LOS ANGELES — Three weeks after signing an agreement to sell seven of its nine clubs, the Sports Club Co. released its third quarter 2005 financials, which showed increased revenue.
The company had delayed filing second quarter 2005 financials due to accounting issues related to reporting of landlord incentives under operating leases, assets held for sale and initiation fee revenue. However, the company is now up to date on its financial reports, said Tom Martin, treasurer for the Sports Club Co.
In late October, the company signed a binding asset purchase agreement for seven of its facilities to be sold to Millennium Partners for $65 million, subject to post closing adjustments. The properties involved in the deal are in New York, Boston, San Francisco, Miami and Washington, D.C. The properties reflect locations where Millennium Partners owns luxury hotels and condominiums. If Millennium elects to also purchase the company's Rockefeller Center location, the sales price would increase, the company said. Proceeds from the sale will pay off part $100 million senior secured notes that are due in March 2006.
Through its affiliates, Millennium Partners is the largest shareholder in the Sports Club Co. and had been the landlord for many of the facilities. Details on the close of the deal could not be released yet, said Martin.
Millennium Partners hired Dr. Art Curtis as CEO of its new sports club operating company, which will be based in Boston. Curtis has been in the fitness business for 25 years, most recently serving as COO of Wellbridge.
The Sports Club Co. reported that third quarter 2005 revenues rose to $11.9 million, an increase of 8.4 percent or $925,000 from the same period last year. Revenues from continuing operations for the nine months ended Sept. 30, 2005 increased 9.4 percent to $35.6 million compared to the same period last year.