Fitness financials: Sports Club’s Q4 sales down 16.3 percent, plus IHRSA reports club industry revenues up 2 percent, Collective Brands

The Sports Club Company posted a 16.3-percent drop in fourth-quarter revenues, the U.S. health club industry remained consistent in 2009, with revenues rising 2 percent,and Moody's upgraded its outlook for Collective Brands.
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Sports Club’s Q4 sales down 16.3 percent

The Sports Club Company (Pink Sheets: SCYL) posted a 16.3-percent drop in fourth-quarter revenues, but narrowed its loss.

Revenues were $13.0 million for the quarter ended Dec. 31 compared to $15.6 million in the same period last year.

It narrowed its loss to $320,000 or $0.01 per share, compared to a net loss of $3.2 million, or $0.15 per share, last year. During the fourth quarter of 2008, the company recorded a $2.6 million one-time charge related to the settlement of a wrongful termination lawsuit.

For FY ‘09, revenues dropped 14.1 percent to $54.4 million versus $63.4 million in FY ’08. The net loss for the year was $2.3 million, or $0.11 per share, compared to a loss of $6.1 million, or $0.29 per share, in ’08.

The Sports Club Company operates and owns fitness facilities under the name The Sports Club/LA in Los Angeles, Orange County and Beverly Hills, Calif., and New York City.

Club industry revenues up 2 percent, IHRSA reports

Despite slow economic conditions and rising unemployment, the performance of the U.S. health club industry remained consistent in 2009, with industry revenues rising 2 percent, according to IHRSA.

Total industry revenues were $19.5 billion in 2009, boosted by increases in health club usage and non-dues spending.

In the United States, there were 29,750 health clubs -- slightly down from the 30,022 total in 2008 -- and 45.3 million members in 2009, a 0.40-percent decrease from the 45.5 million American consumers who belonged to a club in 2008. Roughly 23 percent, or 10.4 million members, were new. Also, health club attendance increased to an all-time high average of 102 days in 2009.



Consistent with findings from previous years, membership has remained statistically the same since 2004, IHRSA noted.



IHRSA added that the recession resulted in consolidation of club locations and the closure of weaker performing clubs. But new club locations did emerge in underserved markets, and there was a rise in niche and theme-oriented facilities, it said.



Moody's upgrades Collective Brands’ outlook

Credit ratings agency Moody's upped its outlook for Collective Brands (NYSE: PSS), the parent of Hind and Saucony.

"Despite a 4-percent loss on its top line over the past fiscal year, Collective Brands' good expense and inventory management resulted in record free cash flow and absolute debt reduction," Moody's said in a statement.

Moody's upgraded its outlook to "stable" from "negative." It affirmed the company's "B1" corporate family and probability of default ratings, which are junk bond ratings four notches below investment grade status.

Earlier this month, Collective Brands reported that losses for the quarter narrowed substantially to $10.9 million, from $144 million during the same period last year.



--Compiled by Wendy Geister

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