Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TOWN SPORTS INTERNATIONAL HOLDINGS INC | ||
Entity Central Index Key | 1,281,774 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 27,923,569 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 211.9 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 48,088 | $ 30,321 |
Accounts receivable, net | 3,050 | 2,216 |
Prepaid corporate income taxes | 746 | 13,563 |
Prepaid rent expense | 63 | 9,153 |
Prepaid expenses and other current assets | 9,984 | 12,894 |
Total current assets | 61,931 | 68,147 |
Fixed assets, net | 157,677 | 151,498 |
Goodwill | 21,877 | 6,217 |
Intangible assets, net | 9,439 | 5,134 |
Deferred membership costs | 1,803 | 959 |
Other assets | 8,727 | 4,716 |
Total assets | 261,454 | 236,671 |
Current liabilities: | ||
Current portion of long-term debt | 21,080 | 2,242 |
Current portion of mortgage and term loan | 314 | 0 |
Accounts payable | 3,672 | 2,247 |
Accrued expenses | 32,547 | 24,669 |
Accrued interest | 34 | 118 |
Deferred revenue | 37,459 | 33,473 |
Total current liabilities | 95,106 | 62,749 |
Long-term debt | 178,002 | 193,947 |
Long-term mortgage and term loan | 5,113 | 0 |
Deferred lease liabilities | 44,374 | 47,356 |
Deferred tax liabilities | 0 | 93 |
Deferred revenue | 258 | 351 |
Other liabilities | 11,298 | 10,132 |
Total liabilities | 334,151 | 314,628 |
Commitments and Contingencies (Note 16) | ||
Stockholders’ deficit: | ||
Preferred stock, $0.001 par value; no shares issued and outstanding at both December 31, 2018 and December 31, 2017 | ||
Common stock, $0.001 par value; issued and outstanding 27,192,154 and 27,149,135 shares at December 31, 2018 and 2017, respectively | 25 | 25 |
Additional paid-in capital | (1,644) | (4,290) |
Accumulated other comprehensive income | 1,841 | 1,201 |
Accumulated deficit | (73,212) | (74,893) |
Total Town Sports International Holdings, Inc. and subsidiaries stockholders’ deficit | (72,990) | (77,957) |
Non-controlling interests | 293 | 0 |
Total stockholders’ deficit | (72,697) | (77,957) |
Total liabilities and stockholders’ deficit | $ 261,454 | $ 236,671 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued | 27,192,154 | 27,149,135 |
Common stock, shares outstanding | 27,192,154 | 27,149,135 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 443,094 | $ 403,042 |
Operating Expenses: | ||
Payroll and related | 168,315 | 145,612 |
Club operating | 197,689 | 180,467 |
General and administrative | 25,047 | 22,680 |
Depreciation and amortization | 37,442 | 40,849 |
Impairment of fixed assets | 2,082 | 6,497 |
Total operating expenses | 430,575 | 396,105 |
Operating income | 12,519 | 6,937 |
Interest expense | 13,478 | 12,665 |
Interest income | (133) | (78) |
Equity in the earnings of investees and rental income | (344) | (333) |
Loss before benefit for corporate income taxes | (482) | (5,317) |
Benefit for corporate income taxes | (357) | (9,686) |
Net (loss) income including non-controlling interests | (125) | 4,369 |
Less: net loss attributable to non-controlling interests | (202) | 0 |
Net income attributable to Town Sports International Holdings, Inc. and subsidiaries | $ 77 | $ 4,369 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0 | $ 0.17 |
Diluted (in dollars per share) | $ 0 | $ 0.17 |
Weighted average number of shares used in calculating earnings per share: | ||
Basic (in shares) | 25,858,494 | 25,229,614 |
Diluted (in shares) | 26,252,137 | 25,948,870 |
Club operations | ||
Revenues | $ 437,357 | $ 397,166 |
Fees and other | ||
Revenues | $ 5,737 | $ 5,876 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Net (loss) income including non-controlling interests | $ (125) | $ 4,369 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments, net of tax of $0 for the years ended in December 31, 2018 and 2017 | 530 | 42 |
Interest rate swap, net of tax of $0 for the years ended in December 31, 2018 and 2017 | 110 | 1,327 |
Total other comprehensive income, net of tax | 640 | 1,369 |
Total comprehensive income including non-controlling interests | 515 | 5,738 |
Less: comprehensive loss attributable to non-controlling interests | (202) | 0 |
Total comprehensive income attributable to Town Sports International Holdings, Inc. and subsidiaries | $ 717 | $ 5,738 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||
Foreign currency translation adjustment, tax | $ 0 | $ 0 | $ 0 |
Interest rate swap, tax | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Total | Total Town Sports International and Subsidiaries Stockholders’ (Deficit) Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Retained Earnings (Deficit) | Non-controlling interests |
Shares, beginning balance at Dec. 31, 2016 | 26,560,547 | ||||||
Beginning balance at Dec. 31, 2016 | $ (85,670) | $ (85,670) | $ 24 | $ (6,261) | $ (168) | $ (79,265) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock option exercises, shares | 44,114 | ||||||
Stock option exercises | 111 | 111 | $ 1 | 110 | |||
Common stock grants, shares | 108,940 | ||||||
Common stock grants | 368 | 368 | 368 | ||||
Restricted stock grants, shares | 506,200 | ||||||
Forfeiture of restricted stock, shares | (70,666) | ||||||
Stock-based compensation expense | 1,493 | 1,493 | 1,493 | ||||
Dividend forfeitures | 3 | 3 | 3 | ||||
Net income (loss) | 4,369 | 4,369 | 4,369 | 0 | |||
Derivative financial instruments | 1,327 | 1,327 | 1,327 | ||||
Foreign currency translation adjustment | 42 | 42 | 42 | ||||
Shares, ending balance at Dec. 31, 2017 | 27,149,135 | ||||||
Ending balance at Dec. 31, 2017 | (77,957) | (77,957) | $ 25 | (4,290) | 1,201 | (74,893) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect of change in accounting principle | 1,604 | 1,604 | 1,604 | ||||
Stock option exercises, shares | 13,110 | ||||||
Stock option exercises | $ 30 | 30 | $ 0 | 30 | |||
Common stock grants, shares | 52,460 | ||||||
Common stock grants | $ 320 | 320 | |||||
Restricted stock grants, shares | 13,115 | ||||||
Shares issued under Employee Stock Purchase Plan, shares | 8,643 | ||||||
Forfeiture of restricted stock, shares | (44,309) | ||||||
Stock-based compensation expense | 2,296 | 2,296 | 2,296 | ||||
Net income (loss) | (125) | 77 | 77 | (202) | |||
Other increases from non-controlling interests | 495 | 495 | |||||
Derivative financial instruments | 110 | 110 | 110 | ||||
Foreign currency translation adjustment | 530 | 530 | 530 | ||||
Shares, ending balance at Dec. 31, 2018 | 27,192,154 | ||||||
Ending balance at Dec. 31, 2018 | $ (72,697) | $ (72,990) | $ 25 | $ (1,644) | $ 1,841 | $ (73,212) | $ 293 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net (loss) income including non-controlling interests | $ (125) | $ 4,369 |
Adjustments to reconcile net (loss) income including non-controlling interests to net cash provided by operating activities: | ||
Depreciation and amortization | 37,442 | 40,849 |
Impairment of fixed assets | 2,082 | 6,497 |
Amortization of debt discount | 976 | 939 |
Amortization of debt issuance costs | 580 | 601 |
Noncash rental income, net of non-cash rental expense | (3,324) | (4,250) |
Share-based compensation expense | 2,616 | 1,861 |
Net change in deferred taxes | (166) | 32 |
Net change in certain operating assets and liabilities | 25,626 | (24,450) |
(Increase) decrease in deferred membership costs | (844) | 133 |
Landlord contributions to tenant improvements | 800 | 2,115 |
(Decrease) increase in insurance reserves | (61) | 552 |
Other | (1,508) | (1,049) |
Total adjustments | 64,219 | 23,830 |
Net cash provided by operating activities | 64,094 | 28,199 |
Cash flows from investing activities: | ||
Capital expenditures | (11,887) | (10,206) |
Acquisition of businesses | (31,277) | (15,375) |
Acquisition of assets | (3,989) | (12,600) |
Deposit paid in connection with acquisitions | 0 | (2,800) |
Other | 135 | (550) |
Net cash used in investing activities | (47,018) | (41,531) |
Cash flows from financing activities: | ||
Principal payments on 2013 Term Loan Facility | (2,083) | (2,082) |
Principal payments on capital lease obligations | (583) | 0 |
Proceeds from mortgage and term loan | 5,530 | 0 |
Principal payments on mortgage and term loan | (103) | 0 |
Debt issuance costs | (186) | 0 |
Cash dividends paid | (2) | (9) |
Proceeds from stock option exercises | 30 | 111 |
Net cash provided by (used in) financing activities | 2,603 | (1,980) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 61 | 37 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 19,740 | (15,275) |
Cash, cash equivalents and restricted cash beginning of period | 30,321 | 45,596 |
Cash, cash equivalents and restricted cash end of period | 50,061 | 30,321 |
Summary of the change in certain operating assets and liabilities: | ||
Increase in accounts receivable | (834) | (984) |
Increase in inventory | 0 | 238 |
Decrease (increase) in prepaid expenses and other current assets | 8,851 | (9,180) |
Increase in accounts payable, accrued expenses and accrued interest | 7,330 | 143 |
Change in prepaid corporate income taxes and corporate income taxes payable | 12,898 | (12,010) |
Decrease in deferred revenue | (2,619) | (2,657) |
Net change in certain working capital components | $ 25,626 | $ (24,450) |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Town Sports International Holdings, Inc. (the “Company” or “TSI Holdings”) is a diversified holding company that owns subsidiaries engaged in a number of business and investment activities. References to “TSI LLC” refer to Town Sports International, LLC, and references to “TSI Group” refer to Town Sports Group, LLC, both of which are wholly-owned operating subsidiaries of the Company. As of December 31, 2018 , the Company operated 185 fitness clubs (“clubs”) under various brand names, primarily located in the United States of America. The Company continues to experience revenue pressure as the fitness industry continues to be highly competitive in the areas in which the Company operates. The Company continues to strategize on improving its financial results and focuses on increasing membership in existing clubs to increase revenue. The Company may consider additional actions within its control, including certain acquisitions, licensing arrangements, the closure of unprofitable clubs upon lease expiration and the sale of certain assets. The Company’s ability to continue to meet its obligations is dependent on its ability to generate positive cash flow from a combination of initiatives, including those mentioned above. Failure to continue to successfully implement these initiatives could have a material adverse effect on the Company’s liquidity and its operations, and the Company would need to implement alternative plans that could include additional asset sales, additional reductions in operating costs, additional reductions in working capital, debt restructurings and the deferral of capital expenditures. There can be no assurance that such alternatives would be available to the Company or that the Company would be successful in their implementation. Certain reclassifications were made to the reported amounts in the consolidated balance sheet as of December 31, 2017 to conform to the presentation as of December 31, 2018 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of TSI Holdings and all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Operating Segment The Company’s operations are conducted mainly through its clubs and continue to be aggregated into one reportable segment. Each of the clubs has similar economic characteristics, services, product offerings and revenues are derived primarily from services to the Company’s members. The Company’s chief operating decision maker is the Chief Executive Officer. The operating segment is the level at which the chief operating decision maker manages the business and reviews operating performance in order to make business decisions and allocate resources. Due to its recent acquisition activity, the Company re-evaluated its operating segments in the fourth quarter of 2018 and determined the business is managed and operating performance is reviewed on a consolidated company level and therefore has one operating segment. Advertising and Marketing Costs Advertising and marketing costs are charged to operations during the period in which they are incurred. Total advertising costs incurred by the Company for the years ended December 31, 2018 and 2017 totaled $2,842 and $2,827 , respectively, and are included in Club operating expenses in the accompanying statements of operations for each respective year. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid instruments which have original maturities of three months or less when acquired to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents approximate fair value. The Company owns and operates a captive insurance company in the State of New York. Under the insurance laws of the State of New York, this captive insurance company is required to maintain a cash balance of at least $250 . Cash related to this wholly-owned subsidiary of $278 and $276 is included in cash and cash equivalents at December 31, 2018 and 2017 , respectively. The Company also holds long-term restricted cash associated with certain letters of credit to secure lease related obligations. Restricted cash of $1,973 was included in Other assets in the Company’s accompanying consolidated balance sheet at December 31, 2018 . There was no restricted cash at December 31, 2017 . Deferred Lease Liabilities, Non-Cash Rental Expense and Additional Rent The Company recognizes rental expense for leases with scheduled rent increases and inclusive of rental concessions, on the straight-line basis over the life of the lease beginning upon the commencement date of the lease. Rent concessions, primarily received in the form of free rental periods, are also deferred and amortized on a straight-line basis over the life of the lease. The Company leases office, warehouse and multi-recreational facilities and certain equipment under non-cancelable operating leases. Also, the Company has operating and capital leases for certain fitness equipments. In addition to base rent, the facility leases generally provide for additional rent to cover common area maintenance charges incurred and to pass along increases in real estate taxes. The Company accrues for any unpaid common area maintenance charges and real estate taxes on a club-by-club basis. Upon entering into certain leases, the Company receives construction allowances from the landlord. These construction allowances are recorded as deferred lease liability credits on the balance sheet when the requirements for these allowances are met as stated in the respective lease and are amortized as a reduction of rent expense over the term of the lease. Amortization of deferred construction allowances were $2,729 and $2,884 as of December 31, 2018 and 2017 , respectively. Certain leases provide for contingent rent based upon defined formulas of revenue, cash flows or operating results for the respective facilities. These contingent rent payments typically call for additional rent payments calculated as a percentage of the respective club’s revenue or a percentage of revenue in excess of defined break-points during a specified year. The Company records contingent rent expense over the related contingent rental period at the time the respective contingent targets are probable of being met. Contingent rent expense was $370 and $131 for the years ended December 31, 2018 and 2017 , respectively, and is included in Club operating expenses in the accompanying consolidated statements of operations for each respective year. Lease termination gains and losses are recognized at fair value based on the expected settlement amount with the landlord when the Company terminates the contract before the lease termination date. In closing a club, the Company discontinues operating 30 days prior to giving back the space to the landlord, and uses this time to remove equipment and clean the premises. Accordingly, lease termination gains and losses related to certain club closures also include one month additional rent to the landlord. In the year ended December 31, 2017, the Company recorded $201 of lease termination losses, which was included in Club operating expenses in the accompanying consolidated statements of operations. There were no lease termination losses in the year ended December 31, 2018 . Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consists of amounts due from the Company’s membership base and was $7,628 and $6,453 at December 31, 2018 and 2017 , respectively, before the allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company considers factors such as: historical collection experience, the age of the receivable balance and general economic conditions that may affect a customer’s ability to pay. Following are the changes in the allowance for doubtful accounts for the years December 31, 2018 and 2017 : Balance Beginning of the Year Additions Write-offs Net of Recoveries Balance at End of Year December 31, 2018 $ 4,237 $ 11,883 $ (11,542 ) $ 4,578 December 31, 2017 $ 2,912 $ 9,712 $ (8,387 ) $ 4,237 Fixed Assets Fixed assets are recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets, which are 30 years for building and improvements, five years for club equipment, furniture, fixtures and computer equipment and three to five years for computer software. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining period of the related lease. Expenditures for maintenance and repairs are charged to operations as incurred. The cost and related accumulated depreciation of assets retired or sold is removed from the respective accounts and any gain or loss is recognized in operations. Third-party costs related to developing web applications, developing web pages and installing or enhancing developed applications on the web servers are capitalized and classified as computer software. Website hosting fees and maintenance costs are expensed as incurred. Intangible Assets and Debt Issuance Costs Intangible assets are stated at cost and amortized by the straight-line method over their respective estimated lives. Intangible assets currently consist of membership lists, favorable lease commitments, management contracts, trade names and non-compete agreements. Membership lists are amortized over the estimated average membership life, currently 26 months, favorable lease commitments are amortized over the remaining life of the lease, trade names are amortized over their estimated useful lives of between five and 15 years, management contracts were amortized over their contractual lives of between nine and 11 years, and non-compete agreements are amortized over the agreement life. Debt issuance costs for the 2013 Revolving Loan Facility are classified within Other assets and are being amortized as additional interest expense to August 2020, the remaining life of the underlying debt, using the interest method. Amortization expense for debt issuance costs related to the 2013 Revolving Loan Facility was $236 and $254 for the years ended December 31, 2018 and 2017 , respectively. Debt issuance costs for the 2013 Term Loan Facility are classified within Long-term debt and are being amortized as additional interest expense over the life of the underlying debt, five to seven years, using the interest method. Amortization expense for debt issuance costs related to the 2013 Term Loan Facility was $343 and $347 for the years ended December 31, 2018 and 2017 , respectively. Business Combinations In connection with an acquisition of a business, the Company records all assets acquired and liabilities assumed, if any, of the acquired business at their acquisition date fair value, including the recognition of contingent consideration at fair value on the acquisition date. These fair value determinations require judgment and may involve the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives, and market multiples, among other items. We may utilize independent third-party valuation firms to assist in making these fair value determinations. Fair Value Measurements Accounting guidance on fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy: • Level 1 — Quoted prices for identical instruments in active markets. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable . This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Accounting for the Impairment of Long-Lived Assets and Goodwill Long-lived assets, such as fixed assets and intangible assets are reviewed for impairment periodically whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable from undiscounted cash flows. Estimated undiscounted expected future cash flows are used to determine if an asset group is impaired, in which case the asset carrying value would be reduced to its fair value, calculated considering a combination of market approach and a cost approach. In determining the recoverability of fixed assets Level 3 inputs were used in determining undiscounted cash flows, which are based on internal budgets and forecasts through the end of the life of the primary asset in the asset group which is normally the life of leasehold improvements. The most significant assumptions in those budgets and forecasts relate to estimated membership and ancillary revenue, attrition rates, discount rates, income tax rates, estimated results related to new program launches and maintenance capital expenditures, which are generally estimated at approximately 2% of total revenues depending upon the conditions and needs of a given club. If the Company continues to experience competitive pressure, certain assumptions may not be accurate. Goodwill represents the excess of consideration paid over the fair value of the net identifiable business assets acquired in the acquisition of a club or group of clubs. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-20, Intangibles – Goodwill and Other, requires goodwill to be tested for impairment on an annual basis and between annual tests in certain circumstances, and written down when impaired. The Company’s impairment review process compares the fair value of the reporting unit in which the goodwill resides to its carrying value. The Company’s annual goodwill impairment tests were performed by comparing the fair value of the Company’s reporting unit with its carrying amount and then recognizing an impairment charge, as necessary, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The estimated fair value was determined by using an income approach. The income approach was based on discounted future cash flows and required significant assumptions, including estimates regarding revenue growth rates, operating margins, weighted average cost of capital, and future economic and market conditions. The Company historically performed its goodwill impairment test annually as of the last day of February and in the interim if a triggering event occurred. In 2018, the Company established August 1 to be the annual testing date for all of the Company’s reporting units that have a goodwill balance. As of February 28, 2018, the Company performed a goodwill impairment test on the Switzerland region in line with the historical policy. As of August 1, 2018, the Company performed a goodwill impairment test on the New York, Boston, California and Switzerland regions, within 12 months of the related acquisitions. For the Florida and Puerto Rico regions, the acquired goodwill was related to the acquisitions of clubs after the annual testing date. As such, these intangible assets were recorded at fair value at the time of acquisitions. The next goodwill impairment test for all reporting units will be August 1, 2019. Insurance The Company obtains insurance coverage for significant exposures as well as those risks required to be insured by law or contract. The Company retains a portion of risk internally related to general liability losses. Where the Company retains risk, provisions are recorded based upon the Company’s estimates of its ultimate exposure for claims, which are included in general and administrative expenses in the accompanying statements of operations. The provisions are estimated using actuarial analysis based on claims experience, an estimate of claims incurred but not yet reported and other relevant factors. In this connection, under the provision of the deductible agreement related to the payment and administration of the Company’s insurance claims, we are required to maintain irrevocable letters of credit, totaling $415 for both December 31, 2018 and 2017 , respectively. The Company maintains a self-insured health benefits plan, which provides medical benefits to employees electing coverage under the plan. The Company maintains a reserve for incurred but not reported medical claims and claim development. The reserve is an estimate based on historical experience, actuarial estimates and other assumptions, some of which are subjective. The Company will adjust its self-insured medical benefits reserve as the Company’s loss experience changes due to medical inflation, changes in the number of plan participants and an aging employee base. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant assumptions and estimates relate to the useful lives of long-term assets, recoverability and impairment of fixed and intangible assets, valuation of business combinations, valuation of deferred income taxes and insurance reserves and the underlying forecasts for these assumptions and estimates. Income Taxes Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined on the basis of the difference between the financial statement and tax basis of assets and liabilities (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized. In assessing the need for a valuation allowance, we consider all positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. As of December 31, 2018 , the Company maintained a full valuation allowance of $39,762 against outstanding net deferred tax assets as the company had a three year cumulative loss position excluding one-time extraordinary income and expense items. The guidance related to accounting for uncertain tax positions prescribes a recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. Statements of Cash Flows Supplemental disclosure of cash flow information: Year Ended December 31, 2018 2017 Cash and cash equivalents $ 48,088 $ 30,321 Restricted cash included in other assets (a) 1,973 — Total cash, cash equivalents and restricted cash $ 50,061 $ 30,321 Cash paid: Interest paid (net of amounts capitalized) $ 12,125 $ 11,165 Income tax paid $ 512 $ 3,891 Cash received: Income tax refund $ 13,619 $ 1,600 Noncash investing and financing activities: Acquisition of fixed assets included in accounts payable and accrued expenses $ 2,566 $ 455 (a) Restricted cash associated with certain letters of credit to secure lease related obligations. Other Comprehensive (Loss) Income Other comprehensive (loss) income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including changes in the fair value of the Company’s derivative financial instrument and foreign currency translation adjustments. The Company presents other comprehensive (loss) income in its consolidated statements of comprehensive (loss) income. Through May 15, 2018, the Company used a derivative financial instrument to limit exposure to changes in interest rates on the Company’s existing term loan facility. Derivative financial instruments are recorded at fair value on the balance sheet and changes in the fair value are either recognized in accumulated other comprehensive income (a component of stockholders’ equity) or net income depending on the nature of the underlying exposure, whether the hedge is formally designated as a hedge, and if designated, the extent to which the hedge is effective. The Company’s derivative financial instrument was designated as a cash flow hedge. See Note 10 - Derivative Financial Instruments for more information on the Company’s risk management program and derivatives. At December 31, 2018 , the Company owned three clubs in Switzerland, which use the Swiss Franc, their local currency, as their functional currency. Assets and liabilities are translated into U.S. dollars at year-end exchange rates, while income and expense items are translated into U.S. dollars at the average exchange rate for the period. Adjustments resulting from the translation of foreign functional currency financial statements into U.S. dollars are included in the currency translation adjustment in the consolidated statements of stockholders’ deficit and the consolidated statements of comprehensive income (loss). The effect of foreign exchange translation adjustments was $530 (net of tax of $0 ) and $42 (net of tax of $0 ) for the years ended December 31, 2018 and 2017 , respectively. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and the interest rate swap. Although the Company deposits its cash with more than one financial institution, as of December 31, 2018 , $24,590 of the cash balance of $48,088 was held at one financial institution. The Company has not experienced any losses on cash and cash equivalent accounts to date, and the Company believes that, based on the credit ratings of these financial institutions, it is not exposed to any significant credit risk related to cash at this time. Earnings (Loss) Per Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) applicable to common stockholders by the weighted average numbers of shares of common stock outstanding during the period. Diluted EPS calculated using the treasury stock method and is computed similarly to basic EPS, except that the denominator is increased for the assumed exercise of dilutive stock options and unvested restricted stock for the diluted shared based awards. The following table summarizes the weighted average common shares for basic and diluted EPS computations. For The Year Ended December 31, 2018 2017 Net (loss) income including non-controlling interests $ (125 ) $ 4,369 Weighted average number of common share outstanding — basic 25,858,494 25,229,614 Effect of dilutive share-based awards 393,643 719,256 Weighted average number of common shares outstanding — diluted 26,252,137 25,948,870 Earnings per share: Basic $ — $ 0.17 Diluted $ — $ 0.17 For the year ended December 31, 2018, there were no stock options or outstanding restricted stock awards excluded from the computation of earnings per diluted share as there were no shares with an anti-dilutive effect. For the year ended December 31, 2017, the Company did not include options to purchase 28,681 shares of the Company’s common stock in the calculations of diluted EPS because the exercise prices of those options were greater than the average market price and such inclusion would be anti-dilutive. In the year ended December 31, 2018, the Company determined that it had incorrectly computed the number of weighted average common shares used in basic earnings per share in previously issued financial statements. This resulted in misstatements of basic EPS for the annual period of 2017. This item also resulted in corresponding misstatements in diluted EPS in the respective period. These errors had no impact to the Company’s revenues, operating income (loss), or net income (loss), and had no impact to the Company’s consolidated balance sheets, consolidated statements of cash flows, consolidated statements of comprehensive income (loss), or consolidated statements of stockholders’ deficit. The Company assessed the materiality of these errors on the previously issued annual financial statements in accordance with SEC Staff Accounting Bulletin No. 99 and No. 108, and concluded that the errors were not material to the previously issued consolidated financial statements. The Company appropriately reflected the weighted average common shares calculations in the accompanying consolidated statements of operations for the year ended December 31, 2018 and revised the comparative presentation of the financial statements. The effects of the revision had the following impacts for the interim and annual periods of 2017: Three Months Ended March 31, 2017 (As Reported) (Adjustment) (As Revised) Weighted average number of common shares outstanding — basic 26,610,215 (1,567,892 ) 25,042,323 Effect of dilutive share based awards — — — Weighted average number of common shares outstanding — diluted 26,610,215 (1,567,892 ) 25,042,323 Loss per share: Basic $ (0.11 ) $ (0.01 ) $ (0.12 ) Diluted $ (0.11 ) $ (0.01 ) $ (0.12 ) Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 (As Reported) (Adjustment) (As Revised) (As Reported) (Adjustment) (As Revised) Weighted average number of common shares outstanding — basic 26,692,919 (1,454,628 ) 25,238,291 26,651,796 (1,510,948 ) 25,140,848 Effect of dilutive share based awards — — — — — — Weighted average number of common shares outstanding — diluted 26,692,919 (1,454,628 ) 25,238,291 26,651,796 (1,510,948 ) 25,140,848 Loss per share: Basic $ (0.02 ) $ — $ (0.02 ) $ (0.13 ) $ — $ (0.13 ) Diluted $ (0.02 ) $ — $ (0.02 ) $ (0.13 ) $ — $ (0.13 ) Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 (As Reported) (Adjustment) (As Revised) (As Reported) (Adjustment) (As Revised) Weighted average number of common shares outstanding — basic 26,683,425 (1,438,163 ) 25,245,262 26,662,455 (1,486,420 ) 25,176,035 Effect of dilutive share based awards — — — — — — Weighted average number of common shares outstanding — diluted 26,683,425 (1,438,163 ) 25,245,262 26,662,455 (1,486,420 ) 25,176,035 Loss per share: Basic $ (0.50 ) $ (0.03 ) $ (0.53 ) $ (0.62 ) $ (0.04 ) $ (0.66 ) Diluted $ (0.50 ) $ (0.03 ) $ (0.53 ) $ (0.62 ) $ (0.04 ) $ (0.66 ) Three Months Ended December 31, 2017 Twelve Months Ended December 31, 2017 (As Reported) (Adjustment) (As Revised) (As Reported) (Adjustment) (As Revised) Weighted average number of common shares outstanding — basic 26,825,605 (1,437,003 ) 25,388,602 26,703,577 (1,473,963 ) 25,229,614 Effect of dilutive share based awards 637,107 — 637,107 719,256 — 719,256 Weighted average number of common shares outstanding — diluted 27,462,712 (1,437,003 ) 26,025,709 27,422,833 (1,473,963 ) 25,948,870 Earnings per share: Basic $ 0.78 $ 0.05 $ 0.83 $ 0.16 $ 0.01 $ 0.17 Diluted $ 0.76 $ 0.05 $ 0.81 $ 0.16 $ 0.01 $ 0.17 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”). ASC 718 requires that the cost resulting from all share-based payment transactions be treated as compensation and recognized in the consolidated financial statements. We record share-based payment awards at fair value on the grant date of the awards, based on the estimated number of awards that are expected to vest. The fair value of stock options and the fair value of the purchase rights granted under the Employee Stock Purchase Plan are determined using the Black-Scholes option-pricing model. Refer to Note 13 - Stockholders’ (Deficit) Equity for further detail about the Employee Stock Purchase Plan. The assumptions in the Black-Scholes model include risk-free interest rate, the Company's expected stock price volatility over the term of the awards, expected term of the award, and dividend yield. The fair value of the restricted stock awards is based on the closing price of the Company’s common stock on the date of the grant. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”. This new guidance requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. Also, capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. This standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of this standard is permitted. The Company is evaluating the impact of this standard on its financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The updated standard expands the range of transactions that qualify for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase the transparency as to the scope and results of hedging programs. This standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this guidance will not have an impact on the Company’s financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”, which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. The Company adopted the updated guidance for the fiscal year beginning January 1, 2018. Restricted cash of $1,973 is combined with the cash and cash equivalents balance in the Consolidated Statement of Cash Flows as of December 31, 2018. There was no restricted cash as of or in the year ended December 31, 2017. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the FASB Emerging Issues Task Force).” This ASU provides specific guidance over eight identified cash flow issues. This standard is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted the updated guidance for the fiscal year beginning January 1, 2018 with no material impact on the Company’s financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months, using a modified retrospective transition method. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” which updates narrow aspects of the guidance issued in ASU No. 2016-02. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” In issuing ASU No. 2018-11, the FASB is permitting another transition method for ASU 2016-02, which allows the transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB issued ASU No. 2018-20, “Narrow-Scope Improvements for Lessors” which updates amendments related to sales taxes and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and non-lease components. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” In issuing ASU No. 2018-11, the FASB is permitting another transition method for ASU 2016-02, which allows the transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company will adopt this transition method on January 1, 2019. The Company also elected certain available practical expedients on adoption. In preparation for adoption of the standard, the Company implemented an enterprise-wide lease management system to assist in the accounting and internal controls to ensure they meet the standard reporting and disclosure requirements. As of December 31, 2018, operating leases are off-balance sheet, however Topic ASC 842 reflects operating leases with terms greater than one year on the balance sheet as both a right-of-use asset and a liability for the obligation to make lease payments, similar to the accounting for capital leases under current guidance. The amounts to be recorded on the balance sheet are based upon the present value of future lease payments, which are based upon discount rates which will be determined using a third party valuation. The Company is in the process of finalizing the calculations of the assets and liabilities to be recorded on the balance sheet at January 1, 2019. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606). On January 1, 2018, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 606 and all the related amendments (the “new revenue standard”) using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Refer to Note 14 - Revenue for further detail. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed Assets Fixed assets as of December 31, 2018 and 2017 are shown at cost, less accumulated depreciation and amortization and are summarized below: December 31, 2018 2017 Leasehold improvements $ 494,418 $ 489,738 Fitness equipment (a) 109,545 103,998 Furniture, fixtures and computer equipment 58,188 56,203 Computer software 19,778 19,048 Construction in progress 2,685 1,237 Building and improvements 16,010 9,575 Land 4,778 2,675 705,402 682,474 Less: Accumulated depreciation and amortization (547,725 ) (530,976 ) $ 157,677 $ 151,498 (a) Included $4,850 and $505 of fitness equipment in our clubs under capital lease for the years ending December 31, 2018 and 2017 , respectively. Depreciation and leasehold amortization expense for the years ended December 31, 2018 and 2017 , was $35,115 and $40,299 , respectively. Fixed assets are evaluated for impairment periodically whenever events or changes in circumstances indicate that related carrying amounts may not be recoverable from undiscounted cash flows in accordance with the FASB guidance. The Company’s long-lived assets and liabilities are grouped at the individual club level which is the lowest level for which there are identifiable cash flows. To the extent that estimated future undiscounted net cash flows attributable to the assets are less than the carrying amount, an impairment charge equal to the difference between the carrying value of such asset and their fair values is recognized. In the years ended December 31, 2018 and 2017 , the Company tested underperforming clubs and recorded impairment charges of $2,082 and $6,497 , respectively, on leasehold improvements and furniture and fixtures at clubs that experienced decreased profitability and sales levels below expectations during these periods. The fair value of long-lived assets is determined using the level 3 valuation technique established by the FASB. Level 3 valuation is based upon unobservable inputs that are significant to the fair value measurement. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles Assets | Goodwill and Intangible Assets Goodwill was allocated to reporting units that closely reflect the regions served by the Company: New York, Boston, Washington, D.C., Philadelphia, Florida, California, Puerto Rico and Switzerland. The Company has acquired several clubs since the third quarter of 2017 and has recorded goodwill as applicable to the appropriate regions. For more information on these acquisitions, refer to Note 6 - Acquisitions. Goodwill for all acquisitions was recorded at fair value at the time of such acquisitions and may have changes to the balances up to one year after acquisition. As of December 31, 2018 , the New York, Boston, California, Florida, Puerto Rico and Switzerland regions each have goodwill balances. The Company historically performed its goodwill impairment test annually as of the last day of February and in the interim if a triggering event occurred. In 2018, the Company established August 1 to be the annual testing date for all of the Company’s reporting units that have a goodwill balance. As of February 28, 2018, the Company performed a goodwill impairment test on the Switzerland region in line with the historical policy. As of August 1, 2018, the Company performed a goodwill impairment test on the New York, Boston, California and Switzerland regions, within 12 months of the related acquisitions. For the Florida and Puerto Rico regions, the acquired goodwill was related to the acquisitions of clubs after the annual testing date. As such, these intangible assets were recorded at fair value at the time of acquisitions. The next goodwill impairment test for all reporting units will be August 1, 2019. The Company’s annual goodwill impairment tests as of August 1, 2018 and February 28, 2018 were performed by comparing the fair value of the Company’s reporting unit with its carrying amount and then recognizing an impairment charge, as necessary, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The estimated fair value was determined by using an income approach. The income approach was based on discounted future cash flows and required significant assumptions, including estimates regarding revenue growth rates, operating margins, weighted average cost of capital, and future economic and market conditions. The August 1, 2018 and February 28, 2018 annual impairment tests supported the goodwill balance and as such, no impairment of goodwill was required. The changes in the carrying amount of goodwill in the year ended December 31, 2018 are detailed in the charts below. New York Boston California Florida Puerto Rico Switzerland Outlier Total Goodwill $ 36,707 $ 15,775 $ — $ — $ — $ 1,175 $ 3,982 $ 57,639 Changes due to foreign currency exchange rate fluctuations — — — — — (116 ) — (116 ) Less: accumulated impairment of goodwill (31,549 ) (15,775 ) — — — — (3,982 ) (51,306 ) Balance as of December 31, 2017 5,158 — — — — 1,059 — 6,217 Acquired goodwill 1,669 7,573 1,584 2,467 2,380 — — 15,673 Changes due to foreign currency exchange rate fluctuations — — — — — (13 ) — (13 ) Balance as of December 31, 2018 $ 6,827 $ 7,573 $ 1,584 $ 2,467 $ 2,380 $ 1,046 $ — $ 21,877 Amortization expense of intangible assets for the years ended December 31, 2018 and 2017 was $2,327 and $550 , respectively. Intangible assets were acquired in connection with club acquisitions in the years ended December 31, 2018 and 2017 . Intangible assets are as follows: As of December 31, 2018 As of December 31, 2017 Gross Carrying Accumulated Net Gross Carrying Accumulated Net Membership lists $ 7,042 $ (4,224 ) $ 2,818 $ 12,744 $ (11,577 ) $ 1,167 Favorable lease commitments 2,390 (553 ) 1,837 2,350 (136 ) 2,214 Trade names 3,050 (295 ) 2,755 900 (47 ) 853 Non-compete agreement 2,337 (308 ) 2,029 900 — 900 $ 14,819 $ (5,380 ) $ 9,439 $ 16,894 $ (11,760 ) $ 5,134 The aggregate amortization expense for the next five years and thereafter of the acquired intangible assets is as follows: Year Ending December 31, 2019 $ 3,224 2020 2,056 2021 1,200 2022 1,017 2023 530 2024 and thereafter 1,412 $ 9,439 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Acquisitions of businesses are accounted for in accordance with ASC 805, Business Combinations and ASU 2017-01. According to ASC 805, transactions that represent business combinations should be accounted for under the acquisition method. In addition, the ASC 805 includes a subtopic which provides guidance on transactions sometimes associated with business combinations but that do not meet the requirements to be accounted for as business combinations under the acquisition method. Under the acquisition method, the purchase price is allocated to the assets acquired and the liabilities assumed based on their respective estimated fair values as of the acquisition date. Any excess of the purchase price over the fair values of the assets acquired and liabilities assumed was allocated to goodwill. The results of operations of the clubs acquired have been included in the Company’s consolidated financial statements from the date of acquisition. The Company incurred acquisition-related costs of $3,114 and $468 in the years ended December 31, 2018 and 2017 , respectively. These costs are included in general and administrative expenses in the accompanying consolidated statements of operations. Acquisition in the Boston Metropolitan Region In December 2018, the Company acquired four existing clubs in the Boston metropolitan region for a purchase price of $12,500 and a net cash purchase price of $12,267 and was accounted for as a business combination. The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. The purchase price allocation presented below has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. December 2018 Allocation of purchase price: Fixed assets $ 3,680 Goodwill 6,498 Definite lived intangible assets: Membership list 1,435 Trade name 248 Non-compete agreement 717 Deferred revenue (311 ) Total allocation of purchase price $ 12,267 The goodwill recognized represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill associated with this acquisition is partially attributable to the avoided costs of acquiring the assembled workforce and is deductible for tax purposes in its entirety. The definite lived intangible assets acquired are being amortized over their estimated useful lives with the membership lists over the estimated average membership life, the trade name over three years and the non-compete agreement over the contract life of five years . In the year ended December 31, 2018 , the Company recorded revenue of $902 associated with these clubs. Net results were not material to the Company’s accompanying consolidated statement of operations. Acquisition of LIV Fitness In September 2018, the Company acquired LIV Fitness for a purchase price of $5,000 and net cash purchase price of $4,930 . The acquisition added two clubs in Puerto Rico to the Company’s portfolio. These clubs continue to operate under the LIV Fitness trade name. The purchase price allocation presented below has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. September 2018 Allocation of purchase price: Fixed assets $ 2,134 Goodwill 2,380 Definite lived intangible assets: Membership list 480 Trade name 340 Non-compete agreement 320 Unfavorable lease commitment (400 ) Deferred revenue (324 ) Total allocation of purchase price $ 4,930 The goodwill recognized represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill associated with this acquisition is partially attributable to the avoided costs of acquiring the assembled workforce and is deductible for tax purposes in its entirety. The definite lived intangible assets acquired are being amortized over their estimated useful lives with the membership lists being amortized over the estimated average membership life, the trade name over 13 years, the non-compete agreement over the contract life of five years , and the unfavorable lease commitment through March 31, 2023, the remaining life of the lease. In the year ended December 31, 2018 , the Company recorded revenue of $1,516 and net income of $46 related to LIV Fitness. Such amounts are included in the respective accompanying consolidated statements of operations. Acquisition in the New York Metropolitan Region In September 2018, the Company acquired 60% of two existing clubs in the New York metropolitan region, with the seller retaining the other 40% . As a result, these two clubs became majority owned subsidiaries of the Company. This acquisition added two clubs to the Company’s portfolio in the New York Metropolitan region and operates under the New York Sports Clubs brand. The following table summarizes an estimated allocation of the purchase price of the assets and liabilities acquired. September 2018 (as adjusted) Allocation of purchase price: Fixed assets $ 703 Goodwill 237 Capital lease liabilities (76 ) Other assets and liabilities assumed, net (111 ) Deferred revenue (476 ) Total allocation of purchase price $ 277 The goodwill recognized represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill associated with this acquisition is partially attributable to the avoided costs of acquiring the assembled workforce and is deductible for tax purposes in its entirety. In the year ended December 31, 2018 , the Company recorded revenue of $596 and net loss attributable to Town Sports International Holdings, Inc. and subsidiaries of $571 related to these two clubs. Such amounts are included in the respective accompanying consolidated statements of operations. Acquisition of Palm Beach Sports Clubs In August 2018, the Company acquired 85% of three clubs in Florida, with the seller retaining the other 15% , for a purchase price of $7,307 and a net cash purchase price of $6,697 and branded them “Palm Beach Sports Clubs”. A net amount of $610 is owed to the seller over the next four years. As a result, Palm Beach Sports Clubs became a majority owned subsidiary of the Company. The acquisition added three clubs to the Company’s portfolio in the Florida region and was accounted for as a business combination. The acquisition also included the purchase of a building in which one of the three clubs operates. The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. The purchase price allocation presented below has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. August 2018 (as adjusted) Allocation of purchase price: Fixed assets $ 5,646 Goodwill 2,467 Definite lived intangible assets: Membership list 288 Amount due to seller, net (610 ) Deferred revenue (599 ) Non-controlling interest (495 ) Total allocation of purchase price $ 6,697 The goodwill recognized represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill associated with this acquisition is partially attributable to the avoided costs of acquiring the assembled workforce and is deductible for tax purposes in its entirety. The definite lived intangible assets acquired are amortized over their estimated useful lives with the membership lists being amortized over the estimated average membership life. In the year ended December 31, 2018 , the Company recorded revenue of $1,571 and net loss attributable to Town Sports International Holdings, Inc. and subsidiaries of $40 related to Palm Beach Sports Clubs. Such amounts are included in the respective accompanying consolidated statements of operations. Acquisition of Total Woman Gym and Spa Business In April 2018, the Company acquired substantially all of the assets of the Total Woman Gym and Spa business for a purchase price of $8,000 and a net cash purchase price of $7,265 . The acquisition added 12 clubs to the Company’s portfolio in California and was accounted for as a business combination. These 12 clubs continue to operate under the Total Woman Gym and Spa trade name. The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. The purchase price allocation presented below has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. April 2018 (as adjusted) Allocation of purchase price: Fixed assets $ 8,064 Goodwill 1,584 Definite lived intangible assets: Favorable lease commitment 440 Trade name 1,562 Working capital, net 161 Deferred revenue (4,546 ) Total allocation of purchase price $ 7,265 The goodwill recognized represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill associated with this acquisition is partially attributable to the avoided costs of acquiring the assembled workforce and is deductible for tax purposes in its entirety. The definite lived intangible assets acquired are being amortized over their estimated useful lives of 15 years for the trade name, and through June 30, 2026, the remaining life of the related lease, for the favorable lease commitment. In the year ended December 31, 2018 , the Company recorded revenue of $16,220 and a net loss of $988 related to Total Woman Gym and Spa. Such amounts are included in the respective accompanying consolidated statements of operations. Acquisition in the Boston Metropolitan Region In January 2018, the Company acquired an existing club in the Boston metropolitan region for a purchase price of $2,750 and a net cash purchase price of $2,866 and was accounted for as a business combination. The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. The purchase price allocation presented below has been prepared and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. January 2018 (as adjusted) Allocation of purchase price: Fixed assets $ 982 Goodwill 1,075 Definite lived intangible assets: Membership list 600 Non-compete agreement 400 Working capital assets 130 Deferred revenue (321 ) Total allocation of purchase price $ 2,866 The goodwill recognized represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill associated with this acquisition is partially attributable to the avoided costs of acquiring the assembled workforce and is deductible for tax purposes in its entirety. The definite lived intangible assets acquired are being amortized over their estimated useful lives with the membership list over the estimated average membership life and the non-compete agreement over the contract life of five years . In the year ended December 31, 2018 , the Company recorded revenue of $4,844 and a net loss of $104 related to this club. Such amounts are included in the respective accompanying consolidated statements of operations. Acquisition of TMPL In December 2017, the Company acquired TMPL Gym, an existing club in the New York metropolitan region, for a cash purchase of $6,500 and a net cash purchase price of $5,925 . TMPL is a luxury gym that features a wide variety of fitness programs and group exercises. The club continues to operate under the TMPL trade name and was accounted for as a business combination. The Company received additional information in the year ended December 31, 2018 and adjusted the purchase price allocation. In the year ended December 31, 2018 , the Company recorded measurement period adjustments of $1,011 to both goodwill and deferred revenue. The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. December 2017 (as adjusted) Allocation of purchase price: Fixed assets $ 5,195 Goodwill 1,376 Definite lived intangible assets: Non-compete agreement 900 Trade name 200 Deferred revenue (1,511 ) Capital lease liability (160 ) Other liabilities (75 ) Total allocation of purchase price $ 5,925 The goodwill recognized represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill associated with this acquisition is partially attributable to the avoided costs of acquiring the assembled workforce and is deductible for tax purposes in its entirety. The definite lived intangible assets acquired are being amortized over their estimated useful lives of 15 years for the trade name and the contract life of 5 years for the non-compete agreement. In the year ended December 31, 2018 , the Company recorded revenue of $5,432 and net loss of $1,166 related to TMPL. Such amounts are included in the respective accompanying consolidated statements of operations. In the year ended December 31, 2017 , the revenue and net results related to this acquisition were immaterial to the Company’s accompanying consolidated statement of operations. TMPL was launched as a new brand in 2016 focusing on the intersection of metabolic science, exercise and nutrition, and as expected, it will take time to mature given the age of the club. Acquisition of Lucille Roberts Health Club Business In September 2017, the Company acquired Lucille Roberts for a purchase price of $9,500 and a net cash purchase price of $9,450 . The acquisition added 16 clubs to the Company’s portfolio in the New York metropolitan region and was accounted for as a business combination. These 16 clubs continue to operate under the Lucille Roberts trade name. The Company received additional information in the year ended December 31, 2018 and adjusted the purchase price allocation. In the year ended December 31, 2018 , the Company recorded measurement period adjustments of $421 to both goodwill and deferred revenue. The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. September 2017 (as adjusted) Allocation of purchase price: Fixed assets 1,024 Goodwill 5,214 Definite lived intangible assets: Membership lists 1,400 Trade names 700 Favorable lease commitment 2,350 Deferred revenue (1,238 ) Total allocation of purchase price $ 9,450 The goodwill recognized represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed. The goodwill associated with this acquisition is partially attributable to the avoided costs of acquiring the assembled workforce and is deductible for tax purposes in its entirety. The definite lived intangible assets acquired are being amortized over their estimated useful lives with the membership lists amortized over the estimated average membership life, the trade name over five years, and the favorable lease commitment through June 30, 2023. In the year ended December 31, 2018 , the Company recorded revenue of $16,413 and net income of $3,484 related to the Lucille Roberts clubs. From the acquisition on in September 2017 through December 2017, the Lucille Roberts clubs generated revenue of $3,937 and net loss of $778 . Such amounts are included in the respective accompanying consolidated statements of operations. Unaudited Pro forma Results The following table provides the Company’s consolidated unaudited pro forma revenues, net income and net income per basic and diluted common share had the results of the acquired businesses’ operations been included in its operations commencing on January 1, 2017, based on available information related to the respective operations. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized by the Company had the acquisitions been consummated at the beginning of the period for which the pro forma information is presented, or of future results and does not account for any operational improvements to be made by the Company post-acquisition. Year Ended December 31, 2018 2017 Revenue $ 473,802 $ 481,027 Net income $ 1,587 $ 4,183 Income per share: Basic $ 0.06 $ 0.16 Diluted $ 0.06 $ 0.16 Acquisition of Assets In January 2018, the Company acquired a building and the land it occupies in the Florida region, as well as a single health club located on the premises for a purchase price of $4,039 . Of the total purchase price, $2,691 was attributed to the building, $1,021 was attributed to the land, and the remainder of the purchase price was primarily attributed to the equipment, intangible assets and deferred revenue. This transaction was accounted for as an asset acquisition. In November 2017, the Company acquired a building and the land it occupies in the New York metropolitan region, as well as a single health club located on the premises for a purchase price of $12,600 . Of the total purchase price, $2,675 was attributed to land, $9,675 was attributed to building, and the remainder of the purchase price was primarily equipment and deferred revenue. This transaction was accounted for as an asset acquisition. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses as of December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Accrued payroll and related $ 9,163 $ 5,888 Accrued occupancy costs 11,020 10,009 Accrued insurance claims 2,321 2,282 Accrued operating expenses 1,994 1,347 Accrued general and administrative 3,302 2,504 Accrued other 4,747 2,639 $ 32,547 $ 24,669 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt as of December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 2013 Term Loan Facility $ 197,835 $ 199,918 Capital lease liabilities 3,817 160 Less: Unamortized discount (1,936 ) (2,912 ) Less: Deferred financing costs (634 ) (977 ) Less: Current portion due within one year (21,080 ) (2,242 ) Long-term portion $ 178,002 $ 193,947 The aggregate long-term debt obligations maturing in the next five years and thereafter are as follows: Amount Due Year Ending December 31, 2019 $ 21,080 2020 178,675 2021 1,060 2022 673 2023 164 2024 and thereafter — $ 201,652 The table above does not reflect potential commitments in connection with our outstanding letters of credit under the 2013 Revolving Loan Facility (defined below) which matures on August 14, 2020. 2013 Senior Credit Facility On November 15, 2013, TSI LLC, an indirect, wholly-owned subsidiary, entered into a $370,000 senior secured credit facility (“2013 Senior Credit Facility”), pursuant to a credit agreement among TSI LLC, TSI Holdings II, LLC, a newly-formed, wholly-owned subsidiary of the Company (“Holdings II”), as a Guarantor, the lenders party thereto, Deutsche Bank AG, as administrative agent, and Keybank National Association, as syndication agent. The 2013 Senior Credit Facility consists of a $325,000 term loan facility maturing on November 15, 2020 (“2013 Term Loan Facility”) and a $15,000 revolving loan facility maturing on August 14, 2020 (“2013 Revolving Loan Facility”). Proceeds from the 2013 Term Loan Facility of $323,375 were issued, net of an original issue discount of 0.5% , or $1,625 . The borrowings under the 2013 Senior Credit Facility are guaranteed and secured by assets and pledges of capital stock by Holdings II, TSI LLC, and, subject to certain customary exceptions, the wholly-owned domestic subsidiaries of TSI LLC. On January 30, 2015, the 2013 Senior Credit Facility was amended (the “ First Amendment”) to permit TSI Holdings to purchase term loans under the credit agreement. Any term loans purchased by TSI Holdings will be canceled in accordance with the terms of the credit agreement, as amended by the First Amendment. The Company may from time to time purchase term loans in market transactions, privately negotiated transactions or otherwise; however the Company is under no obligation to make any such purchases. Any such transactions, and the amounts involved, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. On November 8, 2018, the 2013 Senior Credit Facility was amended (the “ Second Amendment”), which modified the revolving loan facility amount to $15,000 from $45,000 , and extended the maturity date from November 15, 2018 to August 14, 2020. In addition, the Second Amendment restated that the Company is not able to utilize more than 20% or $3,000 in accordance with terms of the 2013 Revolving Loan Facility if the total leverage ratio exceeds 4.00 :1.00 (calculated on a proforma basis to give effect to any borrowing). Previously, the Company was not able to utilize more than 25% or $11,250 in accordance with terms of the 2013 Revolving Loan Facility if the total leverage ratio exceeded 4.50 :1.00 (calculated on a proforma basis to give effect to any borrowing). Borrowings under the 2013 Term Loan Facility and the 2013 Revolving Loan Facility, at TSI LLC’s option, bear interest at either the administrative agent’s base rate plus 2.5% or a LIBOR rate adjusted for certain additional costs (the “Eurodollar Rate”) plus 3.5% , each as defined in the 2013 Senior Credit Facility. With respect to the outstanding term loans, the Eurodollar Rate has a floor of 1.00% and the base rate has a floor of 2.00% . Commencing with the last business day of the quarter ended March 31, 2014, TSI LLC is required to pay 0.25% of the principal amount of the term loans each quarter, which may be reduced by voluntary prepayments. As of December 31, 2018 , TSI LLC had made a total of $26,184 in principal payments on the 2013 Term Loan Facility. In May 2017, TSI LLC loaned $5,000 to TSI Group, a wholly-owned subsidiary of TSI Holdings, at a rate of LIBOR plus 9.55% per annum. In addition to the interest payments, TSI Group is required to repay 1.0% of the principal amount of the loan, $50 per annum, on a quarterly basis commencing September 30, 2017. The loan is secured by certain collateral. This transaction has no impact on the Company's consolidated financial statements as it is eliminated in consolidation. In October 2017, TSI LLC made a dividend distribution of $35,000 to TSI Holdings, Inc. As of December 31, 2018 , TSI Group had a cash balance of approximately $1,968 . As of December 31, 2018 , TSI LLC had outstanding letters of credit of $2,238 and a total leverage ratio that was below 4.00 :1.00. Other than these outstanding letters of credit, TSI LLC did not have any amounts utilized on the 2013 Revolving Loan Facility. The unutilized portion of the 2013 Revolving Loan Facility as of December 31, 2018 was $12,762 , with borrowings under such facility subject to the conditions applicable to borrowings under the Company’s 2013 Senior Credit Facility, which conditions the Company may or may not be able to satisfy at the time of borrowing. In addition, the financial covenant described above, the 2013 Senior Credit Facility contains certain affirmative and negative covenants, including those that may limit or restrict TSI LLC and Holdings II’s ability to, among other things, incur indebtedness and other liabilities; create liens; merge or consolidate; dispose of assets; make investments; pay dividends and make payments to stockholders; make payments on certain indebtedness; and enter into sale leaseback transactions, in each case, subject to certain qualifications and exceptions. The 2013 Senior Credit Facility also includes customary events of default (including non-compliance with the covenants or other terms of the 2013 Senior Credit Facility) which may allow the lenders to terminate the commitments under the 2013 Revolving Loan Facility and declare all outstanding term loans and revolving loans immediately due and payable and enforce its rights as a secured creditor. TSI LLC may prepay the 2013 Term Loan Facility and 2013 Revolving Loan Facility without premium or penalty in accordance with the 2013 Senior Credit Facility. Mandatory prepayments are required relating to certain asset sales, insurance recovery and incurrence of certain other debt and commencing in 2015 in certain circumstances relating to excess cash flow (as defined) for the prior fiscal year, as described below, in excess of certain expenditures. Pursuant to the terms of the 2013 Senior Credit Facility, the Company is required to apply net proceeds in excess of $30,000 from sales of assets in any fiscal year towards mandatory prepayments of outstanding borrowings. In addition, the 2013 Senior Credit Facility contains provisions that require excess cash flow payments, as defined therein, to be applied against outstanding 2013 Term Loan Facility balances. The excess cash flow is calculated annually for each fiscal year ending December 31 and paid 95 days after the fiscal year end. The applicable excess cash flow repayment percentage is applied to the excess cash flow when determining the excess cash flow payment. Earnings, changes in working capital and capital expenditure levels all impact the determination of any excess cash flow. The applicable excess cash flow repayment percentage is 50% when the total leverage ratio, as defined in the 2013 Senior Credit Facility, exceeds or is equal to 2.50 :1.00; 25% when the total leverage ratio is greater than or equal to 2.00 :1.00 but less than 2.50 :1.00 and 0% when the total leverage ratio is less than 2.00 :1.00. TSI LLC may pay dividends in the amount of cumulative retained excess cash flow to TSI Holdings as long as at the time the dividend is made, and immediately after, TSI LLC is in compliance on a pro forma basis with a total leverage ratio of less than 4.00:1.00. For the year ended December 31, 2018, the Company had approximately $36,000 of excess cash flow and expects to pay approximately $18,000 in principal payments in April 2019 and such amount is included in Current portion of long-term debt on the Company’s accompanying consolidated balance sheet as of December 31, 2018. As of December 31, 2018 , the 2013 Term Loan Facility has a gross principal balance of $197,835 and a balance of $195,265 net of unamortized debt discount of $1,936 and unamortized debt issuance costs of $634 . As of December 31, 2018 , both the unamortized balance of debt issuance costs and unamortized debt discount are recorded as a contra-liability and netted with long-term debt on the accompanying consolidated balance sheet and are being amortized as interest expense using the effective interest method. Fair Market Value Based on quoted market prices, the 2013 Term Loan Facility had a fair value of approximately $183,987 or 93% at December 31, 2018 and $188,173 or 94% at December 31, 2017 , and is classified within level 2 of the fair value hierarchy. Level 2 is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. The fair value for the Company’s 2013 Term Loan Facility is determined using observable current market information such as the prevailing Eurodollar interest rate and Eurodollar yield curve rates and includes consideration of counterparty credit risk. For the fair market value of the Company’s interest rate swap instrument in 2017, refer to Note 10 - Derivative Financial Instruments. |
Mortgage and Term Loan
Mortgage and Term Loan | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Mortgage and Term Loan | Mortgage and Term Loan On August 3, 2018, TSI - Donald Ross Realty LLC, a subsidiary of TSI Group, entered into a mortgage note for $3,150 with BankUnited, N.A. (the “Lender”). This mortgage note bears interest at a fixed rate of 5.36% and is payable in 120 monthly payments of principal and interest based on a 25 year amortization period. The first payment was due and paid on September 3, 2018. The entire principal balance of this mortgage note is due and payable in full on its maturity date of August 3, 2028. On April 24, 2018, Dixie Highway Realty, LLC, a subsidiary of TSI Group, entered into promissory notes for $1,880 (the “Mortgage Note”) and $500 (the “Term Note”) with the Lender. The Mortgage Note bears interest at a fixed rate of 5.46% and is payable in 120 monthly payments of principal and interest based on a 25 year amortization period. The first payment was due and paid on May 24, 2018. The entire principal balance of the Mortgage Note is due and payable in full on its maturity date of April 24, 2028. The Term Note bears interest at a fixed rate of 5.30% and is payable in 60 payments of principal and interest. The first payment was due and paid on May 24, 2018 and the final payment will be due to the Lender on the maturity date of April 24, 2023 for all principal and accrued interest not yet paid. In connection with the above mortgage and term loan notes, TSI Group or TSI Holdings must maintain a minimum relationship liquidity balance with the Lender of $500 in the form of an operating account. The carrying amount of the mortgage notes and Term Note approximates fair value based on Level 2 inputs. Level 2 is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company is exposed to market risks relating to fluctuations in interest rates. In order to minimize the possible negative impact of such fluctuations on the Company’s cash flows, the Company entered into derivative financial instruments (“derivatives”), such as interest-rate swaps. Derivatives were not entered into for trading purposes and the Company only used commonly traded instruments. The Company used derivatives solely relating to the variability of cash flows from interest rate fluctuations. The Company originally entered into an interest rate swap arrangement on July 13, 2011 in connection with the Company’s previous credit facility. In connection with entering into the 2013 Senior Credit Facility, the Company amended and restated the interest rate swap agreement initially entered into (and amended in August 2012 and November 2012). Effective as of November 15, 2013, the closing date of the 2013 Senior Credit Facility, the interest rate swap arrangement had a notional amount of $160,000 and matured on May 15, 2018. The swap effectively converted $160,000 of the outstanding principal of the total variable-rate debt under the 2013 Senior Credit Facility to a fixed rate of 0.884% plus the 3.5% applicable margin and the Eurodollar rate, which had a floor of 1% . As permitted by ASC 815, Derivatives and Hedging, the Company designated this swap as a cash flow hedge, the effects of which were reflected in the Company’s consolidated financial statements as of December 31, 2017 and for the years ended December 31, 2018 and 2017 . The objective of this hedge was to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. When the Company’s derivative instrument was executed, hedge accounting was deemed appropriate and it was designated as a cash flow hedge at inception with re-designation being permitted under ASC 815, Derivatives and Hedging. Interest rate swaps were designated as cash flow hedges for accounting purposes since they were being used to transform variable interest rate exposure to fixed interest rate exposure on a recognized liability (debt). The Company performed a quarterly assessment of the hedge effectiveness of the hedge relationship and measured and recognized any hedge ineffectiveness in the consolidated statements of operations. For the years ended December 31, 2018 (through May 15, 2018, the maturity date) and 2017 , hedge ineffectiveness was evaluated using the hypothetical derivative method and there was no hedge ineffectiveness noted. The fair value for the Company’s interest rate swap was determined using observable current market information such as the prevailing Eurodollar interest rate and Eurodollar yield curve rates and include consideration of counterparty credit risk. The following table presents the aggregate fair value of the Company’s derivative financial instrument: Fair Value Measurements Using: Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest rate swap liability as of December 31, 2018 $ — $ — $ — $ — Interest rate swap liability as of December 31, 2017 $ 184 $ — $ 184 $ — There was no contract liability as of December 31, 2018 . As of December 31, 2017, the swap contract liability of $184 was recorded as a component of accrued expenses, with the offset to accumulated other comprehensive income ( $104 , net of taxes) on the accompanying consolidated balance sheets. There were no significant reclassifications out of accumulated other comprehensive income in 2018 and 2017 and there are no remaining amounts in accumulated other comprehensive income as of December 31, 2018 due to the maturity of the interest rate swap on May 15, 2018. |
Related Party
Related Party | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party | Related Party On April 25, 2017, the Company approved the appointment of Stuart M. Steinberg as General Counsel of the Company, effective as of May 1, 2017. Furthermore, the Company and Mr. Steinberg's law firm (the “Firm”) previously entered into an engagement letter agreement (the “Agreement”) dated as of February 4, 2016, and as amended and restated effective as of May 1, 2017, pursuant to which the Company engaged the Firm to provide general legal services requested by the Company. Mr. Steinberg continues to provide services for the Firm while employed by the Company. The Agreement provides for a monthly retainer fee payable to the Firm in the amount of $21 , excluding litigation services. The Company will also reimburse the Firm for any expenses incurred in connection with the Firm’s services to the Company. In connection with this arrangement, the Company incurred legal expenses payable to the Firm in the amount of $269 and $183 in the year ended December 31, 2018 and 2017 , respectively. These amounts were classified within general and administrative expenses on the accompanying consolidated statements of operations for the year ended December 31, 2018 and 2017 . Additionally, the Company paid a bonus to Mr. Steinberg in January 2019 related to services performed in 2018 in the amount of $280 . Such amount was paid to the order of the Firm. This amount was classified within payroll and other expense in the accompanying consolidated statement of operations for the year ended December 31, 2018 and in accrued expenses in the accompanying consolidated balance sheet as of December 31, 2018. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases | Leases The Company leases office, warehouse and multi-recreational facilities and certain equipment under non-cancelable operating leases. In addition to base rent, the facility leases generally provide for additional rent based on operating results, increases in real estate taxes and other costs. Certain leases provide for additional rent based upon defined formulas of revenue, cash flow or operating results of the respective facilities. Under the provisions of certain of these leases, the Company is required to maintain irrevocable letters of credit, which amounted to $1,823 as of December 31, 2018 . The leases expire at various times through June 30, 2038 and certain leases may be extended at the Company’s option. Escalation terms on these leases generally include fixed rent escalations, escalations based on an inflation index such as the consumer price index, and fair market value adjustments. In the next five years, or the period from January 1, 2019 through December 31, 2023 , the Company has leases for 27 club locations that are due to expire without any renewal options, six of which are due to expire in 2019 , and 69 club locations that are due to expire with renewal options. Future minimum rental payments under non-cancelable leases and future capital lease payments are shown in the chart below. Minimum Annual Rental Year Ending December 31, 2019 $ 110,215 2020 107,143 2021 96,768 2022 83,766 2023 70,892 2024 and thereafter 325,644 Rent expense for the years ended December 31, 2018 and 2017 was $139,109 and $126,318 , respectively, such amounts include non-base rent items of $27,448 and $24,881 , respectively. Including the effect of deferred lease liabilities, rent expense was $138,556 and $124,997 for the years ended December 31, 2018 and 2017 . The Company, as landlord, leases space to third party tenants under non-cancelable operating leases and licenses. In addition to base rent, certain leases provide for additional rent based on increases in real estate taxes, indexation, utilities and defined amounts based on the operating results of the lessee. The sub-leases expire at various times through December 31, 2023. Future minimum rentals receivable under non-cancelable leases are shown in the chart below. Minimum Annual Rental Year Ending December 31, 2019 $ 2,477 2020 1,658 2021 1,189 2022 485 2023 5 2024 and thereafter — Rental income, including non-cash rental income, for the years ended December 31, 2018 and 2017 was $3,005 and $2,558 , respectively. For the years ended December 31, 2018 and 2017 , such amounts included no additional rental charges above the base rent. |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' (Deficit) Equity | Stockholders’ (Deficit) Equity The Company’s certificate of incorporation adopted in connection with the IPO provides for 105,000,000 shares of capital stock, consisting of 5,000,000 shares of Preferred Stock, par value $0.001 per share (“Preferred Stock”) and 100,000,000 shares of Common Stock, par value $0.001 per share (“Common Stock”). The Company’s 2006 Stock Incentive Plan, as amended and restated in April 2015 (the “2006 Plan”), authorizes the Company to issue up to 3,500,000 shares of Common Stock to employees, non-employee directors and consultants pursuant to awards of stock options, stock appreciation rights, restricted stock, in payment of performance shares or other stock-based awards. The Company amended the 2006 Plan to increase the aggregate number of shares of common stock issuable under the 2006 Plan by 1,000,000 shares to a total of 4,500,000 in May 2016, and by 2,000,000 shares to a total of 6,500,000 in May 2017. As of December 31, 2018 , there were 2,077,165 shares available to be issued under the 2006 Plan. Beginning January 1, 2017, the Company adopted ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” As a result of this updated guidance, the Company accounted for forfeitures as they occur in the year ended December 31, 2018 . The forfeiture adjustment reduced stock-based compensation expense by $51 in the year ended December 31, 2018 . Common Stock Options The outstanding Common Stock options as of December 31, 2018 were all fully vested. Stock options generally expire ten years from the date of grant. As of December 31, 2018 and 2017 , a total of 22,439 and 61,013 Common Stock options were exercisable and outstanding, respectively. The Company recognizes stock option expense equal to the grant date fair value of a stock option on a straight-line basis over the requisite service period, which is generally the vesting period. For the year ended December 31, 2017, the total compensation expense related to options, classified within Payroll and related on the consolidated statements of operations was $15 and the related tax benefit was $5 . The 2017 tax benefit was prior to the recognition of the valuation allowance. There was no compensation expense related to stock options outstanding for the year ended December 31, 2018 . The following table summarizes the stock option activity for the year ended December 31, 2018 : Common Weighted Average Exercise Price Balance at January 1, 2018 61,013 $ 2.19 Exercised (13,110 ) 2.34 Canceled (25,464 ) 2.42 Balance at December 31, 2018 22,439 $ 1.82 The following table summarizes information about stock options outstanding and exercisable as of December 31, 2018 : Options Outstanding Options Exercisable Number of Options Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Number of Options Weighted-Average Exercise Price Common 2009 grants 11,124 11 months $ 1.74 11,124 $ 1.74 2010 grants 11,315 18 months $ 1.91 11,315 $ 1.91 Total Grants 22,439 15 months $ 1.82 22,439 $ 1.82 At December 31, 2018 , stock options outstanding and exercisable have a weighted average remaining contractual life of 1.2 years and the total intrinsic value for “in-the-money” options, based on the Company’s closing stock price of $6.40 , was $103 . The aggregated intrinsic value represents the pre-tax intrinsic value (the difference between the fair value of the Company’s common stock at December 31, 2018 of $6.40 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2018 . The intrinsic value is based on the fair market value of the Company’s stock and therefore changes as the fair market value of the stock price changes. Under the 2006 Plan, stock options must be granted at a price not less than the fair market value of the stock on the date the option is granted, generally are not subject to re-pricing, and will not be exercisable more than ten years after the date of grant. Options granted under the 2006 Plan generally qualify as “non-qualified stock options” under the U.S. Internal Revenue Code. The exercise price of a stock option is equal to the fair market value of the Company’s Common Stock on the option grant date. The Company did not grant any stock options during the years ended December 31, 2018 and 2017 . As of December 31, 2018 , there was no unrecognized compensation cost related to stock options. Common Stock Grants Restricted Stock Grants The following restricted stock was granted during the year ended December 31, 2018 . Number of Shares Share Price Grant Date Fair Value February 1, 2018 13,115 $ 6.10 $ 80 The following table summarizes the restricted stock activity for the years ended December 31, 2018 : Number of Shares Weighted Average Grant Date Fair Value Balance as of January 1, 2018 1,511,941 $ 3.73 Granted 13,115 6.10 Vested (660,475 ) 3.50 Forfeited (44,309 ) 4.51 Balance as of December 31, 2018 820,272 $ 3.92 The fair value of restricted stock is based on the closing stock price of an unrestricted share of the Company’s Common Stock on the grant date and is amortized to compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period. The total compensation expense, classified within Payroll and related on the consolidated statements of operations, related to restricted stock grants was $2,275 and $1,478 for the years ended December 31, 2018 and 2017 , respectively, and the related tax benefit was $696 and $452 for the years ended December 31, 2018 and 2017 , respectively. Each of these 2018 and 2017 tax benefits were prior to the recognition of the valuation allowance. The restricted shares contain vesting restrictions and vest in equal installments over either three or four years on the anniversary date of the grants. In the years ended December 31, 2018 and 2017 , the Company granted 13,115 and 506,200 restricted shares with an aggregate grant date fair value of $80 and $2,913 , respectively. As of December 31, 2018 , $2,742 of unrecognized compensation cost related to restricted stock was expected to be recognized over a weighted-average period of 1.6 years . Non-Restricted Stock Grants The Company issued 52,460 shares of Common Stock to members of the Company’s Board of Directors with respect to their annual retainer on February 1, 2018 . The fair value of the shares issued on February 1, 2018 was $6.10 per share and was expensed upon the date of grant. The total compensation expense, classified within general and administrative expenses, related to Board of Director Common Stock grants was $320 in the year ended December 31, 2018 . In the year ended December 31, 2017 , the Company issued 108,940 shares of Common Stock with an aggregate grant date fair value of $368 . Management Stock Purchase Plan The Company adopted the 2018 Management Stock Purchase Plan in January 2018, and amended and restated it in March 2018 (the “MSPP”). The purpose of the MSPP is to provide eligible employees of the Company (corporate title of Director or above) an opportunity to voluntarily purchase the Company’s stock in a convenient manner. As of December 31, 2017 , shares purchased under this plan did not have a material impact on the Company’s financial statements. There was no compensation expense related to MSPP for each of the years ended December 31, 2018 and 2017 . The following is a summary of the MSPP, which is qualified in its entirety by the terms of the MSPP. Eligible employees may elect to use up to 20% of their cash compensation (as defined in the MSPP), but in no event more than $200 in any calendar year, to purchase the Company’s common stock generally on a quarterly basis on the open market through a broker (such purchased shares being referred to as “MSPP Shares”). If the participant holds the MSPP Shares for the requisite period specified in the Plan ( two years from the purchase date) and remains an employee of the Company, the participant will receive an award of shares of restricted stock under the Company’s 2006 Stock Incentive Plan, as amended, in an amount equal to the number of MSPP Shares that satisfied the holding period. The award will vest on the second anniversary of the award date so long as the participant remains an employee on the vesting date. Awards granted under the Stock Incentive Plan in any calendar year as a result of participants holding the MSPP Shares for the requisite period will be the lesser of (i) 50% of the shares available for grant under the Stock Incentive Plan and (ii) the number of MSPP Shares that have satisfied the two year holding period. Employee Stock Purchase Plan In May 2018, the Company’s shareholders approved the Town Sports International Holdings, Inc. Employee Stock Purchase Plan (the “ESPP”), effective as of June 15, 2018. Under the ESPP, an aggregate of 800,000 shares of common stock (subject to certain adjustments to reflect changes in the Company’s capitalization) are reserved and may be purchased by eligible employees who become participants in the ESPP. The purchase price per share of the common stock will be the lesser of 85% of the fair market value of a share of common stock on the offering date or 85% of the fair market value of a share of common stock on the purchase date. As of December 31, 2018 , there were 791,357 shares of common stock available for issuance pursuant to the ESPP. Total compensation expense, classified within Payroll and related on the accompanying consolidated statements of operations, related to ESPP was $21 for the year ended December 31, 2018 . The fair value of the purchase rights granted under the ESPP for the offering period beginning December 17, 2018 was $1.64 . It was estimated by applying the Black-Scholes option-pricing model to the purchase period in the offering period using the following assumptions: December 17, 2018 Grant price $ 6.16 Expected term 3 months Expected volatility 57.61 % Risk-free interest rate 2.37 % Expected dividend yield — % Grant price - Closing stock price on the first day of the offering period. Expected Term - The expected term is based on the end date of the purchase period of each offering period, which is three months from the commencement of each new offering period. Expected volatility - The expected volatility is based on historical volatility of the Company’s stock as well as the implied volatility from publicly traded options on the Company’s stock. Risk-free interest rate - The risk-free interest rate is based on a U.S. Treasury rate in effect on the date of grant with a term equal to the expected term. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Revenues | Revenues Adoption of ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606) On January 1, 2018, the Company adopted ASU No. 2014-09 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting period beginning after January 1, 2018 are presented under ASU No. 2014-09, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under “Revenue Recognition” (Topic 605). The Company recorded a net addition to opening retained earnings of $1,604 as of January 1, 2018 due to the cumulative impact of adopting ASC Topic 606, with the impact related to membership costs requiring deferral. ASC Topic 606 requires the Company to defer costs related to obtaining members and expense those costs over the estimated membership life. Under previous guidance, these membership costs were expensed at the time of the respective sale. In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our accompanying consolidated balance sheet and statements of operations was as follows: As of December 31, 2018 Balances Without Effect of Change Balance Sheet As Reported Adoption of ASC 606 Increase/(Decrease) Asset Deferred membership costs $ 1,803 $ 476 $ 1,327 Equity Accumulated deficit $ (73,212 ) $ (74,539 ) $ 1,327 Year Ended December 31, 2018 Balances Without Effect of Change Statements of Operations As Reported Adoption of ASC 606 Increase/ Expenses Payroll and related 168,315 168,038 277 Disaggregation of Revenue The following table presents our revenue by type: Years Ended December 31, 2018 2017 Membership dues $ 339,397 $ 307,966 Initiation and processing fees 1,209 2,268 Membership revenue 340,606 310,234 Personal training revenue 73,458 69,735 Other ancillary club revenue 23,293 17,197 Ancillary club revenue 96,751 86,932 Fees and other revenue 5,737 5,876 Total revenue $ 443,094 $ 403,042 Revenue Recognition Membership dues: The Company generally receives one-time non-refundable joining fees and monthly dues from its members. The Company also offers paid-in-full memberships giving members the option to pay their membership dues in advance. The Company offers both month-to-month and commit memberships. Members can cancel their membership with a fee charged to those members still under contract. Membership dues are recognized in the period in which access to the club is provided. The Company’s membership plans allow for club members to elect to pay a per visit fee to use non-home clubs. These usage fees are recorded to membership revenue in the month the usage occurs. Initiation and processing fees: Initiation and processing fees, as well as related direct and incremental expenses of membership acquisition, which may include sales commissions, bonuses and related taxes and benefits, are deferred and recognized, on a straight-line basis, in operations over the estimated average membership life or 12 months to the extent these costs are related to the first annual fee paid within one month of enrollment. Annual fees are amortized over 12 months. The estimated average membership life was 26 months for each of the years ended December 31, 2018 and 2017 . The Company monitors factors that might affect the estimated average membership life including retention trends, attrition trends, membership sales volumes, membership composition, competition, and general economic conditions, and adjusts the estimate as necessary on an annual basis. Personal training revenue: The Company recognizes revenue from personal training sessions as the services are performed (i.e., when the session is trained). Unused personal training sessions expire after a set, disclosed period of time after purchase (except in California and Florida) and are not refundable or redeemable by the member for cash. The Company had collected approximately $12,371 and $12,456 for unused and expired personal training sessions that had not been recognized as revenue and was recorded as deferred revenue as of December 31, 2018 and 2017 , respectively. For six of the jurisdictions in which the Company operates, the Company has concluded, based on opinions from outside counsel, that monies paid to the company for unused and expired personal training sessions were not escheatable. For the remaining jurisdictions in which the Company operates, the Company has likewise concluded that the monies paid to the company for unused personal training sessions were not escheatable, regardless of whether they expire. However, the Company has not yet obtained opinions from outside counsel for these jurisdictions. It is possible however, that one or more of these jurisdictions may not agree with the Company’s position and may claim that the Company must remit all or a portion of these amounts to such jurisdiction. This could have a material adverse effect on the Company’s cash flows. The State of New York has informed the Company that it is considering whether the Company is required to remit the amount received by the Company for unused, expired personal training sessions to the State of New York as unclaimed property. In addition to the prepaid personal training sessions the Company also offers a personal training membership product which consists of single or multi-session packages ranging from four to 12 sessions per month. These sessions provided by the membership product are at a discount to our stand-alone session pricing and must be used in each respective month. Revenue related to this product is recognized in each respective month. Other ancillary club revenue: Other ancillary club revenue primarily consists of Sports Clubs for Kids, Small Group Training and racquet sports. Revenues are recognized as the services are performed. Fees and other revenue: Fees and other revenue primarily consist of rental income from third party tenants, marketing revenue related to third party marketing in the Company’s club locations, management fees related to clubs the Company manages but does not wholly-own and revenue related to laundry services. Revenue generated from fees and other revenue is generally recognized at the time the related contracted services are performed. The Company generates management fees from certain club facilities that are not wholly-owned, which include two and four managed sites as of December 31, 2018 and 2017 , respectively. Management fees earned for services rendered are recognized at the time the related services are performed. Revenue generated from managed sites was $439 and $922 for the year ended December 31, 2018 and 2017 , respectively. When a revenue agreement involves multiple elements, such as sales of both memberships and services in one arrangement or potentially multiple arrangements, the entire fee from the arrangement is allocated to each respective element based on its relative fair value and recognized when the revenue recognition criteria for each element is met. In connection with advance receipt of fees or dues, the Company was required to maintain bonds totaling $3,443 and $2,658 as of December 31, 2018 and 2017 , respectively. Contract Liability The Company records deferred revenue when cash payments are received or due in advance of our performance. In the year ended December 31, 2018 , the Company recognized revenue of $20,764 that was included in the deferred revenue balance as of December 31, 2017 . Practical Expedients and Exemptions The Company has elected to not capitalize contracts that are shorter than one year. The majority of the Company's contracts have an expected length of one year or less. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
Corporate Income Taxes
Corporate Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Corporate Income Taxes | Corporate Income Taxes On December 22, 2017, the U.S. President signed into law H.R.1, formerly known as the Tax Cuts and Jobs Act (the “Tax Legislation”). The Tax Legislation significantly revised the U.S. tax code by, (i) lowering the U.S federal statutory income tax rate from 35% to 21% , (ii) implementing a territorial tax system, (iii) imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries (“Transition Tax”), (iv) requiring a current inclusion of global intangible low taxed income (“GILTI”) of certain earnings of controlled foreign corporations in U.S. federal taxable income, (v) creating the base erosion anti-abuse tax (“BEAT”) regime, (vi) implementing bonus depreciation that will allow for full expensing of qualified property, and (vii) limiting deductibility of interest and executive compensation expense, among other changes. The Company has computed its 2018 and 2017 current tax benefit using the U.S. federal statutory rates of 21% and 35% , respectively while it has computed its deferred tax expense for both years using the new statutory rate effective on January 1, 2018 of 21% . The Company recorded the applicable impact of the Tax Legislation within its provision for income taxes in the year ended December 31, 2017. The Company recorded the required income tax effects under the Tax Legislation and provided disclosure pursuant to ASC 740, Income Taxes, and the SEC Staff Accounting Bulletin (“SAB”) 118, using its best estimates based on reasonable and supportable assumptions and available inputs and underlying information as of that reporting date. The three provisions that most significantly impact the Company for the year ended December 31, 2017 were (i) the impact of the U.S. federal statutory rate reduction, from 35% to 21% , on the deferred tax provision and related valuation allowance (ii) the full expensing of qualified property and (iii) the calculation of the Transition Tax. All amounts that were recorded as provisional pursuant to SAB 118 have been finalized in the year ended December 31, 2018. Other provisions of the new legislation that were not applicable to the Company until the year ended December 31, 2018 include, but are not limited to, limiting deductibility of interest and executive compensation expense. These additional items have been considered in our income tax provision for the year ended December 31, 2018 and the impact was not material to the overall financial statements. The (benefit) provision for income taxes for the years ended December 31, 2018 and 2017 consisted of the following: Year Ended December 31, 2018 Federal Foreign State and Local Total Current $ (349 ) $ 19 $ 66 $ (264 ) Deferred (93 ) — — (93 ) $ (442 ) $ 19 $ 66 $ (357 ) Year Ended December 31, 2017 Federal Foreign State and Local Total Current $ (9,599 ) $ (63 ) $ (56 ) $ (9,718 ) Deferred 12 — 20 32 $ (9,587 ) $ (63 ) $ (36 ) $ (9,686 ) The components of deferred tax liabilities, net consist of the following items: December 31, 2018 2017 Deferred tax assets Basis differences in depreciation and amortization $ 3,776 $ — Deferred lease liabilities 14,761 15,638 Deferred revenue 4,824 4,590 Deferred compensation expense incurred in connection with stock grants 887 912 Federal and state net operating loss carry-forwards 12,716 15,645 Accruals, reserves and other 4,682 4,942 $ 41,646 $ 41,727 Deferred tax liabilities Basis differences in depreciation and amortization — 1,311 Deferred costs 1,884 1,740 $ 1,884 $ 3,051 Gross deferred tax assets 39,762 38,676 Valuation allowance (39,762 ) (38,769 ) Deferred tax liabilities, net $ — $ (93 ) As of December 31, 2018 and 2017, the Company had a net deferred tax liability of $0 and $93 , respectively. In assessing the realizability of deferred tax assets, the Company evaluates whether it is more likely than not (more than 50%) that some portion or all of the deferred tax assets will be realized. A valuation allowance, if needed, reduces the deferred tax assets to the amount expected to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating loss carryforward can be utilized. The Company evaluates all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized. This evidence includes, but is not limited to, prior earnings history, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Significant weight is given to positive and negative evidence that is objectively verifiable. As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date. Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred tax assets will not be realized. In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, we establish a valuation allowance. The Company maintains a valuation allowance in the amounts of $39,762 and $38,769 at December 31, 2018 and 2017 , respectively. As the Company maintains a full valuation allowance against its outstanding net deferred tax assets, the change in net deferred tax assets due to the rate change was offset by a corresponding change in the valuation allowance. Deferred tax liabilities associated with goodwill generally cannot be used as a source of taxable income to realize deferred tax assets with a definitive loss carry forward period. In recording the valuation allowance, the Company does not amortize goodwill for book purposes but does amortize goodwill that has tax basis for tax purposes. The deferred tax liability remaining after full valuation allowance at December 31, 2017 related to the tax effect of differences between book and tax basis of intangible assets not expected to reverse during the Company’s net operating loss carry forward period. Following the Tax Legislation, the federal net operating losses generated after December 31, 2017 can be carried forward indefinitely and the Company has considered its deferred tax liabilities related to indefinite lived intangibles as a source of taxable income against its indefinite lived net operating losses. As of December 31, 2018 , federal and state tax net operating loss carry-forwards were $3,810 and $134,509 , respectively. Such amounts expire between December 31, 2019 and December 31, 2038. The differences between the U.S. Federal statutory income tax rate and the Company’s effective tax rate were as follows for the years ended December 31, 2018 and 2017 : Years Ended December 31, 2018 2017 Federal statutory tax rate 21 % 35 % State and local income taxes (net of federal tax benefit) (11 ) 1 Permanent differences (27 ) (3 ) Refundable AMT Credit (Tax Reform) 74 — Noncontrolling interest (10 ) — Compensation (83 ) (2 ) Others (5 ) — (41 ) 31 Valuation allowance 115 151 74 % 182 % The effective tax rate on the Company’s pre-tax income or loss was 74% for 2018 and 182% for 2017 , which was primarily impacted by the change in the valuation allowance. The percentages for the various differences above for the year ended December 31, 2108 are greatly impacted by the relatively low pre-tax loss as compared to the income tax benefit amount. The amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate in any future periods was $1,155 as of December 31, 2018 and 2017 . Interest expense on unrecognized tax benefits was $81 for both the years ended December 31, 2018 and 2017 . The Company recognizes both interest accrued related to unrecognized tax benefits and penalties in income tax expenses. The Company had total accruals for interest as of December 31, 2018 and 2017 of $946 and $865 , respectively. A reconciliation of unrecognized tax benefits, excluding interest and penalties, is as follows: 2018 2017 Balance on January 1 $ 1,155 $ 1,187 Reductions due to a lapse of applicable statute of limitations — (32 ) Balance on December 31 $ 1,155 $ 1,155 As of December 31, 2018 , the Company had $1,155 of unrecognized tax benefits and it is reasonably possible that the entire amount could be realized by the Company in the year ending December 31, 2019 since the income tax returns may no longer be subject to audit in 2019. From time to time, the Company is under audit by federal, state, and local tax authorities and the Company may be liable for additional tax obligations and may incur additional costs in defending any claims that may arise. During the quarter ended September 30, 2018, the Company completed its audit by the Internal Revenue Service for federal income tax returns for the years ended December 31, 2014, 2015 and 2016, resulting in no material changes. The following state and local jurisdictions are currently examining our respective returns for the years indicated: New York State (2006 through 2014), and New York City (2006 through 2014). In particular, the Company disagrees with the proposed assessment dated December 12, 2016 from the State of New York and attended a conciliation conference with the New York State Department of Taxation and Finance Audit section on June 7, 2017. No settlement was reached at the conference and the proposed assessment was sustained. As such, in a revised letter dated November 30, 2017, the Company received from the State of New York a revised assessment related to tax years 2006-2009 for approximately $5,097 , inclusive of approximately $2,419 of interest. The Company has appealed the assessment with the New York State Division of Tax Appeals. On November 17, 2017, the Company was notified that the State of New York proposed an adjustment in the amount of approximately $3,906 for the years 2010 to 2014, inclusive of approximately $757 in interest. In November 2018, we met with the Department officials for the assessment related to 2010 to 2014. The meeting ended with the company disagreeing with the proposed assessment for the years in audit. Subsequently, in a letter dated February 4, 2019, the interest amount is revised to $1,203 . The Company disagrees to the proposed assessment and the Company has consented to extend such assessment period through December 31, 2019. The Company is also under examination in New York City (2006 through 2014). New York City Department of Finance has proposed an audit change notice to the Company dated May 2, 2018, for the tax years ended December 31, 2006 through December 31, 2009 for proposed general corporation tax liability in the amount of $4,797 plus $4,138 in interest. In a letter dated January 18, 2019, NYC Department of finance has issued a proposed general tax liability of $5,599 , inclusive of $1,569 in interest for audit periods 2010 to 2014. The Company disagrees with the proposed assessment and the Company has consented to extend such assessment period through September 31, 2019. The Company has not recorded a tax reserve related to these proposed assessments. It is difficult to predict the final outcome or timing of resolution of any particular matter regarding these examinations. An estimate of the reasonably possible changes to unrecognized tax benefits within the next 12 months cannot be made. In March 2018, Commonwealth of Massachusetts began an audit of state tax filing of the company for the state of Massachusetts for the 12 month periods ending December 31, 2014, 2015 and 2016. The Company has agreed to extend the assessment period for state of Massachusetts through March 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies On February 7, 2007, in an action styled White Plains Plaza Realty, LLC v. TSI LLC et al., the landlord of one of TSI LLC’s former health and fitness clubs filed a lawsuit in the Appellate Division, Second Department of the Supreme Court of the State of New York against it and two of its health club subsidiaries alleging, among other things, breach of lease in connection with the decision to close the club located in a building owned by the plaintiff and leased to a subsidiary of TSI LLC, the tenant, and take additional space in a nearby facility leased by another subsidiary of TSI LLC. Following a determination of an initial award, which TSI LLC and the tenant have paid in full, the landlord appealed the trial court’s award of damages, and on August 29, 2011, an additional award (amounting to approximately $900 ) (the “Additional Award”), was entered against the tenant, which has recorded a liability. Separately, TSI LLC is party to an agreement with a third-party developer, which by its terms provides indemnification for the full amount of any liability of any nature arising out of the lease described above, including attorneys’ fees incurred to enforce the indemnity. As a result, the developer reimbursed TSI LLC and the tenant the amount of the initial award in installments over time and also agreed to be responsible for the payment of the Additional Award, and the tenant has recorded a receivable related to the indemnification for the Additional Award. The developer and the landlord are currently litigating the payment of the Additional Award and judgment was entered against the developer on June 5, 2013, in the amount of approximately $1,000 , plus interest, which judgment was upheld by the appellate court on April 29, 2015. TSI LLC does not believe it is probable that TSI LLC will be required to pay for any amount of the Additional Award. In addition to the litigation discussed above, the Company is involved in various other lawsuits, claims and proceedings incidental to the ordinary course of business, including personal injury, landlord tenant disputes, construction matters, employee and member relations, and Telephone Consumer Protection Act claims (a number of which purport to represent a class and one of which was brought by the Washington, D.C. Attorney General’s Office). The results of litigation are inherently unpredictable. Any claims against the Company, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. The results of these other lawsuits, claims and proceedings cannot be predicted with certainty. The Company establishes accruals for loss contingencies when it has determined that a loss is probable and that the amount of loss, or range of loss, can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances. The Company concluded that an accrual for any such matters is not required as of December 31, 2018 . The Company assigned its interest, and is contingently liable, under a real estate lease. This lease expires in 2020. As of December 31, 2018 , the undiscounted payments the Company could be required to make in the event of non-payment by the primary lessee was approximately $946 . The Company has not recorded a liability with respect to this guarantee obligation as of December 31, 2018 as it concluded that payment under this lease guarantee was not probable. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company maintains a 401(k) defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). The plan provides for the Company to make discretionary contributions. Effective January 1, 2016, the plan was amended to eliminate the nondiscretionary matching contribution and to provide for a discretionary matching contribution as determined by the participating employer. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event In January 2019, the Company entered into an agreement to acquire six clubs in Florida for a purchase price of $22,222 . This acquisition was completed in February 2019. The fair value of the net assets acquired is primarily comprised of club equipment, leasehold improvements and intangible assets. The acquisition will be accounted for as a business combination in the first quarter of 2019 and the purchase price allocation is pending. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of TSI Holdings and all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Operating Segment | Operating Segment The Company’s operations are conducted mainly through its clubs and continue to be aggregated into one reportable segment. Each of the clubs has similar economic characteristics, services, product offerings and revenues are derived primarily from services to the Company’s members. The Company’s chief operating decision maker is the Chief Executive Officer. The operating segment is the level at which the chief operating decision maker manages the business and reviews operating performance in order to make business decisions and allocate resources. Due to its recent acquisition activity, the Company re-evaluated its operating segments in the fourth quarter of 2018 and determined the business is managed and operating performance is reviewed on a consolidated company level and therefore has one operating segment. |
Advertising Costs | Advertising and Marketing Costs Advertising and marketing costs are charged to operations during the period in which they are incurred. Total advertising costs incurred by the Company for the years ended December 31, 2018 and 2017 totaled $2,842 and $2,827 , respectively, and are included in Club operating expenses in the accompanying statements of operations for each respective year. |
Cash and Cash Equivalents | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid instruments which have original maturities of three months or less when acquired to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents approximate fair value. The Company owns and operates a captive insurance company in the State of New York. Under the insurance laws of the State of New York, this captive insurance company is required to maintain a cash balance of at least $250 . Cash related to this wholly-owned subsidiary of $278 and $276 is included in cash and cash equivalents at December 31, 2018 and 2017 , respectively. The Company also holds long-term restricted cash associated with certain letters of credit to secure lease related obligations. Restricted cash of $1,973 was included in Other assets in the Company’s accompanying consolidated balance sheet at December 31, 2018 . There was no restricted cash at December 31, 2017 . |
Deferred Lease Liabilities, Non-Cash Rental Expense and Additional Rent | Deferred Lease Liabilities, Non-Cash Rental Expense and Additional Rent The Company recognizes rental expense for leases with scheduled rent increases and inclusive of rental concessions, on the straight-line basis over the life of the lease beginning upon the commencement date of the lease. Rent concessions, primarily received in the form of free rental periods, are also deferred and amortized on a straight-line basis over the life of the lease. The Company leases office, warehouse and multi-recreational facilities and certain equipment under non-cancelable operating leases. Also, the Company has operating and capital leases for certain fitness equipments. In addition to base rent, the facility leases generally provide for additional rent to cover common area maintenance charges incurred and to pass along increases in real estate taxes. The Company accrues for any unpaid common area maintenance charges and real estate taxes on a club-by-club basis. Upon entering into certain leases, the Company receives construction allowances from the landlord. These construction allowances are recorded as deferred lease liability credits on the balance sheet when the requirements for these allowances are met as stated in the respective lease and are amortized as a reduction of rent expense over the term of the lease. Amortization of deferred construction allowances were $2,729 and $2,884 as of December 31, 2018 and 2017 , respectively. Certain leases provide for contingent rent based upon defined formulas of revenue, cash flows or operating results for the respective facilities. These contingent rent payments typically call for additional rent payments calculated as a percentage of the respective club’s revenue or a percentage of revenue in excess of defined break-points during a specified year. The Company records contingent rent expense over the related contingent rental period at the time the respective contingent targets are probable of being met. Contingent rent expense was $370 and $131 for the years ended December 31, 2018 and 2017 , respectively, and is included in Club operating expenses in the accompanying consolidated statements of operations for each respective year. Lease termination gains and losses are recognized at fair value based on the expected settlement amount with the landlord when the Company terminates the contract before the lease termination date. In closing a club, the Company discontinues operating 30 days prior to giving back the space to the landlord, and uses this time to remove equipment and clean the premises. Accordingly, lease termination gains and losses related to certain club closures also include one month additional rent to the landlord. In the year ended December 31, 2017, the Company recorded $201 of lease termination losses, which was included in Club operating expenses in the accompanying consolidated statements of operations. There were no lease termination losses in the year ended December 31, 2018 . |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consists of amounts due from the Company’s membership base and was $7,628 and $6,453 at December 31, 2018 and 2017 , respectively, before the allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company considers factors such as: historical collection experience, the age of the receivable balance and general economic conditions that may affect a customer’s ability to pay. |
Fixed Assets | Fixed Assets Fixed assets are recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets, which are 30 years for building and improvements, five years for club equipment, furniture, fixtures and computer equipment and three to five years for computer software. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining period of the related lease. Expenditures for maintenance and repairs are charged to operations as incurred. The cost and related accumulated depreciation of assets retired or sold is removed from the respective accounts and any gain or loss is recognized in operations. Third-party costs related to developing web applications, developing web pages and installing or enhancing developed applications on the web servers are capitalized and classified as computer software. Website hosting fees and maintenance costs are expensed as incurred. |
Intangible Assets and Debt Issuance Costs | Intangible Assets and Debt Issuance Costs Intangible assets are stated at cost and amortized by the straight-line method over their respective estimated lives. Intangible assets currently consist of membership lists, favorable lease commitments, management contracts, trade names and non-compete agreements. Membership lists are amortized over the estimated average membership life, currently 26 months, favorable lease commitments are amortized over the remaining life of the lease, trade names are amortized over their estimated useful lives of between five and 15 years, management contracts were amortized over their contractual lives of between nine and 11 years, and non-compete agreements are amortized over the agreement life. Debt issuance costs for the 2013 Revolving Loan Facility are classified within Other assets and are being amortized as additional interest expense to August 2020, the remaining life of the underlying debt, using the interest method. Amortization expense for debt issuance costs related to the 2013 Revolving Loan Facility was $236 and $254 for the years ended December 31, 2018 and 2017 , respectively. Debt issuance costs for the 2013 Term Loan Facility are classified within Long-term debt and are being amortized as additional interest expense over the life of the underlying debt, five to seven years, using the interest method. Amortization expense for debt issuance costs related to the 2013 Term Loan Facility was $343 and $347 for the years ended December 31, 2018 and 2017 , respectively. |
Business Combinations | Business Combinations In connection with an acquisition of a business, the Company records all assets acquired and liabilities assumed, if any, of the acquired business at their acquisition date fair value, including the recognition of contingent consideration at fair value on the acquisition date. These fair value determinations require judgment and may involve the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives, and market multiples, among other items. We may utilize independent third-party valuation firms to assist in making these fair value determinations. |
Fair Value Measurements | Fair Value Measurements Accounting guidance on fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy: • Level 1 — Quoted prices for identical instruments in active markets. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable . This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. |
Accounting for the Impairment of Long-Lived Assets and Goodwill | Accounting for the Impairment of Long-Lived Assets and Goodwill Long-lived assets, such as fixed assets and intangible assets are reviewed for impairment periodically whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable from undiscounted cash flows. Estimated undiscounted expected future cash flows are used to determine if an asset group is impaired, in which case the asset carrying value would be reduced to its fair value, calculated considering a combination of market approach and a cost approach. In determining the recoverability of fixed assets Level 3 inputs were used in determining undiscounted cash flows, which are based on internal budgets and forecasts through the end of the life of the primary asset in the asset group which is normally the life of leasehold improvements. The most significant assumptions in those budgets and forecasts relate to estimated membership and ancillary revenue, attrition rates, discount rates, income tax rates, estimated results related to new program launches and maintenance capital expenditures, which are generally estimated at approximately 2% of total revenues depending upon the conditions and needs of a given club. If the Company continues to experience competitive pressure, certain assumptions may not be accurate. Goodwill represents the excess of consideration paid over the fair value of the net identifiable business assets acquired in the acquisition of a club or group of clubs. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-20, Intangibles – Goodwill and Other, requires goodwill to be tested for impairment on an annual basis and between annual tests in certain circumstances, and written down when impaired. The Company’s impairment review process compares the fair value of the reporting unit in which the goodwill resides to its carrying value. The Company’s annual goodwill impairment tests were performed by comparing the fair value of the Company’s reporting unit with its carrying amount and then recognizing an impairment charge, as necessary, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The estimated fair value was determined by using an income approach. The income approach was based on discounted future cash flows and required significant assumptions, including estimates regarding revenue growth rates, operating margins, weighted average cost of capital, and future economic and market conditions. The Company historically performed its goodwill impairment test annually as of the last day of February and in the interim if a triggering event occurred. In 2018, the Company established August 1 to be the annual testing date for all of the Company’s reporting units that have a goodwill balance. As of February 28, 2018, the Company performed a goodwill impairment test on the Switzerland region in line with the historical policy. As of August 1, 2018, the Company performed a goodwill impairment test on the New York, Boston, California and Switzerland regions, within 12 months of the related acquisitions. For the Florida and Puerto Rico regions, the acquired goodwill was related to the acquisitions of clubs after the annual testing date. As such, these intangible assets were recorded at fair value at the time of acquisitions. The next goodwill impairment test for all reporting units will be August 1, 2019. |
Insurance | Insurance The Company obtains insurance coverage for significant exposures as well as those risks required to be insured by law or contract. The Company retains a portion of risk internally related to general liability losses. Where the Company retains risk, provisions are recorded based upon the Company’s estimates of its ultimate exposure for claims, which are included in general and administrative expenses in the accompanying statements of operations. The provisions are estimated using actuarial analysis based on claims experience, an estimate of claims incurred but not yet reported and other relevant factors. In this connection, under the provision of the deductible agreement related to the payment and administration of the Company’s insurance claims, we are required to maintain irrevocable letters of credit, totaling $415 for both December 31, 2018 and 2017 , respectively. The Company maintains a self-insured health benefits plan, which provides medical benefits to employees electing coverage under the plan. The Company maintains a reserve for incurred but not reported medical claims and claim development. The reserve is an estimate based on historical experience, actuarial estimates and other assumptions, some of which are subjective. The Company will adjust its self-insured medical benefits reserve as the Company’s loss experience changes due to medical inflation, changes in the number of plan participants and an aging employee base. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant assumptions and estimates relate to the useful lives of long-term assets, recoverability and impairment of fixed and intangible assets, valuation of business combinations, valuation of deferred income taxes and insurance reserves and the underlying forecasts for these assumptions and estimates. |
Income Taxes | Income Taxes Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined on the basis of the difference between the financial statement and tax basis of assets and liabilities (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized. In assessing the need for a valuation allowance, we consider all positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. As of December 31, 2018 , the Company maintained a full valuation allowance of $39,762 against outstanding net deferred tax assets as the company had a three year cumulative loss position excluding one-time extraordinary income and expense items. The guidance related to accounting for uncertain tax positions prescribes a recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. |
Other Comprehensive (Loss) Income | Other Comprehensive (Loss) Income Other comprehensive (loss) income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including changes in the fair value of the Company’s derivative financial instrument and foreign currency translation adjustments. The Company presents other comprehensive (loss) income in its consolidated statements of comprehensive (loss) income. Through May 15, 2018, the Company used a derivative financial instrument to limit exposure to changes in interest rates on the Company’s existing term loan facility. Derivative financial instruments are recorded at fair value on the balance sheet and changes in the fair value are either recognized in accumulated other comprehensive income (a component of stockholders’ equity) or net income depending on the nature of the underlying exposure, whether the hedge is formally designated as a hedge, and if designated, the extent to which the hedge is effective. The Company’s derivative financial instrument was designated as a cash flow hedge. See Note 10 - Derivative Financial Instruments for more information on the Company’s risk management program and derivatives. At December 31, 2018 , the Company owned three clubs in Switzerland, which use the Swiss Franc, their local currency, as their functional currency. Assets and liabilities are translated into U.S. dollars at year-end exchange rates, while income and expense items are translated into U.S. dollars at the average exchange rate for the period. Adjustments resulting from the translation of foreign functional currency financial statements into U.S. dollars are included in the currency translation adjustment in the consolidated statements of stockholders’ deficit and the consolidated statements of comprehensive income (loss). The effect of foreign exchange translation adjustments was $530 (net of tax of $0 ) and $42 (net of tax of $0 ) for the years ended December 31, 2018 and 2017 , respectively. |
Foreign Currency Transactions | Assets and liabilities are translated into U.S. dollars at year-end exchange rates, while income and expense items are translated into U.S. dollars at the average exchange rate for the period. Adjustments resulting from the translation of foreign functional currency financial statements into U.S. dollars are included in the currency translation adjustment in the consolidated statements of stockholders’ deficit and the consolidated statements of comprehensive income (loss). |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and the interest rate swap. Although the Company deposits its cash with more than one financial institution, as of December 31, 2018 , $24,590 of the cash balance of $48,088 was held at one financial institution. The Company has not experienced any losses on cash and cash equivalent accounts to date, and the Company believes that, based on the credit ratings of these financial institutions, it is not exposed to any significant credit risk related to cash at this time. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) applicable to common stockholders by the weighted average numbers of shares of common stock outstanding during the period. Diluted EPS calculated using the treasury stock method and is computed similarly to basic EPS, except that the denominator is increased for the assumed exercise of dilutive stock options and unvested restricted stock for the diluted shared based awards. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”). ASC 718 requires that the cost resulting from all share-based payment transactions be treated as compensation and recognized in the consolidated financial statements. We record share-based payment awards at fair value on the grant date of the awards, based on the estimated number of awards that are expected to vest. The fair value of stock options and the fair value of the purchase rights granted under the Employee Stock Purchase Plan are determined using the Black-Scholes option-pricing model. Refer to Note 13 - Stockholders’ (Deficit) Equity for further detail about the Employee Stock Purchase Plan. The assumptions in the Black-Scholes model include risk-free interest rate, the Company's expected stock price volatility over the term of the awards, expected term of the award, and dividend yield. The fair value of the restricted stock awards is based on the closing price of the Company’s common stock on the date of the grant. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Table) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Accounts Receivable and Allowance for Doubtful Accounts | Following are the changes in the allowance for doubtful accounts for the years December 31, 2018 and 2017 : Balance Beginning of the Year Additions Write-offs Net of Recoveries Balance at End of Year December 31, 2018 $ 4,237 $ 11,883 $ (11,542 ) $ 4,578 December 31, 2017 $ 2,912 $ 9,712 $ (8,387 ) $ 4,237 |
Schedule of Supplemental Disclosure of Cash Flow Information | Supplemental disclosure of cash flow information: Year Ended December 31, 2018 2017 Cash and cash equivalents $ 48,088 $ 30,321 Restricted cash included in other assets (a) 1,973 — Total cash, cash equivalents and restricted cash $ 50,061 $ 30,321 Cash paid: Interest paid (net of amounts capitalized) $ 12,125 $ 11,165 Income tax paid $ 512 $ 3,891 Cash received: Income tax refund $ 13,619 $ 1,600 Noncash investing and financing activities: Acquisition of fixed assets included in accounts payable and accrued expenses $ 2,566 $ 455 (a) Restricted cash associated with certain letters of credit to secure lease related obligations. |
Schedule of Earnings Per Share, Basic and Diluted | The following table summarizes the weighted average common shares for basic and diluted EPS computations. For The Year Ended December 31, 2018 2017 Net (loss) income including non-controlling interests $ (125 ) $ 4,369 Weighted average number of common share outstanding — basic 25,858,494 25,229,614 Effect of dilutive share-based awards 393,643 719,256 Weighted average number of common shares outstanding — diluted 26,252,137 25,948,870 Earnings per share: Basic $ — $ 0.17 Diluted $ — $ 0.17 |
Schedule of Error Corrections and Prior Period Adjustmentt | The effects of the revision had the following impacts for the interim and annual periods of 2017: Three Months Ended March 31, 2017 (As Reported) (Adjustment) (As Revised) Weighted average number of common shares outstanding — basic 26,610,215 (1,567,892 ) 25,042,323 Effect of dilutive share based awards — — — Weighted average number of common shares outstanding — diluted 26,610,215 (1,567,892 ) 25,042,323 Loss per share: Basic $ (0.11 ) $ (0.01 ) $ (0.12 ) Diluted $ (0.11 ) $ (0.01 ) $ (0.12 ) Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 (As Reported) (Adjustment) (As Revised) (As Reported) (Adjustment) (As Revised) Weighted average number of common shares outstanding — basic 26,692,919 (1,454,628 ) 25,238,291 26,651,796 (1,510,948 ) 25,140,848 Effect of dilutive share based awards — — — — — — Weighted average number of common shares outstanding — diluted 26,692,919 (1,454,628 ) 25,238,291 26,651,796 (1,510,948 ) 25,140,848 Loss per share: Basic $ (0.02 ) $ — $ (0.02 ) $ (0.13 ) $ — $ (0.13 ) Diluted $ (0.02 ) $ — $ (0.02 ) $ (0.13 ) $ — $ (0.13 ) Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 (As Reported) (Adjustment) (As Revised) (As Reported) (Adjustment) (As Revised) Weighted average number of common shares outstanding — basic 26,683,425 (1,438,163 ) 25,245,262 26,662,455 (1,486,420 ) 25,176,035 Effect of dilutive share based awards — — — — — — Weighted average number of common shares outstanding — diluted 26,683,425 (1,438,163 ) 25,245,262 26,662,455 (1,486,420 ) 25,176,035 Loss per share: Basic $ (0.50 ) $ (0.03 ) $ (0.53 ) $ (0.62 ) $ (0.04 ) $ (0.66 ) Diluted $ (0.50 ) $ (0.03 ) $ (0.53 ) $ (0.62 ) $ (0.04 ) $ (0.66 ) Three Months Ended December 31, 2017 Twelve Months Ended December 31, 2017 (As Reported) (Adjustment) (As Revised) (As Reported) (Adjustment) (As Revised) Weighted average number of common shares outstanding — basic 26,825,605 (1,437,003 ) 25,388,602 26,703,577 (1,473,963 ) 25,229,614 Effect of dilutive share based awards 637,107 — 637,107 719,256 — 719,256 Weighted average number of common shares outstanding — diluted 27,462,712 (1,437,003 ) 26,025,709 27,422,833 (1,473,963 ) 25,948,870 Earnings per share: Basic $ 0.78 $ 0.05 $ 0.83 $ 0.16 $ 0.01 $ 0.17 Diluted $ 0.76 $ 0.05 $ 0.81 $ 0.16 $ 0.01 $ 0.17 |
Fixed Assets (Table)
Fixed Assets (Table) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Asset Components | Fixed Assets Fixed assets as of December 31, 2018 and 2017 are shown at cost, less accumulated depreciation and amortization and are summarized below: December 31, 2018 2017 Leasehold improvements $ 494,418 $ 489,738 Fitness equipment (a) 109,545 103,998 Furniture, fixtures and computer equipment 58,188 56,203 Computer software 19,778 19,048 Construction in progress 2,685 1,237 Building and improvements 16,010 9,575 Land 4,778 2,675 705,402 682,474 Less: Accumulated depreciation and amortization (547,725 ) (530,976 ) $ 157,677 $ 151,498 (a) Included $4,850 and $505 of fitness equipment in our clubs under capital lease for the years ending December 31, 2018 and 2017 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Table) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill in the year ended December 31, 2018 are detailed in the charts below. New York Boston California Florida Puerto Rico Switzerland Outlier Total Goodwill $ 36,707 $ 15,775 $ — $ — $ — $ 1,175 $ 3,982 $ 57,639 Changes due to foreign currency exchange rate fluctuations — — — — — (116 ) — (116 ) Less: accumulated impairment of goodwill (31,549 ) (15,775 ) — — — — (3,982 ) (51,306 ) Balance as of December 31, 2017 5,158 — — — — 1,059 — 6,217 Acquired goodwill 1,669 7,573 1,584 2,467 2,380 — — 15,673 Changes due to foreign currency exchange rate fluctuations — — — — — (13 ) — (13 ) Balance as of December 31, 2018 $ 6,827 $ 7,573 $ 1,584 $ 2,467 $ 2,380 $ 1,046 $ — $ 21,877 |
Schedule of Finite-Lived Intangible Assets | Intangible assets are as follows: As of December 31, 2018 As of December 31, 2017 Gross Carrying Accumulated Net Gross Carrying Accumulated Net Membership lists $ 7,042 $ (4,224 ) $ 2,818 $ 12,744 $ (11,577 ) $ 1,167 Favorable lease commitments 2,390 (553 ) 1,837 2,350 (136 ) 2,214 Trade names 3,050 (295 ) 2,755 900 (47 ) 853 Non-compete agreement 2,337 (308 ) 2,029 900 — 900 $ 14,819 $ (5,380 ) $ 9,439 $ 16,894 $ (11,760 ) $ 5,134 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The aggregate amortization expense for the next five years and thereafter of the acquired intangible assets is as follows: Year Ending December 31, 2019 $ 3,224 2020 2,056 2021 1,200 2022 1,017 2023 530 2024 and thereafter 1,412 $ 9,439 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Net Assets Acquired | The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. The purchase price allocation presented below has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. December 2018 Allocation of purchase price: Fixed assets $ 3,680 Goodwill 6,498 Definite lived intangible assets: Membership list 1,435 Trade name 248 Non-compete agreement 717 Deferred revenue (311 ) Total allocation of purchase price $ 12,267 The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. The purchase price allocation presented below has been prepared and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. January 2018 (as adjusted) Allocation of purchase price: Fixed assets $ 982 Goodwill 1,075 Definite lived intangible assets: Membership list 600 Non-compete agreement 400 Working capital assets 130 Deferred revenue (321 ) Total allocation of purchase price $ 2,866 The following table summarizes an estimated allocation of the purchase price of the assets and liabilities acquired. September 2018 (as adjusted) Allocation of purchase price: Fixed assets $ 703 Goodwill 237 Capital lease liabilities (76 ) Other assets and liabilities assumed, net (111 ) Deferred revenue (476 ) Total allocation of purchase price $ 277 The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. December 2017 (as adjusted) Allocation of purchase price: Fixed assets $ 5,195 Goodwill 1,376 Definite lived intangible assets: Non-compete agreement 900 Trade name 200 Deferred revenue (1,511 ) Capital lease liability (160 ) Other liabilities (75 ) Total allocation of purchase price $ 5,925 The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. The purchase price allocation presented below has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. August 2018 (as adjusted) Allocation of purchase price: Fixed assets $ 5,646 Goodwill 2,467 Definite lived intangible assets: Membership list 288 Amount due to seller, net (610 ) Deferred revenue (599 ) Non-controlling interest (495 ) Total allocation of purchase price $ 6,697 September 2017 (as adjusted) Allocation of purchase price: Fixed assets 1,024 Goodwill 5,214 Definite lived intangible assets: Membership lists 1,400 Trade names 700 Favorable lease commitment 2,350 Deferred revenue (1,238 ) Total allocation of purchase price $ 9,450 The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired. The purchase price allocation presented below has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. April 2018 (as adjusted) Allocation of purchase price: Fixed assets $ 8,064 Goodwill 1,584 Definite lived intangible assets: Favorable lease commitment 440 Trade name 1,562 Working capital, net 161 Deferred revenue (4,546 ) Total allocation of purchase price $ 7,265 The purchase price allocation presented below has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations are finalized. September 2018 Allocation of purchase price: Fixed assets $ 2,134 Goodwill 2,380 Definite lived intangible assets: Membership list 480 Trade name 340 Non-compete agreement 320 Unfavorable lease commitment (400 ) Deferred revenue (324 ) Total allocation of purchase price $ 4,930 |
Unaudited Pro Forma Results | This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized by the Company had the acquisitions been consummated at the beginning of the period for which the pro forma information is presented, or of future results and does not account for any operational improvements to be made by the Company post-acquisition. Year Ended December 31, 2018 2017 Revenue $ 473,802 $ 481,027 Net income $ 1,587 $ 4,183 Income per share: Basic $ 0.06 $ 0.16 Diluted $ 0.06 $ 0.16 |
Accrued Expenses (Table)
Accrued Expenses (Table) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses as of December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Accrued payroll and related $ 9,163 $ 5,888 Accrued occupancy costs 11,020 10,009 Accrued insurance claims 2,321 2,282 Accrued operating expenses 1,994 1,347 Accrued general and administrative 3,302 2,504 Accrued other 4,747 2,639 $ 32,547 $ 24,669 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt as of December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 2013 Term Loan Facility $ 197,835 $ 199,918 Capital lease liabilities 3,817 160 Less: Unamortized discount (1,936 ) (2,912 ) Less: Deferred financing costs (634 ) (977 ) Less: Current portion due within one year (21,080 ) (2,242 ) Long-term portion $ 178,002 $ 193,947 |
Schedule of Long Term Obligations | The aggregate long-term debt obligations maturing in the next five years and thereafter are as follows: Amount Due Year Ending December 31, 2019 $ 21,080 2020 178,675 2021 1,060 2022 673 2023 164 2024 and thereafter — $ 201,652 The table above does not reflect potential commitments in connection with our outstanding letters of credit under the 2013 Revolving Loan Facility (defined below) which matures on August 14, 2020. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the aggregate fair value of the Company’s derivative financial instrument: Fair Value Measurements Using: Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest rate swap liability as of December 31, 2018 $ — $ — $ — $ — Interest rate swap liability as of December 31, 2017 $ 184 $ — $ 184 $ — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments, Non-Cancelable Leases | Future minimum rental payments under non-cancelable leases and future capital lease payments are shown in the chart below. Minimum Annual Rental Year Ending December 31, 2019 $ 110,215 2020 107,143 2021 96,768 2022 83,766 2023 70,892 2024 and thereafter 325,644 |
Schedule of Minimum Rental Receivable Under Non-Cancelable Leases | Future minimum rentals receivable under non-cancelable leases are shown in the chart below. Minimum Annual Rental Year Ending December 31, 2019 $ 2,477 2020 1,658 2021 1,189 2022 485 2023 5 2024 and thereafter — |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | It was estimated by applying the Black-Scholes option-pricing model to the purchase period in the offering period using the following assumptions: December 17, 2018 Grant price $ 6.16 Expected term 3 months Expected volatility 57.61 % Risk-free interest rate 2.37 % Expected dividend yield — % |
Schedule of Stock Options Activity | The following table summarizes the stock option activity for the year ended December 31, 2018 : Common Weighted Average Exercise Price Balance at January 1, 2018 61,013 $ 2.19 Exercised (13,110 ) 2.34 Canceled (25,464 ) 2.42 Balance at December 31, 2018 22,439 $ 1.82 |
Schedule of Stock Options Outstanding | The following table summarizes information about stock options outstanding and exercisable as of December 31, 2018 : Options Outstanding Options Exercisable Number of Options Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Number of Options Weighted-Average Exercise Price Common 2009 grants 11,124 11 months $ 1.74 11,124 $ 1.74 2010 grants 11,315 18 months $ 1.91 11,315 $ 1.91 Total Grants 22,439 15 months $ 1.82 22,439 $ 1.82 |
Schedule of Restricted Stock Grants | The following restricted stock was granted during the year ended December 31, 2018 . Number of Shares Share Price Grant Date Fair Value February 1, 2018 13,115 $ 6.10 $ 80 The following table summarizes the restricted stock activity for the years ended December 31, 2018 : Number of Shares Weighted Average Grant Date Fair Value Balance as of January 1, 2018 1,511,941 $ 3.73 Granted 13,115 6.10 Vested (660,475 ) 3.50 Forfeited (44,309 ) 4.51 Balance as of December 31, 2018 820,272 $ 3.92 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Revenue From Club Operations | In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our accompanying consolidated balance sheet and statements of operations was as follows: As of December 31, 2018 Balances Without Effect of Change Balance Sheet As Reported Adoption of ASC 606 Increase/(Decrease) Asset Deferred membership costs $ 1,803 $ 476 $ 1,327 Equity Accumulated deficit $ (73,212 ) $ (74,539 ) $ 1,327 Year Ended December 31, 2018 Balances Without Effect of Change Statements of Operations As Reported Adoption of ASC 606 Increase/ Expenses Payroll and related 168,315 168,038 277 |
Disaggregation of Revenue | The following table presents our revenue by type: Years Ended December 31, 2018 2017 Membership dues $ 339,397 $ 307,966 Initiation and processing fees 1,209 2,268 Membership revenue 340,606 310,234 Personal training revenue 73,458 69,735 Other ancillary club revenue 23,293 17,197 Ancillary club revenue 96,751 86,932 Fees and other revenue 5,737 5,876 Total revenue $ 443,094 $ 403,042 |
Corporate Income Taxes (Tables)
Corporate Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Corporate Income Tax Provision Components | The (benefit) provision for income taxes for the years ended December 31, 2018 and 2017 consisted of the following: Year Ended December 31, 2018 Federal Foreign State and Local Total Current $ (349 ) $ 19 $ 66 $ (264 ) Deferred (93 ) — — (93 ) $ (442 ) $ 19 $ 66 $ (357 ) Year Ended December 31, 2017 Federal Foreign State and Local Total Current $ (9,599 ) $ (63 ) $ (56 ) $ (9,718 ) Deferred 12 — 20 32 $ (9,587 ) $ (63 ) $ (36 ) $ (9,686 ) |
Schedule of Components of Deferred Tax Assets, Net | The components of deferred tax liabilities, net consist of the following items: December 31, 2018 2017 Deferred tax assets Basis differences in depreciation and amortization $ 3,776 $ — Deferred lease liabilities 14,761 15,638 Deferred revenue 4,824 4,590 Deferred compensation expense incurred in connection with stock grants 887 912 Federal and state net operating loss carry-forwards 12,716 15,645 Accruals, reserves and other 4,682 4,942 $ 41,646 $ 41,727 Deferred tax liabilities Basis differences in depreciation and amortization — 1,311 Deferred costs 1,884 1,740 $ 1,884 $ 3,051 Gross deferred tax assets 39,762 38,676 Valuation allowance (39,762 ) (38,769 ) Deferred tax liabilities, net $ — $ (93 ) |
Schedule of Corporate Income Tax Rate Reconciliation | The differences between the U.S. Federal statutory income tax rate and the Company’s effective tax rate were as follows for the years ended December 31, 2018 and 2017 : Years Ended December 31, 2018 2017 Federal statutory tax rate 21 % 35 % State and local income taxes (net of federal tax benefit) (11 ) 1 Permanent differences (27 ) (3 ) Refundable AMT Credit (Tax Reform) 74 — Noncontrolling interest (10 ) — Compensation (83 ) (2 ) Others (5 ) — (41 ) 31 Valuation allowance 115 151 74 % 182 % |
Schedule of Unrecognized Tax Benefits | A reconciliation of unrecognized tax benefits, excluding interest and penalties, is as follows: 2018 2017 Balance on January 1 $ 1,155 $ 1,187 Reductions due to a lapse of applicable statute of limitations — (32 ) Balance on December 31 $ 1,155 $ 1,155 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Dec. 31, 2018club |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of clubs | 185 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Advertising, Cash, and Deferred Lease (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)club | Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | ||
Number of Stores | club | 185 | |
Advertising expense | $ 2,842,000 | $ 2,827,000 |
Restricted Cash | 1,973,000 | 0 |
Captive insurance required balance | 250,000 | |
Cash related to captive insurance that was included in cash and cash equivalents | 278,000 | 276,000 |
Amortization of lease incentives | 2,729,000 | 2,884,000 |
Contingent rent expense | $ 370,000 | 131,000 |
Lease termination penalty | $ 201,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Accounts receivable, gross | $ 7,628 | $ 6,453 |
Accounts Receivable, Allowance for Doubtful Accounts [Roll Forward] | ||
Balance Beginning of the Year | 4,237 | 2,912 |
Additions | 11,883 | 9,712 |
Write-offs Net of Recoveries | (11,542) | (8,387) |
Balance at End of Year | $ 4,578 | $ 4,237 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Fixed Assets (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Building and Building Improvements | |
Property, Plant and Equipment [Line Items] | |
Fixed asset useful life | 30 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Fixed asset useful life | 5 years |
Computer Software, Intangible Asset | Minimum | |
Property, Plant and Equipment [Line Items] | |
Fixed asset useful life | 3 years |
Computer Software, Intangible Asset | Maximum | |
Property, Plant and Equipment [Line Items] | |
Fixed asset useful life | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Intangible Assets and Debt Issuance Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Regular Member | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average member life | 26 months | |
2013 Term Loan Facility Maturing November 15, 2020 | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Debt Issuance Costs | $ 343 | $ 347 |
2013 Term Loan Facility Maturing November 15, 2020 | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
2013 Term Loan Facility Maturing November 15, 2020 | Minimum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
2013 Term Loan Facility Maturing November 15, 2020 | Minimum | Employment Contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 9 years | |
2013 Term Loan Facility Maturing November 15, 2020 | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 7 years | |
2013 Term Loan Facility Maturing November 15, 2020 | Maximum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 15 years | |
2013 Term Loan Facility Maturing November 15, 2020 | Maximum | Employment Contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 11 years | |
2013 Revolving Loan Facility Maturing November 15, 2018 | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Debt Issuance Costs | $ 236 | $ 254 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Impairment and Insurance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Percent of revenue | 2.00% | |
Letter of credit related to insurance claims | $ 415 | $ 415 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Valuation allowance, net of the elimination of federal effect of state deferred taxes | $ 39,762 | $ 38,769 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Statements of Cash Flows (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 48,088,000 | $ 30,321,000 | |
Restricted cash included in other assets | 1,973,000 | 0 | |
Total cash, cash equivalents and restricted cash | 50,061,000 | 30,321,000 | $ 45,596,000 |
Cash paid: | |||
Interest paid (net of amounts capitalized) | 12,125,000 | 11,165,000 | |
Income Taxes Paid | 512,000 | 3,891,000 | |
Cash received: | |||
Income tax refund | 13,619,000 | 1,600,000 | |
Noncash investing and financing activities: | |||
Acquisition of fixed assets included in accounts payable and accrued expenses | $ 2,566,000 | $ 455,000 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - AOCI and Concentrations of Credit Risk (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)club | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Accounting Policies [Line Items] | |||
Number of clubs | club | 185 | ||
Foreign currency translation adjustments, net of tax of $0 for the years ended in December 31, 2018 and 2017 | $ 530,000 | $ 42,000 | |
Foreign currency translation adjustment, tax | 0 | 0 | $ 0 |
Cash and cash equivalents held at one financial institution | 24,590,000 | ||
Cash and cash equivalents | $ 48,088,000 | $ 30,321,000 | |
Switzerland | |||
Accounting Policies [Line Items] | |||
Number of clubs | club | 3 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||||||||
Net (loss) income including non-controlling interests | $ (125) | $ 4,369 | ||||||
Weighted average number of common share outstanding — basic | 25,388,602 | 25,245,262 | 25,238,291 | 25,042,323 | 25,140,848 | 25,176,035 | 25,858,494 | 25,229,614 |
Effect of dilutive share-based awards (in shares) | 393,643 | 719,256 | ||||||
Weighted average number of common shares outstanding — diluted | 26,025,709 | 25,245,262 | 25,238,291 | 25,042,323 | 25,140,848 | 25,176,035 | 26,252,137 | 25,948,870 |
Earnings per share: | ||||||||
Basic (in dollars per share) | $ 0.83 | $ (0.53) | $ (0.02) | $ (0.12) | $ (0.13) | $ (0.66) | $ 0 | $ 0.17 |
Diluted (in dollars per share) | $ 0.81 | $ (0.53) | $ (0.02) | $ (0.12) | $ (0.13) | $ (0.66) | $ 0 | $ 0.17 |
Antidilutive securities excluded (in shares) | 28,681 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies Revisions to Interim and Annual Periods (Details) - $ / shares | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Weighted average number of common share outstanding — basic | 25,388,602 | 25,245,262 | 25,238,291 | 25,042,323 | 25,140,848 | 25,176,035 | 25,858,494 | 25,229,614 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 637,107 | 0 | 0 | 0 | 0 | 0 | 719,256 | |
Weighted Average Number of Shares Outstanding, Diluted | 26,025,709 | 25,245,262 | 25,238,291 | 25,042,323 | 25,140,848 | 25,176,035 | 26,252,137 | 25,948,870 |
Earnings Per Share, Basic | $ 0.83 | $ (0.53) | $ (0.02) | $ (0.12) | $ (0.13) | $ (0.66) | $ 0 | $ 0.17 |
Earnings Per Share, Diluted | $ 0.81 | $ (0.53) | $ (0.02) | $ (0.12) | $ (0.13) | $ (0.66) | $ 0 | $ 0.17 |
Previously Reported [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Weighted average number of common share outstanding — basic | 26,825,605 | 26,683,425 | 26,692,919 | 26,610,215 | 26,651,796 | 26,662,455 | 26,703,577 | |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 637,107 | 0 | 0 | 0 | 0 | 0 | 719,256 | |
Weighted Average Number of Shares Outstanding, Diluted | 27,462,712 | 26,683,425 | 26,692,919 | 26,610,215 | 26,651,796 | 26,662,455 | 27,422,833 | |
Earnings Per Share, Basic | $ 0.78 | $ (0.50) | $ (0.02) | $ (0.11) | $ (0.13) | $ (0.62) | $ 0.16 | |
Earnings Per Share, Diluted | $ 0.76 | $ (0.50) | $ (0.02) | $ (0.11) | $ (0.13) | $ (0.62) | $ 0.16 | |
Restatement Adjustment [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Weighted average number of common share outstanding — basic | (1,437,003) | (1,438,163) | (1,454,628) | (1,567,892) | (1,510,948) | (1,486,420) | (1,473,963) | |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Weighted Average Number of Shares Outstanding, Diluted | (1,437,003) | (1,438,163) | (1,454,628) | (1,567,892) | (1,510,948) | (1,486,420) | (1,473,963) | |
Earnings Per Share, Basic | $ 0.05 | $ (0.03) | $ 0 | $ (0.01) | $ 0 | $ (0.04) | $ 0.01 | |
Earnings Per Share, Diluted | $ 0.05 | $ (0.03) | $ 0 | $ (0.01) | $ 0 | $ (0.04) | $ 0.01 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Narrative (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||
Restricted Cash | $ 1,973,000 | $ 0 |
Fixed Assets - Summary of Fixed
Fixed Assets - Summary of Fixed Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 494,418 | $ 489,738 |
Club equipment | 109,545 | 103,998 |
Furniture, fixtures and computer equipment | 58,188 | 56,203 |
Computer software | 19,778 | 19,048 |
Construction in progress | 2,685 | 1,237 |
Building and improvements | 16,010 | 9,575 |
Land | 4,778 | 2,675 |
Fixed assets, gross | 705,402 | 682,474 |
Less: Accumulated depreciation and amortization | (547,725) | (530,976) |
Fixed assets, net | 157,677 | 151,498 |
Club equipment under capital lease | $ 4,850 | $ 505 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and leasehold amortization expense | $ 35,115 | $ 40,299 |
Impairment of fixed assets | $ 2,082 | $ 6,497 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Goodwill, Gross | $ 57,639 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 6,217 | |
Acquired goodwill | 15,673 | |
Changes due to foreign currency exchange rate fluctuations | (13) | (116) |
Less: accumulated impairment of goodwill | 51,306 | |
Goodwill, ending balance | 21,877 | 6,217 |
New York | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 36,707 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 5,158 | |
Acquired goodwill | 1,669 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Less: accumulated impairment of goodwill | 31,549 | |
Goodwill, ending balance | 6,827 | 5,158 |
Boston | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 15,775 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 0 | |
Acquired goodwill | 7,573 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Less: accumulated impairment of goodwill | 15,775 | |
Goodwill, ending balance | 7,573 | 0 |
CALIFORNIA | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 0 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 0 | |
Acquired goodwill | 1,584 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Less: accumulated impairment of goodwill | 0 | |
Goodwill, ending balance | 1,584 | 0 |
FLORIDA | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 0 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 0 | |
Acquired goodwill | 2,467 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Less: accumulated impairment of goodwill | 0 | |
Goodwill, ending balance | 2,467 | 0 |
PUERTO RICO | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 0 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 0 | |
Acquired goodwill | 2,380 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Less: accumulated impairment of goodwill | 0 | |
Goodwill, ending balance | 2,380 | 0 |
Switzerland | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 1,175 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 1,059 | |
Acquired goodwill | 0 | |
Changes due to foreign currency exchange rate fluctuations | (13) | (116) |
Less: accumulated impairment of goodwill | 0 | |
Goodwill, ending balance | 1,046 | 1,059 |
Outlier Clubs | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 3,982 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 0 | |
Acquired goodwill | 0 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Less: accumulated impairment of goodwill | 3,982 | |
Goodwill, ending balance | $ 0 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Amortization of intangible assets | $ 2,327 | $ 550 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 14,819 | $ 16,894 |
Accumulated Amortization | (5,380) | (11,760) |
Net Intangibles | 9,439 | 5,134 |
Membership lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,042 | 12,744 |
Accumulated Amortization | (4,224) | (11,577) |
Net Intangibles | 2,818 | 1,167 |
Favorable lease commitments | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,390 | 2,350 |
Accumulated Amortization | (553) | (136) |
Net Intangibles | 1,837 | 2,214 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,050 | 900 |
Accumulated Amortization | (295) | (47) |
Net Intangibles | 2,755 | 853 |
Non-compete agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,337 | 900 |
Accumulated Amortization | (308) | 0 |
Net Intangibles | $ 2,029 | $ 900 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Aggregate Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2,019 | $ 3,224 | |
2,020 | 2,056 | |
2,021 | 1,200 | |
2,022 | 1,017 | |
2,023 | 530 | |
2024 and thereafter | 1,412 | |
Net Intangibles | $ 9,439 | $ 5,134 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ in Thousands | 1 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018USD ($)club | Sep. 30, 2018USD ($)club | Aug. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Jan. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($)club | Dec. 31, 2017USD ($) | Dec. 01, 2018club | |
Business Acquisition [Line Items] | |||||||||||
Acquisition costs incurred | $ 3,114 | $ 468 | |||||||||
Number of clubs | club | 185 | 185 | |||||||||
Business Acquisition, Pro Forma Revenue | $ 473,802 | $ 481,027 | |||||||||
Acquisition in the Boston Metropolitan Region, January 2018 | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total purchase price, including future consideration | $ 2,750 | ||||||||||
Consideration transferred | 2,866 | ||||||||||
Revenue since acquisition date | 4,844 | ||||||||||
Net loss since acquisition date | (104) | ||||||||||
Acquisition in the Boston Metropolitan Region, January 2018 | Noncompete Agreements | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Estimated useful life | 5 years | ||||||||||
Acquistion in the Boston Metropolitan Region, December 2018 | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of clubs | club | 4 | ||||||||||
Total purchase price, including future consideration | $ 12,500 | ||||||||||
Consideration transferred | $ 12,267 | ||||||||||
Revenue since acquisition date | $ 902 | ||||||||||
Acquistion in the Boston Metropolitan Region, December 2018 | Trade names | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Estimated useful life | 3 years | ||||||||||
Acquistion in the Boston Metropolitan Region, December 2018 | Noncompete Agreements | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Estimated useful life | 5 years | ||||||||||
LIV Fitness | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of clubs | club | 2 | ||||||||||
Total purchase price, including future consideration | $ 5,000 | ||||||||||
Consideration transferred | $ 4,930 | ||||||||||
Revenue since acquisition date | $ 1,516 | ||||||||||
Net loss since acquisition date | $ 46 | ||||||||||
LIV Fitness | Trade names | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Estimated useful life | 13 years | ||||||||||
LIV Fitness | Leases, Acquired-in-Place, Market Adjustment | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Estimated useful life | 5 years | ||||||||||
Existing Clubs In New York Metropolitan Region | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of clubs | club | 2 | ||||||||||
Percentage acquired | 60.00% | ||||||||||
Percentage retained by seller | 40.00% | ||||||||||
Revenue since acquisition date | $ 596 | ||||||||||
Net loss since acquisition date | (571) | ||||||||||
Palm Beach Sports Clubs | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total purchase price, including future consideration | $ 7,307 | ||||||||||
Consideration transferred | $ 6,697 | ||||||||||
Percentage acquired | 85.00% | ||||||||||
Percentage retained by seller | 15.00% | ||||||||||
Amount due to seller, net | $ 610 | ||||||||||
Amount due to seller, net, term | 4 years | ||||||||||
Revenue since acquisition date | 1,571 | ||||||||||
Net loss since acquisition date | (40) | ||||||||||
Total Woman Gym and Spa | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total purchase price, including future consideration | $ 8,000 | ||||||||||
Consideration transferred | $ 7,265 | ||||||||||
Revenue since acquisition date | 16,220 | ||||||||||
Net loss since acquisition date | (988) | ||||||||||
Total Woman Gym and Spa | Trade names | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Estimated useful life | 15 years | ||||||||||
TMPL | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total purchase price, including future consideration | $ 6,500 | ||||||||||
Consideration transferred | $ 5,925 | ||||||||||
Adjustment to consideration transferred | 1,011 | ||||||||||
Revenue since acquisition date | 5,432 | ||||||||||
Net loss since acquisition date | (1,166) | ||||||||||
TMPL | Trade names | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Estimated useful life | 15 years | ||||||||||
TMPL | Noncompete Agreements | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Estimated useful life | 5 years | ||||||||||
Lucille Roberts | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total purchase price, including future consideration | $ 9,500 | ||||||||||
Consideration transferred | $ 9,450 | ||||||||||
Adjustment to consideration transferred | 421 | ||||||||||
Revenue since acquisition date | $ 3,937 | 16,413 | |||||||||
Net loss since acquisition date | $ 778 | $ 3,484 | |||||||||
Lucille Roberts | Trade names | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Estimated useful life | 5 years | ||||||||||
FLORIDA | Palm Beach Sports Clubs | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of clubs | club | 3 | 3 | |||||||||
CALIFORNIA | Total Woman Gym and Spa | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of clubs | club | 12 | 12 |
Acquisitions - Schedule of Net
Acquisitions - Schedule of Net Assets Acquired (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 01, 2018 | Sep. 30, 2018 | Aug. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 21,877 | $ 6,217 | ||||||
Acquistion in the Boston Metropolitan Region, December 2018 | ||||||||
Business Acquisition [Line Items] | ||||||||
Fixed assets | $ 3,680 | |||||||
Goodwill | 6,498 | |||||||
Deferred revenue | (311) | |||||||
Total allocation of purchase price | 12,267 | |||||||
Acquistion in the Boston Metropolitan Region, December 2018 | Membership Lists | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 1,435 | |||||||
Acquistion in the Boston Metropolitan Region, December 2018 | Trade names | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 248 | |||||||
Acquistion in the Boston Metropolitan Region, December 2018 | Noncompete Agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | $ 717 | |||||||
LIV Fitness | ||||||||
Business Acquisition [Line Items] | ||||||||
Fixed assets | $ 2,134 | |||||||
Goodwill | 2,380 | |||||||
Deferred revenue | (324) | |||||||
Total allocation of purchase price | 4,930 | |||||||
LIV Fitness | Membership Lists | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 480 | |||||||
LIV Fitness | Trade names | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 340 | |||||||
LIV Fitness | Noncompete Agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 320 | |||||||
LIV Fitness | Unfavorable Lease Commitment | ||||||||
Business Acquisition [Line Items] | ||||||||
Other liabilities | (400) | |||||||
Existing Clubs In New York Metropolitan Region | ||||||||
Business Acquisition [Line Items] | ||||||||
Fixed assets | 703 | |||||||
Goodwill | 237 | |||||||
Capital lease liabilities | (76) | |||||||
Other assets and liabilities assumed, net | (111) | |||||||
Deferred revenue | (476) | |||||||
Total allocation of purchase price | $ 277 | |||||||
Palm Beach Sports Clubs | ||||||||
Business Acquisition [Line Items] | ||||||||
Fixed assets | $ 5,646 | |||||||
Goodwill | 2,467 | |||||||
Amount due to seller, net | (610) | |||||||
Deferred revenue | (599) | |||||||
Non-controlling interest | (495) | |||||||
Total allocation of purchase price | 6,697 | |||||||
Palm Beach Sports Clubs | Membership Lists | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | $ 288 | |||||||
Total Woman Gym and Spa | ||||||||
Business Acquisition [Line Items] | ||||||||
Fixed assets | $ 8,064 | |||||||
Goodwill | 1,584 | |||||||
Working capital | 161 | |||||||
Deferred revenue | (4,546) | |||||||
Total allocation of purchase price | 7,265 | |||||||
Total Woman Gym and Spa | Trade names | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 1,562 | |||||||
Total Woman Gym and Spa | Favorable lease commitments | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | $ 440 | |||||||
Acquisition in the Boston Metropolitan Region, January 2018 | ||||||||
Business Acquisition [Line Items] | ||||||||
Fixed assets | $ 982 | |||||||
Goodwill | 1,075 | |||||||
Working capital | 130 | |||||||
Deferred revenue | (321) | |||||||
Total allocation of purchase price | 2,866 | |||||||
Acquisition in the Boston Metropolitan Region, January 2018 | Membership Lists | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 600 | |||||||
Acquisition in the Boston Metropolitan Region, January 2018 | Noncompete Agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | $ 400 | |||||||
TMPL | ||||||||
Business Acquisition [Line Items] | ||||||||
Fixed assets | 5,195 | |||||||
Goodwill | 1,376 | |||||||
Capital lease liabilities | (160) | |||||||
Other liabilities | (75) | |||||||
Deferred revenue | (1,511) | |||||||
Total allocation of purchase price | 5,925 | |||||||
TMPL | Trade names | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 200 | |||||||
TMPL | Noncompete Agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | $ 900 | |||||||
Lucille Roberts | ||||||||
Business Acquisition [Line Items] | ||||||||
Fixed assets | $ 1,024 | |||||||
Goodwill | 5,214 | |||||||
Deferred revenue | (1,238) | |||||||
Total allocation of purchase price | 9,450 | |||||||
Lucille Roberts | Membership Lists | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 1,400 | |||||||
Lucille Roberts | Trade names | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | 700 | |||||||
Lucille Roberts | Favorable lease commitments | ||||||||
Business Acquisition [Line Items] | ||||||||
Definite lived intangible assets: | $ 2,350 |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | ||
Revenue | $ 473,802 | $ 481,027 |
Net income | $ 1,587 | $ 4,183 |
Income (Loss) per share: | ||
Basic (in dollars per share) | $ 0.06 | $ 0.16 |
Diluted (in dollars per share) | $ 0.06 | $ 0.16 |
Acquisitions - Asset Acquisitio
Acquisitions - Asset Acquisitions (Details) - USD ($) $ in Thousands | 1 Months Ended | |
Jan. 31, 2018 | Nov. 30, 2017 | |
January 2018 Acquisition | Existing Club In Florida Region | ||
Property, Plant and Equipment [Line Items] | ||
Consideration transferred | $ 4,039 | |
January 2018 Acquisition | Existing Club In Florida Region | Building | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets | 2,691 | |
January 2018 Acquisition | Existing Club In Florida Region | Land | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets | $ 1,021 | |
November 2017 Acquisition | Land | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets | $ 2,675 | |
November 2017 Acquisition | Building, Land, And Single Health Club | ||
Property, Plant and Equipment [Line Items] | ||
Consideration transferred | 12,600 | |
November 2017 Acquisition | Building, Land, And Single Health Club | Building | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets | $ 9,675 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related | $ 9,163 | $ 5,888 |
Accrued occupancy costs | 11,020 | 10,009 |
Accrued insurance claims | 2,321 | 2,282 |
Accrued operating expenses | 1,994 | 1,347 |
Accrued general and administrative | 3,302 | 2,504 |
Accrued other | 4,747 | 2,639 |
Accrued expenses | $ 32,547 | $ 24,669 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Less: Current portion due within one year | $ (21,080) | $ (2,242) |
Long-term portion | 178,002 | 193,947 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
2013 Term Loan Facility | 197,835 | 199,918 |
Capital lease liabilities | 3,817 | 160 |
Less: Unamortized discount | (1,936) | (2,912) |
Less: Deferred financing costs | (634) | (977) |
Less: Current portion due within one year | (21,080) | (2,242) |
Long-term portion | $ 178,002 | $ 193,947 |
Long-Term Debt - Maturity Table
Long-Term Debt - Maturity Table (Details) - Secured Debt $ in Thousands | Dec. 31, 2018USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,019 | $ 21,080 |
2,020 | 178,675 |
2,021 | 1,060 |
2,022 | 673 |
2,023 | 164 |
2024 and thereafter | 0 |
Long-term Debt | $ 201,652 |
Long-Term Debt - 2013 Senior Cr
Long-Term Debt - 2013 Senior Credit Facility (Details) | Nov. 15, 2013USD ($) | Apr. 30, 2019USD ($) | Oct. 31, 2017USD ($) | May 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt And Credit Facility [Line Items] | ||||||
2013 term loan facility | $ 5,530,000 | $ 0 | ||||
Cash | 1,968,000 | |||||
Debt face amount | $ 5,000,000 | |||||
Stated interest rate | 9.55% | |||||
Periodic payment on principal, percentage | 1.00% | |||||
Periodic payment on principal | $ 50,000 | |||||
Dividends | $ 35,000,000 | |||||
Line of Credit | 2013 Senior Credit Facility | ||||||
Debt And Credit Facility [Line Items] | ||||||
Current line of credit maximum borrowing capacity | $ 370,000,000 | |||||
Covenant compliance, maximum percentage available on line of credit due to exceeded maximum leverage ratio | 25.00% | |||||
Debt Instrument, Covenant Compliance, Maximum Amount Available on Line of Credit Due To Exceeded Maximum Leverage Ratio | $ 11,250,000 | |||||
Debt covenant, excess cash flow | $ 36,000,000 | |||||
Threshold from sale of assets used towards mandatory prepayments | $ 30,000,000 | |||||
Line of Credit | 2013 Senior Credit Facility | Leverage Ratio, Greater Than 2.50 | ||||||
Debt And Credit Facility [Line Items] | ||||||
Previous maximum leverage ratio | 2.50 | |||||
Excess cash flow repayment percentage | 50.00% | |||||
Line of Credit | 2013 Senior Credit Facility | Leverage Ratio, Greater than 2.00 but Less than 2.50 | ||||||
Debt And Credit Facility [Line Items] | ||||||
Previous maximum leverage ratio | 2 | |||||
Excess cash flow repayment percentage | 25.00% | |||||
Line of Credit | 2013 Senior Credit Facility | Leverage Ratio, Less Than or Equal to 2.00 | ||||||
Debt And Credit Facility [Line Items] | ||||||
Excess cash flow repayment percentage | 0.00% | |||||
Line of Credit | 2013 Senior Credit Facility | Base Rate | ||||||
Debt And Credit Facility [Line Items] | ||||||
Debt basis spread on variable rate (as percent) | 2.50% | |||||
Line of Credit | 2013 Senior Credit Facility | LIBOR | ||||||
Debt And Credit Facility [Line Items] | ||||||
Debt basis spread on variable rate (as percent) | 3.50% | |||||
Secured Debt | ||||||
Debt And Credit Facility [Line Items] | ||||||
Long-term Debt, Gross | $ 197,835,000 | 199,918,000 | ||||
Debt Instrument, Unamortized Discount | 1,936,000 | 2,912,000 | ||||
Long-term debt, gross less unamortized discount and debt issuance costs | 201,652,000 | |||||
Debt Issuance Costs, Net | $ 634,000 | $ 977,000 | ||||
Secured Debt | 2013 Term Loan Facility Maturing November 15, 2020 | ||||||
Debt And Credit Facility [Line Items] | ||||||
Long-term Debt, Gross | $ 325,000,000 | |||||
2013 term loan facility | $ 323,375,000 | |||||
Debt instrument, discount percentage | 0.50% | |||||
Debt Instrument, Unamortized Discount | $ 1,625,000 | |||||
Percent of amendment fee paid to consenting lenders | 0.25% | |||||
Repayment of term loan | $ 26,184,000 | |||||
Debt instrument, term after which excess cash flow is paid | 95 days | |||||
Long-term debt, gross less unamortized discount and debt issuance costs | $ 195,265,000 | |||||
Unamortized debt issuance costs | $ 634,000 | |||||
Secured Debt | 2013 Term Loan Facility Maturing November 15, 2020 | Base Rate | ||||||
Debt And Credit Facility [Line Items] | ||||||
Debt instrument, variable rate floor (as a percentage) | 2.00% | |||||
Secured Debt | 2013 Term Loan Facility Maturing November 15, 2020 | LIBOR | ||||||
Debt And Credit Facility [Line Items] | ||||||
Debt instrument, variable rate floor (as a percentage) | 1.00% | |||||
Revolving Credit Facility | 2013 Revolving Loan Facility Maturing November 15, 2018 | ||||||
Debt And Credit Facility [Line Items] | ||||||
Previous line of credit borrowing capacity | $ 15,000,000 | |||||
Current line of credit maximum borrowing capacity | $ 45,000,000 | |||||
Utilization percentage | 20.00% | |||||
Utilization maximum | $ 3,000,000 | |||||
Current maximum leverage ratio | 4 | |||||
Previous maximum leverage ratio | 4.5 | |||||
Letter of Credit | 2013 Revolving Loan Facility Maturing November 15, 2018 | ||||||
Debt And Credit Facility [Line Items] | ||||||
Unused borrowing amount | $ 12,762,000 | |||||
Letters of credit outstanding | $ 2,238,000 | |||||
Scenario, Forecast | Line of Credit | 2013 Senior Credit Facility | ||||||
Debt And Credit Facility [Line Items] | ||||||
Periodic payment on principal | $ 18,000,000 |
Long-Term Debt - Fair Value (De
Long-Term Debt - Fair Value (Details) - Secured Debt - Level 2 - 2013 Term Loan Facility Maturing November 15, 2020 - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Fair market value of debt | $ 183,987 | $ 188,173 |
Fair value percentage | 93.00% | 94.00% |
Mortgage and Term Loan (Details
Mortgage and Term Loan (Details) | Aug. 03, 2018USD ($) | Apr. 24, 2018USD ($) | May 31, 2017USD ($) |
Debt Instrument [Line Items] | |||
Debt face amount | $ 5,000,000 | ||
Fixed interest rate | 9.55% | ||
TSI - Donald Ross Realty LLC Mortgage | Mortgage Loan Facility | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 3,150,000 | ||
Fixed interest rate | 5.36% | ||
Monthly payments | 120 | ||
Amortization period | 25 years | ||
Dixie Highway Realty Mortgage | |||
Debt Instrument [Line Items] | |||
Minimum relationship liquidity balance | $ 500,000 | ||
Dixie Highway Realty Mortgage | Mortgage Loan Facility | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 1,880,000 | ||
Fixed interest rate | 5.46% | ||
Monthly payments | 120 | ||
Amortization period | 25 years | ||
Dixie Highway Realty Mortgage | Term Loan | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 500,000 | ||
Fixed interest rate | 5.30% | ||
Monthly payments | 60 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Nov. 15, 2013 | |
Derivative Instrument [Line Items] | |||
Interest rate swap liability | $ 184 | $ 0 | |
Offset to accumulated other comprehensive income | 104 | ||
November 2013 Agreement | |||
Derivative Instrument [Line Items] | |||
Notional amount of interest rate swap | $ 160,000 | ||
Derivative, fixed interest rate (as a percent) | 0.884% | ||
Derivative, basis spread on variable rate (as a percent) | 3.50% | ||
Derivative, floor interest rate | 1.00% | ||
Level 1 | |||
Derivative Instrument [Line Items] | |||
Interest rate swap liability | 0 | 0 | |
Level 2 | |||
Derivative Instrument [Line Items] | |||
Interest rate swap liability | 184 | 0 | |
Level 3 | |||
Derivative Instrument [Line Items] | |||
Interest rate swap liability | $ 0 | $ 0 |
Related Party (Details)
Related Party (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 01, 2017 | |
General Counsel | ||||
Related Party Transaction [Line Items] | ||||
Legal fees | $ 269,000 | $ 183,000 | ||
General Counsel | Firm Retainer | ||||
Related Party Transaction [Line Items] | ||||
Monthly retainer fee payable | $ 21,000 | |||
Subsequent Event | Affiliated Entity | Bonus | ||||
Related Party Transaction [Line Items] | ||||
Bonus paid | $ 280 |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)lease | Dec. 31, 2017USD ($) | |
Leases [Abstract] | ||
Letters of credit outstanding, amount related to leases | $ 1,823,000 | |
Leases expiring with no renewal options, next 5 years | lease | 27 | |
Leases expiring with no renewal options, current year | lease | 6 | |
Leases expiring with renewal options, next 5 years | lease | 69 | |
Rent expense excluding deferred lease liabilities | $ 139,109,000 | $ 126,318,000 |
Non-base rent expense | 27,448,000 | 24,881,000 |
Rent expense | 138,556,000 | 124,997,000 |
Rental income | 3,005,000 | 2,558,000 |
Rental income above base rent | $ 0 | $ 0 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Minimum Annual Rental | |
2,019 | $ 110,215 |
2,020 | 107,143 |
2,021 | 96,768 |
2,022 | 83,766 |
2,023 | 70,892 |
2024 and thereafter | $ 325,644 |
Leases - Future Lease Receivabl
Leases - Future Lease Receivables (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
2,019 | $ 2,477 |
2,020 | 1,658 |
2,021 | 1,189 |
2,022 | 485 |
2,023 | 5 |
2024 and thereafter | $ 0 |
Stockholders' (Deficit) Equit_2
Stockholders' (Deficit) Equity - Additional Information (Details) - USD ($) | Jun. 15, 2018 | Feb. 01, 2018 | Feb. 01, 2017 | May 31, 2017 | May 31, 2016 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 17, 2018 | Sep. 17, 2018 | Apr. 30, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Capital stock shares authorized | 105,000,000 | |||||||||||
Preferred stock shares authorized | 5,000,000 | |||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||||||
Common stock shares authorized | 100,000,000 | |||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||||||
Options exercisable (in shares) | 22,439 | |||||||||||
Employee Stock Option | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options exercisable (in shares) | 22,439 | 61,013 | ||||||||||
Stock-based compensation expense | $ 15,000 | |||||||||||
Tax benefit | 5,000 | |||||||||||
Award vesting period | 1 year 2 months 12 days | |||||||||||
Options outstanding, intrinsic value | $ 103,000 | |||||||||||
Share price (in dollars per share) | $ 6.40 | |||||||||||
Unrecognized compensation cost related to stock options | $ 0 | |||||||||||
Restricted Stock | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | 2,275,000 | 1,478,000 | ||||||||||
Tax benefit | 696,000 | 452,000 | ||||||||||
Grant date fair value | $ 80,000 | $ 2,913,000 | ||||||||||
Unrecognized compensation cost related to stock options | $ 2,742,000 | |||||||||||
Award of non-qualified options to purchase restricted stock, amount (in shares) | 13,115 | 13,115 | 506,200 | |||||||||
Unrecognized compensation cost related to restricted stock, recognition period | 1 year 6 months 22 days | |||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested, weighted average grant date fair value | $ 3.92 | $ 3.73 | ||||||||||
Common Stock Grants | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | $ 320,000 | |||||||||||
Granted (in shares) | 52,460 | 108,940 | ||||||||||
Grant date fair value | $ 368,000 | |||||||||||
Shares issued, price per share | $ 6.10 | |||||||||||
Minimum | Restricted Stock | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting period | 3 years | |||||||||||
Maximum | Employee Stock Option | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock option term until expiration | 10 years | |||||||||||
Maximum | Restricted Stock | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting period | 4 years | |||||||||||
Accounting Standards Update 2016-09 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Adjustment to share-based compensation expense | $ 51,000 | |||||||||||
2006 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares authorized to be issued under the stock incentive plan | 6,500,000 | 4,500,000 | 3,500,000 | |||||||||
Number of additional shares authorized to be issued under the stock incentive plan | 2,000,000 | 1,000,000 | ||||||||||
Number of shares available to be issued under the stock incentive plan | 2,077,165 | |||||||||||
2006 Plan | Employee Stock Option | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Granted (in shares) | 0 | 0 | ||||||||||
Management Stock Purchase Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | $ 0 | |||||||||||
Maximum amount of cash compensation allowed towards purchase of stock, percent | 20.00% | |||||||||||
Maximum amount of cash compensation allowed towards purchase of stock, amount | $ 200,000 | |||||||||||
Share-based compensation arrangement by share-based payment award, award requisite service period | 2 years | |||||||||||
Share-based compensation arrangement by share-based payment award, shares granted as a result of satisfying requisite period, percent | 50.00% | |||||||||||
Employee Stock Purchase Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares authorized to be issued under the stock incentive plan | 800,000 | |||||||||||
Number of shares available to be issued under the stock incentive plan | 791,357 | |||||||||||
Stock-based compensation expense | $ 21,000 | |||||||||||
Share price (in dollars per share) | $ 6.16 | |||||||||||
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent | 85.00% | |||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested, weighted average grant date fair value | $ 1.64 |
Stockholders' (Deficit) Equit_3
Stockholders' (Deficit) Equity - Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Common | |
Options Outstanding, Ending Balance (in shares) | shares | 22,439 |
Weighted Average Exercise Price | |
Ending Balance, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 1.82 |
Employee Stock Option | |
Common | |
Options Outstanding, Beginning Balance (in shares) | shares | 61,013 |
Exercised (in shares) | shares | (13,110) |
Canceled (in shares) | shares | (25,464) |
Options Outstanding, Ending Balance (in shares) | shares | 22,439 |
Weighted Average Exercise Price | |
Beginning Balance, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 2.19 |
Exercised, Weighted Average Exercise Price (in dollars per share) | $ / shares | 2.34 |
Canceled, Weighted Average Exercise Price (in dollars per share) | $ / shares | 2.42 |
Ending Balance, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 1.82 |
Stockholders' (Deficit) Equit_4
Stockholders' (Deficit) Equity - Stock Option Information (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options outstanding, number of options (in shares) | shares | 22,439 |
Options Outstanding, Weighted-Average Remaining Contractual Life | 15 months |
Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ / shares | $ 1.82 |
Options exercisable (in shares) | shares | 22,439 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 1.82 |
2009 grants | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options outstanding, number of options (in shares) | shares | 11,124 |
Options Outstanding, Weighted-Average Remaining Contractual Life | 11 months |
Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ / shares | $ 1.74 |
Options exercisable (in shares) | shares | 11,124 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 1.74 |
2010 grants | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options outstanding, number of options (in shares) | shares | 11,315 |
Options Outstanding, Weighted-Average Remaining Contractual Life | 18 months |
Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ / shares | $ 1.91 |
Options exercisable (in shares) | shares | 11,315 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 1.91 |
Stockholders' (Deficit) Equit_5
Stockholders' (Deficit) Equity - Restricted Stock Grants (Details) - Restricted Stock - USD ($) $ / shares in Units, $ in Thousands | Feb. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares | 13,115 | 13,115 | 506,200 |
Share Price (in dollars per share) | $ 6.1 | ||
Grant Date Fair Value | $ 80 | $ 2,913 |
Stockholders' (Deficit) Equit_6
Stockholders' (Deficit) Equity - Restricted Stock Activity (Details) - Restricted Stock - $ / shares | Feb. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Number of Shares | |||
Beginning balance, Number of Shares | 1,511,941 | ||
Granted, Number of Shares | 13,115 | 13,115 | 506,200 |
Vested, Number of Shares | (660,475) | ||
Forfeited, Number of Shares | (44,309) | ||
Ending balance, Number of Shares | 820,272 | 1,511,941 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance, weighted average grant date fair value (in dollars per share) | $ 3.73 | ||
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | 6.10 | ||
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | 3.50 | ||
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | 4.51 | ||
Ending balance, weighted average grant date fair value (in dollars per share) | $ 3.92 | $ 3.73 |
Stockholders' (Deficit) Equit_7
Stockholders' (Deficit) Equity - Black-Scholes Option Pricing Model (Details) - Employee Stock Purchase Plan | Sep. 17, 2018$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share price (in dollars per share) | $ 6.16 |
Expected Term (Years) | 3 months |
Expected Volatility | 57.61% |
Risk-Free Interest Rate | 2.37% |
Expected Dividend Yield | 0.00% |
Revenues Revenue - Impact of AS
Revenues Revenue - Impact of ASC 606 (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred membership costs | $ 1,803 | $ 959 | |
Accumulated deficit | (73,212) | (74,893) | |
Payroll and related | 168,315 | $ 145,612 | |
Balances without adoption of ASC 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred membership costs | 476 | ||
Accumulated deficit | (74,539) | ||
Payroll and related | 168,038 | ||
Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative Effect on Retained Earnings, before Tax | $ 1,604 | ||
Accounting Standards Update 2014-09 [Member] | Effect of Change Increase/(Decrease) | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred membership costs | 1,327 | ||
Accumulated deficit | 1,327 | ||
Payroll and related | $ 277 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)clubjurisdictionsession | Dec. 31, 2017USD ($)club | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 443,094 | $ 403,042 |
Average membership life | 26 months | 26 months |
Deferred revenue | $ 37,459 | $ 33,473 |
Number of Stores | club | 185 | |
Bonds Outstanding Pursuant To Various State Consumer Protection Laws | $ 3,443 | 2,658 |
Deferred revenue recognized | 20,764 | |
Membership | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 339,397 | 307,966 |
Initiation And Processing Fees | ||
Disaggregation of Revenue [Line Items] | ||
Annual Membership Fees, Amortization Period | 12 months | |
Revenues | $ 1,209 | 2,268 |
Membership Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 340,606 | 310,234 |
Personal Training Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 73,458 | 69,735 |
Deferred revenue | $ 12,371 | 12,456 |
Number Of Jurisdictions In Which Expired Sessions Are Not Escheatable | jurisdiction | 6 | |
Other Ancillary Club Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 23,293 | 17,197 |
Ancillary Club Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 96,751 | 86,932 |
Club operations | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 437,357 | 397,166 |
Fees and other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 5,737 | 5,876 |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Number of Personal Training Sessions Per Month | session | 4 | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Number of Personal Training Sessions Per Month | session | 12 | |
Managed Sites | Investee | Management Fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 439 | $ 922 |
Number of Stores | club | 2 | 4 |
Corporate Income Taxes - Provis
Corporate Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current | ||
Federal | $ (349) | $ (9,599) |
Foreign | 19 | (63) |
State and Local | 66 | (56) |
Total | (264) | (9,718) |
Deferred | ||
Federal | (93) | 12 |
Foreign | 0 | 0 |
State and Local | 0 | 20 |
Total | (93) | 32 |
Federal (benefit) provision for income tax | (442) | (9,587) |
Foreign (benefit) provision for income tax | 19 | (63) |
State and local (benefit) provision for income tax | 66 | (36) |
Total (benefit) provision for income tax | $ (357) | $ (9,686) |
Corporate Income Taxes - Compon
Corporate Income Taxes - Components of Deferred Tax Assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets | ||
Basis differences in depreciation and amortization | $ 3,776 | $ 0 |
Deferred lease liabilities | 14,761 | 15,638 |
Deferred revenue | 4,824 | 4,590 |
Deferred compensation expense incurred in connection with stock grants | 887 | 912 |
Federal and state net operating loss carry-forwards | 12,716 | 15,645 |
Accruals, reserves and other | 4,682 | 4,942 |
Deferred tax assets, gross | 41,646 | 41,727 |
Deferred tax liabilities | ||
Basis differences in depreciation and amortization | 0 | 1,311 |
Deferred costs | 1,884 | 1,740 |
Deferred tax liabilities, gross | 1,884 | 3,051 |
Gross deferred tax assets | 39,762 | 38,676 |
Valuation allowance | (39,762) | (38,769) |
Deferred tax liabilities, net | $ 0 | $ (93) |
Corporate Income Taxes - Additi
Corporate Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Feb. 04, 2019 | Jan. 18, 2019 | Nov. 30, 2017 | Nov. 17, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Operating Loss Carryforwards [Line Items] | ||||||
Deferred tax liabilities, net | $ 0 | $ 93 | ||||
Valuation allowance | 39,762 | 38,769 | ||||
Current tax provision (benefit) | $ 19 | $ (63) | ||||
Effective income tax rate | 74.00% | 182.00% | ||||
Unrecognized tax benefits affecting future tax rate | $ 1,155 | $ 1,155 | ||||
Interest expense on unrecognized tax benefits | 81 | 81 | ||||
Total accruals for interest | 946 | $ 865 | ||||
Tax Year 2006 Though 2009 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Estimate of possible loss | $ 5,097 | |||||
Interest expense under examination | 2,419 | |||||
Tax Year 2010 Though 2014 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Estimate of possible loss | $ 3,906 | |||||
Interest expense under examination | $ 757 | |||||
Federal Tax | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Federal and state tax net operating loss carry-forwards | 3,810 | |||||
State Tax | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Federal and state tax net operating loss carry-forwards | $ 134,509 | |||||
New York City Department Of Finance | Tax Year 2006 Though 2009 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Estimate of possible loss | 4,797 | |||||
Interest expense under examination | $ 4,138 | |||||
Subsequent Event | Tax Year 2010 Though 2014 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Interest expense under examination | $ 1,203 | |||||
Subsequent Event | New York City Department Of Finance | Tax Year 2006 Though 2009 | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Estimate of possible loss | $ 5,599 | |||||
Interest expense under examination | $ 1,569 |
Corporate Income Taxes - Reconc
Corporate Income Taxes - Reconciliation of Effective Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Federal statutory tax rate | 21.00% | 35.00% |
State and local income taxes (net of federal tax benefit) | (11.00%) | 1.00% |
Permanent differences | (27.00%) | (3.00%) |
Refundable AMT Credit (Tax Reform) | 74.00% | 0.00% |
Noncontrolling interest | (10.00%) | 0.00% |
Effective Income Tax Rate, Share-based Compensation, Excess Tax Benefit, Percent | (83.00%) | (2.00%) |
Others | (5.00%) | (0.00%) |
Effective income tax rate before valuation allowance | (41.00%) | 31.00% |
Valuation allowance | 115.00% | 151.00% |
Effective income tax rate on pre-tax income(loss) | 74.00% | 182.00% |
Corporate Income Taxes - Reco_2
Corporate Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of unrecognized tax benefits excluding amounts pertaining to examined tax returns RollForward | ||
Beginning balance | $ 1,155 | $ 1,187 |
Reductions due to a lapse of applicable statute of limitations | 0 | (32) |
Ending balance | $ 1,155 | $ 1,155 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 05, 2013USD ($) | Dec. 31, 2018USD ($)lawsuit | Aug. 29, 2011USD ($) |
Loss Contingencies [Line Items] | |||
Number Of Class Action Lawsuits | lawsuit | 1 | ||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 946 | ||
Action Styled White Plains Realty Vs Town Sports International [Member] | |||
Loss Contingencies [Line Items] | |||
Additional damages | $ 900,000 | ||
Damages awarded | $ 1,000,000 |
Subsequent Event (Details)
Subsequent Event (Details) - January 2019 Acquisition [Member] - Subsequent Event $ in Thousands | 1 Months Ended |
Feb. 28, 2019USD ($)club | |
Subsequent Event [Line Items] | |
Number of Stores | club | 6 |
Consideration transferred | $ | $ 22,222 |