IHRSA Index Performance Starts Strong in 2012; Double-digit Increases Recorded in Non-dues Revenue and EBITDAR

BOSTON – July 10, 2012 - The International Health, Racquet & Sportsclub Association (IHRSA) announced results for the IHRSA 2012 First Quarter Index, which provides a snapshot of performance results for the commercial health club industry. For the quarter ending March 31, 2012, the Index posted double-digit percent increases in non-dues revenue and EBITDAR. Overall performance outpaced first quarter 2011 results for 15 leading U.S. health and sports club companies, representing a total of 546 facilities.

 “While the IHRSA Index posted robust performance on all fronts, the most notable improvements were shown in non-dues revenue and EBITDAR,” said Jay Ablondi, IHRSA’s executive vice president of global products.  “Building upon a strong 2011, club operator continued to engage members into utilizing non-dues services, which may have provided some flexibility in managing expenses.”

For the quarter ending March 31, 2012, non-dues revenue climbed by 11.4% relative to the quarter ending March 31, 2011. Same-store clubs also posted an improvement of 4.7% in ancillary revenue. EBITDAR soared by 12.6%, up from a company average of $12.6 million to $14.2 million.

Overall, first quarter 2012 results exceeded first quarter 2011 performance. Total revenue and membership dues revenue for the first quarter of 2012 improved by 8.9% and 7.7%, respectively, relative to the first quarter of 2011. For the quarter ending March 31, 2011, total revenue improved by 6.5%, while membership dues revenue increased by 4.8% in comparison with the first quarter of 2010. EBITDAR improved by 7.1% in the first quarter of 2011 as non-dues revenue improved by 10.2%.

“Now on its eight consecutive quarter of improved performance, the IHRSA Index attests to the strength of the commercial health club industry,” said Ablondi. “Not only are health clubs showing favorable indicators companywide, but also consistent results in same-store facilities.

Same-store revenue improved by 2.6%, while total membership accounts improved by 2.4%. Same-store membership/dues revenue also posted a modest improvement of 1.7%, increasing from $9.6 million to $9.8 million. 

(Please refer to the table at the end of the press release) Note: Data reflects information for 15 leading U.S. health and sports club companies representing 546 facilities. Same-store revenue data reflects clubs that have been in operation for at least two years. Participating companies reported owning/managing an average of 36 facilities (same-store count average of 17 facilities). Data is intended to provide a snapshot of U.S. health club industry performance. However, the results are based on a small sample of companies and care should be taken when making comparisons of these findings to the overall industry-at-large. Industry Insights, Inc. conducted the survey for IHRSA.

EBITDAR: Earnings before interest, taxes, depreciation, amortization and rent.

The "% Change" reflects the percentage change from one quarter to the next in the group's overall mean/average for each variable, and is essentially weighted by the size of companies responding to the survey. As such, the "% Change" presents an indication of the broader group's performance. The "Co. % Change" reflects the median/midpoint percentage change reported by the 15 individual companies. As such, the "Co. % Change" represents the "typical" company's performance where all the participants are weighted equally, regardless of size.

Survey results for the quarter ending March 31, 2012 compared to results from the quarter ending March 31, 2011:

Company Analysis

	Mean	Median	Percent Change (mean)	Company Percent Change (median)
Total Revenue	$40.4 million	$8.3 million	8.9%	5.3%
Total Membership Dues	$28.3 million	$6.2 million	7.7%	2.8%
Total Non-dues revenue	$11.8 million	$3.1 million	11.4%	6.6%
Same-store total revenue	$14 million	$8 million	2.6%	3.2%
Same-store membership dues revenue	$9.8 million	$4.8 million	1.7%	1.0%
Same-store non-dues revenue	$4.2 million	$2.1 million	4.7%	5.6%
EBITDAR	$14.2 million	$2.8 million	12.6%	6.3%

About IHRSA

The International Health, Racquet & Sportsclub Association (IHRSA) is a not-for-profit trade association representing health and fitness facilities, gyms, spas, sports clubs, and suppliers worldwide. IHRSA and its members are dedicated to making the world healthier through regular exercise and fitness promotion. Find an IHRSA club at healthclubs.com.