New York — A growth in membership and personal training revenue as well as a low attrition rate highlighted the second quarter 2008 results for Town Sports International (TSI).

TSI's revenue increased 8 percent to $129.4 million in the second quarter compared to $119.8 million during the same period last year. Revenue at clubs operated by TSI for more than 12 months increased 3.2 percent during the second quarter. Revenue for the first six months of 2008 increased 8.7 percent to $255.7 million compared to $235.1 million during the same period last year.

The 3.2 percent monthly attrition rate in second quarter 2008 improved from the levels of attrition in second quarter 2007.

“We are pleased to have delivered another quarter of solid results, and, despite the difficult economic environment, we are able to reaffirm our 2008 guidance,” TSI CEO Alex Alimanestianu said in a July conference call with analysts.

Membership dues increased 8.2 percent to $101.4 million, and personal training revenue grew 7.9 percent to $16.7 million in the second quarter. TSI has 517,000 members.

Net income was $6.8 million for the quarter compared to a net income of $6.4 million for second quarter 2007. Net income for the first six months of 2008 was $11.6 million compared to $2.6 million for the first six months of 2007. The increase was due primarily to the loss on extinguishment of debt of $7.4 million recorded in the six months ended June 30, 2007.

TSI expects total revenue for 2008 to be between $510 million and $520 million, representing 8 percent to 10 percent growth over 2007. TSI estimates it will invest between $90 million and $95 million in capital expenditures this year. This amount includes about $21 million to upgrade existing clubs, $9 million to support and enhance information systems, and $6 million for the construction of a new regional laundry facility in TSI's New York Sports Clubs market.

TSI expects to open 11 clubs and close four clubs in 2008. As of June 30, TSI had opened five clubs and closed three clubs.

This month, TSI raised dues of existing members, which Alimanestianu estimates will increase monthly membership revenue by about $600,000.

Alimanestianu praised TSI's new membership consultant hiring and compensation plan for freeing general managers to focus more on the customer aspects of the business and less on directing membership sales activities. The plan is in place at most Washington Sports Clubs and a few others. TSI also has a new general manager training program in the New York and Boston areas that was scheduled to be in place in all clubs by this month.

During the second quarter, TSI tested an energy management and reductions program in 10 clubs. Alimanestianu said he expects to expand the program to another 25 clubs by the end of the year. The energy management system monitors how much energy is used at a club on an hourly basis. TSI can remotely control settings on all aspects of the club, from the HVAC to the sauna to lighting. The cost to install the system is $50,000 per club, according to Dan Gallagher, TSI's chief financial officer.