From falling stock prices at public club companies to bankruptcy filings to club closings, 2009 was a difficult year for many in the fitness industry. Add those issues to the many other hurdles that club operators and manufacturers had to overcome, including lawsuits, a federal investigation, labor inquiries and proposed bills on licensing personal trainers and yoga instructors. If anything, this year will be remembered more for issues that happened outside clubs than inside clubs.

The darkest day the industry has seen in years occurred in August when a gunman killed three women and wounded nine others in an LA Fitness in Pennsylvania. The shootings drew national attention and focused concern on safety and security at health clubs.

Despite this tragedy and the economy, some news was positive. A few companies enjoyed growth, including low-priced Planet Fitness, key-card companies Anytime Fitness and Snap Fitness, plus companies such as Washington, DC's Sport & Health and Mark Mastrov's New Evolution Fitness Co. (NEFC). Those companies took advantage of growth opportunities that others could not.

One can only hope that better days are ahead for all fitness companies. For now, here's a look at some of the biggest stories in 2009.

IN THE PUBLIC EYE

Because they are public companies, Life Time Fitness, Chanhassen, MN, and Town Sports International (TSI), New York, are two of the most scrutinized companies in the club industry. Their successes or failures in relation to their publicly traded stocks are fair game for Wall Street analysts.

What analysts saw early this year — as they saw with most public companies — was a dramatic drop in prices for Life Time and TSI stock. Life Time's stock price, which hovered around $50 per share in January 2008, fell to as low as $7.07 in early 2009. TSI's stock, which was just under $10 at the beginning of 2008, fell to as low as $1.40 in early 2009.

Life Time revenues grew in each of the first three quarters this year, but the company also reported decreases in net income throughout the year. CEO Bahram Akradi has been disappointed in the company's attrition rate, which has been in the low 40s. The company also slowed its growth rate, opening only three clubs this year compared to 11 in 2008.

TSI reported decreases in both revenue and membership throughout the year. In January, the company completed a round of layoffs, which eliminated 47 non-club positions, or 11 percent of TSI's non-club workforce. TSI also froze non-club salaries, including executive salaries, at 2008 levels. Like Life Time, TSI slowed its growth, opening four new clubs while closing nine this year.

TSI became the subject of a formal investigation by the U.S. Securities and Exchange Commission (SEC) in which the SEC is examining TSI's reporting of expenses and revenues as they relate to the average length of club memberships. TSI also paid fines totaling $40,000 in Massachusetts for violating that state's child labor laws. TSI was cited for more than 1,600 violations in 23 Boston Sports Clubs that it operates in the state.

The economy hit manufacturers equally as hard this year. Two public manufacturing companies, Nautilus Inc., Vancouver, WA, and Life Fitness, Schiller Park, IL, reported falling sales throughout the year.

Nautilus stunned the industry by announcing it was discontinuing its commercial business this year. The company halted orders for commercial equipment in October. One result is a likely closure of Nautilus' plant in Independence, VA.

Brunswick Corp., which runs the Life Fitness Division of the company that manufactures and sells Life Fitness and Hammer Strength equipment, said its sales have declined because club operators remain cautious about ordering new equipment.

BANKRUPTCY FILINGS

Three club companies — Chicago-based Bally Total Fitness, New York-based Crunch and Charlotte, NC-based Peak Fitness — all dealt with bankruptcy issues in 2009, and two of the companies emerged with new owners.

Bally re-emerged from its second bankruptcy in two years, but it came at a price. The company closed about 50 clubs since filing for bankruptcy in December 2008. Those closings dropped Bally's club numbers to less than 300.

JP Morgan Chase Bank and Anchorage Advisors LLC own a majority interest in the reorganized Bally. JP Morgan received 50.5 percent of Bally's equity, and Anchorage received 33.7 percent. Bally was able to reduce its debt by approximately $700 million to less than $100 million.

Crunch filed for bankruptcy in May with the intent that it would emerge with new ownership, spearheaded by NEFC, which is run not only by 24 Hour Fitness founder Mastrov but also by former 24 Hour executive Jim Rowley. NEFC and private equity firm Angelo, Gordon & Co., which had bought Crunch from Bally in 2005, bought Crunch's debt from Goldman Sachs Credit Partners last December.

The Crunch sale was completed in August when it emerged from bankruptcy. Mastrov became the chairman, and Rowley replaced Tim Miller as CEO. Crunch, which had 28 clubs before filing for bankruptcy, pared its company down to 18 clubs and exited the Chicago and Atlanta markets, focusing on its four core markets: New York, Los Angeles, San Francisco and Miami.

Fitness Management Group, owner of Peak Fitness, which has been the subject of several member complaints that resulted in investigations by the North Carolina Attorney General's office, filed for bankruptcy in July. That came on the heels of the April bankruptcy filing by Peak Capital Holdings LLC, which operated Peak Fitness clubs in the Raleigh, NC, area.

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