--------------------------
2000 1999
------------ ------------
(In thousands)
OPERATING:
Income before cumulative effect of a change
in accounting principle $ 67,075 $ 28,029
Adjustments to reconcile to cash provided--
Depreciation and amortization, including
amortization included in interest expense 51,174 40,714
Provision for doubtful receivables 124,127 107,410
Change in operating assets and liabilities (196,567) (148,920)
------------ ------------
Cash provided by operating activities 45,809 27,233
INVESTING:
Purchases and construction of property
and equipment (77,851) (82,736)
Acquisitions of businesses and other (3,816) (16,783)
------------ ------------
Cash used in investing activities (81,667) (99,519)
FINANCING:
Debt transactions--
Net borrowings under revolving credit agreement 36,500 28,500
Repayments of other long-term debt (13,412) (5,584)
Debt issuance and refinancing costs (4,225)
------------ ------------
Cash provided by debt transactions 23,088 18,691
Equity transactions--
Proceeds from issuance of common stock under
stock purchase and option plans 1,721 1,730
------------ ------------
Cash provided by financing activities 24,809 20,421
------------ ------------
Decrease in cash and equivalents (11,049) (51,865)
Cash and equivalents, beginning of period 23,450 64,382
------------ ------------
Cash and equivalents, end of period $ 12,401 $ 12,517
============ ============
See accompanying notes.
5
BALLY TOTAL FITNESS HOLDING CORPORATION
Consolidated Statement of Cash Flows--(continued)
(Unaudited)
Nine months ended
September 30
--------------------------
2000 1999
------------ ------------
(In thousands)
SUPPLEMENTAL CASH FLOWS INFORMATION:
Changes in operating assets and liabilities,
were as follows--
Increase in installment contracts receivable $ (195,465) $ (165,622)
Increase in other current and other assets (14,089) (5,852)
Increase in deferred membership origination
costs (8,337) (6,872)
Increase in accounts payable 6,297 1,869
Increase (decrease) in income taxes payable (20,403) 444
Increase in accrued and other liabilities 8,662 12,534
Increase in deferred revenues 26,768 14,579
------------ ------------
$ (196,567) $ (148,920)
============ ============
Cash payments for interest and income taxes
were as follows--
Interest paid $ 38,197 $ 28,843
Interest capitalized (1,569) (1,032)
Income taxes paid, net 1,128 136
Investing and financing activities exclude the
following non-cash transactions--
Acquisitions of businesses with common stock $ 4,694 $ 7,799
Acquisitions of property and equipment
through capital leases/borrowings 21,897 22,113
Common stock issued/(cancelled) under
long-term incentive plan (net) 3,779
Debt, including assumed debt, related to
acquisitions of businesses 7,577 24,835
See accompanying notes.
6
The accompanying condensed consolidated financial statements include the accounts of Bally Total Fitness Holding Corporation (the "Company") and the subsidiaries it controls. The Company, through its subsidiaries, is a commercial operator of fitness centers in North America with approximately 385 facilities concentrated in 28 states and Canada. The Company operated 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 and Canada. 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, 1999.
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 September 30, 2000, its consolidated statements of operations for the three and nine months ended September 30, 2000 and 1999, its consolidated statements of cash flows for the nine months ended September 30, 2000 and 1999, and its consolidated statement of stockholders' equity for the nine months ended September 30, 2000. 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 2000 presentation.
Seasonal factorsThe Company’s operations are subject to seasonal factors and, therefore, the results of operations for the nine months ended September 30, 2000 and 1999 are not necessarily indicative of the results of operations for the full year.
AcquisitionsDuring the first nine months of 2000, the Company acquired 13 fitness centers located in the Portland, Oregon area and three fitness centers located in the San Diego area.
September 30 December 31
2000 1999
------------ ------------
Current:
Installment contracts receivable $ 416,868 $ 355,029
Unearned finance charges (51,946) (41,515)
Allowance for doubtful receivables
and cancellations (89,595) (72,064)
------------ ------------
$ 275,327 $ 241,450
============ ============
Long-term:
Installment contracts receivable $ 372,410 $ 319,034
Unearned finance charges (25,501) (20,367)
Allowance for doubtful receivables
and cancellations (64,448) (53,974)
------------ ------------
$ 282,461 $ 244,693
============ ============
Allowance for doubtful receivables and cancellations
Three months ended Nine months ended
September 30 September 30
-------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Balance at beginning of period $ 151,957 $ 132,297 $ 126,038 $ 106,301
Contract cancellations and
write-offs of uncollectible
amounts, net of recoveries (84,485) (70,123) (238,672) (197,640)
Provision for cancellations
(classified as a direct
reduction of revenues) 46,203 38,543 142,550 120,365
Provision for doubtful receivables 40,368 35,719 124,127 107,410
--------- --------- --------- ---------
Balance at end of period $ 154,043 $ 136,436 $ 154,043 $ 136,436
========= ========= ========= =========
Basic earnings per common share for each period is computed based on the weighted average number of shares of common stock outstanding of 24,001,923 and 23,417,395 for the three months ended September 30, 2000 and 1999, respectively, and 23,797,183 and 23,316,082 for the nine months ended September 30, 2000 and 1999, respectively. Diluted earnings per common share for each period includes the addition of common stock equivalents of 3,674,307 and 3,930,773 for the three months ended September 30, 2000 and 1999, respectively, and 3,746,601 and 3,779,647 for the nine months ended September 30, 2000 and 1999, respectively. Common stock equivalents represent the dilutive effect of the assumed exercise of outstanding warrants and stock options.
Cumulative effect of a change in accounting principleIn April 1998, the American Institute of Certified Public Accountants issued Statement of Position ("SOP") 98-5, Reporting the Costs of Start-up Activities. The SOP was effective beginning on January 1, 1999, and required that start-up costs including organization costs capitalized prior to January 1, 1999 be written-off and any future start-up costs be expensed as incurred. The Company's unamortized start-up costs at January 1, 1999 were written off and reported as a cumulative effect of a change in accounting principle, net of tax, in accordance with APB Opinion No. 20.
New Accounting PronouncementsThe FASB issued Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Activities," which requires companies to recognize all derivatives as either assets or liabilities in the balance sheet and measure such instruments at fair value. Adoption is required no later than January 1, 2001. The Company does not expect adoption of SFAS 133, as amended to have an impact on the Company’s consolidated financial statements.
Income TaxesIn accordance with SFAS No. 109 Accounting for Income Taxes, the Company reviewed the likelihood of realizing the future benefits of tax loss carryforwards. Based on consistent and growing profitability over the past three years and reasonably expected continuation of these trends, the Company reduced its tax valuation allowance against net operating losses realized in prior periods by $20,000 during the third quarter of 2000. This adjustment decreased the income tax provision, increasing net income. The Company will continue to review and evaluate the remaining approximate $100,000 valuation allowance periodically.
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The Company's non-executive Chairman of the Board, Arthur M. Goldberg, died on October 19, 2000. On October 25, 2000, Lee S. Hillman, President and CEO, was elected to the additional post of Chairman of the Board.
Comparison of the Three Months Ended September 30, 2000 and 1999Net revenue for the third quarter of 2000 was $254.8 million compared to $219.1 million in 1999, an increase of $35.7 million (16%). Net revenues from comparable fitness centers increased 9%. The increase in net revenues resulted from the following:
Full membership units sold increased 7% and the weighted average selling price of membership contracts sold increased 5% over the prior year quarter. During the 2000 quarter, shorter-term and seasonal memberships added 1% more membership units and less than 1% more revenue. As a result, initial membership fees originated increased $14.5 million (12%).
Dues collected increased $11.8 million (20%) from the 1999 quarter, reflecting continued improvements in member retention and pricing strategies and an increase attributable to fitness centers operating under our four upscale brands.
Finance charges earned during the third quarter of 2000 increased $2.2 million (15%) compared to the 1999 quarter, due to the growth in size and consistent quality of the receivables portfolio. Membership receivables written off in the 2000 period, as a percent of average membership receivables, was consistent with prior periods. The percentage of accounts current with all contractual payments was 87% as of September 30, 2000 compared to 86% as of a year earlier. The average interest rate for finance charges to members was substantially unchanged between the periods.
Products and services revenue increased $11.8 million (68%) over the 1999 quarter, primarily reflecting the continued growth of personal training services and nutritional and other retail product sales.
Fees and other revenues increased $.9 million over the 1999 quarter, primarily reflecting the continuing growth of licensing revenue.
The weighted average number of fitness centers increased to 380 in the third quarter of 2000 from 348 in the third quarter of 1999, including an increase in the weighted-average number of centers operating under our four upscale brands, which have smaller membership volume strategies, from 25 to 34.
Operating income for the third quarter of 2000 was $32.4 million compared to $25.1 million in 1999. The increase of $7.3 million (29%) was due to a $35.8 million (16%) increase in net revenue, offset, in part, by an increase in operating costs and expenses of $24.8 million (14%) and a $3.7 million increase in depreciation and amortization. The operating margin before depreciation and amortization increased to 19% from 18% in the prior year quarter. Excluding the provision for doubtful receivables, depreciation and amortization and the effect of deferral accounting, operating costs and expenses increased $21.1 million (14%) from 1999. Fitness center operating expenses increased $13.3 million (12%) due principally to incremental costs of operating new fitness centers and additional sales commissions from the growth in initial membership fees originated. A substantial portion of commission expense is deferred through deferral accounting. Products and services expenses increased $7.9 million (72%) to support the revenue growth of product and service offerings. Operating income from products and services increased to $10.4 million from $6.4 million in the prior year quarter, with an operating margin of 36% in 2000 compared to 37% in the 1999 quarter. Member processing and collection center expenses increased $.7 million (7%) due to increased printing and postage costs to support the growth in the collection of membership fees and dues. Advertising expenses decreased $.6 million (5%)
compared to the prior year. General and administrative expenses decreased 2% compared to the prior year quarter due to the elimination of licensing fees as a result of the Company’s purchase of various Bally trademarks. Depreciation and amortization expense increased $3.7 million (28%) as a result of increased expenditures for property and equipment and acquired fitness centers during the past two years.
The provision for doubtful receivables, including the provision for cancellations which is reported in the financial statements as a direct reduction of initial membership fees on financed memberships originated, totaled 41% of the gross financed portion of new membership fees originated in both periods.
Deferral accounting reduced earnings by $4.5 million for 2000 compared to 1999. This reduction reflects the greater deferral of revenues during the 2000 period.
Interest expense was $16.7 million for the third quarter of 2000 compared to $13.1 million in 1999. The $3.6 million increase was primarily due to higher levels of debt incurred to support the Company's growth.
The income tax provisions for the third quarters of 2000 and 1999 reflect state income taxes. The federal provisions were offset by the utilization of prior years' net operating losses. In addition, as a result of the Company's improved operating results and trends, the Company reduced its tax valuation allowance by $20 million in the third quarter of 2000. This adjustment was reflected as a reduction of the tax provision, increasing net income.
Comparison of the Nine Months Ended September 30, 2000 and 1999Net revenue for the first nine months of 2000 was $754.9 million compared to $636.9 million in 1999, an increase of $118.0 million (19%). Net revenues from comparable fitness centers increased 10%. The increase in net revenues resulted from the following:
Full membership units sold increased 5% and the weighted average selling price of membership contracts sold increased 7% over the prior year period. Additionally, during the 2000 period, the Company expanded its selection of shorter-term and seasonal memberships which added 2% more membership units and less than 1% more revenue. As a result, initial membership fees originated increased $47.0 million (12%).
Dues collected increased $34.9 million (20%) from the 1999 period, reflecting continued improvements in member retention and pricing strategies and an increase attributable to fitness centers operating under our four upscale brands.
Finance charges earned during the first nine months of 2000 increased $6.2 million (14%) compared to the 1999 period, due to the growth in size and consistent quality of the receivables portfolio. Membership receivables written off in the 2000 period, as a percent of average membership receivables, was consistent with prior periods. The average interest rate for finance charges to members was substantially unchanged between the periods.
Products and services revenue increased $40.3 million (95%) from the 1999 period, primarily reflecting the continued growth of personal training services and nutritional and other retail product sales.
Fees and other revenues increased $3.0 million (41%) over the 1999 period, primarily reflecting the continued growth of licensing revenue.
The weighted average number of fitness centers increased to 374 in the first nine months of 2000 from 338 in 1999, including an increase in the weighted-average number of centers operating under our four upscale brands, which have smaller membership volume strategies, from 20 to 34.
Operating income for the first nine months of 2000 was $93.9 million compared to $64.6 million in 1999. The increase of $29.3 million (45%) was due to a $118.0 million (19%) increase in net revenue, offset, in part, by an increase in operating costs and expenses of $79.0 million (15%) and a $9.6 million increase in depreciation and amortization. The operating margin before depreciation and amortization increased to 19% for the first nine months of 2000 from 16% for the 1999 period. Excluding the provision for doubtful receivables, depreciation and amortization and the effect of deferral accounting, operating costs and expenses increased $63.8 million (15%) from 1999. Fitness center operating expenses increased $31.9 million (10%) due principally to incremental costs of operating new fitness centers and additional sales commissions from the growth in initial membership fees originated. A substantial portion of commission expense is deferred through deferral accounting. Products and services expenses increased $26.1 million (94%) to support the revenue growth of product and service offerings. Operating income from products and services increased to $28.7 million from $14.6 million in the prior year period, with an operating margin of 35% in 2000 compared to 34% in the 1999 period. Member processing and collection center expenses increased $2.2 million (7%) due to increased printing and postage costs to support the growth in the collection of membership fees and dues. Advertising expenses increased $2.7 million (7%) compared to the prior year due to increased market research, new club marketing, advertising in new markets and direct mail programs used to grow initial membership fees. General and administrative expenses increased 4% compared to the prior year period to support the Company's overall growth. Depreciation and amortization expense increased $9.6 million (25%) largely as a result of increased expenditures for property and equipment and acquired fitness centers during the past two years.
The provision for doubtful receivables, including the provision for cancellations which is reported in the financial statements as a direct reduction of initial membership fees on financed memberships originated, totaled 41% of the gross financed portion of new membership fees originated in both periods.
Deferral accounting reduced earnings by $11.9 million for 2000 compared to 1999. This decrease principally reflects the greater deferral of revenues during the 2000 period.
Interest expense was $47.5 million for the first nine months of 2000 compared to $37.8 million in 1999. The $9.7 million increase was primarily due to higher levels of debt incurred to support the Company's growth.
The income tax provisions for the first nine months of 2000 and 1999 reflect state income taxes. The federal provisions were offset by the utilization of prior years' net operating losses. In addition, as a result of the Company's improved operating results and trends, the Company reduced its tax valuation allowance by $20 million in the 2000 period. This adjustment was reflected as a reduction of the tax provision, increasing net income.
Liquidity and Capital ResourcesCash flow from operating activities was $45.8 million for the first nine months of 2000 compared to $27.2 million in 1999. Net contracts receivable grew $71.6 million compared to $58.2 million in 1999 and interest paid totaled $38.2 million compared to $28.8 million in 1999 resulting in a combined increase in the use of working capital of $22.8 million. Cash provided by operating activities, excluding the growth in net contracts receivable and interest paid, increased $41.4 million period over period. The improvement principally reflects the continued growth in overall collections from installment contracts receivable and monthly dues and the continued improvement in operating margins.
Our bank credit facility provides up to $175.0 million of availability consisting of a five-year $75.0 million term loan and a $100.0 million three-year revolving credit facility. The amount available under the revolving credit facility is reduced by any outstanding letters of credit, which cannot exceed $30.0 million. As of September 30, 2000, the Company had drawn $36.5 million on its $100 million revolving credit line and had outstanding letters of credit totaling $6.0 million. The $75.0 million term loan is repayable in 19 quarterly installments, commencing March 31, 2000, of $.25 million with a final installment of $70.3 million due in November 2004. We have no scheduled principal payments under our subordinated debt until October 2007, and the principal amount of the certificates under our securitization facility remains fixed at $160.0 million through July 2001. Our debt service requirements, including interest, for the next 12 months are approximately
$74.4 million. We believe that we will be able to satisfy our debt service requirements, capital expenditures and any stock repurchases for the next 12 months, out of available cash balances, cash flow from operations and borrowings on the revolving credit facility.
We are authorized to repurchase up to 1,500,000 shares of our common stock on the open market from time to time. We have repurchased 625,100 shares at an average price of $18 per share. No purchases have been made since November 1999.
During the first nine months of 2000, excluding acquisitions, we invested approximately $77.9 million in property and equipment, including approximately $57.0 million related to new fitness centers and major upgrades and expansions, including new equipment, of existing fitness centers, and $1.5 million to purchase existing leaseholds.
Forward-Looking StatementsForward- looking statements in this Form 10-Q including, without limitation, statements relating to our 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 our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the 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 this Form 10-Q or in other of our filings with the Securities and Exchange Commission. We are under no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| Item 6. | Exhibits and reports on Form 8-K |
| (a) | Exhibits: |
| 27.1 | Financial Data Schedule for September 30, 2000 (filed electronically only). |
| 27.2 | Restated Financial Data Schedule for September 30, 1999 (filed electronically only) |
| (b) | Reports on Form 8-K: |
| Financial | |||
| Date | Items | Statements | |
| --------------------- | --------------------- | --------------------- | |
| August 3, 2000 | #5 and #7 | None |
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 Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer) |
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