Health chain 24 Hour Health Worldwide Inc.’s bonds plunged final week to distressed ranges after the privately owned health club chain advised traders its earnings declined within the third quarter.
The San Ramon, Calif.-based firm, one of many nation’s largest health golf equipment, noticed its adjusted earnings earlier than curiosity, taxes, depreciation, and amortization decline to $47.eight million for the quarter ended Sept. 30, down 25.2% from the identical interval a yr in the past, in line with a confidential earnings report obtained by The Wall Road Journal.
The chain additionally reported a internet lack of $13.2 million for the quarter, in contrast with internet revenue of $2.1 million over the identical interval in 2018. The corporate’s backside line was damage by a 1.5% drop in income, to $376 million, coupled with a 2.9% enhance in bills.
Complete membership fell to three.four million on the finish of September, down from three.5 million on the finish of 2018, in line with the report back to traders launched Thursday.
The corporate completed the quarter with simply $6.7 million of money on the stability sheet, in addition to $89 million of availability on a revolving credit score facility. Complete debt stood at barely greater than $1.three billion as of Sept. 30.
24 Hour’s $500 million eight% unsecured notes due 2022 modified palms at 62 cents on the greenback on Thursday, down 11 factors from the prior commerce of 73 cents, in line with MarketAxess.
The corporate, which has 448 areas in 13 states, is owned by AEA Traders LP, Health Capital Companions LP and Ontario Lecturers’ Pension Plan Board, in addition to different traders. The homeowners paid $1.85 billion for the chain once they bought it five years ago from private-equity sponsor Forstmann Little Co.
Based in 1983 by businessman Mark Mastrov, 24 Hour Health has been a sponsor of U.S. Olympic groups since 2004 and is a associate to the U.S. Olympic Committee for the 2020 Olympics and Paralympic Video games in Tokyo.
In 2004, the corporate additionally partnered with NBC to create a actuality TV present known as “The Largest Loser,” wherein chubby contestants competed to reduce weight. The chain has additionally fashioned partnerships to co-brand health golf equipment with well-known athletes and celebrities together with Jackie Chan, Derek Jeter, Yao Ming, Shaquille O’Neal, and Andre Agassi.
A 24 Hour Health spokesperson declined to remark.
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