Town Sports International Holdings, Inc. Announces Second Quarter 2013 Financial Results

  Town Sports International Holdings, Inc. Announces Second Quarter 2013
  Financial Results

Business Wire

NEW YORK -- July 24, 2013

Town Sports International Holdings, Inc. (“TSI” or the “Company”) (NASDAQ:
CLUB), a leading owner and operator of health clubs located primarily in major
cities from Washington, DC north through New England, operating under the
brand names “New York Sports Clubs,” “Boston Sports Clubs,” “Washington Sports
Clubs” and “Philadelphia Sports Clubs,” announced its results for the second
quarter ended June 30, 2013.

Second Quarter Overview:

  *Total member count remained at the same level with approximately 512,000
    members at the end of Q2 2013 and Q1 2013.
  *Membership attrition averaged 3.3% per month in Q2 2013 compared to 3.2%
    per month in Q2 2012.
  *Revenue decreased 1.7% in Q2 2013 compared to Q2 2012.
  *Comparable club revenue decreased 1.7% in Q2 2013 compared to an increase
    of 2.1% in Q2 2012.
  *Ancillary club revenue decreased 4.3% in Q2 2013 compared to Q2 2012.
  *Net income increased 14.4% in Q2 2013 to $6.2 million compared to $5.4
    million in Q2 2012. Diluted earnings per share were $0.25 in Q2 2013
    compared to diluted earnings per share of $0.23 in Q2 2012. Q2 2013
    results were favorably impacted by a $0.06 per diluted share net gain
    comprised of a $2.5 million insurance recovery related to our property
    damage claims in connection with Hurricane Sandy partially offset by a
    fixed asset impairment charge of $128,000 related to one underperforming
    club.
  *Adjusted EBITDA was $25.7 million in Q2 2013, a decrease of $1.2 million,
    or 4.3%, when compared to Adjusted EBITDA of $26.8 million in Q2 2012
    (Refer to the reconciliation below).

Robert Giardina, Chief Executive Officer of TSI, commented:“Our overall
results were broadly in line with our expectations with a sequential
improvement in personal training revenues as we continue to make nice strides
with our personal training membership product. We are particularly pleased to
have exceeded our EBITDA expectations for the quarter and generated $15
million in free cash flow to end the quarter with a cash balance of $69.5
million. After a soft start to the year, which we believe was impacted by
macro factors, our overall business is back on plan as we head into the third
quarter. We are excited about the direction of our business, including an
outlook for improved comparable club revenue, driven by personal training and
pricing, in the back half of the year.”

Second Quarter Ended June 30, 2013 Financial Results:
                                                         
Revenue (in thousands):
                                                                             
                Quarter Ended June 30,
                2013                      2012
                Revenue       %           Revenue       %           %
                              Revenue                   Revenue     Variance
Membership      $ 90,882      75.7  %     $ 92,944      76.0  %     (2.2   ) %
dues
Joining          3,823       3.1   %      2,686       2.2   %     42.3     %
fees
Membership       94,705      78.8  %      95,630      78.2  %     (1.0   ) %
revenue
Personal
training          17,615      14.7  %       17,625      14.4  %     (0.1   ) %
revenue
Other
ancillary        6,474       5.4   %      7,549       6.2   %     (14.2  ) %
club
revenue
Ancillary
club              24,089      20.1  %       25,174      20.6  %     (4.3   ) %
revenue
Fees and
other            1,318       1.1   %      1,437       1.2   %     (8.3   ) %
revenue
Total           $ 120,112     100.0 %     $ 122,241     100.0 %     (1.7   ) %
revenue
                                                                             

Total revenue for Q2 2013 decreased $2.1 million, or 1.7%, compared to Q2
2012. Revenue at clubs operated for over 12 months (“comparable club revenue”)
decreased 1.7% in Q2 2013. Memberships at our comparable clubs were down 3.1%
which was partially offset by a 1.4% increase in the price of our dues and
fees.

The increase in joining fees revenue of 42.3% was, in part, due to the effect
of the lower estimated average membership life of 24 months in effect for our
unrestricted members during Q2 2013 compared to a higher estimated average
membership life of 28 months in effect for Q2 2012. The lower amortizable life
in the current period resulted in higher joining fees revenue recognition as
joining fees were amortized over a shorter estimated average membership life.

                                                                
                                          Quarter Ended June 30,
                                          2013          2012
                                                                     Expense %
                                          Expense % of Revenue       Variance
Payroll and related                       36.7     %    37.0 %     (2.8  ) %
Club operating                            36.7     %      36.5 %     (1.1  ) %
General and administrative                5.8      %      5.0  %     13.3    %
Depreciation and amortization             10.3     %      10.2 %     (0.1  ) %
Insurance recovery related to damaged     (2.1  )  %      -    %     N/A     %
property
Impairment of fixed assets                0.1     %      -    %     N/A     %
Operating expenses                        87.5    %      88.7 %     (3.1  ) %
                                                                             

Total operating expenses decreased $3.3 million, or 3.1%, in Q2 2013 compared
to Q2 2012. Operating margin was 12.5% for Q2 2013 compared to 11.3% in Q2
2012. The total months of club operation increased 0.2% from 480 in Q2 2012 to
481 in Q2 2013. The decrease in operating expense was impacted, in part, by
the receipt of $2.5 million of insurance proceeds received in connection with
property damaged by Hurricane Sandy as well as the following factors:

Payroll and related. Payroll and related expenses decreased $1.3 million, or
2.8%, to $44.0 million in Q2 2013 compared to $45.3 million in Q2 2012. The
decrease was due to decreases in bonuses and commissions as well as decreases
in management incentive bonuses.

Club operating. Club operating expenses decreased $495,000, or 1.1%, to $44.1
million in Q2 2013 compared to $44.6 million in Q2 2012, primarily due to
declines in rent and occupancy expenses and utilities, partially offset by
increased repairs and maintenance expense.

General and administrative. The increase in general and administrative
expenses in Q2 2013 was impacted by increases in insurance expense and
increases in computer maintenance expense related to the implementation of a
new club operating system.

Depreciation and amortization. Depreciation and amortization expense for Q2
2013 was relatively flat to the same period in the prior year. Modest
decreases in depreciation were offset by an acceleration of depreciation of
$331,000 at a single club where we have a planned near-term reduction of
rental space at the location.

Net income for Q2 2013 was $6.2 million compared to net income of $5.4 million
for Q2 2012.

Cash flow from operating activities for the six months ended June 30, 2013
totaled $44.5 million, an increase of $9.5 million from the corresponding
period in 2012. This increase was primarily driven by increases in overall
earnings, a decrease in cash paid for interest of $1.2 million and cash flows
resulting from the timing of certain payments and collections made associated
with our accounts receivable.

Third Quarter 2013 Financial Outlook:

Based on the current business environment, recent performance and current
trends in the marketplace and subject to the risks and uncertainties inherent
in forward-looking statements, our outlook for the third quarter of 2013
includes the following:

  *Revenue for Q3 2013 is expected to be between $118.5 million and $119.5
    million versus $119.6 million for Q3 2012. As percentages of revenue, we
    expect Q3 2013 payroll and related expenses to be approximately 37.4% and
    club operating expenses to approximate 39.2%. We expect general and
    administrative expenses to approximate $6.8 million, depreciation and
    amortization to approximate $12.5 million and net interest expense to
    approximate $5.5 million.
  *We expect net income for Q3 2013 to be between $2.0 million and $2.5
    million, and diluted earnings per share to be in the range of $0.08 per
    share to $0.10 per share, assuming a 39% effective tax rate and
    approximately 24.5 million weighted average fully diluted shares
    outstanding.
  *We estimate that EBITDA will approximate $21.75 million in Q3 2013.

Investing Activities Outlook:

For the year ending December 31, 2013, we are lowering our capital
expenditures guidance and now plan to invest $34.0 million to $37.0 million in
capital expenditures. This is a reduction from our previous expectation of
$37.0 million to $42.0 million. The amount includes approximately $10.0
million to $12.0 million related to potential 2013 and 2014 club openings,
inclusive of amounts for our recently acquired Fitcorp chain in Boston and
planned renovations at these clubs as well as the separate single club
acquired in Manhattan. The total capital expenditures also includes
approximately $17.0 million to $18.0 million to continue enhancing or
upgrading existing clubs and approximately $4.5 million to $5.0 million
principally related to major renovations at clubs with recent lease renewals
and to upgrade our in-club entertainment system network. We also expect to
invest approximately $2.5 million to $3.0 million to enhance our management
information and communication systems. We expect these capital expenditures to
be funded by cash flow provided by operations and available cash on hand.

Forward-Looking Statements:

Statements in this release that do not constitute historical facts, including,
without limitation, statements under the captions “Third Quarter 2013
Financial Outlook” and “Investing Activities Outlook”, other statements
regarding future financial results and performance and potential sales revenue
and other 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 results
may differ materially from anticipated 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 164 fitness clubs as of
June 30, 2013, comprising 108 New York Sports Clubs, 30 Boston Sports Clubs,
17 Washington Sports Clubs (two of which are partly-owned), six Philadelphia
Sports Clubs, and three clubs located in Switzerland. These clubs collectively
served approximately 512,000 members. For more information on TSI, visit
http://www.mysportsclubs.com.

The Company will hold a conference call on Wednesday, July 24, 2013 at 4:30 PM
(Eastern) to discuss the second quarter results. Robert Giardina, Chief
Executive Officer, and Dan Gallagher, Chief Financial Officer, will host the
conference call. The conference call will be Web cast and may be accessed via
the Company's Investor Relations section of its Web site at
www.mysportsclubs.com. A replay and transcript of the call will be available
via the Company's Web site beginning July 25, 2013.

From time to time we may use our Web site as a channel of distribution of
material company information. Financial and other material information
regarding the Company is routinely posted on and accessible at
http://www.mysportsclubs.com. In addition, you may automatically receive email
alerts and other information about us by enrolling your email by visiting the
“Email Alerts” section at http://www.mysportsclubs.com.


TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                                           
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2013 and December 31, 2012
(All figures in thousands)
(Unaudited)
                                                                  
                                                  June 30,        December 31,
                                                  2013            2012
                                                                  
ASSETS
Current assets:
Cash and cash equivalents                       $ 69,521        $ 37,758
Accounts receivable, net                          3,415           6,508
Inventory                                         423             438
Prepaid corporate income taxes                    157             550
Deferred tax assets, net                          22,249          24,897
Prepaid expenses and other current assets        9,751         9,866     
Total current assets                              105,516         80,017
Fixed assets, net                                 248,074         256,871
Goodwill                                          32,792          32,824
Intangible assets, net                            1,162           -
Deferred tax assets, net                          5,803           9,296
Deferred membership costs                         9,686           10,811
Other assets                                     11,498        14,091    
Total assets                                    $ 414,531      $ 403,910   
                                                                  
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current portion of long-term debt               $ 43,900        $ 15,787
Accounts payable                                  7,297           7,467
Accrued expenses                                  28,312          27,053
Accrued interest                                  190             89
Dividends payable                                 304             305
Deferred revenue                                 39,807        37,138    
Total current liabilities                         119,810         87,839
Long-term debt                                    266,918         294,552
Dividends payable                                 695             799
Deferred lease liabilities                        59,510          61,732
Deferred revenue                                  3,232           3,889
Other liabilities                                8,059         10,595    
Total liabilities                                 458,224         459,406
Stockholders’ deficit:
Common stock                                      24              24
Additional paid-in capital                        (15,112 )       (16,326   )
Accumulated other comprehensive income            1,383           1,226
Accumulated deficit                              (29,988 )      (40,420   )
Total stockholders’ deficit                      (43,693 )      (55,496   )
Total liabilities and stockholders’ deficit     $ 414,531      $ 403,910   
                                                                            

                                                                                         
TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                                                   
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three and Six Months Ended June 30, 2013 and 2012
(All figures in thousands except share and per share data)
(Unaudited)
                                                                                         
                   Three Months Ended                    Six Months Ended
                   June 30,                              June 30,
                   2013               2012               2013               2012         
                                                                                         
Revenues:
Club               $ 118,794          $ 120,804          $ 236,929          $ 242,538
operations
Fees and other      1,318            1,437            2,347            2,615      
                    120,112          122,241          239,276          245,153    
Operating
Expenses:
Payroll and          44,005             45,280             88,553             92,639
related
Club operating       44,116             44,611             88,316             89,742
General and          6,951              6,135              13,740             12,068
administrative
Depreciation
and                  12,411             12,419             24,559             25,279
amortization
Insurance
recovery
related to           (2,500     )       ―                  (2,500     )       ―
damaged
property
Impairment of       128              ―                128              ―          
fixed assets
                    105,111          108,445          212,796          219,728    
Operating            15,001             13,796             26,480             25,425
income
Interest             5,435              5,554              10,785             11,485
expense
Interest             ―                  (8         )       (1         )       (18        )
income
Equity in the
earnings of         (640       )      (632       )      (1,249     )      (1,220     )
investees and
rental income
Income before
provision for        10,206             8,882              16,945             15,178
corporate
income taxes
Provision for
corporate           4,009            3,465            6,517            5,911      
income taxes
Net income         $ 6,197           $ 5,417           $ 10,428          $ 9,267      
                                                                                         
Earnings per
share:
Basic              $ 0.26             $ 0.23             $ 0.44             $ 0.40
Diluted            $ 0.25             $ 0.23             $ 0.43             $ 0.39
Weighted
average number
of shares used
in calculating
earnings per
share:
Basic                24,042,947         23,293,228         23,959,567         23,205,628
Diluted              24,632,856         24,019,116         24,446,794         23,933,660
                                                                                         


TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                                              
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2013 and 2012
(All figures in thousands)
(Unaudited)
                                                                     
                                                   Six Months Ended June 30,
                                                   2013            2012
Cash flows from operating activities:
Net income                                         $ 10,428        $ 9,267
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization                        24,559          25,279
Impairment of fixed assets                           128             -
Insurance recovery related to damaged property       (2,500  )       -
Amortization of debt discount                        478             192
Amortization of debt issuance costs                  545             575
Non-cash rental expense, net of non-cash             (2,806  )       (2,377  )
rental income
Share-based compensation expense                     1,123           570
Decrease in deferred tax asset                       5,978           4,915
Net change in certain operating assets and           5,138           (2,295  )
liabilities
Decrease (increase) in deferred membership           1,125           (1,027  )
costs
Landlord contributions to tenant improvements        784             995
Decrease in insurance reserves                       (658    )       (1,332  )
Other                                               225           266     
Total adjustments                                   34,119        25,761  
Net cash provided by operating activities           44,547        35,028  
                                                                     
Cash flows from investing activities:
Capital expenditures                                 (12,301 )       (7,087  )
Acquisition of businesses                            (2,939  )       -
Insurance recovery related to damaged property      2,500         -       
Net cash used in investing activities               (12,740 )      (7,087  )
                                                                     
Cash flows from financing activities:
Principal payments on 2011 Term Loan Facility        -               (21,007 )
Cash dividends paid                                  (101    )       -
Proceeds from stock option exercises                 337             2,011
Tax shortfall from stock option exercise and        (220    )      -       
restricted stock vesting
Net cash provided by (used in) financing             16              (18,996 )
activities
Effect of exchange rate changes on cash             (60     )      (21     )
Net increase in cash and cash equivalents            31,763          8,924
Cash and cash equivalents beginning of period      $ 37,758       $ 47,880  
Cash and cash equivalents end of period            $ 69,521       $ 56,804  
                                                                     
Summary of the change in certain operating
assets and liabilities:
Decrease (increase) in accounts receivable         $ 3,130         $ (1,823  )
Decrease in inventory                                14              27
Increase in prepaid expenses and other current       (493    )       (1,007  )
assets
Increase (decrease) in accounts payable,             203             (5,177  )
accrued expenses and accrued interest
Change in prepaid corporate income taxes and         958             829
corporate income taxes payable
Increase in deferred revenue                        1,326         4,856   
Net change in certain working capital              $ 5,138        $ (2,295  )
components
                                                                             


TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                                               
Reconciliation of Net Cash Provided by Operating Activities to EBITDA and
Adjusted EBITDA
For the Three Months Ended June, 2013 and 2012
(All figures in thousands)
(Unaudited)
                                                Three Months Ended
                                                June 30
                                                2013                2012
Net cash provided by operating activities       $  22,780           $ 18,624
Interest expense, net of interest income           5,435              5,546
Provision for corporate income taxes               4,009              3,465
Changes in operating assets and liabilities        (1,631  )          844
Insurance recovery related to damaged              2,500              -
property
Impairment of fixed assets                         (128    )          -
Amortization of debt discount                      (239    )          (95    )
Amortization of debt issuance costs                (272    )          (287   )
Share-based compensation expense                   (467    )          (241   )
Landlord contributions to tenant                   (784    )          (332   )
improvements
Non-cash rental expense, net of non-cash           1,310              1,518
rental income
Decrease in insurance reserves                     167                743
Decrease in deferred tax asset                     (3,544  )          (2,502 )
Decrease in deferred membership costs              (843    )          277
Other                                             (241    )         (713   )
EBITDA                                          $  28,052          $ 26,847 
Insurance recovery related to damaged              (2,500  )          -
property
Impairment of fixed assets                        128              -      
Adjusted EBITDA                                 $  25,680          $ 26,847 
                                                                      

        EBITDA consists of net income plus interest expense (net of interest
        income), provision for corporate income taxes, and depreciation and
        amortization. We define Adjusted EBITDA as EBITDA excluding loss on
        extinguishment of debt, any fixed asset or goodwill impairments and
Note:  insurance recovery gains. For the quarter ended June 30, 2013, we
        recorded $2.5 million of insurance recoveries related to damaged
        property and incurred a fixed asset impairment charge of $128 related
        to the impairment of one underperforming club. For the quarter ended
        June 30, 2012 we did not incur these charges, and as a result, EBITDA
        and Adjusted EBITDA were identical in that period.


TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                                             
Reconciliation of Estimated and Actual Net Cash Provided by Operating
Activities to EBITDA
For the Quarter Ending September 30, 2013 and the Quarter Ended September 30,
2012
(All figures in thousands)
(Unaudited)
                                             Estimated
                                             Q3 2013             Q3 2012
Net cash provided by operating activities    $  18,000           $  8,920
Interest expense, net of interest income        5,500               6,517
Provision for corporate income taxes            1,400               1,613
Changes in operating assets and liabilities     (1,300  )           8,738
Impairment of fixed assets                      -                   (239    )
Loss on extinguishment of debt                  -                   (1,010  )
Amortization of debt discount                   (240    )           (119    )
Amortization of debt issuance costs             (275    )           (291    )
Share-based compensation expense                (450    )           (217    )
Landlord contribution to tenant improvements    (780    )           (325    )
Non-cash rental expense, net of non-cash        1,300               573
rental income
Decrease in insurance reserves                  -                   792
Decrease in deferred tax asset                  (2,600  )           (2,121  )
Increase in deferred member costs               250                 146
Other                                          945               453     
EBITDA                                       $  21,750           $  23,430
Impairment of fixed assets                      -                   239
Loss on extinguishment of debt                 -                 1,010   
Adjusted EBITDA                              $  21,750          $  24,679  
                                                                    

Non-GAAP Financial Measures – EBITDA and Adjusted EBITDA

EBITDA consists of net income plus interest expense (net of interest income),
provision for corporate income taxes, and depreciation and amortization.
Adjusted EBITDA is the Company’s EBITDA excluding loss on extinguishment of
debt, any fixed asset or goodwill impairments, insurance recoveries and, in
the case of Q4 2012 and full year-2012, charges in connection with the
Company’s special dividend payment and incremental share-based compensation
expense resulting from option modifications. EBITDA is not a measure of
liquidity or financial performance presented in accordance with GAAP. EBITDA,
as we define it, may not be identical to similarly titled measures used by
some other companies.

EBITDA has material limitations as an analytical tool and should not be
considered in isolation or as a substitute for cash flows from operating
activities, operating income or other cash flow or income data prepared in
accordance with GAAP. The items excluded from EBITDA, but included in the
calculation of reported net income, are significant components of the
consolidated statements of cash flows and income, and must be considered in
performing a comprehensive assessment of our liquidity.

EBITDA excludes, among other items, the effect of depreciation and
amortization, which is a significant component of our reported GAAP data.
Depreciation and amortization, which is a non-cash item, totaled $12.4million
in the quarter ended June 30, 2013. Although a premise underlying depreciation
and amortization is that it will be reinvested in our business to restore,
replenish or purchase property, equipment and other related assets, the funds
represented by depreciation and amortization could, in the Company’s
discretion, be utilized for other purposes (e.g., debt service). Accordingly,
EBITDA may be useful as a supplemental measure to GAAP financial data for
demonstrating our ability to satisfy our liquidity and capital resource
requirements.

Investors or prospective investors in the Company regularly request EBITDA as
a supplemental analytical measure to, and in conjunction with, our GAAP
financial data. We understand that these investors use EBITDA, among other
things, to assess our ability to service our existing debt and to incur debt
in the future, to evaluate our executive compensation programs, to assess our
ability to fund our capital expenditure program, and to gain insight into the
manner in which the Company’s management and board of directors analyze our
liquidity. We believe that investors find the inclusion of EBITDA in our press
releases to be useful and helpful to them.

Our management and board of directors also use EBITDA as a supplemental
measure to our GAAP financial data for purposes broadly similar to those used
by investors.

The purposes to which EBITDA may be used by investors, and is used by our
management and board of directors, include the following:

      The Company is required to comply with financial covenants and borrowing
 •  limitations that are based on variations of EBITDA as defined in our
      2011 Senior Credit Facility, as amended.
      
      Our discussions with prospective lenders and investors in recent years,
  •   including in relation to our 2011 Senior Credit Facility have confirmed
      the importance of EBITDA in their decision-making processes relating to
      the making of loans to us or investing in our debt securities.
      
  •   The Company uses EBITDA as a key factor in determining annual incentive
      bonuses for executive officers (as discussed in our proxy statement).
      
      The Company considers EBITDA to be a useful supplemental measure to GAAP
      financial data because it indicates our ability to generate funds
  •   sufficient to make capital expenditures (including for the opening of
      new clubs and the upgrading of existing clubs) as well as to undertake
      initiatives to enhance our business by offering new products and
      services in accordance with our strategy.
      
  •   Quarterly, equity analysts who follow our company often report on our
      EBITDA with respect to valuation commentary.

Adjusted EBITDA has similar uses and limitations as EBITDA. We do not, and
investors should not, place undue reliance on EBITDA or Adjusted EBITDA as a
measure of our liquidity.

Contact:

Town Sports International Holdings, Inc., New York
Investors:
212-246-6700 extension 1650
Investor.relations@town-sports.com
or
ICR, Inc.
Joseph Teklits / Farah Soi
203-682-8390
farah.soi@icrinc.com