Planet Fitness Inc. today reported financial results for its fourth quarter and fiscal year ended December 31, 2016 and announced its full-year 2017 outlook.
Fourth Quarter Fiscal 2016 Highlights
- Total revenue increased from the prior-year period by 10 percent to $116.4 million.
- System-wide same-store sales increased 10.6 percent.
- Net income was $21.9 million, or 18 cents per diluted share, compared to net income of $17.2 million, or 6 cents per diluted share, in the prior-year period.
- Adjusted net income increased 15.9 percent to $19.7 million, or 20 cents per diluted share, compared to $17 million, or 17 cents per diluted share, in the prior-year period.
- Adjusted EBITDA increased 17.7 percent to $44.1 million from $37.5 million in the prior-year period.
- 74 new Planet Fitness stores were opened system-wide during the period, bringing system-wide total stores to 1,313 at December 31, 2016.
- A cash dividend was declared and paid to Class A shareholders of $2.78 per share.
Fiscal Year 2016 Highlights
- Total revenue increased from the prior year by 14.4 percent to $378.2 million.
- System-wide same-store sales increased 8.8 percent.
- Net income was $71.2 million, or 50 cents per diluted share, compared to net income of $38.1 million, or 11 cents per diluted share in the prior year.
- Adjusted net income increased 26.9 percent to $67.6 million, or 69 cents per diluted share, compared to $53.2 million, or 54 cents per diluted share, in the prior year.
- Adjusted EBITDA increased 22 percent to $150.6 million from $123.5 million in the prior year.
- 195 new Planet Fitness stores were opened system-wide during the year, bringing system-wide total stores to 1,313 at December 31, 2016.
Christopher Rondeau, CEO, commented: “It was another terrific year for Planet Fitness. We increased system-wide same store sales high-single digits, grew adjusted net income 27 percent and returned $271 million to shareholders through a special one-time dividend. The foundation of our success starts with our affordable, non-intimidating fitness offering. Our welcoming in-store experience featuring industry leading cardio and strength equipment is resonating with an increasing number of consumers as we expand brand awareness through our growing national and local advertising spend combined with our powerful franchise base that continues to bring our brand to new communities. We ended the year with over 1.6 million additional members in 2016, many of whom had never belonged to a gym before, and the new year is off to a strong start. I’m incredibly proud of everything we have accomplished, especially how we’ve enriched so many members’ lives and delivered strong returns for our franchisees and shareholders. We are excited to build on our current momentum in 2017 and over the long-term.”
Operating Results For Fourth Quarter Ended December 31, 2016
For the fourth quarter of 2016, total revenue increased $10.6 million, or 10 percent, to $116.4 million from $105.8 million in the prior-year period.
By segment:
- Franchise segment revenue, which includes commission income, increased $7.5 million, or 30.2 percent, to $32.1 million from $24.7 million in the prior-year period.
- Corporate-owned stores segment revenue increased $1.2 million, or 5.1 percent, to $26 million from $24.7 million in the prior-year period.
- Equipment segment revenue increased $1.9 million, or 3.3 percent, to $58.3 million from $56.5 million.
System-wide same-store sales increased 10.6 percent. By segment, franchisee-owned same-store sales increased 11 percent and corporate-owned same-store sales increased 4.7 percent.
For the fourth quarter of fiscal 2016, net income was $21.9 million, or 18 cents per diluted share, compared to net income of $17.2 million, or 6 cents per diluted share, in the prior-year period. Adjusted net income increased 15.9 percent to $19.7 million, or 20 cents per diluted share, from $17 million, or 17 cents per diluted share, in the prior-year period.
Adjusted net income has been adjusted to reflect a normalized federal income tax rate of 39.5 percent for the current-year period and 39.4 percent for the comparable prior-year period and excludes certain non-cash and other items that the company does not consider in the evaluation of ongoing operational performance.
Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation and amortization, adjusted for the impact of certain non-cash and other items not considered in the evaluation of ongoing operational performance, increased 17.7 percent to $44.1 million from $37.5 million in the prior-year period.
Franchise segment EBITDA increased $6.7 million, or 34.8 percent, to $25.9 million driven by royalties from new stores opened since December 31, 2015 as well as higher same store sales. Corporate-owned stores segment EBITDA increased $0.9 million, or 8.8 percent, to $10.6 million driven by higher same store sales. Equipment segment EBITDA increased $2.1 million, or 16 percent, to $15.1 million driven primarily by higher equipment sales.
Operating Results For Fiscal Year Ended December 31, 2016
For the fiscal year ended December 31, 2016, total revenue increased $47.7 million, or 14.4 percent, to $378.2 million from $330.5 million in the prior year.
By segment:
- Franchise segment revenue, which includes commission income, increased $28.4 million, or 32.2 percent, to $116.5 million from $88.1 million in the prior year.
- Corporate-owned stores segment revenue increased $6.3 million, or 6.4 percent, to $104.7 million from $98.4 million in the prior year.
- Equipment segment revenue increased $13 million, or 9 percent, to $157 million from $144.1 million in the prior year.
System-wide same-store sales increased 8.8 percent from the prior year. By segment, franchisee-owned same-store sales increased 9 percent and corporate-owned same-store sales increased 4.9 percent from the prior year.
Net income increased to $71.2 million, or 50 cents per diluted share, from $38.1 million, or 11 cents per diluted share, in the prior year. Adjusted net income increased 26.9 percent to $67.6 million, or 69 cents per diluted share, from $53.2 million, or 54 cents per diluted share, in the prior year.
Adjusted net income has been adjusted to reflect a normalized federal income tax rate of 39.5 percent for the current-year period and 39.4 percent for the comparable prior-year period and excludes certain non-cash and other items not considered in the evaluation of ongoing operational performance.
Adjusted EBITDA increased $27.1 million or 22 percent to $150.6 million in fiscal 2016 from $123.5 million in the prior year.
Franchise segment EBITDA increased $31.2 million, or 47.3 percent, to $97.3 million. Corporate-owned stores segment EBITDA increased $4.8 million, or 13.2 percent, to $40.8 million. Equipment segment EBITDA increased $4.5 million, or 14.1 percent, to $36.4 million.
2017 Outlook
For the year ending December 31, 2017, the company expects:
- Total revenue between $405 million and $415 million
- System-wide same-store sales growth in the 6 percent to 8 percent range
- Adjusted net income of $71 million to $74 million, or 72 cents to 75 cents per diluted share.
Photo courtesy Planet Fitness