Planet Fitness, Inc. Announces Second Quarter 2021 Results

August 13, 2021

HAMPTON, N.H., Aug. 9, 2021 -- Today, Planet Fitness, Inc. (NYSE:PLNT) reported financial results for its second quarter ended June 30, 2021.

"Our membership momentum continues to defy our historical seasonal patterns, and, as of the end of July we had more than 15 million members. It's a testament to the strength of our brand that more than 13 million people remained members of Planet Fitness in the depths of the global pandemic when most of our gyms were temporarily closed. And today, with nearly all of our stores reopened, existing members are re-engaging with us, and net membership is continuing to climb as people realize the importance of fitness to their overall wellness," said Chris Rondeau, Chief Executive Officer. "There is a dislocation in the fitness industry with approximately 22 percent of U.S. gyms permanently closed due to the impact from COVID-19 through the end of the second quarter, while, at the same time, more Americans are realizing that fitness is essential to physical, mental, and emotional well-being. We believe Planet Fitness is the place that fills that gap with our affordable, non-intimidating workout environment, and, as a result, we are confident in achieving and possibly exceeding our long-term target of 4,000 locations in the U.S."

Second Quarter Fiscal 2021 results

Total revenue increased from the prior year period by 241.1% to $137.3 million.
Net income attributable to Planet Fitness, Inc. was $14.0 million, or $0.17 per diluted share, compared to a loss of $29.2 million, or $0.36 per diluted share in the prior year period.
Net income increased $47.0 million to $15.0 million, compared to a net loss of $32.0 million in the prior year period.
Adjusted net income(1) increased $46.1 million to $18.2 million, or $0.21 per diluted share, compared to an Adjusted net loss of $27.9 million, or $0.32 per diluted share in the prior year period.
Adjusted EBITDA(1) increased $64.8 million to $55.6 million from a loss of $9.3 million in the prior year period.
24 new Planet Fitness stores were opened during the period, bringing system-wide total stores to 2,170 as of June 30, 2021.
Cash of $527.4 million as of June 30, 2021, which includes cash and cash equivalents of $469.1 million and restricted cash of $58.2 million.

(1) Adjusted net income (loss) and Adjusted EBITDA are non-GAAP measures. For reconciliations of Adjusted EBITDA and Adjusted net income (loss) to U.S. GAAP ("GAAP") net income (loss) see "Non-GAAP Financial Measures" accompanying this press release.

Operating Results for the Second Quarter Ended June 30, 2021

For the second quarter 2021, total revenue increased $97.0 million or 241.1% to $137.3 million from $40.2 million in the prior year period. By segment:

Franchise segment revenue increased $51.8 million or 246.9% to $72.8 million from $21.0 million in the prior year period. The increase in franchise segment revenue for the second quarter 2021 is primarily due to a $37.7 million increase in franchise royalty revenue, an $8.3 million increase in NAF revenue, and a $5.0 million increase in franchise and other fees, primarily attributable to temporary store closures as a result of COVID-19 in the prior year period;
Corporate-owned stores segment revenue increased $31.2 million or 330.8% to $40.6 million from $9.4 million in the prior year period. The increase was primarily due to temporary store closures as a result of COVID-19 in the prior year period, as well as the opening of seven new corporate-owned stores since April 1, 2020; and
Equipment segment revenue increased $14.0 million or 142.8% to $23.8 million from $9.8 million in the prior year period, driven by higher equipment sales to new and existing franchisee-owned stores in the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to temporary store closures as a result of COVID-19 in the prior year period.

For the second quarter of 2021, net income attributable to Planet Fitness, Inc. was $14.0 million, or $0.17 per diluted share, compared to a net loss attributable to Planet Fitness, Inc. of $29.2 million, or $0.36 per diluted share in the prior year period. Net income was $15.0 million in the second quarter of 2021 compared to a net loss of $32.0 million in the prior year period. Adjusted net income increased $46.1 million to $18.2 million, or $0.21 per diluted share, from an Adjusted net loss of $27.9 million, or $0.32 per diluted share in the prior year period. Adjusted net income (loss) has been adjusted to reflect a normalized federal income tax rate of 26.6% and 26.8% for the current and prior year period, respectively, and excludes certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance (see "Non-GAAP Financial Measures").

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 that we do not consider in the evaluation of ongoing operational performance (see "Non-GAAP Financial Measures"), increased $64.8 million to $55.6 million from a loss of $9.3 million in the prior year period.

Segment EBITDA represents our Total Segment EBITDA broken down by the Company's reportable segments. Total Segment EBITDA is equal to EBITDA, which is defined as net income before interest, taxes, depreciation and amortization (see "Non-GAAP Financial Measures").

Franchise segment EBITDA increased $48.2 million to $51.8 million. The increase in franchise segment EBITDA for the second quarter 2021 was a result of higher royalty and national advertising fund collections in the three months ended June 30, 2021 consisting of a $37.7 million increase in franchise royalty revenue, a $8.3 million increase in NAF revenue, and a $5.0 million increase in franchise and other fees, primarily attributable to temporary store closures as a result of COVID-19 in the prior year period;
Corporate-owned stores segment EBITDA increased $16.7 million to $10.4 million. The increase was primarily due to temporary store closures as a result of COVID-19 in the prior year period, as well as the opening of seven new corporate-owned stores since April 1, 2020; and
Equipment segment EBITDA increased by $4.3 million to $5.6 million driven by higher equipment sales to new and existing franchisee-owned stores in the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to temporary store closures as a result of COVID-19 in the prior year period.

2021 Outlook

For the year ending December 31, 2021, the Company expects the following, assuming there is no significant worsening of the COVID-19 pandemic that seriously impacts performance, including prolonged store closures or other mandated operational restrictions:

To be at the high-end of its 75 to 100 new store opening range
Full-year revenue will be between $530 million and $540 million
Selling, General & Administrative expenses will be in the low $90 million dollar range
Adjusted EBITDA will be between $200 million and $210 million
Adjusted net income per share, diluted, will be between $0.65 and $0.70

Presentation of Financial Measures

Planet Fitness, Inc. (the "Company") was formed in March 2015 for the purpose of facilitating the initial public offering (the "IPO") and related recapitalization transactions that occurred in August 2015, and in order to carry on the business of Pla-Fit Holdings, LLC ("Pla-Fit Holdings") and its subsidiaries. As the sole managing member of Pla-Fit Holdings, the Company operates and controls all of the business and affairs of Pla-Fit Holdings, and through Pla-Fit Holdings, conducts its business. As a result, the Company consolidates Pla-Fit Holdings' financial results and reports a non-controlling interest related to the portion of Pla-Fit Holdings not owned by the Company.

The financial information presented in this press release includes non-GAAP financial measures such as EBITDA, Segment EBITDA, Adjusted EBITDA, Adjusted net income (loss) and Adjusted net income (loss) per share, diluted, to provide measures that we believe are useful to investors in evaluating the Company's performance. These non-GAAP financial measures are supplemental measures of the Company's performance that are neither required by, nor presented in accordance with GAAP. These financial measures should not be considered in isolation or as substitutes for GAAP financial measures such as net income or any other performance measures derived in accordance with GAAP. In addition, in the future, the Company may incur expenses or charges such as those added back to calculate Adjusted EBITDA, Adjusted net income (loss) and Adjusted net income (loss) per share, diluted. The Company's presentation of Adjusted EBITDA, Adjusted net income (loss) and Adjusted net income (loss) per share, diluted, should not be construed as an inference that the Company's future results will be unaffected by similar amounts or other unusual or nonrecurring items. See the tables at the end of this press release for a reconciliation of EBITDA, Adjusted EBITDA, Total Segment EBITDA, Adjusted net income (loss), and Adjusted net income (loss) per share, diluted, to their most directly comparable GAAP financial measure.

Same store sales refers to year-over-year sales comparisons for the same store sales base of both corporate-owned and franchisee-owned stores, which is calculated for a given period by including only sales from stores that had sales in the comparable months of both years. We define the same store sales base to include those stores that have been open and for which monthly membership dues have been billed for longer than 12 months. We measure same store sales based solely upon monthly dues billed to members of our corporate-owned and franchisee-owned stores. As a result of the closure of all of our stores due to COVID-19 in March 2020, a majority of stores remained closed for a portion of the three and six months ended June 30, 2020. Because less than 50% of our stores in the same store sales base had membership billings in all of the months included in the three and six months ended June 30, 2020, we are not providing same store sales comparisons for the three and six months ended June 30, 2021 and 2020.

The non-GAAP financial measures used in our full-year outlook will differ from net income (loss) and net income (loss) per share, diluted, determined in accordance with GAAP in ways similar to those described in the reconciliations at the end of this press release. We do not provide guidance for net income (loss) or net income (loss) per share, diluted, determined in accordance with GAAP or a reconciliation of guidance for Adjusted EBITDA and Adjusted net income per share, diluted, to the most directly comparable GAAP measure because we are not able to predict with reasonable certainty the amount or nature of all items that will be included in our net income and net income per share, diluted, for the year ending December 31, 2021. These items are uncertain, depend on many factors and could have a material impact on our net income and net income per share, diluted, for the year ending December 31, 2021.

Investor Conference Call

The Company will hold a conference call at 4:30 pm (ET) on August 9, 2021 to discuss the news announced in this press release. A live webcast of the conference call will be accessible at www.planetfitness.com via the "Investor Relations" link. The webcast will be archived on the website for one year.

About Planet Fitness

Founded in 1992 in Dover, NH, Planet Fitness is one of the largest and fastest-growing franchisors and operators of fitness centers in the United States by number of members and locations. As of June 30, 2021, Planet Fitness had more than 14.8 million members and 2,170 stores in 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia. The Company's mission is to enhance people's lives by providing a high-quality fitness experience in a welcoming, non-intimidating environment, which we call the Judgement Free Zone®. More than 95% of Planet Fitness stores are owned and operated by independent business men and women.