Town Sports International Holdings, Inc. Declares a One-Time Special Cash Dividend of $3.00 Per Share

  Town Sports International Holdings, Inc. Declares a One-Time Special Cash
  Dividend of $3.00 Per Share

                Closes on a $60 Million Incremental Term Loan

Business Wire

NEW YORK -- November 16, 2012

Town Sports International Holdings,Inc. (the “Company”) (NASDAQ: CLUB) today
announced that its Board of Directors declared a one-time special cash
dividend of $3.00 per share, payable on December 11, 2012 to stockholders of
record at the close of business on November 30, 2012 (the “Dividend”). The
aggregate amount of the payment to be made in connection with the Dividend
will be approximately $71.4 million, based upon shares of common stock
outstanding as of November 14, 2012. The Company also announced the payment of
an equivalent cash bonus to optionholders holding in-the-money, vested options
(the “Cash Bonus Payment”). The aggregate amount of the Cash Bonus Payment
will be approximately $2.5 million.

In connection with the above, on November 14, 2012, the Company’s wholly-owned
subsidiary, Town Sports International, LLC (the “Borrower”), entered into an
amendment to its senior secured credit facility under which it borrowed an
additional $60 million. The new borrowings will be used together with cash on
hand in order to fund the Dividend and the Cash Bonus Payment. In addition,
the amendment to the senior secured credit facility provides for a waiver of
any prepayment required to be paid using the Company’s excess cash flow for
the period endingDecember 31, 2012, amends the restricted payments covenant
to permit the payment of the Dividend and Cash Bonus Payment and permits
adjustments to the Company’s calculation of consolidated EBITDAwith respect
to the Cash Bonus Payment and with respect to fees and expenses associated
with certain permitted transactions.

Daniel Gallagher, Chief Financial Officer of the Company, commented:“We are
very pleased we are able to return value to our shareholders through this
one-time special dividend. The strength of our financial position and the free
cash flow profile of our business enable both this return of capital to our
shareholders as well as the self-funding of our club growth plans.”

The portion of the Company’s Dividend that will be treated as a qualified
dividend for U.S. tax purposes will depend upon the amount of the Company’s
accumulated earnings and profits as of December 31, 2012, the end of the
Company’s current fiscal year, as determined by the Internal Revenue Code.
Therefore, at this time the Company is not able to determine the portion of
the Dividend that will be treated as a qualified dividend. Stockholders will
receive further information on Form 1099 after the end of 2012 and are
encouraged to consult with their own tax advisors regarding the tax treatment
of the Dividend.

Forward-Looking Statements

Statements in this release that do not constitute historical facts, including
statements that are predictive in nature or depend upon or refer to events or
conditions, or that include words such as “expects,” “anticipated,” “intends,”
“plans,” “believes,” “estimates” or “could”, are “forward-looking” statements
made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are subject to
various risks and uncertainties, many of which are outside the Company’s
control, including, among others, the level of market demand for the Company’s
services, economic conditions affecting the Company’s business, the geographic
concentration of the Company’s clubs, competitive pressures, the ability to
achieve reductions in operating costs and to continue to integrate
acquisitions, environmental initiatives, any security and privacy breaches
involving customer data, the application of Federal and state tax laws and
regulations, the levels and terms of the Company’s indebtedness, and other
specific factors discussed herein and in other releases and public filings
made by the Company (including the Company’s reports on Forms 10-K and 10-Q
filed with the Securities and Exchange Commission). The Company believes that
all forward-looking statements are based on reasonable assumptions when made;
however, the Company cautions that it is impossible to predict actual results
or outcomes or the effects of risks, uncertainties or other factors on
anticipated results or outcomes and that, accordingly, one should not place
undue reliance on these statements. Forward-looking statements speak only as
of the date they were made, and the Company undertakes no obligation to update
these statements in light of subsequent events or developments. Actual events
or results may differ materially from anticipated events or results or
outcomes discussed in any forward-looking statement.

About Town Sports International Holdings, Inc.

New York-based Town Sports International Holdings, Inc. is a leading owner and
operator of fitness clubs in the Northeast and mid-Atlantic regions of the
United States and, through its subsidiaries, operated 160 fitness clubs as of
September 30, 2012, comprising 108 New York Sports Clubs, 25 Boston Sports
Clubs, 18 Washington Sports Clubs (two of which are partly-owned), six
Philadelphia Sports Clubs, and three clubs located in Switzerland. These clubs
collectively served approximately 522,000 members. For more information on the
Company, visit

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Town Sports International Holdings, Inc., New York
212-246-6700 extension 1650
ICR, Inc.
Joseph Teklits / Farah Soi, 203-682-8390
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