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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Planet Fitness Inc | NYSE:PLNT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.56 | -0.93% | 59.53 | 61.23 | 59.47 | 60.95 | 1,200,673 | 01:00:00 |
☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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38-3942097
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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ý
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Accelerated filer
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Non-accelerated filer
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☐ (Do not check if a small reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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•
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future financial position;
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•
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business strategy;
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•
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budgets, projected costs and plans;
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•
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future industry growth;
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•
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financing sources;
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•
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Potential return of capital initiatives;
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•
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the impact of litigation, government inquiries and investigations; and
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•
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all other statements regarding our intent, plans, beliefs or expectations or those of our directors or officers.
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•
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our dependence on the operational and financial results of, and our relationships with, our franchisees and the success of their new and existing stores;
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•
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risks relating to damage to our brand and reputation;
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•
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our ability to successfully implement our growth strategy;
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•
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technical, operational and regulatory risks related to our third-party providers’ systems and our own information systems;
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•
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our and our franchisees’ ability to attract and retain members;
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•
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the high level of competition in the health club industry generally;
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•
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our reliance on a limited number of vendors, suppliers and other third-party service providers;
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•
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our substantial increased indebtedness as a result of our refinancing and securitization transactions and our ability to incur additional indebtedness or refinance that indebtedness in the future;
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•
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our future financial performance and our ability to pay principal and interest on our indebtedness;
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•
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risks relating to our corporate structure and tax receivable agreements; and
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•
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the other factors identified under the heading “Risk Factors” in our annual report on Form 10-K for the fiscal year ended
December 31, 2017
filed with the Securities and Exchange Commission on March 1, 2018, and elsewhere in this Quarterly Report on Form 10-Q.
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June 30,
|
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December 31,
|
||||
|
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2018
|
|
2017
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
147,784
|
|
|
$
|
113,080
|
|
Accounts receivable, net of allowance for bad debts of $20 and $32 at June 30, 2018 and December 31, 2017, respectively
|
|
14,932
|
|
|
37,272
|
|
||
Due from related parties
|
|
—
|
|
|
3,020
|
|
||
Inventory
|
|
3,193
|
|
|
2,692
|
|
||
Restricted assets – national advertising fund
|
|
73
|
|
|
499
|
|
||
Deferred expenses – national advertising fund
|
|
1,648
|
|
|
—
|
|
||
Prepaid expenses
|
|
3,796
|
|
|
3,929
|
|
||
Other receivables
|
|
23,343
|
|
|
9,562
|
|
||
Other current assets
|
|
5,916
|
|
|
6,947
|
|
||
Total current assets
|
|
200,685
|
|
|
177,001
|
|
||
Property and equipment, net of accumulated depreciation of $44,676, as of June 30, 2018 and $36,228 as of December 31, 2017
|
|
87,570
|
|
|
83,327
|
|
||
Intangible assets, net
|
|
237,092
|
|
|
235,657
|
|
||
Goodwill
|
|
191,038
|
|
|
176,981
|
|
||
Deferred income taxes
|
|
406,699
|
|
|
407,782
|
|
||
Other assets, net
|
|
1,637
|
|
|
11,717
|
|
||
Total assets
|
|
$
|
1,124,721
|
|
|
$
|
1,092,465
|
|
Liabilities and stockholders' deficit
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current maturities of long-term debt
|
|
$
|
7,185
|
|
|
$
|
7,185
|
|
Accounts payable
|
|
16,268
|
|
|
28,648
|
|
||
Accrued expenses
|
|
14,715
|
|
|
18,590
|
|
||
Equipment deposits
|
|
9,001
|
|
|
6,498
|
|
||
Restricted liabilities – national advertising fund
|
|
73
|
|
|
490
|
|
||
Deferred revenue, current
|
|
23,186
|
|
|
19,083
|
|
||
Payable to related parties pursuant to tax benefit arrangements, current
|
|
25,578
|
|
|
31,062
|
|
||
Other current liabilities
|
|
436
|
|
|
474
|
|
||
Total current liabilities
|
|
96,442
|
|
|
112,030
|
|
||
Long-term debt, net of current maturities
|
|
693,957
|
|
|
696,576
|
|
||
Deferred rent, net of current portion
|
|
7,700
|
|
|
6,127
|
|
||
Deferred revenue, net of current portion
|
|
23,255
|
|
|
8,440
|
|
||
Deferred tax liabilities
|
|
1,389
|
|
|
1,629
|
|
||
Payable to related parties pursuant to tax benefit arrangements, net of current portion
|
|
391,876
|
|
|
400,298
|
|
||
Other liabilities
|
|
1,350
|
|
|
4,302
|
|
||
Total noncurrent liabilities
|
|
1,119,527
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|
|
1,117,372
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|
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Commitments and contingencies (Note 12)
|
|
|
|
|
||||
Stockholders' equity (deficit):
|
|
|
|
|
||||
Class A common stock, $.0001 par value - 300,000 authorized, 87,932 and 87,188 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively
|
|
9
|
|
|
9
|
|
||
Class B common stock, $.0001 par value - 100,000 authorized, 10,471 and 11,193 shares issued and outstanding as of June 30, 2018 December 31, 2017, respectively
|
|
1
|
|
|
1
|
|
||
Accumulated other comprehensive loss
|
|
(385
|
)
|
|
(648
|
)
|
||
Additional paid in capital
|
|
14,744
|
|
|
12,118
|
|
||
Accumulated deficit
|
|
(94,348
|
)
|
|
(130,966
|
)
|
||
Total stockholders' deficit attributable to Planet Fitness Inc.
|
|
(79,979
|
)
|
|
(119,486
|
)
|
||
Non-controlling interests
|
|
(11,269
|
)
|
|
(17,451
|
)
|
||
Total stockholders' deficit
|
|
(91,248
|
)
|
|
(136,937
|
)
|
||
Total liabilities and stockholders' deficit
|
|
$
|
1,124,721
|
|
|
$
|
1,092,465
|
|
|
|
For the three months ended
June 30, |
|
For the six months ended
June 30, |
||||||||||||
|
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2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||
Franchise
|
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$
|
45,417
|
|
|
$
|
32,791
|
|
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$
|
87,579
|
|
|
$
|
63,072
|
|
Commission income
|
|
1,575
|
|
|
5,003
|
|
|
3,563
|
|
|
11,519
|
|
||||
National advertising fund revenue
|
|
11,158
|
|
|
—
|
|
|
21,620
|
|
|
—
|
|
||||
Corporate-owned stores
|
|
34,252
|
|
|
28,285
|
|
|
66,959
|
|
|
55,326
|
|
||||
Equipment
|
|
48,148
|
|
|
41,237
|
|
|
82,161
|
|
|
68,501
|
|
||||
Total revenue
|
|
140,550
|
|
|
107,316
|
|
|
261,882
|
|
|
198,418
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
|
36,744
|
|
|
31,452
|
|
|
63,244
|
|
|
52,576
|
|
||||
Store operations
|
|
18,047
|
|
|
14,604
|
|
|
36,403
|
|
|
29,788
|
|
||||
Selling, general and administrative
|
|
17,210
|
|
|
14,768
|
|
|
34,831
|
|
|
28,588
|
|
||||
National advertising fund expense
|
|
11,158
|
|
|
—
|
|
|
21,620
|
|
|
—
|
|
||||
Depreciation and amortization
|
|
8,619
|
|
|
7,894
|
|
|
17,084
|
|
|
15,845
|
|
||||
Other loss (gain)
|
|
(39
|
)
|
|
348
|
|
|
971
|
|
|
316
|
|
||||
Total operating costs and expenses
|
|
91,739
|
|
|
69,066
|
|
|
174,153
|
|
|
127,113
|
|
||||
Income from operations
|
|
48,811
|
|
|
38,250
|
|
|
87,729
|
|
|
71,305
|
|
||||
Other expense, net:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
|
(8,628
|
)
|
|
(9,028
|
)
|
|
(17,361
|
)
|
|
(17,791
|
)
|
||||
Other expense
|
|
(502
|
)
|
|
(933
|
)
|
|
(310
|
)
|
|
(251
|
)
|
||||
Total other expense, net
|
|
(9,130
|
)
|
|
(9,961
|
)
|
|
(17,671
|
)
|
|
(18,042
|
)
|
||||
Income before income taxes
|
|
39,681
|
|
|
28,289
|
|
|
70,058
|
|
|
53,263
|
|
||||
Provision for income taxes
|
|
9,263
|
|
|
10,285
|
|
|
16,146
|
|
|
17,393
|
|
||||
Net income
|
|
30,418
|
|
|
18,004
|
|
|
53,912
|
|
|
35,870
|
|
||||
Less net income attributable to non-controlling interests
|
|
4,544
|
|
|
5,592
|
|
|
8,157
|
|
|
14,616
|
|
||||
Net income attributable to Planet Fitness, Inc.
|
|
$
|
25,874
|
|
|
$
|
12,412
|
|
|
45,755
|
|
|
$
|
21,254
|
|
|
Net income per share of Class A common stock:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.30
|
|
|
$
|
0.16
|
|
|
$
|
0.52
|
|
|
$
|
0.30
|
|
Diluted
|
|
$
|
0.29
|
|
|
$
|
0.16
|
|
|
$
|
0.52
|
|
|
$
|
0.30
|
|
Weighted-average shares of Class A common stock outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
87,693
|
|
|
79,154
|
|
|
87,565
|
|
|
71,679
|
|
||||
Diluted
|
|
88,105
|
|
|
79,193
|
|
|
87,931
|
|
|
71,713
|
|
|
|
For the three months ended
June 30, |
|
For the six months ended
June 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income including non-controlling interests
|
|
$
|
30,418
|
|
|
$
|
18,004
|
|
|
$
|
53,912
|
|
|
$
|
35,870
|
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on interest rate caps, net of tax
|
|
17
|
|
|
179
|
|
|
383
|
|
|
356
|
|
||||
Foreign currency translation adjustments
|
|
(34
|
)
|
|
13
|
|
|
(63
|
)
|
|
5
|
|
||||
Total other comprehensive (loss) income, net
|
|
(17
|
)
|
|
192
|
|
|
320
|
|
|
361
|
|
||||
Total comprehensive income including non-controlling
interests
|
|
30,401
|
|
|
18,196
|
|
|
54,232
|
|
|
36,231
|
|
||||
Less: total comprehensive income attributable to non-controlling interests
|
|
4,543
|
|
|
5,639
|
|
|
8,214
|
|
|
14,753
|
|
||||
Total comprehensive income attributable to Planet Fitness, Inc.
|
|
$
|
25,858
|
|
|
$
|
12,557
|
|
|
$
|
46,018
|
|
|
$
|
21,478
|
|
|
|
For the six months ended June 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net income
|
|
$
|
53,912
|
|
|
$
|
35,870
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
17,084
|
|
|
15,845
|
|
||
Amortization of deferred financing costs
|
|
973
|
|
|
942
|
|
||
Amortization of favorable leases and asset retirement obligations
|
|
186
|
|
|
184
|
|
||
Amortization of interest rate caps
|
|
446
|
|
|
954
|
|
||
Deferred tax expense
|
|
13,300
|
|
|
14,589
|
|
||
Loss on extinguishment of debt
|
|
—
|
|
|
79
|
|
||
Third party debt refinancing expense
|
|
—
|
|
|
1,021
|
|
||
Gain on re-measurement of tax benefit arrangement
|
|
(354
|
)
|
|
(541
|
)
|
||
Provision for bad debts
|
|
(8
|
)
|
|
28
|
|
||
Loss on reacquired franchise rights
|
|
350
|
|
|
—
|
|
||
Loss (gain) on disposal of property and equipment
|
|
547
|
|
|
(323
|
)
|
||
Equity-based compensation
|
|
2,687
|
|
|
1,012
|
|
||
Changes in operating assets and liabilities, excluding effects of acquisitions:
|
|
|
|
|
||||
Accounts receivable
|
|
22,281
|
|
|
11,542
|
|
||
Due to and due from related parties
|
|
3,375
|
|
|
(289
|
)
|
||
Inventory
|
|
(501
|
)
|
|
355
|
|
||
Other assets and other current assets
|
|
(3,109
|
)
|
|
(3,239
|
)
|
||
National advertising fund
|
|
(1,634
|
)
|
|
—
|
|
||
Accounts payable and accrued expenses
|
|
(16,884
|
)
|
|
(14,144
|
)
|
||
Other liabilities and other current liabilities
|
|
(2,908
|
)
|
|
(33
|
)
|
||
Income taxes
|
|
131
|
|
|
(406
|
)
|
||
Payable to related parties pursuant to tax benefit arrangements
|
|
(21,706
|
)
|
|
(7,909
|
)
|
||
Equipment deposits
|
|
2,503
|
|
|
5,390
|
|
||
Deferred revenue
|
|
6,229
|
|
|
1,826
|
|
||
Deferred rent
|
|
1,594
|
|
|
245
|
|
||
Net cash provided by operating activities
|
|
78,494
|
|
|
62,998
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Additions to property and equipment
|
|
(8,136
|
)
|
|
(14,127
|
)
|
||
Acquisition of franchises
|
|
(28,503
|
)
|
|
—
|
|
||
Proceeds from sale of property and equipment
|
|
134
|
|
|
—
|
|
||
Net cash used in investing activities
|
|
(36,505
|
)
|
|
(14,127
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Principal payments on capital lease obligations
|
|
(23
|
)
|
|
—
|
|
||
Repayment of long-term debt
|
|
(3,592
|
)
|
|
(3,592
|
)
|
||
Payment of deferred financing and other debt-related costs
|
|
—
|
|
|
(1,278
|
)
|
||
Premiums paid for interest rate caps
|
|
—
|
|
|
(366
|
)
|
||
Exercise of stock options
|
|
400
|
|
|
26
|
|
||
Dividend equivalent payments
|
|
(138
|
)
|
|
(139
|
)
|
||
Distributions to Continuing LLC Members
|
|
(3,503
|
)
|
|
(5,592
|
)
|
||
Net cash used in financing activities
|
|
(6,856
|
)
|
|
(10,941
|
)
|
||
Effects of exchange rate changes on cash and cash equivalents
|
|
(429
|
)
|
|
198
|
|
||
Net increase in cash and cash equivalents
|
|
34,704
|
|
|
38,128
|
|
||
Cash and cash equivalents, beginning of period
|
|
113,080
|
|
|
40,393
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
147,784
|
|
|
$
|
78,521
|
|
Supplemental cash flow information:
|
|
|
|
|
||||
Net cash paid for income taxes
|
|
$
|
2,929
|
|
|
$
|
2,914
|
|
Cash paid for interest
|
|
$
|
16,795
|
|
|
$
|
15,890
|
|
Non-cash investing activities:
|
|
|
|
|
||||
Non-cash additions to property and equipment
|
|
$
|
2,072
|
|
|
$
|
988
|
|
|
|
Class A
common stock
|
|
Class B
common stock
|
|
Accumulated
other
comprehensive
(loss) income
|
|
Additional paid-
in capital
|
|
Accumulated
deficit
|
|
Non-controlling
interests
|
|
Total (deficit)
equity
|
||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2017
|
|
87,188
|
|
|
$
|
9
|
|
|
11,193
|
|
|
$
|
1
|
|
|
$
|
(648
|
)
|
|
$
|
12,118
|
|
|
$
|
(130,966
|
)
|
|
$
|
(17,451
|
)
|
|
$
|
(136,937
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,755
|
|
|
8,157
|
|
|
53,912
|
|
|||||||
Equity-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,690
|
|
|
(3
|
)
|
|
—
|
|
|
2,687
|
|
|||||||
Exchanges of Class B common stock
|
|
713
|
|
|
—
|
|
|
(713
|
)
|
|
—
|
|
|
—
|
|
|
(1,471
|
)
|
|
—
|
|
|
1,471
|
|
|
—
|
|
|||||||
Retirement of Class B common stock
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options and vesting of restricted share units
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400
|
|
|
—
|
|
|
—
|
|
|
400
|
|
|||||||
Tax benefit arrangement liability and deferred taxes arising from exchanges of Class B common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,007
|
|
|
—
|
|
|
—
|
|
|
1,007
|
|
|||||||
Forfeiture of dividend equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
58
|
|
|||||||
Distributions paid to members of Pla-Fit Holdings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,503
|
)
|
|
(3,503
|
)
|
|||||||
Cumulative effect adjustment (Note 15)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,192
|
)
|
|
—
|
|
|
(9,192
|
)
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
320
|
|
|||||||
Balance at June 30, 2018
|
|
87,932
|
|
|
$
|
9
|
|
|
10,471
|
|
|
$
|
1
|
|
|
$
|
(385
|
)
|
|
$
|
14,744
|
|
|
$
|
(94,348
|
)
|
|
$
|
(11,269
|
)
|
|
$
|
(91,248
|
)
|
•
|
Licensing and selling franchises under the Planet Fitness trade name.
|
•
|
Owning and operating fitness centers under the Planet Fitness trade name.
|
•
|
Selling fitness-related equipment to franchisee-owned stores.
|
|
|
Total fair value at June 30,
2018 |
|
Quoted prices
in active markets (Level 1)
|
|
Significant other
observable inputs (Level 2) |
|
Significant
unobservable inputs
(Level 3)
|
||||||||
Interest rate caps
|
|
$
|
404
|
|
|
$
|
—
|
|
|
$
|
404
|
|
|
$
|
—
|
|
|
|
Total fair value at December 31,
2017 |
|
Quoted prices
in active markets (Level 1) |
|
Significant other
observable inputs (Level 2) |
|
Significant
unobservable inputs (Level 3) |
||||||||
Interest rate caps
|
|
$
|
340
|
|
|
$
|
—
|
|
|
$
|
340
|
|
|
$
|
—
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
PF Melville
|
|
$
|
4,603
|
|
|
$
|
—
|
|
|
$
|
4,420
|
|
|
$
|
—
|
|
MMR
|
|
3,461
|
|
|
—
|
|
|
3,360
|
|
|
—
|
|
||||
Total
|
|
$
|
8,064
|
|
|
$
|
—
|
|
|
$
|
7,780
|
|
|
$
|
—
|
|
|
Amount
|
||
Fixed assets
|
$
|
4,672
|
|
Reacquired franchise rights
|
7,640
|
|
|
Customer relationships
|
1,150
|
|
|
Favorable leases, net
|
520
|
|
|
Reacquired area development rights
|
150
|
|
|
Other assets
|
275
|
|
|
Goodwill
|
14,056
|
|
|
Liabilities assumed, including deferred revenues
|
(310
|
)
|
|
|
$
|
28,153
|
|
June 30, 2018
|
|
Weighted
average
amortization
period (years)
|
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net carrying
Amount
|
||||||
Customer relationships
|
|
11.1
|
|
$
|
172,932
|
|
|
(92,965
|
)
|
|
$
|
79,967
|
|
|
Noncompete agreements
|
|
5.0
|
|
14,500
|
|
|
(14,500
|
)
|
|
—
|
|
|||
Favorable leases
|
|
7.7
|
|
3,455
|
|
|
(2,156
|
)
|
|
1,299
|
|
|||
Order backlog
|
|
0.4
|
|
3,400
|
|
|
(3,400
|
)
|
|
—
|
|
|||
Reacquired franchise rights
|
|
6.8
|
|
16,590
|
|
|
(7,199
|
)
|
|
9,391
|
|
|||
Reacquired ADA rights
|
|
5.0
|
|
150
|
|
|
(15
|
)
|
|
135
|
|
|||
|
|
|
|
211,027
|
|
|
(120,235
|
)
|
|
90,792
|
|
|||
Indefinite-lived intangible:
|
|
|
|
|
|
|
|
|
||||||
Trade and brand names
|
|
N/A
|
|
146,300
|
|
|
—
|
|
|
146,300
|
|
|||
Total intangible assets
|
|
|
|
$
|
357,327
|
|
|
$
|
(120,235
|
)
|
|
$
|
237,092
|
|
Goodwill
|
|
|
|
$
|
191,038
|
|
|
$
|
—
|
|
|
$
|
191,038
|
|
December 31, 2017
|
|
Weighted
average amortization period (years) |
|
Gross
carrying amount |
|
Accumulated
amortization |
|
Net carrying
Amount |
||||||
Customer relationships
|
|
11.1
|
|
$
|
171,782
|
|
|
$
|
(86,501
|
)
|
|
$
|
85,281
|
|
Noncompete agreements
|
|
5.0
|
|
14,500
|
|
|
(14,500
|
)
|
|
—
|
|
|||
Favorable leases
|
|
7.5
|
|
2,935
|
|
|
(1,972
|
)
|
|
963
|
|
|||
Order backlog
|
|
0.4
|
|
3,400
|
|
|
(3,400
|
)
|
|
—
|
|
|||
Reacquired franchise rights
|
|
5.8
|
|
8,950
|
|
|
(5,837
|
)
|
|
3,113
|
|
|||
|
|
|
|
201,567
|
|
|
(112,210
|
)
|
|
89,357
|
|
|||
Indefinite-lived intangible:
|
|
|
|
|
|
|
|
|
||||||
Trade and brand names
|
|
N/A
|
|
146,300
|
|
|
—
|
|
|
146,300
|
|
|||
Total intangible assets
|
|
|
|
$
|
347,867
|
|
|
$
|
(112,210
|
)
|
|
$
|
235,657
|
|
Goodwill
|
|
|
|
$
|
176,981
|
|
|
$
|
—
|
|
|
$
|
176,981
|
|
|
Amount
|
||
Remainder of 2018
|
$
|
8,016
|
|
2019
|
15,536
|
|
|
2020
|
13,676
|
|
|
2021
|
13,701
|
|
|
2022
|
13,789
|
|
|
Thereafter
|
26,074
|
|
|
Total
|
$
|
90,792
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Term loan B requires quarterly installments plus interest through the term of the loan, maturing March 31, 2021. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (all-in weighted-average rate of 4.89% at June 30, 2018 and 4.59% at December 31, 2017)
|
|
$
|
705,877
|
|
|
$
|
709,470
|
|
Revolving credit line, requires interest only payments through the term of the loan, maturing March 31, 2019. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (all-in rate of 6.75% at June 30, 2018 and 6.25% at December 31, 2017)
|
|
—
|
|
|
—
|
|
||
Total debt, excluding deferred financing costs
|
|
$
|
705,877
|
|
|
709,470
|
|
|
Deferred financing costs, net of accumulated amortization
|
|
(4,735
|
)
|
|
(5,709
|
)
|
||
Total debt
|
|
701,142
|
|
|
703,761
|
|
||
Current portion of long-term debt and line of credit
|
|
7,185
|
|
|
7,185
|
|
||
Long-term debt, net of current portion
|
|
$
|
693,957
|
|
|
$
|
696,576
|
|
|
Amount
|
||
Remainder of 2018
|
$
|
3,593
|
|
2019
|
7,185
|
|
|
2020
|
7,185
|
|
|
2021
|
687,914
|
|
|
2022
|
—
|
|
|
Total
|
$
|
705,877
|
|
|
|
For the three months ended
June 30, |
|
For the six months ended
June 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Franchise revenue
|
|
$
|
813
|
|
|
$
|
382
|
|
|
$
|
1,557
|
|
|
$
|
830
|
|
Equipment revenue
|
|
323
|
|
|
554
|
|
|
323
|
|
|
573
|
|
||||
Total revenue from related parties
|
|
$
|
1,136
|
|
|
$
|
936
|
|
|
1,880
|
|
|
$
|
1,403
|
|
•
|
Holders of our Class A common stock owned
87,932,160
shares of our Class A common stock, representing
89.4%
of the voting power in the Company and, through the Company,
87,932,160
Holdings Units representing
89.4%
of the economic interest in Pla-Fit Holdings; and
|
•
|
the Continuing LLC Owners collectively owned
10,470,750
Holdings Units, representing
10.6%
of the economic interest in Pla-Fit Holdings and
10,470,750
shares of our Class B common stock, representing
10.6%
of the voting power in the Company.
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
30,418
|
|
|
$
|
18,004
|
|
|
$
|
53,912
|
|
|
$
|
35,870
|
|
|
Less: net income attributable to non-controlling interests
|
|
4,544
|
|
|
5,592
|
|
|
8,157
|
|
|
14,616
|
|
|
||||
Net income attributable to Planet Fitness, Inc.
|
|
$
|
25,874
|
|
|
$
|
12,412
|
|
|
$
|
45,755
|
|
|
$
|
21,254
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares of Class A common stock outstanding - basic
|
|
87,693,377
|
|
|
79,153,778
|
|
|
87,564,596
|
|
|
71,678,755
|
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Stock options
|
|
389,994
|
|
|
33,564
|
|
|
351,987
|
|
|
28,893
|
|
|
||||
Restricted stock units
|
|
21,960
|
|
|
5,708
|
|
|
14,886
|
|
|
5,121
|
|
|
||||
Weighted-average shares of Class A common stock outstanding - diluted
|
|
88,105,331
|
|
|
79,193,050
|
|
|
87,931,469
|
|
|
71,712,769
|
|
|
||||
Earnings per share of Class A common stock - basic
|
|
$
|
0.30
|
|
|
$
|
0.16
|
|
|
$
|
0.52
|
|
|
$
|
0.30
|
|
|
Earnings per share of Class A common stock - diluted
|
|
$
|
0.29
|
|
|
$
|
0.16
|
|
|
$
|
0.52
|
|
|
$
|
0.30
|
|
|
|
Amount
|
||
Remainder of 2018
|
$
|
8,764
|
|
2019
|
24,004
|
|
|
2020
|
23,983
|
|
|
2021
|
24,407
|
|
|
2022
|
24,897
|
|
|
Thereafter
|
311,399
|
|
|
Total
|
$
|
417,454
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||||||
Franchise segment revenue - U.S.
|
|
$
|
57,252
|
|
|
$
|
37,017
|
|
|
$
|
110,697
|
|
|
$
|
73,445
|
|
Franchise segment revenue - International
|
|
898
|
|
|
777
|
|
|
2,065
|
|
|
1,146
|
|
||||
Franchise segment total
|
|
58,150
|
|
|
37,794
|
|
|
112,762
|
|
|
74,591
|
|
||||
Corporate-owned stores - U.S.
|
|
33,125
|
|
|
27,210
|
|
|
64,697
|
|
|
53,183
|
|
||||
Corporate-owned stores - International
|
|
1,127
|
|
|
1,075
|
|
|
2,262
|
|
|
2,143
|
|
||||
Corporate-owned stores total
|
|
34,252
|
|
|
28,285
|
|
|
66,959
|
|
|
55,326
|
|
||||
Equipment segment - U.S.
|
|
48,148
|
|
|
41,237
|
|
|
82,161
|
|
|
68,501
|
|
||||
Equipment segment total
|
|
48,148
|
|
|
41,237
|
|
|
82,161
|
|
|
68,501
|
|
||||
Total revenue
|
|
$
|
140,550
|
|
|
$
|
107,316
|
|
|
$
|
261,882
|
|
|
$
|
198,418
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment EBITDA
|
|
|
|
|
|
|
|
|
|
|
||||||
Franchise
|
|
$
|
40,041
|
|
|
$
|
32,487
|
|
|
$
|
76,719
|
|
|
$
|
64,519
|
|
Corporate-owned stores
|
|
14,666
|
|
|
12,840
|
|
|
26,837
|
|
|
23,533
|
|
||||
Equipment
|
|
11,457
|
|
|
9,809
|
|
|
18,925
|
|
|
15,904
|
|
||||
Corporate and other
|
|
(9,236
|
)
|
|
(9,925
|
)
|
|
(17,978
|
)
|
|
(17,057
|
)
|
||||
Total Segment EBITDA
|
|
$
|
56,928
|
|
|
$
|
45,211
|
|
|
$
|
104,503
|
|
|
$
|
86,899
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total Segment EBITDA
|
|
$
|
56,928
|
|
|
$
|
45,211
|
|
|
$
|
104,503
|
|
|
$
|
86,899
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
|
8,619
|
|
|
7,894
|
|
|
17,084
|
|
|
15,845
|
|
||||
Other expense
|
|
(502
|
)
|
|
(933
|
)
|
|
(310
|
)
|
|
(251
|
)
|
||||
Income from operations
|
|
48,811
|
|
|
38,250
|
|
|
87,729
|
|
|
71,305
|
|
||||
Interest expense, net
|
|
(8,628
|
)
|
|
(9,028
|
)
|
|
(17,361
|
)
|
|
(17,791
|
)
|
||||
Other expense
|
|
(502
|
)
|
|
(933
|
)
|
|
(310
|
)
|
|
(251
|
)
|
||||
Income before income taxes
|
|
$
|
39,681
|
|
|
$
|
28,289
|
|
|
$
|
70,058
|
|
|
$
|
53,263
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Franchise
|
|
$
|
239,226
|
|
|
$
|
243,348
|
|
Corporate-owned stores
|
|
191,473
|
|
|
167,367
|
|
||
Equipment
|
|
185,594
|
|
|
206,632
|
|
||
Unallocated
|
|
508,428
|
|
|
475,118
|
|
||
Total consolidated assets
|
|
$
|
1,124,721
|
|
|
$
|
1,092,465
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Franchise
|
|
$
|
16,938
|
|
|
$
|
16,938
|
|
Corporate-owned stores
|
|
81,434
|
|
|
67,377
|
|
||
Equipment
|
|
92,666
|
|
|
92,666
|
|
||
Consolidated goodwill
|
|
$
|
191,038
|
|
|
$
|
176,981
|
|
|
|
For the three months ended
June 30, |
|
For the six months ended
June 30, |
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Franchisee-owned stores:
|
|
|
|
|
|
|
|
|
||||
Stores operated at beginning of period
|
|
1,497
|
|
|
1,309
|
|
|
1,456
|
|
|
1,255
|
|
New stores opened
|
|
44
|
|
|
37
|
|
|
91
|
|
|
91
|
|
Stores debranded, sold or consolidated
(1)
|
|
(1
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
(1
|
)
|
Stores operated at end of period
|
|
1,540
|
|
|
1,345
|
|
|
1,540
|
|
|
1,345
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate-owned stores:
|
|
|
|
|
|
|
|
|
||||
Stores operated at beginning of period
|
|
68
|
|
|
58
|
|
|
62
|
|
|
58
|
|
New stores opened
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Stores acquired from franchisees
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
Stores operated at end of period
|
|
68
|
|
|
58
|
|
|
68
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
||||
Total stores:
|
|
|
|
|
|
|
|
|
||||
Stores operated at beginning of period
|
|
1,565
|
|
|
1,367
|
|
|
1,518
|
|
|
1,313
|
|
New stores opened
|
|
44
|
|
|
37
|
|
|
91
|
|
|
91
|
|
Stores acquired, debranded, sold or consolidated
(1)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Stores operated at end of period
|
|
1,608
|
|
|
1,403
|
|
|
1,608
|
|
|
1,403
|
|
(1)
|
The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
|
|
Contract liabilities
|
||
Balance at January 1, 2018
|
$
|
40,000
|
|
Revenue recognized that was included in the contract liability at the beginning of the year
|
(16,107
|
)
|
|
Increase, excluding amounts recognized as revenue during the period
|
22,548
|
|
|
Balance at June 30, 2018
|
$
|
46,441
|
|
Contract liabilities to be recognized in:
|
|
Amount
|
||
2018
|
|
$
|
16,533
|
|
2019
|
|
8,035
|
|
|
2020
|
|
2,179
|
|
|
2021
|
|
2,012
|
|
|
2022
|
|
1,873
|
|
|
Thereafter
|
|
15,809
|
|
|
Total
|
|
$
|
46,441
|
|
|
As Reported December 31,
|
|
Total adjustments
|
|
Adjusted January 1,
|
||||||
|
2017
|
|
|
|
2018
|
||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
113,080
|
|
|
$
|
—
|
|
|
$
|
113,080
|
|
Accounts receivable, net
|
37,272
|
|
|
—
|
|
|
37,272
|
|
|||
Due from related parties
|
3,020
|
|
|
—
|
|
|
3,020
|
|
|||
Inventory
|
2,692
|
|
|
—
|
|
|
2,692
|
|
|||
Restricted assets – national advertising fund
|
499
|
|
|
—
|
|
|
499
|
|
|||
Prepaid expenses
|
3,929
|
|
|
—
|
|
|
3,929
|
|
|||
Other receivables
|
9,562
|
|
|
—
|
|
|
9,562
|
|
|||
Other current assets
|
6,947
|
|
|
—
|
|
|
6,947
|
|
|||
Total current assets
|
177,001
|
|
|
—
|
|
|
177,001
|
|
|||
Property and equipment, net
|
83,327
|
|
|
—
|
|
|
83,327
|
|
|||
Intangible assets, net
|
235,657
|
|
|
—
|
|
|
235,657
|
|
|||
Goodwill
|
176,981
|
|
|
—
|
|
|
176,981
|
|
|||
Deferred income taxes
|
407,782
|
|
|
3,285
|
|
|
411,067
|
|
|||
Other assets, net
|
11,717
|
|
|
—
|
|
|
11,717
|
|
|||
Total assets
|
$
|
1,092,465
|
|
|
$
|
3,285
|
|
|
$
|
1,095,750
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current maturities of long-term debt
|
$
|
7,185
|
|
|
$
|
—
|
|
|
$
|
7,185
|
|
Accounts payable
|
28,648
|
|
|
—
|
|
|
28,648
|
|
|||
Accrued expenses
|
18,590
|
|
|
—
|
|
|
18,590
|
|
|||
Equipment deposits
|
6,498
|
|
|
—
|
|
|
6,498
|
|
|||
Restricted liabilities – national advertising fund
|
490
|
|
|
—
|
|
|
490
|
|
|||
Deferred revenue, current
|
19,083
|
|
|
(764
|
)
|
|
18,319
|
|
|||
Payable pursuant to tax benefit arrangements, current
|
31,062
|
|
|
—
|
|
|
31,062
|
|
|||
Other current liabilities
|
474
|
|
|
—
|
|
|
474
|
|
|||
Total current liabilities
|
112,030
|
|
|
(764
|
)
|
|
111,266
|
|
|||
Long-term debt, net of current maturities
|
696,576
|
|
|
—
|
|
|
696,576
|
|
|||
Deferred rent, net of current portion
|
6,127
|
|
|
—
|
|
|
6,127
|
|
|||
Deferred revenue, net of current portion
|
8,440
|
|
|
13,241
|
|
|
21,681
|
|
|||
Deferred tax liabilities
|
1,629
|
|
|
—
|
|
|
1,629
|
|
|||
Payable pursuant to tax benefit arrangements, net of current portion
|
400,298
|
|
|
—
|
|
|
400,298
|
|
|||
Other liabilities
|
4,302
|
|
|
—
|
|
|
4,302
|
|
|||
Total noncurrent liabilities
|
1,117,372
|
|
|
13,241
|
|
|
1,130,613
|
|
|||
Stockholders' equity (deficit):
|
|
|
|
|
|
||||||
Class A common stock
|
9
|
|
|
—
|
|
|
9
|
|
|||
Class B common stock
|
1
|
|
|
—
|
|
|
1
|
|
|||
Accumulated other comprehensive loss
|
(648
|
)
|
|
—
|
|
|
(648
|
)
|
|||
Additional paid in capital
|
12,118
|
|
|
—
|
|
|
12,118
|
|
|||
Accumulated deficit
|
(130,966
|
)
|
|
(9,192
|
)
|
|
(140,158
|
)
|
|||
Total stockholders' deficit attributable to Planet Fitness Inc.
|
(119,486
|
)
|
|
(9,192
|
)
|
|
(128,678
|
)
|
|||
Non-controlling interests
|
(17,451
|
)
|
|
—
|
|
|
(17,451
|
)
|
|||
Total stockholders' deficit
|
(136,937
|
)
|
|
(9,192
|
)
|
|
(146,129
|
)
|
|||
Total liabilities and stockholders' deficit
|
$
|
1,092,465
|
|
|
$
|
3,285
|
|
|
$
|
1,095,750
|
|
•
|
An increase in deferred revenue, net of $
12,477
for the cumulative reversal and deferral of previously recognized fees related to franchise agreements in effect at January 1, 2018 that were entered into subsequent to the acquisition of Pla-Fit Holdings on November 8, 2012 by TSG Consumer Partners, LLC (the “2012 Acquisition”) (net of the cumulative revenue attributable for the period through January 1, 2018), with a corresponding decrease to Shareholders’ equity.
|
•
|
An increase to deferred income taxes, net of $
3,285
for the tax effects of the adjustment noted above, with a corresponding increase to stockholders' equity.
|
|
As reported for the three months ended June 30, 2018
|
|
Total adjustments
|
|
Amounts under Previous Standards
|
|
As reported for the six months ended June 30, 2018
|
|
Total adjustments
|
|
Amounts under Previous Standards
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Franchise
|
$
|
45,417
|
|
|
$
|
762
|
|
|
$
|
46,179
|
|
|
$
|
87,579
|
|
|
$
|
2,527
|
|
|
$
|
90,106
|
|
Commission income
|
1,575
|
|
|
—
|
|
|
1,575
|
|
|
3,563
|
|
|
—
|
|
|
3,563
|
|
||||||
National advertising fund revenue
|
11,158
|
|
|
(11,158
|
)
|
|
—
|
|
|
21,620
|
|
|
(21,620
|
)
|
|
—
|
|
||||||
Corporate-owned stores
|
34,252
|
|
|
—
|
|
|
34,252
|
|
|
66,959
|
|
|
—
|
|
|
66,959
|
|
||||||
Equipment
|
48,148
|
|
|
—
|
|
|
48,148
|
|
|
82,161
|
|
|
—
|
|
|
82,161
|
|
||||||
Total revenue
|
140,550
|
|
|
(10,396
|
)
|
|
130,154
|
|
|
261,882
|
|
|
(19,093
|
)
|
|
242,789
|
|
||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue
|
36,744
|
|
|
—
|
|
|
36,744
|
|
|
63,244
|
|
|
—
|
|
|
63,244
|
|
||||||
Store operations
|
18,047
|
|
|
—
|
|
|
18,047
|
|
|
36,403
|
|
|
—
|
|
|
36,403
|
|
||||||
Selling, general and administrative
|
17,210
|
|
|
—
|
|
|
17,210
|
|
|
34,831
|
|
|
—
|
|
|
34,831
|
|
||||||
National advertising fund expense
|
11,158
|
|
|
(11,158
|
)
|
|
—
|
|
|
21,620
|
|
|
(21,620
|
)
|
|
—
|
|
||||||
Depreciation and amortization
|
8,619
|
|
|
—
|
|
|
8,619
|
|
|
17,084
|
|
|
—
|
|
|
17,084
|
|
||||||
Other loss (gain)
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
|
971
|
|
|
—
|
|
|
971
|
|
||||||
Total operating costs and expenses
|
91,739
|
|
|
(11,158
|
)
|
|
80,581
|
|
|
174,153
|
|
|
(21,620
|
)
|
|
152,533
|
|
||||||
Income from operations
|
48,811
|
|
|
762
|
|
|
49,573
|
|
|
87,729
|
|
|
2,527
|
|
|
90,256
|
|
||||||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense, net
|
(8,628
|
)
|
|
—
|
|
|
(8,628
|
)
|
|
(17,361
|
)
|
|
—
|
|
|
(17,361
|
)
|
||||||
Other (expense) income
|
(502
|
)
|
|
—
|
|
|
(502
|
)
|
|
(310
|
)
|
|
—
|
|
|
(310
|
)
|
||||||
Total other expense, net
|
(9,130
|
)
|
|
—
|
|
|
(9,130
|
)
|
|
(17,671
|
)
|
|
—
|
|
|
(17,671
|
)
|
||||||
Income before income taxes
|
39,681
|
|
|
762
|
|
|
40,443
|
|
|
70,058
|
|
|
2,527
|
|
|
72,585
|
|
||||||
Provision for income taxes
|
9,263
|
|
|
200
|
|
|
9,463
|
|
|
16,146
|
|
|
624
|
|
|
16,770
|
|
||||||
Net income
|
30,418
|
|
|
562
|
|
|
30,980
|
|
|
53,912
|
|
|
1,903
|
|
|
55,815
|
|
||||||
Less net income attributable to non-controlling interests
|
4,544
|
|
|
83
|
|
|
4,627
|
|
|
8,157
|
|
|
279
|
|
|
8,436
|
|
||||||
Net income attributable to Planet Fitness, Inc.
|
$
|
25,874
|
|
|
$
|
479
|
|
|
$
|
26,353
|
|
|
$
|
45,755
|
|
|
$
|
1,624
|
|
|
$
|
47,379
|
|
Net income per share of Class A common stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
0.30
|
|
|
|
|
$
|
0.30
|
|
|
$
|
0.52
|
|
|
|
|
$
|
0.54
|
|
||||
Diluted
|
$
|
0.29
|
|
|
|
|
$
|
0.30
|
|
|
$
|
0.52
|
|
|
|
|
$
|
0.54
|
|
|
As reported June 30, 2018
|
|
Total adjustments
|
|
Amounts under Previous Standards
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
53,912
|
|
|
$
|
1,903
|
|
|
$
|
55,815
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
17,084
|
|
|
—
|
|
|
17,084
|
|
|||
Amortization of deferred financing costs
|
973
|
|
|
—
|
|
|
973
|
|
|||
Amortization of favorable leases and asset retirement obligations
|
186
|
|
|
—
|
|
|
186
|
|
|||
Amortization of interest rate caps
|
446
|
|
|
—
|
|
|
446
|
|
|||
Deferred tax expense
|
13,300
|
|
|
—
|
|
|
13,300
|
|
|||
Gain on re-measurement of tax benefit arrangement
|
(354
|
)
|
|
—
|
|
|
(354
|
)
|
|||
Provision for bad debts
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||
Loss on reacquired franchise rights
|
350
|
|
|
—
|
|
|
350
|
|
|||
Loss (gain) on disposal of property and equipment
|
547
|
|
|
—
|
|
|
547
|
|
|||
Equity-based compensation
|
2,687
|
|
|
—
|
|
|
2,687
|
|
|||
Changes in operating assets and liabilities, excluding effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
22,281
|
|
|
—
|
|
|
22,281
|
|
|||
Due to and due from related parties
|
3,375
|
|
|
—
|
|
|
3,375
|
|
|||
Inventory
|
(501
|
)
|
|
—
|
|
|
(501
|
)
|
|||
Other assets and other current assets
|
(3,109
|
)
|
|
—
|
|
|
(3,109
|
)
|
|||
National advertising fund
|
(1,634
|
)
|
|
—
|
|
|
(1,634
|
)
|
|||
Accounts payable and accrued expenses
|
(16,884
|
)
|
|
—
|
|
|
(16,884
|
)
|
|||
Other liabilities and other current liabilities
|
(2,908
|
)
|
|
—
|
|
|
(2,908
|
)
|
|||
Income taxes
|
131
|
|
|
624
|
|
|
755
|
|
|||
Payable to related parties pursuant to tax benefit arrangements
|
(21,706
|
)
|
|
—
|
|
|
(21,706
|
)
|
|||
Equipment deposits
|
2,503
|
|
|
—
|
|
|
2,503
|
|
|||
Deferred revenue
|
6,229
|
|
|
(2,527
|
)
|
|
3,702
|
|
|||
Deferred rent
|
1594
|
|
|
—
|
|
|
1,594
|
|
|||
Net cash provided by operating activities
|
$
|
78,494
|
|
|
$
|
—
|
|
|
$
|
78,494
|
|
|
As reported June 30, 2018
|
|
Total adjustments
|
|
Amounts under Previous Standards
|
||||||
Assets
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
147,784
|
|
|
$
|
—
|
|
|
$
|
147,784
|
|
Accounts receivable, net
|
14,932
|
|
|
—
|
|
|
14,932
|
|
|||
Due from related parties
|
—
|
|
|
—
|
|
|
—
|
|
|||
Inventory
|
3,193
|
|
|
—
|
|
|
3,193
|
|
|||
Restricted assets – national advertising fund
|
73
|
|
|
—
|
|
|
73
|
|
|||
Deferred expenses – national advertising fund
|
1,648
|
|
|
—
|
|
|
1,648
|
|
|||
Prepaid expenses
|
3,796
|
|
|
—
|
|
|
3,796
|
|
|||
Other receivables
|
23,343
|
|
|
—
|
|
|
23,343
|
|
|||
Other current assets
|
5,916
|
|
|
—
|
|
|
5,916
|
|
|||
Total current assets
|
200,685
|
|
|
—
|
|
|
200,685
|
|
|||
Property and equipment, net
|
87,570
|
|
|
—
|
|
|
87,570
|
|
|||
Intangible assets, net
|
237,092
|
|
|
—
|
|
|
237,092
|
|
|||
Goodwill
|
191,038
|
|
|
—
|
|
|
191,038
|
|
|||
Deferred income taxes
|
406,699
|
|
|
(3,285
|
)
|
|
403,414
|
|
|||
Other assets, net
|
1,637
|
|
|
—
|
|
|
1,637
|
|
|||
Total assets
|
$
|
1,124,721
|
|
|
$
|
(3,285
|
)
|
|
$
|
1,121,436
|
|
Liabilities and stockholders' equity (deficit)
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current maturities of long-term debt
|
$
|
7,185
|
|
|
$
|
—
|
|
|
$
|
7,185
|
|
Accounts payable
|
16,268
|
|
|
—
|
|
|
16,268
|
|
|||
Accrued expenses
|
14,715
|
|
|
624
|
|
|
15,339
|
|
|||
Equipment deposits
|
9,001
|
|
|
—
|
|
|
9,001
|
|
|||
Restricted liabilities – national advertising fund
|
73
|
|
|
—
|
|
|
73
|
|
|||
Deferred revenue, current
|
23,186
|
|
|
306
|
|
|
23,492
|
|
|||
Payable pursuant to tax benefit arrangements, current
|
25,578
|
|
|
—
|
|
|
25,578
|
|
|||
Other current liabilities
|
436
|
|
|
—
|
|
|
436
|
|
|||
Total current liabilities
|
96,442
|
|
|
930
|
|
|
97,372
|
|
|||
Long-term debt, net of current maturities
|
693,957
|
|
|
—
|
|
|
693,957
|
|
|||
Deferred rent, net of current portion
|
7,700
|
|
|
—
|
|
|
7,700
|
|
|||
Deferred revenue, net of current portion
|
23,255
|
|
|
(15,068
|
)
|
|
8,187
|
|
|||
Deferred tax liabilities
|
1,389
|
|
|
—
|
|
|
1,389
|
|
|||
Payable pursuant to tax benefit arrangements, net of current portion
|
391,876
|
|
|
—
|
|
|
391,876
|
|
|||
Other liabilities
|
1,350
|
|
|
—
|
|
|
1,350
|
|
|||
Total noncurrent liabilities
|
1,119,527
|
|
|
(15,068
|
)
|
|
1,104,459
|
|
|||
Stockholders' equity (deficit):
|
|
|
|
|
|
||||||
Class A common stock
|
9
|
|
|
—
|
|
|
9
|
|
|||
Class B common stock
|
1
|
|
|
—
|
|
|
1
|
|
|||
Accumulated other comprehensive loss
|
(385
|
)
|
|
—
|
|
|
(385
|
)
|
|||
Additional paid in capital
|
14,744
|
|
|
—
|
|
|
14,744
|
|
|||
Accumulated deficit
|
(94,348
|
)
|
|
10,574
|
|
|
(83,774
|
)
|
|||
Total stockholders' deficit attributable to Planet Fitness Inc.
|
(79,979
|
)
|
|
10,574
|
|
|
(69,405
|
)
|
|||
Non-controlling interests
|
(11,269
|
)
|
|
279
|
|
|
(10,990
|
)
|
|||
Total stockholders' deficit
|
(91,248
|
)
|
|
10,853
|
|
|
(80,395
|
)
|
|||
Total liabilities and stockholders' deficit
|
$
|
1,124,721
|
|
|
$
|
(3,285
|
)
|
|
$
|
1,121,436
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Franchise segment
|
|
$
|
58,150
|
|
|
$
|
37,794
|
|
|
$
|
112,762
|
|
|
$
|
74,591
|
|
Corporate-owned stores segment
|
|
34,252
|
|
|
28,285
|
|
|
66,959
|
|
|
55,326
|
|
||||
Equipment segment
|
|
48,148
|
|
|
41,237
|
|
|
82,161
|
|
|
68,501
|
|
||||
Total revenue
|
|
$
|
140,550
|
|
|
$
|
107,316
|
|
|
$
|
261,882
|
|
|
$
|
198,418
|
|
|
|
|
|
|
|
|
|
|
||||||||
Segment EBITDA
|
|
|
|
|
|
|
|
|
||||||||
Franchise
|
|
$
|
40,041
|
|
|
$
|
32,487
|
|
|
$
|
76,719
|
|
|
$
|
64,519
|
|
Corporate-owned stores
|
|
14,666
|
|
|
12,840
|
|
|
26,837
|
|
|
23,533
|
|
||||
Equipment
|
|
11,457
|
|
|
9,809
|
|
|
18,925
|
|
|
15,904
|
|
||||
Corporate and other
|
|
(9,236
|
)
|
|
(9,925
|
)
|
|
(17,978
|
)
|
|
(17,057
|
)
|
||||
Total Segment EBITDA
(1)
|
|
$
|
56,928
|
|
|
$
|
45,211
|
|
|
$
|
104,503
|
|
|
$
|
86,899
|
|
(1)
|
Total Segment EBITDA is equal to EBITDA, which is a metric that is not presented in accordance with U.S. GAAP. Refer to “—Non-GAAP financial measures” for a definition of EBITDA and a reconciliation to net income, the most directly comparable U.S. GAAP measure.
|
(in thousands)
|
|
Franchise
|
|
Corporate-owned
stores
|
|
Equipment
|
|
Corporate and
other
|
|
Total
|
||||||||||
Three months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from operations
|
|
$
|
38,092
|
|
|
$
|
9,849
|
|
|
$
|
10,201
|
|
|
$
|
(9,331
|
)
|
|
$
|
48,811
|
|
Depreciation and amortization
|
|
1,949
|
|
|
4,952
|
|
|
1,256
|
|
|
462
|
|
|
8,619
|
|
|||||
Other expense
|
|
—
|
|
|
(135
|
)
|
|
—
|
|
|
(367
|
)
|
|
(502
|
)
|
|||||
Segment EBITDA
(1)
|
|
$
|
40,041
|
|
|
$
|
14,666
|
|
|
$
|
11,457
|
|
|
$
|
(9,236
|
)
|
|
$
|
56,928
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from operations
|
|
$
|
30,346
|
|
|
$
|
8,949
|
|
|
$
|
8,258
|
|
|
$
|
(9,303
|
)
|
|
$
|
38,250
|
|
Depreciation and amortization
|
|
2,141
|
|
|
3,812
|
|
|
1,551
|
|
|
390
|
|
|
7,894
|
|
|||||
Other income (expense)
|
|
—
|
|
|
79
|
|
|
—
|
|
|
(1,012
|
)
|
|
(933
|
)
|
|||||
Segment EBITDA
(1)
|
|
$
|
32,487
|
|
|
$
|
12,840
|
|
|
$
|
9,809
|
|
|
$
|
(9,925
|
)
|
|
$
|
45,211
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Six months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from operations
|
|
$
|
72,790
|
|
|
$
|
17,456
|
|
|
$
|
16,412
|
|
|
$
|
(18,929
|
)
|
|
$
|
87,729
|
|
Depreciation and amortization
|
|
3,941
|
|
|
9,729
|
|
|
2,513
|
|
|
901
|
|
|
17,084
|
|
|||||
Other income (expense)
|
|
(12
|
)
|
|
(348
|
)
|
|
—
|
|
|
50
|
|
|
(310
|
)
|
|||||
Segment EBITDA
(1)
|
|
$
|
76,719
|
|
|
$
|
26,837
|
|
|
$
|
18,925
|
|
|
$
|
(17,978
|
)
|
|
$
|
104,503
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Six months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from operations
|
|
$
|
60,243
|
|
|
$
|
15,629
|
|
|
$
|
12,803
|
|
|
$
|
(17,370
|
)
|
|
$
|
71,305
|
|
Depreciation and amortization
|
|
4,284
|
|
|
7,684
|
|
|
3,101
|
|
|
776
|
|
|
15,845
|
|
|||||
Other income (expense)
|
|
(8
|
)
|
|
220
|
|
|
—
|
|
|
(463
|
)
|
|
(251
|
)
|
|||||
Segment EBITDA
(1)
|
|
$
|
64,519
|
|
|
$
|
23,533
|
|
|
$
|
15,904
|
|
|
$
|
(17,057
|
)
|
|
$
|
86,899
|
|
(1)
|
Total Segment EBITDA is equal to EBITDA, which is a metric that is not presented in accordance with U.S. GAAP. Refer to “—Non-GAAP Financial Measures” for a definition of EBITDA and a reconciliation to net income, the most directly comparable U.S. GAAP measure.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Franchisee-owned stores:
|
|
|
|
|
|
|
|
|
||||
Stores operated at beginning of period
|
|
1,497
|
|
|
1,309
|
|
|
1,456
|
|
|
1,255
|
|
New stores opened
|
|
44
|
|
|
37
|
|
|
91
|
|
|
91
|
|
Stores debranded, sold or consolidated
(1)
|
|
(1
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
(1
|
)
|
Stores operated at end of period
|
|
1,540
|
|
|
1,345
|
|
|
1,540
|
|
|
1,345
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate-owned stores:
|
|
|
|
|
|
|
|
|
||||
Stores operated at beginning of period
|
|
68
|
|
|
58
|
|
|
62
|
|
|
58
|
|
New stores opened
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Stores acquired from franchisees
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
Stores operated at end of period
|
|
68
|
|
|
58
|
|
|
68
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
||||
Total stores:
|
|
|
|
|
|
|
|
|
||||
Stores operated at beginning of period
|
|
1,565
|
|
|
1,367
|
|
|
1,518
|
|
|
1,313
|
|
New stores opened
|
|
44
|
|
|
37
|
|
|
91
|
|
|
91
|
|
Stores acquired, debranded, sold or consolidated
(1)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Stores operated at end of period
|
|
1,608
|
|
|
1,403
|
|
|
1,608
|
|
|
1,403
|
|
(1)
|
The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
|
•
|
the number of stores that have been in operation for more than
12
months;
|
•
|
the percentage mix of PF Black Card and standard memberships in any period;
|
•
|
growth in total net memberships per store;
|
•
|
consumer recognition of our brand and our ability to respond to changing consumer preferences;
|
•
|
overall economic trends, particularly those related to consumer spending;
|
•
|
our and our franchisees’ ability to operate stores effectively and efficiently to meet consumer expectations;
|
•
|
marketing and promotional efforts;
|
•
|
local competition;
|
•
|
trade area dynamics; and
|
•
|
opening of new stores in the vicinity of existing locations.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||
Same store sales data
|
|
|
|
|
|
|
|
|
|
|
|
||
Same store sales growth:
|
|
|
|
|
|
|
|
|
|
|
|
||
Franchisee-owned stores
|
|
10.4
|
%
|
|
9.3
|
%
|
|
10.8
|
%
|
|
10.3
|
%
|
|
Corporate-owned stores
|
|
5.7
|
%
|
|
4.3
|
%
|
|
5.4
|
%
|
|
4.4
|
%
|
|
Total stores
|
|
10.2
|
%
|
|
9.0
|
%
|
|
10.6
|
%
|
|
10.0
|
%
|
|
Number of stores in same store sales base:
|
|
|
|
|
|
|
|
|
|
||||
Franchisee-owned stores
|
|
1,328
|
|
|
1,138
|
|
|
1,328
|
|
|
1,138
|
|
|
Corporate-owned stores
|
|
58
|
|
|
58
|
|
|
58
|
|
|
58
|
|
|
Total stores
|
|
1,392
|
|
|
1,196
|
|
|
1,392
|
|
|
1,196
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
30,418
|
|
|
$
|
18,004
|
|
|
$
|
53,912
|
|
|
$
|
35,870
|
|
Interest expense, net
|
|
8,628
|
|
|
9,028
|
|
|
17,361
|
|
|
17,791
|
|
||||
Provision for income taxes
|
|
9,263
|
|
|
10,285
|
|
|
16,146
|
|
|
17,393
|
|
||||
Depreciation and amortization
|
|
8,619
|
|
|
7,894
|
|
|
17,084
|
|
|
15,845
|
|
||||
EBITDA
|
|
$
|
56,928
|
|
|
$
|
45,211
|
|
|
$
|
104,503
|
|
|
$
|
86,899
|
|
Purchase accounting adjustments-revenue
(1)
|
|
(30
|
)
|
|
444
|
|
|
414
|
|
|
780
|
|
||||
Purchase accounting adjustments-rent
(2)
|
|
168
|
|
|
191
|
|
|
350
|
|
|
387
|
|
||||
Loss on reacquired franchise rights
(3)
|
|
—
|
|
|
—
|
|
|
350
|
|
|
—
|
|
||||
Transaction fees
(4)
|
|
—
|
|
|
1,021
|
|
|
—
|
|
|
1,021
|
|
||||
Stock offering-related costs
(5)
|
|
—
|
|
|
329
|
|
|
—
|
|
|
937
|
|
||||
Severance costs
(6)
|
|
352
|
|
|
—
|
|
|
352
|
|
|
—
|
|
||||
Pre-opening costs
(7)
|
|
461
|
|
|
—
|
|
|
483
|
|
|
—
|
|
||||
Early lease termination costs
(8)
|
|
—
|
|
|
719
|
|
|
—
|
|
|
719
|
|
||||
Other
(9)
|
|
502
|
|
|
—
|
|
|
702
|
|
|
(573
|
)
|
||||
Adjusted EBITDA
|
|
$
|
58,381
|
|
|
$
|
47,915
|
|
|
$
|
107,154
|
|
|
$
|
90,170
|
|
(1)
|
Represents the impact of revenue-related purchase accounting adjustments associated with the 2012 Acquisition. At the time of the 2012 Acquisition, the Company maintained a deferred revenue account, which consisted of deferred ADA fees, deferred franchise fees, and deferred enrollment fees that the Company billed and collected up front but recognizes for U.S. GAAP purposes at a later date. In connection with the 2012 Acquisition, it was determined that the carrying amount of deferred revenue was greater than the fair value assessed in accordance with ASC 805—Business Combinations, which resulted in a write-down of the carrying value of the deferred revenue balance upon application of acquisition push-down accounting under ASC 805. These amounts represent the additional revenue that would have been recognized in these periods if the write-down to deferred revenue had not occurred in connection with the application of acquisition pushdown accounting.
|
(2)
|
Represents the impact of rent-related purchase accounting adjustments. In accordance with guidance in ASC 805 – Business Combinations, in connection with the 2012 Acquisition, the Company’s deferred rent liability was required to be written off as of the acquisition date and rent was recorded on a straight-line basis from the acquisition date through the end of the lease term. This resulted in higher overall recorded rent expense each period than would have otherwise been recorded had the deferred rent liability not been written off as a result of the acquisition push down accounting applied in accordance with ASC 805. Adjustments of $77, $104, $167 and $207 in the
three and six
months ended
June 30, 2018
and
2017
, respectively, reflect the difference between the higher rent expense recorded in accordance with U.S. GAAP since the acquisition and the rent expense that would have been recorded had the 2012 Acquisition not occurred. Adjustments of $92, $88, $183 and $181 in the
three and six
months ended
June 30, 2018
and
2017
, respectively, are due to the amortization of favorable and unfavorable lease intangible assets. All of the rent related purchase accounting adjustments are adjustments to rent expense which is included in store operations on our consolidated statements of operations.
|
(3)
|
Represents the impact of a one-time, non-cash loss recorded in accordance with ASC 805 - Business Combinations related to our acquisition of six franchisee-owned stores on January 1, 2018. The loss recorded under GAAP represents the difference between the fair value of the reacquired franchise rights and the contractual terms of the reacquired franchise rights and is included in other (gain) loss on our consolidated statements of operations.
|
(4)
|
Represents transaction fees and expenses related to the amendment of our credit facilities.
|
(5)
|
Represents legal, accounting and other costs incurred in connection with offerings of the Company’s Class A common stock.
|
(6)
|
Represents severance expense recorded in connection with an equity award modification.
|
(7)
|
Represents costs associated with new corporate-owned stores incurred prior to the store opening, including payroll-related costs, rent and occupancy expenses, marketing and other store operating supply expenses.
|
(8)
|
Represents charges and expenses incurred in connection with the early termination of the lease for our previous headquarters.
|
(9)
|
Represents certain other charges and gains that we do not believe reflect our underlying business performance. In the
three and six
months ended
June 30, 2018
, this amount includes $342 related to the reversal of a tax indemnification receivable. In the
six months ended
June 30, 2018
and
2017
, this amount includes a gain of $354 and $541, respectively, related to the adjustment of our tax benefit arrangements primarily due to changes in our effective tax rate. Additionally, in the
six months ended
June 30, 2018
, this amount includes expense of $590 related to the write off of certain assets that were being tested for potential use across the system.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(in thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
|
$
|
30,418
|
|
|
$
|
18,004
|
|
|
$
|
53,912
|
|
|
$
|
35,870
|
|
Provision for income taxes, as reported
|
|
9,263
|
|
|
10,285
|
|
|
16,146
|
|
|
17,393
|
|
||||
Purchase accounting adjustments-revenue
(1)
|
|
(30
|
)
|
|
444
|
|
|
414
|
|
|
780
|
|
||||
Purchase accounting adjustments-rent
(2)
|
|
168
|
|
|
191
|
|
|
350
|
|
|
387
|
|
||||
Loss on reacquired franchise rights
(3)
|
|
—
|
|
|
—
|
|
|
350
|
|
|
—
|
|
||||
Transaction fees
(4)
|
|
—
|
|
|
1,021
|
|
|
—
|
|
|
1,021
|
|
||||
Stock offering-related costs
(5)
|
|
—
|
|
|
329
|
|
|
—
|
|
|
937
|
|
||||
Severance costs
(6)
|
|
352
|
|
|
—
|
|
|
352
|
|
|
—
|
|
||||
Pre-opening costs
(7)
|
|
461
|
|
|
—
|
|
|
483
|
|
|
—
|
|
||||
Early lease termination costs
(8)
|
|
—
|
|
|
912
|
|
|
—
|
|
|
1,143
|
|
||||
Other
(9)
|
|
502
|
|
|
—
|
|
|
702
|
|
|
(573
|
)
|
||||
Purchase accounting amortization
(10)
|
|
3,920
|
|
|
4,622
|
|
|
7,841
|
|
|
9,244
|
|
||||
Adjusted income before income taxes
|
|
$
|
45,054
|
|
|
$
|
35,808
|
|
|
$
|
80,550
|
|
|
$
|
66,202
|
|
Adjusted income taxes
(11)
|
|
11,849
|
|
|
14,144
|
|
|
21,185
|
|
|
26,150
|
|
||||
Adjusted net income
|
|
$
|
33,205
|
|
|
$
|
21,664
|
|
|
$
|
59,365
|
|
|
$
|
40,052
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income per share, diluted
|
|
$
|
0.34
|
|
|
$
|
0.22
|
|
|
$
|
0.60
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted weighted-average shares outstanding
(12)
|
|
98,810
|
|
|
98,391
|
|
|
98,760
|
|
|
98,459
|
|
(1)
|
Represents the impact of revenue-related purchase accounting adjustments associated with the 2012 Acquisition. At the time of the 2012 Acquisition, the Company maintained a deferred revenue account, which consisted of deferred ADA fees, deferred franchise fees, and deferred enrollment fees that the Company billed and collected up front but recognizes for U.S. GAAP purposes at a later date. In connection with the 2012 Acquisition, it was determined that the carrying amount of deferred revenue was greater than the fair value assessed in accordance with ASC 805—Business Combinations, which resulted in a write-down of the carrying value of the deferred revenue balance upon application of acquisition push-down accounting under ASC 805. These amounts represent the additional revenue that would have been recognized in these
|
(2)
|
Represents the impact of rent-related purchase accounting adjustments. In accordance with guidance in ASC 805 – Business Combinations, in connection with the 2012 Acquisition, the Company’s deferred rent liability was required to be written off as of the acquisition date and rent was recorded on a straight-line basis from the acquisition date through the end of the lease term. This resulted in higher overall recorded rent expense each period than would have otherwise been recorded had the deferred rent liability not been written off as a result of the acquisition push down accounting applied in accordance with ASC 805. Adjustments of $77, $104, $167 and $207 in the
three and six
months ended
June 30, 2018
and
2017
, respectively, reflect the difference between the higher rent expense recorded in accordance with U.S. GAAP since the acquisition and the rent expense that would have been recorded had the 2012 Acquisition not occurred. Adjustments of $92, $88, $183 and $181 for the
three and six
months ended
June 30, 2018
and
2017
, respectively, are due to the amortization of favorable and unfavorable lease intangible assets. All of the rent related purchase accounting adjustments are adjustments to rent expense which is included in store operations on our consolidated statements of operations.
|
(3)
|
Represents the impact of a one-time, non-cash loss recorded in accordance with ASC 805 - Business Combinations related to our acquisition of six franchisee-owned stores on January 1, 2018. The loss recorded under GAAP represents the difference between the fair value of the reacquired franchise rights and the contractual terms of the reacquired franchise rights and is included in other (gain) loss on our consolidated statements of operations.
|
(4)
|
Represents transaction fees and expenses related to the amendment of our credit facilities
|
(5)
|
Represents legal, accounting and other costs incurred in connection with offerings of the Company’s Class A common stock.
|
(6)
|
Represents severance expense recorded in connection with an equity award modification.
|
(7)
|
Represents costs associated with new corporate-owned stores incurred prior to the store opening, including payroll-related costs, rent and occupancy expenses, marketing and other store operating supply expenses.
|
(8)
|
Represents charges and expenses incurred in connection with the early termination of the lease for our previous headquarters. In the three and
six months ended
June 30, 2017
, this amount includes expense of $193 and $424, respectively, related to accelerated depreciation expense taken on our headquarters in preparation for moving to a new building.
|
(9)
|
Represents certain other charges and gains that we do not believe reflect our underlying business performance. In the
three and six
months ended
June 30, 2018
, this amount includes $342 related to the reversal of a tax indemnification receivable. In the
six months ended
June 30, 2018
and
2017
, this amount includes a gain of $354 and $541, respectively, related to the adjustment of our tax benefit arrangements primarily due to changes in our effective tax rate. Additionally, in the
six months ended
June 30, 2018
, this amount includes expense of $590 related to the write off of certain assets that were being tested for potential use across the system.
|
(10)
|
Includes $3,096, $4,086, $6,192 and $8,172 of amortization of intangible assets, other than favorable leases, for the
three and six
months ended
June 30, 2018
and
2017
, respectively, recorded in connection with the 2012 Acquisition, and $825, $536, $1,650 and $1,072 of amortization of intangible assets for the three months ended
June 30, 2018
and
2017
, respectively, recorded in connection with historical acquisitions of franchisee-owned stores. The adjustment represents the amount of actual non-cash amortization expense recorded, in accordance with U.S. GAAP, in each period.
|
(11)
|
Represents corporate income taxes at an assumed effective tax rate of 26.3% and 39.5% for the
three and six
months ended
June 30, 2018
and
2017
, respectively, applied to adjusted income before income taxes.
|
(12)
|
Assumes the full exchange of all outstanding Holdings Units and corresponding shares of Class B common stock for shares of Class A common stock of Planet Fitness, Inc.
|
|
|
For the three months ended
June 30, 2018 |
|
For the three months ended
June 30, 2017 |
||||||||||||||||||
|
|
Net income
|
|
Weighted Average Shares
|
|
Net income per share, diluted
|
|
Net income
|
|
Weighted Average Shares
|
|
Net income per share, diluted
|
||||||||||
Net income attributable to Planet Fitness, Inc.
(1)
|
|
$
|
25,874
|
|
|
88,105
|
|
|
$
|
0.29
|
|
|
$
|
12,412
|
|
|
79,193
|
|
|
$
|
0.16
|
|
Assumed exchange of shares
(2)
|
|
4,544
|
|
|
10,705
|
|
|
|
|
5,592
|
|
|
19,198
|
|
|
|
||||||
Net Income
|
|
30,418
|
|
|
|
|
|
|
18,004
|
|
|
|
|
|
||||||||
Adjustments to arrive at adjusted income
before income taxes
(3)
|
|
14,636
|
|
|
|
|
|
|
17,804
|
|
|
|
|
|
||||||||
Adjusted income before income taxes
|
|
45,054
|
|
|
|
|
|
|
|
35,808
|
|
|
|
|
|
|||||||
Adjusted income taxes
(4)
|
|
11,849
|
|
|
|
|
|
|
14,144
|
|
|
|
|
|
||||||||
Adjusted Net Income
|
|
$
|
33,205
|
|
|
98,810
|
|
|
$
|
0.34
|
|
|
$
|
21,664
|
|
|
98,391
|
|
|
$
|
0.22
|
|
(1)
|
Represents net income attributable to Planet Fitness, Inc. and the associated weighted average shares, diluted of Class A common stock outstanding.
|
(2)
|
Assumes the full exchange of all outstanding Holdings Units and corresponding shares of Class B common stock for shares of Class A common stock of Planet Fitness, Inc. Also assumes the addition of net income attributable to non-controlling interests corresponding with the assumed exchange of Holdings Units and Class B common shares for shares of Class A common stock.
|
(3)
|
Represents the total impact of all adjustments identified in the adjusted net income table above to arrive at adjusted income before income taxes.
|
(4)
|
Represents corporate income taxes at an assumed effective tax rate of 26.3% and 39.5% for the
three and six
months ended
June 30, 2018
and
2017
, respectively, applied to adjusted income before income taxes.
|
|
|
For the six months ended
June 30, 2018 |
|
For the six months ended
June 30, 2017 |
||||||||||||||||||
|
|
Net income
|
|
Weighted Average Shares
|
|
Net income per share, diluted
|
|
Net income
|
|
Weighted Average Shares
|
|
Net income per share, diluted
|
||||||||||
Net income attributable to Planet Fitness, Inc.
(1)
|
|
$
|
45,755
|
|
|
87,931
|
|
|
$
|
0.52
|
|
|
$
|
21,254
|
|
|
71,713
|
|
|
$
|
0.30
|
|
Assumed exchange of shares
(2)
|
|
8,157
|
|
|
10,829
|
|
|
|
|
|
14,616
|
|
|
26,746
|
|
|
|
|
||||
Net Income
|
|
53,912
|
|
|
|
|
|
|
35,870
|
|
|
|
|
|
||||||||
Adjustments to arrive at adjusted income
before income taxes (3) |
|
26,638
|
|
|
|
|
|
|
30,332
|
|
|
|
|
|
||||||||
Adjusted income before income taxes
|
|
80,550
|
|
|
|
|
|
|
66,202
|
|
|
|
|
|
||||||||
Adjusted income taxes
(4)
|
|
21,185
|
|
|
|
|
|
|
26,150
|
|
|
|
|
|
||||||||
Adjusted Net Income
|
|
$
|
59,365
|
|
|
98,760
|
|
|
$
|
0.60
|
|
|
$
|
40,052
|
|
|
98,459
|
|
|
$
|
0.41
|
|
(1)
|
Represents net income attributable to Planet Fitness, Inc. and the associated weighted average shares, diluted of Class A common stock outstanding.
|
(2)
|
Assumes the full exchange of all outstanding Holdings Units and corresponding shares of Class B common stock for shares of Class A common stock of Planet Fitness, Inc. Also assumes the addition of net income attributable to non-controlling interests corresponding with the assumed exchange of Holdings Units and Class B common shares for shares of Class A common stock.
|
(3)
|
Represents the total impact of all adjustments identified in the adjusted net income table above to arrive at adjusted income before income taxes.
|
(4)
|
Represents corporate income taxes at an assumed effective tax rate of 26.3% and 39.5% for the
three and six
months ended
June 30, 2018
and
2017
, respectively, applied to adjusted income before income taxes.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||
Franchise revenue
|
|
32.3
|
%
|
|
30.6
|
%
|
|
33.4
|
%
|
|
31.8
|
%
|
Commission income
|
|
1.1
|
%
|
|
4.6
|
%
|
|
1.3
|
%
|
|
5.8
|
%
|
National advertising fund revenue
|
|
7.9
|
%
|
|
—
|
%
|
|
8.3
|
%
|
|
—
|
%
|
Franchise segment
|
|
41.3
|
%
|
|
35.2
|
%
|
|
43.0
|
%
|
|
37.6
|
%
|
Corporate-owned stores
|
|
24.4
|
%
|
|
26.4
|
%
|
|
25.6
|
%
|
|
27.9
|
%
|
Equipment
|
|
34.3
|
%
|
|
38.4
|
%
|
|
31.4
|
%
|
|
34.5
|
%
|
Total revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||
Cost of revenue
|
|
26.1
|
%
|
|
29.3
|
%
|
|
24.1
|
%
|
|
26.5
|
%
|
Store operations
|
|
12.8
|
%
|
|
13.6
|
%
|
|
13.9
|
%
|
|
15.0
|
%
|
Selling, general and administrative
|
|
12.2
|
%
|
|
13.8
|
%
|
|
13.3
|
%
|
|
14.4
|
%
|
National advertising fund expense
|
|
7.9
|
%
|
|
—
|
%
|
|
8.3
|
%
|
|
—
|
%
|
Depreciation and amortization
|
|
6.1
|
%
|
|
7.4
|
%
|
|
6.5
|
%
|
|
8.0
|
%
|
Other loss (gain)
|
|
—
|
%
|
|
0.3
|
%
|
|
0.4
|
%
|
|
0.2
|
%
|
Total operating costs and expenses
|
|
65.1
|
%
|
|
64.4
|
%
|
|
66.5
|
%
|
|
64.1
|
%
|
Income from operations
|
|
34.9
|
%
|
|
35.6
|
%
|
|
33.5
|
%
|
|
35.9
|
%
|
Other income (expense), net:
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
|
(6.1
|
)%
|
|
(8.4
|
)%
|
|
(6.6
|
)%
|
|
(9.0
|
)%
|
Other expense
|
|
(0.4
|
)%
|
|
(0.9
|
)%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
Total other expense, net
|
|
(6.5
|
)%
|
|
(9.3
|
)%
|
|
(6.7
|
)%
|
|
(9.1
|
)%
|
Income before income taxes
|
|
28.4
|
%
|
|
26.3
|
%
|
|
26.8
|
%
|
|
26.8
|
%
|
Provision for income taxes
|
|
6.6
|
%
|
|
9.6
|
%
|
|
6.2
|
%
|
|
8.8
|
%
|
Net income
|
|
21.8
|
%
|
|
16.7
|
%
|
|
20.6
|
%
|
|
18.0
|
%
|
Less net income attributable to non-controlling interests
|
|
3.2
|
%
|
|
5.2
|
%
|
|
3.1
|
%
|
|
7.4
|
%
|
Net income attributable to Planet Fitness, Inc.
|
|
18.6
|
%
|
|
11.5
|
%
|
|
17.5
|
%
|
|
10.6
|
%
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|||||||
Franchise revenue
|
|
$
|
45,417
|
|
|
$
|
32,791
|
|
|
$
|
87,579
|
|
|
$
|
63,072
|
|
Commission income
|
|
1,575
|
|
|
5,003
|
|
|
3,563
|
|
|
11,519
|
|
||||
National advertising fund revenue
|
|
11,158
|
|
|
—
|
|
|
21,620
|
|
|
—
|
|
||||
Franchise segment
|
|
58,150
|
|
|
37,794
|
|
|
112,762
|
|
|
74,591
|
|
||||
Corporate-owned stores
|
|
34,252
|
|
|
28,285
|
|
|
66,959
|
|
|
55,326
|
|
||||
Equipment
|
|
48,148
|
|
|
41,237
|
|
|
82,161
|
|
|
68,501
|
|
||||
Total revenue
|
|
140,550
|
|
|
107,316
|
|
|
261,882
|
|
|
198,418
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
|
36,744
|
|
|
31,452
|
|
|
63,244
|
|
|
52,576
|
|
||||
Store operations
|
|
18,047
|
|
|
14,604
|
|
|
36,403
|
|
|
29,788
|
|
||||
Selling, general and administrative
|
|
17,210
|
|
|
14,768
|
|
|
34,831
|
|
|
28,588
|
|
||||
National advertising fund expense
|
|
11,158
|
|
|
—
|
|
|
21,620
|
|
|
—
|
|
||||
Depreciation and amortization
|
|
8,619
|
|
|
7,894
|
|
|
17,084
|
|
|
15,845
|
|
||||
Other loss (gain)
|
|
(39
|
)
|
|
348
|
|
|
971
|
|
|
316
|
|
||||
Total operating costs and expenses
|
|
91,739
|
|
|
69,066
|
|
|
174,153
|
|
|
127,113
|
|
||||
Income from operations
|
|
48,811
|
|
|
38,250
|
|
|
87,729
|
|
|
71,305
|
|
||||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
|
(8,628
|
)
|
|
(9,028
|
)
|
|
(17,361
|
)
|
|
(17,791
|
)
|
||||
Other expense
|
|
(502
|
)
|
|
(933
|
)
|
|
(310
|
)
|
|
(251
|
)
|
||||
Total other expense, net
|
|
(9,130
|
)
|
|
(9,961
|
)
|
|
(17,671
|
)
|
|
(18,042
|
)
|
||||
Income before income taxes
|
|
39,681
|
|
|
28,289
|
|
|
70,058
|
|
|
53,263
|
|
||||
Provision for income taxes
|
|
9,263
|
|
|
10,285
|
|
|
16,146
|
|
|
17,393
|
|
||||
Net income
|
|
30,418
|
|
|
18,004
|
|
|
53,912
|
|
|
35,870
|
|
||||
Less net income attributable to non-controlling interests
|
|
4,544
|
|
|
5,592
|
|
|
8,157
|
|
|
14,616
|
|
||||
Net income attributable to Planet Fitness, Inc.
|
|
$
|
25,874
|
|
|
$
|
12,412
|
|
|
$
|
45,755
|
|
|
$
|
21,254
|
|
|
|
Six months ended June 30,
|
||||||
(
in thousands
)
|
|
2018
|
|
2017
|
||||
Net cash (used in) provided by:
|
|
|
|
|
|
|
||
Operating activities
|
|
$
|
78,494
|
|
|
$
|
62,998
|
|
Investing activities
|
|
(36,505
|
)
|
|
(14,127
|
)
|
||
Financing activities
|
|
(6,856
|
)
|
|
(10,941
|
)
|
||
Effect of foreign exchange rates on cash
|
|
(429
|
)
|
|
198
|
|
||
Net increase in cash
|
|
$
|
34,704
|
|
|
$
|
38,128
|
|
|
|
Six months ended June 30,
|
||||||
(
in thousands
)
|
|
2018
|
|
2017
|
||||
New corporate-owned stores and corporate-owned stores not yet opened
|
|
$
|
2,458
|
|
|
$
|
—
|
|
Existing corporate-owned stores
|
|
4,090
|
|
|
8,297
|
|
||
Information systems
|
|
1,516
|
|
|
384
|
|
||
Corporate and all other
|
|
72
|
|
|
5,446
|
|
||
Total capital expenditures
|
|
$
|
8,136
|
|
|
$
|
14,127
|
|
•
|
resulting in an event of default if the Company’s subsidiaries fail to comply with the financial and other restrictive covenants contained in debt agreements, which event of default could result in all of the Company’s subsidiaries’ debt becoming immediately due and payable;
|
•
|
reducing the availability of the Company’s cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting the Company’s ability to obtain additional financing for these purposes;
|
•
|
limiting the Company’s flexibility in planning for, or reacting to, and increasing its vulnerability to, changes in the Company’s business, the industry in which it operates and the general economy;
|
•
|
placing the Company at a competitive disadvantage compared to its competitors that are less leveraged; and
|
•
|
subjecting the Company to the risk of increased sensitivity to interest rate increases on indebtedness with variable interest rates.
|
•
|
incur or guarantee additional indebtedness;
|
•
|
sell certain assets;
|
•
|
create or incur liens on certain assets to secure indebtedness; or
|
•
|
consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.
|
|
|
|
|
Description of Exhibit Incorporated
|
||||||||
|
|
|
|
Herein by Reference
|
||||||||
Exhibit
|
|
|
|
|
|
|
|
|
|
Exhibit
|
|
Filed
|
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Filing Date
|
|
Number
|
|
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
Interactive Data Files pursuant to Rule 405 of regulation S-T (XBRL)
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
Planet Fitness, Inc.
|
|
|
|
|
(Registrant)
|
|
|
|
||
Date: August 9, 2018
|
|
|
|
/s/ Dorvin Lively
|
|
|
|
|
Dorvin Lively
|
|
|
|
|
President and Chief Financial Officer
(On behalf of the Registrant and as Principal Financial Officer)
|
1 Year Planet Fitness Chart |
1 Month Planet Fitness Chart |
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