The Sports Club Company, Inc. Announces Operating Results for the Third Quarter and Nine Months Ended September 30, 2009

Business Wire

posted: 31 DAYS 4 HOURS AGO

The Sports Club Company, Inc. (Pink Sheets:SCYL) today announced financial results for the third quarter and nine months ended September 30, 2009.

Revenues from operations for the third quarter ended September 30, 2009 were $13,324,000 compared to $15,492,000 for the third quarter ended September 30, 2008, a decrease of $2,168,000 or 13.9%. After Preferred Stock dividends of $299,000 for the third quarter ended September 30, 2009 and the third quarter ended September 30, 2008, the net loss attributable to common stockholders for the third quarter ended September 30, 2009 was $542,000 or $0.02 per basic and diluted share, compared to a net loss attributable to common stockholders for the third quarter ended September 30, 2008 of $275,000 or $0.01 per basic and diluted share. The weighted average number of basic and diluted shares outstanding for the third quarter ended September 30, 2009 was 21,907,000 shares compared to 21,474,000 shares for the third quarter ended September 30, 2008.

Revenues from operations for the nine months ended September 30, 2009 were $41,449,000 compared to $47,855,000 for the nine months ended September 30, 2008, a decrease of $6,406,000 or 13.3%. After Preferred Stock dividends of $894,000 for the nine months ended September 30, 2009 and $895,000 the nine months ended September 30, 2008, the net loss attributable to common stockholders for the nine months ended September 30, 2009 was $1,995,000 or $0.09 per basic and diluted share, compared to a net loss attributable to common stockholders for the nine months ended September 30, 2008 of $2,909,000 or $0.14 per basic and diluted share. The weighted average number of basic and diluted shares outstanding for the nine months ended September 30, 2009 was 21,818,000 shares compared to 21,356,000 shares for the nine months ended September 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.


THE SPORTS CLUB COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2008 and September 30, 2009
(in thousands, except share and per share amounts)

ASSETS
	December 31,			Sept. 30,
	2008			2009
	(Audited)			(Unaudited)
Current assets:
Cash and cash equivalents	$ 1,280			$	2,624
Marketable securities	3,224				--
Restricted cash	1,019				1,026
Accounts receivable, net of allowance for doubtful accounts of $398 and $360 at December 31, 2008 and September 30, 2009, respectively	920				762
Inventories	426				349
Prepaid expenses and other current assets	548				679
Total current assets	7,417				5,440

Property and equipment, net	56,456				54,565
Goodwill	7,315				7,315
Restricted cash	75				75
Other assets	1,450				1,623
	$ 72,713			$	69,018
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current installments of notes payable and equipment financing loans	$	1,474		$ 1,550
Accounts payable		655		590
Accrued liabilities		4,799		4,324
Deferred lease obligations		810		767
Deferred revenues		4,973		4,196
Redeemable Convertible Preferred Stock, Series B, $.01 par value, 10,500 shares authorized; 9,252 shares issued and outstanding at December 31, 2008 and September 30, 2009		11,145		11,782
Total current liabilities		23,856		23,209

Notes payable and equipment financing loans, less current installments		76,218		75,165
Deferred lease obligations, less current portion		6,569		5,934
Deferred revenues, less current portion		285		270
Minority interest		600		600
Total liabilities		107,528		105,178

Commitments and contingencies

Stockholders’ deficit:
Convertible Preferred Stock, Series C, $.01 par value, 5,000 shares authorized; 4,005 shares issued and outstanding at December 31, 2008 and September 30, 2009 (liquidation preference of $4,939 and $5,209 at December 31, 2008 and September 30, 2009, respectively)		4,939		5,209
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 September 30, 2009, respectively		215		219
Additional paid-in capital		104,964		104,447
Accumulated deficit		(144,933	)	(146,035		)
Total Stockholders’ deficit		(34,815	)	(36,160		)
	$	72,713		$ 69,018


THE SPORTS CLUB COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months and Nine Months Ended September 30, 2008 and 2009
(in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2009			2008			2009
Revenue:	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Membership revenue	$	10,799		$	9,452		$	32,683		$	29,067
Products and services		4,693			3,872			15,172			12,382
Total revenue		15,492			13,324			47,855			41,449

Operating expenses:
Club operating costs		7,004			6,401			21,486			19,603
Cost of products and services		3,714			2,867			12,084			9,258
Selling and marketing		472			386			1,974			1,505
General and administrative		1,755			1,362			5,640			4,712
Impairment charge		--			83			1,218			89
Depreciation and amortization		1,106			1,034			3,269			3,124
Total operating expenses		14,051			12,133			45,671			38,291
Income from operations		1,441			1,191			2,184			3,158

Other income (expense):
Interest, net		(1,380	)		(1,396	)		(4,087	)		(4,147	)
Minority interests		(37	)		(38	)		(111	)		(112	)
Net income (loss) before provision (benefit) for income taxes		24			(243	)		(2,014	)		(1,101	)

Provision (benefit) for income taxes		--			--			--			--

Net income (loss)		24			(243	)		(2,014	)		(1,101	)

Dividends on Preferred Stock		299			299			895			894

Net loss attributable to common stockholders	$	(275	)	$	(542	)	$	(2,909	)	$	(1,995	)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.14	)	$	(0.09	)
Weighted average number of common shares outstanding:
Basic and diluted		21,474			21,907			21,356			21,818

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The Sports Club Company, Inc. Announces Operating Results for the Third Quarter and Nine Months Ended September 30, 2009

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