Revenue Déjà Vu in Health Fitness’ Second Quarter

Article Tools




Interact With Us



Best of 2011

Top Stories of 2011

The most popular stories of 2011. Did your favorites make our list?

View our Top 12 list here

Resource Center

Buyers Guide

Find industry businesses by product or service categories, view company profiles and more.

View our Buyers Guide

Club Industry Trade Show

Club Industry Show and Conference, held each October, is the premier event for fitness and wellness professionals. Find out more about Exhibitors, Events, and Education.

View our Trade Show

Industry Events & Trade Shows

The industry-wide calendar features listings for educational events, trade shows and more.

View our Events Calendar

Classifieds

View classified ads for health club equipment and services, plus business opportunities and job postings.

View Classifieds

Current Issue

Read stories from the latest print issue of Club Industry magazine.

View the Current Issue

E-Newsletter Signup

Breaking news on the industry, people on the move, mergers and acquisitions and much more. Delivered weekly.

MINNEAPOLIS -- Health Fitness Corp., Minneapolis, reported revenue of $18.8 million in the second quarter of 2009, in line with second quarter 2008 revenue of $18.8 million, according to the company’s financials released last week. Gross profit for the quarter increased 1.4 percent to $5.6 million compared to $5.5 million in the second quarter of 2008. Gross margin for the quarter was 29.9 percent compared to 29.4 percent in last year’s second quarter. Health Fitness Corp. reported net earnings of $0.36 million, or $0.04 per diluted share, the same as in the second quarter of 2008.

The company generated three new health management commitments and three health management customer expansions during the quarter, resulting in potential annualized revenue of $3.7 million, compared to $1.9 million generated in the same quarter last year, a 95 percent increase.

In a statement from the company, Gregg Lehman, president and chief executive officer, said that the $3.7 million of potential annualized revenue from new health management business represents the company’s best quarter since the second quarter of 2006.

Health Fitness also generated four new fitness management commitments during the quarter, resulting in potential annualized revenue of $0.7 million, compared to $0.5 million of customer expansions in the same quarter last year, a 40 percent increase. This is the highest number of new fitness commitments for the company since the fourth quarter of 2006, Lehman said.

Not all is rosy, however. Health and fitness management annualized revenue loss from contract cancellations during the quarter totaled $0.1 million and $1.2 million, respectively, versus $0.2 million in last year’s second quarter for fitness management. Net of contract cancellations, total potential annualized revenue generated during the second quarter of 2009 was $3.1 million, up 41 percent compared to $2.2 million in the comparable quarter of 2008.

The weak economy has further eroded the company’s base of fitness revenue as evidenced by the $1.2 million of annualized revenue Health Fitness will lose from second quarter contract cancellations, Lehman said.

“The good news is that the economy appears to be stabilizing, which makes us believe that contract cancellations may be lower during the second half of the year,” he said in the statement. “When combined with approximately $3 million of potential annualized revenue in our fitness sales pipeline, there is a very good opportunity to start 2010 with positive revenue growth in our fitness segment."

Some notable health management wins for the second quarter include a $1.2 million expansion of a middle market customer that Health Fitness secured during the first quarter, and a $1.3 million commitment from a Fortune 100 financial services company.

Regarding the company’s health management sales pipeline, Health Fitness is currently among the finalists on 18 requests for proposal representing total potential annualized revenue of approximately $10 million, according to Lehman.

“Given the new commitments and expansions generated in the first half of the year, along with a strong sales pipeline, we are optimistic that 2010 will produce stronger top- and bottom-line results,” he said.

Want to use this article? Click here for options!
© 2012 Penton Media Inc.

Sponsored Content

Cardio and Strength Trends
Sponsored by Life Fitness

Core Strength Conditioning
Sponsored by The AB Coaster Company

Group Exercise
Sponsored by LesMills

Technology Resource Center
Sponsored by ABC Financial

Videos

1st Annual Fitness Industry Summit 2011: Introduction

Jay Del Vecchio, World Instructor Training Schools President and CEO

Star Trac 2012 Photo Shoot: Behind the Scenes

Making of Star Trac Lifestyle Images Video.

Elevation Series iPod Compatibility

Watch the newest informative video from Life Fitness.



More Video

E-Newsletter

Newsbeat

Delivered once a week, this timely e-newsletter features breaking news, people on the move, mergers and acquisitions, supplier news, industry trends and more.

Subscribe

Most Popular

Most Recent

Insights into what high-level club executives think about their business and industry trends.

View Executive Insights

Practical Internet strategies to help you build customer relationships, increase revenues and lower costs.

View Web Savvy

In This Issue: May 2012 View All Past Issues

Cover Story

The Business of Corporate Fitness

Focusing on the corporate fitness market can present a revenue opportunity.



View the full issue
| View the digital edition

Subscribe To Club Industry Magazine

In Print and Online

Subscribe today to get the news you need and information you want from our print or digital edition as well as in our e-newsletters.

Subscribe Today!