Town Sports International (TSI), New York, had slight decreases in revenue for both 2013 and fourth quarter 2013, according to financials released by the company on Wednesday.
TSI revenue was $470.2 million in 2013, a 1.8 percent decrease from $479 million in 2012. In fourth quarter 2013, TSI revenue was $113.9 million, a 0.3 percent decrease from $114.2 million in fourth quarter 2012.
Net income for TSI in 2013 was $12.3 million, a slight increase from $12.0 million in 2012. In fourth quarter 2013, TSI had a net loss of $695,000 compared to a net loss of
TSI CEO Bob Giardina said the company had several accomplishments in 2013 in areas such as personal training, pricing improvements, system investments, capital structure improvements and the development of TSI's new brand, BFX Studio.
"While I cannot say we are satisfied with how we are finishing 2013 from a financial results standpoint, we are making progress positioning ourselves to benefit from the changes that are taking place in the fitness industry," Giardina said during a conference call with analysts.
TSI's total member count decreased by 10,000 to 497,000 in fourth quarter 2013 and decreased by 13,000 for the full-year 2013. Membership attrition averaged 3.4 percent per month in fourth quarter 2013 compared to 3.5 percent per month in fourth quarter 2012.
TSI expects its revenue for first quarter 2014 to be between $116.5 million and $117.5 million compared to $119.2 million for first quarter 2013. Net income for first quarter 2014 is expected to be between $0 and $250,000.
Winter Weather and BFX Studio
Giardina said on the call that the winter storms that have hit the Northeast so far this year have affected TSI's clubs (New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs and Washington Sports Clubs).
"From January through mid-February last year, we had about 14 inches of snow," Giardina said. "This year, we had about 47 inches of snow. When you have the weather dynamic on top of the competitive landscape, it's a decline in guests. What we're doing to address it is we're doing more things to work with existing members."
Giardina said that TSI has leases in place for five new clubs in 2014. All clubs are expected to benefit from TSI's new software program that was rolled out and implemented last year.
The company's first BFX Studio is expected to open in the first half of 2014 on 6th Avenue and 16th Street in Manhattan. Future studios could be built across the country, Giardina said.
"At this point, we expect two to four BFX studio units this year, and most likely double that number in 2015," Giardina said. "What also makes this exciting is that we plan to have some of our future studios outside of our core markets. We fully expect BFX to be a national brand."
Giardina said Dan Gallagher, who was promoted from CFO to president and COO last year, will continue to handle CFO duties while the company searches for his replacement.
TSI's stock price was $8.75 during midday trading today on the NASDAQ Stock Market after opening this morning at $8.50.