Planet Fitness (PLNT) 5 May 202020 Q1 Earnings call transcript

Good afternoon. My name is Jason, and I will be your conference operator today. At this time, I would like to welcome everyone to the Planet Fitness First Quarter 2020 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there’ll be a question-and-answer session. Instructions [Operator

like Frey. call ahead, Thank now speaker to sir. turn Brendon today you. to would over the your I Please go

first Financial Chief Executive Thank discuss Dorvin Lively, On us joining Tom Officer; call quarter Fitzgerald, and Fitness's Chief today’s Rondeau, you results. XXXX Chris today are President; earnings Officer. for Planet to

for Following remarks, will we the open questions. prepared the call up

reflect make Planet you differ in to based judgment actual would remind that These factors certain of forward-looking we and statements. like Planet a on only statements presentation this materially analysis Fitness's will Fitness's are and expectations today, as business. forward-looking I statements number affecting from of current may results

should not undue you these place forward-looking on Accordingly, reliance statements.

risks statements and the earnings our For included SEC SEC X-K, the as uncertainties was and to first well a refer more to on furnished statements Form XXXX disclaimer. referenced to made call conference associated disclaimer our that forward-looking thorough with webcast, this filings we the in in as quarter in you the of forward-looking be today which with regarding release, the discussion

or result We new any forward-looking a or do information, obligation alter undertake whether as future not update statements any to otherwise. events, of

certain In be of on these filed addition, found release adjusted metrics in refer the company this may today. to earlier can metrics non-GAAP call. Explanation the earnings

over the call of Rondeau, Chris? Chief Fitness. Chris turn to I’ll that, With Officer Planet Executive

joining you for thank us And Brendon. everyone you, today. Thank

address unprecedented Before we QX dive COVID-XX situation. want our I the into results, to

and workers communities. frontline responders, a result our who the the health members pandemic those as lost thoughts supporting have loved with are and the first on ones and care providers, our family foremost, First essential of of

our On of our for to closed do By franchisees same. presented communication team all also worked than we encouraged in brand. this XX informed locations to all situation, X,XXX members, been our the our members March has our have COVID-XX March our keep were we have evolving franchisees corporate stores, with more with and have realities our and XX, challenging constant closed. of Throughout engaged XX, all businesses. and and

of be they stores fees were communicated any monthly accounts members’ stores while we not includes that would annual to closed. our Upon in dues March, our charged them frozen membership This fees. the closures all in and are

in critical may has As put message that is we our foremost. a franchisees interest and it leader helped received, well first the our have Planet requests. extremely cancellation believe Fitness industry, believe member’s and We minimize also and this been

the in to did member see we our March period. due fact, any cancels not initial count of change during material In in second the closure half

corporate employees to to headquarters support and this our remotely the franchisees continued work during Our business time.

in hold time. orders equipment in this place developments still Given are at many new stay-at-home store and on placements states

Our teams preparing between operational to been and of physical distancing, like our reopening more. contact including members, and franchisees reduce address our for work hard prospective a and stores, enhanced COVID-XX playbook at policies, have members procedures, standardization and team things developing

Two stores. a priority. top May members reopening official Utah, accordance local approach and one in we our the thoughtful of with with of are three and opened Georgia in As phase began safety X, and teams and in guidelines,

the reopening of re-opened; a these first system this first in will we believe In broader clubs, stores will so. monitor outlined can and our to additional believe playbook. have We guidelines continue are reopen procedures we do our obtain key executing these step throughout learning’s we operations safely in us to few and COVID-XX is advance operational and rollout. We allow updated important we

ended X.X% increase pleased a in stores of quarter go year XXXX stores over the more year COVID-XX increase XX.X% results, three first members strong same-store first a with Tom system-wide. and XXXX XX.X in on impacted period. will months first off got of total, I'm the open detail In on sales a start. top new XX certainly the ago in but with we our million results. Now on to our in of quarter our how it system-wide QX to

the center To to jump start joining sponsor a thinking are Times health again, presenting stage for when and consumers once a Eve opportunity global wellness a put in great New gym. XXXX, brand a to Year's of Iconic which Planet front Fitness was Celebration continues time at Square's be us about and on

with reach and looking brand also health than traditional fitness lifestyle us be reinforces kicked platform Planet to Loser to gyms. and off allowed Biggest may make in a that January. Fitness how is and are viewers, partnership in change Our captive interested This who messaging different

in marketing new TV of mix goers. part our with advertising, we and QX, into casual leaned timers resonated creative gym first heavily which As believe debuting

the strong As I usual right as member stores to close to signups business usage was with new mid-March. COVID-XX said, quarter. new It the until signups perspective member were in started in first due and up both

the effectiveness first the leading on future we and to in continue in on marketing right for are Based closures creative quarter joint up in made the store that confident to have the and the place we've strategy in enhancements to optimize we results. new trend the mix, our messaging overall strong mid-March,

marketing Jerry football such Planet the trainers initiatives, and Biggest home, of Edelman; We special that famous as Erica digital our celebrity with In we’ve less members brand and in featuring Lugo; United workouts trainer Fitness are This Loser, and minutes England an and daily XX engaged Patriots New at or player Julian our guests, our director, O'Connell. keep accelerated actor Facebook including effort Move live campaign. our includes to number while active

more the these media brand access done views billion been people XXX than XXX,XXX or and that workouts workout, can more perspective, to be with X.X an and minimal at per extremely We've to engagement equipment. encouraged Planet successful have for also App From impressions. Fitness averaging exercises home than no download

workouts app. our daily in XXX% increase average mobile result, we're on a As seeing a

streaming new accelerate leader fitness connected further Finally, iFit, to interactive and last home announced a we month, digital partnership offering. workouts, in our technology a with

The Planet be was Fitness no the streaming anyone new our to exclusively used a collaboration or on step first with series equipment. minimal App workouts in to of available

workouts home to home available are span non-members Planet of training, and including range at strength at fitness Fitness cardio, both a broad to free members stretching for categories, The wellness more. and and

continue more We the order members. partnership for deliver in to to explore expanding with our to our iFit possibilities future in value

that through to together during the this when come one franchisees time. and I our ahead, is the count could of with of our the team situation this not had goal support members COVID-XX ensure we Looking way another we more count and same-store member we proud be to out muscle have united began.

all for Our they healthy, a current team reopen. is inside our steps throughout members example, to which safe creating taken personal our stores members stores, employees, equipment An protective our for and focus on more. is our via distancing app increase enabling providing and our our we've physical equipment cleaning while to this cardio maintaining members checking use for to and touchless few a mobile for ensure adhering stations when include environment guidelines,

are still from and impact our point. industry at times is unclear on These for and this COVID-XX overall economy difficult everyone

emerge price Fitness Planet our several store our as non-intimidating on leadership further group the attractive confident we points in environment, on an of and industry. this of strength based our franchisees, and wellness, the the our health expand factors of from I'm business importance great differentiated and welcoming brand, will well-positioned and focus such However, period to fitness the model, role employees increased

I'll the call turn now over to Dorvin.

Chris. Thanks,

system several Fitness we optimistic overall the our for said, reasons, one our Planet and scale future of competition. about to our and continue biggest franchise being advantage the of size be Chris of the As versus strength

is have comprised been past the time with compares five some which as there system XXX of groups, at consolidation franchise over Our the IPO years. approximately XXX of approximately the

the base. have years. that approximately XX many our private XX for franchisee we some All-in-all, approximately Today, majority largest or a group of owned and Of groups, operators by XXX operating brand stores very Planet the XXX Fitness experienced stores of been X% are the our owning average our have seasoned store equity represent operators. of owns largest with

stores reinvesting their back into percentages cash replacing growing significant investments been range taking the the While adjusted XX% basis, four-wall have EBITDA either in average EBITDA years, significant business on an the few past had business, equity. their many remodeling most I flows been have we've franchise margin historically high private as and equipment, sell franchisees In mentioned, fleet, or, from older locations. to store another franchisee, franchisees

higher firms on returns significant their In to indicated companies existing many in former Fitness the the build seeing brand, then of more their these Planet that past, they in private runway investment and have out Planet some are us Fitness to portfolio of stores. equity or have

extremely interested further these indicated of several to recently in us that remained have our equity In firms fact, they investment private brand. in

balance our to structure their comes capital the it sheets, it of When and varies. franchisees

have while have their put as are Some businesses had of to these of others financial businesses franchisees sustainability. dealing and focused times, close on on that to in have other same due increasing all with COVID-XX. financial challenges of leverage condition, their Regardless our flexibility the recent

and day-to-day Protection flows, of assessing In the actions cover franchisees taken also to cash forms hearing no relief. Program assistant through many the different in We reduce our general, of about to government with landlords expenses. are help productive rent related Payroll that With reopen. discussions we're successful until SBA having start were their can groups revenue their know the have stores to their they burn cash

flexibility Some remodel have employees. do we are same a providing many and are choosing as necessary. workforce, of equipment, term to requirements, and the deem on time, will of near while store their temporary others At continue over to replacement to the furloughed pay so portion their we continue

to working when able closely our for a our stores team we're members, and to system provide ensure are for with staff, we entire to our members. environment prepare safe reopen Finally,

construction this to and estates, as of as and went XXXX activities, system continue, existing better communities on store new significant like. we'll pipeline what a terms in has both economy with and In a overall in franchisees as the openings mode, real our evaluate wide look near position estate term overall reopen be had shutdown will development, conversations well projects, into impact the

While the from within XX% ramp we're guidance expansion in and or realm this record degree from could of of could down crisis. more emerge high slowly And not our be It's we sales high replacement to as equipment anticipate by XXXX. this time, that providing well. once our XXXX will linger placements into possibility headwind due this created that the at COVID-XX, equipment we our uncertainty

any Planet focused the franchisees term. the believe a near This for provide on will to the term a preserving the that of the fact from COVID-XX with reopen, opportunity continue of system we more X,XXX market the how combined is reflection will our the on on long said, over based rather favorable we the are toward industry uncertainty That in not build-out it impact is change locations the liquidity in estate real as in estate U.S. real economy environment

over it turn I'll financials. to Tom, that, review who With the will QX

Thanks Dorvin afternoon and good everyone.

quarter, first the revenue to total XXX.X million the XXX.X prior For million, in period. was year compared

significantly heard, and in our I'll As walk disrupted the starting quarter our first COVID-XX then shutdown you've provide how color impacted of results middle business through overall the segment. March. by

our top impact was to the on before bottom stores collected in dues QX The membership revenue deferral to line closed related and of due March, monthly biggest COVID-XX.

our credited for any members for paid were membership periods announced, closed. previously when will be dues As stores

March recognize once associated with dues membership store revenue We stores expect revenue and in were franchise that corporate those reopen to drafted owned

the to planned unable over COVID-XX move outbreak March. sales weeks new forward In due we last of addition, replacement with few equipment the and of to were

top three me due total Let summarize to caused million which to COVID-XX, our impacts following due drivers. results, line revenues the be to down the $XX.X to

royalty to First, of March dues from of a million revenue corporate stores XX.X in before million deferral and stores That's there made from monthly was franchise million dues. $XX collected own closed. related monthly X.X membership up

million million replacement equipment new contributions the were segments. were $X.X NAF the $XX segment and Second, and placement of $X.X in lower equipment by equipment lastly revenues million, in franchise sales and deferred; reduced were

by sales same-store our we're corporate segment Now increased same-store XX.X% quarters pleased quarter growth our the and X.X%. as same-store comp net increase perspective, context, that a driven sales QX rate of with increased member growth. that X.X%. balance From sales with Approximately increased three being was very first franchise

growth drove store pricing The the the prior black black in card for was sales. two basis The impact from card the same system-wide past driven by with mostly higher our point to The joints. compared black rate basis penetration increase years. approximately card by combined increase card with was driven rate in over growth XX.X%, increase points XXX black year pricing of period, pricing new XX

base upon closed included that execute month. in did a are monthly draft stores in Note, fees XXX opening, total therefore are are that the that don't a calculation therefore was draft or the to full when comp And prior sales same-store stores not and they don't for included were not March closed membership not of and XX. draft. There

have Of same-store would closure month including corporate for the XXX, base, been the sales XXX XXX calculation to franchise X their comp excluded the from Due were stores. in a the and of March. they

Moving the a prior segments XX.X was on our franchise period. revenue in compared to to of results, revenue review million, year XX.X segment million

quarter membership XX.X break of Now, quarter. the me million, on down the consists membership to million royalties for last and fees Royalty compared XX.X let which same of in was monthly drivers revenue, year. the dues, annual

of after rate of The period stores deferred March average more at quarter first from driven the to the last as for higher draft XX.X from last year, million same million revenue X.X% in up period the a excludes of year. same compared royalty result XX.X closed by was X.X%, rates royalty The the that revenue COVID-XX. stores

percentage the million, were agreements, franchise million and fees agreements, fees compared system. fees, for processing are signups, total These the join same was The volume the join prior X.X in from period to through franchise paid driven us recognition the join to higher and Next online received web stores existing new and X.X to fees joints our received compared period. of and higher year fees by development year. higher area from other web primarily acquisition increase of due transfer our point-of-sale to member last dues of

million and sales was stores the equipment revenue to first owned quarter the within franchisee the X.X million to Also of year U.S. a within are for franchise received assembly segment These compared our we which fees is revenue, placement ago. the placement in our X.X

in decrease quarter due year placements equipment compared reflects COVID-XX. script a our new revenues. equipment the new number challenging later The the a lower equipment further quarter, of comparison in we I the to discuss year-over-year in when store executed due place to in with discussed placements inability ago to the my late I'll

advertising but XX.X revenue to not national was year. quarter X.X Finally, to recognized fund current X.X deferred related NAF NAF revenue that last compared was does of million the in include million, collected, not revenue The COVID-XX. million

increased in from revenue million period. the segment prior X.X% stores million corporate-owned year Our to XX.X XX

million draft March. membership store the for month deferred from revenue year, increase was due but higher million X.X The same from revenue opened of of base, of sales the XX.X a the by of stores or stores lower revenue after monthly end dues million X.X the the revenue to closed to total first were of COVID-XX. stores in for of The excludes X.X deferred quarter offset whose of March X corporate-owned last from included acquired since of the million partially quarter million due

Revenue due segment. replacement XX.X lower by million. existing sales, owned to XX to as as XX.X% The equipment primarily from million store decrease equipment our well to decreased equipment or was sales to stores. lower Turning new XX.X million franchisee

our to we last we year-over-year. as Now, figure first a expected on number new quarter store year up fourth in placements high were call discussed be of this against in of record quarter the down and February,

COVID-XX to $XX approximately down million prior of our XX and the expectations quarter, from addition placements, due sales XX international, the reflects from year to In new equipment had was XX decrease period, impact. first challenging to new the we one which COVID-XX. comparison, the store including revenue and replacement In due the lower below

driven with are opened associated year. was sales ago, XX.X increase the which to of increased previously quarter compared and owned XX.X% associated acquired revenue ago. to franchisee since XX.X stores of with new corporate with the XX a cost the in-line costs and seven stores XX.X direct The cost our and million, to owned expenses, year last year million the revenue, XX.X to a of primarily which operation I first the of stores new amounted to existing million stores, compared primarily Store mentioned. end to equipment relates Our decrease decrease a million, by

XX The NAF was million in ago. draft. a fund SG&A NAF National for revenue with was variable year primarily quarter compensation decrease COVID-XX. and and revenue this the XX.X million, million. equity by reflects expense quarter the NAF was deferral the to related to March reductions XX.X of advertising associated driven The between difference compared expenses the primarily

considered which to not ongoing and income can that of to non-cash year compared period. impact operating also EBITDA, reconciliation GAAP the XX.X defined the adjusted net million, is as A Adjusted items evaluation before performance prior of EBITDA amortization was depreciation, in the certain are release. in found taxes, be the adjusted other net interest, of for million in XX.X earnings income and

COVID-XX The overall first EBITDA XX.X approximately adjusted discussed revenue million. of was previously, from due impact on to quarter deferral our the

Additionally, to $XX decrease was adjusted sales, decrease X.X million which equipment in EBITDA. would equate mentioned, million a as previously there in

income of was net of $XX.X to impact the a $XX from and adjusted adjusted share. net diluted was share due XX.X adjusted the The discussed revenue decrease down to Adjusted net per equates adjusted year which net to million million income deferral XX.X reflect ago, previously, of million $X.XX, of income $X.XX. per income declines and EBITDA $X.XX a million

also EPS of income the Our the of includes first $XX and COVID-XX. the to equipment due reduced adjusted impact quarter million in net sales

sheet. the Now turning to balance

XXXX. combined one. the funding we in compared cash the XXX.X first December drew quarter variable on we during the XX generated the of free quarter by driven March in XX.X flow of million and million down notes was equivalents $XX XXXX with cash XX, increase approximately million, XXXX, cash million equivalents and cash since of on cash had end As of to The XXX.X

our Based we that on the current liquidity, on share for announced time situation the being. in halting were repurchase March our and preserving we focus activity

our cash for took reduce our compensation burn, our board additional of to announced including Additionally, monthly directors. measures we reductions leadership team the previously and

XXXX, of million on March financing was notes billion excluding preserve our debt, Total of flexibility. to liquidity drawn in XX, long-term consisting X.XX to variable our XXXX funding tranches fully debt and March XX costs deferred the related as of three of and

is structure debt like]. WBS Our [covenant

quarter the We a These trailing ratio tested service at debt threshold. system-wide are basis. a covenants, every coverage XX-month have total two calculated both maintenance of on and end sales a and

recent XXXX, our of at In covenant event. debt period ratio and these March debt coverage sales well total system-wide service times Both reporting are X.XX X, our potential of levels stood triggering above a X.XX most billion. was

that automatically the when the service of trapped first principal be falls cash For the interest. DSCR, which below occur inflows at would and X.XX would point times, XX% ratio trigger our to

maintenance to occurs when first controlled by end our was X.XX the trigger to sales we on XX-month if system-wide only covenant, trailing were basis happen, If it maintenance amortization below For of other XX% total billion. respectively. the declared rapid this the approximately those in kick would fall had our At covenants, and sales thresholds XX% a system-wide and DSCR party. of cushion for quarter, a the

again, would sufficient our of we headroom we liquidity trigger the to rapid automatically. of we tripping not party believe maintenance at remain for only have rapid through our the and the does control two Similar to position, end covenant Finally, stores DSCR if covenants. it the our be close as declare risk amort have year, would amortization

to based will time. we're outlook financial and with by our providing guidance on business this conditions an at normalize, significant disruption updated near-term to alluded not around the COVID-XX when respect Dorvin as Now uncertainty caused to

difficult we its profitability. the undoubtedly able to the resume growth Fitness faced Planet storm about delivering delivering track ever that good and be to operating has confidence ability feel While very our record weather will long the these conditions are most and our company increased

turn the now for the operator back I'll to call questions.

line [Operator from Konik from Instructions] Your Jefferies. the first question comes of Randy

Your line is open.

news share on on compared past my good industry right participant in see like the Chris, Chris. around, you other and first in ask lot, now afforded know, lifelong perspective you movies, and question more and what you're wanted I can a from know been to afternoon, a more of give that you us that, you starting this movie bankruptcies, know are your based I market the everybody. your thanks looks to guess you Yes, perspective. you've opportunities know, talk industry and in the Thanks. the about, to

the is you guess, accelerate I I This Chris. lining, I think, years others, the lot closing is of been their XX Randy. and I And know, Thanks the, probably of our competition think few a now. Gym XX a about our of and and think model others. we've that this Gold's Sure. you hear of with definitely our and it's Hour to of for silver and in bankruptcy lot the about that recent to model longevity profitability in compared Yes, all talking going Fitness a stores and strength of what of

on a it lives stores death. they're keeping and Randy. one, I a really it's, our know, think lot them let I We're that until new. known slow it you once build of unfortunately the big of casual what, what they've been it’s up of low being is always a mean, sit timer, a it and to for, not, which for we've first known opposite are is always catered lot fresh, CapEx, been

think this I happen, So, that's guess pandemic if have a lining would is definitely probably timing I here. taken these didn't accelerating. silver The so I

all and that definitely and it's of and there's And done situations will then and but being – the got through being it. weather get this to industry you've storm right, your think surveys appreciation fit health healthy renewed to honestly the have point help I this longer-term of do I some like the think and importance been will when a for that people

spot is, than to back mode widen So, way even get to already you're pave it I right, good think a in excited we're will so work more I our this to and and think here. the

you're have here. started little you you few have of bit that follow-up, believe to the particular know, then kind club mentioned of the you position? are open and now, operators? You I that, learnings about a of, using And Helpful, know, think topics council, opening plans are opened, things related kind any that the that, you In clubs the have the and franchisee I when think franchisee right discussed what business have and in the a going I being you how seeing that the your, first then, or of from what other are members council the a to the kind some most to forward?

question. great yes, Sure,

just the openings clubs you has So, been, three know, right now.

We have two in Georgia, one in few Utah. It's days. only been a

opened mentioned XXX list So, cleaning policies May my protocols operations staff Xst all of was [it we for have those. and in place COVID-XX put members we in remarks, as procedures. and opening And I more] page and we about of the

So, pleased and early, to before out I'd system, crossed four these joining now but clubs you we're we T's the dotted know, sure all for right five opening. I's momentum the stores again broader have planning on. since days, far, It's broader we're about May really open make pre-May bucket so to we're to we a roll which that using say, [filling] with so XX, our to XX early XXX

seven little I We're CEO out cancellations really is gym about of usage which slower, chains of a around think great, anything whack I the on be world. think, a there, pent-up would there a Roundtable a bit of surprising. aren't demand, was bit

weeks seven joins one his with And ahead his of he's pandemic, seeing are pent-up a ahead us of demand, this year. is a in now with who's XXX And stores. are opened about particular what last of been par on cancellations and lot year, last in whole he's

XX% is several usage. the in, the now demand and usage, in So, last is of member out the member year's definitely a a bit pent-up weeks slow which about gate they're different little of

see but people for I think a my think a in happened. around there is see all and said own and until the minute Randy had demand back it the exercise in honestly just mean, the I being exciting in this walking thing I I healthier, ago renewed I neighborhood. most to is, encouraging you So, interest is [indiscernible] which me, what neighbors

attention I just So, to more are think people paying that.

get in there getting they're or some was free big the question through leeway, storm manual. it's one more one schedules they're to the really we jump the to know, is of and and and even And you but design is, franchisee now to and page help right committees concessions – they they're to excited can and having We big big there to feel open Dorvin want use is how XXX one document, on our to Randy that grow. procedure other council, The The franchisee stay, here. there and their opening know, the them make on re-equip not right want give you they schedules the when the that to, know, is any not less ADA side stuff, so you re-equip all open.

they again feet and around them start and some given usually their under can rope drafting go their [till up comes here]. less build so get that here or more it and So, them,

Really helpful.

the Sounds franchisee and like great partnership members partners. your with

So, that's really great.

So, move I'll thanks and on. lot a

Randy. Thanks,

line from of comes the question Guggenheim. next Your from John Heinbockel

open. is line Your

two, kind staying an with issue, overwhelmed not know on know, of members times, usage is, at minutes, remind XX than seem get not to even which come back of, touch those, particular peak Chris. I would are And in comfortable they're things, plan that to and please. Your Two Hi, how skew younger members you one; clubs of demographics, things, with and for, then that your opens? more communicate once right? probably you to gym us to or then them be you think sort two not

Sure.

members, unlike for we billed going open. we, to So, closed know, weren't time weren't you be [indiscernible] going not that when to down is communicating they be

to after because know, you some like, we communication of communicating, now reopen, and what mentioned regulations. his we billing then like were in process – billed opening club is shortly looks that Tom So, government just when remarks, how the plans the had closed as members your

owe So, them we credit.

So, how to their that credit gets applied opening time.

compared it's be will So, to when they when first they walk communication of see closes. the what what they on opening, in, can expect that and definitely different of top when lot – saw gyms they they we a that

had our more in we've our decades, of we and know, much I cleaning, than a as cleaning, our – procedures sanitization before, is already on. the signage had them which their reiterating common stations members is. more where, signage had but our which they're always know, workout policies we've So, you mean, use gym you apparatus staff and after know, are more they as before cleaning treadmill those, it's, that world, the always unfortunately cleaning for you all are or not bench, more they that stores,

reiterating using that, from in more lot actually using, to no key type keys forcing a they their get staff there. in. taking or or of way, doing the themselves all they're is There of go we're way person's and phone, now them the their hand, on kind that, – self-checking So, barcode of downloads back app the the the we're a

that’s of things they So, the some member. expressing were to the that

age big you're know, XX% members, another part and Yes, right. that. the thing are Z's] of you On we millennial but have, [Gen XX million is

and in are Majority we Wednesday. two-thirds thing I one of know, think usage always X the you are big the call the, the X. we've there that about is evenings, of X,XXX those other have between Monday about workers through those a on So, store, said, is as

same is So, doing that's do XXX XXX doing workouts Monday, XXX or Friday on a a weekend X,XXX that if and on you a a day. on club

XXX, doing of X you X those and XXX between X. or they're visits, probably X,XXX and know, X On

busier the I've with connected So, the that seen. quick afternoon hours really is in John in morning three clubs X X work the are to are though, the from one, evening. that to Really those recent home than and interesting and is o'clock open, it's

So, are not before crack people it throughout having you they dawn in, are of in day. not come I they work think to know, are and the just coming afterwards, the using

is that night any Monday people opening, where which even at one stipulations time, be more So, first that have And can't January one bad. a three than in is you on even wouldn't for in technically bad. clubs club which hour, these not a there XXX

usage their with but bad, now day better out a time this night spread, year So, is us. the the of throughout even for not on is Monday XXX that this

the the then deferred of right. And just maybe revenue, lastly, mechanics

those will that So, when each opens. realized like it sounds of get clubs

of a over spread fair? be that be is XQ would XQ, said, and like you So, lot that will

Tom. in really actually and know, then – think Chris as the authorities, closed Hi, opening, the draft. I and before we on the was based The the there reopens. the vast on majority, club said the clubs you John, who closed. That's gyms it's XXX depends drafted said, the of It when advice

credit in cases. on is depends the up So, member a clubs essentially what it burns just those most XX-day open and off essentially when

you. thank Okay,

Yes.

Your next of from Raymond from Joe line comes James. Altobello question the

line is Your open.

afternoon. good Thanks. Hi guys,

how and Equinox like long guys sense something any they A, So, to to have any the quickly how up first members. I build done they your the curious among gym? question store want it go how surveys of your into if volume? and readily you guys how b, to with how to know, think members, to for: the notion once I return intend you did I'm that. back curious to come to gym; normal take back you might communicating opens gauge quickly I'm the if

their on how you Yes, to to, we've our we’re some opened? we were after unanswered, about wanted we were cancellation, discontinue were done many competitors at our want saying than X%. X% higher We resume the And that to discontinue, about we you only we're skewed know, compared know, peers and to some. looking at who’s competitors. were the memberships And continue where pose, our did – memberships one and were even

So was there. some that

I as was I so. believe had pointed back if don't that far exactly, anything As out, trying get out that part to think to and want working I and

guys of maybe that way, earlier you so X,XXX U.S. you of has targeting know, target in helpful. the still any a couple that And just or does mentioned that's stores has in Okay, in timing like out impacted you're pushed sound so? big years that this secondly, it this terms

real Hard get opening we estate you know, to really the – how say, and pipeline [indiscernible] flywheel determines but… with fast but the again, can moving get that it really fill

add in it shut country, only that, how and while to shutdown across ago, came well. that long all then had the essence halt I And pipeline, generally and the you obviously, you in remarks know, down know, crews as way because Joe, to to working you you the of to, would construction the know, the with take I'd knew down how one think my know, I thing is, a the said when etcetera. a no

So just again. and could – be into back that you our go pipeline even you next indicated over, to and we get and know, down this year, the that, I would up know because total year, got you expect high to units going last year

know, still A will obviously exactly one, they so to what say in couple period I we you would time guess, we're things, as reopen know, how like. know, look don't and the will that country you I is

bit think Randy's answered might little a have in it terms think been I in question of maybe, competition. that earlier Chris to I

not to a competitor it's retail think lot to as look but lot whole I going look different is a landscape] like, going well. that different, of [the the only perspective, out look going this to from a coming landscape

whole there's know, a think in nearer repositioning that in, know, think retail provides, to going just also to in you you I world then opportunities, even longer-term. be I the and

don't was So, had of size still of lot what that's normal impacting know, expect a said still, that you road. that, to we advantage like, to you pre-COVID time, confidence the look believe, but years same we Obviously, even that this will new the know, down take we at scale. got see a be we've the and may X,XXX. and I see always few in but

the in terms brand, grow certainly in know, at, U.S. in all because considerable you this know, our to, the almost the still in of pipeline our you and to You franchisees, continue every know, have every know, of you and markets regional base members, market we market, sophisticated ability we're

guys. you, thank Great,

Joe. Thanks,

Joe. you, Thank

Your next question comes from the Sandler. line of from Peter Keith Piper

Your is open. line

other you. maybe gym to the Thank there's of ever so capacity, really a little on some with never Chris, help kind are back over you crowding the your you issues hand, go issue, have machines, so, gyms Hi. maybe CNBC, made the get and some clarify detail to some might on Wanted XX% a members the reopening, you I interesting those more could well just half comments? unplugging cardio Good around you around are where that of afternoon. at faced on concern capacity? comments that and gym point to earlier questions think

yes. Sure,

other you clubs. that distancing we area, the So, pieces then signage equipment of know, in social we clubs open have at a about have we're If XXX how doing and unplugged, there mandated And cardio, three of is that by least or spaced are now. are piece every people so so cardiovascular out.

the XXX pieces of for you so have So, usable. cardio, XX pieces

quieter things a kind in You know, if good here of so know, you May night ways Monday get in the gym world. and it's opening January, was a generally it June, in

to And mentioned with Heinbockel here people home the of. I where generally coming coming which something with John in then not mid-day, is what lot back in people the work a you with question see from

that quite for So, luckily us. it will spread out bit a

schedule. out Monday, also workout So, Because I Wednesday. year. the issue. spacing really are people Two our workouts, One, Tuesday, see an and out of generally people work and their time don't is,

was same on know, you club XXX Friday. that I As the club on a X,XXX mentioned, a workouts Monday,

go to come can't out. January, unlike of and the week, not just and get in, day usage people So, different they where the a spread crowds that want

thing club us XX-day a So, members period don't see of really I And different. about either. XX% don't in being the our the use

about half work a the little were the it period. bit gives club to how in our of out? many mean, Well, use wanting to members I don't XX-day of come So, back Joe's people me question back

customer. I'm seven know, than day a a a person So, week customer you a cycle water. sole a different six, general or Gym Gold's That's, little have high

you could concessions now that around up over of implied was coming is to equipment or were other regards with see if you there there for that question we might are replacement, maybe looking process, I interesting. maybe but reopening one with some spending, Okay, And frame some the in right any then us that that's comments months ad concessions want to there the unfold franchisee curious at quarters? help possibilities ask

is this I Yes, Peter. Dorvin, this mean,

don't it, are know, most referred try know, are when one you in August know are the know, I down all out priority earlier, think clubs July not to come to, to maybe the, you things the of getting a know, know, it, to you that's you here or open. And, to in stores know, obviously said Tom You clubs, re-equip we even franchisees open, his Chris I and on that you highest clubs and plan or etc. maybe and the interested but remarks the, think when the

sure that you worry to essence, because obviously So, default of for being agreements make the of with there off franchisees that asset, off things is biggest take our in terms not kind of one to their, compliance being want of in in our their plate we of out their in know, franchise that.

all that store is, all the And communicated we've as done we requirements push out base, would franchisee as schedules. re-equips so we what our well development to new have under

then that on have care up, does we're that. for of is territory focus year. of, open everything that their the that the on push back because couple getting issue their allows focus asset to losing it a them ready clubs on huge members, you to, know, what taking ready out is And, and And focus Just know, have. frankly, one business, making pipeline you a know, not things. Number the a that's, quite sure that you and they is,

kind do level know, So, that to them comfort. provide we wanted of you to, of to that

that's one. number So,

you've that you you is, but on The an side second that they ways sure in we're done thing that know, we've Chris heard that you to to and, there need is advertising them know, is we're flip anything that say that much support is, of the make to as know, company help else.

these local open. get in the you of marketing back know, have spend, same So, terms – still it Because calls the will we're etc. requirements we

You being able know, with make prospective well. brand a members to sure we there to and want to out market we're that as

you And a that, add couple had you it things I wanted think well. as Tom, to of to

Yes.

really very to we how landlords franchise have And deferrals. productive worked while closed. team’s – his the led but have the on conversations development deferrals So, stores giving share by fruitful about I'd rent part, with for those the Miolla the very abatements on touched few but The best say, practices mentioned deferrals conversations. majority landlords, as this team while may groups are and has really to of club's before, on Dorvin our with abatements, earlier most been have Ray

And month the on so, that two six subsequent would a months the months situation. to that's depending or get if on was nine foregone for or added rent that

about to and say final we expectations. that level we've tried our to I'd people's taking point, help Chris' as situation to thing the sanitization the given think cleanliness And that another in and is, position and leadership

behalf to the capabilities on our ability is to franchisees are investing can sanitization to what products secure tools so we and elevate store our difficult We secure of level. at enhance

So, we're advance. in essentially that buying inventory

in it. sure it clubs, we So, as it pay off. get could we secure And order it their and make they'll then they

with So helps that liquidity. their

understand going I calls So, and think we're all we with think every I'd looking together say, in a have you are to forward, things widen to have club's to we've that treated know, we a all combination of the standpoint, the going from terms continue week, on really the we of in customer run competitively. franchisees and that based billing out some come how and moat both that appreciative them in this how we're stronger,

luck good the in and feedback helpful coming very That's with you. reopening. thank months the Okay,

thank you. Great,

Peter. Thanks

of Chen Your Oliver from line comes question from next the Cowen.

is open. Your line

with a monitor And Dorvin, as what you sure the replacement amidst of how are are thank thinking imply with relation with might – unknowns or happening? are different about was you nature second this to down marketing I'm question some that mentioned, in as openings in crisis, quite is what's at you that that and what about managing more could sales you, the on churn and looking the thinking net you. marketing you the roughly then strategies that churn and your comments around Difficulty] been of Hi, for underway things are spend lot Thank as or much equipment be possible generally does or there be everybody. XX% as and [Technical environment?

Oliver, there. you were a cutting lot out

I the if get to, I'm going question come back. So, can didn't exactly you right,

the is expectation versus I first initial think had of think were your was our and we was question in where the we guidance? on question. maybe I specifically The part now maybe reequipped or where what

this could rather of ago, year. Tom You replacement year my new of guidance remarks as providing a or openings, balance know, year, store it of said we guidance full-year the terms the earlier and as months we're the whipped that in was over through the that, or balance few development year likely back well of in but made our comment it as you not kind know, more last down I over equipment, be XX% what of

on priority putting on July know, clubs be some, here priority May the give we result And their replacement a or know, still back the kind would we're pipeline, those our for closed know, not franchisees three or stores mentioned them a ago of you the step the down As you road. when that we or be August of with get require the able to or up. stores in are And uncertainty you that couple the be something know, the now, you and, fact to then list and not of trying know, highest was highest you stores to that opened except when open, in, it to to want to, and open equipment that, minutes in June that's made didn't said list. for Chris were the earlier comment you new going I just sales we confidence then, ultimately, what the have know, regenerate

the I will the We care to a that out why members. XX pushing take the for dividends pay were right months know, everything and right thing do ultimately, we as and that's for brand think is thing So, to of our original the to from comment, do back to date. made brand, the you us its franchisees

marketing first weren't notified pieces is over, thing your know, I them, the we on the think churn And that foremost other most you I members and we think important I in billing them. froze on the think question that we

leading cancellations the we're a our when to enduring closure, we're used to what up So, fraction seeing of open. in an

you even tracking and along open pretty memberships, though we're not base, remember, this is So know, selling se. solid, per

night I over we've I’d active, doing as Live, per stores, XX, we XXX,XXX think soon looked and as them keeping launched it, digital stuff Facebook we all you we the churn our between piece March doing as at workouts know, those videos. far been and on of we're as say, the closed that

members it's really non-members. and unbelievable both So, transaction for

post Burlington that closing, XX there brand up are and subscribers have are So, them the XXX% YouTube us affinity people in and since YouTube Then million we over is our watching views. on big. really

real time. is this So, happening all in

did, we've iFit in a XXX% engage strategy year continue a increase and launched the So, launched We when we're about workouts average getting members there. XXX%. able to go digital daily now up we our content. app. of the that, our going down a along in We bit and the that then that's and for talking And And going then all and way. videos the a been already right new the bunch our partnership were we doing mobile we've back you about app were road and think for definitely over that to luckily

there keep think we're with in longer-term and fitness engaged to hopefully them value, in keeping them brand and the where partner though So, their open, going our giving I engaged aren’t we're keep longer-term some is that even four-walls them them that here. then

of changes with what And you are those about what may your on thinking of you're there app? side and making as versus well capabilities that business? as at that are that the to you're Chris, digital the How experience, platforms building? with customer your home, the thoughts long-term happen the demand

think in and content, even else. know, Yes, just noted [indiscernible] and stuff whether their it caused advantage the that rattling iFit taking just and has other where definitely you've off digital are I an it even seen I home of and people you track adoption was of acceleration [meltdowns], the everything

at not it their a you're, necessarily going to digital can't it that think new wait although was, of it'll to back stay never write to it also customers and been they're there, I big So, where that a go the but get say but to I it's showed, when bricks-and-mortar will they to even study There's maintain of up level will, influx think not ahead open, today. XXX%, though it's accelerated. we’ve been also not It'll numbers. back the pre-COVID recent

think big outside. be to wellness a what – engaged it's want like going part you know, that we're at about it's longer we've be to of, talked I or we in club and in source journey, running I do home the think or term whether trusted their

it's think just do members really in from feedback something at night going that proof our consumption just Live and and Facebook what or get are be the we looking and I forever Live I at non-members we think of accelerated at it, view doing and it's seeing pudding, it's on point. point we're the something to the now is probably So, this Facebook from the

end-all think it's out be-all an don't I have. home must a it's by think at means. working I a, it's So, any

I summer. why builds the but and going builders, experience good, being a bricks motivation we others and I last the in the think of it's good and the camaraderie kept around mortar replaceable, be to app not think place of

from comes question of next Komp Baird. Your line the Jonathan from

open. is line Your

broader clear. thinking, Yes. relaxing Hi, thinking Are side and curious, after sort you then your thank just what you. to how there's you you prior before question catch-up you here? normalized that about and requirements Just get units, just the Are for units partners get just close how the you and are franchise going trajectory be about the I of want you or you those the the new of this, a the some maybe re-equipment, kind the you for back on to everything up communicated thinking know something thinking but of level? follow are things, of more to next are to on thinking year of period, here? a post on the

we out is deadline, we're essence from five the [new] affordable and equipment to same date, Chris And, original replacement now to when all are think of a critical you that we exist as that, know, brand saying the little XX for the earlier the that reasons that the open, all one know, you have they're high our requirements know, what value, and Yes, to know, that they mentioned is done, still stores bit are, we brand having critical but that's and pushed know, we're in pipeline new when that doing for, can't its and you out it's you seven. John, we months where in today. same you gets, be option stands what

So, that's it. handling we're how

it's are pushed as there So, they out seven. year existing being and what's has forward going in out place then the new requirements the today, a going five everything for but still

cancellations, use talked know Okay, other voluntary your behavior and extended one kind time, your that you're get more and then. members cancellation? that is Chris, about you're of don't more just out risk the some know there's being topic, wondering you've about know members. club how your to of a I period you the on, if reopen, of the of need the biggest maybe of driver contingent things use you non as certain what of far of of how risk on I’m always Curious you thinking thinking thoughts who kind how about for

I or sales to issue, don't to there I of these was where really going when Yes, more change banking then. were when you I store go even think great our I are look and recession back at, know, XXXX back when don't same a, that. see

downgrading did serve don't like their did down there from want or to the to price would of we less said XX% a that option. size this healthy higher gym And of are ours be more active. one people I membership was one that consider – be less think to think affordable So, of going coming out we or members I over

in what down were which where trading. So, saw XXXX is people we

you So in think direction going saw would the I know, any feel see, points XXXX. than I differently nothing we any we're to that don't to something

expect inquiries any from to about requests And that? downturn a seen, Or you white during have of would you card a to see or downgrading membership? any the card black do

example, maybe you Possibly, a real, coming slight chance big about members White kind situation Card where one probably upon because the not a much they're black like talking joining but they the a that cheaper any ticket card see black like than maybe upgraded really but in more we're even think, from. take the is it, on card know, we talked upgrade of necessarily I a no for maybe didn't about join I

I appreciate luck. of Okay, perspective. great. the Best

Thanks, John.

next Blair. Your from the Zackfia question from Sharon comes line of William

Your line open. is

Hi, it's good how the afternoon. many because classes your attract follow you've been the it's to via you've on obviously, intriguing non-members I different wanted members to also digital but able keep dynamic, important offering. up pretty engaged, been to

what the I you're you the talk kind but Planet, folks then club? have there this is these data, if trying from and to know can people follow any reopen who to seeing into evidence demographic versus start how of So, that engage don't terms come up in all you difference about, digital and is kind of you to at engagement clubs and once between aperture for into of online Any the do move widening the realm club?

then is nonmembers, high, really a is if now the Members Facebook was know or it to those can unfortunately you interesting get we able is access we within be we're content will report the able that have know, And people Yes, work you them XXX,XXX we'll all who a or thing be non-members free. who's free. the just are it. don't content going is message to to then download the know, data we on the you lot of we'll night. actually are, with actually member who on have there messaging, live our as be yet, a One where to today app, app, app who you for that speak is members separately. have don't utilizing and launching, the which We to that but that on

use – avenue not introduced other of a come so give get we taste non-member to difference a – So, we're has for team on use avenue us our to what us to it them to kind marketing to another to could summer a or for challenge like, to second can ways of hopefully to no second, marketing create in. that brand them market them

always could out some the intimidation still courage is the plan that big is, first be and piece. can't a brand, know, So, if you can through intimidation or to we that go some some build for we it gym, be in user something walk up know, casual and And the that no content we of give it can access gym to at level breaks say honestly, some, we to this in. them timer that it's they somebody you be because is a come that but maybe home could

guys I talk I That's but this, don't you can lot helpful but on right there's obviously, think control a you you now, can't then, SG&A the and about control heard SG&A.

that run So SG&A? rate saw is [$XX million] quarterly is of right this a kind quarter, for correct now of what we

Hi, Tom. it's Yes. Sharon,

reflective. some some really you since in of or hit that that that QX that, there's think taken actions weren't we’ve the QX know, things I

we've we rate liquidity. our us through that to made continue down, cash close if, but you beyond know, well year. remain And burn had made we the statements about we look know, come to liquidity year, clubs we've So, the you the when carry rate, – I will think at enough

cash actions very disclose, the we true. third. our taken, we've don't we've You that's a but we've know, rate, which by still burn And that about reduced taken through true,

take because fully So, prolonged, it'll we of will situation, is continue is, answer some weren't actions in down from where extent if this the additional know, to monitor reflected. and short it QX to but actions the was necessary, the you come

Thank you.

from comes JPMorgan. Your of line John Ivankoe next question from a

Your open. is line

them of appreciate and that financial different fact franchisees some in perspective, I your debt to you. many are thank positions are the Hi, a from of expand. using debt

have times”, that was if but You “guaranteed cash balances, to that's recurring significantly all how but a know, opportunity challenged, other in think company account. know, franchisees really was, it's know, given franchisees case, their your store model financially know, you to normal the cash or and you expecting you flows and of in for them of in the normal many now, franchisees, within I many increase some mean, obviously I value other type we’re your think, franchise know, own you business sense there how and willing your base, times you one you equity stores not do where buy are are an own give but

start the I'll to discussions and you Tom. Yes, our we've I with it. lenders point business off put on know, said cash economics on of the will on that, build what franchisees leverage were it's of your know, Dorvin John, and lenders willing business the, our on, Hi produces the and a had based Dorvin very for know, maybe think profitability. franchisee the so much just and, some you on you earlier, to some

And so, no our a revenues to the own including go you I contemplated where know, – zero. one one structure, basically think no ever situation

of of other we portfolio work think across the we just growing. they fact, lenders That have So, to they fact assumed conversations on franchisees. with lenders want accommodating you system the the if that - the are most we've near be in had we of their top if the to of so the the out folks most our they'd are not that's top, and want profitable as communicated list because and that lenders to would deep be, calls, of would our pretty look franchisees with they're in to, some lenders, know, in borne as who of

and short the with happening And they reopen, of all overall get better key wellness. basically the sense all, metrics clubs They and until it's you'd strong. know, stronger are, given where will coming for trends answer the what's they waivers the provide, know, of be things imagine, and strong where they're the and you very of, in we going needed, extent they would you you a know, just were likely were competitively closed the said, into accommodating to are it, while this, coming tailwinds health and out but be are, as that very to would strengthening understanding knowing provide

this are to they're private would our the love And We've sure I'm franchisees that, we actually by want of some the equity anybody some and have they saying you model, system. sell, your out, X% and of know, we're if stores the in-bound that Dorvin. try we've within and you And Planet past, we had Yes, portfolio to you as that stated asset-like to to franchisees XX know, of to to a like I know, overall reaching corporately although there's buy. in John, bigger mean, calls less from is of base. have some you know, franchisees that the probably you latter build the the we point, know, themselves, than we,

came we know, as sell up sell, to we It's to be not or to something needed and, that you who if inconceivable would well. wanted a knew clearly franchisee there table

in portfolio you work with, sideline got have, business that, with So, and we've be of a then I that know, be. the what guys the think the to on need varying various you've with this here Tom's even have in believe on conversations based banks willing got got capital if you as they that we To we well franchisees structure. there they're just know, is, would you've a degree system point, and

you. Thank Understood.

Thank you, John.

John. Thanks,

of from comes question Capital Siegel the Markets. from Your next line BMO Simeon

Your open. line is

hope just point. guys, last office. doing all for on that well Hi, Thanks. enough Dorvin, your you're

meaningful So Does black Has as you view? changes then, any benefits? to consolidated the card changed point the more it looking back value envision [indiscernible] thoughts ads further I out, out home base a your top get if people through you to So, there? of base? Like post-COVID? further And and more? just just maybe composition know How Chris, to don't think you spread just what further the does the the are franchisee out, any we coming the do had anything from thinking there? stay made. you get about

will Sure. Simeon, be think you consolidation. I there continued know, that

looking from coming out to, You where inside obviously. new were know, this into what know, you world's well of this outside, know you we're like we're going as works, look in, going private grow. as the looking the potential equity There guys guys we to the know to deals in don't on you know, the that both

there. I think be that still will

purple in I bleed, accelerating it like XXX to, you you know, I of XXX. business and gone they we've roughly grow. a about got know, probably moderating want down and because from know, know, want and the business to see You we've lot you that guys that, yellow to and that they they see don't the stay

of also know, over smaller end And we the guys fine see will some today at, out of then, but be don't to but, it. the we'd know, you at it where know, with it's where the selling time, you staying it's know, fine. that's larger few of guys, think probably composition you up, like We you we

have You system today, the quite accelerating a to in we That's reduction know, in number you partners the you'd and that point we have the today. significant really of frankly, franchisees like know, today. it's the

definitely the I’d with our say and think definitely road Chris. and standpoint earlier, or I shown the think reassured is seen I us, they've and right from have others industry, down, were they're people on has with all the that, just and the I has and mentioned our this we're within – what because Yes, and like think card reinforced we that and just home this, we're Live it with YouTube, the direction but your seeing company black going that going app in content down they're amenity, industry pandemic the road consumption consumption know, an Facebook a app that even the from the you this. what of our their consumption and work I

going the are gym is a you bench on And people why tier us already know, phone to benefit, and membership, this think question go an membership? we're know, the it or we, you it any it something that as the anyway. their I down, they that Planet, people and wall luckily, from to the content benefit. or on know, phone is know, add-on a big that in black next but the is You is you I card just got guess know, it all So, to somewhere that reinforces routine, third getting you I getting I the time, they see aren't

capitalize think as the world then and to I to how on even it how definitely figure be and before, forward So, that. going so will more than

and of Okay, lot, luck a Best thanks guys. healthy. stay

Your from Maroccia next question comes line Berenberg. the Alex of from

open. is line Your

abroad. and of some to afternoon. competitive previously oversaturated competitor in opens thinking larger U.S. Do even think you store international Good the were unattractive both in previously some have been might bankruptcies, opportunities guys. you U.S. forced that Hi, closures cities up I'm the or about regions guys? that

it could it box, you around necessarily, of be look model have is the strictly think it a in know, sense of a it? could estate our I it's is perfect like So, for lot bankruptcies is – we it's example, you somebody could have and estate real courts something we bigger bigger make definitely it's, the renovate more know, estate pools look York, we have don't they with and a what one but basketball and real or in be ours. just at, quite different know, that a a those coverage on play, the a in to a because Yes, to if hard play, very real who estate could of as you that's be the has real Boston New as, model lot find frankly, ways, in it hurdles city big of available,

most way it doubt of you that about know, the some estate know, is, hard So, know, could there's that is, with retailers, they markets you most free let’s you real talk is but estate up to come up free rural this of locations real of Then generally really but by that’s in potentially some for markets. would us unavailable. with not better longer-term, be the us definitely well no that, it probably new some dense could even definitely, these I for in markets, out think

you go off there, sense I know, a top some to of make to go in countries I presence but at some I one there anything was head know, know know pretty don't if and opportunity [indiscernible] I'd make in but might if there's want a you bigger bigger, front, come into my time for sure. these the an time, you think don't there's international you where some at I yet, something, if know, as already players large said, in

get. franchisees? percentage loans. total Okay. give And cost businesses then a of the able for a of know costs the labor general metric how much is that small for some what you OpEx as is, second labor are Can sense were to main the us one I the SBA the on of

in occupancy, on depends Yes, a hi, and less generally of combined and little Between circumstances, more might mid-XX-ish. be it's XX/XX others, than it's Tom. labor labor It that's pretty close. they're occupancy but, location, but kind little and the some between

you. great. Okay, Thank That's helpful.

comes of from Rafe line Your Bank next question Jadrosich a of from America.

Your open. is line

Rafe. Good afternoon. for question. it’s Thanks taking Hi, my

Rafe. Hi,

expect the deferrals revenue I wanted to clarify store the just quarter to closures, the second would you start to the stores to that start in from – recognize the as reopen? clubs

It on hi they Tom. when it's Rafe, Yes, reopen. depends really

the that that And days starts so, for, the reopen burning where clock then as membership we're XX roughly XX paid ticking off revenue. folks, we that can days folks recognize club's soon the and as

then the yes, So, if inside that's good. we're quarter,

QX. heard, different You know, you it we've extends, could clubs, If from things in be some different that you know, know, which states.

a really So, club is is it. basis, club recognize we'll how which by

when it prior and time, when an its club of takes past that Got the periods or it the can the happened you've it. in you reopened, seen an long extended club about And cancellations And close just reopens prior then, has just for talk in and closures? you how churn see March, you've uptick in club mentioned half productivity? Chris, period the how see return to steady, membership maybe an of did uptick in you in where didn't second stayed individual you an what's had to

build. be, were doing even once that better months, year, Maria, as The a the for went probably was that and Yes, that was at it continued and I think rebuilt be say, was within the Puerto half three island stores Rico market. they were And thing in to six that business they know, the in would and we closed franchisee to was EFT time pre-hurricane. usual, closed, Those probably devastated than Hurricane were XXXX. to and XX there of you they essentially – anything it it only on that completely stores to store somewhat close those build another store were rebuild. reopened completely and this

moved in were if then work the Island recovered resilient, they back no they off So, XX% saying that pretty might the of was housing. there and Island about [indiscernible] you remember have or

closed. we how when So, they it were the you being with out, know turned stores really reopened pleasantly surprised from

So the that probably only that's similar. that's

best, but We know. they're Florida, you know, at you really, closures weak our in have

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the you think joins, longer-term day. any to see not the having place only just options the I really new really shop, end we’re of

you. Thank great. Okay,

Rafe. Thanks

the line comes question next from Your Macquarie. Golding from of Paul

is line Your open.

being Hi, the I my home turning some could the thanks dues the membership suburban, because on. may to so I resumption turned there there, much of black see ability there turn back membership around when access Or have for taking if back urban turns think you there could reciprocity a around on. card was back some mechanics the at hoping is on about gym color members differential and and If versus looked this when us I question. the I dues member is and give on? and we – mean,

that? light you any So, could shed on

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you’ve something that, – that So be that’s that that mentioned now a idea. I'll probably great would

I think sure. at we for will look that

the Chris. on color what protocols, future basis offset improvement and on you could like the the stickiness can margin look And appreciate contactless I uptake the Great. then of that, say with any on understanding increased physical out on going this? of looking into from a anything decrement cleanliness virtual forward and longer-term or sort

we to but never paper machine, have, the was have, given luckily always towels, gym you of any credit fact always and feet really this and XX for know, I know, I just, know, this. XX, the need done you one more for you throughout we no I and taking less always calling happens we've with and virus. of the I know, out, in or mentioned that a sanitization disinfectants don't stations of payroll. it really entire see guess, actually lot took is to, reinforcing protocols, people We for it what don't as and done guess it, we've is, our just, already be, There's more credit probably you approved within,

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Understood.

potentially side? benefit look could from could then your longer environment margins contactless how potentially trying and more a get whether iFit content, less to Just consumption certain fitness picture maintain to of through it's cost or would having whatever, So you the virtual of things a say, term, need from usage?

you is, thing some will create one think the is know, I well, Yes, benefit. it unknown retention

tell not maybe content they're somebody the keep and know that is, we members gym. use the at I not don't and longer, else's. using XX% now then using don't mentioned, they’re our working the using us if As they'll they're is out home, because the gym, of app will and because don't We membership know our they're

we're be we'll providing else. think that'd upside that track bigger because maybe giving I've I longer say is watch value some they're somewhere So looked the value to to not a probably and and try little

Got Appreciate it. it. Thanks so much.

Thank Pleasure. you.

Your Bolton-Weiser from Linda comes the Davidson. from last of D.A. question line

open. Your line is

much. question Hi, has Thank and answered. actually my asked been very you

Linda. Thanks, Okay.

Linda. Thanks,

to Chris closing are time. There the Rondeau further no this for turn I back questions remarks. call at

and excited mentioned, as Great. under you quarter our Well, really don't moat for wellness I business lining about members the release, widen for thank about getting of today that longer pretty to attending members for different we future. franchisees, times being in future excited I trusted everybody think non see yet. first all and open, this for source our you these silver just for will, call things in us. this our the all the that know, Still have term, the the happy

quarter an time. forward to you and second call look update So, at give you. Thank that our

That today's call. conference concludes

disconnect. You now may