Exhibit 99.1
For Release on July 31, 2008
TOWN SPORTS INTERNATIONAL HOLDINGS, INC. ANNOUNCES SECOND QUARTER 2008 FINANCIAL RESULTS
MAINTAINS FISCAL 2008 GUIDANCE
New York, NY — July 31, 2008— 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”, announced its results for the second quarter ended June 30, 2008.
2nd Quarter Highlights:
| • | Revenues increased 8.0% to $129.4 million. | |
| • | Comparable club revenue increased 3.2%. | |
| • | Diluted earnings per share increased 8.3% to $0.26. | |
| • | EBITDA increased 8.1% to $30.9 million. | |
| • | Personal training revenues grew 7.9%, to $16.7 million. | |
| • | Membership attrition averaged 3.2% per month. |
Alex Alimanestianu, Chief Executive Officer of TSI, commented: “We are pleased with our 2nd quarter performance, and we are once again reaffirming our guidance for the year. As we have said before, we believe that our core customer base in major northeastern metropolitan areas will remain committed to their health and fitness goals despite any additional economic strains that may arise. Our 3.2% monthly attrition rate in the second quarter was better than the levels experienced in the second quarter of 2007, which we believe reflects the resiliency of our business as well as the focus we are putting on the member experience in our clubs. We are also very pleased that our new club portfolio continues to exceed expectations and generate strong returns.”
Quarter Ended June 30, 2008 Financial Highlights:
Revenue (in $’000s) was comprised of the following:
| Quarter Ended June 30, | ||||||||||||||||||||
| 2008 | 2007 | |||||||||||||||||||
| Revenue | % Revenue | Revenue | % Revenue | % Growth | ||||||||||||||||
| Membership dues | $ | 101,489 | 78.4 | % | $ | 93,818 | 78.3 | % | 8.2 | % | ||||||||||
| Initiation fees | 3,486 | 2.7 | % | 3,096 | 2.6 | % | 12.6 | % | ||||||||||||
| Membership revenue | 104,975 | 81.1 | % | 96,914 | 80.9 | % | 8.3 | % | ||||||||||||
| Personal training revenue | 16,700 | 12.9 | % | 15,482 | 12.9 | % | 7.9 | % | ||||||||||||
| Other ancillary club revenue | 6,054 | 4.7 | % | 5,732 | 4.8 | % | 5.6 | % | ||||||||||||
| Ancillary club revenue | 22,754 | 17.6 | % | 21,214 | 17.7 | % | 7.3 | % | ||||||||||||
| Fees and other revenue | 1,664 | 1.3 | % | 1,650 | 1.4 | % | 0.8 | % | ||||||||||||
| Total revenue | $ | 129,393 | 100.0 | % | $ | 119,778 | 100.0 | % | 8.0 | % | ||||||||||
Total revenuefor Q2 2008 increased 8.0% compared to Q2 2007 driven by growth in membership and personal training revenue. Revenue at clubs operated by us for over 12 months (“comparable club revenue”) increased 3.2% during the three months ended June 30, 2008. Of this 3.2% increase, 1.5% was due to an increase in membership, 1.0% was due to an increase in price and 0.7% was due to an increase in ancillary club revenue and fees and other revenue.
Operating expenses (in $’000s) were comprised of the following:
| Quarter Ended June 30, | ||||||||||||||||||||
| 2008 | 2007 | |||||||||||||||||||
| Expense | % Revenue | Expense | % Revenue | % Change | ||||||||||||||||
| Payroll and related | $ | 48,653 | 37.6 | % | $ | 44,563 | 37.2 | % | 9.2 | % | ||||||||||
| Club operating | 41,521 | 32.1 | % | 37,938 | 31.7 | % | 9.4 | % | ||||||||||||
| General and administrative | 8,895 | 6.9 | % | 9,122 | 7.6 | % | (2.5 | )% | ||||||||||||
| Depreciation and amortization | 13,858 | 10.7 | % | 11,731 | 9.8 | % | 18.1 | % | ||||||||||||
| Operating expenses | $ | 112,927 | 87.3 | % | $ | 103,354 | 86.3 | % | 9.3 | % | ||||||||||
Total operating expensesincreased 9.3% to $112.9 million for Q2 2008 compared to Q2 2007. Operating margin was 12.7% for Q2 2008 and 13.7% in Q2 2007.
| • | The increases in payroll and related and club operating expenses were principally attributable to a 7.8% increase in the total months of club operation from 448 in Q2 2007 to 483 in Q2 2008. There was a net increase of eleven clubs in the twelve months ended June 30, 2008. | ||
| • | The increase in depreciation and amortization expenses was principally due to clubs opened after April 1, 2007. In addition, during the six months ended June 30, 2008, we recorded an impairment loss of $755,000 on fixed assets of a remote club that did not benefit from being part of a regional cluster and therefore experienced a decline in asset fair value, and an impairment loss of $387,000 related to an agreement to close a club prior to its lease expiration. Offsetting these increases are insurance proceeds of approximately $600,000 received for fixed asset damages at two of our clubs. |
Net incomefor Q2 2008 was $6.8 million compared to a net income of $6.4 million for Q2 2007.
EBITDAfor Q2 2008 increased 8.1% to $30.9 million from $28.6 million for Q2 2007. EBITDA as a percentage of total revenue (“EBITDA margin”) was 23.9% for Q2 2008 and Q2 2007. Please refer to the reconciliation of net income to EBITDA at the end of this release.
Six Months Ended June 30, 2008 Financial Highlights:
Revenue (in $’000s) was comprised of the following:
| Six Months Ended June 30, | ||||||||||||||||||||
| 2008 | 2007 | |||||||||||||||||||
| Revenue | % Revenue | Revenue | % Revenue | % Growth | ||||||||||||||||
| Membership dues | $ | 200,672 | 78.5 | % | $ | 184,802 | 78.6 | % | 8.6 | % | ||||||||||
| Initiation fees | 6,888 | 2.7 | % | 5,979 | 2.5 | % | 15.2 | % | ||||||||||||
| Membership revenue | 207,560 | 81.2 | % | 190,781 | 81.1 | % | 8.8 | % | ||||||||||||
| Personal training revenue | 32,841 | 12.8 | % | 29,403 | 12.5 | % | 11.7 | % | ||||||||||||
| Other ancillary club revenue | 12,236 | 4.8 | % | 12,284 | 5.2 | % | (0.4 | )% | ||||||||||||
| Ancillary club revenue | 45,077 | 17.6 | % | 41,687 | 17.7 | % | 8.1 | % | ||||||||||||
| Fees and other revenue | 3,076 | 1.2 | % | 2,687 | 1.2 | % | 14.5 | % | ||||||||||||
| Total revenue | $ | 255,713 | 100.0 | % | $ | 235,155 | 100.0 | % | 8.7 | % | ||||||||||
Total revenuefor the six months ended June 30, 2008 increased 8.7% compared to the six months ended June 30, 2007 driven by growth in membership and personal training revenue. Comparable club revenue increased 3.8% during the six months ended June 30, 2008. Of this 3.8% increase, 1.6% was due to an increase in membership, 1.2% was due to an increase in price and 1.0% was due to an increase in ancillary club revenue and fees and other revenue.
Operating expenses (in $’000s) were comprised of the following:
| Six Months Ended June 30, | ||||||||||||||||||||
| 2008 | 2007 | |||||||||||||||||||
| Expense | % Revenue | Expense | % Revenue | % Change | ||||||||||||||||
| Payroll and related | $ | 97,057 | 38.0 | % | $ | 89,314 | 38.0 | % | 8.7 | % | ||||||||||
| Club operating | 84,401 | 33.0 | % | 77,302 | 32.9 | % | 9.2 | % | ||||||||||||
| General and administrative | 17,201 | 6.7 | % | 16,880 | 7.2 | % | 1.9 | % | ||||||||||||
| Depreciation and amortization | 26,507 | 10.4 | % | 22,822 | 9.7 | % | 16.1 | % | ||||||||||||
| Operating expenses | $ | 225,166 | 88.1 | % | $ | 206,318 | 87.8 | % | 9.1 | % | ||||||||||
Total operating expensesincreased 9.1% for the six months ended June 30, 2008 compared to the six months ended June 30, 2007. Operating margin was 11.9% for the six months ended June 30, 2008 and 12.2% for the six months ended June 30, 2007.
| • | The increases in payroll and related and club operating expenses were attributed to a 7.9% increase in the total months of club operation to 960 for the six months ended June 30, 2008 from 890 for the same period last year. There was a net increase of eleven clubs in the last twelve months. | ||
| • | The increase in depreciation and amortization expenses was principally due to clubs opened after April 1, 2007. In addition, during the six months ended June 30, 2008, we recorded an impairment loss of $755,000 on fixed assets of a remote club that did not benefit from being part of a regional cluster and therefore experienced a decline in asset fair value, and an impairment loss of $387,000 related to the agreement to close a club prior to the lease expiration. Offsetting these increases are insurance proceeds of approximately $600,000 received for fixed asset damages at two of our clubs. |
Net incomefor the six months ended June 30, 2008 was $11.6 million compared to $2.6 million for the six months ended June 30, 2007. This $9.0 million increase in net income was primarily due to the loss on extinguishment of debt of $7.4 million, net of taxes recorded in the six months ended June 30, 2007.
EBITDAfor the six months ended June 30, 2008 increased 10.6% to $58.1 million from $52.6 million for the six months ended June 30, 2007. EBITDA margin was 22.7% for the six months ended June 30, 2008, compared to 22.4% for the six months ended June 30, 2007. Please refer to the reconciliation of net income to EBITDA at the end of this release.
Cash flow from operating activitiesfor the six months ended June 30, 2008 increased $9.1 million, or 19.0% from the same period last year. Contributing to the cash flow increase was the increase in earnings before interest, taxes and depreciation and amortization of $5.6 million. In addition, the net changes in certain operating assets and liabilities increased $4.5 million primarily due to decreases in pre-payments made to landlords and the timing of other vendor payments. Cash paid for interest decreased $4.3 million, while cash paid for taxes increased $5.0 million.
2008 Business Outlook:
Based upon the current business environment and current trends in the market, the Company is reaffirming its previous guidance, and expects the following results for 2008:
| • | Total revenue for 2008 will be in the range of $510.0 million to $520.0 million, representing 8% to 10% growth over 2007. | ||
| • | Net income will be between $21.3 million and $22.3 million compared to net income of $13.6 million or $20.5 million in 2007 before the net effect of the loss on extinguishment of $7.4 million and favorable tax adjustments of $538,000. | ||
| • | Earnings per share on a fully diluted basis will be between $0.80 and $0.84 for 2008 compared to earnings per share on a fully diluted basis of $0.51 per share in 2007, or $0.77 per share before the net effect of the loss on extinguishment of debt of $0.28 per share and favorable tax adjustments of $0.02 per share. |
2008 Investing Activities Outlook:
For the year ending December 31, 2008, the Company estimates it will invest between $90.0 and $95.0 million in capital expenditures. This amount includes approximately $21.0 million to continue to upgrade existing clubs, $9.0 million to support and enhance our management information systems and $6.0 million for the construction of a new regional laundry facility in our New York Sports Clubs market. The remainder of our 2008 capital expenditures will be committed to building or expanding clubs. The Company expects to open 11 new clubs and close four clubs in 2008. As of June 30, 2008 we have opened five clubs and closed three clubs.
Forward-Looking Statements:
Statements in this release that do not constitute historical facts, including, without limitation, statements under the caption “2008 Business Outlook” and “2008 Investing Activities Outlook” and other statements regarding future financial results and performance and potential sales revenue are “forward-looking” statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements under the captions “2008 Business Outlook” and “2008 Investing Activities Outlook,” other statements regarding future financial results and performance and potential sales revenue, 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”. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control, including the level of market demand for the Company’s services, competitive pressures, the ability to achieve reductions in operating costs and to continue to integrate acquisitions, the application of federal and state tax laws and regulations, and other specific factors discussed herein and in other releases and public filings made by the Company (including Forms 10-K and 10-Q filed with the Securities and Exchange Commission); accordingly, actual results could differ materially from any such forward-looking statement. The forward-looking statements speak only as of the date hereof and the Company does not intend to update this information, except as required by law, to reflect developments or information obtained after the date hereof, and the Company disclaims any legal obligation to the contrary.
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 163 fitness clubs as of June 30, 2008, comprising 112 New York Sports Clubs, 22 Boston Sports Clubs, 19 Washington Sports Clubs (two of which are partly-owned), seven Philadelphia Sports Clubs, and three clubs located in Switzerland. These clubs collectively served approximately 517,000 members, excluding pre-sold, short-term and seasonal memberships. For more information on TSI visithttp://www.mysportsclubs.com.
The Company will hold a conference call on Thursday, July 31, 2008 at 4:30 PM (Eastern) to discuss the second quarter 2008 results. Alex Alimanestianu, Chief Executive Officer, and Dan Gallagher, Chief Financial Officer, will host the conference call. The conference call will be Web cast and may be accessed via the Company’s Investor Relations section of its Website at www.mysportsclubs.com. A replay and transcript of the call will be available via the Company’s Website beginning August 1, 2008.
Town Sports International Holdings, Inc., New York
Contact Information:
Contact Information:
Investor Contact:
(212) 246-6700 extension 1650
Investor.relations@town-sports.com
(212) 246-6700 extension 1650
Investor.relations@town-sports.com
or
Integrated Corporate Relations, Joseph Teklits
(203) 682-8258
joseph.teklits@icrinc.com
(203) 682-8258
joseph.teklits@icrinc.com
TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2008 and December 31, 2007
(All figures in $’000s)
(Unaudited)
June 30, 2008 and December 31, 2007
(All figures in $’000s)
(Unaudited)
| June 30, | December 31, | |||||||
| 2008 | 2007 | |||||||
ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 10,506 | $ | 5,463 | ||||
| Accounts receivable, net | 10,346 | 8,815 | ||||||
| Inventory | 302 | 230 | ||||||
| Prepaid expenses and other current assets | 8,084 | 11,334 | ||||||
| Total current assets | 29,238 | 25,842 | ||||||
| Fixed assets, net | 345,618 | 337,152 | ||||||
| Goodwill | 50,262 | 50,165 | ||||||
| Intangible assets, net | 663 | 477 | ||||||
| Deferred tax assets, net | 47,945 | 44,345 | ||||||
| Deferred membership costs | 17,250 | 17,974 | ||||||
| Other assets | 12,458 | 12,808 | ||||||
| Total assets | $ | 503,434 | $ | 488,763 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 1,902 | $ | 10,898 | ||||
| Accounts payable | 5,666 | 10,891 | ||||||
| Accrued expenses | 35,650 | 34,186 | ||||||
| Accrued interest | 458 | 738 | ||||||
| Corporate income taxes payable | 1,510 | 811 | ||||||
| Deferred revenue | 47,130 | 41,798 | ||||||
| Total current liabilities | 92,316 | 99,322 | ||||||
| Long-term debt | 310,929 | 305,124 | ||||||
| Deferred lease liabilities | 65,393 | 61,221 | ||||||
| Deferred revenue | 6,137 | 7,300 | ||||||
| Other liabilities | 14,548 | 15,613 | ||||||
| Total liabilities | 489,323 | 488,580 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 26 | 26 | ||||||
| Paid-in capital | (15,118 | ) | (16,977 | ) | ||||
| Accumulated other comprehensive income (currency translation adjustment) | 1,271 | 814 | ||||||
| Retained earnings | 27,932 | 16,320 | ||||||
| Total stockholders’ equity | 14,111 | 183 | ||||||
| Total liabilities and stockholders’ equity | $ | 503,434 | $ | 488,763 | ||||
TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
For the quarters and six months ended June 30, 2008 and 2007
(All figures in $’000s except share and per share data)
(Unaudited)
For the quarters and six months ended June 30, 2008 and 2007
(All figures in $’000s except share and per share data)
(Unaudited)
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues: | ||||||||||||||||
| Club operations | $ | 127,729 | $ | 118,128 | $ | 252,636 | $ | 232,468 | ||||||||
| Fees and other | 1,664 | 1,650 | 3,077 | 2,687 | ||||||||||||
| 129,393 | 119,778 | 255,713 | 235,155 | |||||||||||||
Operating Expenses: | ||||||||||||||||
| Payroll and related | 48,653 | 44,563 | 97,057 | 89,314 | ||||||||||||
| Club operating | 41,521 | 37,938 | 84,401 | 77,302 | ||||||||||||
| General and administrative | 8,895 | 9,122 | 17,201 | 16,880 | ||||||||||||
| Depreciation and amortization | 13,858 | 11,731 | 26,507 | 22,822 | ||||||||||||
| 112,927 | 103,354 | 225,166 | 206,318 | |||||||||||||
| Operating income | 16,466 | 16,424 | 30,547 | 28,837 | ||||||||||||
| Loss on extinguishment of debt | — | — | — | 12,521 | ||||||||||||
| Interest expense | 5,633 | 6,393 | 12,147 | 13,409 | ||||||||||||
| Interest income | (74 | ) | (279 | ) | (215 | ) | (538 | ) | ||||||||
| Equity in the earnings of investees and rental income | (620 | ) | (482 | ) | (1,067 | ) | (904 | ) | ||||||||
| Income before provision for corporate income taxes | 11,527 | 10,792 | 19,682 | 4,349 | ||||||||||||
| Provision for corporate income taxes | 4,726 | 4,426 | 8,070 | 1,784 | ||||||||||||
| Net income | $ | 6,801 | $ | 6,366 | $ | 11,612 | $ | 2,565 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.26 | $ | 0.24 | $ | 0.44 | $ | 0.10 | ||||||||
| Diluted | $ | 0.26 | $ | 0.24 | $ | 0.44 | $ | 0.10 | ||||||||
| Weighted average number of shares used in calculating earnings per share: | ||||||||||||||||
| Basic | 26,417,859 | 26,142,383 | 26,361,758 | 26,070,219 | ||||||||||||
| Diluted | 26,488,634 | 26,656,341 | 26,422,359 | 26,572,355 | ||||||||||||
TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2008 and 2007
(All figures in $’000s)
(Unaudited)
For the six months ended June 30, 2008 and 2007
(All figures in $’000s)
(Unaudited)
| Six Months | ||||||||
| Ended June 30, | ||||||||
| 2008 | 2007 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 11,612 | $ | 2,565 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 26,507 | 22,822 | ||||||
| Non-cash interest expense on Senior Discount Notes | 6,782 | 6,029 | ||||||
| Loss on extinguishment of debt | — | 12,521 | ||||||
| Amortization of debt issuance costs | 387 | 443 | ||||||
| Noncash rental expense, net of noncash rental income | 741 | 886 | ||||||
| Compensation expense incurred in connection with stock options and common stock grants | 500 | 355 | ||||||
| Net changes in certain operating assets and liabilities | 9,363 | 4,860 | ||||||
| Increase in deferred tax asset | (3,600 | ) | (6,271 | ) | ||||
| Landlord contributions to tenant improvements | 3,338 | 3,686 | ||||||
| Change in reserve for self-insured liability claims | 1,056 | 1,304 | ||||||
| Decrease (increase) in deferred membership costs | 724 | (1,051 | ) | |||||
| Other | (97 | ) | 20 | |||||
| Total adjustments | 45,701 | 45,604 | ||||||
| Net cash provided by operating activities | 57,313 | 48,169 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (44,542 | ) | (42,142 | ) | ||||
| Insurance proceeds | 1,074 | — | ||||||
| Net cash used in investing activities | (43,468 | ) | (42,142 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from New Credit Facility | — | 185,000 | ||||||
| Costs related to issuance of New Credit Facility | — | (2,634 | ) | |||||
| Repayment of Senior Notes | — | (169,999 | ) | |||||
| Premium paid on extinguishment of debt and related costs | — | (9,309 | ) | |||||
| Repayment of long term borrowings | (973 | ) | (575 | ) | ||||
| Repayment of borrowings on Revolving Loan Facility | (9,000 | ) | — | |||||
| Change in book overdraft | (583 | ) | (1,230 | ) | ||||
| Proceeds from exercise of stock options | 1,187 | 1,740 | ||||||
| Excess tax benefit from stock option exercises | 173 | 1,036 | ||||||
| Net cash (used in) provided by financing activities | (9,196 | ) | 4,029 | |||||
| Effect of exchange rate changes on cash | 394 | (10 | ) | |||||
| Net increase in cash and cash equivalents | 5,043 | 10,046 | ||||||
| Cash and cash equivalents at beginning of period | 5,463 | 6,810 | ||||||
| Cash and cash equivalents at end of period | $ | 10,506 | $ | 16,856 | ||||
| Summary of change in certain operating assets and liabilities: | ||||||||
| (Increase) in accounts receivable | $ | (2,932 | ) | $ | (2,322 | ) | ||
| (Increase) decrease in inventory | (68 | ) | 41 | |||||
| Decrease (increase) in prepaid expenses and other current assets | 3,486 | (1,207 | ) | |||||
| Increase in accounts payable, accrued expenses and accrued interest | 4,026 | 1,396 | ||||||
| Increase in corporate income taxes payable | 699 | 1,050 | ||||||
| Increase in deferred revenue | 4,152 | 5,902 | ||||||
| Net changes in certain operating assets and liabilities | $ | 9,363 | $ | 4,860 | ||||
TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Net Income to EBITDA
For the quarters and six months ended June 30, 2008 and 2007
(All figures in $’000s)
(Unaudited)
Reconciliation of Net Income to EBITDA
For the quarters and six months ended June 30, 2008 and 2007
(All figures in $’000s)
(Unaudited)
| Quarter Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2008 | 2007 | % Chg. | 2008 | 2007 | % Chg. | |||||||||||||||||||
| Net income | $ | 6,801 | $ | 6,366 | $ | 11,612 | $ | 2,565 | ||||||||||||||||
| Provision for corporate income taxes | 4,726 | 4,426 | 8,070 | 1,784 | ||||||||||||||||||||
| Loss on extinguishment of debt | — | — | — | 12,521 | ||||||||||||||||||||
| Interest expense, net of interest income | 5,558 | 6,114 | 11,932 | 12,871 | ||||||||||||||||||||
| Depreciation and amortization | 13,858 | 11,731 | 26,507 | 22,822 | ||||||||||||||||||||
| EBITDA | $ | 30,943 | $ | 28,637 | 8.1 | % | $ | 58,121 | $ | 52,563 | 10.6 | % | ||||||||||||
| EBITDA margin | 23.9 | % | 23.9 | % | 22.7 | % | 22.4 | % | ||||||||||||||||
Non-GAAP Financial Measures:
EBITDA is defined as earnings before interest, taxes, depreciation and amortization and loss on extinguishment of debt. EBITDA provides useful information regarding the Company’s operating performance and financial condition, subject to the limitations described below. EBITDA should not be considered in isolation or as a substitute for net income, cash flows or other consolidated income (loss) or cash flow data prepared in accordance with generally accepted accounting principles in the United States of America or as a measure of the Company’s profitability or liquidity. Additionally, investors should be aware that EBITDA may not be comparable to similarly titled measures presented by other companies. EBITDA margin is defined as EBITDA as a percentage of consolidated revenue.
The Company believes that EBITDA is used by some investors, analysts and other parties to measure the Company’s performance over time. Management believes that providing this additional information is useful to understanding the Company’s ability to meet capital expenditures and working capital requirements and to better assess and understand operating performance. The measure allows investors, analysts and other parties to better evaluate the Company’s financial performance and prospects in the same manner as management.