Town Sports International, New York, reported a decrease in revenue and members in third quarter 2016.
TSI generated $98.5 million in third quarter 2016, a 5 percent decrease from the $103.8 million it generated in third quarter 2015, according to financials released Wednesday. Revenue decreased about $3.8 million at closed clubs and about $2.3 million at clubs operating longer than 24 months, according to the company. The decreases were partially offset by an $831,000 increase in revenue from clubs that opened in the last 24 months.
The company’s net loss was $5.5 million in third quarter 2016 compared to a net loss of $22 million in the same period last year.
TSI’s total member count decreased 6,000 to 545,000 in third quarter 2016 compared to an increase of 14,000 in the same period last year that was associated with the rollout of TSI’s low-price model. Membership revenue was down 2.5 percent, and personal training revenue was down 13.4 percent in third quarter 2016.
For the first nine months of 2016, TSI generated $300.8 million in revenue compared to $323.5 million in the first nine months of 2015.
Despite the numbers, TSI Chairman and CEO Patrick Walsh called the company’s operations a “turnaround” that has led to a “material improvement in the company’s profitability.”
“During the third quarter, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased 68.5 percent from the prior year to $11 million,” Walsh said in a statement. “We continue to focus on improving the member experience through club remodels which include new, state-of-the-art equipment, specialized programming and an updated visual aesthetic.”
Walsh, who did not conduct a call with analysts, added that TSI recently launched new digital tools that include an enhanced and more user-friendly website as well as TSI’s first-ever mobile member app.
As of Sept. 30, TSI operated 148 clubs — 101 New York Sports Clubs, 27 Boston Sports Clubs, 12 Washington Sports Clubs (one of which is partly-owned), five Philadelphia Sports Clubs and three clubs in Switzerland. The company also owned two BFX Studios and had one partly-owned club that operated under a different brand name in Washington, D.C.
TSI’s stock closed at $2.65 on Friday on the NASDAQ Stock Market.