Alex Alimanestianu began his first official day as CEO of Town Sports International by hosting a conference call with investors and analysts on the third quarter 2007 earnings for the company. Although he initially seemed a little hesitant on the call, he picked it up quickly and handled a few somewhat "pointed" questions well.
The company announced increased revenues overall, but a bit of sluggishness in new memberships at some of the company's mature clubs. Alimanestianu said they couldn't pinpoint exactly why the sluggishness occurred, but he said that October numbers had already begun to pick up.
One analyst asked whether the company wasn't cannibalizing its members at older clubs by opening new clubs too close to them. Alimanestianu assured the analyst that the company researches this possibility thoroughly and only opens clubs when they can be assured that cannibalization won't occur. He then said that their research actually shows an increase in membership at old clubs when a new TSI facility opens nearby.
Another analyst asked about a selling rush on TSI stock in the late afternoon today before the company's earnings were released, speculating that someone had leaked information. Alimanestianu said that he and Richard Pyle, CFO, had noticed the selling, too. They were uncertain of the reason but are investigating it.
Other analysts were concerned about the New York market, where TSI is invested heavily with the New York Sports Club brand. Alimanestianu responded by saying that the company had weathered the dot.com bust and the 9-11 disaster, and he didn't see New York's current economic concerns nearing those two occurrences in seriousness.
Overall, a nice performance by the new CEO. Although I guess we shouldn't be too surprised since he's worked with Bob Giardina, the former CEO, so closely for the past 17 years. - Pam