Bally Total Fitness Files Form 12b-25 With SEC Concerning Late Filing of 2006 Form 10-K
15 Marzo 2007 - 3:43PM
PR Newswire (US)
-- Updates Debt and Liquidity Positions CHICAGO, March 15
/PRNewswire-FirstCall/ -- Bally Total Fitness (NYSE:BFT), the
largest publicly-traded full-service commercial North American
fitness center operator, announced today that it has filed a notice
with the Securities and Exchange Commission on Form 12b-25
indicating that it is unable to file its Annual Report on Form 10-K
for the year ended December 31, 2006 by the March 16, 2007 deadline
without unreasonable effort and expense because it has not yet
completed the preparation of its financial statements for the year
ended December 31, 2006, by the March 16, 2007 deadline. The
Company is not yet able to determine when it will be able to file
this report. Bally indicated that in determining the amount of its
liability for deferred revenue, the Company estimates membership
life for its members at the time that members enter into membership
agreements based on historical trends of actual attrition. The
Company has identified certain errors in its historical member data
used to create its estimates of membership life for those members
whose memberships are expected to extend beyond seven years. The
Company is also evaluating the assumptions it uses in updating
these attrition estimates throughout the memberships' terms. The
Company is evaluating the impact that these data errors and the
assumptions relating to attrition estimates will have on its
estimates of membership life and its estimate of deferred revenue
on previously reported annual and interim consolidated financial
statements as well as interim consolidated financial statements and
interim consolidated financial information for 2006. In its 12b-25
filing, Bally stated that it expects to report a loss from
continuing operations for 2006, and that it expects cash
collections of membership revenues in 2006 to be approximately 3%,
or more than $25 million, lower than cash collections in 2005. The
trend of lower cash collections has continued in the first eleven
weeks of 2007 and is expected to continue through at least the
remainder of 2007. These unfavorable comparisons and trends reflect
shortfalls in new member additions and the continuing effects on
cash collections associated with the Company's 2005 transition to
its Build Your Own Membership ("BYOM") model, related changes in
the Company's sales approach and club operating model, and
heightened competition in the Company's key markets. While the
changes implemented to the BYOM model since the third quarter of
2006 have led to some improvement in certain key operating
parameters, this progress has not been sufficient to offset the
impact of lower cash collections from BYOM members added in 2005
and early 2006. Bally reported that its results of operations for
2006 are still being finalized by management, and that it expected
certain expenses to be higher in 2006 compared to 2005. Those
higher expenses include an impairment charge estimated at $35 to
$37 million and associated with the carrying value of certain
long-lived assets, primarily leasehold improvements to certain
fitness clubs. Interest expense increased approximately 20% (or
approximately $16 million) in 2006, primarily due to the
amortization of deferred financing costs. On March 14, 2007, the
Company's liquidity was approximately $45 million. The Company's
availability under its amended and restated Credit Agreement,
subject to compliance with the terms thereof, was approximately
$2.1 million. Further, as of March 14, 2007, the Company had
approximately $827 million in debt outstanding, which includes
approximately $19 million in letters of credit. Interest payments
on the Company's public notes are due in April, July and October
2007, along with the maturity of the $300 million of 9-7/8% Senior
Subordinated Notes in October 2007. The Company is exploring a
broad range of options to restructure its debt obligations. If the
Company is unable to restructure that debt, is unable or determines
not to make the interest payments, or otherwise determines that its
financial condition and obligations necessitate a broader
restructuring, it may seek to reorganize its operations under
Chapter 11. The Company has engaged Jefferies & Company, Inc.
as its financial advisor. The Company's inability to file its 2006
Form 10-K by March 16, 2007 will be a default under its public note
indentures. Subject to certain notice provisions, events of default
resulting from the Company's failure to file and deliver 2006
audited financial statements, or make the interest payment under
its Senior Subordinated Notes on April 16, 2007, could ultimately
result in certain debt obligations becoming immediately due and
payable. The Company also said that management is assessing the
effectiveness of its internal control over financial reporting, and
has identified material weaknesses in the internal control over
financial reporting as of December 31, 2006. Bally's independent
auditor, KPMG LLP, has informed the Company's Audit Committee that,
in the absence of further information in support of the Company's
ability to meet its obligations as they become due, comply with
certain debt covenants and timely file its financial statements,
its auditors' report on the Company's consolidated financial
statements will include an explanatory paragraph indicating that
substantial doubt exists as to the Company's ability to continue as
a going concern. Further, the Company also expects that the
independent auditor's report on internal control over financial
reporting will again include an adverse opinion on the
effectiveness of its internal controls over financial reporting,
consistent with management's conclusion that material weaknesses
exist. Additional information regarding the Company's financial
position, its status as a listed Company on the New York Stock
Exchange and other matters are detailed in the Company's Form
12b-25 filing, which can be accessed at
http://www.ballyfitness.com/ and on the EDGAR section of the SEC's
website at http://www.sec.gov/. Investor Conference Call Management
will hold a conference call for investors and members of the
financial community on March 15, 2007, at 4:00 p.m.. Central
Daylight Time. In order to participate on the conference call,
please dial 866-356-3095 international 617-597-5391, at least 15
minutes before the start of the call. The participant passcode is
86084932. The call can also be accessed live and in archive on the
Company's website, http://www.ballyfitness.com/. About Bally Total
Fitness Bally Total Fitness is among the largest commercial
operators of fitness centers in the U.S., with nearly 390
facilities located in 29 states, Mexico, Canada, Korea, China and
the Caribbean under the Bally Total Fitness(R), Bally Sports
Clubs(R) and Sports Clubs of Canada (R) brands. Bally offers a
unique platform for distribution of a wide range of products and
services targeted to active, fitness-conscious adult consumers.
Forward-Looking Statements Forward-looking statements in this press
release including, without limitation, statements relating to (i)
the Company's plans, strategies, objectives, expectations,
intentions, and adequacy of resources, (ii) the Company's
expectation that its strategies will enable it to create economic
value, (iii) the determination by management of the Company's
deferred revenue liability at December 31, 2006 and whether or not
restatement of prior periods is required, (iv) the completion by
the Company's independent auditor of the audit of the Company's
financial statements, (v) the potential effect of any adjustments
identified during the audit process and (vi) the anticipated future
performance of the Company's business are made pursuant to the safe
harbor provisions of Section 21E of the Securities Exchange Act of
1934. Statements that are not historical facts, including
statements about the Company's beliefs and expectations, are
forward-looking statements. These statements are based on beliefs
and assumptions by the Company's management, and on information
currently available to management. Forward-looking statements speak
only as of the date they are made, and the Company undertakes no
obligation to update publicly any of them in light of new
information or future events. In addition, these forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement. These factors include, among others: --
the ability to satisfy debt and debt-related obligations as
interest becomes payable or principal becomes due, including the
substantial interest payable on the Company's 9-7/8% Senior
Subordinated Notes due 2007 (the "Senior Subordinated Notes") on
April 16, 2007, and the Company's 10-1/2% Senior Notes due 2011
(the "Senior Notes" and, together with the Senior Subordinated
Notes, the "Notes") on July 15, 2007; the $300 million aggregate
principal amount payable at maturity of the Senior Subordinated
Notes on October 15, 2007; and the approximately $282 million
aggregate obligations under the Company's Amended and Restated
Credit Agreement (the "New Facility") on October 1, 2007, which
will terminate if the Senior Subordinated Notes are not refinanced
or restructured by that date; -- a determination by the Company not
to make interest payments due in 2007 in respect of either or both
classes of the Notes; -- the ability to maintain existing or obtain
new sources of debt or equity financing, on acceptable terms or at
all, to satisfy the Company's cash needs and obligations, and the
outcome of the Company's exploration of restructuring and
refinancing alternatives; -- the response of creditors, customers
and suppliers, including financial intermediaries such as credit
card payment processors, to the filing of the company's 12b-25 and
the matters discussed therein, particularly as those matters relate
to liquidity, the uncertain timing of the filing by the Company of
its 2006 Form 10-K and the presence of an explanatory paragraph in
the audit report on the Company's consolidated financial statements
indicating that substantial doubt exists as to the Company's
ability to continue as a going concern and other actions the
Company may take to restructure or reorganize its obligations,
including a reorganization of its operations under Chapter 11 of
the U.S. Bankruptcy Code; -- the ability to comply with, or obtain
waivers under, the Company's loan agreements and indentures; -- the
effect of material weaknesses in internal control over financial
reporting on the Company's ability to prepare financial statements
and file timely reports with the Securities and Exchange Commission
(the "SEC"); -- the success of operating initiatives, advertising
and promotional efforts to attract and retain members; --
competition, including the ongoing effect of increased competition
from well-financed competitors and the Company's limited ability to
invest in capital improvements due to its constrained liquidity and
overall financial condition; -- the acceptance of the Company's
product and service offerings; -- changes in business strategy or
plans; -- the refusal of the Company's suppliers to provide key
products and services, or any requirement by suppliers that the
Company change the terms and conditions associated with these
products and services; -- the outcome of SEC and Department of
Justice investigations; -- the existence of adverse publicity or
litigation (including stockholder litigation and insurance
rescission actions), the outcome thereof and the costs and expenses
associated therewith; -- the changes in, or the failure to comply
with, government regulations; -- the ability to attract, retain and
motivate highly skilled employees, including a permanent Chief
Executive Officer; -- the business abilities and judgment of
personnel; -- general economic and business conditions; and --
other factors described in the company's 12b-25, including the risk
factors identified in the periodic reports that the Company has
previously filed with the SEC. DATASOURCE: Bally Total Fitness
CONTACT: Matt Messinger of Bally Total Fitness Holding Corporation,
+1-773-864-6850 Web site: http://www.ballyfitness.com/
Copyright
Foley Trasimene Acquisit... (NYSE:BFT)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Foley Trasimene Acquisit... (NYSE:BFT)
Gráfica de Acción Histórica
De May 2023 a May 2024