TSI Shows Revenue Increase in Second Quarter


Town Sports International (TSI), New York, showed an increase in revenue in second quarter 2012 compared to the same period last year, according to financial results released on Thursday.

Total revenue for the second quarter increased $4 million, or 3.3 percent, to $122.2 million compared to $118.2 million in second quarter 2011. Net income for second quarter 2012 was $5.4 million compared to a net loss of $410,000 in second quarter 2011.

“We were pleased with the continued improvements we saw this past quarter,” TSI CEO Bob Giardina told analysts during an earnings call on Thursday.

The total member count for TSI, which operates New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs and Washington Sports Clubs, decreased by 4,000 in second quarter 2012 to 529,000. Giardina says the company’s low attrition rate, which averaged 3.2 percent for the quarter, demonstrated “the strength of our brand and demand for our product.”


Even though ancillary club revenue increased 6 percent in the quarter compared to the same period last year, Giardina was disappointed the company fell short of its goal of 8 percent to 10 percent growth in the category.

Giardina cited two reasons for the drop: a decrease in attendance for TSI’s new UXF program in June and a new benefits policy instituted last year which gave personal trainers more paid vacation, resulting in more personal trainers taking time off in June. However, Giardina added that in the month of July, the volume of personal training sessions is back in line with previous expectations.

“Overall, we have no regrets about the changes in our policy,” Giardina said. “We did not foresee how this change in policy might impact our PT revenue in June, almost a year after the transition.”

TSI had looked at the possibility of single-club acquisitions earlier this year, but the company has decided it will not open any new clubs in 2012. TSI did sign a lease for a club in the Williamsburg section of Brooklyn, NY, that will open in the second half of 2013. Giardina says he expects the company to open three to six clubs in 2013.

“In the meantime, we will focus our energy on our existing clubs and on driving revenue per member,” Giardina said. “We are confident that our ancillary revenue will be back on plan in the third and fourth quarters.”

TSI expects revenue for third quarter 2012 to be between $119 million and $120 million compared to $116.1 million for third quarter 2011. Net income for third quarter 2012 is expected to be between $2.5 million and $3 million.

TSI’s stock closed at $12.15 today on the NASDAQ stock exchange.

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