þ
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Annual Report pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
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DELAWARE
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20-0640002
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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5 PENN PLAZA — 4
TH
FLOOR
NEW YORK, NEW YORK
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10001
(Zip code)
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(Address of principal executive offices)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.001 par value
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The NASDAQ Stock Market LLC
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Preferred Stock Purchase Rights
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The NASDAQ Stock Market LLC
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Large accelerated filer
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Accelerated filer
þ
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
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The Premier Membership is offered at our HVLP clubs and is a month-to-month plan offering the same level of quality service currently offered under the Core Membership, but at a significantly reduced rate. The Premier Membership allows members unlimited use of a single "home club". Premier members can also elect to pay a per visit fee of $12.95 to use non-home clubs.The current list price of a Premier Membership generally ranges from $9.95 to $39.95 per month with joining fees ranging from $0 to $250 and an annual fee to be paid on each anniversary date of enrollment of $40 to $50.
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•
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The Passport Membership is our higher priced membership and entitles members to use any of our clubs in any region at any time and our Regional Passport Membership, offered in our WSC and PSC regions, entitles members to use any of our clubs within one region. These membership plans provide the convenience of having fitness clubs near a member’s workplace and home. The current list price of commit Regional Passport and Passport Memberships generally ranges from $69.99 per month to $99.99 per month, excluding passport restricted members, corporate and group members and premium memberships available at a very limited number of clubs. Our corporate and group memberships are sold as Passport Memberships and averaged approximately $70 per month for those sold in the year ended December 31, 2014. In addition, we have a Passport Premium Membership at two select clubs, which includes a greater array of member services and facilities, with list prices currently ranging from $105.99 per month to $115.99 per month. Further, our Boston Racquet Club offers a higher level Premium Membership with pricing ranging from $135.00 to $199.00 per month. Joining fees under the Passport Membership range from $50 to $150. The Passport Membership also includes an annual fee of $50 to be paid on each anniversary date of enrollment.
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•
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The Core Membership enables members to use a specific club at any time. The current list price of a commit Core membership generally ranges from $39.99 per month to $89.99 per month based on club specific facilities and services, the market area of enrollment and length of the membership contract. Core members can also elect to pay a per visit fee of $12.95 to use non-home clubs. Core members existing at the time of HVLP adoption will convert to a Passport Membership.
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•
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The Restricted Membership is a favorably-priced, restricted-use month-to-month only membership held primarily by students and teachers. Usage fees of $12.95 per visit are applied if a restricted member chooses to use a club during certain peak hours, Monday through Thursday. The Restricted Membership is currently listed from $19.99 per month to $39.99 per month. Additional groups may also be offered a restricted membership at times through our call center. Restricted members existing at the time of HVLP adoption will convert to a Premier Membership.
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•
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Prior to November 1, 2010, we also offered The Gold Membership. This membership enables members to use a specific club at any time and any of our clubs during off-peak times. Gold members can elect to pay a per visit fee of $12.95 to use
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For the Years Ended December 31, ($ in thousands)
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|||||||||||||||||||||||||||||||||
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2014
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%
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2013
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%
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2012
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%
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2011
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%
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2010
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%
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|||||||||||||||
Total revenue
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$
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453,842
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100.0
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%
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$
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470,225
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100.0
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%
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$
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478,981
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100.0
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%
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$
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466,941
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100.0
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%
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$
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462,387
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100.0
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%
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Non-Membership Revenue:
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Personal training revenue(1)
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70,338
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15.5
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%
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66,367
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14.1
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%
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65,641
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13.7
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%
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62,394
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13.4
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%
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60,875
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13.2
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%
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|||||
Other ancillary club revenue(2)
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22,304
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4.9
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%
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24,720
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5.3
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%
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29,897
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6.3
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%
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28,297
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6.1
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%
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24,684
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5.3
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%
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Fees and Other
revenue(3)
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5,971
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1.3
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%
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5,985
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1.3
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%
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5,804
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1.2
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%
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4,890
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1.0
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%
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4,761
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1.0
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%
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|||||
Total non-membership revenue
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$
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98,613
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21.7
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%
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$
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97,072
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20.7
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%
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$
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101,342
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21.2
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%
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$
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95,581
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20.5
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%
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$
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90,320
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19.5
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%
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(1)
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Personal training revenue in the year ended December 31, 2010 includes $2,697 related to unused and expired sessions in three jurisdictions, of which $570 is related to expired sessions that would have been recognized in 2010.
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(2)
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Other ancillary club revenue primarily consists of Small Group Training, Signature Classes, Sports Clubs for Kids, and racquet sports.
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(3)
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Fees and other revenue primarily consist of rental income, marketing revenue and management fees. The year ended December 31, 2013 includes $424 for the correction of an accounting error related to out of period rental income.
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•
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commercial, multi-recreational and fitness-only chains, including, among others, Equinox Holdings, Inc., Lifetime Fitness, Inc., Crunch, New York Health and Racquet, LA Fitness International LLC, 24 Hour Fitness Worldwide, Inc., Bally Total Fitness Holding Corporation, Gold’s Gym International, Inc., Retro Fitness, Snap Fitness, Anytime Fitness and Planet Fitness;
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•
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private studios, including, among others, Flywheel, Soul Cycle, Barry’s Bootcamp and Cross-Fit, as well as other private studios offering cycling, yoga or Pilates;
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•
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the YMCA and similar non-profit organizations;
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•
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physical fitness and recreational facilities established by local governments, hospitals and businesses;
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•
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exercise and small fitness clubs; racquet, tennis and other athletic clubs;
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•
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amenity gyms in apartments, condominiums and offices;
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•
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weight-reducing salons;
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•
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country clubs; and
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•
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the home-use fitness equipment industry.
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Market
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Number of
Clubs
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Position
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Boston metropolitan
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30
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#1 owner and operator
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New York metropolitan
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107
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#1 owner and operator
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Washington, D.C. metropolitan
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13
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#3 owner and operator; #1 in urban center
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Philadelphia metropolitan
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5
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#2 owner and operator; #1 in urban center
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Switzerland
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3
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Local owner and operator only
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•
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general rules and regulations of the Federal Trade Commission;
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•
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rules and regulations of state and local consumer protection agencies;
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•
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state statutes that prescribe certain forms and provisions of membership contracts
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•
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state statutes that govern the advertising, sale, financing and collection of memberships;
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•
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federal and state laws and regulations governing privacy and security of information; and
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•
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state and local health regulations
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•
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making it more difficult for us to satisfy our obligations with respect to our outstanding indebtedness;
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•
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increasing our vulnerability to general adverse economic and industry conditions;
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•
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limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions of clubs and other general corporate requirements;
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•
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requiring a substantial portion of our cash flow from operations for the payment of interest on our debt, which is variable on our 2013 Revolving Loan Facility and partially variable on our 2013 Term Loan Facility, and/or principal pursuant to excess cash flow requirements and reducing our ability to use our cash flow to fund working capital, capital expenditures and acquisitions of new clubs and general corporate requirements;
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•
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increasing our vulnerability to interest rate fluctuations in connection with borrowings under our 2013 Senior Credit Facility, some of which are at variable interest rates;
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•
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limiting our ability to refinance our existing indebtedness on favorable terms, or at all; and
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•
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limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate.
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•
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incur debt;
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•
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pay dividends or make distributions;
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•
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purchase or redeem stock;
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•
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make investments and extend credit;
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•
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engage in transactions with affiliates;
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•
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engage in sale-leaseback transactions;
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•
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consummate certain asset sales;
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•
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effect a consolidation or merger or sell, transfer, lease or otherwise dispose of all or substantially all of our assets; and
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•
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create liens on our assets.
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Location
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Address
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Date Opened or Management Assumed
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New York Sports Clubs:
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Manhattan
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151 East 86th Street
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January 1977
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Manhattan
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61 West 62nd Street
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July 1983
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Manhattan
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614 Second Avenue
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July 1986
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Manhattan
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151 Reade Street
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January 1990
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Manhattan
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1601 Broadway
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September 1991
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Manhattan
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349 East 76th Street
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April 1994
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Manhattan
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248 West 80th Street
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May 1994
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Manhattan
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502 Park Avenue
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February 1995
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Manhattan
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117 Seventh Avenue South
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March 1995
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Manhattan
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303 Park Avenue South
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December 1995
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Manhattan
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30 Wall Street
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May 1996
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Manhattan
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1635 Third Avenue
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October 1996
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Manhattan
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575 Lexington Avenue
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November 1996
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Manhattan
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278 Eighth Avenue
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December 1996
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Manhattan
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200 Madison Avenue
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February 1997
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Manhattan
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2162 Broadway
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November 1997
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Manhattan
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633 Third Avenue
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April 1998
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Manhattan
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217 Broadway
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March 1999
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Manhattan
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23 West 73rd Street
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April 1999
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Manhattan
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34 West 14th Street
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July 1999
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Manhattan
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503-511 Broadway
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July 1999
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Manhattan
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1372 Broadway
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October 1999
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Manhattan
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300 West 125th Street
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May 2000
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Manhattan
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19 West 44th Street
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August 2000
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Manhattan
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128 Eighth Avenue
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December 2000
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Manhattan
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2527 Broadway
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August 2001
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Manhattan
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3 Park Avenue
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August 2001
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Manhattan
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10 Irving Place
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November 2001
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Manhattan
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230 West 41st Street
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November 2001
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Manhattan
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1221 Avenue of the Americas
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January 2002
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Manhattan
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200 Park Avenue
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December 2002
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Manhattan
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232 Mercer Street
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September 2004
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Manhattan
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225 Varick Street
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August 2006
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Manhattan
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885 Second Avenue
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February 2007
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Manhattan
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301 West 145th Street
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October 2007
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Manhattan
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1400 5th Avenue
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December 2007
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Manhattan
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75 West End Avenue
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April 2013
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Manhattan
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28-30 Avenue A
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Future opening
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Bronx, NY
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1601 Bronxdale Avenue
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November 2007
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Brooklyn, NY
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110 Boerum Place
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October 1985
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Brooklyn, NY
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1736 Shore Parkway
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June 1998
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Brooklyn, NY
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179 Remsen Street
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May 2001
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Brooklyn, NY
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324 Ninth Street
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August 2003
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Brooklyn, NY
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1630 E 15th Street
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August 2007
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Brooklyn, NY
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7118 Third Avenue
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May 2004
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Brooklyn, NY
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439 86th Street
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April 2008
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Location
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Address
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Date Opened or Management Assumed
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Brooklyn, NY
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242 Bedford Avenue
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Future opening
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Brooklyn, NY
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147 Greenpoint Avenue
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June 2014
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Queens, NY
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69-33 Austin Street
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April 1997
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Queens, NY
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153-67 A Cross Island Parkway
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June 1998
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Queens, NY
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2856-2861 Steinway Street
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February 2004
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Queens, NY
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8000 Cooper Avenue
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March 2007
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Queens, NY
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99-01 Queens Boulevard
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June 2007
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Queens, NY
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39-01 Queens Blvd
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December 2007
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Staten Island, NY
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300 West Service Road
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June 1998
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Scarsdale, NY
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696 White Plains Road
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October 1995
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Mamaroneck, NY
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124 Palmer Avenue
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January 1997
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Croton-on-Hudson, NY
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420 South Riverside Drive
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January 1998
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Larchmont, NY
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15 Madison Avenue
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December 1998
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Nanuet, NY
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58 Demarest Mill Road
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May 1998
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Great Neck, NY
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15 Barstow Road
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July 1989
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East Meadow, NY
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625 Merrick Avenue
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January 1999
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Commack, NY
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6136 Jericho Turnpike
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January 1999
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Oceanside, NY
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2909 Lincoln Avenue
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May 1999
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Long Beach, NY
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265 East Park Avenue
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July 1999
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Garden City, NY
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833 Franklin Avenue
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May 2000
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Huntington, NY
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350 New York Avenue
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February 2001
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Syosset, NY
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49 Ira Road
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March 2001
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West Nyack, NY
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3656 Palisades Center Drive
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February 2002
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Woodmere, NY
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158 Irving Street
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March 2002
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Hartsdale, NY
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208 E. Hartsdale Avenue
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September 2004
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Somers, NY
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Somers Commons, 80 Route 6
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February 2005
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White Plains, NY
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4 City Center
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September 2005
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Hawthorne, NY
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24 Saw Mill River Road
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January 2006
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Dobbs Ferry, NY
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50 Livingstone Avenue
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June 2008
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Smithtown, NY
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5 Browns Road
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December 2007
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Carmel, NY
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1880 Route 6
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July 2007
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Hicksville, NY
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100 Duffy Avenue
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November 2008
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New Rochelle, NY
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Trump Plaza, Huguenot Street
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March 2008
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Deer Park, NY
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455 Commack Avenue
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March 2009
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Garnerville, NY
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20 W. Ramapo Road
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October 2011
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Stamford, CT
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106 Commerce Road
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January 1998
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Danbury, CT
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38 Mill Plain Road
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January 1998
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Stamford, CT
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1063 Hope Street
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November 1998
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Greenwich, CT
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6 Liberty Way
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May 1999
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Westport, CT
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427 Post Road, East
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January 2002
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West Hartford, CT
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65 Memorial Road
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November 2007
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Princeton, NJ
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301 North Harrison Street
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May 1997
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Matawan, NJ
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450 Route 34
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April 1998
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Marlboro, NJ
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34 Route 9 North
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April 1998
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Ramsey, NJ
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1100 Route 17 North
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June 1998
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Mahwah, NJ
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7 Leighton Place
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June 1998
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Springfield, NJ
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215 Morris Avenue
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August 1998
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Colonia, NJ
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1250 Route 27
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August 1998
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Somerset, NJ
|
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120 Cedar Grove Lane
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August 1998
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Hoboken, NJ
|
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59 Newark Street
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October 1998
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West Caldwell, NJ
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913 Bloomfield Avenue
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April 1999
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Location
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Address
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Date Opened or Management Assumed
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Jersey City, NJ
|
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147 Two Harborside Financial Center
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June 2002
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Newark, NJ
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1 Gateway Center
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October 2002
|
Ridgewood, NJ
|
|
129 S. Broad Street
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|
June 2003
|
Westwood, NJ
|
|
35 Jefferson Avenue
|
|
June 2004
|
Livingston, NJ
|
|
39 W. North Field Rd.
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|
February 2005
|
Hoboken, NJ
|
|
210 14th Street
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|
December 2006
|
Englewood, NJ
|
|
34-36 South Dean Street
|
|
December 2006
|
Clifton, NJ
|
|
202 Main Avenue
|
|
March 2007
|
Montclair, NJ
|
|
56 Church Street
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|
January 2008
|
Butler, NJ
|
|
1481 Route 23
|
|
January 2009
|
East Brunswick, NJ
|
|
300 State Route 18
|
|
March 2009
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Bayonne, NJ
|
|
550 Route 440 North
|
|
December 2011
|
Boston Sports Clubs:
|
|
|
|
|
Boston, MA
|
|
1 Bulfinch Place
|
|
August 1998
|
Boston, MA
|
|
201 Brookline Avenue
|
|
June 2000
|
Boston, MA
|
|
361 Newbury Street
|
|
November 2001
|
Boston, MA
|
|
350 Washington Street
|
|
February 2002
|
Boston, MA
|
|
505 Boylston Street
|
|
January 2006
|
Boston, MA
|
|
560 Harrison Avenue
|
|
February 2006
|
Boston, MA
|
|
695 Atlantic Avenue
|
|
October 2006
|
Boston, MA
|
|
One Beacon Street
|
|
May 2013
|
Boston, MA
|
|
197 Clarendon Street
|
|
May 2013
|
Boston, MA
|
|
800 Boylston Street
|
|
May 2013
|
Boston, MA
|
|
100 Summer Street
|
|
May 2013
|
Boston, MA
|
|
540 Gallivan Road
|
|
October 2014
|
Boston, MA
|
|
95 Washington Street
|
|
November 2014
|
Allston, MA
|
|
15 Gorham Street
|
|
July 1997
|
Wellesley, MA
|
|
140 Great Plain Avenue
|
|
July 2000
|
Andover, MA
|
|
307 Lowell Street
|
|
July 2000
|
Lynnfield, MA
|
|
425 Walnut Street
|
|
July 2000
|
Lexington, MA
|
|
475 Bedford Avenue
|
|
July 2000
|
Franklin, MA
|
|
750 Union Street
|
|
July 2000
|
Cambridge, MA
|
|
625 Massachusetts Avenue
|
|
January 2001
|
West Newton, MA
|
|
1359 Washington Street
|
|
November 2001
|
Waltham, MA
|
|
840 Winter Street
|
|
November 2002
|
Watertown, MA
|
|
311 Arsenal Street
|
|
January 2006
|
Newton, MA
|
|
135 Wells Avenue
|
|
August 2006
|
Somerville, MA
|
|
1 Davis Square
|
|
December 2007
|
Medford, MA
|
|
70 Station Landing
|
|
December 2007
|
Westborough, MA
|
|
1500 Union Street
|
|
September 2008
|
Woburn, MA
|
|
300 Presidential Way
|
|
December 2008
|
Wayland, MA
|
|
Wayland Town Center
|
|
November 2014
|
Providence, RI
|
|
131 Pittman Street
|
|
December 2008
|
Washington Sports Clubs:
|
|
|
|
|
Washington, D.C.
|
|
214 D Street, S.E
|
|
January 1980
|
Washington, D.C.
|
|
1835 Connecticut Avenue, N.W .
|
|
January 1990
|
Washington, D.C.
|
|
2251 Wisconsin Avenue, N.W
|
|
May 1994
|
Washington, D.C.
|
|
1211 Connecticut Avenue, N.W
|
|
July 2000
|
Washington, D.C.
|
|
1345 F Street, N.W
|
|
August 2002
|
Washington, D.C.
|
|
783 Seventh Street, N.W
|
|
October 2004
|
Washington, D.C.
|
|
3222 M Street, N.W
|
|
February 2005
|
Washington, D.C.
|
|
14th Street, N.W
|
|
June 2008
|
North Bethesda, MD
|
|
10400 Old Georgetown Road
|
|
June 1998
|
Location
|
|
Address
|
|
Date Opened or Management Assumed
|
Silver Spring, MD
|
|
8506 Fenton Street
|
|
November 2005
|
Bethesda, MD
|
|
6800 Wisconsin Avenue
|
|
November 2007
|
Fairfax, VA
|
|
11001 Lee Highway
|
|
October 1999
|
Clarendon, VA
|
|
2700 Clarendon Boulevard
|
|
November 2001
|
Philadelphia Sports Clubs:
|
|
|
|
|
Philadelphia, PA
|
|
220 South 5th Street
|
|
January 1999
|
Philadelphia, PA
|
|
2000 Hamilton Street
|
|
July 1999
|
Chalfont, PA
|
|
One Highpoint Drive
|
|
January 2000
|
Philadelphia, PA
|
|
1735 Market Street
|
|
October 2000
|
Radnor, PA
|
|
555 East Lancaster Avenue
|
|
December 2006
|
Swiss Sports Clubs:
|
|
|
|
|
Basel, Switzerland
|
|
St. Johanns-Vorstadt 41
|
|
August 1987
|
Zurich, Switzerland
|
|
Glarnischstrasse 35
|
|
August 1987
|
Basel, Switzerland
|
|
Gellerstrasse 235
|
|
August 2001
|
BFX Studio:
|
|
|
|
|
Manhattan, NY
|
|
555 Sixth Avenue
|
|
July 2014
|
Manhattan, NY
|
|
30 Broad Street
|
|
Future opening
|
Manhattan, NY
|
|
1231 Third Avenue
|
|
Future opening
|
Boston, MA
|
|
699 Boylston Street
|
|
Future opening
|
|
High
|
|
Low
|
||||
Year ended December 31, 2014:
|
|
|
|
||||
First Quarter
|
$
|
14.70
|
|
|
$
|
8.14
|
|
Second Quarter
|
$
|
8.78
|
|
|
$
|
5.65
|
|
Third Quarter
|
$
|
7.36
|
|
|
$
|
4.01
|
|
Fourth Quarter
|
$
|
7.00
|
|
|
$
|
5.37
|
|
Year ended December 31, 2013:
|
|
|
|
||||
First Quarter
|
$
|
11.11
|
|
|
$
|
8.91
|
|
Second Quarter
|
$
|
11.37
|
|
|
$
|
9.31
|
|
Third Quarter
|
$
|
13.03
|
|
|
$
|
10.83
|
|
Fourth Quarter
|
$
|
14.96
|
|
|
$
|
11.50
|
|
*
|
$100 invested on 12/31/09 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
|
|
December 31,
|
||||||||||||||||||||||
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
||||||||||||
Town Sports International Holdings, Inc
|
$
|
100.00
|
|
|
$
|
174.25
|
|
|
$
|
315.45
|
|
|
$
|
596.79
|
|
|
$
|
835.48
|
|
|
$
|
352.18
|
|
NASDAQ Composite
|
$
|
100.00
|
|
|
$
|
117.61
|
|
|
$
|
118.70
|
|
|
$
|
139.00
|
|
|
$
|
196.83
|
|
|
$
|
223.74
|
|
Russell 2000
|
$
|
100.00
|
|
|
$
|
126.86
|
|
|
$
|
121.56
|
|
|
$
|
141.43
|
|
|
$
|
196.34
|
|
|
$
|
205.95
|
|
(1)
|
The graph covers the period from December 31, 2009 to
December 31, 2014
.
|
(2)
|
The graph assumes that $100 was invested at the market close on December 31, 2009 in our common stock, in the Russell 2000 and in the NASDAQ composite indexes and that all dividends were reinvested.
|
(3)
|
A special cash dividend of $3.00 per share of common stock was declared by our board of directors on November 16, 2012 to shareholders of record on November 30, 2012, paid on December 11, 2012. On each of November 26, 2013, March 5, 2014 and June 6, 2014, we paid a quarterly cash dividend of $0.16 per share to common stock holders.
|
(4)
|
Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.
|
(5)
|
We include a comparison against the Russell 2000 because there is no published industry or line-of-business index for our industry and we do not have a readily definable peer group that is publicly traded.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
453,842
|
|
|
$
|
470,225
|
|
|
$
|
478,981
|
|
|
$
|
466,941
|
|
|
$
|
462,387
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Payroll and related
|
|
177,009
|
|
|
174,894
|
|
|
181,632
|
|
|
177,528
|
|
|
185,583
|
|
|||||
Club operating
|
|
192,716
|
|
|
179,683
|
|
|
178,950
|
|
|
176,463
|
|
|
174,135
|
|
|||||
General and administrative
|
|
31,352
|
|
|
28,431
|
|
|
24,139
|
|
|
25,799
|
|
|
28,773
|
|
|||||
Depreciation and amortization
|
|
47,307
|
|
|
49,099
|
|
|
49,391
|
|
|
51,536
|
|
|
52,202
|
|
|||||
Insurance recovery related to damaged property(1)
|
|
—
|
|
|
(3,194
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment of fixed assets
|
|
4,569
|
|
|
714
|
|
|
3,436
|
|
|
—
|
|
|
3,254
|
|
|||||
Impairment of goodwill
|
|
137
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
|
752
|
|
|
40,598
|
|
|
41,433
|
|
|
35,615
|
|
|
18,440
|
|
|||||
Loss on extinguishment of debt(2)
|
|
493
|
|
|
750
|
|
|
1,010
|
|
|
4,865
|
|
|
—
|
|
|||||
Interest expense, net of interest income
|
|
19,039
|
|
|
22,616
|
|
|
24,597
|
|
|
24,127
|
|
|
21,013
|
|
|||||
Equity in the earnings of investees and rental income
|
|
(2,402
|
)
|
|
(2,459
|
)
|
|
(2,461
|
)
|
|
(2,391
|
)
|
|
(2,139
|
)
|
|||||
Loss (income) before (benefit) provision for corporate income taxes
|
|
(16,378
|
)
|
|
19,691
|
|
|
18,287
|
|
|
9,014
|
|
|
(434
|
)
|
|||||
(Benefit) provision for corporate income taxes(3)
|
|
52,611
|
|
|
7,367
|
|
|
6,321
|
|
|
2,699
|
|
|
(144
|
)
|
|||||
Net (loss) income
|
|
$
|
(68,989
|
)
|
|
$
|
12,324
|
|
|
$
|
11,966
|
|
|
$
|
6,315
|
|
|
$
|
(290
|
)
|
(Loss) earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(2.84
|
)
|
|
$
|
0.51
|
|
|
$
|
0.51
|
|
|
$
|
0.28
|
|
|
$
|
(0.01
|
)
|
Diluted
|
|
$
|
(2.84
|
)
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
$
|
0.27
|
|
|
$
|
(0.01
|
)
|
Dividends declared per common share(4)
|
|
$
|
0.32
|
|
|
$
|
0.16
|
|
|
$
|
3.00
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
93,452
|
|
|
$
|
73,598
|
|
|
$
|
37,758
|
|
|
$
|
47,880
|
|
|
$
|
38,803
|
|
Working capital surplus (deficit)
|
|
52,280
|
|
|
27,830
|
|
|
(11,825
|
)
|
|
(18,311
|
)
|
|
(11,926
|
)
|
|||||
Total assets
|
|
409,833
|
|
|
413,792
|
|
|
404,770
|
|
|
450,402
|
|
|
474,693
|
|
|||||
Long-term debt, including current installments
|
|
299,871
|
|
|
314,909
|
|
|
310,339
|
|
|
288,994
|
|
|
316,513
|
|
|||||
Total stockholders’ (deficit) equity
|
|
(118,084
|
)
|
|
(43,516
|
)
|
|
(55,496
|
)
|
|
354
|
|
|
(6,945
|
)
|
|||||
Net debt(5)
|
|
214,832
|
|
|
251,402
|
|
|
277,985
|
|
|
243,870
|
|
|
277,710
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
|
$
|
4,758
|
|
|
$
|
67,388
|
|
|
$
|
60,053
|
|
|
$
|
74,885
|
|
|
$
|
51,238
|
|
Investing activities
|
|
(42,054
|
)
|
|
(30,606
|
)
|
|
(22,490
|
)
|
|
(30,907
|
)
|
|
(22,035
|
)
|
|||||
Financing activities
|
|
57,503
|
|
|
(975
|
)
|
|
(47,722
|
)
|
|
(35,349
|
)
|
|
(1,765
|
)
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-cash rental income, net of non-cash rental expense
|
|
(5,399
|
)
|
|
(5,692
|
)
|
|
(4,037
|
)
|
|
(3,663
|
)
|
|
(5,552
|
)
|
|||||
Non-cash share-based compensation expense
|
|
1,911
|
|
|
2,204
|
|
|
1,306
|
|
|
1,412
|
|
|
1,336
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Club and Membership Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
New clubs opened
|
|
4
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||
Clubs acquired
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Clubs closed
|
|
(8
|
)
|
|
(4
|
)
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|||||
Wholly-owned clubs operated at end of period
|
|
156
|
|
|
160
|
|
|
158
|
|
|
158
|
|
|
158
|
|
|||||
Total clubs operated at end of period(6)
|
|
158
|
|
|
162
|
|
|
160
|
|
|
160
|
|
|
160
|
|
|||||
BFX Studio at end of period
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total members at end of period(7)
|
|
484,000
|
|
|
497,000
|
|
|
510,000
|
|
|
523,000
|
|
|
493,000
|
|
|||||
Restricted members at end of period(8)
|
|
20,000
|
|
|
41,000
|
|
|
38,000
|
|
|
38,000
|
|
|
17,000
|
|
|||||
Comparable club revenue (decrease) increase(9)
|
|
(4.2
|
)%
|
|
(1.8
|
)%
|
|
1.6
|
%
|
|
1.8
|
%
|
|
(4.3
|
)%
|
|||||
Revenue per weighted average club (in thousands)(10)
|
|
$
|
2,842
|
|
|
$
|
2,971
|
|
|
$
|
3,032
|
|
|
$
|
2,934
|
|
|
$
|
2,881
|
|
Average revenue per member(11)
|
|
$
|
941
|
|
|
$
|
934
|
|
|
$
|
922
|
|
|
$
|
915
|
|
|
$
|
947
|
|
Average joining fees collected per member(12)
|
|
$
|
65
|
|
|
$
|
59
|
|
|
$
|
57
|
|
|
$
|
55
|
|
|
$
|
37
|
|
Annual attrition(13)
|
|
44.3
|
%
|
|
41.9
|
%
|
|
41.0
|
%
|
|
39.9
|
%
|
|
41.9
|
%
|
(1)
|
The $3,194 of insurance recovery related to damaged property in the year ended December 31, 2013 related to property damaged by Hurricane Sandy.
|
(2)
|
The
$493
loss on extinguishment of debt recorded for the year ended December 31, 2014 is comprised of the write-off of unamortized debt issuance costs and debt discount, in connection with the fourth quarter 2014 mandatory prepayment of
$13,500
on the 2013 Term Loan Facility.
|
(3)
|
Corporate income taxes for the year ended December 31, 2014 includes a non-cash charge of $60,368, related to a tax valuation allowance.Corporate income taxes for the year ended December 31, 2013, 2012 and 2011 includes income tax benefits totaling $16, $483 and $343, respectively, related to the correction of accounting errors. See Note
16
— Corporate Income Taxes to the Company’s consolidated financial statements in this Annual Report for further details.
|
(4)
|
In April 2014, February 2014 and November 2013, the board of directors of the Company declared quarterly cash dividends of $0.16 per share. The quarterly dividend was discontinued in the second quarter of 2014.
|
(5)
|
Net debt represents the total principal balance of long-term debt outstanding, net of cash and cash equivalents.
|
(6)
|
Includes wholly-owned and partly-owned clubs. Not included in the total club count are locations that are managed by us in which we do not have an equity interest. These managed sites include three managed university locations, and seven managed sites, including four managed sites acquired in connection with our Fitcorp acquisition in May 2013.
|
(7)
|
Represents members at wholly-owned and partly-owned clubs.
|
(8)
|
Restricted members primarily include students and teachers. This membership allows for club usage at restricted times, at a discount to other memberships offered. The Company is currently in the process of introducing the HVLP strategy to most of its clubs which will eliminate the Restricted Membership.
|
(9)
|
Total revenue for a club is included in comparable club revenue increase (decrease) beginning on the first day of the thirteenth full calendar month of the club’s operation.
|
(10)
|
Revenue per weighted average club is calculated as total revenue divided by the product of the total number of clubs and their weighted average months in operation as a percentage of the period.
|
(11)
|
Average revenue per member is total revenue from wholly-owned clubs for the period divided by the average number of memberships from wholly-owned clubs for the period, including restricted memberships, summer student and summer pool memberships, where average number of memberships for the period is derived by dividing the sum of the total memberships at the end of each month during the period by the total number of months in the period.
|
(12)
|
Average joining fees collected per member is calculated as total initiation and processing fees divided by the number of new members, excluding pre-sold, summer student and summer pool memberships and including Restricted Memberships that began in April 2010, during each respective year.
|
(13)
|
Annual attrition is calculated as total member losses for the year divided by the average monthly member count over the year excluding pre-sold, summer student and summer pool memberships and including our Restricted Memberships that began in April 2010, during each respective year.
|
•
|
Membership revenue:
Our largest sources of revenue are dues inclusive of monthly membership fees, annual maintenance fees and joining fees paid by our members. In addition, we collect usage fees on a per visit basis subject to peak and off-peak hourly restrictions depending on membership type. These dues and fees comprised
78.3%
of our total revenue for the year ended
December 31, 2014
. We recognize revenue from membership dues in the month when the services are rendered. Approximately 98% of our members pay their monthly dues by Electronic Funds Transfer, or EFT, while the balance is paid annually in advance. We recognize revenue from joining fees over the estimated average membership life.
|
•
|
Ancillary club revenue:
For the year ended
December 31, 2014
, we generated
15.5%
of our revenue from personal training and
4.9%
of our revenue from other ancillary programs and services consisting of programming for children, signature classes, Small Group Training and other member activities, as well as sales of miscellaneous sports products. We continue to grow ancillary club revenue by building on ancillary programs such as our personal training membership product and our fee-based Small Group Training programs.
|
|
|
Comparable Club Revenue
Increase (Decrease)
|
||||
|
|
Quarter
|
|
Full-Year
|
||
2012
|
|
|
|
|
||
First Quarter
|
|
4.5
|
%
|
|
|
|
Second Quarter
|
|
2.1
|
%
|
|
|
|
Third Quarter (a)
|
|
1.0
|
%
|
|
|
|
Fourth Quarter
|
|
(1.1
|
)%
|
|
1.6
|
%
|
2013
|
|
|
|
|
||
First Quarter
|
|
(2.4
|
)%
|
|
|
|
Second Quarter
|
|
(1.7
|
)%
|
|
|
|
Third Quarter
|
|
(1.7
|
)%
|
|
|
|
Fourth Quarter (a)
|
|
(1.3
|
)%
|
|
(1.8
|
)%
|
2014
|
|
|
|
|
||
First Quarter
|
|
(4.7
|
)%
|
|
|
|
Second Quarter
|
|
(4.5
|
)%
|
|
|
|
Third Quarter
|
|
(4.5
|
)%
|
|
|
|
Fourth Quarter
|
|
(3.9
|
)%
|
|
(4.2
|
)%
|
(a)
|
Comparable club revenue for the third quarter of 2012 excludes $1.2 million of additional fees and other revenue realized in connection with the termination of a long-term marketing arrangement with a third party in-club advertiser. Comparable club revenue for the fourth quarter of 2013 excludes $424,000 of out of period rental income recognized resulting from the correction of an accounting error.
|
|
|
Year Ended December 31,
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
Wholly-owned clubs operated at beginning of period
|
|
160
|
|
|
158
|
|
|
158
|
|
New clubs opened
|
|
4
|
|
|
—
|
|
|
—
|
|
Clubs acquired
|
|
—
|
|
|
6
|
|
|
—
|
|
Clubs closed
|
|
(8
|
)
|
|
(4
|
)
|
|
—
|
|
Wholly-owned clubs operated at end of period
|
|
156
|
|
|
160
|
|
|
158
|
|
Partly-owned clubs operated at end of period
|
|
2
|
|
|
2
|
|
|
2
|
|
Total clubs operated at end of period(1)(2)
|
|
158
|
|
|
162
|
|
|
160
|
|
|
Year Ended December 31,
|
|
|
|||||||||||||
|
2014
|
|
2013
|
|
|
|||||||||||
|
Revenue
|
|
% Revenue
|
|
Revenue
|
|
% Revenue
|
|
% Variance
|
|||||||
Membership dues
|
$
|
343,185
|
|
|
75.6
|
%
|
|
$
|
358,761
|
|
|
76.3
|
%
|
|
(4.3
|
)%
|
Joining fees
|
12,044
|
|
|
2.7
|
%
|
|
14,392
|
|
|
3.0
|
%
|
|
(16.3
|
)%
|
||
Membership revenue
|
355,229
|
|
|
78.3
|
%
|
|
373,153
|
|
|
79.3
|
%
|
|
(4.8
|
)%
|
||
Personal training revenue
|
70,338
|
|
|
15.5
|
%
|
|
66,367
|
|
|
14.1
|
%
|
|
6.0
|
%
|
||
Other ancillary club revenue
|
22,304
|
|
|
4.9
|
%
|
|
24,720
|
|
|
5.3
|
%
|
|
(9.8
|
)%
|
||
Ancillary club revenue
|
92,642
|
|
|
20.4
|
%
|
|
91,087
|
|
|
19.4
|
%
|
|
1.7
|
%
|
||
Fees and other revenue
|
5,971
|
|
|
1.3
|
%
|
|
5,985
|
|
|
1.3
|
%
|
|
(0.2
|
)%
|
||
Total revenue
|
$
|
453,842
|
|
|
100.0
|
%
|
|
$
|
470,225
|
|
|
100.0
|
%
|
|
(3.5
|
)%
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
|
2014
|
|
2013
|
|
$ Variance
|
|
% Variance
|
|||||||
Payroll and related
|
|
$
|
177,009
|
|
|
$
|
174,894
|
|
|
$
|
2,115
|
|
|
1.2
|
%
|
Club operating
|
|
192,716
|
|
|
179,683
|
|
|
13,033
|
|
|
7.3
|
%
|
|||
General and administrative
|
|
31,352
|
|
|
28,431
|
|
|
2,921
|
|
|
10.3
|
%
|
|||
Depreciation and amortization
|
|
47,307
|
|
|
49,099
|
|
|
(1,792
|
)
|
|
(3.6
|
)%
|
|||
Insurance recovery related to damaged property
|
|
—
|
|
|
(3,194
|
)
|
|
3,194
|
|
|
100
|
%
|
|||
Impairment of fixed assets
|
|
4,569
|
|
|
714
|
|
|
3,855
|
|
|
539.9
|
%
|
|||
Impairment of goodwill
|
|
137
|
|
|
—
|
|
|
137
|
|
|
N/A
|
|
|||
Operating expenses
|
|
$
|
453,090
|
|
|
$
|
429,627
|
|
|
$
|
23,463
|
|
|
5.5
|
%
|
•
|
Rent and occupancy expenses increased $6.2 million. This increase included $4.7 million related to leases that commenced for newly opened and future clubs in 2013 and 2014, including our new BFX Studio units, as well as $2.4 million in increased occupancy expenses at our mature clubs. The current year increase was also driven by a prior-year period net decrease of $790,000 related to three early lease terminations in 2013 and the write-off of the remaining deferred rent at two of those locations. These increases were partially offset by a decrease of $1.7 million related to clubs closed in 2014. Of this amount, $1.4 million was a net occupancy gain related to the 2014 club closures which includes penalty payments to landlords and the write-offs of deferred rent at clubs with early terminations.
|
•
|
Utilities expense increased $2.3 million in the year ended
December 31, 2014
compared to the prior year principally due to higher energy costs. Energy costs were negatively impacted by the severe cold experienced in our markets during the first quarter of 2014.
|
•
|
Marketing expenses increased $2.0 million in the year ended
December 31, 2014
compared to the prior year principally due to increased advertising spend at locations converting to the HVLP pricing strategy.
|
•
|
Repair and maintenance expenses increased $1.0 million in the year ended
December 31, 2014
compared to the prior year, reflecting an increase in overall club maintenance, in particular, repairs of heating, ventilation and air conditioning system.
|
|
|
Year Ended December 31,
|
|
|
|||||||||||||
|
|
2013
|
|
2012
|
|
|
|||||||||||
|
|
Revenue
|
|
% Revenue
|
|
Revenue
|
|
% Revenue
|
|
% Variance
|
|||||||
Membership dues
|
|
$
|
358,761
|
|
|
76.3
|
%
|
|
$
|
366,044
|
|
|
76.4
|
%
|
|
(2.0
|
)%
|
Joining fees
|
|
14,392
|
|
|
3.0
|
%
|
|
11,595
|
|
|
2.4
|
%
|
|
24.1
|
%
|
||
Membership revenue
|
|
373,153
|
|
|
79.3
|
%
|
|
377,639
|
|
|
78.8
|
%
|
|
(1.2
|
)%
|
||
Personal training revenue
|
|
66,367
|
|
|
14.1
|
%
|
|
65,641
|
|
|
13.7
|
%
|
|
1.1
|
%
|
||
Other ancillary club revenue
|
|
24,720
|
|
|
5.3
|
%
|
|
29,897
|
|
|
6.3
|
%
|
|
(17.3
|
)%
|
||
Ancillary club revenue
|
|
91,087
|
|
|
19.4
|
%
|
|
95,538
|
|
|
20.0
|
%
|
|
(4.7
|
)%
|
||
Fees and other revenue
|
|
5,985
|
|
|
1.3
|
%
|
|
5,804
|
|
|
1.2
|
%
|
|
3.1
|
%
|
||
Total revenue
|
|
$
|
470,225
|
|
|
100.0
|
%
|
|
$
|
478,981
|
|
|
100.0
|
%
|
|
(1.8
|
)%
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
|
2013
|
|
2012
|
|
$ Variance
|
|
% Variance
|
|||||||
Payroll and related
|
|
$
|
174,894
|
|
|
$
|
181,632
|
|
|
$
|
(6,738
|
)
|
|
(3.7
|
)%
|
Club operating
|
|
179,683
|
|
|
178,950
|
|
|
733
|
|
|
0.4
|
%
|
|||
General and administrative
|
|
28,431
|
|
|
24,139
|
|
|
4,292
|
|
|
17.8
|
%
|
|||
Depreciation and amortization
|
|
49,099
|
|
|
49,391
|
|
|
(292
|
)
|
|
(0.6
|
)%
|
|||
Insurance recovery related to damaged property
|
|
(3,194
|
)
|
|
—
|
|
|
(3,194
|
)
|
|
N/A
|
|
|||
Impairment of fixed assets
|
|
714
|
|
|
3,436
|
|
|
(2,722
|
)
|
|
(79.2
|
)%
|
|||
Operating expenses
|
|
$
|
429,627
|
|
|
$
|
437,548
|
|
|
$
|
(7,921
|
)
|
|
(1.8
|
)%
|
|
Year ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenue
|
$
|
326
|
|
|
$
|
—
|
|
EBITDA
|
$
|
(3,556
|
)
|
|
$
|
(364
|
)
|
•
|
making it more difficult to satisfy our obligations with respect to our outstanding indebtedness;
|
•
|
increasing our vulnerability to general adverse economic and industry conditions;
|
•
|
limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions of new clubs and other general corporate requirements;
|
•
|
requiring a substantial portion of our cash flow from operations for the payment of interest on our debt, which is variable on our 2013 Revolving Loan Facility and partially variable on our 2013 Term Loan Facility, and/or principal pursuant to excess cash flow requirements and reducing our ability to use our cash flow to fund working capital, capital expenditures and acquisitions of new clubs and general corporate requirements;
|
•
|
increasing our vulnerability to interest rate fluctuations in connection with borrowings under our 2013 Senior Credit Facility, some of which are at variable interest rates;
|
•
|
limiting our ability to refinance our existing indebtedness on favorable terms, or at all; and
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate.
|
|
|
Payments Due by Period (in thousands)
|
||||||||||||||||||
Contractual Obligations(4)
|
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
||||||||||
Long-term debt(1)
|
|
$
|
308,284
|
|
|
$
|
3,114
|
|
|
$
|
6,228
|
|
|
$
|
6,228
|
|
|
$
|
292,714
|
|
Interest payments on long-term debt(2)
|
|
84,843
|
|
|
15,439
|
|
|
30,453
|
|
|
27,319
|
|
|
11,632
|
|
|||||
Operating lease obligations(3)
|
|
621,420
|
|
|
91,052
|
|
|
165,784
|
|
|
134,532
|
|
|
230,052
|
|
|||||
Total contractual obligations
|
|
$
|
1,014,547
|
|
|
$
|
109,605
|
|
|
$
|
202,465
|
|
|
$
|
168,079
|
|
|
$
|
534,398
|
|
(1)
|
Principal amounts paid each year may increase if annual excess cash flow amounts are required (as described above). Excess cash flow was calculated as of December 31, 2014 and no payments are currently required in 2015 or any future period.
|
(2)
|
Based on interest rates pursuant to the 2013 Term Loan Facility and the interest swap agreement as of
December 31, 2014
.
|
(3)
|
Operating lease obligations include base rent only. Certain leases provide for additional rent based on real estate taxes, common area maintenance and defined amounts based on our operating results. Amounts include net obligations under the Initial Lease related to the building financing arrangement. Does not include any amounts relating to the New Club Lease. See "Building Financing Arrangement" and Note
11
- Building Financing Arrangement to our consolidated financial statements.
|
(4)
|
The table above does not reflect payments related to planned club closures.
|
Board of Directors:
|
|
|
Robert Giardina
|
|
Executive Chairman, Town Sports International Holdings, Inc.
|
Paul N. Arnold
|
|
Former Chairman of the Board and Chief Executive Officer, Cort Business Services, Inc.
|
Bruce C. Bruckmann
|
|
Managing Director, Bruckmann, Rosser, Sherrill & Co., LP
|
J. Rice Edmonds
|
|
Managing Director, Edmonds Capital, LLC
|
John H. Flood III
|
|
Chief Executive Officer, Synergy Global Outsourcing, LLC
|
Thomas J. Galligan III
|
|
Former Executive Chairman, Papa Gino’s Holdings Corp.
|
Kevin McCall
|
|
Chief Executive Officer and President, Paradigm Properties, LLC
|
Executive Officers:
|
|
|
Robert Giardina
|
|
Executive Chairman
|
Daniel Gallagher
|
|
Chief Executive Officer and President
|
Carolyn Spatafora
|
|
Chief Financial Officer
|
Nitin Ajmera
|
|
Senior Vice President — Shared Services and Controller
|
Paul Barron
|
|
Senior Vice President — Chief Information Officer
|
David M. Kastin
|
|
Senior Vice President — General Counsel and Corporate Secretary
|
Scott Milford
|
|
Senior Vice President — Human Resources
|
|
|
|
|
|
Page Number
|
Consolidated Annual Financial Statements of Town Sports International Holdings, Inc:
|
|
|
|
|
|
|
F-2
|
|
|
|
|
|
F-3
|
|
|
|
|
|
F-4
|
|
|
|
|
|
F-5
|
|
|
|
|
|
F-6
|
|
|
|
|
|
F-7
|
|
|
|
|
|
F-8
|
T
OWN
S
PORTS
I
NTERNATIONAL
H
OLDINGS
, I
NC
.
|
||
|
|
|
By:
|
|
/s/
DANIEL GALLAGHER
|
|
|
|
|
|
Chief Executive Officer
|
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
By:
|
|
/s/ DANIEL GALLAGHER
|
|
Chief Executive Officer (principal executive officer)
|
|
February 26, 2015
|
|
|
Daniel Gallagher
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ CAROLYN SPATAFORA
|
|
Chief Financial Officer (principal financial and accounting officer)
|
|
February 26, 2015
|
|
|
Carolyn Spatafora
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ PAUL ARNOLD
|
|
Director
|
|
February 26, 2015
|
|
|
Paul Arnold
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ BRUCE BRUCKMANN
|
|
Director
|
|
February 26, 2015
|
|
|
Bruce Bruckmann
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ J. RICE EDMONDS
|
|
Director
|
|
February 26, 2015
|
|
|
J. Rice Edmonds
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ JOHN H. FLOOD III
|
|
Director
|
|
February 26, 2015
|
|
|
John H. Flood III
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ THOMAS J. GALLIGAN III
|
|
Director
|
|
February 26, 2015
|
|
|
Thomas J. Galligan III
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ ROBERT GIARDINA
|
|
Executive Chairman
|
|
February 26, 2015
|
|
|
Robert Giardina
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ KEVIN MCCALL
|
|
Director
|
|
February 26, 2015
|
|
|
Kevin McCall
|
|
|
|
|
|
Page
|
Consolidated Annual Financial Statements of Town Sports International Holdings, Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Club operations
|
$
|
447,871
|
|
|
$
|
464,240
|
|
|
$
|
473,177
|
|
Fees and other
|
5,971
|
|
|
5,985
|
|
|
5,804
|
|
|||
|
453,842
|
|
|
470,225
|
|
|
478,981
|
|
|||
Operating Expenses:
|
|
|
|
|
|
||||||
Payroll and related
|
177,009
|
|
|
174,894
|
|
|
181,632
|
|
|||
Club operating
|
192,716
|
|
|
179,683
|
|
|
178,950
|
|
|||
General and administrative
|
31,352
|
|
|
28,431
|
|
|
24,139
|
|
|||
Depreciation and amortization
|
47,307
|
|
|
49,099
|
|
|
49,391
|
|
|||
Insurance recovery related to damaged property
|
—
|
|
|
(3,194
|
)
|
|
—
|
|
|||
Impairment of fixed assets
|
4,569
|
|
|
714
|
|
|
3,436
|
|
|||
Impairment of goodwill
|
137
|
|
|
—
|
|
|
—
|
|
|||
|
453,090
|
|
|
429,627
|
|
|
437,548
|
|
|||
Operating income
|
752
|
|
|
40,598
|
|
|
41,433
|
|
|||
Loss on extinguishment of debt
|
493
|
|
|
750
|
|
|
1,010
|
|
|||
Interest expense
|
19,039
|
|
|
22,617
|
|
|
24,640
|
|
|||
Interest income
|
—
|
|
|
(1
|
)
|
|
(43
|
)
|
|||
Equity in the earnings of investees and rental income
|
(2,402
|
)
|
|
(2,459
|
)
|
|
(2,461
|
)
|
|||
(Loss) income before provision for corporate income taxes
|
(16,378
|
)
|
|
19,691
|
|
|
18,287
|
|
|||
Provision for corporate income taxes
|
52,611
|
|
|
7,367
|
|
|
6,321
|
|
|||
Net (loss) income
|
$
|
(68,989
|
)
|
|
$
|
12,324
|
|
|
$
|
11,966
|
|
(Loss) earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(2.84
|
)
|
|
$
|
0.51
|
|
|
$
|
0.51
|
|
Diluted
|
$
|
(2.84
|
)
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
Weighted average number of shares used in calculating (loss) earnings per share:
|
|
|
|
|
|
||||||
Basic
|
24,266,407
|
|
|
24,031,533
|
|
|
23,436,393
|
|
|||
Diluted
|
24,266,407
|
|
|
24,736,961
|
|
|
24,114,540
|
|
|||
Dividends declared per common share
|
$
|
0.32
|
|
|
$
|
0.16
|
|
|
$
|
3.00
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Net (loss) income
|
$
|
(68,989
|
)
|
|
$
|
12,324
|
|
|
$
|
11,966
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of tax of $0, ($49) and $0 for the years ended December 31, 2014, 2013 and 2012, respectively
|
(545
|
)
|
|
68
|
|
|
95
|
|
|||
Interest rate swap, net of tax of $0, ($583) and $61 for the years ended December 31, 2014, 2013 and 2012, respectively
|
(1,112
|
)
|
|
758
|
|
|
(120
|
)
|
|||
Total other comprehensive (loss) income, net of tax
|
(1,657
|
)
|
|
826
|
|
|
(25
|
)
|
|||
Total comprehensive (loss) income
|
$
|
(70,646
|
)
|
|
$
|
13,150
|
|
|
$
|
11,941
|
|
|
Common Stock
($.001 par)
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
(Deficit)
|
|
Total
Stockholders’
(Deficit) Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2011
|
23,040,881
|
|
|
$
|
23
|
|
|
$
|
(19,934
|
)
|
|
$
|
1,251
|
|
|
$
|
19,014
|
|
|
$
|
354
|
|
Stock option exercises
|
534,514
|
|
|
1
|
|
|
2,351
|
|
|
—
|
|
|
—
|
|
|
2,352
|
|
|||||
Common stock grants
|
12,502
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
116
|
|
|||||
Restricted stock grants
|
251,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cancellation of options
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|||||
Forfeiture of restricted stock
|
(26,291
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Compensation related to stock options and restricted stock grants
|
—
|
|
|
—
|
|
|
1,190
|
|
|
—
|
|
|
—
|
|
|
1,190
|
|
|||||
Dividends declared on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,400
|
)
|
|
(71,400
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,966
|
|
|
11,966
|
|
|||||
Derivative financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|
—
|
|
|
(120
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
95
|
|
|||||
Balance at December 31, 2012
|
23,813,106
|
|
|
24
|
|
|
(16,326
|
)
|
|
1,226
|
|
|
(40,420
|
)
|
|
(55,496
|
)
|
|||||
Stock option exercises
|
135,786
|
|
|
—
|
|
|
600
|
|
|
—
|
|
|
—
|
|
|
600
|
|
|||||
Common stock grants
|
29,562
|
|
|
—
|
|
|
305
|
|
|
—
|
|
|
—
|
|
|
305
|
|
|||||
Restricted stock grants
|
178,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cancellation of options
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|||||
Forfeiture of restricted stock
|
(84,249
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Compensation related to stock options and restricted stock grants
|
—
|
|
|
—
|
|
|
1,899
|
|
|
—
|
|
|
—
|
|
|
1,899
|
|
|||||
Tax shortfall from stock option exercises and restricted stock vesting
|
—
|
|
|
—
|
|
|
(244
|
)
|
|
—
|
|
|
—
|
|
|
(244
|
)
|
|||||
Dividends declared on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,850
|
)
|
|
(3,850
|
)
|
|||||
Dividend forfeitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
200
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,324
|
|
|
12,324
|
|
|||||
Derivative financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
758
|
|
|
—
|
|
|
758
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
|||||
Balance at December 31, 2013
|
24,072,705
|
|
|
24
|
|
|
(13,846
|
)
|
|
2,052
|
|
|
(31,746
|
)
|
|
(43,516
|
)
|
|||||
Stock option exercises
|
73,043
|
|
|
—
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
133
|
|
|||||
Common stock grants
|
21,248
|
|
|
—
|
|
|
245
|
|
|
—
|
|
|
—
|
|
|
245
|
|
|||||
Restricted stock grants
|
196,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cancellation of options
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|||||
Forfeiture of restricted stock
|
(31,956
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Compensation related to stock options and restricted stock grants
|
—
|
|
|
—
|
|
|
1,666
|
|
|
—
|
|
|
—
|
|
|
1,666
|
|
|||||
Tax benefit from stock option exercises and restricted stock vesting, net
|
—
|
|
|
—
|
|
|
1,613
|
|
|
—
|
|
|
—
|
|
|
1,613
|
|
|||||
Tax benefit on dividend payments
|
—
|
|
|
—
|
|
|
205
|
|
|
—
|
|
|
—
|
|
|
205
|
|
|||||
Dividends declared on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,736
|
)
|
|
(7,736
|
)
|
|||||
Dividend forfeitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68,989
|
)
|
|
(68,989
|
)
|
|||||
Derivative financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,112
|
)
|
|
—
|
|
|
(1,112
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(545
|
)
|
|
—
|
|
|
(545
|
)
|
|||||
Balance at December 31, 2014
|
24,331,540
|
|
|
$
|
24
|
|
|
$
|
(10,055
|
)
|
|
$
|
395
|
|
|
$
|
(108,448
|
)
|
|
$
|
(118,084
|
)
|
|
2014
|
|
2013
|
|
2012
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(68,989
|
)
|
|
$
|
12,324
|
|
|
$
|
11,966
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities
|
|
|
|
|
|
||||||
Depreciation and amortization
|
47,307
|
|
|
49,099
|
|
|
49,391
|
|
|||
Insurance recovery related to damaged property
|
—
|
|
|
(3,194
|
)
|
|
—
|
|
|||
Impairment of fixed assets
|
4,569
|
|
|
714
|
|
|
3,436
|
|
|||
Impairment of goodwill
|
137
|
|
|
—
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
493
|
|
|
750
|
|
|
1,010
|
|
|||
Amortization of debt discount
|
1,304
|
|
|
996
|
|
|
517
|
|
|||
Amortization of debt issuance costs
|
627
|
|
|
1,153
|
|
|
1,135
|
|
|||
Amortization of building financing costs
|
31
|
|
|
—
|
|
|
—
|
|
|||
Noncash rental income, net of non-cash rental expense
|
(5,399
|
)
|
|
(5,692
|
)
|
|
(4,037
|
)
|
|||
Share-based compensation expense
|
1,911
|
|
|
2,204
|
|
|
1,306
|
|
|||
Net change in deferred taxes
|
40,129
|
|
|
6,120
|
|
|
5,865
|
|
|||
Net change in certain operating assets and liabilities, net of acquisitions
|
(20,994
|
)
|
|
898
|
|
|
(8,967
|
)
|
|||
Decrease in deferred membership costs
|
1,329
|
|
|
2,086
|
|
|
(694
|
)
|
|||
Landlord contributions to tenant improvements
|
1,684
|
|
|
1,472
|
|
|
1,345
|
|
|||
Increase (decrease) in insurance reserves
|
482
|
|
|
(929
|
)
|
|
(2,071
|
)
|
|||
Other
|
137
|
|
|
(613
|
)
|
|
(149
|
)
|
|||
Total adjustments
|
73,747
|
|
|
55,064
|
|
|
48,087
|
|
|||
Net cash provided by operating activities
|
4,758
|
|
|
67,388
|
|
|
60,053
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(42,054
|
)
|
|
(30,861
|
)
|
|
(22,490
|
)
|
|||
Acquisition of businesses
|
—
|
|
|
(2,939
|
)
|
|
—
|
|
|||
Insurance recovery related to damaged property
|
—
|
|
|
3,194
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(42,054
|
)
|
|
(30,606
|
)
|
|
(22,490
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from building financing arrangement
|
83,400
|
|
|
—
|
|
|
—
|
|
|||
Building financing arrangement costs
|
(3,160
|
)
|
|
—
|
|
|
—
|
|
|||
Principal payments on 2013 Term Loan Facility
|
(16,716
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from 2013 Senior Credit Facility, net of original issue discount
|
—
|
|
|
323,375
|
|
|
—
|
|
|||
Proceeds from incremental term loan, net of original issue discount
|
—
|
|
|
—
|
|
|
59,700
|
|
|||
Proceeds from replacement 2011 Term Loan Facility lenders
|
—
|
|
|
—
|
|
|
13,796
|
|
|||
Principal payments to non-consenting 2011 Term Loan Facility lenders
|
—
|
|
|
—
|
|
|
(13,796
|
)
|
|||
Principal payments on 2011 Term Loan Facility
|
—
|
|
|
—
|
|
|
(36,007
|
)
|
|||
Repayment of 2011 Senior Credit Facility
|
—
|
|
|
(315,743
|
)
|
|
—
|
|
|||
Term loan issuance and amendment related financing costs
|
—
|
|
|
(4,356
|
)
|
|
(3,346
|
)
|
|||
Debt issuance costs
|
—
|
|
|
(763
|
)
|
|
(125
|
)
|
|||
Cash dividends paid
|
(7,877
|
)
|
|
(4,088
|
)
|
|
(70,296
|
)
|
|||
Proceeds from stock option exercises
|
133
|
|
|
600
|
|
|
2,352
|
|
|||
Tax benefit from restricted stock vesting
|
1,723
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
57,503
|
|
|
(975
|
)
|
|
(47,722
|
)
|
|||
Effect of exchange rate changes on cash
|
(353
|
)
|
|
33
|
|
|
37
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
19,854
|
|
|
35,840
|
|
|
(10,122
|
)
|
|||
Cash and cash equivalents beginning of period
|
73,598
|
|
|
37,758
|
|
|
47,880
|
|
|||
Cash and cash equivalents end of period
|
$
|
93,452
|
|
|
$
|
73,598
|
|
|
$
|
37,758
|
|
Summary of the change in certain operating assets and liabilities:
|
|
|
|
|
|
||||||
Decrease (increase) in accounts receivable
|
$
|
25
|
|
|
$
|
2,859
|
|
|
$
|
(645
|
)
|
Increase in inventory
|
(101
|
)
|
|
(36
|
)
|
|
(148
|
)
|
|||
Increase in prepaid expenses and other current assets
|
(1,549
|
)
|
|
(1,278
|
)
|
|
(432
|
)
|
|||
(Decrease) increase in accounts payable, accrued expenses and accrued interest
|
(9,856
|
)
|
|
3,089
|
|
|
(3,094
|
)
|
|||
Change in prepaid corporate income taxes and corporate income taxes payable
|
(12,773
|
)
|
|
1,604
|
|
|
(427
|
)
|
|||
Increase (decrease) in deferred revenue
|
3,260
|
|
|
(5,340
|
)
|
|
(4,221
|
)
|
|||
Net change in certain working capital components
|
$
|
(20,994
|
)
|
|
$
|
898
|
|
|
$
|
(8,967
|
)
|
|
Estimated Average Membership Life of
an Unrestricted Member
|
|
Estimated Average Membership Life of
a Restricted Member
|
||||||||
Period
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
Three months ended March 31
|
22 months
|
|
25 months
|
|
28 months
|
|
28 months
|
|
27 months
|
|
25 months
|
Three months ended June 30
|
22 months
|
|
24 months
|
|
28 months
|
|
27 months
|
|
28 months
|
|
27 months
|
Three months ended September 30
|
22 months
|
|
23 months
|
|
28 months
|
|
26 months
|
|
28 months
|
|
28 months
|
Three months ended December 31
|
22 months
|
|
23 months
|
|
27 months
|
|
26 months
|
|
28 months
|
|
27 months
|
|
Balance Beginning
of the Year
|
|
Additions
|
|
Write-offs Net of
Recoveries
|
|
Balance at
End of Year
|
||||||||
December 31, 2014
|
$
|
2,309
|
|
|
$
|
9,826
|
|
|
$
|
(9,624
|
)
|
|
$
|
2,511
|
|
December 31, 2013
|
$
|
3,249
|
|
|
$
|
8,335
|
|
|
$
|
(9,275
|
)
|
|
$
|
2,309
|
|
December 31, 2012
|
$
|
2,440
|
|
|
$
|
9,711
|
|
|
$
|
(8,902
|
)
|
|
$
|
3,249
|
|
•
|
Level 1 — Quoted prices for
identical
instruments in active markets.
|
•
|
Level 2 — Quoted prices for
similar
instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
|
•
|
Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable
.
|
|
For The Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Weighted average number of common share outstanding — basic
|
24,266,407
|
|
|
24,031,533
|
|
|
23,436,393
|
|
|||
Effect of dilutive share-based awards
|
—
|
|
|
705,428
|
|
|
678,147
|
|
|||
Weighted average number of common shares outstanding — diluted
|
24,266,407
|
|
|
24,736,961
|
|
|
24,114,540
|
|
|||
(Loss) earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(2.84
|
)
|
|
$
|
0.51
|
|
|
$
|
0.51
|
|
Diluted
|
$
|
(2.84
|
)
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
Common
|
|
Risk-Free
Interest
Rate
|
|
Expected
Life
|
|
Expected
Volatility
|
|
Expected
Dividend
Yield
|
|
Fair Value
at Date
of Grant
|
|||||
2012 option modification incremental expense
|
|
2.6
|
%
|
|
6 years
|
|
79
|
%
|
|
—
|
|
|
$
|
2.74
|
|
2012 option modification incremental expense
|
|
0.4
|
%
|
|
3 years
|
|
50
|
%
|
|
—
|
|
|
—
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Leasehold improvements
|
$
|
491,401
|
|
|
$
|
503,174
|
|
Club equipment
|
105,486
|
|
|
99,461
|
|
||
Furniture, fixtures and computer equipment
|
65,373
|
|
|
61,481
|
|
||
Computer software
|
22,071
|
|
|
20,229
|
|
||
Building and improvements
|
4,995
|
|
|
4,995
|
|
||
Land
|
986
|
|
|
986
|
|
||
Construction in progress
|
12,740
|
|
|
9,907
|
|
||
|
703,052
|
|
|
700,233
|
|
||
Less: Accumulated depreciation and amortization
|
(469,408
|
)
|
|
(456,241
|
)
|
||
|
$
|
233,644
|
|
|
$
|
243,992
|
|
|
|
|
Basis of Fair Value Measurements
|
||||||||||||
|
Fair Value
of Assets
(Liabilities)
|
|
Quoted Prices in Active
Markets for Identical
Items (Level 1)
|
|
Significant Other
Observable
Inputs (Level 2)
|
|
Significant Unobservable
Inputs (Level 3)
|
||||||||
December 31, 2014
|
$
|
4,569
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,569
|
|
December 31, 2013
|
$
|
714
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
714
|
|
|
Acquisition on
May 17, 2013
|
||
Allocation of purchase price:
|
|
||
Other assets
|
$
|
90
|
|
Fixed assets related to leasehold improvements
|
2,289
|
|
|
Goodwill
|
9
|
|
|
Definite lived intangible assets:
|
|
||
Membership lists
|
830
|
|
|
Management contracts
|
250
|
|
|
Trade names
|
40
|
|
|
Deferred revenue
|
(630
|
)
|
|
Other liabilities
|
(443
|
)
|
|
Total allocation of purchase price
|
$
|
2,435
|
|
|
NYSC
|
|
BSC
|
|
SSC
|
|
Outlier Clubs
|
|
Total
|
||||||||||
Goodwill, net of accumulated amortization
|
$
|
31,403
|
|
|
$
|
15,775
|
|
|
$
|
1,321
|
|
|
$
|
3,982
|
|
|
$
|
52,481
|
|
Less: accumulated impairment of goodwill
|
—
|
|
|
(15,766
|
)
|
|
—
|
|
|
(3,845
|
)
|
|
(19,611
|
)
|
|||||
Balance as of December 31, 2013
|
31,403
|
|
|
9
|
|
|
1,321
|
|
|
137
|
|
|
32,870
|
|
|||||
Changes due to foreign currency exchange rate fluctuations
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
—
|
|
|
(140
|
)
|
|||||
Less: impairment of goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
(137
|
)
|
|
(137
|
)
|
|||||
Balance as of December 31, 2014
|
$
|
31,403
|
|
|
$
|
9
|
|
|
$
|
1,181
|
|
|
$
|
—
|
|
|
$
|
32,593
|
|
|
As of December 31, 2014
|
||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Intangibles
|
||||||
Membership lists
|
$
|
11,344
|
|
|
$
|
(11,163
|
)
|
|
$
|
181
|
|
Management contracts
|
250
|
|
|
(73
|
)
|
|
177
|
|
|||
Trade names
|
40
|
|
|
(4
|
)
|
|
36
|
|
|||
|
$
|
11,634
|
|
|
$
|
(11,240
|
)
|
|
$
|
394
|
|
|
As of December 31, 2013
|
||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Intangibles
|
||||||
Membership lists
|
$
|
11,344
|
|
|
$
|
(10,696
|
)
|
|
$
|
648
|
|
Non compete agreements
|
1,508
|
|
|
(1,508
|
)
|
|
—
|
|
|||
Management contracts
|
250
|
|
|
(28
|
)
|
|
222
|
|
|||
Trade names
|
40
|
|
|
(2
|
)
|
|
38
|
|
|||
Other
|
23
|
|
|
(23
|
)
|
|
—
|
|
|||
|
$
|
13,165
|
|
|
$
|
(12,257
|
)
|
|
$
|
908
|
|
Year Ending December 31,
|
|
||
2015
|
$
|
223
|
|
2016
|
36
|
|
|
2017
|
30
|
|
|
2018
|
24
|
|
|
2019
|
19
|
|
|
2020 and thereafter
|
62
|
|
|
|
$
|
394
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Accrued payroll
|
$
|
3,966
|
|
|
$
|
8,904
|
|
Accrued construction in progress and equipment
|
4,822
|
|
|
5,789
|
|
||
Accrued occupancy costs
|
7,493
|
|
|
6,741
|
|
||
Accrued insurance claims
|
2,065
|
|
|
1,863
|
|
||
Accrued other
|
8,356
|
|
|
8,239
|
|
||
|
$
|
26,702
|
|
|
$
|
31,536
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
2013 Term Loan Facility
|
$
|
308,284
|
|
|
$
|
325,000
|
|
Less: Unamortized discount
|
(8,413
|
)
|
|
(10,091
|
)
|
||
Less: Current portion due within one year
|
(3,114
|
)
|
|
(3,250
|
)
|
||
Long-term portion
|
$
|
296,757
|
|
|
$
|
311,659
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Interest costs expensed
|
$
|
18,228
|
|
|
$
|
22,617
|
|
|
$
|
24,640
|
|
Interest costs capitalized
|
300
|
|
|
32
|
|
|
—
|
|
|||
Total interest expense and amounts capitalized
|
$
|
18,528
|
|
|
$
|
22,649
|
|
|
$
|
24,640
|
|
12 months ending December 31,
|
|
|
||
2015
|
|
$
|
750
|
|
2016
|
|
750
|
|
|
2017
|
|
750
|
|
|
2018
|
|
750
|
|
|
2019
|
|
750
|
|
|
2020 and thereafter
|
|
14,771
|
|
|
Minimum lease commitments
|
|
$
|
18,521
|
|
|
Fair Value Measurements Using:
|
||||||||||||||
|
Total
Fair Value
|
|
Quoted Prices
in Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Interest rate swap liability as of December 31, 2014
|
$
|
1,294
|
|
|
$
|
—
|
|
|
$
|
1,294
|
|
|
$
|
—
|
|
Interest rate swap liability as of December 31, 2013
|
$
|
182
|
|
|
$
|
—
|
|
|
$
|
182
|
|
|
$
|
—
|
|
|
Options Outstanding
|
|
|
|
|
||||||||||
|
Number
Outstanding
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Weighted-
Average
Exercise
Price
|
|
Number
Exercisable
|
|
Weighted-
Average
Exercise
Price
|
||||||
Common
|
|
|
|
|
|
|
|
|
|
||||||
2005 grants
|
7,000
|
|
|
4 months
|
|
$
|
4.38
|
|
|
1,960
|
|
|
$
|
6.54
|
|
2006 grants
|
116,500
|
|
|
19 months
|
|
12.05
|
|
|
116,500
|
|
|
12.05
|
|
||
2007 grants
|
111,000
|
|
|
31 months
|
|
15.03
|
|
|
111,000
|
|
|
15.03
|
|
||
2008 grants
|
202,894
|
|
|
42 months
|
|
6.24
|
|
|
202,894
|
|
|
6.24
|
|
||
2009 grants
|
215,740
|
|
|
59 months
|
|
1.74
|
|
|
215,740
|
|
|
1.74
|
|
||
2010 grants
|
369,887
|
|
|
68 months
|
|
1.89
|
|
|
369,887
|
|
|
1.89
|
|
||
2011 grants
|
7,500
|
|
|
73 months
|
|
1.93
|
|
|
5,625
|
|
|
2.18
|
|
||
Total Grants
|
1,030,521
|
|
|
51 months
|
|
$
|
5.29
|
|
|
1,023,606
|
|
|
$
|
5.31
|
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
(years)
|
|
(thousands)
|
|||||
Outstanding at December 31, 2014
|
1,030,521
|
|
|
$
|
5.29
|
|
|
4.2
|
|
$
|
2,880
|
|
Vested and exercisable at December 31, 2014
|
1,023,606
|
|
|
$
|
5.31
|
|
|
4.3
|
|
$
|
2,858
|
|
Date
|
Number
of Shares
|
|
Share
Price
|
|
Grant Date
Fair Value
|
|||||
February 24, 2014
|
181,500
|
|
|
$
|
8.63
|
|
|
$
|
1,566
|
|
May 12, 2014
|
15,000
|
|
|
$
|
6.47
|
|
|
97
|
|
|
Total
|
196,500
|
|
|
|
|
$
|
1,663
|
|
|
Number
of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Balance as of January 1, 2012
|
186,249
|
|
|
$
|
7.39
|
|
Granted
|
251,500
|
|
|
12.30
|
|
|
Vested
|
(43,846
|
)
|
|
7.28
|
|
|
Forfeited
|
(26,291
|
)
|
|
7.98
|
|
|
Balance as of December 31, 2012
|
367,612
|
|
|
10.72
|
|
|
Granted
|
178,500
|
|
|
9.33
|
|
|
Vested
|
(98,692
|
)
|
|
10.39
|
|
|
Forfeited
|
(84,249
|
)
|
|
10.92
|
|
|
Balance as of December 31, 2013
|
363,171
|
|
|
10.08
|
|
|
Granted
|
196,500
|
|
|
8.47
|
|
|
Vested
|
(116,890
|
)
|
|
9.82
|
|
|
Forfeited
|
(41,247
|
)
|
|
9.92
|
|
|
Balance as of December 31, 2014
|
401,534
|
|
|
$
|
9.38
|
|
Date
|
Number of
Shares
|
|
Share
Price
|
|
Grant Date
Fair Value
|
|||||
January 16, 2013
|
24,280
|
|
|
$
|
10.09
|
|
|
$
|
245
|
|
March 25, 2013
|
1,622
|
|
|
9.25
|
|
|
15
|
|
||
June 24, 2013
|
1,418
|
|
|
10.58
|
|
|
15
|
|
||
September 24, 2013
|
1,208
|
|
|
12.42
|
|
|
15
|
|
||
December 26, 2013
|
1,034
|
|
|
14.51
|
|
|
15
|
|
||
January 16, 2014
|
21,248
|
|
|
11.53
|
|
|
245
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Membership dues
|
$
|
343,185
|
|
|
$
|
358,761
|
|
|
$
|
366,044
|
|
Joining fees
|
12,044
|
|
|
14,392
|
|
|
11,595
|
|
|||
Personal training revenue
|
70,338
|
|
|
66,367
|
|
|
65,641
|
|
|||
Other ancillary club revenue(1)
|
22,304
|
|
|
24,720
|
|
|
29,897
|
|
|||
Total club revenue
|
447,871
|
|
|
464,240
|
|
|
473,177
|
|
|||
Fees and other revenue(2)
|
5,971
|
|
|
5,985
|
|
|
5,804
|
|
|||
Total revenue
|
$
|
453,842
|
|
|
$
|
470,225
|
|
|
$
|
478,981
|
|
(1)
|
Other ancillary club revenue primarily consists of Small Group Training, Sports Clubs for Kids and racquet sports.
|
(2)
|
Fees and other revenue primarily consist of rental income, marketing revenue and management fees.
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
|
|
|
||||
Deferred tax assets
|
|
|
|
||||
Building financing arrangement
|
$
|
39,295
|
|
|
$
|
—
|
|
Deferred lease liabilities
|
25,077
|
|
|
24,560
|
|
||
Deferred revenue
|
12,603
|
|
|
10,816
|
|
||
Deferred compensation expense incurred in connection with stock options
|
2,370
|
|
|
2,101
|
|
||
Federal and state net operating loss carry-forwards
|
7,197
|
|
|
6,397
|
|
||
Accruals, reserves and other
|
6,121
|
|
|
5,773
|
|
||
|
$
|
92,663
|
|
|
$
|
49,647
|
|
Deferred tax liabilities
|
|
|
|
||||
Basis differences in fixed and intangible assets (including depreciation and amortization)
|
$
|
16,674
|
|
|
$
|
16,283
|
|
Change in accounting method
|
10,121
|
|
|
—
|
|
||
Deferred costs and other assets
|
5,604
|
|
|
4,457
|
|
||
Deferred lease receivable
|
1,564
|
|
|
—
|
|
||
Undistributed foreign earnings and other
|
587
|
|
|
492
|
|
||
|
$
|
34,550
|
|
|
$
|
21,232
|
|
Gross deferred tax assets
|
58,113
|
|
|
28,415
|
|
||
Valuation allowance
|
(69,689
|
)
|
|
(65
|
)
|
||
Deferred tax assets, net
|
$
|
(11,576
|
)
|
|
$
|
28,350
|
|
|
Years Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Federal statutory tax rate
|
(35
|
)%
|
|
35
|
%
|
|
35
|
%
|
State and local income taxes, net of federal tax benefit
|
(8
|
)
|
|
8
|
|
|
8
|
|
Change in state effective income tax rate
|
4
|
|
|
—
|
|
|
(2
|
)
|
State tax benefit related to insurance premiums
|
(7
|
)
|
|
(6
|
)
|
|
(7
|
)
|
Tax reserves
|
(1
|
)
|
|
2
|
|
|
—
|
|
Correction of an error
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
Other permanent differences
|
(1
|
)
|
|
(1
|
)
|
|
4
|
|
|
(48
|
)
|
|
37
|
|
|
35
|
|
Valuation allowance
|
422
|
|
|
—
|
|
|
—
|
|
Elimination of federal effect of state deferred taxes
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
321
|
%
|
|
37
|
%
|
|
35
|
%
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
(Revised)
|
||||||
Balance on January 1
|
$
|
13,830
|
|
|
$
|
15,659
|
|
|
$
|
16,497
|
|
Gross decreases for tax positions taken in prior years
|
(12,675
|
)
|
|
(1,829
|
)
|
|
(838
|
)
|
|||
Gross increases for tax positions taken in prior years
|
32
|
|
|
—
|
|
|
—
|
|
|||
Balance on December 31
|
$
|
1,187
|
|
|
$
|
13,830
|
|
|
$
|
15,659
|
|
|
Year ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Clubs
|
$
|
453,516
|
|
|
$
|
470,225
|
|
|
$
|
478,981
|
|
BFX Studio
|
326
|
|
|
—
|
|
|
—
|
|
|||
Total Revenues
|
$
|
453,842
|
|
|
$
|
470,225
|
|
|
$
|
478,981
|
|
|
Year ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
EBITDA:
|
|
|
|
|
|
||||||
Clubs
|
$
|
53,524
|
|
|
$
|
91,770
|
|
|
$
|
92,275
|
|
BFX Studio
|
(3,556
|
)
|
|
(364
|
)
|
|
—
|
|
|||
Total reportable segments
|
49,968
|
|
|
91,406
|
|
|
92,275
|
|
|||
Depreciation and amortization
|
47,307
|
|
|
49,099
|
|
|
49,391
|
|
|||
Interest expense
|
19,039
|
|
|
22,617
|
|
|
24,640
|
|
|||
Interest income
|
—
|
|
|
(1
|
)
|
|
(43
|
)
|
|||
(Loss) income before provision for corporate income taxes
|
$
|
(16,378
|
)
|
|
$
|
19,691
|
|
|
$
|
18,287
|
|
|
Year ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Capital Expenditures:
|
|
|
|
|
|
||||||
Clubs
|
$
|
37,101
|
|
|
$
|
30,565
|
|
|
$
|
22,490
|
|
BFX Studio
|
4,953
|
|
|
296
|
|
|
—
|
|
|||
Total Capital Expenditures
|
$
|
42,054
|
|
|
$
|
30,861
|
|
|
$
|
22,490
|
|
|
2014
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
|
|
|
(b)
|
|
(c)
|
||||||||
Net revenue
|
$
|
115,903
|
|
|
$
|
115,697
|
|
|
$
|
112,521
|
|
|
$
|
109,721
|
|
Operating income (loss)
|
(2,104
|
)
|
|
2,068
|
|
|
2,412
|
|
|
(1,624
|
)
|
||||
Net income (loss)
|
(3,515
|
)
|
|
(919
|
)
|
|
(867
|
)
|
|
(63,688
|
)
|
||||
Earnings (loss) per share(a)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.15
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(2.62
|
)
|
Diluted
|
$
|
(0.15
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(2.62
|
)
|
|
2013
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
|
|
|
|
|
(d)
|
||||||||
Net revenue
|
$
|
119,164
|
|
|
$
|
120,112
|
|
|
$
|
117,042
|
|
|
$
|
113,907
|
|
Operating income
|
11,479
|
|
|
15,001
|
|
|
8,770
|
|
|
5,348
|
|
||||
Net income (loss)
|
4,231
|
|
|
6,197
|
|
|
2,591
|
|
|
(695
|
)
|
||||
Earnings (loss) per share(a)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.18
|
|
|
$
|
0.26
|
|
|
$
|
0.11
|
|
|
$
|
(0.03
|
)
|
Diluted
|
$
|
0.18
|
|
|
$
|
0.25
|
|
|
$
|
0.10
|
|
|
$
|
(0.03
|
)
|
(a)
|
Basic and diluted (loss) earnings per share are computed independently for each quarter presented. Accordingly, the sum of the quarterly earnings per share may not agree with the calculated full year earnings per share.
|
(b)
|
Net loss and loss per share for the third quarter of 2014 included
$833
and
$0.03
, respectively, comprised of the following:
$928
, net of tax, occupancy gain related to club closures,
$60
, net of tax, related to rental income from the Company's former tenant in the East 86th Street building,
$24
, net of tax, resulting from rent paid under the building financing arrangement (recorded in interest expense on the accompanying consolidated statement of operations), partially offset by
$123
, net of tax, related to legal damages resulting from a legal judgment and
$56
, net of tax, related to legal and other expenses associated with club closures.
|
(c)
|
Net loss and loss per share for the fourth quarter of 2014 included
$60,368
and
$2.48
, respectively, comprised of non-cash charge related to a tax valuation allowance recorded against deferred tax assets.
|
(d)
|
Revenue and operating income for the fourth quarter of 2013 include
$424
of rental revenue due to an out of period error correction. Net loss and loss per share for the fourth quarter of 2013 include
$632
and
$(0.03)
, respectively, comprised of the following:
$259
, net of tax, related to the out of period adjustment to rental income referred to above,
$457
loss on extinguishment of debt, net of tax, in connection with the Company’s debt refinancing in November 2013;
$77
payroll bonus expense, net of tax, in connection with the payment of a
$0.16
cash bonus to eligible stock option holders;
$237
, net of tax, of severance related to an executive departure;
$136
, net of tax, related to legal fees in connection with the sale of the Company's 86
th
Street property and
$16
of net income tax benefits related to corrections of temporary tax differences.
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Town Sports International Holdings, Inc. (the “Registrant”) (incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006).
|
|
|
|
3.2
|
|
Certificate of Designations of Series A Junior Participating Preferred Stock of Town Sports International Holdings, Inc. filed with the Secretary of State of the State of Delaware on January 2, 2015 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, dated January 2, 2015).
|
|
|
|
3.3
|
|
Third Amended and Restated By-laws of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K, filed on September 17, 2014).
|
|
|
|
4.1
|
|
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.5 of the Registrant’s Registration Statement on Form S-1, File No. 333-126428 (the “S-1 Registration Statement”)).
|
|
|
|
4.2
|
|
Rights Agreement, dated as of December 31, 2014, between Registrant and Computershare Trust Company N.A., as Rights Agent (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K, dated January 2, 2015).
|
|
|
|
10.1
|
|
Registration Rights Agreement, dated as of February 4, 2004, by and among Town Sports International Holdings, Inc., Town Sports International, Inc., Bruckmann, Rosser, Sherrill & Co., L.P. the individuals and entities listed on the BRS Co-Investor Signature Pages thereto, Farallon Capital Partners, L.P., Farallon Capital Institutional Partners, L.P., RR Capital Partners, L.P., and Farallon Capital Institutional Partners II, L.P., Canterbury Detroit Partners, L.P., Canterbury Mezzanine Capital, L.P., Rosewood Capital, L.P., Rosewood Capital IV, L.P., Rosewood Capital IV Associates, L.P., CapitalSource Holdings LLC, Keith Alessi, Paul Arnold, and certain stockholders of the Company listed on the Executive Signature Pages thereto (incorporated by reference to Exhibit 10.5 of the S-4 Registration Statement).
|
|
|
|
10.2
|
|
Amendment No. 1 to the Registration Rights Agreement dated as of March 23, 2006 (incorporated by reference to Exhibit 10.21 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005).
|
|
|
|
10.3
|
|
Amendment No. 2 to the Registration Rights Agreement dated as of May 30, 2006 (incorporated by reference to Exhibit 10.9.1 of the S-1 Registration Statement).
|
|
|
|
10.4
|
|
Credit Agreement, dated as of November 15, 2013, among Town Sports International, LLC, TSI Holdings II, LLC, the lenders party thereto, Deutsche Bank Trust Company Americas, as Administrative Agent, and Keybank National Association, as Syndication Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, dated November 15, 2013).
|
|
|
|
10.5
|
|
First Amendment to Credit Agreement, dated as of January 30, 2015, among Town Sports International, LLC, TSI Holdings, II, LLC, the lenders party thereto, Deutsche Bank AG New York Branch, as administrative agent (Filed herewith).
|
|
|
|
10.6
|
|
Subsidiaries Guaranty, dated as of November 15, 2013, among each of the Guarantors party thereto, and Deutsche Bank AG New York Branch, as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, dated November 15, 2013).
|
|
|
|
10.7
|
|
Pledge Agreement dated as of November 15, 2013, among the Borrower, Holdings II, each of the Pledgors party thereto, and Deutsche Bank AG New York Branch, as Collateral Agent (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, dated November 15, 2013).
|
|
|
|
10.8
|
|
Security Agreement dated as of November 15, 2013, among the Borrower, Holdings II, each of the Assignors party thereto, and Deutsche Bank AG New York Branch, as Collateral Agent (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, dated November 15, 2013).
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
|
|
10.9
|
|
Amended and Restated Interest Rate Swap Confirmation, dated November 15, 2013, between Town Sports International, LLC and Deutsche Bank AG New York (incorporated by reference to Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K, for the year ended December 31, 2013).
|
|
|
|
10.10
|
|
Agreement of Sale, dated December 23, 2013, by and between Town Sports International, LLC and Monty Two East 86th Street Associates LLC (incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013).
|
|
|
|
10.11
|
|
First Amendment to Agreement of Sale, dated March 26, 2014, between Town Sports International, LLC and Monte Two East 86
th
Street Associates, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
|
|
|
|
10.12
|
|
Second Amendment to Agreement of Sale, dated April 11, 2014, between Town Sports International, LLC and Monte Two East 86
th
Street Associates, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
|
|
|
|
10.13
|
|
Third Amendment to Agreement of Sale, dated July 7, 2014, between Town Sports International, LLC and Monte Two East 86
th
Street Associates, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014).
|
|
|
|
*10.14
|
|
2004 Common Stock Option Plan (incorporated by reference to Exhibit 10.7 of the S-4 Registration Statement).
|
|
|
|
*10.15
|
|
Amendment No. 1 to the Registrant’s 2004 Common Stock Option Plan (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).
|
|
|
|
*10.16
|
|
Amended and Restated 2006 Stock Incentive Plan (incorporated herein by reference to Appendix A of the Company’s definitive Proxy Statement on Schedule 14A filed on March 29, 2011).
|
|
|
|
*10.17
|
|
Form of Incentive Stock Option Agreement pursuant to the 2006 Incentive Plan (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed August 8, 2006).
|
|
|
|
*10.18
|
|
Form of Non-Qualified Stock Option Agreement pursuant to the 2006 Incentive Plan (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed August 8, 2006).
|
|
|
|
*10.19
|
|
Form of the Non-Qualified Stock Option Agreement for Non-Employee Directors pursuant to the 2006 Incentive Plan (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed April 2, 2007).
|
|
|
|
*10.20
|
|
Form of Non-Qualified Stock Option Agreement pursuant to the 2006 Incentive Plan (incorporated by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).
|
|
|
|
*10.21
|
|
Form of Restricted Stock Agreement pursuant to the 2006 Incentive Plan (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).
|
|
|
|
*10.22
|
|
Amended and Restated 2006 Annual Performance Bonus Plan (incorporated by reference to Appendix A of the Registrant’s definitive Proxy Statement on Schedule 14A filed on March 30, 2010).
|
|
|
|
*10.23
|
|
Amended and Restated Non-Employee Director Compensation Plan Summary Effective January 1, 2013 (incorporated by reference to Exhibit 10.11 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012).
|
|
|
|
*10.24
|
|
Amended and Restated Non-Employee Director Compensation Plan Summary Effective January 1, 2015 (incorporated by reference to Exhibit 10.4 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014).
|
Exhibit
No.
|
|
Description of Exhibit
|
|
|
|
*10.25
|
|
Offer Letter to David M. Kastin, dated July 23, 2007 (incorporated by reference to Exhibit 10.35 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007).
|
|
|
|
*10.26
|
|
Amendment to Offer Letter to David M. Kastin, dated December 23, 2008 (incorporated by reference to Exhibit 10.35 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
|
|
|
*10.27
|
|
Offer Letter, dated March 18, 2010, between the Registrant and Robert Giardina (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2010).
|
|
|
|
*10.28
|
|
Letter Agreement with Daniel Gallagher, dated January 10, 2014 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed January 13, 2014).
|
|
|
|
*10.29
|
|
Letter Agreement with Carolyn Spatafora, dated April 16, 2014 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed April 25, 2014).
|
|
|
|
*10.30
|
|
Form of Executive Severance Agreement between the Registrant and each of Daniel Gallagher and David Kastin (incorporated by reference to Exhibit 10.38 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007).
|
|
|
|
*10.31
|
|
Form of Amendment to Executive Severance Agreement between the Registrant and each of Daniel Gallagher and David Kastin (incorporated by reference to Exhibit 10.39 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
|
|
|
*10.32
|
|
Form of Executive Severance Agreement between the Registrant and each of Robert Giardina, Paul Barron, Scott Milford, Carolyn Spatafora and Nitin Ajmera (incorporated by reference to Exhibit 10.28 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009).
|
|
|
|
*10.33
|
|
Amendment dated March 1, 2011 to Executive Severance Agreement between the Registrant and Robert Giardina (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2011).
|
|
|
|
*10.34
|
|
Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.25 of the S-1 Registration Statement).
|
|
|
|
*10.35
|
|
Form of 2012 Bonus Letter between the Registrant and each of Robert Giardina, Daniel Gallagher, David Kastin, Scott Milford and Paul Barron (incorporated by reference to Exhibit 10.11 if the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012).
|
|
|
|
*10.36
|
|
Letter Agreement, dated February 25, 2015, between Town Sports International Holdings, Inc. and Robert Giardina (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed February 25, 2015).
|
|
|
|
*10.37
|
|
Letter Agreement, dated February 25, 2015, between Town Sports International Holdings, Inc. and Daniel Gallagher (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed February 25, 2015).
|
|
|
|
*10.38
|
|
Form of Amended and Restated Executive Severance Agreement, dated February 25, 2015, between Town Sports International Holdings, Inc. and each of Carolyn Spatafora, David M. Kastin, Paul Barron, Scott Milford, and Nitin Ajmera (incorporated by reference to Exhibit 10.3 of the Registrant's Current Report on Form 8-K filed February 25, 2015).
|
|
|
|
21
|
|
Subsidiaries of the Registrant (Filed herewith).
.
|
|
|
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP.
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer.
|
|
|
|
32.2
|
|
Section 1350 Certification of Chief Financial Officer.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
*
|
Management contract or compensatory plan or arrangement.
|
Section 1.
|
AMENDMENTS TO THE CREDIT AGREEMENT
|
1.1
|
Amendments to Section 1: Definitions and Accounting Terms
|
Section 2.
|
CONDITIONS TO EFFECTIVENESS
|
Section 3.
|
CREDIT PARTY REPRESENTATIONS AND WARRANTIES
|
Section 4.
|
ACKNOWLEDGMENT AND CONSENT
|
Section 5.
|
MISCELLANEOUS
|
TSI HOLDINGS II, LLC
|
|
|
|
By:
|
/s/ David Kastin
|
|
|
Name:
|
David Kastin
|
|
|
Title:
|
Senior Vice President
|
|
|
|
|
TOWN SPORTS INTERNATIONAL, LLC
|
|
|
|
By:
|
/s/ David Kastin
|
|
|
Name:
|
David Kastin
|
|
|
Title:
|
Senior Vice President
|
BFX 30 BROAD STREET, LLC
|
|
BFX 1231 THIRD AVENUE, LLC
|
|
BFX BACK BAY, LLC
|
|
BFX WEST 15th STREET, LLC
|
|
BOUTIQUE FITNESS, LLC
|
|
TSI 217 BROADWAY, LLC
|
|
TSI ALEXANDRIA, LLC
|
|
TSI ALEXANDRIA WEST, LLC
|
|
TSI ALLSTON, LLC
|
|
TSI ANDOVER, LLC
|
|
TSI ARDMORE, LLC
|
|
TSI ARTHRO-FITNESS SERVICES, LLC
|
|
TSI ASTORIA, LLC
|
|
TSI AVENUE A, LLC
|
|
TSI BACK BAY, LLC
|
|
TSI BATTERY PARK, LLC
|
|
TSI BAY RIDGE 86TH STREET, LLC
|
|
TSI BAYONNE, LLC
|
|
TSI BAYRIDGE, LLC
|
|
TSI BEACON STREET, LLC
|
|
TSI BENSONHURST, LLC
|
|
TSI BETHESDA, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI BOYLSTON, LLC
|
|
TSI BROADWAY, LLC
|
|
TSI BROOKLYN BELT, LLC
|
|
TSI BRUNSWICK, LLC
|
|
TSI BULFINCH, LLC
|
|
TSI BUTLER, LLC
|
|
TSI CANTON, LLC
|
|
TSI CARMEL, LLC
|
|
TSI CASH MANAGEMENT, LLC
|
|
TSI CENTRAL SQUARE, LLC
|
|
TSI CHERRY HILL, LLC
|
|
TSI CHEVY CHASE, LLC
|
|
TSI CLARENDON, LLC
|
|
TSI CLARENDON STREET, LLC
|
|
TSI CLIFTON, LLC
|
|
TSI COBBLE HILL, LLC
|
|
TSI COLONIA, LLC
|
|
TSI COLUMBIA HEIGHTS, LLC
|
|
TSI COMMACK, LLC
|
|
TSI CONNECTICUT AVENUE, LLC
|
|
TSI COURT STREET, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI CROTON, LLC
|
|
TSI DANBURY, LLC
|
|
TSI DAVIS SQUARE, LLC
|
|
TSI DEER PARK, LLC
|
|
TSI DOBBS FERRY, LLC
|
|
TSI DORCHESTER, LLC
|
|
TSI DOWNTOWN CROSSING, LLC
|
|
TSI DUPONT CIRCLE, INC.
|
|
TSI DUPONT II, INC.
|
|
TSI EAST 23, LLC
|
|
TSI EAST 31, LLC
|
|
TSI EAST 34, LLC
|
|
TSI EAST 36, LLC
|
|
TSI EAST 41, LLC
|
|
TSI EAST 48, LLC
|
|
TSI EAST 51, LLC
|
|
TSI EAST 59, LLC
|
|
TSI EAST 76, LLC
|
|
TSI EAST 86, LLC
|
|
TSI EAST 86
th
STREET II, LLC
|
|
TSI EAST 91, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI EAST BRUNSWICK, LLC
|
|
TSI EAST MEADOW, LLC
|
|
TSI ENGLEWOOD, LLC
|
|
TSI F STREET, LLC
|
|
TSI FAIRFAX, LLC
|
|
TSI FENWAY, LLC
|
|
TSI FIRST AVENUE, LLC
|
|
TSI FIT ACQUISITION, LLC
|
|
TSI FOREST HILLS, LLC
|
|
TSI FORT LEE, LLC
|
|
TSI FRAMINGHAM, LLC
|
|
TSI FRANKLIN (MA), LLC
|
|
TSI FRANKLIN PARK, LLC
|
|
TSI FREEHOLD, LLC
|
|
TSI GALLERY PLACE, LLC
|
|
TSI GARDEN CITY, LLC
|
|
TSI GARNERVILLE, LLC
|
|
TSI GEORGETOWN, LLC
|
|
TSI GERMANTOWN, LLC
|
|
TSI GIFTCO, LLC
|
|
TSI GLENDALE, LLC ,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI GLOVER, LLC
|
|
TSI GRAND CENTRAL, LLC
|
|
TSI GREAT NECK, LLC
|
|
TSI GREENPOINT, LLC
|
|
TSI GREENWICH, LLC
|
|
TSI HARTSDALE, LLC
|
|
TSI HAWTHORNE, LLC
|
|
TSI HERALD, LLC
|
|
TSI HICKSVILLE, LLC
|
|
TSI HIGHPOINT, LLC
|
|
TSI HOBOKEN, LLC
|
|
TSI HOBOKEN NORTH, LLC
|
|
TSI HOLDINGS (CIP), LLC
|
|
TSI HOLDINGS (DC), LLC
|
|
TSI HOLDINGS (IP), LLC
|
|
TSI HOLDINGS (MA), LLC
|
|
TSI HOLDINGS (MD), LLC
|
|
TSI HOLDINGS (NJ), LLC
|
|
TSI HOLDINGS (PA), LLC
|
|
TSI HOLDINGS (VA), LLC
|
|
TSI HUNTINGTON, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI INTERNATIONAL, INC.
|
|
TSI IRVING PLACE, LLC
|
|
TSI JAMAICA ESTATES, LLC
|
|
TSI JERSEY CITY, LLC
|
|
TSI K STREET, LLC
|
|
TSI LARCHMONT, LLC
|
|
TSI LEXINGTON (MA), LLC
|
|
TSI LINCOLN, LLC
|
|
TSI LIVINGSTON, LLC
|
|
TSI LONG BEACH, LLC
|
|
TSI LYNNFIELD, LLC
|
|
TSI M STREET, LLC
|
|
TSI MAHWAH, LLC
|
|
TSI MAMARONECK, LLC
|
|
TSI MARKET STREET, LLC
|
|
TSI MARLBORO, LLC
|
|
TSI MATAWAN, LLC
|
|
TSI MERCER STREET, LLC
|
|
TSI MIDWOOD, LLC
|
|
TSI MONTCLAIR, LLC
|
|
TSI MORRIS PARK, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI MURRAY HILL, LLC
|
|
TSI NANUET, LLC
|
|
TSI NATICK, LLC
|
|
TSI NEW ROCHELLE, LLC
|
|
TSI NEWARK, LLC
|
|
TSI NEWBURY STREET, LLC
|
|
TSI NEWTON, LLC
|
|
TSI NO SWEAT, LLC
|
|
TSI NORTH BETHESDA, LLC
|
|
TSI NORWALK, LLC
|
|
TSI OCEANSIDE, LLC
|
|
TSI OLD BRIDGE, LLC
|
|
TSI PARSIPPANY, LLC
|
|
TSI PLAINSBORO, LLC
|
|
TSI PORT JEFFERSON, LLC
|
|
TSI PRINCETON, LLC
|
|
TSI PRINCETON NORTH, LLC
|
|
TSI PROVIDENCE DOWNTOWN, LLC
|
|
TSI PROVIDENCE EASTSIDE, LLC
|
|
TSI RADNOR, LLC
|
|
TSI RAMSEY, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI READE STREET, LLC
|
|
TSI REGO PARK, LLC
|
|
TSI RIDGEWOOD, LLC
|
|
TSI RODIN PLACE, LLC
|
|
TSI SCARSDALE, LLC
|
|
TSI SEAPORT, LLC
|
|
TSI SHERIDAN, LLC
|
|
TSI SILVER SPRING, LLC
|
|
TSI SMITHTOWN, LLC
|
|
TSI SOCIETY HILL, LLC
|
|
TSI SOHO, LLC
|
|
TSI SOMERS, LLC
|
|
TSI SOMERSET, LLC
|
|
TSI SOUTH BETHESDA, LLC
|
|
TSI SOUTH END, LLC
|
|
TSI SOUTH PARK SLOPE, LLC
|
|
TSI SOUTH STATION, LLC
|
|
TSI SPRINGFIELD, LLC
|
|
TSI STAMFORD DOWNTOWN, LLC
|
|
TSI STAMFORD POST, LLC
|
|
TSI STAMFORD RINKS, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI STATEN ISLAND, LLC
|
|
TSI STERLING, LLC
|
|
TSI SUMMER STREET, LLC
|
|
TSI SUNNYSIDE, LLC
|
|
TSI SYOSSET, LLC
|
|
TSI UNIVERSITY MANAGEMENT, LLC
|
|
TSI VARICK STREET, LLC
|
|
TSI WALL STREET, LLC
|
|
TSI WALTHAM, LLC
|
|
TSI WASHINGTON, INC.
|
|
TSI WATER STREET, LLC
|
|
TSI WATERTOWN, LLC
|
|
TSI WAYLAND, LLC
|
|
TSI WELLESLEY, LLC
|
|
TSI WELLINGTON CIRCLE, LLC
|
|
TSI WEST 14, LLC
|
|
TSI WEST 16, LLC
|
|
TSI WEST 23, LLC
|
|
TSI WEST 38, LLC
|
|
TSI WEST 41, LLC
|
|
TSI WEST 44, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI WEST 48, LLC
|
|
TSI WEST 52, LLC
|
|
TSI WEST 73, LLC
|
|
TSI WEST 76, LLC
|
|
TSI WEST 80, LLC
|
|
TSI WEST 94, LLC
|
|
TSI WEST 115TH STREET, LLC
|
|
TSI WEST 125, LLC
|
|
TSI WEST 145TH STREET, LLC
|
|
TSI WEST CALDWELL, LLC
|
|
TSI WEST END, LLC
|
|
TSI WEST HARTFORD, LLC
|
|
TSI WEST NEWTON, LLC
|
|
TSI WEST NYACK, LLC
|
|
TSI WEST SPRINGFIELD, LLC
|
|
TSI WESTBOROUGH, LLC
|
|
TSI WESTPORT, LLC
|
|
TSI WESTWOOD, LLC
|
|
TSI WEYMOUTH, LLC
|
|
TSI WHITE PLAINS, LLC
|
|
TSI WHITE PLAINS CITY CENTER, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
TSI WHITESTONE, LLC
|
|
TSI WILLIAMSBURG, LLC
|
|
TSI WOBURN, LLC
|
|
TSI WOODMERE, LLC,
|
each as a Guarantor
|
|
By:
/s/ David Kastin
|
Name: David Kastin
|
Title: Senior Vice President
|
DEUTSCHE BANK AG NEW YORK BRANCH
, as Administrative Agent
|
|
|
|
|
|
By:
|
/s/ Mary Kay Coyle
|
|
|
Name:
|
Mary Kay Coyle
|
|
|
Title:
|
Managing Director
|
|
|
|
|
By:
|
/s/ Kirk L. Tashjian
|
|
|
Name:
|
Kirk L. Tashjian
|
|
|
Title:
|
Vice President
|
Company
|
|
State of
Incorporation
|
|
Doing Business As
|
Parent
|
|
|
|
|
TSI Holdings II, LLC
|
|
DE
|
|
n/a
|
Town Sports International, LLC
|
|
NY
|
|
n/a
|
Subsidiaries
|
|
|
|
|
BFX 1231 Third Avenue, LLC
|
|
DE
|
|
BFX Studio
|
BFX 30 Broad Street, LLC
|
|
DE
|
|
BFX Studio
|
BFX Back Bay, LLC
|
|
DE
|
|
BFX Studio
|
BFX West 15th Street, LLC
|
|
DE
|
|
BFX Studio
|
Boutique Fitness, LLC
|
|
DE
|
|
BFX Boutique Fitness Experience
|
TSI 217 Broadway, LLC
|
|
DE
|
|
NYSC
|
TSI Alexandria, LLC
|
|
DE
|
|
WSC
|
TSI Alexandria West, LLC
|
|
DE
|
|
n/a
|
TSI Allston, LLC
|
|
DE
|
|
BSC
|
TSI Andover, LLC
|
|
DE
|
|
BSC
|
TSI Ardmore, LLC
|
|
DE
|
|
PSC
|
TSI Arthro-Fitness Services, LLC
|
|
DE
|
|
NYSC
|
TSI Astoria, LLC
|
|
DE
|
|
NYSC
|
TSI Avenue A, LLC
|
|
DE
|
|
NYSC
|
TSI Back Bay, LLC
|
|
DE
|
|
BSC
|
TSI Battery Park, LLC
|
|
DE
|
|
NYSC
|
TSI Bay Ridge 86th Street, LLC
|
|
DE
|
|
NYSC
|
TSI Bayonne, LLC
|
|
DE
|
|
NYSC
|
TSI Bayridge, LLC
|
|
DE
|
|
NYSC
|
TSI Beacon Street, LLC
|
|
DE
|
|
BSC
|
TSI Bensonhurst, LLC
|
|
DE
|
|
NYSC
|
TSI Bethesda, LLC
|
|
DE
|
|
n/a
|
TSI Boylston, LLC
|
|
DE
|
|
BSC
|
TSI Broadway, LLC
|
|
DE
|
|
NYSC
|
TSI Brooklyn Belt, LLC
|
|
DE
|
|
NYSC
|
TSI Brunswick, LLC
|
|
DE
|
|
NYSC
|
TSI Bulfinch, LLC
|
|
DE
|
|
BSC
|
TSI Butler, LLC
|
|
DE
|
|
NYSC
|
TSI Canton, LLC
|
|
DE
|
|
BSC
|
TSI Carmel, LLC
|
|
DE
|
|
NYSC
|
TSI Cash Management, LLC
|
|
DE
|
|
n/a
|
TSI Central Square, LLC
|
|
DE
|
|
BSC
|
TSI Cherry Hill, LLC
|
|
DE
|
|
n/a
|
TSI Chevy Chase, LLC
|
|
DE
|
|
WSC
|
TSI Clarendon, LLC
|
|
DE
|
|
WSC
|
TSI Clarendon Street, LLC
|
|
DE
|
|
BSC
|
TSI Clifton, LLC
|
|
DE
|
|
NYSC
|
TSI Cobble Hill, LLC
|
|
DE
|
|
NYSC
|
TSI Colonia, LLC
|
|
DE
|
|
NYSC
|
TSI Columbia Heights, LLC
|
|
DE
|
|
WSC
|
TSI Commack, LLC
|
|
DE
|
|
NYSC
|
TSI Connecticut Avenue, LLC
|
|
DE
|
|
WSC
|
TSI Court Street, LLC
|
|
DE
|
|
NYSC
|
TSI Croton, LLC
|
|
DE
|
|
NYSC
|
TSI Danbury, LLC
|
|
DE
|
|
NYSC
|
TSI Davis Square, LLC
|
|
DE
|
|
BSC
|
TSI Deer Park, LLC
|
|
DE
|
|
NYSC
|
TSI Dobbs Ferry, LLC
|
|
DE
|
|
NYSC
|
TSI Dorchester, LLC
|
|
DE
|
|
BSC
|
TSI Downtown Crossing, LLC
|
|
DE
|
|
BSC
|
TSI Dupont Circle, Inc.
|
|
DE
|
|
n/a
|
TSI Dupont II, Inc.
|
|
DE
|
|
n/a
|
Company
|
|
State of
Incorporation
|
|
Doing Business As
|
TSI East 23, LLC
|
|
DE
|
|
NYSC
|
TSI East 31, LLC
|
|
DE
|
|
NYSC
|
TSI East 34, LLC
|
|
DE
|
|
NYSC
|
TSI East 36, LLC
|
|
DE
|
|
NYSC
|
TSI East 41, LLC
|
|
DE
|
|
NYSC
|
TSI East 48, LLC
|
|
DE
|
|
NYSC
|
TSI East 51, LLC
|
|
DE
|
|
NYSC
|
TSI East 59, LLC
|
|
DE
|
|
NYSC
|
TSI East 76, LLC
|
|
DE
|
|
NYSC
|
TSI East 86, LLC
|
|
DE
|
|
NYSC
|
TSI East 86th Street II, LLC
|
|
DE
|
|
NYSC
|
TSI East 91, LLC
|
|
DE
|
|
NYSC
|
TSI East Brunswick, LLC
|
|
DE
|
|
NYSC
|
TSI East Meadow, LLC
|
|
DE
|
|
NYSC
|
TSI Englewood, LLC
|
|
DE
|
|
NYSC
|
TSI F Street, LLC
|
|
DE
|
|
WSC
|
TSI Fairfax, LLC
|
|
DE
|
|
WSC
|
TSI Fenway, LLC
|
|
DE
|
|
BSC
|
TSI First Avenue, LLC
|
|
DE
|
|
NYSC
|
TSI Fit Acquisition, LLC
|
|
DE
|
|
n/a
|
TSI Forest Hills, LLC
|
|
DE
|
|
NYSC
|
TSI Fort Lee, LLC
|
|
DE
|
|
NYSC
|
TSI Framingham, LLC
|
|
DE
|
|
BSC
|
TSI Franklin (MA), LLC
|
|
DE
|
|
BSC
|
TSI Franklin Park, LLC
|
|
DE
|
|
NYSC
|
TSI Freehold, LLC
|
|
DE
|
|
NYSC
|
TSI Gallery Place, LLC
|
|
DE
|
|
WSC
|
TSI Garden City, LLC
|
|
DE
|
|
NYSC
|
TSI Garnerville, LLC
|
|
DE
|
|
NYSC
|
TSI Georgetown, LLC
|
|
DE
|
|
WSC
|
TSI Germantown, LLC
|
|
DE
|
|
WSC
|
TSI Giftco, LLC
|
|
PA
|
|
n/a
|
TSI Glendale, LLC
|
|
DE
|
|
NYSC
|
TSI Glover, LLC
|
|
DE
|
|
WSC
|
TSI Grand Central, LLC
|
|
DE
|
|
NYSC
|
TSI Great Neck, LLC
|
|
DE
|
|
NYSC
|
TSI Greenpoint, LLC
|
|
DE
|
|
NYSC
|
TSI Greenwich, LLC
|
|
DE
|
|
NYSC and AMFIT Physical Therapy
|
TSI Hartsdale, LLC
|
|
DE
|
|
NYSC
|
TSI Hawthorne, LLC
|
|
DE
|
|
NYSC
|
TSI Herald, LLC
|
|
DE
|
|
NYSC
|
TSI Hicksville, LLC
|
|
DE
|
|
NYSC
|
TSI Highpoint, LLC
|
|
DE
|
|
PSC
|
TSI Hoboken, LLC
|
|
DE
|
|
NYSC
|
TSI Hoboken North, LLC
|
|
DE
|
|
NYSC
|
TSI Holdings (CIP), LLC
|
|
DE
|
|
n/a
|
TSI Holdings (DC), LLC
|
|
DE
|
|
n/a
|
TSI Holdings (IP), LLC
|
|
DE
|
|
n/a
|
TSI Holdings (MA), LLC
|
|
DE
|
|
n/a
|
TSI Holdings (MD), LLC
|
|
DE
|
|
n/a
|
TSI Holdings (NJ), LLC
|
|
DE
|
|
n/a
|
TSI Holdings (PA), LLC
|
|
DE
|
|
n/a
|
TSI Holdings (VA), LLC
|
|
DE
|
|
n/a
|
TSI Huntington, LLC
|
|
DE
|
|
NYSC
|
TSI Insurance, Inc.
|
|
NY
|
|
n/a
|
TSI International, Inc.
|
|
DE
|
|
n/a
|
TSI Irving Place, LLC
|
|
DE
|
|
NYSC
|
TSI Jamaica Estates, LLC
|
|
DE
|
|
NYSC
|
Company
|
|
State of
Incorporation
|
|
Doing Business As
|
TSI Jersey City, LLC
|
|
DE
|
|
NYSC
|
TSI K Street, LLC
|
|
DE
|
|
WSC
|
TSI Larchmont, LLC
|
|
DE
|
|
NYSC
|
TSI Lexington (MA), LLC
|
|
DE
|
|
BSC
|
TSI Lincoln, LLC
|
|
DE
|
|
NYSC
|
TSI Livingston, LLC
|
|
DE
|
|
NYSC
|
TSI Long Beach, LLC
|
|
DE
|
|
NYSC
|
TSI Lynnfield, LLC
|
|
DE
|
|
BSC
|
TSI M Street, LLC
|
|
DE
|
|
WSC
|
TSI Mahwah, LLC
|
|
DE
|
|
NYSC
|
TSI Mamaroneck, LLC
|
|
DE
|
|
NYSC
|
TSI Market Street, LLC
|
|
DE
|
|
PSC
|
TSI Marlboro, LLC
|
|
DE
|
|
NYSC
|
TSI Matawan, LLC
|
|
DE
|
|
NYSC
|
TSI Mercer Street, LLC
|
|
DE
|
|
NYSC
|
TSI Midwood, LLC
|
|
DE
|
|
NYSC
|
TSI Montclair, LLC
|
|
DE
|
|
NYSC
|
TSI Morris Park, LLC
|
|
DE
|
|
NYSC
|
TSI Murray Hill, LLC
|
|
DE
|
|
NYSC
|
TSI Nanuet, LLC
|
|
DE
|
|
NYSC
|
TSI Natick, LLC
|
|
DE
|
|
BSC
|
TSI New Rochelle, LLC
|
|
DE
|
|
NYSC
|
TSI Newark, LLC
|
|
DE
|
|
NYSC
|
TSI Newbury Street, LLC
|
|
DE
|
|
BSC
|
TSI Newton, LLC
|
|
DE
|
|
BSC
|
TSI No Sweat, LLC
|
|
DE
|
|
n/a
|
TSI North Bethesda, LLC
|
|
DE
|
|
WSC
|
TSI Norwalk, LLC
|
|
DE
|
|
NYSC
|
TSI Oceanside, LLC
|
|
DE
|
|
NYSC
|
TSI Old Bridge, LLC
|
|
DE
|
|
NYSC
|
TSI Parsippany, LLC
|
|
DE
|
|
NYSC
|
TSI Plainsboro, LLC
|
|
DE
|
|
NYSC
|
TSI Port Jefferson, LLC
|
|
DE
|
|
NYSC
|
TSI Princeton, LLC
|
|
DE
|
|
NYSC
|
TSI Princeton North, LLC
|
|
DE
|
|
NYSC
|
TSI Providence Downtown, LLC
|
|
DE
|
|
BSC I
|
TSI Providence Eastside, LLC
|
|
DE
|
|
BSC II
|
TSI Radnor, LLC
|
|
DE
|
|
PSC
|
TSI Ramsey, LLC
|
|
DE
|
|
NYSC
|
TSI Reade Street, LLC
|
|
DE
|
|
NYSC
|
TSI Rego Park, LLC
|
|
DE
|
|
NYSC
|
TSI Ridgewood, LLC
|
|
DE
|
|
NYSC
|
TSI Rodin Place, LLC
|
|
DE
|
|
PSC
|
TSI Scarsdale, LLC
|
|
DE
|
|
NYSC
|
TSI Seaport, LLC
|
|
DE
|
|
NYSC
|
TSI Sheridan, LLC
|
|
DE
|
|
NYSC
|
TSI Silver Spring, LLC
|
|
DE
|
|
WSC
|
TSI Smithtown, LLC
|
|
DE
|
|
NYSC
|
TSI Society Hill, LLC
|
|
DE
|
|
PSC
|
TSI Soho, LLC
|
|
DE
|
|
NYSC
|
TSI Somers, LLC
|
|
DE
|
|
NYSC
|
TSI Somerset, LLC
|
|
DE
|
|
NYSC
|
TSI South Bethesda, LLC
|
|
DE
|
|
WSC
|
TSI South End, LLC
|
|
DE
|
|
BSC
|
TSI South Park Slope, LLC
|
|
DE
|
|
NYSC
|
TSI South Station, LLC
|
|
DE
|
|
BSC
|
TSI Springfield, LLC
|
|
DE
|
|
NYSC
|
TSI Stamford Downtown, LLC
|
|
DE
|
|
NYSC
|
Company
|
|
State of
Incorporation
|
|
Doing Business As
|
TSI Stamford Post, LLC
|
|
DE
|
|
NYSC
|
TSI Stamford Rinks, LLC
|
|
DE
|
|
NYSC
|
TSI Staten Island, LLC
|
|
DE
|
|
NYSC
|
TSI Sterling, LLC
|
|
DE
|
|
WSC
|
TSI Summer Street, LLC
|
|
DE
|
|
BSC and Boston Racquet Club
|
TSI Sunnyside, LLC
|
|
DE
|
|
NYSC
|
TSI Syosset, LLC
|
|
DE
|
|
NYSC
|
TSI University Management, LLC
|
|
DE
|
|
n/a
|
TSI Varick Street, LLC
|
|
DE
|
|
NYSC
|
TSI Wall Street, LLC
|
|
DE
|
|
NYSC
|
TSI Waltham, LLC
|
|
DE
|
|
BSC
|
TSI Washington, Inc.
|
|
DE
|
|
WSC
|
TSI Water Street, LLC
|
|
DE
|
|
NYSC
|
TSI Watertown, LLC
|
|
DE
|
|
BSC
|
TSI Wayland, LLC
|
|
DE
|
|
BSC
|
TSI Wellesley, LLC
|
|
DE
|
|
BSC
|
TSI Wellington Circle, LLC
|
|
DE
|
|
BSC
|
TSI West 14, LLC
|
|
DE
|
|
NYSC
|
TSI West 16, LLC
|
|
DE
|
|
NYSC
|
TSI West 23, LLC
|
|
DE
|
|
NYSC
|
TSI West 38, LLC
|
|
DE
|
|
NYSC
|
TSI West 41, LLC
|
|
DE
|
|
NYSC
|
TSI West 44, LLC
|
|
DE
|
|
NYSC
|
TSI West 48, LLC
|
|
DE
|
|
NYSC
|
TSI West 52, LLC
|
|
DE
|
|
NYSC
|
TSI West 73, LLC
|
|
DE
|
|
NYSC
|
TSI West 76, LLC
|
|
DE
|
|
NYSC
|
TSI West 80, LLC
|
|
DE
|
|
NYSC
|
TSI West 94, LLC
|
|
DE
|
|
NYSC
|
TSI West 115th Street, LLC
|
|
DE
|
|
NYSC
|
TSI West 125, LLC
|
|
DE
|
|
NYSC
|
TSI West 145th Street, LLC
|
|
DE
|
|
NYSC
|
TSI West Caldwell, LLC
|
|
DE
|
|
NYSC
|
TSI West End, LLC
|
|
DE
|
|
NYSC
|
TSI West Hartford, LLC
|
|
DE
|
|
NYSC
|
TSI West Newton, LLC
|
|
DE
|
|
BSC
|
TSI West Nyack, LLC
|
|
DE
|
|
NYSC
|
TSI West Springfield, LLC
|
|
DE
|
|
WSC
|
TSI Westborough, LLC
|
|
DE
|
|
BSC
|
TSI Westport, LLC
|
|
DE
|
|
NYSC
|
TSI Westwood, LLC
|
|
DE
|
|
NYSC
|
TSI Weymouth, LLC
|
|
DE
|
|
BSC
|
TSI White Plains City Center, LLC
|
|
DE
|
|
NYSC
|
TSI White Plains, LLC
|
|
DE
|
|
NYSC
|
TSI Whitestone, LLC
|
|
DE
|
|
NYSC
|
TSI Williamsburg, LLC
|
|
DE
|
|
n/a
|
TSI Woburn, LLC
|
|
DE
|
|
BSC
|
TSI Woodmere, LLC
|
|
DE
|
|
NYSC
|
1.
|
I have reviewed this Annual Report on Form 10-K for the year ended
December 31, 2014
of Town Sports International Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Daniel Gallagher
|
|
Daniel Gallagher
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K for the year ended
December 31, 2014
of Town Sports International Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Carolyn Spatafora
|
|
Carolyn Spatafora
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Daniel Gallagher
|
Daniel Gallagher
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Carolyn Spatafora
|
Carolyn Spatafora
|
Chief Financial Officer
|