Posted April 4, 2012 9:07 pm by healthclubnews

Town Sports International Holdings, Inc. Announces Ratings Agency Upgrades

Town Sports International Holdings, Inc. Announces Ratings Agency Upgrades

Standard & Poor’s raises corporate credit rating on Town Sports to B+ from B; outlook stable
Moody’s upgrades Town Sports’ CFR to B1 from B2; outlook stable

Town Sports International Holdings, Inc. (“TSI” or the “Company”) (NASDAQ: CLUB), a leading owner and operator of health clubs located primarily in major cities from Washington, DC north through New England, operating under the brand names “New York Sports Clubs,” “Boston Sports Clubs,” “Washington Sports Clubs” and “Philadelphia Sports Clubs,” today announced credit ratings upgrades by Standard & Poor’s and Moody’s respectively.

On March 22, 2012, Standard & Poor’s Ratings Services raised its corporate credit rating on Town Sports International Holdings Inc. to ‘B+’ from ‘B’ with a stable outlook. At the same time, Standard &Poor’s raised the issue-level rating on Town Sports’ $350 million credit facility, consisting of a $50 million revolver due 2016 and a $300 million term loan due 2018, to ‘B+’, from ‘B’.

On April 2, 2012, Moody’s Investors Service upgraded Town Sports International Holdings, Inc.’s corporate family rating to B1 from B2 and the probability of default rating to B2 from B3. Moody’s also upgraded Town Sports International, LLC’s (wholly-owned subsidiary of Town Sports International Holdings, Inc) senior secured credit facility rating to Ba3 from B1. The speculative grade liquidity rating was upgraded to SGL-1 from SGL-2. The ratings outlook is stable.

Daniel Gallagher, Chief Financial Officer of TSI stated, “We are pleased with the ratings upgrades we have recently received by both Standard and Poor’s and Moody’s. We have been generating EBITDA growth and increases in free cash flow, while consistently reducing our debt and improving our credit and leverage metrics. Many improvements were made in the business in 2011 and we remain excited about our future prospects.”

Credit ratings are opinions of a rated entity’s ability to meet its ongoing obligations. Credit ratings are not recommendations to buy, sell or hold securities and are subject to revision or withdrawal at any time by the assigning rating agency. Each agency’s rating should be evaluated independently of any other agency’s rating.

Forward-Looking Statements:

Statements in this release that do not constitute historical facts, including, without limitation, statements regarding future financial results and performance and potential sales revenue and other statements that are predictive in nature or depend upon or refer to events or conditions, or that include words such as “expects,” “anticipated,” “intends,” “plans,” “believes,” “estimates” or “could”, are “forward-looking” statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control, including, among others, the level of market demand for the Company’s services, economic conditions affecting the Company’s business, the geographic concentration of the Company’s clubs, competitive pressures, the ability to achieve reductions in operating costs and to continue to integrate acquisitions, environmental initiatives, any security and privacy breaches involving customer data, the application of Federal and state tax laws and regulations, the levels and terms of the Company’s indebtedness, and other specific factors discussed herein and in other releases and public filings made by the Company (including the Company’s reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission). The Company believes that all forward-looking statements are based on reasonable assumptions when made; however, the Company cautions that it is impossible to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that, accordingly, one should not place undue reliance on these statements. Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to update these statements in light of subsequent events or developments. Actual results may differ materially from anticipated results or outcomes discussed in any forward-looking statement.

About Town Sports International Holdings, Inc.:

New York-based Town Sports International Holdings, Inc. is a leading owner and operator of fitness clubs in the Northeast and mid-Atlantic regions of the United States and, through its subsidiaries, operated 160 fitness clubs as of December 31, 2011, comprising 108 New York Sports Clubs, 25 Boston Sports Clubs, 18 Washington Sports Clubs (two of which are partly-owned), six Philadelphia Sports Clubs, and three clubs located in Switzerland. These clubs collectively served approximately 523,000 members. For more information on TSI, visit http://www.mysportsclubs.com.

From time to time we may use our Web site as a channel of distribution of material company information. Financial and other material information regarding the Company is routinely posted on and accessible at http://www.mysportsclubs.com. In addition, you may automatically receive email alerts and other information about us by enrolling your email by visiting the “Email Alert” section at http://www.mysportsclubs.com.