Chicago — It may have been a tough year for the economy and an even tougher year for publicly traded companies, but for the industry's leading chain, at least, 2001 proved to be a profitable one. Bally Total Fitness Holding Corp. reported its financial results for the year ended Dec. 31, 2001, with a net income of $72.4 million, an increase of 11 percent over the prior year, as net revenues increased 8 percent to $852 million.
“Despite the many challenges of 2001, Bally had considerable success and made progress toward our long-term objectives,” said Lee Hillman, chairman and CEO, Bally Total Fitness Holding Corp. “In a difficult economy, we were able to increase revenues, with products and services growing very well and margins holding steady for the year. In addition, we've worked hard to improve our sales processes and services for our members, and believe the progress we're making is having an impact.”
And the good fortune of 2001 didn't get ushered out when the ball dropped in New York City's Times Square, despite rate increases.
“Looking to 2002, we're excited about our future. During the first six weeks of the year we enjoyed an improvement in new membership sales, in terms of both number of members and membership rates,” Hillman added. “Comparable club visits have increased more than 10 percent year-over-year, fostering an increase in personal training and retail sales of nearly 30 percent. We look to build on this success in the coming months through our strong commitment to our members' health and lifestyles.”
And Bally's personal training, as well as its bottom line, received a boost from its acquisition of Crunch Fitness last year.
“The addition of the popular and well-known Crunch Fitness brand has already begun to have a powerful impact on our business,” explained Hillman. “The company's expertise in personal training, development of leading-edge programming and innovative marketing are proving to be tremendous resources to the Bally family.”
But Hillman warned analysts at the company's conference call last month that the success of the Crunch acquisition doesn't mean the company will go on a spending spree, though it plans on opening 15 to 20 clubs this year.
“We are very measured and strict in our merger and acquisition criteria. There are lots of opportunities [for acquisition],” he said. “If we were free-spending we could get lots done, but we are not. We believe every acquisition should be a winner. We have been able to do that to this point.”
Instead of spending, Hillman said the company would look to continue to build on its success of the past year.
“As far as the customer is concerned, Bally has changed. It is now the place for active adult members,” said Hillman. “We believe that is something that has changed momentum for us and clearly we are seeing that translate into the club experience.”