NEW YORK — Town Sports International Inc. (TSI) announced its results for the quarter ended June 30, 2004.

Revenues for the three months ended June 30, 2004 were $88.9 million, an increase of $2.8 million or 3.2 percent over the same quarter of 2003. During the quarter, TSI's mature clubs (those in operation for 24 months or longer) experienced a slight increase in revenue of 1 percent or $0.8 million when compared to the prior year's second quarter. Revenue at clubs open more than twelve months increased 1.3 percent when compared to the prior year's second quarter.

“As part of our focus of concentrating on growing ancillary revenue, during the quarter our new vice president of marketing successfully negotiated several sponsorship programs that are expected to generate more than $5 million in revenue over the next five years,” said Bob Giardina, CEO of TSI. “These programs include product sampling, in club promotions and in club advertising. During the quarter ended June 30, 2004 we realized $265,000 of sponsorship-related revenue.”

TSI FINANCIALS
Three months ended June 30, 2004 2Q 2003 2Q 2004 % Chg.
Net Income (loss)
$(1,121) $2,447 (318.3)%
Provision (benefit) for corporate income taxes
(84) 1,659
Loss on extinguishment of debt
7,773
Interest expense, net of interest income
5,919 6,478
Non-cash goodwill impairment
Six months ended June 30, 2004 2003 2004 % Chg.
Net Income (loss)
$4,720 $1,594 (66.2)%
Provision (benefit) for corporate income taxes
4,015 990
Loss on extinguishment of debt
7,773
Interest expense, net of interest income
10,129 12,964
Non-cash goodwill impairment
2,002