CHICAGO — Bally Total Fitness, which has been unable to sell the company, is now focusing on seeking capital and looking for ways to increase financial flexibility.
“We are actively pursuing both short-term and long-term financing alternatives that will enable Bally to address its significant debt load and create financial flexibility for its operations,” says Don Kornstein, interim chairman.
The fitness chain reported a year-over-year decline in new members and a 2 percent slip in second quarter revenues during a Sept. 12 conference call. The company also reported that it was at risk of defaulting on its credit agreement.
“Bally's business saw its top-line performance negatively affected in the first half of 2006 as a result of a lower average number of total members, a changing mix of new members added and a lower average monthly selling price for new members added,” says Barry Elson, acting CEO.
Net revenues decreased $5 million, or 2 percent, from the second quarter of 2005.
Membership services revenue declined $3.8 million, or 2 percent, to $239.5 million, driven by a 3 percent decline in the average number of members to 3.6 million.
New member adds in the second quarter of 2006 of about 278,000 were about 5 percent lower than in the second quarter of 2005.
Average monthly revenue per member in the quarter was $19.30, up $0.11 compared to the second quarter of 2005.
Personal training revenue of $32.2 million grew 1 percent over the second quarter of 2005.
Retail products revenue decreased $1.2 million, or 9 percent, to $11.5 million from the same period last year.