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SMALL BUSINESS
The Sports Club Company, Inc. Announces Operating Results for the Second Quarter and Six Months Ended June 30, 2009
The Sports Club Company, Inc. (Pink Sheets:SCYL) today announced financial results for the second quarter and six months ended June 30, 2009.
Revenues from operations for the second quarter ended June 30, 2009 were $14,078,000 compared to $16,369,000 for the second quarter ended June 30, 2008, a decrease of $2,291,000 or 14.0%. After Preferred Stock dividends of $298,000 for the second quarter ended June 30, 2009 and the second quarter ended June 30, 2008, the net loss attributable to common stockholders for the second quarter ended June 30, 2009 was $315,000 or $0.01 per basic and diluted share, compared to a net loss attributable to common stockholders for the second quarter ended June 30, 2008 of $1,267,000 or $0.06 per basic and diluted share. The weighted average number of basic and diluted shares outstanding for the second quarter ended June 30, 2009 was 21,907,000 shares compared to 21,474,000 shares for the second quarter ended June 30, 2008.
Revenues from operations for the six months ended June 30, 2009 were $28,125,000 compared to $32,363,000 for the six months ended June 30, 2008, a decrease of $4,238,000 or 13.1%. After Preferred Stock dividends of $595,000 for the six months ended June 30, 2009 and $596,000 the six months ended June 30, 2008, the net loss attributable to common stockholders for the six months ended June 30, 2009 was $1,454,000 or $0.07 per basic and diluted share, compared to a net loss attributable to common stockholders for the six months ended June 30, 2008 of $2,634,000 or $0.12 per basic and diluted share. The weighted average number of basic and diluted shares outstanding for the six months ended June 30, 2009 was 21,773,000 shares compared to 21,297,000 shares for the six months ended June 30, 2008.
All statements in this press release other than statements of historical fact are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in this press release. The forward-looking statements speak only as of the date of this press release, and the Company expressly disclaims any obligations to release publicly, update or revise any forward-looking statement contained herein if there are changes in the Company’s expectations or if any events, conditions or circumstances on which any such forward-looking statement is based.
The Sports Club Company, based in Los Angeles, California operates and owns luxury sports and fitness complexes nationwide under the brand name The Sports Club/LA.
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THE SPORTS CLUB COMPANY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS December 31, 2008 and June 30, 2009 (in thousands, except share and per share amounts) |
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ASSETS |
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| December 31, | June 30, | |||||||||
|
2008 |
2009 |
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| (Audited) | (Unaudited) | |||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 1,280 | $ | 3,913 | ||||||
| Marketable securities | 3,224 | -- | ||||||||
| Restricted cash | 1,019 | 962 | ||||||||
|
|
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Accounts receivable, net of allowance for doubtful accounts of $398 and $367 at December 31, 2008 and June 30, 2009, respectively |
920 | 892 | ||||||||
| Inventories | 426 | 356 | ||||||||
| Prepaid expenses and other current assets | 548 | 483 | ||||||||
| Total current assets | 7,417 | 6,606 | ||||||||
| Property and equipment, net | 56,456 | 55,271 | ||||||||
| Goodwill | 7,315 | 7,315 | ||||||||
| Restricted cash | 75 | 75 | ||||||||
| Other assets | 1,450 | 1,472 | ||||||||
| $ | 72,713 | $ | 70,739 | |||||||
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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| Current liabilities: | ||||||||||
| Current installments of notes payable and equipment financing loans | $ | 1,474 | $ | 1,524 | ||||||
| Accounts payable | 655 | 1,605 | ||||||||
| Accrued liabilities | 4,799 | 3,708 | ||||||||
| Deferred lease obligations | 810 | 780 | ||||||||
| Deferred revenues | 4,973 | 4,489 | ||||||||
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Redeemable Convertible Preferred Stock, Series B, $.01 par value, 10,500 shares authorized; 9,252 shares issued and outstanding at December 31, 2008 and June 30, 2009 |
11,145 | 11,574 | ||||||||
| Total current liabilities | 23,856 | 23,680 | ||||||||
| Notes payable and equipment financing loans, less current installments | 76,218 | 75,550 | ||||||||
| Deferred lease obligations, less current portion | 6,569 | 6,353 | ||||||||
| Deferred revenues, less current portion | 285 | 265 | ||||||||
| Minority interest | 600 | 600 | ||||||||
| Total liabilities | 107,528 | 106,448 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders’ deficit: | ||||||||||
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Convertible Preferred Stock, Series C, $.01 par value, 5,000 shares authorized; 4,005 shares issued and outstanding at December 31, 2008 and June 30, 2009 (liquidation preference of $4,939 and $5,118 at December 31, 2008 and June 30, 2009, respectively) |
4,939 | 5,118 | ||||||||
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Common Stock, $.01 par value, 80,000,000 shares authorized; 21,473,914 and 21,907,210 shares issued and outstanding at December 31, 2008 and June 30, 2009, respectively |
215 | 219 | ||||||||
| Additional paid-in capital | 104,964 | 104,746 | ||||||||
| Accumulated deficit | (144,933 | ) | (145,792 | ) | ||||||
| Total Stockholders’ deficit | (34,815 | ) | (35,709 | ) | ||||||
| $ | 72,713 | $ | 70,739 | |||||||
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THE SPORTS CLUB COMPANY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months and Six Months Ended June 30, 2008 and 2009 (in thousands, except per share amounts) |
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| Three Months Ended | Six Months Ended | |||||||||||||||||||
|
June 30, |
June 30, |
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|
2008 |
2009 |
2008 |
2009 |
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| Revenue: | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| Membership revenue | $ | 11,036 | $ | 9,705 | $ | 21,884 | $ | 19,615 | ||||||||||||
| Products and services | 5,333 | 4,373 | 10,479 | 8,510 | ||||||||||||||||
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Total revenue |
16,369 | 14,078 | 32,363 | 28,125 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Club operating costs | 7,104 | 6,428 | 14,482 | 13,202 | ||||||||||||||||
| Cost of products and services | 4,148 | 3,161 | 8,370 | 6,391 | ||||||||||||||||
| Selling and marketing | 468 | 442 | 1,502 | 1,119 | ||||||||||||||||
| General and administrative | 1,907 | 1,602 | 3,885 | 3,350 | ||||||||||||||||
| Impairment charge | 1,214 | -- | 1,218 | 6 | ||||||||||||||||
| Depreciation and amortization | 1,098 | 1,039 | 2,163 | 2,090 | ||||||||||||||||
| Total operating expenses | 15,939 | 12,672 | 31,620 | 26,158 | ||||||||||||||||
| Income from operations | 430 | 1,406 | 743 | 1,967 | ||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest, net | (1,362 | ) | (1,385 | ) | (2,707 | ) | (2,751 | ) | ||||||||||||
| Minority interests | (37 | ) | (38 | ) | (74 | ) | (75 | ) | ||||||||||||
| Net loss before provision (benefit) for income taxes |
(969 |
) |
(17 |
) |
(2,038 |
) |
(859 |
) |
||||||||||||
| Provision (benefit) for income taxes | -- | -- | -- | -- | ||||||||||||||||
| Net loss | (969 | ) | (17 | ) | (2,038 | ) | (859 | ) | ||||||||||||
| Dividends on Preferred Stock | 298 | 298 | 596 | 595 | ||||||||||||||||
| Net loss attributable to common stockholders | $ | (1,267 | ) | $ | (315 | ) | $ | (2,634 | ) | $ | (1,454 | ) | ||||||||
| Net loss per share attributable to common stockholders: | ||||||||||||||||||||
| Basic and diluted | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.12 | ) | $ | (0.07 | ) | ||||||||
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Weighted average number of common shares outstanding: |
||||||||||||||||||||
| Basic and diluted | 21,474 | 21,907 | 21,297 | 21,773 | ||||||||||||||||