Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 17, 2017 | Jun. 30, 2016 | |
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 | Smaller Reporting Company | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 26,609,737 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 33.9 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 45,596 | $ 76,217 |
Accounts receivable, net | 1,221 | 1,923 |
Inventory | 238 | 337 |
Deferred tax assets | 0 | 1,549 |
Prepaid corporate income taxes | 1,505 | 6,895 |
Prepaid expenses and other current assets | 10,274 | 13,170 |
Total current assets | 58,834 | 100,091 |
Fixed assets, net | 170,580 | 195,341 |
Goodwill | 1,008 | 1,025 |
Intangible assets, net | 135 | 171 |
Deferred tax assets | 0 | 219 |
Deferred membership costs | 1,092 | 3,029 |
Other assets | 4,229 | 3,225 |
Total assets | 235,878 | 303,101 |
Current liabilities: | ||
Current portion of long-term debt | 2,082 | 2,810 |
Accounts payable | 2,477 | 2,615 |
Accrued expenses | 25,907 | 26,129 |
Accrued interest | 119 | 129 |
Deferred revenue | 34,572 | 40,225 |
Deferred tax liabilities | 0 | 236 |
Total current liabilities | 65,157 | 72,144 |
Long-term debt | 194,743 | 263,930 |
Deferred lease liabilities | 49,660 | 51,136 |
Deferred tax liabilities | 61 | 1,593 |
Deferred revenue | 440 | 319 |
Other liabilities | 11,487 | 10,224 |
Total liabilities | 321,548 | 399,346 |
Commitments and Contingencies (Note 14) | ||
Stockholders’ deficit: | ||
Preferred stock, $0.001 par value; no shares issued and outstanding at both December 31, 2016 and December 31, 2015 | ||
Common stock, $0.001 par value; issued and outstanding 26,560,547 and 24,818,786 shares at December 31, 2016 and 2015, respectively | 24 | 24 |
Additional paid-in capital | (6,261) | (8,386) |
Accumulated other comprehensive loss | (168) | (523) |
Accumulated deficit | (79,265) | (87,360) |
Total stockholders’ deficit | (85,670) | (96,245) |
Total liabilities and stockholders’ deficit | $ 235,878 | $ 303,101 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
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 | 26,560,547 | 24,818,786 |
Common stock, shares outstanding | 26,560,547 | 24,818,786 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Club operations | $ 390,560 | $ 418,069 | $ 447,871 |
Fees and other | 6,361 | 6,254 | 5,971 |
Total revenue | 396,921 | 424,323 | 453,842 |
Operating Expenses: | |||
Payroll and related | 149,029 | 175,898 | 177,009 |
Club operating | 185,104 | 196,725 | 192,716 |
General and administrative | 24,702 | 30,683 | 31,352 |
Depreciation and amortization | 43,727 | 47,887 | 47,307 |
Impairment of fixed assets | 742 | 14,571 | 4,569 |
Impairment of goodwill | 0 | 31,558 | 137 |
Gain on sale of building | 0 | (77,146) | 0 |
Gain on lease termination | 0 | (2,967) | 0 |
Total operating expenses | 403,304 | 417,209 | 453,090 |
Operating (loss) income | (6,383) | 7,114 | 752 |
(Gain) loss on extinguishment of debt | (37,893) | (17,911) | 493 |
Interest expense | 13,940 | 20,579 | 19,039 |
Interest income | (2) | 0 | 0 |
Equity in the earnings of investees and rental income | (242) | (2,361) | (2,402) |
Income (loss) before provision (benefit) for corporate income taxes | 17,814 | 6,807 | (16,378) |
Provision (benefit) for corporate income taxes | 9,771 | (14,351) | 52,611 |
Net income (loss) | $ 8,043 | $ 21,158 | $ (68,989) |
Earnings (loss) per share: | |||
Basic (in dollars per share) | $ 0.31 | $ 0.86 | $ (2.84) |
Diluted (in dollars per share) | $ 0.31 | $ 0.84 | $ (2.84) |
Weighted average number of shares used in calculating earnings (loss) per share: | |||
Basic (in shares) | 25,568,371 | 24,630,898 | 24,266,407 |
Diluted (in shares) | 26,074,735 | 25,114,057 | 24,266,407 |
Dividends declared per common share (in dollars per share) | $ 0 | $ 0 | $ 0.32 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||
Net income (loss) | $ 8,043 | $ 21,158 | $ (68,989) |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments, net of tax of $0 for the years ended in December 31, 2016, 2015 and 2014 | (176) | (165) | (545) |
Interest rate swap, net of tax of $0 for the years ended in December 31, 2016, 2015 and 2014 | 531 | (753) | (1,112) |
Total other comprehensive income (loss), net of tax | 355 | (918) | (1,657) |
Total comprehensive income (loss) | $ 8,398 | $ 20,240 | $ (70,646) |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
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 | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Retained Earnings (Deficit) |
Shares, beginning balance at Dec. 31, 2013 | 24,072,705 | ||||
Beginning balance at Dec. 31, 2013 | $ (43,516) | $ 24 | $ (13,846) | $ 2,052 | $ (31,746) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises, shares | 73,043 | ||||
Stock option exercises | 133 | 133 | |||
Common stock grants, shares | 21,248 | ||||
Common stock grants | 245 | 245 | |||
Restricted stock grants, shares | 196,500 | ||||
Cancellation of options | (71) | (71) | |||
Forfeiture of restricted stock, shares | (41,247) | ||||
Compensation related to stock options and restricted stock grants | 1,666 | 1,666 | |||
Tax benefit from stock option exercises and restricted stock vesting, net | 1,613 | 1,613 | |||
Tax benefit on dividend payments | 205 | 205 | |||
Dividends declared on common stock | (7,736) | (7,736) | |||
Dividend forfeitures | 23 | 23 | |||
Net income (loss) | (68,989) | (68,989) | |||
Derivative financial instruments | (1,112) | (1,112) | |||
Foreign currency translation adjustment | (545) | (545) | |||
Shares, ending balance at Dec. 31, 2014 | 24,322,249 | ||||
Ending balance at Dec. 31, 2014 | (118,084) | $ 24 | (10,055) | 395 | (108,448) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises, shares | 171,718 | ||||
Stock option exercises | 283 | 283 | |||
Common stock grants, shares | 67,609 | ||||
Common stock grants | 445 | 445 | |||
Restricted stock grants, shares | 507,000 | ||||
Forfeiture of restricted stock, shares | (249,790) | ||||
Compensation related to stock options and restricted stock grants | 941 | 941 | |||
Dividend forfeitures | 176 | 176 | |||
Net income (loss) | 21,158 | 21,158 | |||
Derivative financial instruments | (753) | (753) | |||
Foreign currency translation adjustment | (165) | (165) | |||
Dividend related to registration rights | (246) | (246) | |||
Shares, ending balance at Dec. 31, 2015 | 24,818,786 | ||||
Ending balance at Dec. 31, 2015 | (96,245) | $ 24 | (8,386) | (523) | (87,360) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises, shares | 226,011 | ||||
Stock option exercises | 318 | 318 | |||
Common stock grants, shares | 206,750 | ||||
Common stock grants | 246 | 246 | |||
Restricted stock grants, shares | 1,711,000 | ||||
Forfeiture of restricted stock, shares | (402,000) | ||||
Compensation related to stock options and restricted stock grants | 1,561 | 1,561 | |||
Dividend forfeitures | 52 | 52 | |||
Net income (loss) | 8,043 | 8,043 | |||
Derivative financial instruments | 531 | 531 | |||
Foreign currency translation adjustment | (176) | (176) | |||
Shares, ending balance at Dec. 31, 2016 | 26,560,547 | ||||
Ending balance at Dec. 31, 2016 | $ (85,670) | $ 24 | $ (6,261) | $ (168) | $ (79,265) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 8,043,000 | $ 21,158,000 | $ (68,989,000) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 43,727,000 | 47,887,000 | 47,307,000 |
Impairment of fixed assets | 742,000 | 14,571,000 | 4,569,000 |
Impairment of goodwill | 0 | 31,558,000 | 137,000 |
Gain on sale of building | 0 | (77,146,000) | 0 |
(Gain) loss on extinguishment of debt | (37,893,000) | (17,911,000) | 493,000 |
Amortization of debt discount | 1,006,000 | 1,288,000 | 1,304,000 |
Amortization of debt issuance costs | 644,000 | 778,000 | 627,000 |
Amortization of building financing costs | 0 | 124,000 | 31,000 |
Noncash rental income, net of non-cash rental expense | (3,617,000) | (3,647,000) | (5,399,000) |
Share-based compensation expense | 1,807,000 | 1,386,000 | 1,911,000 |
Net change in deferred taxes | 0 | (11,519,000) | 40,129,000 |
Net change in certain operating assets and liabilities | 1,500,000 | 9,185,000 | (20,994,000) |
Decrease in membership costs | 1,937,000 | 4,367,000 | 1,329,000 |
Landlord contributions to tenant improvements | 2,080,000 | 1,288,000 | 1,684,000 |
Increase in insurance reserves | 1,130,000 | 1,087,000 | 482,000 |
Other | 84,000 | 416,000 | 137,000 |
Total adjustments | 13,147,000 | 3,712,000 | 73,747,000 |
Net cash provided by operating activities | 21,190,000 | 24,870,000 | 4,758,000 |
Cash flows from investing activities: | |||
Capital expenditures | (19,723,000) | (30,471,000) | (42,054,000) |
Change in restricted cash | 0 | (1,100,000) | 0 |
Other | (280,000) | 0 | 0 |
Net cash used in investing activities | (20,003,000) | (31,571,000) | (42,054,000) |
Cash flows from financing activities: | |||
Proceeds from building financing arrangement | 0 | 4,000,000 | 83,400,000 |
Building financing arrangement costs | 0 | 0 | (3,160,000) |
Principal payments on 2013 Term Loan Facility | (2,266,000) | (3,038,000) | (16,716,000) |
Repurchase of 2013 Term Loan Facility | (29,765,000) | (10,947,000) | 0 |
Debt issuance costs | 0 | (350,000) | 0 |
Cash dividends paid | (50,000) | (213,000) | (7,877,000) |
Redemption paid pursuant to the Rights Plan | 0 | (246,000) | 0 |
Proceeds from stock option exercises | 318,000 | 283,000 | 133,000 |
Tax benefit from restricted stock vesting | 0 | 0 | 1,723,000 |
Net cash (used in) provided by financing activities | (31,763,000) | (10,511,000) | 57,503,000 |
Effect of exchange rate changes on cash | (45,000) | (23,000) | (353,000) |
Net (decrease) increase in cash and cash equivalents | (30,621,000) | (17,235,000) | 19,854,000 |
Cash and cash equivalents beginning of period | 76,217,000 | 93,452,000 | 73,598,000 |
Cash and cash equivalents end of period | 45,596,000 | 76,217,000 | 93,452,000 |
Summary of the change in certain operating assets and liabilities: | |||
Decrease in accounts receivable | 763,000 | 1,446,000 | 25,000 |
Decrease (increase) in inventory | 99,000 | 219,000 | (101,000) |
Decrease (increase) in prepaid expenses and other current assets | 2,997,000 | 596,000 | (1,549,000) |
(Decrease) Increase in accounts payable, accrued expenses and accrued interest | (2,298,000) | 1,011,000 | (9,856,000) |
Change in prepaid corporate income taxes and corporate income taxes payable | 5,471,000 | 4,774,000 | (12,773,000) |
(Decrease) increase in deferred revenue | (5,532,000) | 1,139,000 | 3,260,000 |
Net change in certain working capital components | $ 1,500,000 | $ 9,185,000 | $ (20,994,000) |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation As of December 31, 2016 , Town Sports International Holdings, Inc. (the “Company” or “TSI Holdings”), through its wholly-owned subsidiary, Town Sports International, LLC (“TSI, LLC”), operated 150 fitness clubs (“clubs”). The clubs are composed of 102 clubs in the New York metropolitan market under the “New York Sports Clubs” brand name, 28 clubs in the Boston market under the “Boston Sports Clubs” brand name, 12 clubs ( one of which is partly-owned) in the Washington, D.C. market under the “Washington Sports Clubs” brand name, five clubs in the Philadelphia market under the “Philadelphia Sports Clubs” brand name and three clubs in Switzerland. We also have one partly-owned club that operated under a different brand name in Washington, D.C. as of December 31, 2016 . The Company’s operating segments are New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs, Washington Sports Clubs and the clubs the Company owns in Switzerland, which is the level at which the chief operating decision makers review discrete financial information and make decisions about segment profitability based on earnings before income tax depreciation and amortization. The Company has determined that these operating segments have similar economic characteristics and meet the criteria which permit them to be aggregated into one reportable segment. Beginning in the first quarter of 2016, the Company's chief operating decision maker discontinued the review of BFX Studio financial information separately for purposes of making operating decisions and assessing financial performance. Also, in the second half of 2016, all BFX Studio locations were converted to clubs, discontinuing the BFX Studio brand. Accordingly, the Company manages and reports results through one reportable segment. Previously, the Company managed and reported results through two reportable segments: clubs and BFX Studio. Certain reclassifications were made to the reported amounts on the condensed consolidated balance sheet as of December 31, 2015 to conform to the presentation as of December 31, 2016 . The Company has been experiencing declining revenue from members for several years as the fitness industry continues to be highly competitive in the geographic regions in which the Company competes. New members have been joining at lower monthly rates and cancellations of members paying higher rates will continue to negatively impact the Company's results and liquidity if these trends are not reversed. In response to this, the Company initiated cost savings initiatives in 2015 that continued through 2016 to help mitigate the impact the decline in revenue has had on its profitability and cash flow from operations. In December 2015, TSI Holdings purchased $29,829 principal amount of debt outstanding under its senior credit facility in the open market for $10,947 , or 36.7% of face value. On April 21, 2016, TSI Holdings settled a transaction to purchase $8,705 principal amount of debt outstanding under the senior credit facility for $3,787 , or 43.5% of face value. On May 6, 2016, TSI Holdings settled another transaction to purchase $62,447 principal amount of debt outstanding under the senior credit facility for $25,978 , or 41.6% of face value. All of the above purchased debt was transferred to TSI, LLC and canceled. The Company’s ability to fund operations and capital expenditures is dependent upon its ability to generate sufficient cash from operations coupled with cash on hand. The Company believes it has sufficient liquidity from a combination of cash on hand and cash to be generated from operations to fund anticipated capital expenditures and currently scheduled debt service for at least the next 12 months. Failure to maintain club equipment could lead to decreased member satisfaction and increased member attrition and could therefore negatively affect future operating results and cash generated from operations. As further described in Note 7 - Long-Term Debt, the Company maintains a senior credit facility with its lenders which contains a term loan facility and a revolving loan facility. The term loan facility carries a gross principal balance of $202,000 and will mature on November 15, 2020. The terms of the senior credit facility include a financial covenant under which the Company is not able to utilize more than 25% , or $11,250 in accordance with terms of the credit agreement, of the revolving loan facility if the total leverage ratio (as defined in the credit agreement) exceeds 4.50 :1.00 (calculated on a proforma basis to give effect to any borrowing). As of December 31, 2016 , the total leverage ratio was slightly below 4.50 :1.00. Any new borrowings on the revolving loan facility would be pursuant to the terms and subject to the conditions applicable to borrowings under the Company’s senior credit facility, which conditions the Company may or may not be able to satisfy at the time of borrowing. The revolving loan facility is scheduled to mature in November 2018 and under this facility we have $2,851 in letters of credit that, if still outstanding, will likely need to be funded by the Company's cash. The Company continues to focus on increasing membership in existing clubs to increase revenue. The Company may consider additional actions within its control, including the sale of certain assets, club acquisitions, additional club closures and entering into arrangements with revenue generating partnerships, some of which will utilize a “shop-in-shop” concept. The Company may also consider additional strategic alternatives including opportunities to reduce TSI, LLC's existing debt and further cost savings initiatives, among other possibilities, if any. 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 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, further reductions in working capital, debt restructurings and 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
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. Revenue Recognition The Company generally receives one-time non-refundable joining fees and monthly dues from its members. The Company offers both month-to-month and one-year commit memberships. Members can cancel their membership with a fee charged to those 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. Usage fees recorded were $1,015 , $719 and $2,248 for the years ended December 31, 2016 , 2015 and 2014 , respectively. Initiation and processing fees, as well as related direct and incremental expenses of membership acquisition, which 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. Deferred membership costs were $1,092 and $3,029 at December 31, 2016 and 2015, respectively. The average membership life was 25 months for the year ended December 31, 2016 , and 22 months for the years ended December 31, 2015 and 2014 . 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 a quarterly basis. Revenues from ancillary services, such as personal training sessions, are recognized as services are performed. Unused personal training sessions expire after a set, disclosed period of time after purchase and are not refundable or redeemable by the member for cash. The State of New York has informed the Company that it is considering whether the Company is required to remit the amount collected for unused, expired personal training sessions to the State of New York as unclaimed property. As of December 31, 2016 and 2015 , the Company had approximately $15,079 and $14,968 , respectively, of unused and expired personal training sessions. We have not recognized any revenue from these sessions and have recorded the amounts as deferred revenue. The Company does not believe that these amounts are subject to the escheatment or abandoned property laws of any jurisdiction, including the State of New York. However, it is possible 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 jurisdictions. 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. Members who purchase this product commit to a three month period and revenue is recognized ratably over this period. The Company generates management fees from certain club facilities that are not wholly-owned. Management fees earned for services rendered are recognized at the time the related services are performed. These managed sites include three fitness clubs located in colleges and universities and eight managed sites. Revenue generated from managed sites was $1,892 , $1,802 and $1,502 for the years ended December 31, 2016 , 2015 and 2014 , 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. The Company recognizes revenue from merchandise sales upon delivery to the member. In connection with advance receipts of fees or dues, the Company was required to maintain bonds totaling $3,112 and $3,900 as of December 31, 2016 and 2015 , respectively, pursuant to various state consumer protection laws. Advertising and Club Pre-opening Costs Advertising costs and club pre-opening costs are charged to operations during the period in which they are incurred, except for production costs related to television and radio advertisements, which are expensed when the related commercials are first aired. Total advertising costs incurred by the Company for the years ended December 31, 2016 , 2015 and 2014 totaled $6,384 , $11,057 and $7,903 , respectively and are included in Club operating expenses. Cash and Cash Equivalents 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 $276 and $275 are included in cash and cash equivalents at December 31, 2016 and 2015 , respectively. 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. 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 $3,190 , $2,920 and $2,771 as of December 31, 2016 , 2015 and 2014 , 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. 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. The Company recorded $329 , $1,550 and $1,482 of lease termination losses in the years ended December 31, 2016, 2015 and 2014. In the year ended December 31, 2014, the lease termination losses of $1,482 was partially offset by write-offs of deferred rent at clubs with early lease terminations of $2,924 , which resulted in a lease termination gain of $1,442 . The above lease termination gains (losses) were included in Club operating expenses in the accompanying consolidated statements of operations for each respective year. In the year ended December 31, 2015, in addition to the $1,550 lease termination losses recorded in Club operating expenses in the accompanying statements of operations, the Company also recorded an additional $2,967 net gain on lease termination in a separate line item on the accompanying consolidated statements of operations. This net gain on lease termination was related to the termination of a lease for a planned club opening that was not yet effective. The Company received one-time gross proceeds of $3,090 from a landlord related to this lease termination in November 2015. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consists of amounts due from the Company’s membership base and was $4,133 and $5,056 at December 31, 2016 and 2015 , 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, 2016 , 2015 and 2014 : Balance Beginning of the Year Additions Write-offs Net of Recoveries Balance at End of Year December 31, 2016 $ 3,133 $ 6,704 $ (6,925 ) $ 2,912 December 31, 2015 $ 2,511 $ 11,237 $ (10,615 ) $ 3,133 December 31, 2014 $ 2,309 $ 9,826 $ (9,624 ) $ 2,511 Inventory Inventory primarily consists of cleaning and locker room supplies. Inventories are valued at the lower of costs or market by the first-in, first-out method. 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. Payroll costs directly related to the construction or expansion of the Company’s club base are capitalized with leasehold improvements. 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. The 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. Web site 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, management contracts and trade names. Membership lists are amortized over the estimated average membership life, currently at 25 months, management contracts are amortized over their current contractual lives of between nine and 11 years and trade names are amortized over their estimated useful lives of between 10 and 20 years. Debt issuance costs are classified within other assets and are being amortized as additional interest expense over the life of the underlying debt, five to seven years, using the interest method. Amortization of debt issue costs was $644 , $778 and $627 , for the years ended December 31, 2016 , 2015 and 2014 , respectively. Building financing costs were classified within other assets and were being amortized as additional interest expense over the life of the underlying financing arrangement, 25 years , using the interest method. Amortization of building financing costs was $124 and $31 for the years ended December 31, 2015 and 2014. There was no amortization of building financing costs in December 31, 2016 . The balance of building financing costs of $3,005 was written off in December 2015 in connection with the termination of the future lease, which was included in Gain on sale of building in the accompanying statements of operations. 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 when events or circumstances indicate that their carrying value may not be recoverable. 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. Goodwill impairment testing is a two-step process. Prior to performing this two-step process, companies also have the option to apply a qualitative approach to assess goodwill for impairment. Under the qualitative approach, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the estimated fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. Companies that do not elect to perform the qualitative approach may proceed directly to the two-step process. Step 1 involves comparing the estimated fair value of the Company’s reporting units to their carrying amounts. If the estimated fair value of the reporting unit is greater than its carrying amount, there is no requirement to perform Step 2 of the impairment test, and there is no impairment. If the reporting unit’s carrying amount is greater than the estimated fair value, the second step must be completed to measure the amount of impairment, if any. Step 2 calculates the implied fair value of goodwill by deducting the estimated fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the estimated fair value of the reporting unit as determined in Step 1. The implied fair value of goodwill determined in this step is compared to the carrying value of goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, an impairment charge is recognized equal to the difference. The Company performs this analysis annually as of the last day of February and in the interim if a triggering event occurs. The February 29, 2016 annual impairment test supported the goodwill balance and as such no impairment of goodwill was required. For the February 29, 2016 impairment test, fair value was determined by using an income approach, as this was deemed to be the most indicative of the Company’s fair value. Under the income approach, the Company determined fair value based on estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn, which are unobservable Level 3 inputs. The discounted estimates of future cash flows include significant management assumptions such as revenue growth rates, operating margins, weighted average cost of capital, and future economic and market conditions. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. These assumptions were determined separately for each reporting unit. Solely for purposes of establishing inputs for the fair value calculation described above related to goodwill impairment testing, the Company developed long-range financial forecasts (three years) for all reporting units and assumed known changes in the existing club base. Terminal growth rates were calculated for years beyond the three year forecast. 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 $615 as of December 31, 2016 and 2015 . 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, deferred income tax valuation, valuation of and expense incurred in connection with stock options, valuation of interest-rate swap arrangements, insurance reserves, legal contingencies and the estimated average membership life 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. The Company also recognizes deferred tax in relation to the U.S. taxes on the total cumulative earnings of the Company's Swiss clubs. 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. Based on the weight of the evidence at December 31, 2014, the Company was projected to be in a cumulative loss during the three year period ending in December 31, 2015, which was considered a significant piece of negative evidence, the Company recorded a $60,368 non-cash charge to income tax expense to establish a full valuation allowance against its U.S. net deferred tax assets in the fourth quarter of 2014. As of December 31, 2016 , the Company continues to maintain a full valuation allowance of $54,193 against outstanding net deferred tax assets as the company continues to have 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 also 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, 2016 2015 2014 Cash paid: Interest paid (net of amounts capitalized) $ 12,289 $ 16,749 $ 17,103 Income taxes paid $ 11,286 $ 105 $ 23,553 Cash received: Income taxes refund $ 6,985 $ 7,768 $ — Noncash investing and financing activities: Acquisition of fixed assets included in accounts payable and accrued expenses $ 2,058 $ 2,031 $ 4,822 Note: Interest includes cash payments under the Initial Lease (as defined below) resulting from the sale of the East 86th Street property in the years ended December 31, 2015 and 2014. See Notes 7 and 8 for additional noncash financing activities. Accumulated Other Comprehensive (Loss) Income Accumulated 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 accumulated other comprehensive (loss) income in its consolidated statements of comprehensive (loss) income. The Company uses a derivative financial instrument to limit exposure to changes in interest rates on the Company’s existing term loan facility. The derivative financial instrument is 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 shareholders’ 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 has been designated as a cash flow hedge. See Note 9 - Derivative Financial Instruments for more information on the Company’s risk management program and derivatives. At December 31, 2016 , the Company owned three Swiss clubs, 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. For all periods presented, foreign exchange transaction gains and losses were not material. 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 $(176) , net of tax of $0 ; $(165) , net of tax of $0 and $(545) , net of tax of $0 , for the years ended December 31, 2016 , 2015 and 2014 , 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, 2016 , $20,965 of the cash balance of $45,596 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. The counterparty to the Company’s interest rate swap is a major banking institution with a credit rating of investment grade or better and no collateral is required, and there are no significant risk concentrations. The Company believes the risk of incurring losses on derivative contracts related to credit risk is unlikely. 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 is computed similarly to basic EPS, except that the denominator is increased for the assumed exercise of dilutive stock options and unvested restricted stock calculated using the treasury stock method. The following table summarizes the weighted average common shares for basic and diluted EPS computations. For The Year Ended December 31, 2016 2015 2014 Net income (loss) $ 8,043 $ 21,158 $ (68,989 ) Weighted average number of common share outstanding — basic 25,568,371 24,630,898 24,266,407 Effect of dilutive share-based awards 506,364 483,159 — Weighted average number of common shares outstanding — diluted 26,074,735 25,114,057 24,266,407 Earnings (loss) per share: Basic $ 0.31 $ 0.86 $ (2.84 ) Diluted $ 0.31 $ 0.84 $ (2.84 ) For the years ended December 31, 2016 and December 31, 2015, the Company did not include options to purchase 810,571 and 276,846 shares of the Company’s common stock, respectively, 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. For the year ended December 31, 2014, there was no effect of diluted stock options and unvested restricted common stock on the calculation of diluted EPS as the Company had a net loss for this period. There would have been 378,285 anti-dilutive shares for this period had the Company not been in a net loss position. 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 is determined using the Black-Scholes option-pricing model. 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, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2016, the FASB issued Accounting Standards Update (“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 adoption of this guidance is not expected to have a material impact on the Company's financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” Under this standard, all excess tax benefits and tax deficiencies will be recorded as an income tax expense or benefit in the income statement in the period in which the awards vest or are exercised. Excess tax benefits will be classified as an operating activity in the statement of cash flows. The standard also allows an entity to elect an accounting policy to either estimate the number of forfeitures or account for forfeitures when they occur. In addition, entities can withhold up to the maximum individual statutory tax rate without classifying the awards as a liability. This standard is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (topic 842),” to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This standard is effective for annual periods beginning after December 15, 2018, including 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 November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes.” This amendment requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This standard is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company has prospectively adopted this change in accounting principle for the fiscal year beginning January 1, 2016. Prior periods were not retrospectively adjusted. The adoption of this standard did not have a material impact on the Company's consolidated financial statements as it only pertains to a change in the balance sheet presentation of deferred taxes. In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This standard changes the presentation of debt issuance costs in the financial statements to present such costs as a direct deduction from the related debt liability rather than as an asset. Amortization of debt issuance costs will be reported as interest expense. In August 2015, the FASB issued ASU No. 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” ASU 2015-15 clarifies that the Securities Exchange Commission (the “SEC”) would not object to the deferral and presentation of debt issuance costs as an asset and subsequent amortization of debt issuance costs over the term of the line-of-credit arrangement, whether or there are any outstanding borrowings on the line-of-credit arrangement. These standards are effective for annual reporting periods beginning after December 15, 2015. The Company has retrospectively adopted this change in accounting principle for the fiscal year beginning January 1, 2016 and accordingly reclassified $2,259 of deferred financing costs from other assets to long-term debt on its consolidated balance sheet as of December 31, 2015. The adoption of this amended guidance did not impact the Company's consolidated financial position, results of operations or cash flows. In April 2015, the FASB issued ASU No. 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 35-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.” This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If an arrangement includes a software license, the accounting for the license will be consistent with licenses of other intangible assets. If the arrangement does not include a license, the arrangement will be accounted for as a service contract. ASU 2015-05 is effective for interim and annual periods beginning after December 15, 2015. The Company adopted the updated guidance for the fiscal year beginning January 1, 2016 with no impact on the Company’s financial statements. In January 2015, the FASB issued ASU No. 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” This guidance eliminates the concept of extraordinary items from generally accepted accounting principles in the U.S. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, the ASU does not affect the reporting and disclosure requirements for an event that is unusual in nature or infrequent in occurrence. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption was permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company adopted the updated guidance for the fiscal year beginning January 1, 2016 with no impact on the Company’s financial statements. In November 2014, the FASB issued ASU No. 2014-16, “Derivatives and Hedging” (Topic 815): “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity, which provides guidance on identifying whether the nature of the host contract in a hybrid instrument is in the form of debt or equity.” This standard requires management to consider the stated and implied substantive terms and features of the hybrid financial instrument, including the embedded derivative features, in order to determine whether the nature of the host contract is more akin to debt or to equity. The ASU is effective for annual periods and interim periods with those annual periods beginning after December 15, 2015, with early adoption permitted. The Company adopted the updated guidance for the fiscal year beginning January 1, 2016 with no impact on the Company’s financial statements. In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The standard requires management to evaluate, at each annual and interim reporting period, the Company’s ability to continue as a going concern within one year of the date the financial statements are issued and provide related disclosures. This guidance is effective for the annual period ending after December 15, 2016 and for annual periods and interim periods thereafter. The adoption of this amended guidance did not impact the Company’s financial statements. However, it will be required to evaluate and determine if further disclosure is necessary at each balance sheet date beginning December 31, 2016. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606). The standard provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes current revenue recognition guidance. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The new standard also includes enhanced disclosures which are significantly more comprehensive than those in existing revenue standards. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU No. 2014-09 for all entities by one year, to annual reporting periods beginning after December 15, 2017. Early adoption will be permitted for annual reporting periods beginning after December 15, 2016. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements. In addition, the FASB issued ASU 2016-08, ASU 2016-10, and ASU 2016-12 in March 2016, April 2016, and May 2016, respectively, to help provide interpretive clarifications on the new guidance in ASC Topic 606. To date, the Company has formed a committee to evaluate the impact on its financial statement and has preliminarily concluded that it will not significantly affect how revenue for contracts with customers is recognized. At this time, the Company does not plan to early adopt this guidance and has not determined the transition method that will be used. During 2017, the Company plans to further evaluate the transition approach and consider its method of adoption. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed Assets Fixed assets as of December 31, 2016 and 2015 are shown at cost, less accumulated depreciation and amortization and are summarized below: December 31, 2016 2015 Leasehold improvements $ 495,515 $ 498,394 Club equipment 107,905 105,998 Furniture, fixtures and computer equipment 71,222 69,383 Computer software 25,813 24,047 Construction in progress 3,617 4,882 704,072 702,704 Less: Accumulated depreciation and amortization (533,492 ) (507,363 ) $ 170,580 $ 195,341 Depreciation and leasehold amortization expense for the years ended December 31, 2016 , 2015 and 2014 , was $43,691 , $47,664 and $46,794 , 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 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 year ended December 31, 2016 , the Company tested its underperforming clubs and recorded impairment charges of $742 on leasehold improvements and furniture and fixtures at clubs that experienced decreased profitability and sales levels below expectations during this period. The Company will continue to monitor the results and changes in expectations of its clubs closely during 2017 to determine if additional fixed asset impairment charges will be necessary. In the years ended December 31, 2015 and December 31, 2014 , the Company recorded impairment charges of $14,571 and $4,569 , respectively, related to underperforming clubs. The following table presents the long-lived assets measured at fair value on a nonrecurring basis for the period ended December 31, 2016 : Basis of Fair Value Measurements Fair Value of Assets (Liabilities) Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2016 $ 742 $ — $ — $ 742 December 31, 2015 $ 14,571 $ — $ — $ 14,571 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
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’s four trade names: New York Sports Clubs (“NYSC”), Boston Sports Clubs (“BSC”), Washington Sports Clubs (“WSC”) and Philadelphia Sports Clubs (“PSC”), with certain more remote clubs that do not benefit from a regional cluster being considered single reporting units (“Outlier Clubs”), and the Company’s three clubs located in Switzerland being considered a single reporting unit (“SSC”). As of December 31, 2016 , only the SSC region has a remaining goodwill balance. The Company’s annual goodwill impairment test is performed on the last day of February, or more frequently, should circumstances change which would indicate the fair value of goodwill is below its carrying amount. The determination as to whether a triggering event exists that would warrant an interim review of goodwill and whether a write-down of goodwill is necessary involves significant judgment based on short-term and long-term projections of the Company. As a result of the significant decrease in market capitalization and a decline in the Company’s performance primarily due to existing members downgrading their memberships to those with lower monthly dues and new members enrolling at lower rates that occurred between February 28, 2015 and May 31, 2015, the Company performed an interim impairment test as of May 31, 2015. The Company’s annual goodwill impairment test as of February 29, 2016 and 2015, and the interim test performed as of May 31, 2015 were performed using the two-step goodwill impairment analysis. Step 1 involves comparing the estimated fair value of the Company’s reporting units to their carrying amounts. If the estimated fair value of the reporting unit is greater than its carrying amount, there is no requirement to perform Step 2 of the impairment test, and there is no impairment. If the reporting unit’s carrying amount is greater than the estimated fair value, the second step must be completed to measure the amount of impairment, if any. Step 2 calculates the implied fair value of goodwill by deducting the estimated fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the estimated fair value of the reporting unit as determined in Step 1. The implied fair value of goodwill determined in this step is compared to the carrying value of goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, an impairment charge is recognized equal to the difference. Both the February 29, 2016 and 2015 annual impairment tests supported the goodwill balance and as such no impairment of goodwill was required. The Company also performed an interim impairment test as of May 31, 2015 and concluded that there would be no remaining implied fair value of goodwill attributable to the NYSC and BSC regions. Accordingly, as of May 31, 2015, the Company wrote off $31,558 of goodwill associated with these reporting units. The Company did not have a goodwill impairment charge in the SSC region as a result of the interim test given the profitability of this unit. 2016 Impairment Test For the February 29, 2016 impairment test, fair value was determined by using an income approach, as this was deemed to be the most indicative of the Company’s fair value. Under this income approach, the Company determined fair value based on estimated future cash flows of the SSC reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn, which are unobservable Level 3 inputs. The discounted estimates of future cash flows include significant management assumptions such as revenue growth rates, operating margins, weighted average cost of capital, and future economic and market conditions. The estimated weighted-average cost of capital of SSC was 11.2% as of February 29, 2016. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. These assumptions were determined separately for each reporting unit. The Company believes its assumptions are reasonable, however, there can be no assurance that the Company’s estimates and assumptions made for purposes of the Company’s goodwill impairment testing as of February 29, 2016 will prove to be accurate predictions of the future. If the Company’s assumptions regarding forecasted revenue or margin growth rates of certain reporting units are not achieved, the Company may be required to record goodwill impairment charges in future periods, whether in connection with the Company’s next annual impairment testing or prior to that, if any such change constitutes a triggering event outside the quarter when the annual goodwill impairment test is performed. It is not possible at this time to determine if any such future impairment charge would result. Solely for purposes of establishing inputs for the fair value calculation described above related to goodwill impairment testing, the Company made the following assumptions. The Company developed long-range financial forecasts ( three years) for all reporting units and assumed known changes in the existing club base. Terminal growth rates were calculated for years beyond the three year forecast. As of February 29, 2016, the Company used a terminal growth rate of 2% . 2015 Impairment Tests For the May 31, 2015 and February 28, 2015 impairment tests, fair value was determined by using a weighted combination of two market-based approaches (weighted 50% collectively) and an income approach (weighted 50%), as this combination was deemed to be the most indicative of the Company’s fair value in an orderly transaction between market participants. Under the market-based approaches, the Company utilized information regarding the Company, the Company’s industry as well as publicly available industry information to determine earnings multiples and sales multiples that are used to value the Company’s reporting units. Under the income approach, the Company determined fair value based on estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn, which are unobservable Level 3 inputs. The discounted estimates of future cash flows include significant management assumptions such as revenue growth rates, operating margins, weighted average cost of capital, and future economic and market conditions. The estimated weighted-average cost of capital of NYSC and SSC were 9.2% and 11.2% as of May 31, 2015, respectively, compared to 13.3% and 13.9% as of February 28, 2015. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. These assumptions were determined separately for each reporting unit. The Company believes its assumptions are reasonable. Solely for purposes of establishing inputs for the fair value calculation described above related to goodwill impairment testing, the Company made the following assumptions. The Company developed long-range financial forecasts ( three years) for all reporting units and assumed known changes in the existing club base. Terminal growth rates were calculated for years beyond the three year forecast. As of May 31, 2015, the Company used discount rates ranging from 8.2% to 11.2% and terminal growth rates ranging from 1.0% to 3.0% . As of February 28, 2015, the Company used discount rates ranging from 13.2% to 13.9% and terminal growth rates ranging from 0.5% to 3.0% . These assumptions are developed separately for each reporting unit. The changes in the carrying amount of goodwill from December 31, 2015 through December 31, 2016 are detailed in the charts below. NYSC BSC SSC Outlier Clubs Total Goodwill $ 31,549 $ 15,775 $ 1,175 $ 3,982 $ 52,481 Changes due to foreign currency exchange rate fluctuations — — (150 ) — (150 ) Less: accumulated impairment of goodwill (31,549 ) (15,775 ) — (3,982 ) (51,306 ) Balance as of December 31, 2015 — — 1,025 — 1,025 Changes due to foreign currency exchange rate fluctuations — — (17 ) — (17 ) Balance as of December 31, 2016 $ — $ — $ 1,008 $ — $ 1,008 Intangible assets as of December 31, 2016 and 2015 are as follows: As of December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Intangibles Membership lists $ 11,344 $ (11,344 ) $ — Management contracts 250 (146 ) 104 Trade names 40 (9 ) 31 $ 11,634 $ (11,499 ) $ 135 As of December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Intangibles Membership lists $ 11,344 $ (11,344 ) $ — Management contracts 250 (112 ) 138 Trade names 40 (7 ) 33 $ 11,634 $ (11,463 ) $ 171 Intangible assets were acquired in connection with the Company’s acquisitions during 2013. Amortization expense of intangible assets for the years ended December 31, 2016 , 2015 and 2013 was $36 , $223 and $513 respectively. The aggregate amortization expense for the next five years and thereafter of the acquired intangible assets is as follows: Year Ending December 31, 2017 $ 30 2018 24 2019 19 2020 16 2021 13 2022 and thereafter 33 $ 135 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses as of December 31, 2016 and 2015 consisted of the following: December 31, 2016 2015 Accrued payroll and related $ 6,817 $ 5,674 Accrued construction in progress and equipment 917 1,235 Accrued occupancy costs 8,594 8,563 Accrued insurance claims 2,786 2,346 Accrued other 6,793 8,311 $ 25,907 $ 26,129 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt as of December 31, 2016 and 2015 consisted of the following: December 31, 2016 2015 2013 Term Loan Facility $ 202,000 $ 275,417 Less: Unamortized discount (3,851 ) (6,418 ) Less: Deferred financing costs (1,324 ) (2,259 ) Less: Current portion due within one year (2,082 ) (2,810 ) Long-term portion $ 194,743 $ 263,930 The aggregate long-term debt obligations maturing during the next five years and thereafter are as follows: Amount Due Year Ending December 31, 2017 $ 2,082 2018 2,082 2019 2,082 2020 195,754 2021 — 2022 and thereafter — $ 202,000 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”), 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 $45,000 revolving loan facility maturing on November 15, 2018 (“2013 Revolving Loan Facility”). Proceeds from the 2013 Term Loan Facility of $323,375 were issued, net of an original issue discount (“OID”) of 0.5% , or $1,625 . Debt issuance costs recorded in connection with the 2013 Senior Credit Facility were $5,119 and are being amortized as interest expense and are recorded as a contra-liability to long-term debt on the accompanying consolidated balance sheets. The Company also recorded additional debt discount of $4,356 related to creditor fees. The proceeds from the 2013 Term Loan Facility were used to pay off amounts outstanding under the Company’s previously outstanding long-term debt facility originally entered into on May 11, 2011 (as amended from time to time), and to pay related fees and expenses. None of the revolving loan facility was drawn upon as of the closing date on November 15, 2013, but loans under the 2013 Revolving Loan Facility may be drawn from time to time pursuant to the terms of the 2013 Senior Credit Facility. 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. 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, 2016 , TSI LLC has made a total of $22,019 in principal payments on the 2013 Term Loan Facility. On January 30, 2015, the 2013 Senior Credit Facility was amended (the “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 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. As of December 31, 2016 , TSI Holdings had a cash balance of approximately $506 . In December 2015, TSI Holdings purchased $29,829 principal amount of debt outstanding under the 2013 Senior Credit Facility in the open market for $10,947 , or 36.7% of face value, which resulted in a gain on extinguishment of debt of $17,911 , including the write-off of related deferred financing costs and debt discount of $249 and $707 , respectively. On April 21, 2016, TSI Holdings settled a transaction to purchase $8,705 principal amount of debt outstanding under the 2013 Senior Credit Facility for $3,787 , or 43.5% of face value. On May 6, 2016, TSI Holdings settled another transaction to purchase $62,447 principal amount of debt outstanding under the 2013 Senior Credit Facility for $25,978 , or 41.6% of face value. The April and May transactions created gains on extinguishment of debt in 2016 of $37,893 with a tax effect of $13,451 . When this was netted with our operating loss, it resulted in a tax provision for 2016 of $9,771 . The gain on extinguishment of debt was net of the write-off of deferred financing costs and debt discount of $545 and $1,561 , respectively, and other costs related to the transaction. All of the above purchased debt was transferred to TSI, LLC and canceled. The terms of the 2013 Senior Credit Facility provide for a financial covenant in the situation where the total utilization of the revolving loan commitments (other than letters of credit up to $5,500 at any time outstanding) exceeds 25% of the aggregate amount of those commitments. In such event, TSI, LLC is required to maintain a total leverage ratio, as defined in the 2013 Senior Credit Facility, of no greater than 4.50 :1.00. As of December 31, 2016 , the total leverage ratio was slightly below 4.50 :1.00. Other than $2,851 of letters of credit, we did not have any amounts utilized on the 2013 Revolving Loan Facility and therefore we were not subject to this financial covenant as of December 31, 2016 . The terms of the 2013 Senior Credit Facility include a financial covenant under which the Company is not able to utilize more than 25% , or $11,250 , in accordance with terms of credit agreement, of the 2013 Revolving Loan Facility if the total leverage ratio exceeds 4.50 :1:00 (calculated on a proforma basis to give effect to any borrowing). The 2013 Senior Credit Facility also contains certain affirmative and negative covenants, including covenants 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 shareholders; make payments on certain indebtedness; and enter into sale leaseback transactions, in each case, subject to certain qualifications and exceptions. In addition, at any time when the total leverage ratio is greater than 4.50 :1.00, there are additional limitations on the ability of TSI, LLC and Holdings II to, among other things, make certain distributions of cash to TSI Holdings. 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 connection with the sale of the East 86th Street property, which was accounted for as a building financing arrangement, as described in Note 8 - Sale of Building, the Company received approximately $43,500 in net sales proceeds (after taxes, before giving effect to utilization of net operating losses and carryforward). Accordingly, the Company made a mandatory prepayment of $13,500 on the 2013 Term Loan Facility in November 2014. In connection with this mandatory prepayment, during the year ended December 31, 2014, the Company recorded loss on extinguishment of debt of $493 , consisting of the write-off of unamortized debt issuance costs and debt discount of $119 and $374 , respectively, and was included in loss on extinguishment of debt in the accompanying consolidated statements of operations for the year ended December 31, 2014. To the extent the proceeds of the sale of the East 86th Street property were not reinvested within 30 months of the date of the sale, the Company may have been required to use such amounts, other than amounts used in 2014 to repay debt, to pay down its outstanding debt, as provided under the terms of its 2013 Senior Credit Facility. The Company has reinvested all the remaining net proceeds from the sale. In addition, the 2013 Senior Credit Facility contains provisions that require excess cash flow payments, as defined, 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. The excess cash flow calculation performed as of December 31, 2016 did not result in any required payments. As of December 31, 2016 , the 2013 Term Loan Facility has a gross principal balance of $202,000 and a balance of $196,825 net of unamortized debt discount of $3,851 and unamortized debt issuance costs of $1,324 . As of December 31, 2016 , both the unamortized balance of debt issuance costs and unamortized debt discount are recorded as a contra-liability to long-term debt on the accompanying condensed consolidated balance sheet and are being amortized as interest expense using the effective interest method. As of December 31, 2016 , there were no outstanding 2013 Revolving Loan Facility borrowings and outstanding letters of credit issued totaled $2,851 . The unutilized portion of the 2013 Revolving Loan Facility as of December 31, 2016 was $42,149 , 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. Fair Market Value Based on quoted market prices, the 2013 Term Loan Facility had a fair value of approximately $163,115 and $104,658 , respectively, at December 31, 2016 and December 31, 2015 , respectively, 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 refer to Note 9 — Derivative Financial Instruments. Interest Expense The Company’s interest expense and capitalized interest related to funds borrowed to finance club facilities under construction for the years ended December 31, 2016 , 2015 and 2014 were as follows: Year Ended December 31, 2016 2015 2014 Interest costs expensed $ 13,904 $ 17,914 $ 18,228 Interest costs capitalized 28 72 300 Total interest expense and amounts capitalized $ 13,932 $ 17,986 $ 18,528 Note: The table above does not include $2,666 and $810 of interest expense related to the building financing arrangement in the years ended December 31, 2015 and 2014, respectively. |
Sale of Building
Sale of Building | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Sale of Building | Sale of Building On September 12, 2014, the Company completed the legal sale of its property (building and land) on East 86th Street, New York City, to an unaffiliated third-party for gross proceeds of $85,650 . Concurrent with the closing of the transaction, the Company leased back the portion of the property comprising its health club (“Initial Lease”) and had agreed to vacate the property in connection with the purchaser's future development of a new luxury, high-rise multi-use building. In connection with vacating the property, the Company agreed to enter into a new lease (“New Club Lease”) for approximately 24,000 square feet in the new building for the purpose of operating a health club upon completion of construction by the purchaser/landlord. This sale-leaseback transaction was characterized as a financing arrangement for accounting purposes rather than a sale until any continuing involvement has ceased. In March 2015, the Company received the remaining proceeds that had been held in escrow of $500 . On December 23, 2015, the Company terminated the Initial Lease and the agreement to enter into the New Club Lease and received gross proceeds of $3,500 in connection with the termination. Because the lease was terminated with no continuing involvement, this sale-leaseback transaction was accounted for as a completed sale as of December 23, 2015. Under this treatment, the Company recorded a $77,146 gain, previously accounted for as a financing, on the sale of the property, recorded in Gain on sale of building in the consolidated statements of operations for the year ended December 31, 2015. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments In its normal operations, 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 may enter into derivative financial instruments (“derivatives”), such as interest-rate swaps. Derivatives are not entered into for trading purposes and the Company only uses commonly traded instruments. Currently, the Company has 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 2011 Senior 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 will mature on May 15, 2018. The swap effectively converts $160,000 of the current outstanding principal of the total variable-rate debt under the 2013 Senior Credit Facility to a fixed rate of 5.384% , when including the applicable 3.50% margin. As permitted by ASC 815, Derivatives and Hedging, the Company has designated this swap as a cash flow hedge, the effects of which have been reflected in the Company's consolidated financial statements as of and for the years ended December 31, 2016 , 2015 and 2014 . The objective of this hedge is 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 are designated as cash flow hedges for accounting purposes since they are being used to transform variable interest rate exposure to fixed interest rate exposure on a recognized liability (debt). On an ongoing basis, the Company performs a quarterly assessment of the hedge effectiveness of the hedge relationship and measures and recognizes any hedge ineffectiveness in the consolidated statements of operations. For the years ended December 31, 2016 , 2015 and 2014 , hedge ineffectiveness was evaluated using the hypothetical derivative method. There was no hedge ineffectiveness in the years ended December 31, 2016 , 2015 and 2014 . The fair value for the Company’s interest rate swap is 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, 2016 $ 1,511 $ — $ 1,511 $ — Interest rate swap liability as of December 31, 2015 $ 2,042 $ — $ 2,042 $ — The swap contract liability of $1,511 and $2,042 was recorded as a component of other liabilities as of December 31, 2016 and 2015 , respectively, with the offset to accumulated other comprehensive income ( $854 and $1,154 , net of taxes, as of December 31, 2016 and 2015 , respectively) on the accompanying consolidated balance sheets. There were no significant reclassifications out of accumulated other comprehensive income in 2016 , 2015 and 2014 and the Company does not expect that significant derivative losses included in accumulated other comprehensive income at December 31, 2016 will be reclassified into earnings within the next 12 months . |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
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 $1,136 as of December 31, 2016 . The leases expire at various times through October 31, 2031 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, 2017 through December 31, 2021 , the Company has leases for 23 club locations that are due to expire without any renewal options, three of which are due to expire in 2017 , and 48 club locations that are due to expire with renewal options. Future minimum rental payments under non-cancelable operating leases are shown in the chart below. Minimum Annual Rental Year Ending December 31, 2017 $ 89,846 2018 84,749 2019 77,588 2020 71,202 2021 60,592 Aggregate thereafter 181,302 Rent expense for the years ended December 31, 2016 , 2015 and 2014 was $124,952 , $124,920 and $124,816 , respectively. Such amounts include non-base rent items of $25,384 , $24,767 and $24,340 , respectively. Including the effect of deferred lease liabilities, rent expense was $124,333 , $123,872 and $124,449 for the years ended December 31, 2016 , 2015 and 2014 . 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, 2022. Future minimum rentals receivable under non-cancelable leases are shown in the chart below. Minimum Annual Rental Year Ending December 31, 2017 $ 2,032 2018 1,154 2019 865 2020 755 2021 532 Aggregate thereafter 99 Rental income, including non-cash rental income, for the years ended December 31, 2016 , 2015 and 2014 was $2,338 , $4,669 and $4,791 , respectively. For the years ended December 31, 2016 and 2015, such amounts included no additional rental charges above the base rent. For the year ended December 31, 2014, rental income included additional rental charges above the base rent of $229 . The Company previously owned the building at the 86th Street club location which housed a rental tenant that generated rental income of approximately $1,926 and $2,000 for the years ended December 31, 2015 and 2014 . Refer to Note 8 - Sale of Building for further details. |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity | 12 Months Ended |
Dec. 31, 2016 | |
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. In May 2016, the Company further 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 . As of December 31, 2016 , there were 534,861 shares available to be issued under the 2006 Plan. On August 19, 2015, the Company granted an award of non-qualified options to purchase 250,000 shares of its common stock to its Chief Operating Officer (“COO”) under the Company's 2006 Plan ("In-Plan Options"). In addition to the In-Plan Options, the Company granted its COO an award of non-qualified options to purchase 450,000 shares (“Non-Plan Options”) of its common stock and 300,000 shares of restricted stock (“Non-Plan RSA”). These Non-Plan Options and Non-Plan RSA were granted outside of any shareholder-approved plan as an inducement to accept employment with the Company. In September 2016, the COO's employment with the Company was terminated. As a result of the termination, the Company accelerated 17% of unvested In-Plan Options, Non-Plan Options and Non-Plan RSA previously awarded to the COO. The Company incurred non-cash severance expense of $250 related to this acceleration. On March 24, 2015, the Company entered into a nomination and standstill agreement (the “Nomination and Standstill Agreement”). Pursuant to the Nomination and Standstill Agreement, the Company agreed to redeem, effective immediately, the rights issued pursuant to the Rights Plan. Pursuant to the terms of the Rights Plan, the Company paid a redemption price to the holders of the rights equal to $0.01 per right in cash, or $246 , on April 20, 2015. Effective December 31, 2014, the Company’s Board of Directors adopted a stockholder rights plan (the “Rights Plan”). Pursuant to the Rights Plan, the Board of Directors declared a dividend distribution of one preferred share right (a “Right”) for each share of Common Stock held as of January 12, 2015. Each Right entitled the holder to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock (“Preferred Share”) at an initial exercise price of $15 per one one-thousandth of a Preferred Share, subject to certain adjustments. a. Common Stock Options The outstanding Common Stock options as of December 31, 2016 vest in full in October 2019. The vesting of certain grants will be accelerated in the event that certain defined events occur including the sale of the Company. Stock options generally vest over a three to four year service period and expire five to ten years from the date of grant. As of December 31, 2016 , 2015 and 2014 , a total of 150,207 , 544,869 and 1,023,606 Common Stock options were exercisable, respectively. At December 31, 2016 , the Company had 187,707 stock options outstanding under the 2006 Plan and no Non-Plan Options were outstanding. 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, net of estimated forfeitures. The total compensation expense related to options, classified within Payroll and related on the consolidated statements of operations was $156 , $99 , and $299 for the years ended December 31, 2016 , 2015 and 2014 , respectively, and the related tax benefit was $67 , $38 and $142 for the years ended December 31, 2016 , 2015 and 2014 , respectively. Each of these 2016, 2015 and 2014 tax benefits were prior to the recognition of the valuation allowance. The total compensation expense of $299 for the year ended December 31, 2014 includes $160 related to incremental compensation expense recognized in connection with the modification of stock options described below. The following table summarizes the stock option activity for the years ended December 31, 2016 , 2015 and 2014 : Common Weighted Average Exercise Price Balance at January 1, 2014 1,140,231 $ 5.21 Exercised (73,043 ) 1.82 Canceled (34,567 ) 12.56 Forfeited (2,100 ) 3.54 Balance at December 31, 2014 1,030,521 5.29 Granted 850,000 2.68 Exercised (171,718 ) 1.68 Canceled (313,934 ) 8.61 Balance at December 31, 2015 1,394,869 3.40 Exercised (226,011 ) 1.41 Canceled (533,484 ) 3.99 Forfeited (447,667 ) 2.71 Balance at December 31, 2016 187,707 $ 5.78 The following table summarizes information about stock options outstanding and exercisable as of December 31, 2016 : Options Outstanding Options Exercisable Number of Options Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Number of Options Weighted-Average Exercise Price Common 2007 grants 51,000 7 months $ 14.76 51,000 $ 14.76 2008 grants 34,020 23 months 2.64 34,020 2.64 2009 grants 41,372 34 months 1.75 41,372 1.75 2010 grants 11,315 42 months 1.91 11,315 1.91 2015 grants 50,000 105 months 2.95 12,500 2.95 Total Grants 187,707 44 months $ 5.78 150,207 $ 6.48 At December 31, 2016 , stock options outstanding have a weighted average remaining contractual life of 3.7 years and the total intrinsic value for “in-the-money” options, based on the Company’s closing stock price of $2.50 , was $42 . At December 31, 2016 , stock options exercisable have a weighted average remaining contractual life of 2.4 years and the total intrinsic value for “in-the-money” exercisable options was $42 . The total intrinsic value of options exercised was $279 for the year ended December 31, 2016 . 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, 2016 of $2.50 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, 2016 . 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, 2016 and 2014. In the year ended December 31, 2015, the Company granted 850,000 stock options, with an aggregate grant date fair value of $2,279 . Options granted during the year ended December 31, 2015 to employees of the Company were as follows: Date Number of Shares Exercise Price Grant Date Fair Value August 19, 2015 700,000 $ 2.61 $ 1,827 October 12, 2015 50,000 $ 2.95 148 October 19, 2015 100,000 $ 3.04 304 850,000 $ 2,279 The weighted average fair value of stock options as of the grant date was $1.10 in 2015. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: Common Risk-Free Interest Rate Expected Dividend Yield Expected Term (Years) Expected Volatility 2015 Grants 1.1 % — 3.99 52.03 % The Company calculated the weighted average expected term of stock options to be 3.99 years, which represented the period of time that options were expected to be outstanding. The risk free interest rate for periods within the contractual life of the option was based on the U.S. treasury yield in effect at the time of grant. The volatility was determined based on management's estimate or historical volatilities of comparable companies. As of December 31, 2016 , $52 of unrecognized compensation cost related to stock options was expected to be recognized over a weighted-average period of 2.8 years . b. Common Stock Grants Restricted Stock Grants The following restricted stock grants were issued to employees of the Company during the year ended December 31, 2016 . Number of Shares Share Price Grant Date Fair Value March 10, 2016 559,000 $ 2.06 $ 1,152 September 30, 2016 200,000 $ 3.09 618 December 12, 2016 952,000 $ 2.60 2,475 Total 1,711,000 $ 4,245 The following table summarizes the restricted stock activity for the years ended December 31, 2016 , 2015 and 2014 : Number of Shares Weighted Average Grant Date Fair Value Balance as of January 1, 2014 363,171 $ 10.08 Granted 196,500 8.47 Vested (116,890 ) 9.82 Forfeited (41,247 ) 9.92 Balance as of December 31, 2014 401,534 9.38 Granted 507,000 4.27 Vested (133,874 ) 9.20 Forfeited (249,790 ) 8.19 Balance as of December 31, 2015 524,870 5.06 Granted 1,711,000 2.48 Vested (222,495 ) 4.59 Forfeited (402,000 ) 3.39 Balance as of December 31, 2016 1,611,375 $ 2.80 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, net of estimated forfeitures. The total compensation expense, classified within Payroll and related on the consolidated statements of operations, related to restricted stock grants was $1,155 , $842 and $1,367 for the years ended December 31, 2016 , 2015 and 2014 , respectively, and the related tax benefit was $496 , $321 , $648 for the years ended December 31, 2016 , 2015 and 2014 , respectively. Each of these 2016, 2015 and 2014 tax benefit 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 year ended December 31, 2016 , the Company granted 1,711,000 restricted shares with an aggregate grant date fair value of $4,245 . In the years ended December 31, 2015 and 2014 , the Company granted 507,000 and 196,500 restricted shares, respectively, with an aggregate grant date fair value of $2,166 and $1,663 , respectively. As of December 31, 2016 , $3,702 of unrecognized compensation cost related to restricted stock was expected to be recognized over a weighted-average period of 2.7 years . Non-Restricted Stock Grants On February 3, 2016, the Company issued 206,750 shares of Common Stock to members of the Company’s Board of Directors with respect to their annual retainer. The fair value of the shares issued was $1.19 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 $246 in the year ended December 31, 2016 . In the years ended December 31, 2015 and 2014 , the Company issued 67,609 and 21,248 shares of Common Stock, respectively, with an aggregate grant date fair value of $445 and $245 , respectively. c. Common Stock Dividends On April 15, 2014, February 12, 2014 and November 15, 2013, the board of directors of the Company declared cash dividends of $0.16 per share, payable in June 2014, March 2014 and December 2013, respectively, to common stockholders of record at the close of business on May 22, 2014, February 24, 2014 and November 26, 2013, respectively. On November 16, 2012, the board of directors of the Company declared cash dividends of $3.00 per share, payable in December 2012 to common stockholders of record at the close of business on November 30, 2012. Pursuant to the 2006 Plan, holders of unvested restricted shares as of the record dates qualify to receive the above dividends on each future vesting date, subject to continued employment through the vesting date. As of December 31, 2016 and 2015, total dividends payable for unvested restricted shares was $14 and $118 , respectively. As of December 31, 2016, $9 and $5 of the remaining amount payable is expected to be paid in 2017 and 2018, respectively, and is included in Accrued expenses and Other liabilities, respectively, on the Company’s consolidated balance sheet as of December 31, 2016. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Revenues | Revenues Revenues for the years ended December 31, 2016 , 2015 and 2014 are summarized below: Years Ended December 31, 2016 2015 2014 Membership dues $ 296,795 $ 309,096 $ 343,185 Initiation and processing fees 7,636 13,644 12,044 Personal training revenue 66,487 73,191 70,338 Other ancillary club revenue(1) 19,642 22,138 22,304 Total club revenue 390,560 418,069 447,871 Fees and other revenue(2) 6,361 6,254 5,971 Total revenue $ 396,921 $ 424,323 $ 453,842 (1) Other ancillary club revenue primarily consists of Sports Clubs for Kids, racquet sports, Small Group Training and studio classes. (2) Fees and other revenue primarily consist of rental income, management fees, marketing revenue and laundry revenue. |
Corporate Income Taxes
Corporate Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Corporate Income Taxes | Corporate Income Taxes The provision for income taxes for the years ended December 31, 2016 , 2015 and 2014 consisted of the following: Year Ended December 31, 2016 Federal Foreign State and Local Total Current $ 9,346 $ (63 ) $ 488 $ 9,771 Deferred — — — — $ 9,346 $ (63 ) $ 488 $ 9,771 Year Ended December 31, 2015 Federal Foreign State and Local Total Current $ (3,100 ) $ 67 $ 197 $ (2,836 ) Deferred (8,262 ) — (3,253 ) (11,515 ) $ (11,362 ) $ 67 $ (3,056 ) $ (14,351 ) Year Ended December 31, 2014 Federal Foreign State and Local Total Current $ 12,454 $ 183 $ 266 $ 12,903 Deferred 14,684 — 25,024 39,708 $ 27,138 $ 183 $ 25,290 $ 52,611 The components of deferred tax liabilities, net consist of the following items: December 31, 2016 2015 Deferred tax assets Basis differences in depreciation and amortization $ 10,073 $ 6,578 Deferred lease liabilities 23,527 24,345 Deferred revenue 8,247 10,974 Deferred compensation expense incurred in connection with stock options 994 1,589 Federal and state net operating loss carry-forwards 8,473 10,430 Accruals, reserves and other 7,297 7,654 $ 58,611 $ 61,570 Deferred tax liabilities Deferred costs $ 803 $ 1,751 Change in accounting method 3,147 6,621 Undistributed foreign earnings and other 529 622 $ 4,479 $ 8,994 Gross deferred tax assets 54,132 52,576 Valuation allowance (54,193 ) (52,637 ) Deferred tax liabilities, net $ (61 ) $ (61 ) As of December 31, 2016 and 2015 , the Company had a net deferred tax liability of $61 . 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 has recorded valuation allowances in the amounts of $54,193 and $52,637 at December 31, 2016 and 2015 , respectively. In recording 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. The Company does not amortize goodwill for book purposes but does amortize goodwill with tax basis for tax purposes. The deferred tax liability recorded at December 31, 2016 relates 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. As of December 31, 2016 , state tax net operating loss carry-forwards were $8,473 . Such amounts expire between December 31, 2016 and December 31, 2034. The Company has not recorded a tax benefit for the windfall portion of the stock compensation that either created or increased the remaining state net operating losses for tax purposes. As such, the amount of state net operating loss carry-forwards for which a tax benefit would be recorded to additional paid-in capital when the tax benefit is realized was approximately $590 as of December 31, 2016 . The Company’s foreign pre-tax earnings (loss) related to the Swiss clubs were $(264) , $277 and $762 for the years ended December 31, 2016 , 2015 and 2014 , respectively, and the related current tax provisions (benefit) were $(63) , $67 and $183 , respectively. In 2011, the Company repatriated Swiss earnings through 2010. In accordance with ASC 740-30, the Company has recognized a deferred tax liability of $529 for the incremental U.S. tax cost on the total cumulative undistributed earnings of the Swiss clubs for the period through December 31, 2016 . 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, 2016 , 2015 and 2014 : Years Ended December 31, 2016 2015 2014 Federal statutory tax rate 35 % 35 % 35 % State and local income taxes (net of federal tax benefit) 2 11 8 Change in state effective income tax rate — 3 (4 ) State tax (benefit) provision related to insurance premiums — (14 ) 7 Tax reserves — 1 1 Permanent differences in fines and penalties — 2 1 37 38 48 Valuation allowance 18 (249 ) (422 ) Elimination of federal effect of state deferred taxes — — 53 55 % (211 )% (321 )% The effective tax rate on the Company’s pre-tax income or loss was 55% for 2016 , (211)% for 2015 , and (321)% for 2014 , which was primarily impacted by the change in the valuation allowance. The amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate in any future periods were $1,155 as of both December 31, 2016 and 2015 . Interest (income) expense on unrecognized tax benefits was $81 for the years ended December 31, 2016 and 2015 , and $(334) for the year ended December 31, 2014 . 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, 2016 and 2015 of $785 and $704 , respectively. A reconciliation of unrecognized tax benefits, excluding interest and penalties, is as follows: 2016 2015 2014 Balance on January 1 $ 1,187 $ 1,187 $ 13,830 Gross decreases for tax positions taken in prior years — — (12,675 ) Gross increases for tax positions taken in prior years — — 32 Balance on December 31 $ 1,187 $ 1,187 $ 1,187 As of December 31, 2016 , the Company had $1,187 of unrecognized tax benefits and it is reasonably possible that the entire amount could be realized by the Company in 2017 since the income tax returns may no longer be subject to audit in 2017. The Company files federal, foreign and multiple state and local jurisdiction income tax returns. The Company is no longer subject to examinations of its federal income tax returns by the Internal Revenue Service for years 2012 and prior. U.S. net operating losses generated in closed years and utilized in open years are subject to adjustment by tax authorities. The Company was recently notified by the Internal Revenue Service that they intend to examine federal income tax returns for years 2014 and 2015. 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 2012). In a revised letter dated December 12, 2016, the Company received from the State of New York a revised assessment related to tax years 2006-2009 for $4,722 , inclusive of $2,044 of interest. The Company disagreed with the proposed assessment and have scheduled a conciliation conference with the State of New York to appeal the assessment. The Company has not recorded a tax reserve related to the proposed assessment. 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 change to unrecognized tax benefits within the next 12 months cannot be made. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
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 $1,045 , 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. On or about October 4, 2012, in an action styled James Labbe, et al. v. Town Sports International, LLC, plaintiff, commenced a purported class action in New York State court on behalf of personal trainers employed in New York State. Labbe was seeking unpaid wages and damages from TSI, LLC and alleges violations of various provisions of the New York State labor law with respect to payment of wages and TSI, LLC’s notification and record-keeping obligations. The Company completed settlement negotiations, pursuant to which TSI, LLC will pay its trainers the aggregate sum of $165 in exchange for full releases. The settlement agreement has been executed by the parties, has been approved by the court and the class, and the Company paid the settlement amount in the fourth quarter of 2016. On January 21, 2016, in an action styled Triangle 17 Center, LLC v. Town Sports International Holdings (NJ), LLC, et al. (“TSI Holdings NJ”), filed in the New Jersey Superior Court, a Landlord of one of TSI Holdings NJ’s competitors filed an action against TSI Holdings NJ, its affiliate and subsidiary, claiming that TSI Holdings NJ engaged in sham litigation to prevent the opening of a competitor’s facility in close proximity to TSI Holdings NJ’s location in Ramsey, New Jersey. This matter settled for nominal consideration without any admission of liability on the Company’s part. On or about October 6, 2016, Moelis & Company LLC commenced an action against TSI, LLC in the Supreme Court of the State of New York claiming entitlement to certain fees due pursuant to a Letter Agreement between the parties dated December 28, 2015. In consideration for Moelis & Company LLC’s services, it is claimed that TSI, LLC agreed to pay a debt discount transaction fee plus costs and expenses incurred. While the Company disagreed and objected to Moelis' claim, solely for business purposes, TSI, LLC settled the matter in 2016. 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, construction matters, employee relations claims and landlord tenant disputes. 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, 2016 . |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [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. The plan was amended, effective January 1, 2001, to provide for an employer matching contribution in an amount equal to 25% of the participant’s contribution with a limit of five hundred dollars per individual, per annum. 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. Employer matching contributions totaling $204 and $198 were made in March 2016 and February 2015, respectively, for the plan years ended December 31, 2015 and 2014, respectively. The Company will not make an employer matching contribution for the plan year ended December 31, 2016 . |
Separation Obligation
Separation Obligation | 12 Months Ended |
Dec. 31, 2016 | |
Compensation Related Costs [Abstract] | |
Separation Obligation | Separation Obligation In September 2016, Greg Bartoli's employment with the Company as Chief Operating Officer was terminated. In connection with his termination, Mr. Bartoli received a severance payment, including a prorated bonus payment and a 17% vesting acceleration of his unvested, previously awarded In-Plan Options, Non-Plan Options and Non-Plan RSA. The Company expensed $1,644 related to Mr. Bartoli's termination in the year ended December 31, 2016. These amounts were classified within Payroll and related expense in the consolidated statement of operations for the year ended December 31, 2016 . Related amounts that remained unpaid as of December 31, 2016 were included in Accrued expenses in the consolidated balance sheet as of December 31, 2016 . |
Other Commitments
Other Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Commitments | Other Commitments During the three months ended March 31, 2016, the Company entered into an agreement with CYC Fitness Partners, LLC (“CYC”) to provide up to $5,600 of growth capital to CYC from time to time over the next five years of which half of the growth capital will be considered a loan. CYC will use any proceeds provided by the Company for capital to build-out specific locations within certain TSI, LLC clubs as well as other locations that the Company provides consent. With respect to the locations the Company has committed to fund, the Company must provide consent for the use of any proceeds prior to funding more than $750 per location. A percentage of net earnings derived from each location funded by the Company will be applied to interest accrued on the loan, and the remaining amount will be applied to the principal of the loan. In October 2016, the Company funded $280 to CYC for the build-out of one of our locations. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) 2016 First Quarter Second Quarter Third Quarter Fourth Quarter (b) (c) Net revenue $ 101,345 $ 100,935 $ 98,534 $ 96,107 Operating (loss) income (3,722 ) (1,462 ) (2,624 ) 1,425 Net (loss) income (6,925 ) 20,733 (5,506 ) (259 ) (Loss) earnings per share (a) Basic $ (0.28 ) $ 0.81 $ (0.21 ) $ (0.01 ) Diluted $ (0.28 ) $ 0.79 $ (0.21 ) $ (0.01 ) 2015 First Quarter Second Quarter Third Quarter Fourth Quarter (d) (e) (f) Net revenue $ 111,424 $ 108,296 $ 103,764 $ 100,839 Operating (loss) income (7,941 ) (41,451 ) (19,711 ) 76,217 Net (loss) earnings (12,764 ) (31,068 ) (22,006 ) 86,996 (Loss) earnings per share (a) Basic $ (0.52 ) $ (1.26 ) $ (0.89 ) $ 3.50 Diluted $ (0.52 ) $ (1.26 ) $ (0.89 ) $ 3.47 (a) Basic and diluted (loss) earnings per share are computed independently for each quarter presented. Accordingly, the sum of the quarterly earnings per share may not agree with the calculated full year earnings per share. (b) In the second quarter of 2016, the Company recorded a pre-tax gain on extinguishment of debt of $38,497 in connection with the purchase of $71,152 of its debt. (c) In the third quarter of 2016, the Company recorded a pre-tax non-cash fixed asset impairment charge of $742 related to underperforming clubs. (d) In the second quarter of 2015, the Company recorded a pre-tax non-cash goodwill impairment charge of $31,558 associated with the NYSC and BSC regions and a pre-tax non-cash fixed asset impairment charge of $1,014 related to underperforming clubs. (e) In the third quarter of 2015, the Company recorded a pre-tax non-cash fixed asset impairment charge of $12,420 related to underperforming clubs. (f) In the fourth quarter of 2015, the Company recorded a pre-tax gain on sale of building of $77,146 related to the sale of the property on East 86th Street. The Company also recorded a pre-tax gain on extinguishment of debt of $17,911 in connection with the purchase of $29,829 of its debt. In addition, the Company recorded a pre-tax gain on lease termination of $2,967 related to the termination of a lease for a planned club opening that was not yet effective. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event In February 2017, the Company entered into a lease for a club location in New York City. In connection with this lease, the Company's issued a letter of credit for $1,000 , increasing total letters of credit to $3,851 . |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
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. |
Revenue Recognition | 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. The Company recognizes revenue from merchandise sales upon delivery to the member. Initiation and processing fees, as well as related direct and incremental expenses of membership acquisition, which 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. Revenue Recognition The Company generally receives one-time non-refundable joining fees and monthly dues from its members. The Company offers both month-to-month and one-year commit memberships. Members can cancel their membership with a fee charged to those 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. 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. Members who purchase this product commit to a three month period and revenue is recognized ratably over this period. The Company generates management fees from certain club facilities that are not wholly-owned. Management fees earned for services rendered are recognized at the time the related services are performed. 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 a quarterly basis. Revenues from ancillary services, such as personal training sessions, are recognized as services are performed. Unused personal training sessions expire after a set, disclosed period of time after purchase and are not refundable or redeemable by the member for cash. |
Advertising and Club Pre-opening Costs | Advertising and Club Pre-opening Costs Advertising costs and club pre-opening costs are charged to operations during the period in which they are incurred, except for production costs related to television and radio advertisements, which are expensed when the related commercials are first aired. |
Cash and Cash Equivalents | Cash and Cash Equivalents 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 . |
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. 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. 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. 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. |
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 $4,133 and $5,056 at December 31, 2016 and 2015 , 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. |
Inventory | Inventory Inventory primarily consists of cleaning and locker room supplies. Inventories are valued at the lower of costs or market by the first-in, first-out method. |
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. Payroll costs directly related to the construction or expansion of the Company’s club base are capitalized with leasehold improvements. 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. The 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. Web site hosting fees and maintenance costs are expensed as incurred. |
Intangible Assets | 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, management contracts and trade names. Membership lists are amortized over the estimated average membership life, currently at 25 months, management contracts are amortized over their current contractual lives of between nine and 11 years and trade names are amortized over their estimated useful lives of between 10 and 20 years. Debt issuance costs are classified within other assets and are being amortized as additional interest expense over the life of the underlying debt, five to seven years, using the interest method. Building financing costs were classified within other assets and were being amortized as additional interest expense over the life of the underlying financing arrangement, 25 years , using the interest method. |
Debt Issuance Costs | Debt issuance costs are classified within other assets and are being amortized as additional interest expense over the life of the underlying debt, five to seven years, using the interest method. |
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 when events or circumstances indicate that their carrying value may not be recoverable. 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. Goodwill impairment testing is a two-step process. Prior to performing this two-step process, companies also have the option to apply a qualitative approach to assess goodwill for impairment. Under the qualitative approach, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the estimated fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. Companies that do not elect to perform the qualitative approach may proceed directly to the two-step process. Step 1 involves comparing the estimated fair value of the Company’s reporting units to their carrying amounts. If the estimated fair value of the reporting unit is greater than its carrying amount, there is no requirement to perform Step 2 of the impairment test, and there is no impairment. If the reporting unit’s carrying amount is greater than the estimated fair value, the second step must be completed to measure the amount of impairment, if any. Step 2 calculates the implied fair value of goodwill by deducting the estimated fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the estimated fair value of the reporting unit as determined in Step 1. The implied fair value of goodwill determined in this step is compared to the carrying value of goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, an impairment charge is recognized equal to the difference. The Company performs this analysis annually as of the last day of February and in the interim if a triggering event occurs. The February 29, 2016 annual impairment test supported the goodwill balance and as such no impairment of goodwill was required. For the February 29, 2016 impairment test, fair value was determined by using an income approach, as this was deemed to be the most indicative of the Company’s fair value. Under the income approach, the Company determined fair value based on estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn, which are unobservable Level 3 inputs. The discounted estimates of future cash flows include significant management assumptions such as revenue growth rates, operating margins, weighted average cost of capital, and future economic and market conditions. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. These assumptions were determined separately for each reporting unit. Solely for purposes of establishing inputs for the fair value calculation described above related to goodwill impairment testing, the Company developed long-range financial forecasts (three years) for all reporting units and assumed known changes in the existing club base. Terminal growth rates were calculated for years beyond the three year forecast. |
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 $615 as of December 31, 2016 and 2015 . |
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, deferred income tax valuation, valuation of and expense incurred in connection with stock options, valuation of interest-rate swap arrangements, insurance reserves, legal contingencies and the estimated average membership life and the underlying forecasts for these assumptions and estimates. |
Income Taxes | 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 also 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. 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. The Company also recognizes deferred tax in relation to the U.S. taxes on the total cumulative earnings of the Company's Swiss clubs. 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. |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income Accumulated 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 accumulated other comprehensive (loss) income in its consolidated statements of comprehensive (loss) income. The Company uses a derivative financial instrument to limit exposure to changes in interest rates on the Company’s existing term loan facility. The derivative financial instrument is 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 shareholders’ 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 has been designated as a cash flow hedge. See Note 9 - Derivative Financial Instruments for more information on the Company’s risk management program and derivatives. |
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. |
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 is computed similarly to basic EPS, except that the denominator is increased for the assumed exercise of dilutive stock options and unvested restricted stock calculated using the treasury stock method. |
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 is determined using the Black-Scholes option-pricing model. 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 Pronouncements | Recent Accounting Pronouncements In August 2016, the FASB issued Accounting Standards Update (“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 adoption of this guidance is not expected to have a material impact on the Company's financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” Under this standard, all excess tax benefits and tax deficiencies will be recorded as an income tax expense or benefit in the income statement in the period in which the awards vest or are exercised. Excess tax benefits will be classified as an operating activity in the statement of cash flows. The standard also allows an entity to elect an accounting policy to either estimate the number of forfeitures or account for forfeitures when they occur. In addition, entities can withhold up to the maximum individual statutory tax rate without classifying the awards as a liability. This standard is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (topic 842),” to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This standard is effective for annual periods beginning after December 15, 2018, including 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 November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes.” This amendment requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This standard is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company has prospectively adopted this change in accounting principle for the fiscal year beginning January 1, 2016. Prior periods were not retrospectively adjusted. The adoption of this standard did not have a material impact on the Company's consolidated financial statements as it only pertains to a change in the balance sheet presentation of deferred taxes. In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This standard changes the presentation of debt issuance costs in the financial statements to present such costs as a direct deduction from the related debt liability rather than as an asset. Amortization of debt issuance costs will be reported as interest expense. In August 2015, the FASB issued ASU No. 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” ASU 2015-15 clarifies that the Securities Exchange Commission (the “SEC”) would not object to the deferral and presentation of debt issuance costs as an asset and subsequent amortization of debt issuance costs over the term of the line-of-credit arrangement, whether or there are any outstanding borrowings on the line-of-credit arrangement. These standards are effective for annual reporting periods beginning after December 15, 2015. The Company has retrospectively adopted this change in accounting principle for the fiscal year beginning January 1, 2016 and accordingly reclassified $2,259 of deferred financing costs from other assets to long-term debt on its consolidated balance sheet as of December 31, 2015. The adoption of this amended guidance did not impact the Company's consolidated financial position, results of operations or cash flows. In April 2015, the FASB issued ASU No. 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 35-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.” This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If an arrangement includes a software license, the accounting for the license will be consistent with licenses of other intangible assets. If the arrangement does not include a license, the arrangement will be accounted for as a service contract. ASU 2015-05 is effective for interim and annual periods beginning after December 15, 2015. The Company adopted the updated guidance for the fiscal year beginning January 1, 2016 with no impact on the Company’s financial statements. In January 2015, the FASB issued ASU No. 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” This guidance eliminates the concept of extraordinary items from generally accepted accounting principles in the U.S. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, the ASU does not affect the reporting and disclosure requirements for an event that is unusual in nature or infrequent in occurrence. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption was permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company adopted the updated guidance for the fiscal year beginning January 1, 2016 with no impact on the Company’s financial statements. In November 2014, the FASB issued ASU No. 2014-16, “Derivatives and Hedging” (Topic 815): “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity, which provides guidance on identifying whether the nature of the host contract in a hybrid instrument is in the form of debt or equity.” This standard requires management to consider the stated and implied substantive terms and features of the hybrid financial instrument, including the embedded derivative features, in order to determine whether the nature of the host contract is more akin to debt or to equity. The ASU is effective for annual periods and interim periods with those annual periods beginning after December 15, 2015, with early adoption permitted. The Company adopted the updated guidance for the fiscal year beginning January 1, 2016 with no impact on the Company’s financial statements. In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The standard requires management to evaluate, at each annual and interim reporting period, the Company’s ability to continue as a going concern within one year of the date the financial statements are issued and provide related disclosures. This guidance is effective for the annual period ending after December 15, 2016 and for annual periods and interim periods thereafter. The adoption of this amended guidance did not impact the Company’s financial statements. However, it will be required to evaluate and determine if further disclosure is necessary at each balance sheet date beginning December 31, 2016. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606). The standard provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes current revenue recognition guidance. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The new standard also includes enhanced disclosures which are significantly more comprehensive than those in existing revenue standards. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU No. 2014-09 for all entities by one year, to annual reporting periods beginning after December 15, 2017. Early adoption will be permitted for annual reporting periods beginning after December 15, 2016. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements. In addition, the FASB issued ASU 2016-08, ASU 2016-10, and ASU 2016-12 in March 2016, April 2016, and May 2016, respectively, to help provide interpretive clarifications on the new guidance in ASC Topic 606. To date, the Company has formed a committee to evaluate the impact on its financial statement and has preliminarily concluded that it will not significantly affect how revenue for contracts with customers is recognized. At this time, the Company does not plan to early adopt this guidance and has not determined the transition method that will be used. During 2017, the Company plans to further evaluate the transition approach and consider its method of adoption. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Table) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 , 2015 and 2014 : Balance Beginning of the Year Additions Write-offs Net of Recoveries Balance at End of Year December 31, 2016 $ 3,133 $ 6,704 $ (6,925 ) $ 2,912 December 31, 2015 $ 2,511 $ 11,237 $ (10,615 ) $ 3,133 December 31, 2014 $ 2,309 $ 9,826 $ (9,624 ) $ 2,511 |
Schedule of Supplemental Disclosure of Cash Flow Information | Supplemental disclosure of cash flow information: Year Ended December 31, 2016 2015 2014 Cash paid: Interest paid (net of amounts capitalized) $ 12,289 $ 16,749 $ 17,103 Income taxes paid $ 11,286 $ 105 $ 23,553 Cash received: Income taxes refund $ 6,985 $ 7,768 $ — Noncash investing and financing activities: Acquisition of fixed assets included in accounts payable and accrued expenses $ 2,058 $ 2,031 $ 4,822 Note: Interest includes cash payments under the Initial Lease (as defined below) resulting from the sale of the East 86th Street property in the years ended December 31, 2015 and 2014. See Notes 7 and 8 for additional noncash financing activities. |
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, 2016 2015 2014 Net income (loss) $ 8,043 $ 21,158 $ (68,989 ) Weighted average number of common share outstanding — basic 25,568,371 24,630,898 24,266,407 Effect of dilutive share-based awards 506,364 483,159 — Weighted average number of common shares outstanding — diluted 26,074,735 25,114,057 24,266,407 Earnings (loss) per share: Basic $ 0.31 $ 0.86 $ (2.84 ) Diluted $ 0.31 $ 0.84 $ (2.84 ) |
Fixed Assets (Table)
Fixed Assets (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Asset Components | Fixed assets as of December 31, 2016 and 2015 are shown at cost, less accumulated depreciation and amortization and are summarized below: December 31, 2016 2015 Leasehold improvements $ 495,515 $ 498,394 Club equipment 107,905 105,998 Furniture, fixtures and computer equipment 71,222 69,383 Computer software 25,813 24,047 Construction in progress 3,617 4,882 704,072 702,704 Less: Accumulated depreciation and amortization (533,492 ) (507,363 ) $ 170,580 $ 195,341 |
Schedule of Long-lived Assets Measured at Fair Value, Nonrecurring | The following table presents the long-lived assets measured at fair value on a nonrecurring basis for the period ended December 31, 2016 : Basis of Fair Value Measurements Fair Value of Assets (Liabilities) Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2016 $ 742 $ — $ — $ 742 December 31, 2015 $ 14,571 $ — $ — $ 14,571 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill from December 31, 2015 through December 31, 2016 are detailed in the charts below. NYSC BSC SSC Outlier Clubs Total Goodwill $ 31,549 $ 15,775 $ 1,175 $ 3,982 $ 52,481 Changes due to foreign currency exchange rate fluctuations — — (150 ) — (150 ) Less: accumulated impairment of goodwill (31,549 ) (15,775 ) — (3,982 ) (51,306 ) Balance as of December 31, 2015 — — 1,025 — 1,025 Changes due to foreign currency exchange rate fluctuations — — (17 ) — (17 ) Balance as of December 31, 2016 $ — $ — $ 1,008 $ — $ 1,008 |
Schedule of Finite-Lived Intangible Assets | Intangible assets as of December 31, 2016 and 2015 are as follows: As of December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Intangibles Membership lists $ 11,344 $ (11,344 ) $ — Management contracts 250 (146 ) 104 Trade names 40 (9 ) 31 $ 11,634 $ (11,499 ) $ 135 As of December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Intangibles Membership lists $ 11,344 $ (11,344 ) $ — Management contracts 250 (112 ) 138 Trade names 40 (7 ) 33 $ 11,634 $ (11,463 ) $ 171 |
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, 2017 $ 30 2018 24 2019 19 2020 16 2021 13 2022 and thereafter 33 $ 135 |
Accrued Expenses (Table)
Accrued Expenses (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses as of December 31, 2016 and 2015 consisted of the following: December 31, 2016 2015 Accrued payroll and related $ 6,817 $ 5,674 Accrued construction in progress and equipment 917 1,235 Accrued occupancy costs 8,594 8,563 Accrued insurance claims 2,786 2,346 Accrued other 6,793 8,311 $ 25,907 $ 26,129 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt as of December 31, 2016 and 2015 consisted of the following: December 31, 2016 2015 2013 Term Loan Facility $ 202,000 $ 275,417 Less: Unamortized discount (3,851 ) (6,418 ) Less: Deferred financing costs (1,324 ) (2,259 ) Less: Current portion due within one year (2,082 ) (2,810 ) Long-term portion $ 194,743 $ 263,930 |
Schedule of Long Term Obligations | The aggregate long-term debt obligations maturing during the next five years and thereafter are as follows: Amount Due Year Ending December 31, 2017 $ 2,082 2018 2,082 2019 2,082 2020 195,754 2021 — 2022 and thereafter — $ 202,000 |
Schedule of Interest Expense and Capitalized Interest | The Company’s interest expense and capitalized interest related to funds borrowed to finance club facilities under construction for the years ended December 31, 2016 , 2015 and 2014 were as follows: Year Ended December 31, 2016 2015 2014 Interest costs expensed $ 13,904 $ 17,914 $ 18,228 Interest costs capitalized 28 72 300 Total interest expense and amounts capitalized $ 13,932 $ 17,986 $ 18,528 Note: The table above does not include $2,666 and $810 of interest expense related to the building financing arrangement in the years ended December 31, 2015 and 2014, respectively. |
Derivative Financial Instrume34
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 $ 1,511 $ — $ 1,511 $ — Interest rate swap liability as of December 31, 2015 $ 2,042 $ — $ 2,042 $ — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Minimum Rental Payments Under Non-Cancelable Operating Leases | Future minimum rental payments under non-cancelable operating leases are shown in the chart below. Minimum Annual Rental Year Ending December 31, 2017 $ 89,846 2018 84,749 2019 77,588 2020 71,202 2021 60,592 Aggregate thereafter 181,302 |
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, 2017 $ 2,032 2018 1,154 2019 865 2020 755 2021 532 Aggregate thereafter 99 |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Options Activity | The following table summarizes the stock option activity for the years ended December 31, 2016 , 2015 and 2014 : Common Weighted Average Exercise Price Balance at January 1, 2014 1,140,231 $ 5.21 Exercised (73,043 ) 1.82 Canceled (34,567 ) 12.56 Forfeited (2,100 ) 3.54 Balance at December 31, 2014 1,030,521 5.29 Granted 850,000 2.68 Exercised (171,718 ) 1.68 Canceled (313,934 ) 8.61 Balance at December 31, 2015 1,394,869 3.40 Exercised (226,011 ) 1.41 Canceled (533,484 ) 3.99 Forfeited (447,667 ) 2.71 Balance at December 31, 2016 187,707 $ 5.78 |
Schedule of Stock Options Outstanding | The following table summarizes information about stock options outstanding and exercisable as of December 31, 2016 : Options Outstanding Options Exercisable Number of Options Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Number of Options Weighted-Average Exercise Price Common 2007 grants 51,000 7 months $ 14.76 51,000 $ 14.76 2008 grants 34,020 23 months 2.64 34,020 2.64 2009 grants 41,372 34 months 1.75 41,372 1.75 2010 grants 11,315 42 months 1.91 11,315 1.91 2015 grants 50,000 105 months 2.95 12,500 2.95 Total Grants 187,707 44 months $ 5.78 150,207 $ 6.48 |
Schedule of Stock Option and Non-Restricted Stock Grants Issued | Options granted during the year ended December 31, 2015 to employees of the Company were as follows: Date Number of Shares Exercise Price Grant Date Fair Value August 19, 2015 700,000 $ 2.61 $ 1,827 October 12, 2015 50,000 $ 2.95 148 October 19, 2015 100,000 $ 3.04 304 850,000 $ 2,279 |
Schedule of Fair Value Inputs | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: Common Risk-Free Interest Rate Expected Dividend Yield Expected Term (Years) Expected Volatility 2015 Grants 1.1 % — 3.99 52.03 % |
Schedule of Restricted Stock Grants | The following restricted stock grants were issued to employees of the Company during the year ended December 31, 2016 . Number of Shares Share Price Grant Date Fair Value March 10, 2016 559,000 $ 2.06 $ 1,152 September 30, 2016 200,000 $ 3.09 618 December 12, 2016 952,000 $ 2.60 2,475 Total 1,711,000 $ 4,245 The following table summarizes the restricted stock activity for the years ended December 31, 2016 , 2015 and 2014 : Number of Shares Weighted Average Grant Date Fair Value Balance as of January 1, 2014 363,171 $ 10.08 Granted 196,500 8.47 Vested (116,890 ) 9.82 Forfeited (41,247 ) 9.92 Balance as of December 31, 2014 401,534 9.38 Granted 507,000 4.27 Vested (133,874 ) 9.20 Forfeited (249,790 ) 8.19 Balance as of December 31, 2015 524,870 5.06 Granted 1,711,000 2.48 Vested (222,495 ) 4.59 Forfeited (402,000 ) 3.39 Balance as of December 31, 2016 1,611,375 $ 2.80 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of revenue from club operations | Revenues for the years ended December 31, 2016 , 2015 and 2014 are summarized below: Years Ended December 31, 2016 2015 2014 Membership dues $ 296,795 $ 309,096 $ 343,185 Initiation and processing fees 7,636 13,644 12,044 Personal training revenue 66,487 73,191 70,338 Other ancillary club revenue(1) 19,642 22,138 22,304 Total club revenue 390,560 418,069 447,871 Fees and other revenue(2) 6,361 6,254 5,971 Total revenue $ 396,921 $ 424,323 $ 453,842 (1) Other ancillary club revenue primarily consists of Sports Clubs for Kids, racquet sports, Small Group Training and studio classes. (2) Fees and other revenue primarily consist of rental income, management fees, marketing revenue and laundry revenue. |
Corporate Income Taxes (Tables)
Corporate Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Corporate Income Tax Provision Components | The provision for income taxes for the years ended December 31, 2016 , 2015 and 2014 consisted of the following: Year Ended December 31, 2016 Federal Foreign State and Local Total Current $ 9,346 $ (63 ) $ 488 $ 9,771 Deferred — — — — $ 9,346 $ (63 ) $ 488 $ 9,771 Year Ended December 31, 2015 Federal Foreign State and Local Total Current $ (3,100 ) $ 67 $ 197 $ (2,836 ) Deferred (8,262 ) — (3,253 ) (11,515 ) $ (11,362 ) $ 67 $ (3,056 ) $ (14,351 ) Year Ended December 31, 2014 Federal Foreign State and Local Total Current $ 12,454 $ 183 $ 266 $ 12,903 Deferred 14,684 — 25,024 39,708 $ 27,138 $ 183 $ 25,290 $ 52,611 |
Schedule of Components of Deferred Tax Assets, Net | The components of deferred tax liabilities, net consist of the following items: December 31, 2016 2015 Deferred tax assets Basis differences in depreciation and amortization $ 10,073 $ 6,578 Deferred lease liabilities 23,527 24,345 Deferred revenue 8,247 10,974 Deferred compensation expense incurred in connection with stock options 994 1,589 Federal and state net operating loss carry-forwards 8,473 10,430 Accruals, reserves and other 7,297 7,654 $ 58,611 $ 61,570 Deferred tax liabilities Deferred costs $ 803 $ 1,751 Change in accounting method 3,147 6,621 Undistributed foreign earnings and other 529 622 $ 4,479 $ 8,994 Gross deferred tax assets 54,132 52,576 Valuation allowance (54,193 ) (52,637 ) Deferred tax liabilities, net $ (61 ) $ (61 ) |
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, 2016 , 2015 and 2014 : Years Ended December 31, 2016 2015 2014 Federal statutory tax rate 35 % 35 % 35 % State and local income taxes (net of federal tax benefit) 2 11 8 Change in state effective income tax rate — 3 (4 ) State tax (benefit) provision related to insurance premiums — (14 ) 7 Tax reserves — 1 1 Permanent differences in fines and penalties — 2 1 37 38 48 Valuation allowance 18 (249 ) (422 ) Elimination of federal effect of state deferred taxes — — 53 55 % (211 )% (321 )% |
Schedule of Unrecognized Tax Benefits | A reconciliation of unrecognized tax benefits, excluding interest and penalties, is as follows: 2016 2015 2014 Balance on January 1 $ 1,187 $ 1,187 $ 13,830 Gross decreases for tax positions taken in prior years — — (12,675 ) Gross increases for tax positions taken in prior years — — 32 Balance on December 31 $ 1,187 $ 1,187 $ 1,187 |
Selected Quarterly Financial 39
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | 2016 First Quarter Second Quarter Third Quarter Fourth Quarter (b) (c) Net revenue $ 101,345 $ 100,935 $ 98,534 $ 96,107 Operating (loss) income (3,722 ) (1,462 ) (2,624 ) 1,425 Net (loss) income (6,925 ) 20,733 (5,506 ) (259 ) (Loss) earnings per share (a) Basic $ (0.28 ) $ 0.81 $ (0.21 ) $ (0.01 ) Diluted $ (0.28 ) $ 0.79 $ (0.21 ) $ (0.01 ) 2015 First Quarter Second Quarter Third Quarter Fourth Quarter (d) (e) (f) Net revenue $ 111,424 $ 108,296 $ 103,764 $ 100,839 Operating (loss) income (7,941 ) (41,451 ) (19,711 ) 76,217 Net (loss) earnings (12,764 ) (31,068 ) (22,006 ) 86,996 (Loss) earnings per share (a) Basic $ (0.52 ) $ (1.26 ) $ (0.89 ) $ 3.50 Diluted $ (0.52 ) $ (1.26 ) $ (0.89 ) $ 3.47 (a) Basic and diluted (loss) earnings per share are computed independently for each quarter presented. Accordingly, the sum of the quarterly earnings per share may not agree with the calculated full year earnings per share. (b) In the second quarter of 2016, the Company recorded a pre-tax gain on extinguishment of debt of $38,497 in connection with the purchase of $71,152 of its debt. (c) In the third quarter of 2016, the Company recorded a pre-tax non-cash fixed asset impairment charge of $742 related to underperforming clubs. (d) In the second quarter of 2015, the Company recorded a pre-tax non-cash goodwill impairment charge of $31,558 associated with the NYSC and BSC regions and a pre-tax non-cash fixed asset impairment charge of $1,014 related to underperforming clubs. (e) In the third quarter of 2015, the Company recorded a pre-tax non-cash fixed asset impairment charge of $12,420 related to underperforming clubs. (f) In the fourth quarter of 2015, the Company recorded a pre-tax gain on sale of building of $77,146 related to the sale of the property on East 86th Street. The Company also recorded a pre-tax gain on extinguishment of debt of $17,911 in connection with the purchase of $29,829 of its debt. In addition, the Company recorded a pre-tax gain on lease termination of $2,967 related to the termination of a lease for a planned club opening that was not yet effective. |
Basis of Presentation (Details)
Basis of Presentation (Details) | 12 Months Ended | |||||||
Dec. 31, 2016USD ($)club | Dec. 31, 2016USD ($)clubreporting_unit | Dec. 31, 2016USD ($)clubsegment | Dec. 31, 2015USD ($)segment | Jun. 30, 2016USD ($) | May 06, 2016USD ($) | Apr. 21, 2016USD ($) | Nov. 15, 2013USD ($) | |
Basis Of Presentation [Line Items] | ||||||||
Number of stores | 150 | 150 | 150 | |||||
Number of reportable segments | 1 | 1 | 2 | |||||
Repurchase amount | $ | $ 71,152,000 | |||||||
Revolving Credit Facility [Member] | 2013 Senior Credit Facility [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Repurchased face amount | $ | $ 29,829,000 | $ 62,447,000 | $ 8,705,000 | |||||
Repurchase amount | $ | $ 10,947,000 | $ 25,978,000 | $ 3,787,000 | |||||
Repurchase amount, percentage of face value | 36.70% | 41.60% | 43.50% | |||||
Revolving Credit Facility [Member] | 2013 Revolving Loan Facility Maturing November 15, 2018 [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Covenant compliance, maximum percentage available on line of credit due to exceeded maximum leverage ratio | 25.00% | |||||||
Unused borrowing capacity based on leverage ratio | $ | $ 11,250,000 | $ 11,250,000 | $ 11,250,000 | |||||
Covenant compliance, maximum leverage ratio | 4.50 | 4.50 | 4.50 | |||||
Secured Debt [Member] | 2013 Term Loan Facility Maturing November 15, 2020 [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
2013 Term Loan Facility | $ | $ 202,000,000 | $ 202,000,000 | $ 202,000,000 | $ 275,417,000 | $ 325,000,000 | |||
Letter of Credit [Member] | 2013 Revolving Loan Facility Maturing November 15, 2018 [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Letters of credit outstanding | $ | $ 2,851,000 | $ 2,851,000 | $ 2,851,000 | |||||
New York Sports Clubs [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of stores | 102 | 102 | 102 | |||||
Boston Sports Clubs [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of stores | 28 | 28 | 28 | |||||
Washington Sports Clubs [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of stores | 12 | 12 | 12 | |||||
Philadelphia Sports Clubs [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of stores | 5 | 5 | 5 | |||||
Switzerland Clubs [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of stores | 3 | 3 | 3 | |||||
Partially Owned Properties [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of stores | 1 | 1 | 1 | |||||
Partially Owned Properties [Member] | Washington Sports Clubs [Member] | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Number of stores | 1 | 1 | 1 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)clubsession | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Summary of Significant Accounting Policies - Revenue Recognition [Line Items] | |||
Usage fee revenue | $ 1,015 | $ 719 | $ 2,248 |
Initiation and processing fees, period of recognition (in months) | 12 months | ||
Annual membership fees, amortization period (in months) | 12 months | ||
Deferred membership costs | $ 1,092 | 3,029 | |
Unused and expired personal training sessions | $ 15,079 | 14,968 | |
Personal training, recognition period (in months) | 3 months | ||
Bonds outstanding pursuant to various state consumer protection laws | $ 3,112 | 3,900 | |
Managed Sites [Member] | |||
Summary of Significant Accounting Policies - Revenue Recognition [Line Items] | |||
Managed university sites | club | 3 | ||
Managed sites | club | 8 | ||
Revenues | $ 1,892 | $ 1,802 | $ 1,502 |
Minimum [Member] | |||
Summary of Significant Accounting Policies - Revenue Recognition [Line Items] | |||
Number of personal training sessions per month | session | 4 | ||
Maximum [Member] | |||
Summary of Significant Accounting Policies - Revenue Recognition [Line Items] | |||
Number of personal training sessions per month | session | 12 | ||
Regular Member [Member] | |||
Summary of Significant Accounting Policies - Revenue Recognition [Line Items] | |||
Average member life (in months) | 25 months | 22 months | 22 months |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Advertising, Cash, and Deferred Lease (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Financing Receivable, Impaired [Line Items] | |||||
Advertising expense | $ 6,384,000 | $ 11,057,000 | $ 7,903,000 | ||
Captive insurance required balance | 250,000 | ||||
Cash related to captive insurance that was included in cash and cash equivalents | $ 275,000 | 276,000 | 275,000 | ||
Amortization of lease incentives | 3,190,000 | 2,920,000 | 2,771,000 | ||
Write off of deferred lease liability | 2,924,000 | ||||
Net occupancy gain on club closure | 1,442,000 | ||||
Gain (loss) on lease termination | $ 2,967,000 | 0 | 2,967,000 | 0 | |
Proceeds from termination of lease by landlord | $ 3,090,000 | ||||
Operating Expense [Member] | |||||
Financing Receivable, Impaired [Line Items] | |||||
Lease termination penalty | $ 329,000 | $ 1,550,000 | $ 1,482,000 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Accounts receivable, gross | $ 4,133 | $ 5,056 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Balance Beginning of the Year | 3,133 | 2,511 | $ 2,309 |
Additions | 6,704 | 11,237 | 9,826 |
Write-offs Net of Recoveries | (6,925) | (10,615) | (9,624) |
Balance at End of Year | $ 2,912 | $ 3,133 | $ 2,511 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Fixed Assets (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Building and Building Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed asset useful life (in years) | 30 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed asset useful life (in years) | 5 years |
Computer Software, Intangible Asset [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed asset useful life (in years) | 3 years |
Computer Software, Intangible Asset [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Fixed asset useful life (in years) | 5 years |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Intangible Assets (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employment Contracts [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 9 years | ||
Employment Contracts [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 11 years | ||
Trade Names [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 10 years | ||
Trade Names [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 20 years | ||
Regular Member [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Average member life (in months) | 25 months | 22 months | 22 months |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Debt Issuance Costs (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Line Items] | |||
Amortization of debt issuance costs | $ 644,000 | $ 778,000 | $ 627,000 |
Amortization of building financing costs | 0 | $ 124,000 | $ 31,000 |
Write-off of unamortized debt issuance cost | $ 3,005,000 | ||
Debt Issuance Cost [Member] | Minimum [Member] | |||
Accounting Policies [Line Items] | |||
Debt issuance costs, amortization period (in years) | 5 years | ||
Debt Issuance Cost [Member] | Maximum [Member] | |||
Accounting Policies [Line Items] | |||
Debt issuance costs, amortization period (in years) | 7 years | ||
Building Financing Cost [Member] | |||
Accounting Policies [Line Items] | |||
Deferred building financing costs, amortization period (in years) | 25 years |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Impairment and Insurance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Percent of revenue | 2.00% | |
Period of financial forecast (in years) | 3 years | 3 years |
Letter of credit related to insurance claims | $ 615 | $ 615 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Valuation allowance, net of the elimination of federal effect of state deferred taxes | $ 54,193 | $ 52,637 | $ 60,368 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash paid: | |||
Interest paid (net of amounts capitalized) | $ 12,289 | $ 16,749 | $ 17,103 |
Income taxes paid | 11,286 | 105 | 23,553 |
Cash received: | |||
Income taxes refund | 6,985 | 7,768 | 0 |
Noncash investing and financing activities: | |||
Acquisition of fixed assets included in accounts payable and accrued expenses | $ 2,058 | $ 2,031 | $ 4,822 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - AOCI and Concentrations of Credit Risk (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)club | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Accounting Policies [Line Items] | ||||
Number of stores | club | 150 | |||
Foreign currency translation adjustment | $ (176,000) | $ (165,000) | $ (545,000) | |
Foreign currency translation adjustment, tax | 0 | 0 | 0 | |
Cash and cash equivalents held at one financial institution | 20,965,000 | |||
Cash and cash equivalents | $ 45,596,000 | $ 76,217,000 | $ 93,452,000 | $ 73,598,000 |
Switzerland Clubs [Member] | ||||
Accounting Policies [Line Items] | ||||
Number of stores | club | 3 |
Summary of Significant Accoun51
Summary of Significant Accounting Policies - Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||||||||||
Net income (loss) | $ (259) | $ (5,506) | $ 20,733 | $ (6,925) | $ 86,996 | $ (22,006) | $ (31,068) | $ (12,764) | $ 8,043 | $ 21,158 | $ (68,989) |
Weighted average number of common share outstanding — basic | 25,568,371 | 24,630,898 | 24,266,407 | ||||||||
Effect of dilutive share-based awards (in shares) | 506,364 | 483,159 | 0 | ||||||||
Weighted average number of common shares outstanding — diluted | 26,074,735 | 25,114,057 | 24,266,407 | ||||||||
Earnings (loss) per share: | |||||||||||
Basic (in dollars per share) | $ (0.01) | $ (0.21) | $ 0.81 | $ (0.28) | $ 3.50 | $ (0.89) | $ (1.26) | $ (0.52) | $ 0.31 | $ 0.86 | $ (2.84) |
Diluted (in dollars per share) | $ (0.01) | $ (0.21) | $ 0.79 | $ (0.28) | $ 3.47 | $ (0.89) | $ (1.26) | $ (0.52) | $ 0.31 | $ 0.84 | $ (2.84) |
Antidilutive securities excluded | 810,571 | 276,846 | |||||||||
Antidilutive securities excluded from computation of earnings if not in net loss position | 378,285 |
Recent Accounting Pronounceme52
Recent Accounting Pronouncements - Narrative (Details) - Accounting Standards Update 2015-03 [Member] $ in Thousands | Dec. 31, 2015USD ($) |
Other Assets [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Deferred financing costs | $ (2,259) |
Long-term Debt [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Deferred financing costs | $ 2,259 |
Fixed Assets - Summary of Fixed
Fixed Assets - Summary of Fixed Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 495,515 | $ 498,394 |
Club equipment | 107,905 | 105,998 |
Furniture, fixtures and computer equipment | 71,222 | 69,383 |
Computer software | 25,813 | 24,047 |
Construction in progress | 3,617 | 4,882 |
Fixed assets, gross | 704,072 | 702,704 |
Less: Accumulated depreciation and amortization | (533,492) | (507,363) |
Fixed assets, net | $ 170,580 | $ 195,341 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Depreciation and leasehold amortization expense | $ 43,691 | $ 47,664 | $ 46,794 | |||
Impairment of fixed assets | $ 742 | $ 12,420 | $ 1,014 | 742 | 14,571 | $ 4,569 |
Significant Unobservable Inputs (Level 3) [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impairment of fixed assets | $ 742 | $ 14,571 |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets - Additional Information (Details) $ in Thousands | Feb. 29, 2016 | May 31, 2015USD ($) | Feb. 28, 2015 | Jun. 30, 2015USD ($) | Dec. 31, 2016club | Dec. 31, 2016USD ($)club | Dec. 31, 2016clubreporting_unit | Dec. 31, 2016clubsegment | Dec. 31, 2016clubtrade_name | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) |
Goodwill [Line Items] | |||||||||||
Number of trade names | trade_name | 4 | ||||||||||
Number of reporting units | 1 | 1 | 2 | ||||||||
Number of clubs | 150 | 150 | 150 | 150 | 150 | ||||||
Impairment of goodwill | $ | $ 31,558 | $ 0 | $ 31,558 | $ 137 | |||||||
Period of financial forecast (in years) | 3 years | 3 years | |||||||||
Terminal Growth Rate (as a percentage) | 2.00% | ||||||||||
Switzerland Clubs [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Number of clubs | 3 | 3 | 3 | 3 | 3 | ||||||
Discount Rate (as a percent) | 11.20% | 11.20% | 13.90% | ||||||||
New York and Boston Sports Clubs [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Impairment of goodwill | $ | $ 31,558 | ||||||||||
New York Sports Clubs [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Number of clubs | 102 | 102 | 102 | 102 | 102 | ||||||
Discount Rate (as a percent) | 9.20% | 13.30% | |||||||||
Minimum [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Discount Rate (as a percent) | 8.20% | 13.20% | |||||||||
Terminal Growth Rate (as a percentage) | 1.00% | 0.50% | |||||||||
Maximum [Member] | |||||||||||
Goodwill [Line Items] | |||||||||||
Discount Rate (as a percent) | 11.20% | 13.90% | |||||||||
Terminal Growth Rate (as a percentage) | 3.00% | 3.00% |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | ||
Goodwill | $ 52,481 | |
Changes due to foreign currency exchange rate fluctuations | $ (17) | (150) |
Less: accumulated impairment of goodwill | (51,306) | |
Goodwill [Roll Forward] | ||
Goodwill | 1,025 | |
Changes due to foreign currency exchange rate fluctuations | (17) | (150) |
Goodwill | 1,008 | 1,025 |
New York Sports Clubs [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 31,549 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Less: accumulated impairment of goodwill | (31,549) | |
Goodwill [Roll Forward] | ||
Goodwill | 0 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Goodwill | 0 | 0 |
Boston Sports Clubs [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 15,775 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Less: accumulated impairment of goodwill | (15,775) | |
Goodwill [Roll Forward] | ||
Goodwill | 0 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Goodwill | 0 | 0 |
Switzerland Clubs [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 1,175 | |
Changes due to foreign currency exchange rate fluctuations | (17) | (150) |
Less: accumulated impairment of goodwill | 0 | |
Goodwill [Roll Forward] | ||
Goodwill | 1,025 | |
Changes due to foreign currency exchange rate fluctuations | (17) | (150) |
Goodwill | 1,008 | 1,025 |
Outlier Clubs [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 3,982 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Less: accumulated impairment of goodwill | (3,982) | |
Goodwill [Roll Forward] | ||
Goodwill | 0 | |
Changes due to foreign currency exchange rate fluctuations | 0 | 0 |
Goodwill | $ 0 | $ 0 |
Goodwill and Intangible Asset57
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 11,634 | $ 11,634 | |
Accumulated Amortization | (11,499) | (11,463) | |
Net Intangibles | 135 | 171 | |
Amortization of Intangible Assets | 36 | 223 | $ 513 |
Membership list [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 11,344 | 11,344 | |
Accumulated Amortization | (11,344) | (11,344) | |
Net Intangibles | 0 | 0 | |
Management contracts [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 250 | 250 | |
Accumulated Amortization | (146) | (112) | |
Net Intangibles | 104 | 138 | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 40 | 40 | |
Accumulated Amortization | (9) | (7) | |
Net Intangibles | $ 31 | $ 33 |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets - Schedule of Aggregate Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2,017 | $ 30 | |
2,018 | 24 | |
2,019 | 19 | |
2,020 | 16 | |
2,021 | 13 | |
2022 and thereafter | 33 | |
Net Intangibles | $ 135 | $ 171 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related | $ 6,817 | $ 5,674 |
Accrued construction in progress and equipment | 917 | 1,235 |
Accrued occupancy costs | 8,594 | 8,563 |
Accrued insurance claims | 2,786 | 2,346 |
Accrued other | 6,793 | 8,311 |
Accrued Liabilities, Current | $ 25,907 | $ 26,129 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 15, 2013 |
Debt Instrument [Line Items] | |||
Less: Current portion due within one year | $ (2,082,000) | $ (2,810,000) | |
Long-term portion | 194,743,000 | 263,930,000 | |
Secured Debt [Member] | 2013 Term Loan Facility Maturing November 15, 2020 [Member] | |||
Debt Instrument [Line Items] | |||
2013 Term Loan Facility | 202,000,000 | 275,417,000 | $ 325,000,000 |
Less: Unamortized discount | (3,851,000) | (6,418,000) | $ (1,625,000) |
Less: Deferred financing costs | (1,324,000) | (2,259,000) | |
Less: Current portion due within one year | (2,082,000) | (2,810,000) | |
Long-term portion | $ 194,743,000 | $ 263,930,000 |
Long-Term Debt - Maturity Table
Long-Term Debt - Maturity Table (Details) - Secured Debt [Member] - 2013 Term Loan Facility Maturing November 15, 2020 [Member] - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 15, 2013 |
Long-term Debt, Fiscal Year Maturity [Abstract] | |||
2,017 | $ 2,082,000 | ||
2,018 | 2,082,000 | ||
2,019 | 2,082,000 | ||
2,020 | 195,754,000 | ||
2,021 | 0 | ||
2022 and thereafter | 0 | ||
2013 Term Loan Facility | $ 202,000,000 | $ 275,417,000 | $ 325,000,000 |
Long-Term Debt - 2013 Senior Cr
Long-Term Debt - 2013 Senior Credit Facility (Details) | Nov. 15, 2013USD ($) | Dec. 31, 2015USD ($) | Nov. 30, 2014USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | May 06, 2016USD ($) | Apr. 21, 2016USD ($) |
Debt And Credit Facility [Line Items] | ||||||||||
Cash | $ 506,000 | |||||||||
Repurchase amount | $ 71,152,000 | |||||||||
Gain (loss) on extinguishment of debt | $ 38,497,000 | $ 17,911,000 | 37,893,000 | $ 17,911,000 | $ (493,000) | |||||
Write-off of unamortized debt issuance cost | 3,005,000 | |||||||||
Gain on extinguishment of debt, tax effect | 13,451,000 | |||||||||
Provision (benefit) for corporate income taxes | 9,771,000 | (14,351,000) | 52,611,000 | |||||||
Line of Credit [Member] | 2013 Senior Credit Facility [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
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% | |||||||||
Threshold from sale of assets used towards mandatory prepayments | $ 30,000,000 | |||||||||
Proceeds from sale of assets | $ 43,500,000 | |||||||||
Line of Credit [Member] | 2013 Senior Credit Facility [Member] | Leverage Ratio, Greater Than 2.50 [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Covenant compliance, maximum leverage ratio | 2.50 | |||||||||
Excess cash flow repayment percentage | 50.00% | |||||||||
Line of Credit [Member] | 2013 Senior Credit Facility [Member] | Leverage Ratio, Greater than 2.00 but Less than 2.50 [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Covenant compliance, maximum leverage ratio | 2 | |||||||||
Excess cash flow repayment percentage | 25.00% | |||||||||
Line of Credit [Member] | 2013 Senior Credit Facility [Member] | Leverage Ratio, Less Than or Equal to 2.00 [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Excess cash flow repayment percentage | 0.00% | |||||||||
Line of Credit [Member] | 2013 Senior Credit Facility [Member] | Base Rate [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Debt basis spread on variable rate (as percent) | 2.50% | |||||||||
Line of Credit [Member] | 2013 Senior Credit Facility [Member] | LIBOR [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Debt basis spread on variable rate (as percent) | 3.50% | |||||||||
Secured Debt [Member] | 2013 Senior Credit Facility [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Debt unamortized discount | $ 4,356,000 | |||||||||
Deferred debt issuance costs | 5,119,000 | |||||||||
Secured Debt [Member] | 2013 Term Loan Facility Maturing November 15, 2020 [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Long-term debt, gross | 325,000,000 | $ 275,417,000 | 275,417,000 | $ 202,000,000 | 275,417,000 | |||||
Proceeds from issuance of secured debt | $ 323,375,000 | |||||||||
Debt instrument, discount percentage | 0.50% | |||||||||
Debt unamortized discount | $ 1,625,000 | 6,418,000 | 6,418,000 | $ 3,851,000 | 6,418,000 | |||||
Percent of amendment fee paid to consenting lenders | 0.25% | |||||||||
Repayment of term loan | $ 22,019,000 | |||||||||
Gain (loss) on extinguishment of debt | (493,000) | |||||||||
Write-off of unamortized debt issuance cost | 119,000 | |||||||||
Debt mandatory prepayment from sale of assets | $ 13,500,000 | |||||||||
Write-off of unamortized original issue discount | $ 374,000 | |||||||||
Debt instrument, term after which excess cash flow is paid | 95 days | |||||||||
Long-term debt | $ 196,825,000 | |||||||||
Unamortized debt issuance costs | 1,324,000 | |||||||||
Secured Debt [Member] | 2013 Term Loan Facility Maturing November 15, 2020 [Member] | Base Rate [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Debt instrument, variable rate floor (as a percentage) | 2.00% | |||||||||
Secured Debt [Member] | 2013 Term Loan Facility Maturing November 15, 2020 [Member] | LIBOR [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Debt instrument, variable rate floor (as a percentage) | 1.00% | |||||||||
Revolving Credit Facility [Member] | 2013 Senior Credit Facility [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Repurchased face amount | 29,829,000 | 29,829,000 | 29,829,000 | $ 62,447,000 | $ 8,705,000 | |||||
Repurchase amount | $ 10,947,000 | $ 10,947,000 | $ 10,947,000 | $ 25,978,000 | $ 3,787,000 | |||||
Repurchase amount, percentage of face value | 36.70% | 36.70% | 36.70% | 41.60% | 43.50% | |||||
Write-off of unamortized debt issuance cost | $ 249,000 | 545,000 | ||||||||
Write-off of debt discount | $ 707,000 | $ 1,561,000 | ||||||||
Revolving Credit Facility [Member] | 2013 Revolving Loan Facility Maturing November 15, 2018 [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Line of credit maximum borrowing capacity | $ 45,000,000 | |||||||||
Covenant compliance, maximum percentage available on line of credit due to exceeded maximum leverage ratio | 25.00% | |||||||||
Covenant compliance, maximum leverage ratio | 4.50 | |||||||||
Unused borrowing capacity based on leverage ratio | $ 11,250,000 | |||||||||
Unused borrowing capacity | 42,149,000 | |||||||||
Letter of Credit [Member] | 2013 Senior Credit Facility [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Line of credit maximum borrowing capacity | $ 5,500,000 | |||||||||
Letter of Credit [Member] | 2013 Revolving Loan Facility Maturing November 15, 2018 [Member] | ||||||||||
Debt And Credit Facility [Line Items] | ||||||||||
Letters of credit outstanding | $ 2,851,000 |
Long-Term Debt - Fair Value (De
Long-Term Debt - Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Secured Debt [Member] | 2013 Term Loan Facility Maturing November 15, 2020 [Member] | Level 2 [Member] | ||
Debt Instrument [Line Items] | ||
Fair market value of debt | $ 163,115 | $ 104,658 |
Long-Term Debt Long-Term Debt -
Long-Term Debt Long-Term Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |||
Interest costs expensed | $ 13,904 | $ 17,914 | $ 18,228 |
Interest costs capitalized | 28 | 72 | 300 |
Total interest expense and amounts capitalized | $ 13,932 | 17,986 | 18,528 |
Interest expense, building financing arrangement | $ 2,666 | $ 810 |
Sale of Building (Details)
Sale of Building (Details) ft² in Thousands, $ in Thousands | Dec. 23, 2015USD ($) | Sep. 12, 2014USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Leases [Abstract] | |||||||
Gross proceeds from sale of building | $ 85,650 | ||||||
Area of new club lease (in sq ft) | ft² | 24 | ||||||
Proceeds from building financing arrangement | $ 3,500 | $ 500 | $ 0 | $ 4,000 | $ 83,400 | ||
Gain on sale of building | $ 77,146 | $ 0 | $ 77,146 | $ 0 |
Derivative Financial Instrume66
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Nov. 15, 2013 | |
Derivative Instrument [Line Items] | |||
Interest rate swap liability | $ 1,511 | $ 2,042 | |
Offset to accumulated other comprehensive income | 854 | 1,154 | |
November 2013 Agreement [Member] | |||
Derivative Instrument [Line Items] | |||
Notional amount of interest rate swap | $ 160,000 | ||
Derivative, fixed interest rate (as a percent) | 5.384% | ||
Derivative, basis spread on variable rate (as a percent) | 3.50% | ||
Level 2 [Member] | |||
Derivative Instrument [Line Items] | |||
Interest rate swap liability | $ 1,511 | $ 2,042 |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)lease | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Leases [Abstract] | |||
Letters of credit outstanding, amount related to leases | $ 1,136,000 | ||
Leases expiring with no renewal options, next 5 years | lease | 23 | ||
Leases expiring with no renewal options, current year | lease | 3 | ||
Leases expiring with renewal options, next 5 years | lease | 48 | ||
Rent expense excluding deferred lease liabilities | $ 124,952,000 | $ 124,920,000 | $ 124,816,000 |
Non-base rent expense | 25,384,000 | 24,767,000 | 24,340,000 |
Rent expense | 124,333,000 | 123,872,000 | 124,449,000 |
Rental income | 2,338,000 | 4,669,000 | 4,791,000 |
Rental income above base rent | $ 0 | 0 | 229,000 |
Rental income from owned property | $ 1,926,000 | $ 2,000,000 |
Leases Leases - Future Minimum
Leases Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,017 | $ 89,846 |
2,018 | 84,749 |
2,019 | 77,588 |
2,020 | 71,202 |
2,021 | 60,592 |
Aggregate thereafter | $ 181,302 |
Leases - Future Lease Receivabl
Leases - Future Lease Receivables (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
2,017 | $ 2,032 |
2,018 | 1,154 |
2,019 | 865 |
2,020 | 755 |
2,021 | 532 |
Aggregate thereafter | $ 99 |
Stockholders' (Deficit) Equit70
Stockholders' (Deficit) Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 19, 2015 | Apr. 20, 2015 | Sep. 30, 2016 | May 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Apr. 30, 2016 |
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 | |||||
Redemption price, amount | $ 246 | ||||||
2006 Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized to be issued under the stock incentive plan | 4,500,000 | 3,500,000 | |||||
Number of additional shares authorized to be issued under the stock incentive plan | 1,000,000 | ||||||
Number of shares available to be issued under the stock incentive plan | 534,861 | ||||||
Rights Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Redemption price (in dollars per right) | $ 0.01 | ||||||
Redemption price, amount | $ 246 | ||||||
Dividend, right | 1 | ||||||
Rights Plan [Member] | Series A Preferred Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of securities called by each right | 0.001 | ||||||
Right, exercise price (in dollars per share) | $ 15 | ||||||
Employee Stock Option and Restricted Stock [Member] | Non-Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of unvested shares accelerated | 17.00% | ||||||
Chief Operating Officer [Member] | Non-Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Non-cash severance expense | $ 250 | ||||||
Employee Stock Option [Member] | Chief Operating Officer [Member] | 2006 Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award of non-qualified options to purchase common stock, amount (in shares) | 250,000 | ||||||
Employee Stock Option [Member] | Chief Operating Officer [Member] | Non-Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award of non-qualified options to purchase common stock, amount (in shares) | 450,000 | ||||||
Restricted Stock [Member] | Chief Operating Officer [Member] | Non-Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award of non-qualified options to purchase restricted stock, amount (in shares) | 300,000 |
Stockholders' (Deficit) Equit71
Stockholders' (Deficit) Equity - Common Stock Options (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options Exercisable (in shares) | 150,207 | 544,869 | 1,023,606 | |
Options Outstanding, Number of Options (in shares) | 187,707 | |||
Expected Term (Years) | 3 years 11 months 25 days | |||
2006 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options Outstanding, Number of Options (in shares) | 187,707 | |||
Stock Option Grants [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period (in years) | 3 years 8 months 9 days | |||
Options Outstanding, Number of Options (in shares) | 187,707 | 1,394,869 | 1,030,521 | 1,140,231 |
Stock-based compensation expense | $ 156,000 | $ 99,000 | $ 299,000 | |
Tax benefit | $ 67,000 | $ 38,000 | 142,000 | |
Incremental expense recognized | $ 160,000 | |||
Share Price (in dollars per share) | $ 2.50 | |||
Options outstanding, intrinsic value | $ 42,000 | |||
Vested and exercisable, Weighted- Average Remaining Contractual Term (in years) | 2 years 4 months 28 days | |||
Vested and exercisable, Aggregate intrinsic value | $ 42,000 | |||
Intrinsic value of options exercised | 279,000 | |||
Granted (in shares) | 850,000 | |||
Grant Date Fair Value | $ 2,279,000 | |||
Unrecognized compensation cost related to stock options | $ 52,000 | |||
Unrecognized compensation cost related to restricted stock, recognition period | 2 years 9 months 11 days | |||
Stock Option Grants [Member] | 2006 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 0 | 850,000 | 0 | |
Grant Date Fair Value | $ 2,279,000 | |||
Stock Option Grants [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award service period (in years) | 3 years | |||
Award vesting period (in years) | 5 years | |||
Stock Option Grants [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award service period (in years) | 4 years | |||
Award vesting period (in years) | 10 years | |||
Chief Operating Officer [Member] | Stock Option Grants [Member] | Non-Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options Outstanding, Number of Options (in shares) | 0 |
Stockholders' (Deficit) Equit72
Stockholders' (Deficit) Equity - Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options Outstanding, Ending Balance (in shares) | 187,707 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Ending Balance, Weighted Average Exercise Price (in dollars per share) | $ 5.78 | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options Outstanding, Beginning Balance (in shares) | 1,394,869 | 1,030,521 | 1,140,231 |
Granted (in shares) | 850,000 | ||
Exercised (in shares) | (226,011) | (171,718) | (73,043) |
Canceled (in shares) | (533,484) | (313,934) | (34,567) |
Forfeited (in shares) | (447,667) | (2,100) | |
Options Outstanding, Ending Balance (in shares) | 187,707 | 1,394,869 | 1,030,521 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Beginning Balance, Weighted Average Exercise Price (in dollars per share) | $ 3.40 | $ 5.29 | $ 5.21 |
Granted, Weighted Average Exercise Price (in dollars per share) | 2.68 | ||
Exercised, Weighted Average Exercise Price (in dollars per share) | 1.41 | 1.68 | 1.82 |
Canceled, Weighted Average Exercise Price (in dollars per share) | 3.99 | 8.61 | 12.56 |
Forfeited, Weighted Average Exercise Price (in dollars per share) | 2.71 | 3.54 | |
Ending Balance, Weighted Average Exercise Price (in dollars per share) | $ 5.78 | $ 3.40 | $ 5.29 |
Stockholders' (Deficit) Equit73
Stockholders' (Deficit) Equity - Stock Option Information (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding (in shares) | 187,707 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (in months) | 44 months | ||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 5.78 | ||
Options Exercisable, Number of Options (in shares) | 150,207 | 544,869 | 1,023,606 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 6.48 | ||
2007 Option Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding (in shares) | 51,000 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (in months) | 7 months | ||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 14.76 | ||
Options Exercisable, Number of Options (in shares) | 51,000 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 14.76 | ||
2008 Option Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding (in shares) | 34,020 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (in months) | 23 months | ||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 2.64 | ||
Options Exercisable, Number of Options (in shares) | 34,020 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 2.64 | ||
2009 Option Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding (in shares) | 41,372 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (in months) | 34 months | ||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 1.75 | ||
Options Exercisable, Number of Options (in shares) | 41,372 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 1.75 | ||
2010 Option Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding (in shares) | 11,315 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (in months) | 42 months | ||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 1.91 | ||
Options Exercisable, Number of Options (in shares) | 11,315 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 1.91 | ||
2015 Option Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding (in shares) | 50,000 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (in months) | 105 months | ||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 2.95 | ||
Options Exercisable, Number of Options (in shares) | 12,500 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 2.95 |
Stockholders' (Deficit) Equit74
Stockholders' (Deficit) Equity - Stock Option and Non-Restricted Common Stock Grants (Details) - Employee Stock Option [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Class of Stock [Line Items] | |
Number of Shares | shares | 850,000 |
Grant Date Fair Value | $ | $ 2,279 |
August 19, 2015 [Member] | |
Class of Stock [Line Items] | |
Number of Shares | shares | 700,000 |
Exercise Price (in dollars per share) | $ / shares | $ 2.61 |
Grant Date Fair Value | $ | $ 1,827 |
October 12, 2015 [Member] | |
Class of Stock [Line Items] | |
Number of Shares | shares | 50,000 |
Exercise Price (in dollars per share) | $ / shares | $ 2.95 |
Grant Date Fair Value | $ | $ 148 |
October 19, 2015 [Member] | |
Class of Stock [Line Items] | |
Number of Shares | shares | 100,000 |
Exercise Price (in dollars per share) | $ / shares | $ 3.04 |
Grant Date Fair Value | $ | $ 304 |
Stockholders' (Deficit) Equit75
Stockholders' (Deficit) Equity - Black-Scholes Option Pricing Model (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value (in dollars per share) | $ 1.10 | |
Risk-Free Interest Rate (as a percent) | 1.10% | |
Expected Dividend Yield (as a percent) | 0.00% | |
Expected Term (Years) | 3 years 11 months 25 days | |
Expected Volatility (as a percent) | 52.03% |
Stockholders' (Deficit) Equit76
Stockholders' (Deficit) Equity - Restricted Stock Grants (Details) - Restricted Stock [Member] - USD ($) $ / shares in Units, $ in Thousands | Dec. 12, 2016 | Sep. 30, 2016 | Mar. 10, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of Shares | 952,000 | 200,000 | 559,000 | 1,711,000 | 507,000 | 196,500 |
Share Price (in dollars per share) | $ 2.60 | $ 3.09 | $ 2.06 | |||
Grant Date Fair Value | $ 2,475 | $ 618 | $ 1,152 | $ 4,245 | $ 2,166 | $ 1,663 |
Stockholders' (Deficit) Equit77
Stockholders' (Deficit) Equity - Restricted Stock Activity (Details) - Restricted Stock [Member] - USD ($) $ / shares in Units, $ in Thousands | Dec. 12, 2016 | Sep. 30, 2016 | Mar. 10, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Beginning balance, Number of Shares | 524,870 | 401,534 | 363,171 | |||
Granted, Number of Shares | 952,000 | 200,000 | 559,000 | 1,711,000 | 507,000 | 196,500 |
Vested, Number of Shares | (222,495) | (133,874) | (116,890) | |||
Forfeited, Number of Shares | (402,000) | (249,790) | (41,247) | |||
Ending balance, Number of Shares | 1,611,375 | 524,870 | 401,534 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Beginning balance, Weighted Average Grant Date Fair Value | $ 5.06 | $ 9.38 | $ 10.08 | |||
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | 2.48 | 4.27 | 8.47 | |||
Vested, Weighted Average Grant Date Fair Value | 4.59 | 9.20 | 9.82 | |||
Forfeited, Weighted Average Grant Date Fair Value | 3.39 | 8.19 | 9.92 | |||
Ending balance, Weighted Average Grant Date Fair Value | $ 2.80 | $ 5.06 | $ 9.38 | |||
Stock-based compensation expense | $ 1,155 | $ 842 | $ 1,367 | |||
Tax benefit | 496 | 321 | 648 | |||
Grant Date Fair Value | $ 2,475 | $ 618 | $ 1,152 | 4,245 | $ 2,166 | $ 1,663 |
Unrecognized compensation cost related to stock options | $ 3,702 | |||||
Unrecognized compensation cost related to restricted stock, recognition period | 2 years 8 months 9 days | |||||
Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Award vesting period (in years) | 3 years | |||||
Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Award vesting period (in years) | 4 years |
Stockholders' (Deficit) Equit78
Stockholders' (Deficit) Equity - Non-Restricted Common Stock Grants (Details) - Common Stock Grants [Member] - USD ($) $ / shares in Units, $ in Thousands | Feb. 03, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock issued, shares | 206,750 | |||
Fair value of shares issued (usd per share) | $ 1.19 | |||
Stock-based compensation expense | $ 246 | |||
Shares issued, shares | 67,609 | 21,248 | ||
Grant Date Fair Value | $ 445 | $ 245 |
Stockholders' (Deficit) Equit79
Stockholders' (Deficit) Equity - Common Stock Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 15, 2014 | Feb. 12, 2014 | Nov. 15, 2013 | Nov. 16, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||
Common stock dividends (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.16 | $ 3 | $ 0 | $ 0 | $ 0.32 |
Dividends payable, current and noncurrent | $ 14 | $ 118 | |||||
Dividends payable, current | 9 | ||||||
Dividends payable noncurrent | $ 5 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Income and Expenses [Abstract] | |||||||||||
Membership dues | $ 296,795 | $ 309,096 | $ 343,185 | ||||||||
Initiation and processing fees | 7,636 | 13,644 | 12,044 | ||||||||
Personal training revenue | 66,487 | 73,191 | 70,338 | ||||||||
Other ancillary club revenue | 19,642 | 22,138 | 22,304 | ||||||||
Total club revenue | 390,560 | 418,069 | 447,871 | ||||||||
Fees and other revenue | 6,361 | 6,254 | 5,971 | ||||||||
Total revenue | $ 96,107 | $ 98,534 | $ 100,935 | $ 101,345 | $ 100,839 | $ 103,764 | $ 108,296 | $ 111,424 | $ 396,921 | $ 424,323 | $ 453,842 |
Corporate Income Taxes - Provis
Corporate Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current | |||
Federal | $ 9,346 | $ (3,100) | $ 12,454 |
Foreign | (63) | 67 | 183 |
State and Local | 488 | 197 | 266 |
Total | 9,771 | (2,836) | 12,903 |
Deferred | |||
Federal | 0 | (8,262) | 14,684 |
Foreign | 0 | 0 | 0 |
State and Local | 0 | (3,253) | 25,024 |
Total | 0 | (11,515) | 39,708 |
Federal income tax expense (benefit) | 9,346 | (11,362) | 27,138 |
Foreign income tax expense (benefit) | (63) | 67 | 183 |
State and local income tax expense (benefit) | 488 | (3,056) | 25,290 |
Income tax expense (benefit) | $ 9,771 | $ (14,351) | $ 52,611 |
Corporate Income Taxes - Compon
Corporate Income Taxes - Components of Deferred Tax Assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets | ||
Basis differences in depreciation and amortization | $ 10,073 | $ 6,578 |
Deferred lease liabilities | 23,527 | 24,345 |
Deferred revenue | 8,247 | 10,974 |
Deferred compensation expense incurred in connection with stock options | 994 | 1,589 |
Federal and state net operating loss carry-forwards | 8,473 | 10,430 |
Accruals, reserves and other | 7,297 | 7,654 |
Deferred tax assets, gross | 58,611 | 61,570 |
Deferred tax liabilities | ||
Deferred costs | 803 | 1,751 |
Change in accounting method | 3,147 | 6,621 |
Undistributed foreign earnings and other | 529 | 622 |
Deferred tax liabilities, gross | 4,479 | 8,994 |
Gross deferred tax assets | 54,132 | 52,576 |
Valuation allowance | (54,193) | (52,637) |
Deferred tax liabilities, net | $ (61) | $ (61) |
Corporate Income Taxes - Additi
Corporate Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Dec. 12, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Operating Loss Carryforwards [Line Items] | |||||
Deferred tax liabilities, net | $ 61 | $ 61 | |||
Valuation allowance | 54,193 | 52,637 | $ 60,368 | ||
State tax net operating loss carry-forwards | 8,473 | ||||
Pre-tax earnings of foreign subsidiary | (264) | 277 | 762 | ||
Current tax provision | (63) | 67 | $ 183 | ||
Deferred tax liability | $ 529 | $ 622 | |||
Effective income tax rate reconciliation | 55.00% | (211.00%) | (321.00%) | ||
Unrecognized tax benefits | $ 1,155 | $ 1,155 | |||
Interest expense on unrecognized tax benefits | 81 | $ (334) | |||
Total accruals for interest | 785 | 704 | |||
Unrecognized tax benefits | 1,187 | $ 1,187 | $ 1,187 | $ 13,830 | |
Estimate of possible loss | $ 4,722 | ||||
Interest expense under examination | $ 2,044 | ||||
Additional Paid-in Capital [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
State tax net operating loss carry-forwards | $ 590 |
Corporate Income Taxes - Reconc
Corporate Income Taxes - Reconciliation of Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax rate | 35.00% | 35.00% | 35.00% |
State and local income taxes (net of federal tax benefit) | 2.00% | 11.00% | 8.00% |
Change in state effective income tax rate | 0.00% | 3.00% | (4.00%) |
State tax (benefit) provision related to insurance premiums | 0.00% | (14.00%) | 7.00% |
Tax reserves | 0.00% | 1.00% | 1.00% |
Permanent differences in fines and penalties | 0.00% | 2.00% | 1.00% |
Effective income tax rate reconciliation, before adjustment for valuation allowance and federal benefit of state | 37.00% | 38.00% | 48.00% |
Valuation allowance | 18.00% | (249.00%) | (422.00%) |
Elimination of federal effect of state deferred taxes | 0.00% | 0.00% | 53.00% |
Effective income tax rate reconciliation | 55.00% | (211.00%) | (321.00%) |
Corporate Income Taxes - Reco85
Corporate Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of unrecognized tax benefits excluding amounts pertaining to examined tax returns RollForward | |||
Beginning balance | $ 1,187 | $ 1,187 | $ 13,830 |
Gross decreases for tax positions taken in prior years | 0 | 0 | (12,675) |
Gross increases for tax positions taken in prior years | 0 | 0 | 32 |
Ending balance | $ 1,187 | $ 1,187 | $ 1,187 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2016 | Jun. 05, 2013 | Aug. 29, 2011 | |
NY Personal Trainers [Member] | |||
Loss Contingencies [Line Items] | |||
Litigation Settlement, Amount | $ 165 | ||
Action Styled White Plains Realty Vs Town Sports International [Member] | |||
Loss Contingencies [Line Items] | |||
Additional awards including interest and costs | $ 900 | ||
Damages awarded | $ 1,045 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 31, 2016 | Feb. 28, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |||
Employer matching contribution, percentage | 25.00% | ||
Employer matching contribution maximum amount | $ 500 | ||
Employer matching contribution | $ 204,000 | $ 198,000 |
Separation Obligation (Details)
Separation Obligation (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2016 | |
Former Chief Operating Officer [Member] | Separation Agreement Payment [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Amount expensed related to termination | $ 1,644 | |
Non-Plan [Member] | Employee Stock Option and Restricted Stock [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Percentage of unvested shares accelerated | 17.00% |
Other Commitments (Details)
Other Commitments (Details) - Cyc Fitness Partners, LLC [Member] - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Oct. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | |
Other Commitments [Line Items] | |||
Maximum amount of growth capital payable | $ 5,600,000 | ||
Payment period for growth capital (more than) (in years) | 5 years | ||
Minimum amount of growth capital per location requiring approval | $ 750,000 | ||
Amount of growth capital provided | $ 280,000 |
Selected Quarterly Financial 90
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 06, 2016 | Apr. 21, 2016 | |
Debt Instrument [Line Items] | |||||||||||||
Net revenue | $ 96,107 | $ 98,534 | $ 100,935 | $ 101,345 | $ 100,839 | $ 103,764 | $ 108,296 | $ 111,424 | $ 396,921 | $ 424,323 | $ 453,842 | ||
Operating (loss) income | 1,425 | (2,624) | (1,462) | (3,722) | 76,217 | (19,711) | (41,451) | (7,941) | (6,383) | 7,114 | 752 | ||
Net income (loss) | $ (259) | $ (5,506) | $ 20,733 | $ (6,925) | $ 86,996 | $ (22,006) | $ (31,068) | $ (12,764) | $ 8,043 | $ 21,158 | $ (68,989) | ||
Earnings (loss) per share: | |||||||||||||
Basic (in dollars per share) | $ (0.01) | $ (0.21) | $ 0.81 | $ (0.28) | $ 3.50 | $ (0.89) | $ (1.26) | $ (0.52) | $ 0.31 | $ 0.86 | $ (2.84) | ||
Diluted (in dollars per share) | $ (0.01) | $ (0.21) | $ 0.79 | $ (0.28) | $ 3.47 | $ (0.89) | $ (1.26) | $ (0.52) | $ 0.31 | $ 0.84 | $ (2.84) | ||
Gain (loss) on extinguishment of debt | $ 38,497 | $ 17,911 | $ 37,893 | $ 17,911 | $ (493) | ||||||||
Repurchase amount | $ 71,152 | ||||||||||||
Fixed asset impairment charge | $ 742 | $ 12,420 | $ 1,014 | 742 | 14,571 | 4,569 | |||||||
Impairment of goodwill | $ 31,558 | 0 | 31,558 | 137 | |||||||||
Gain on sale of building | 77,146 | 0 | 77,146 | 0 | |||||||||
Gain (loss) on lease termination | 2,967 | $ 0 | 2,967 | $ 0 | |||||||||
2013 Senior Credit Facility [Member] | Revolving Credit Facility [Member] | |||||||||||||
Earnings (loss) per share: | |||||||||||||
Repurchase amount | 10,947 | 10,947 | $ 25,978 | $ 3,787 | |||||||||
Repurchased face amount | $ 29,829 | $ 29,829 | $ 62,447 | $ 8,705 |
Subsequent Event (Details)
Subsequent Event (Details) - Letter of Credit [Member] - Subsequent Event [Member] | 1 Months Ended |
Feb. 28, 2017USD ($) | |
Subsequent Event [Line Items] | |
Proceeds from issuance of letters of credit | $ 1,000,000 |
Letters of credit outstanding | $ 3,851,000 |