SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): November 3, 2003
THE SPORTS CLUB COMPANY, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-13290 95-4479735
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(Commission File Number) (IRS Employer Identification Number)
11100 Santa Monica Boulevard, Suite 300
Los Angeles, California 90025
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(Address of Principal Executive Offices)
Registrant's telephone number, including area
code: 310-479-5200
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Index of Exhibits on Page 2
1
Item 7. Financial Statements and Exhibits
(a) Financial Statements
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
99.1 Press Release Dated November 3, 2003
Item 9. Regulation FD Disclosure
On November 3, 2003, we announced the third quarter 2003 operating results.
A copy of the press release is furnished to the United States Securities and
Exchange Commission (the "Commission") with this current report on Form 8-K as
an exhibit. The information in this current report is being furnished pursuant
to Item 12 under Item 9 of Form 8-K as directed by the Commission in Release No.
34-47583.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: November 3, 2003 THE SPORTS CLUB COMPANY, INC.
By: /s/ Timothy M. O'Brien
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Timothy M. O'Brien
Chief Financial Officer
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EXHIBIT 99.1
NEWS RELEASE
For Immediate Release CONTACT: Timothy O'Brien
Chief Financial Officer
The Sports Club Company, Inc.
(310) 479-5200
THE SPORTS CLUB COMPANY, INC. ANNOUNCES
OPERATING RESULTS FOR THE THIRD QUARTER AND NINE MONTHS
ENDED SEPTEMBER 30, 2003
LOS ANGELES, CA (November 3, 2003) - The Sports Club Company, Inc. (AMEX:SCY)
today announced financial results for the third quarter and nine months ended
September 30, 2003.
Revenues for the quarter ended September 30, 2003 were $31,727,000 compared to
$30,195,000 for the quarter ended September 30, 2002, an increase of $1,532,000
or 5.1%. EBITDA(1) for the quarter ended September 30, 2003 decreased 16.2 % to
$2,182,000, compared to $2,603,000 for the quarter ended September 30, 2002, a
decrease of $421,000. The EBITDA decrease was the result of higher workers'
compensation insurance and increased costs such as utilities, insurance, common
area maintenance and property taxes related to Club facilities. The net loss
attributable to common shareholders for the quarter ended September 30, 2003 was
$5,618,000 or $0.31 per basic and diluted share, compared to a net loss
attributable to common shareholders for the quarter ended September 30, 2002 of
$3,882,000 or $0.21 per basic and diluted share. The 2003 loss includes $901,000
of pre-opening expenses related to the development of The Sports Club/LA -
Beverly Hills. The weighted average number of basic and diluted shares
outstanding for the quarter ended September 30, 2003 was 18,370,000 shares
compared to 18,096,000 shares for the quarter ended September 30, 2002.
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Revenues for the nine months ended September 30, 2003 increased 6.9% to
$96,311,000, compared to $90,109,000 for the nine months ended September 30,
2002, an increase of $6,202,000. EBITDA(1) for the first nine months of 2003
increased 31.5% to $7,415,000, compared to $5,639,000 for the first nine months
of 2002, an increase of $1,776,000. The net loss attributable to common
shareholders for the nine months ended September 30, 2003 was $14,683,000 or
$0.80 per basic and diluted share, compared to a net loss attributable to common
shareholders for the nine months ended September 30, 2002 of $13,433,000 or
$0.74 per basic and diluted share. The 2003 loss includes $1,677,000 of
pre-opening expenses related to the development of The Sports Club/LA - Beverly
Hills. The weighted average number of basic and diluted shares outstanding for
the nine months ended September 30, 2003 was 18,286,000 shares compared to
18,073,000 shares for the nine months ended September 30, 2002.
The Sports Club Company will host a conference call on Tuesday, November 4, 2003
at 8:30 A.M. (PST). As part of this conference call, management will discuss
operating results for the quarter and nine months ended September 30, 2003, the
status of the Company's new developments and other corporate matters. Parties
should dial (800) 240-6709 to participate. There will also be a replay available
starting Tuesday, November 4, 2003, after 10:00 A.M. (PST), which can be
accessed until Tuesday, November 18, 2003. The number for the replay is (800)
405-2236 with the pass code 557822#.
This press release contains forward-looking statements under the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such
statements include the words "will," "expects," "anticipates," "believes,"
"estimates," "intends," "plans" and similar expressions. Such forward-looking
statements involve numerous known and unknown risks, uncertainties and other
factors that could cause actual results to be materially different from those
currently anticipated. Such factors are outlined in the Company's Annual Report
on Form 10-K filed with the Securities and Exchange Commission.
The Sports Club Company, based in Los Angeles, California currently operates
nine luxury sports and fitness facilities nationwide under the brand name The
Sports Club/LA.
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(1) EBITDA is calculated by adding income tax provision (benefit), net interest
expense, depreciation/amortization, pre-opening expenses and non-recurring
items, to net loss. We have included EBITDA data because management
believes that this measure is useful to an investor to evaluate our ability
to service debt and to assess our earnings ability. However, these items
should not be considered in isolation or as substitutes for net income,
cash flows from (used in) operating activities or other statement of
operations or cash flows data prepared in accordance with generally
accepted accounting principles. These measures are not necessarily
comparable to similarly titled measures employed by other companies. A
reconciliation of net cash used in operating activities to net loss and
EBITDA is provided in the tables accompanying this press release.
-Tables to Follow-
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THE SPORTS CLUB COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2003 and December 31, 2002
(Amounts in thousands)
(Unaudited)
September 30, December 31,
ASSETS 2003 2002
---- ----
Current assets:
Cash and cash equivalents $ 2,507 $ 3,185
Accounts receivable, net of allowance for doubtful accounts 3,434 3,951
Other current assets 2,194 2,317
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Total current assets 8,135 9,453
Property and equipment, at cost, net of accumulated
depreciation and amortization 156,246 156,630
Restricted cash 4,427 227
Costs in excess of net assets acquired, less applicable amortization 12,794 12,794
Other assets, at cost, net 8,368 7,282
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$ 189,970 $ 186,386
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of notes payable $ 2,297 $ 2,158
Accounts payable and accrued liabilities 13,001 15,202
Deferred membership revenues 18,227 18,231
Notes payable, less current installments 120,169 101,882
Other long-term liabilities 9,286 8,907
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Total liabilities 162,980 146,380
Commitments and contingencies
Redeemable preferred stock 11,503 10,727
Shareholders' equity:
Common stock 211 211
Preferred stock 5,000 5,000
Additional paid-in capital 101,185 101,961
Accumulated deficit (76,343) (62,709)
Less: treasury stock, at cost (14,566) (15,184)
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Net shareholders' equity 15,487 29,279
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$ 189,970 $ 186,386
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THE SPORTS CLUB COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Three-months ended Nine-months ended
September 30, September 30,
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2003 2002 2003 2002
---- ---- ---- ----
Revenues $ 31,727 $ 30,195 $ 96,311 $ 90,109
Operating expenses:
Direct 26,491 24,524 79,198 74,935
General and administrative 1,950 1,944 5,919 5,755
Selling 1,066 1,086 3,666 3,667
Depreciation and amortization 2,991 2,937 8,920 8,945
Pre-opening expenses 901 -- 1,677 130
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Total operating expenses 33,399 30,491 99,380 93,432
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Loss from operations (1,672) (296) (3,069) (3,323)
Other income (expense):
Net interest expense (3,502) (3,305) (10,037) (10,032)
Minority interests (38) (38) (113) (113)
Non-recurring gain -- 97 -- 127
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Loss before income taxes (5,212) (3,542) (13,219) (13,341)
Income tax provision (benefit) 55 76 415 (445)
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Net loss (5,267) (3,618) (13,634) (12,896)
Dividends on preferred stock 351 264 1,049 537
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Net loss attributable to common
shareholders $ (5,618) $ (3,882) $ (14,683) $ (13,433)
=============== =============== =============== ===============
Net loss per share:
Basic $ (0.31) $ (0.21) $ (0.80) $ (0.74)
=============== ============== =============== ===============
Diluted $ (0.31) $ (0.21) $ (0.80) $ (0.74)
=============== ============== =============== ===============
Weighted average shares outstanding:
Basic 18,370 18,096 18,286 18,073
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Diluted 18,370 18,096 18,286 18,073
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THE SPORTS CLUB COMPANY, INC.
RECONCILIATION OF NET CASH USED IN OPERATING ACTIVITIES
TO NET LOSS AND EBITDA
(Amounts in thousands)
(Unaudited)
Three-months ended Nine-months ended
September 30, September 30,
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2003 2002 2003 2002
---- ---- ---- ----
Net loss $ (5,267) $ (3,618) $ (13,634) $ (12,896)
Net interest expense 3,502 3,305 10,037 10,032
Income tax provision (benefit) 55 76 415 (445)
Depreciation and amortization 2,991 2,937 8,920 8,945
Non-recurring gain -- (97) -- (127)
Pre-opening expenses 901 -- 1,677 130
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EBITDA $ 2,182 $ 2,603 $ 7,415 $ 5,639
Interest payment (6,120) (5,810) (12,075) (11,803)
Changes in working capital items and other 2,387 232 (949) 546
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Net cash provided by (used in) operating activities $ (1,551) $ (2,975) $ (5,609) $ (5,618)
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