TSI Town Sports International Holdings Inc. saw an increase in third quarter revenue but a decrease in net income compared to the same time period last year, the company announced. TSI, which owns and operates health clubs in major cities from Washington, DC north through New England, announced its results for the quarter ended Sept. 30, 2004.
Revenues for the three months ended Sept. 30, 2004 were $90.1 million, an increase of $3.3 million, or 3.8 percent over the same quarter of 2003. During the quarter, TSI's mature clubs (those in operation for 24 months or longer) experienced an increase in revenue of 2.1 percent or $1.7 million when compared to the prior year's third quarter. Revenue at clubs open more than 12 months increased 3.6 percent when compared to the prior year’s third quarter.
“We are encouraged by the improvement in our revenue for the quarter. In addition, our commit membership program continues to be well received by our new members with 70 percent of new members year to date September selecting this plan over the month-to-month alternative. For the 12 months ended Sept. 30, 2004 our attrition rate of 3.5 percent is a significant improvement over the 4.5 percent attrition rate experienced in 2003,” said Bob Giardina, CEO of TSI.
Operating income for the third quarter of 2004 was $11.4 million compared to $10.9 million in the third quarter of 2003. Interest expense increased to $10.3 million from $6.8 million due to increased interest accruing on our Senior Discount Notes issued in February 2004.
The company recorded net income for the quarter of $690,000 compared to $2.3 million for the comparable period in the prior year.
The company's adjusted EBITDA increased slightly by 0.6 percent to $20.2 million this quarter from $20.1 million in last year's quarter, although the prior period’s results did include the benefit from the final settlement of business interruption insurance post the events of Sept. 11th, of $1.5 million.