8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 11, 2005

Town Sports International Holdings, Inc

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Delaware	333-114210	20-0640002
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

888 Seventh Avenue (25th Floor), New York, New York 10106
(Address of Principal Executive Offices, including Zip code)

212-246-6700
(Registrant’s Telephone Number, Including Area Code)

Not applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

 EX-99.1: PRESS RELEASE

Item 2.02. Results of Operations and Financial Condition

     On November 11, 2005, Town Sports International Holdings, Inc. issued a press release announcing its results of operations for the three and nine months ended September 30, 2005. A copy of the press release is attached hereto as Exhibit 99.1.

     The information in this Current Report on form 8-K, including the attached exhibit, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

     (c) Exhibits

     99.1 Press release dated November 11, 2005

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Town Sports International Holdings, Inc.
	/s/  Richard Pyle
	By:  Richard Pyle
Date November 11, 2005	Its:   Chief Financial Officer

2

INDEX TO EXHIBITS

EXHIBIT	DESCRIPTION
99.1	Press release issued by Town Sports International Holdings, Inc. on November 11, 2005 announcing earnings for the three and nine months ended September 30, 2005.

3

EX-99.1

For Release on November 11, 2005 Exhibit 99.l

TOWN SPORTS INTERNATIONAL HOLDINGS, INC. ANNOUNCES THIRD QUARTER 2005 FINANCIAL RESULTS

New York, NY — November 11, 2005 — Town Sports International Holdings, Inc. (“TSI” or “the Company”), a leading owner of health clubs located primarily in major cities from Washington, DC north through New England, operating under the New York Sports Clubs, Boston Sports Clubs, Washington Sports Clubs and Philadelphia Sports Clubs brands, announced its results for the quarter ended September 30, 2005.

Third quarter 2005 revenue grew 9.5% to $98.2 million from $89.7 million during the same period last year. For the nine months ended September 30, 2005, revenue grew 9.7% to $290.0 million from $264.3 million during the same period last year.

“Our total member count which stands at 410,000 continues to grow. Year-on-year, we have added 32,000 members for an 8.5% increase in the prior twelve months” said Bob Giardina CEO of TSI “In addition, we are excited about the performance of our seven new clubs opened or acquired in the last twelve months. We look forward to the openings of the next six facilities currently under construction and planned to open in the next two quarters.”

Three and Nine Months Ended September 30, 2005, Financial Highlights:

Total revenue for the third quarter grew 9.5% to $98.2 million and total revenue for the first nine months of 2005 grew 9.7% to $290.0 million from $264.3 million during the same period last year. The increases in revenue were driven by growth in membership revenue and ancillary club revenue.

• Membership revenue for the third quarter grew 9.3% to $81.0 million from $74.1 million in Q3 2004. Year-to-date membership revenue grew 8.5% to $239.2 million from $220.4 million during the same period last year.

• Ancillary club revenue for the third quarter grew 15.0% to $16.2 million from $14.1 million in Q3 2004. Year-to-date ancillary club revenue totaled $47.9 million, up 17.6% from $40.7 million during the prior-year period.

• Same-club revenue increased 6.1% during the third quarter compared to the prior-year period and 6.4% for the first nine months of 2005 compared to the prior period.

Total operating expenses during Q3 2005 totaled $89.0 million compared to $78.6 in Q3 2004. Year-to-date operating expenses totaled $260.7 million compared with $238.4 million for the same period last year.

• Payroll and related expenses totaled $38.4 million in Q3 2005 compared to $33.8 million in Q3 2004. Year-to-date payroll and related expenses totaled $114.0 million compared with $104.3 million during the same period last year.

• Club operating expenses totaled $34.1 million for Q3 2005 compared to $29.8 for the same period last year. Year-to-date club operating expenses totaled $97.3 million compared with $86.7 million during the prior-year period.

• General and administrative expenses totaled $6.7 million for the third quarter compared to $6.1 million in the prior-year period. For the nine months ended September 30, 2005, general and administrative expenses totaled $19.8 million compared with $18.2 million in the prior-year period.

• Depreciation and amortization expenses totaled $9.9 million during Q3 2005 compared to $8.9 million in Q3 2004. Year-to-date depreciation and amortization expenses were $29.7 million compared with $27.3 million in the prior-year period.

Cash flow from operations for the nine months ended September 30, 2005 grew 14.5% to $57.8 from $50.5 million for the same period last year.

Adjusted EBITDA for Q3 2005 decreased 3.1% to $19.6 million from $20.2 million in Q3 2004.

• Year-to-date adjusted EBITDA grew 6.3% to $61.4 million from $57.8 million for the same period last year.

• As a percentage of total revenue, adjusted EBITDA margin was 19.9% in Q3 2005, down from 22.4% in Q3 2004. Year-to-date Adjusted EBITDA margin was 21.2%, down from 21.8% for the same period last year.

The Company will hold a conference call on, Monday, November 14, 2005 at 2:30 PM (Eastern) to discuss the third quarter 2005 results. Robert Giardina, chief executive officer, and Richard Pyle, chief financial officer, will host the conference call. The conference call will be Web cast and may be accessed via the Company’s Investor Relations section in the “About us” section of its Website at www.mysportsclubs.com. A replay of the call will be available via the Company’s Website beginning at 5:00 PM (Eastern) on November 14, 2005.

About Town Sports International Holdings, Inc.:

New York-based Town Sports International Holdings, Inc. (TSI) is a leading owner and operator of fitness clubs in the Northeast and mid-Atlantic regions of the United States. In addition to New York Sports Clubs, TSI operates under the brand names of Boston Sports Clubs, Washington Sports Clubs and Philadelphia Sports Clubs, with 137 clubs and more than 410,000 members in the U.S. In addition, the Company operates three facilities in Switzerland. For more information on TSI visit www.mysportsclubs.com

Town Sports International Holdings, Inc., New York
Investor Contact:
investor.relations@town-sports.com

TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2004 and September 30, 2005
(All figures $’000s except share and per share data)

	December 31,			September 30,
	2004			2005
				(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	57,506		$	68,866
Accounts receivable (less allowance for doubtful accounts of $2,647 and $2,689 as of December 31, 2004 and September 30, 2005, respectively)		1,955			4,864
Inventory		655			550
Prepaid corporate income taxes		5,645			1,987
Prepaid expenses and other current assets		8,971			12,015
Total current assets		74,732			88,282
Fixed assets, net		226,253			237,528
Goodwill		47,494			49,967
Intangible assets, net		931			913
Deferred tax asset, net		12,735			23,035
Deferred membership costs		12,017			11,714
Other assets		16,794			15,706
Total assets	$	390,956		$	427,145
Liabilities and Stockholders’ Deficit
Current Liabilities:
Current portion of long-term debt and capital lease obligations	$	1,225		$	1,270
Accounts payable		10,555			6,321
Accrued expenses		22,402			29,429
Accrued interest		5,217			11,483
Deferred revenue		28,294			36,363
Total current liabilities		67,693			84,866
Long-term debt and capital lease obligations		395,236			406,067
Deferred lease liabilities		36,009			43,551
Deferred revenue		3,298			2,916
Other liabilities		5,737			6,858
Total liabilities		507,973			544,258
Commitments and contingencies
Stockholders’ deficit:
Class A voting common stock, $.001 par value; issued and outstanding 1,312,289 and 1,309,123 shares at December 31, 2004 and September 30, 2005, respectively		1			1
Paid-in capital		(113,900	)		(114,087	)
Unearned compensation		(292	)		(254	)
Accumulated other comprehensive income (currency translation adjustment)		916			422
Accumulated deficit		(3,742	)		(3,195	)
Total stockholders’ deficit		(117,017	)		(117,113	)
Total liabilities and stockholders’ deficit	$	390,956		$	427,145

TOWN SPORTS INTERNATIONAL HOLDINDS, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
and CONSENDED CONSOLIDATED STATEMENTSOF COMPREHENSIVE INCOME (LOSS)
For the three and nine months ended September 30, 2004 and 2005
(All figures $’000s)
(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2004			2005			2004			2005
Revenues:
Club Operations	$	88,205		$	97,212		$	261,126		$	287,121
Fees and Other		1,471			988			3,184			2,921
		89,676			98,200			264,310			290,042
Operating Expenses:
Payroll and related		33,813			38,388			104,256			113,952
Club operating		29,848			34,146			86,665			97,314
General and administrative		6,104			6,653			18,228			19,796
Depreciation and amortization		8,851			9,850			27,271			29,673
Goodwill impairment		—			—			2,002			—
		78,616			89,037			238,422			260,735
Operating Income		11,060			9,163			25,888			29,307
Interest expense		10,311			10,485			29,174			31,113
Interest income		(221	)		(618	)		(510	)		(1,452	)
Equity in the earnings of investees and rental income		(407	)		(446	)		(1,090	)		(1,321	)
Income (loss) before provision (benefit) for corporate income taxes		1,377			(258	)		(1,686	)		967
Provision (benefit) for corporate income taxes		687			(135	)		(808	)		420
Net income (loss)	$	690		$	(123	)	$	(878	)	$	547

TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2004 and 2005
(All figures $’000s)
(Unaudited)

	Nine months ended
	September 30,
	2004			2005
Cash flows from operating activities:
Net income (loss)	$	(878	)	$	547
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		27,271			29,673
Interest expense on Senior Discount Notes		9,146			11,495
Goodwill impairment		2,002			—
Compensation expense incurred in connection with stock options		29			35
Noncash rental expense, net of noncash rental income		363			1,079
Amortization of debt issuance costs		1,178			1,227
Net changes in certain operating assets and liabilities		6,617			16,391
(Increase) decrease in deferred tax asset		1,839			(10,300	)
Decrease in deferred membership costs		643			303
Increase in reserve for self-insured liability claims		845			1,496
Landlord contributions to tenant improvements		2,112			6,389
Other		(661	)		(513	)
Total adjustments		51,384			57,275
Net cash provided by operating activities		50,506			57,822
Cash flows from investing activities:
Capital expenditures, net of effect of acquired businesses		(23,754	)		(40,773	)
Acquisition of businesses		(3,726	)		(3,861	)
Net cash used in investing activities		(27,480	)		(44,634	)
Cash flows from financing activities:
Proceeds from 11.0% Senior Discount Note offering		120,729			—
Proceeds from stock option exercises		539			—
Redemption of Series A and Series B preferred stock		(50,635	)		—
Common stock distribution		(68,943	)		—
Repurchase of common stock		(53	)		(184	)
Repayment of borrowings		(3,055	)		(959	)
Costs related to a planned equity offer		—			(685	)
Net cash used in financing activities		(1,418	)		(1,828	)
Net increase in cash and cash equivalents		21,608			11,360
Cash and cash equivalents at beginning of period		40,802			57,506
Cash and cash equivalents at end of period	$	62,410		$	68,866
Summary of change in certain operating assets and liabilities; net of effects of acquired businesses:
Increase in accounts receivable	$	(1,111	)	$	(2,803	)
Decrease in inventory		43			109
Decrease (increase) in prepaid expenses, prepaid income taxes, and other current assets		(3,590	)		155
Increase in accounts payable, accrued expenses and accrued interest		8,448			11,532
Increase in deferred revenue		2,827			7,398
Net changes in certain operating assets and liabilities	$	6,617		$	16,391

TOWN SPORTS INTERNATIONAL HOLDINGS, INC. and SUBSIDIARIES
Reconciliation of Net Income (Loss) to Adjusted EBITDA
For the three and nine months ended September 30, 2004 and 2005
(All figures $’000s)
(Unaudited)

	Three months ended									Nine months ended
	September 30,									September 30,
	2004			2005			% Chg.			2004			2005			% Chg.
Net income (loss)	$	690		$	(123	)				$	(878	)	$	547
Provision (benefit) for corporate income taxes		687			(135	)					(808	)		420
Interest expense, net of interest income		10,090			9,867						28,664			29,661
Goodwill impairment		—			—						2,002			—
Depreciation and amortization		8,851			9,850						27,271			29,673
Noncash rental expense, net of noncash rental income		(117	)		111						363			1,079
Noncash compensation expense incurred in in connection with stock options		10			10						29			35
Distribution to option holders classified as payroll		—			—						1,144			—
Adjusted EBITDA	$	20,211		$	19,580			(3.1	%)	$	57,787		$	61,415			6.3	%
Adjusted EBITDA Margin		22.4	%		19.9	%					21.8	%		21.2	%

Non GAAP Financial Measures:

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA provides useful information regarding our operating performance and financial condition. EBITDA should not be considered in isolation or as a substitute for net income, cash flows or other consolidated income (loss) or cash flow data prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) or as a measure of our profitability or liquidity. Additionally, investors should be aware that EBITDA may not be comparable to similarly titled measures presented by other companies.

Adjusted EBITDA is calculated by adding to or deducting from EBITDA (as defined above) certain items of income and expense consisting of: (i) noncash deferred rental expense, net of noncash deferred rental income, (ii) noncash compensation expense incurred in connection with stock options, (iii) distribution to option holders classified as payroll and (iv) goodwill impairment charges. We believe that the adjustment for these items is appropriate for such periods in order to provide an appropriate analysis of recent historical results. Adjusted EBITDA is presented because we believe it provides useful information regarding our operating performance and financial condition. Adjusted EBITDA is substantially similar to a metric used by our lenders when assessing our compliance with debt covenants. Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), cash flows or other consolidated income (loss) or cash flow data prepared in accordance with GAAP or as a measure of our profitability or liquidity. Additionally, investors should be aware that Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of consolidated revenue.

Forward-Looking Statements:

Statements in this release that do not constitute historical facts, including, without limitation, statements regarding future financial results and performance and potential sales revenue are “forward-looking” statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, many of which are outside our control, including the level of market demand for our services, competitive pressures, the ability to achieve reductions in operating costs and to continue to integrate acquisitions, the application of federal and state tax laws and regulations, and other specific factors discussed herein and in other releases and public filings made by the Company. The information contained herein represents management’s best judgment as of the date hereof based on information currently available. However, we do not intend to update this information to reflect development or information obtained after the date hereof and we disclaim any legal obligation to the contrary.