TSI Sees Revenue, Net Income Increase in First Quarter

Town Sports International (TSI), New York, enjoyed increases in revenue and net income in the first quarter, according to financial results the company released today.

Revenue increased 5.3 percent to $122.9 million in first quarter 2012 compared to $116.7 million in the same period in 2011. Ancillary club revenue increased 12.3 percent to $25.9 million in first quarter 2012 compared to $23.1 million in first quarter 2011. Net income for first quarter 2012 was $3.9 million compared to net income of $1.5 million in first quarter 2011.

“We’re off to a great start in 2012,” TSI CEO Bob Giardina said today during an earnings call with analysts. “We are better positioned today than we have been for a very long time.”

TSI, which operates New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs and Washington Sports Clubs, also had 10,000 new members in the first quarter, bringing its total to 533,000 at the end of the quarter.

Attrition was up slightly, jumping to 3.4 percent in first quarter 2012 compared to 3.2 percent in first quarter 2011. Giardina said that the unseasonably warm weather, especially in March, kept members out of TSI clubs and kept new members from joining. Conversely, some revenue figures saw an uptick in first quarter 2012 compared to first quarter 2011, which was plagued by snowstorms.

Giardina praised new chief operating officer Terry Kew, who had served as the COO at Fitness First Australia. Kew replaces Martin Annese, who is scheduled to leave the company next month.

TSI will add one club, either a new club or an acquired club, in the latter half of this year. The company potentiallly will add four to six new clubs in 2013 and 2014 with an emphasis on the Manhattan or Boston urban markets. The company currently has 160 clubs.

TSI expects its revenue in second quarter 2012 to be between $123 million and $124 million compared to $118.3 million in second quarter 2011. The company also expects net income to be between $4.25 million and $4.75 million.

TSI’s stock price increased $0.40 to $12.88 during late afternoon trading on the New York Stock Exchange.

The company recently announced credit rating upgrades by financial services companies Standard & Poor’s and Moody’s.