Fitness financials: Bally seeks another extension on financial statements

The dark cloud hanging over Bally Total Fitness (NYSE: BFT) is still looking like a slow-moving storm front. While its memberships rose slightly, according to operating highlights of its first quarter 2005 and five months ended May 31, 2005, the company is also seeking a 90-day extension on its still unrevealed audited financial statements for 2002 to 2004.
Author:
Updated:
Original:

The dark cloud hanging over Bally Total Fitness (NYSE: BFT) is still looking like a slow-moving storm front. While its memberships rose slightly, according to operating highlights of its first quarter 2005 and five months ended May 31, 2005, the company is also seeking a 90-day extension on its still unrevealed audited financial statements for 2002 to 2004.

The company had been slated to provide the financial statements by July 31, as ordered by a previous waver, but Bally has requested an extended deadline of Oct. 31 (trick or treat?).

"During the past nine months, we have made substantial progress toward completing this audit despite having to replace several key finance executives, hiring a new CFO, treasurer and controller and dealing with many complex accounting issues, several of which were unearthed during the process," said Paul Toback, chairman and CEO, in a statement. "Now I believe that barring any unforeseen circumstances, we are close to completing this long process despite needing a little more time to do so."

If not granted the additional waiver, the company's public notes could be accelerated after notice and the passage of cure periods under the indentures. Additionally, its credit facility provides for a cross-default 10 days after delivery of such notice, which would give the company's lenders the right to accelerate the company's obligations. Neither situation would be easy to deal with for a company with approximately $9.8 million of letters of credit under the $100 million revolving credit portion of its $275 million credit facility, net debts of $723.6 million and free cash flow of about $15 million after a jump of $17.2 million for the five months ended May 31.

Bally is counting on some of its new membership packages to boost those numbers and its bottom line, and that has had a slight impact.

According to the company's statement, in the first quarter of 2005 new joining members increased 11 percent compared to the prior year period. For the five months ending May 31, 2005, new joining members rose 8 percent over the same period in the prior year. For the corresponding periods, new memberships (contracts which represent one or more members) increased 4 percent and 2 percent, respectively, over 2004. The total number of members at May 31, 2005 was up 1 percent over the same period in 2004

"On the issue of the performance of the business, our business redesign through our 'Build Your Own Membership' program, is in the early stages of implementation and we are introducing it into our major markets during the second half of this year," said Toback. "The preliminary indications are positive, including early demonstrations of an improvement in the retention of members during their first 30 days. Similarly, it appears as though, we are experiencing an increase in our average down payment in markets that have rolled out the Build Your Own Membership program, which is an indication of our customers' ability and willingness to stay and pay."

SNEW® View: Considering a still-pending class-action lawsuit, investors and stockholders likely getting antsy, and the revolving personnel door in the last half a year, Bally better get its act together soon. We're not sure how long those who hold the money or have a stake in the action will wait to hear what exactly is going on.

Related

Fitness financial: Bally looking to sell or merge amid flurry of restatement disclosures

Deluging inboxes everywhere with notices of SEC filings (20 last week alone), Bally Total Fitness (NYSE: BFT) finally released all of its back financial statements for fiscal 2004 and 2005 and restated earnings going back to 2000, as well as held its first earnings call in nearly ...read more

Bally gets needed covenant and cross-default extensions

Bally Total Fitness Holding Corp. (NYSE: BFT) has announced it has not only received an extension relating to waivers of financial reporting covenant defaults, but also of its cross-default deadline relating to Bally's financial reporting covenant defaults under its public bond ...read more

Fitness financials: Bally asks lenders for Q3 filing extension, plus Life Time Fitness, Finish Line, Crocs

Bally asks lenders for Q3 filing extension, selected to join Russell 3000 IndexAlthough Bally Total Fitness (NYSE: BFT) reported that it would be filing its full-year 2005 report and first-quarter 2006 reports with the SEC before the July 10 expiration, it is asking its senior ...read more

Fitness financials: Bally gets forbearance extensions from lenders, plus Brunswick, Nautilus, Winmark, GSI Commerce

Bally gets forbearance extensions from lendersBally Total Fitness (Pink Sheets: BFTH) said it received forbearance extensions until July 31 from a majority of holders of its 9-7/8 percent senior subordinated notes due 2007 and its 10-1/2 percent senior notes due 2011 and from the ...read more

Fitness financials: Life Fitness seeks expanded European avenues, plus Precor, Nautilus, Bally, Big 5, Saucony, Russell

Brunswick looks for other European avenues to continue LF growth there Noting that the European market is retrenching somewhat after recent strong growth, Brunswick Corp. (NYSE: BC) said in its earnings call for the first quarter ended March 31 that it will look at expanding its ...read more

Outdoor financials: Sportsman's Guide restates financial statements, withdraws public offering, plus Amer Sports

Sportsman's Guide restates financial statements, withdraws public offeringThe Sportsman's Guide (NasdaqNM: SGDE) is restating some of its previously reported financial statements after the SEC said the catalog retailer needed to change its accounting for membership fees. ...read more

Fitness financials: Bally reportedly being eyed by Virgin; seeks waivers from debt holders, plus Forzani Group, Nike, Finish Line

Bally reportedly being eyed by Virgin; seeks waivers from debt holdersVirgin group billionaire Sir Richard Branson is reportedly weighing a $1.2 billion bid to buy Bally Total Fitness (NYSE: BFT) and sees the health club operator as a way to grow the company's U.K.-based Virgin ...read more

Fitness financials: Bally results restatement to delay earnings reports until July 2005, plus increased holiday spending forecast, results of Sears consumer survey

Bally's results restatement to delay financial statements until July 2005Bally Total Fitness Holding Corp. (NYSE: BFT) reported Nov. 15 it will restate more than four years -- 2000 through first quarter 2004 -- of financial results to change the way it accounted for membership ...read more

Fitness financials: Cybex receives new term loan, plus Nike, Amer Group, Bally Total Fitness, Finish Line

Cybex gets commitment for loan that will save $1 million per yearCybex International Inc. (AMEX: CYB) has announced it received a commitment from GMAC Commercial Finance to provide a term facility of up to $13 million, the proceeds of which will be used to repay higher cost real ...read more