Planet Fitness Inc. provided further update on its response to COVID-19, including the decision to keep all system-wide locations closed and also to withdraw guidance for 2020.
“The health and safety of our members, team members, and the communities we operate in is our top priority, and as such we are extending our temporary store closures until further notice,” said Chris Rondeau, CEO of Planet Fitness. “We entered 2020 in a very strong financial position, and have taken additional steps to proactively strengthen our financial liquidity and flexibility during these unprecedented times. We believe we have sufficient liquidity to carry us well beyond the end of this year, even in the event that clubs remain closed for the rest of 2020. Given the significant near-term disruption to our business caused by COVID-19 and uncertainty around when conditions normalize, we have decided to withdraw our 2020 outlook at this time.”
Extending Store Closures
Currently, all domestic and international Planet Fitness locations system-wide are temporarily closed until further notice. This includes both corporate and franchise stores. The company plans to follow the guidance of local, state and federal governments and health officials to determine when it will reopen its stores.
Increasing Financial Flexibility
The company has increased its already strong cash position by drawing down $75 million under its revolving financing facility of Variable Funding Senior Secured Notes. Including the drawdown, the company currently has approximately $540 million in available cash on hand. The increased borrowing and the previously announced suspension of our share repurchase program were taken as precautionary measures to provide enhanced financial flexibility considering the uncertain market conditions arising from COVID-19.
As a result of the uncertainty and significant business impacts caused by COVID-19, the company is withdrawing its previously issued guidance for 2020 and is not providing an updated outlook at this time.
Photo courtesy Planet Fitness