PLANET FITNESS, INC., 10-Q filed on 11/3/2016
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2016
Oct. 26, 2016
Class A Common Stock [Member]
Oct. 26, 2016
Class B Common Stock [Member]
Document Information [Line Items]
 
 
 
Document Type
10-Q 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Sep. 30, 2016 
 
 
Document Fiscal Year Focus
2016 
 
 
Document Fiscal Period Focus
Q3 
 
 
Trading Symbol
PLNT 
 
 
Entity Registrant Name
PLANET FITNESS, INC. 
 
 
Entity Central Index Key
0001637207 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Non-accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
50,049,305 
48,530,085 
Condensed consolidated balance sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 65,954 
$ 31,430 
Accounts receivable, net of allowance for bad debts of $673 and $629 at September 30, 2016 and December 31, 2015, respectively
14,435 
19,079 
Due from related parties
97 
4,940 
Inventory
759 
4,557 
Restricted assets – national advertising fund
2,455 
1,962 
Other current assets
19,420 
10,977 
Total current assets
103,120 
72,945 
Property and equipment, net of accumulated depreciation of $28,435 as of September 30, 2016 and $23,525 as of December 31, 2015
56,577 
56,139 
Intangible assets, net
258,799 
273,619 
Goodwill
176,981 
176,981 
Deferred income taxes
255,729 
117,358 
Other assets, net
1,132 
2,135 
Total assets
852,338 
699,177 
Current liabilities:
 
 
Current maturities of long-term debt
5,100 
5,100 
Accounts payable
14,415 
23,950 
Accrued expenses
10,207 
13,667 
Due to related parties
3,966 
 
Equipment deposits
3,978 
5,587 
Restricted liabilities - national advertising fund
2,455 
 
Deferred revenue, current
17,084 
14,717 
Payable to related parties pursuant to tax benefit arrangements, current
8,916 
3,019 
Other current liabilities
222 
212 
Total current liabilities
66,343 
66,252 
Long-term debt, net of current maturities
477,067 
479,779 
Deferred rent, net of current portion
4,878 
4,554 
Deferred revenue, net of current portion
8,472 
12,016 
Deferred tax liabilities
1,275 
Payable to related parties pursuant to tax benefit arrangements, net of current portion
265,156 
137,172 
Other liabilities
489 
484 
Total noncurrent liabilities
757,337 
634,005 
Commitments and contingencies (note 11)
   
   
Stockholders' equity (deficit):
 
 
Accumulated other comprehensive loss
(1,123)
(1,710)
Additional paid in capital
14,825 
352 
Retained earnings (accumulated deficit)
(4,248)
(14,032)
Total stockholders' equity (deficit) attributable to Planet Fitness Inc.
9,464 
(15,380)
Non-controlling interests
19,194 
14,300 
Total stockholders' equity (deficit)
28,658 
(1,080)
Total liabilities and stockholders' equity (deficit)
852,338 
699,177 
Class A Common Stock [Member]
 
 
Stockholders' equity (deficit):
 
 
Common stock, value
Class B Common Stock [Member]
 
 
Stockholders' equity (deficit):
 
 
Common stock, value
$ 5 
$ 6 
Condensed consolidated balance sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Accounts receivable, allowance for bad debts
$ 673 
$ 629 
Property and equipment, accumulated depreciation
$ 28,435 
$ 23,525 
Class A Common Stock [Member]
 
 
Common stock, par value
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
300,000,000 
300,000,000 
Common stock, shares issued
49,914,000 
36,598,000 
Common stock, shares outstanding
49,914,000 
36,598,000 
Class B Common Stock [Member]
 
 
Common stock, par value
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
48,665,000 
62,112,000 
Common stock, shares outstanding
48,665,000 
62,112,000 
Condensed consolidated statements of operations (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Revenue:
 
 
 
 
Franchise
$ 23,046,000 
$ 16,148,000 
$ 70,042,000 
$ 51,806,000 
Commission income
4,179,000 
3,646,000 
14,338,000 
11,624,000 
Corporate-owned stores
26,675,000 
25,153,000 
78,756,000 
73,674,000 
Equipment
33,107,000 
23,870,000 
98,686,000 
87,588,000 
Total revenue
87,007,000 
68,817,000 
261,822,000 
224,692,000 
Operating costs and expenses:
 
 
 
 
Cost of revenue
25,925,000 
18,858,000 
77,365,000 
70,104,000 
Store operations
15,181,000 
14,305,000 
45,673,000 
43,354,000 
Selling, general and administrative
12,244,000 
17,348,000 
36,470,000 
43,840,000 
Depreciation and amortization
7,745,000 
7,976,000 
23,127,000 
24,160,000 
Other gain
(241,000)
(9,000)
(406,000)
(76,000)
Total operating costs and expenses
60,854,000 
58,478,000 
182,229,000 
181,382,000 
Income from operations
26,153,000 
10,339,000 
79,593,000 
43,310,000 
Other expense, net:
 
 
 
 
Interest expense, net
(6,291,000)
(6,556,000)
(18,819,000)
(17,872,000)
Other income (expense)
(204,000)
(1,815,000)
30,000 
(2,627,000)
Total other expense, net
(6,495,000)
(8,371,000)
(18,789,000)
(20,499,000)
Income before income taxes
19,658,000 
1,968,000 
60,804,000 
22,811,000 
Provision for income taxes
4,795,000 
1,230,000 
11,504,000 
1,921,000 
Net income
14,863,000 
738,000 
49,300,000 
20,890,000 
Less net income attributable to non-controlling interests
11,438,000 
4,631,000 
38,374,000 
4,857,000 
Net income (loss) attributable to Planet Fitness, Inc.
$ 3,425,000 
$ (3,893,000)
$ 10,926,000 
$ 16,033,000 
Class A Common Stock [Member]
 
 
 
 
Net income per share of Class A common stock:
 
 
 
 
Basic
$ 0.08 1
$ 0.05 1
$ 0.28 1
$ 0.05 1
Diluted
$ 0.08 1
$ 0.04 1
$ 0.28 1
$ 0.04 1
Weighted-average shares of Class A common stock outstanding(1):
 
 
 
 
Basic
44,668,875 1
35,661 1
39,394,318 1
35,661 1
Diluted
44,685,696 1
98,710 1
39,397,486 1
98,710 1
Condensed consolidated statements of comprehensive income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Statement Of Income And Comprehensive Income [Abstract]
 
 
 
 
Net income including non-controlling interests
$ 14,863 
$ 738 
$ 49,300 
$ 20,890 
Other comprehensive income (loss), net:
 
 
 
 
Unrealized gain (loss) on interest rate caps, net of tax
193 
(557)
(469)
(1,497)
Foreign currency translation adjustments
11 
198 
(84)
245 
Total other comprehensive income (loss), net
204 
(359)
(553)
(1,252)
Total comprehensive income including non-controlling interests
15,067 
379 
48,747 
19,638 
Less: total comprehensive income attributable to non-controlling interests
11,572 
4,423 
37,964 
4,649 
Total comprehensive income (loss) attributable to Planet Fitness, Inc.
$ 3,495 
$ (4,044)
$ 10,783 
$ 14,989 
Condensed consolidated statements of cash flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Cash flows from operating activities:
 
 
Net income
$ 49,300 
$ 20,890 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
23,127 
24,160 
Amortization of deferred financing costs
1,114 
1,070 
Amortization of favorable leases and asset retirement obligations
297 
380 
Amortization of interest rate caps
459 
 
Deferred tax expense (benefit)
11,062 
(141)
Provision for bad debts
44 
547 
Gain on disposal of property and equipment
(347)
(76)
Equity-based compensation
1,373 
4,647 
Changes in operating assets and liabilities:
 
 
Accounts receivable
4,898 
8,830 
Due to and due from related parties
8,494 
4,532 
Inventory
3,798 
237 
Other assets and other current assets
(1,635)
(563)
Accounts payable and accrued expenses
(10,172)
(11,745)
Other liabilities and other current liabilities
(30)
57 
Income taxes
(7,543)
969 
Payable to related parties pursuant to tax benefit arrangements
(6,007)
 
Equipment deposits
(1,609)
823 
Deferred revenue
(1,264)
626 
Deferred rent
379 
1,330 
Net cash provided by operating activities
75,738 
56,573 
Cash flows from investing activities:
 
 
Additions to property and equipment
(9,266)
(13,830)
Proceeds from sale of property and equipment
402 
76 
Net cash used in investing activities
(8,864)
(13,754)
Cash flows from financing activities:
 
 
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and commissions
 
156,946 
Use of proceeds from issuance of Class A common stock to purchase Holdings Units
 
(156,946)
Exercise of common stock options
79 
 
Proceeds from issuance of long-term debt
 
120,000 
Principal payments on capital lease obligations
(37)
(343)
Repayment of long-term debt
(3,825)
(3,525)
Payment of deferred financing and other debt-related costs
 
(1,698)
Premiums paid for interest rate caps
 
(880)
Repurchase and retirement of Class B common stock
(1,583)
 
Distributions to Continuing LLC Members
(27,071)
(171,101)
Net cash used in financing activities
(32,437)
(57,547)
Effects of exchange rate changes on cash and cash equivalents
87 
(102)
Net increase (decrease) in cash and cash equivalents
34,524 
(14,830)
Cash and cash equivalents, beginning of period
31,430 
43,291 
Cash and cash equivalents, end of period
65,954 
28,461 
Supplemental cash flow information:
 
 
Net cash paid for income taxes
8,121 
1,105 
Cash paid for interest
17,187 
17,063 
Non-cash investing activities:
 
 
Non-cash additions to property and equipment
$ 127 
$ 709 
Condensed consolidated statement of changes in equity (deficit) (USD $)
In Thousands, except Share data
Total
USD ($)
Accumulated Other Comprehensive Loss [Member]
USD ($)
Additional Paid-in capital [Member]
USD ($)
Accumulated Deficit [Member]
USD ($)
Non-Controlling Interests [Member]
USD ($)
Class A Common Stock [Member]
Class A Common Stock [Member]
Common Stock [Member]
USD ($)
Class B Common Stock [Member]
Class B Common Stock [Member]
Common Stock [Member]
USD ($)
Beginning balance at Dec. 31, 2015
$ (1,080)
$ (1,710)
$ 352 
$ (14,032)
$ 14,300 
 
$ 4 
 
$ 6 
Beginning balance (shares) at Dec. 31, 2015
 
 
 
 
 
36,598,000 
 
62,112,000 
 
Net income
49,300 
 
 
10,926 
38,374 
 
 
 
 
Equity-based compensation expense
1,373 
 
1,373 
 
 
 
 
 
 
Repurchase and retirement of Class B common stock
(1,583)
 
(441)
(1,142)
 
 
 
 
 
Repurchase and retirement of Class B common stock, shares
 
 
 
 
 
 
 
(141,000)
 
Exchanges of Class B common stock
 
730 
5,269 
 
(5,999)
 
 
(1)
Exchanges of Class B common stock, shares
 
 
 
 
 
13,306,000 
 
(13,306,000)
 
Tax benefit arrangement liability and deferred taxes arising from secondary offerings
8,148 
 
8,148 
 
 
 
 
 
 
Exercise of stock options and vesting of restricted share units
124 
 
124 
 
 
 
 
 
 
Exercise of stock options and vesting of restricted share units, shares
 
 
 
 
 
10,000 
 
 
 
Distributions paid to members of Pla-Fit Holdings
(27,071)
 
 
 
(27,071)
 
 
 
 
Other comprehensive loss
(553)
(143)
 
 
(410)
 
 
 
 
Ending balance at Sep. 30, 2016
$ 28,658 
$ (1,123)
$ 14,825 
$ (4,248)
$ 19,194 
 
$ 5 
 
$ 5 
Ending balance (shares) at Sep. 30, 2016
 
 
 
 
 
49,914,000 
 
48,665,000 
 
Business organization
Business organization

(1) Business organization

Planet Fitness, Inc. (the “Company”), through its subsidiaries, is a franchisor and operator of fitness centers, with more than 8.7 million members and 1,242 owned and franchised locations (referred to as stores) in 47 states, the District of Columbia, Puerto Rico, Canada and the Dominican Republic as of September 30, 2016.

The Company serves as the reporting entity for its various subsidiaries that operate three distinct lines of business:

 

Licensing and selling franchises under the Planet Fitness trade name.

 

Owning and operating fitness centers under the Planet Fitness trade name.

 

Selling fitness-related equipment to franchisee-owned stores.

The Company was formed as a Delaware corporation on March 16, 2015 for the purpose of facilitating an initial public offering (the “IPO”) which was completed on August 11, 2015 and related transactions in order to carry on the business of Pla-Fit Holdings, LLC and its subsidiaries (“Pla-Fit Holdings”). As of August 5, 2015, in connection with the recapitalization transactions that occurred prior to the IPO, the Company became the sole managing member and holder of 100% of the voting power of Pla-Fit Holdings. Pla-Fit Holdings owns 100% of Planet Intermediate, LLC which has no operations but is the 100% owner of Planet Fitness Holdings, LLC, a franchisor and operator of fitness centers. With respect to the Company, Pla-Fit Holdings and Planet Intermediate, LLC, each entity owns nothing other than the respective entity below it in the corporate structure and each entity has no other material operations.

Subsequent to the IPO and the related recapitalization transactions, the Company is a holding company whose principal asset is a controlling equity interest in Pla-Fit Holdings. 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 limited liability company units of Pla-Fit Holdings, LLC (“Holdings Units”) not owned by the Company.

The recapitalization transactions are considered transactions between entities under common control. As a result, the financial statements for periods prior to the IPO and the recapitalization transactions are the financial statements of Pla-Fit Holdings as the predecessor to the Company for accounting and reporting purposes. Unless otherwise specified, “the Company” refers to both Planet Fitness, Inc. and Pla-Fit Holdings throughout the remainder of these notes.

In June 2016, the Company completed a secondary offering (“June Secondary Offering”) of 11,500,000 shares of its Class A common stock at a price of $16.50 per share. All of the shares sold in the offering were offered by certain existing holders of Holdings Units (“Continuing LLC Owners”) and certain holders of Class A common stock (“Direct TSG Investors”). The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Direct TSG Investors and the participating Continuing LLC Owners. The shares sold in the June Secondary Offering consisted of (i) 3,608,840 existing shares of Class A common stock held by the Direct TSG Investors and (ii) 7,891,160 newly-issued shares of Class A common stock issued in connection with the exercise of the exchange right by the Continuing LLC Owners that participated in the June Secondary Offering. Simultaneously, and in connection with the exchange, 7,891,160 shares of Class B common stock were surrendered by the Continuing LLC Owners that participated in the June Secondary Offering and canceled. Additionally, in connection with the exchange, Planet Fitness, Inc. received 7,891,160 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings. Immediately preceding the June Secondary Offering, Planet Fitness, Inc. held 100% of the voting interest and 37.1% of the economic interest of Pla-Fit Holdings and the Continuing LLC Owners held the remaining 62.9% economic interest in Pla-Fit Holdings.

In September 2016, the Company completed a secondary offering (“September Secondary Offering”) of 8,000,000 shares of its Class A common stock at a price of $19.62 per share. All of the shares sold in the offering were offered by the Direct TSG Investors and participating Continuing LLC Owners. The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Direct TSG Investors and the Continuing LLC Owners that participating in the September Secondary Offering. The shares sold in the September Secondary Offering consisted of (i) 2,593,981 existing shares of Class A common stock held by the Direct TSG Investors and (ii) 5,406,019 newly-issued shares of Class A common stock issued in connection with the exercise of the exchange right by the Continuing LLC Owners that participated in the September Secondary offering. Simultaneously, and in connection with the exchange, 5,406,019 shares of Class B common stock were surrendered by the Continuing LLC Owners that participated in the September Secondary Offering and canceled. Additionally, in connection with the exchange, Planet Fitness, Inc received 5,406,019 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings. Immediately preceding the September Secondary Offering, Planet Fitness, Inc. held 100% of the voting interest and 45.1% of the economic interest of Pla-Fit Holdings and the Continuing LLC Owners held the remaining 54.9% economic interest in Pla-Fit Holdings. Immediately following the completion of the September Secondary Offering and as of September 30, 2016, Planet Fitness, Inc. held 100% of the voting interest and 50.6% of the economic interest of Pla-Fit Holdings and the Continuing LLC Owners held the remaining 49.4% economic interest in Pla-Fit Holdings. As future exchanges of Holdings Units occur, Planet Fitness, Inc.’s economic interest in Pla-Fit Holdings will increase.

Summary of significant accounting policies
Summary of significant accounting policies

(2) Summary of significant accounting policies

(a) Basis of presentation and consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All significant intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated financial statements as of and for the three and nine months ended September 30, 2016 and 2015 are unaudited. The condensed consolidated balance sheet as of December 31, 2015 has been derived from the audited financial statements at that date but does not include all of the disclosures required by U.S. GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “Annual Report”) filed with the SEC on March 4, 2016. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year.

As discussed in Note 1, as a result of the recapitalization transactions, Planet Fitness, Inc. consolidates Pla-Fit Holdings and Pla-Fit Holdings is considered to be the predecessor to Planet Fitness, Inc. for accounting and reporting purposes. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated.

The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”) and PF Melville LLC (“PF Melville”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. These entities are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs.

(b) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of assets and liabilities in connection with acquisitions, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, and the liability for the Company’s tax benefit arrangements.

(c) Fair Value

ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The table below presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:

 

 

 

 

 

 

 

Quoted

 

 

Significant

 

 

 

 

 

 

 

Total fair

 

 

prices

 

 

other

 

 

Significant

 

 

 

value at

 

 

in active

 

 

observable

 

 

unobservable

 

 

 

September 30,

 

 

markets

 

 

inputs

 

 

inputs

 

 

 

2016

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Interest rate caps

 

$

134

 

 

$

 

 

$

134

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quoted

 

 

Significant

 

 

 

 

 

 

 

Total fair

 

 

prices

 

 

other

 

 

Significant

 

 

 

value at

 

 

in active

 

 

observable

 

 

unobservable

 

 

 

December 31,

 

 

markets

 

 

inputs

 

 

inputs

 

 

 

2015

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Interest rate caps

 

$

1,147

 

 

$

 

 

$

1,147

 

 

$

 

 

(d) Recent accounting pronouncements

The FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, in September 2014. This guidance requires that an entity recognize revenue to depict the transfer of a promised good or service to its customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for such transfer. This guidance also specifies accounting for certain costs incurred by an entity to obtain or fulfill a contract with a customer and provides for enhancements to revenue specific disclosures intended to allow users of the financial statements to clearly understand the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with its customers. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 for public companies. In March 2016, the FASB issued ASU 2016-08, which further clarifies the implementation guidance on principal versus agent considerations contained in ASU 2014-09. This guidance is to be applied either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements.

The FASB issued ASU No. 2015-02, Income Statement—Consolidation, in February 2015. This guidance affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the guidance 1) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, 2) eliminates the presumption that a general partner should consolidate a limited partnership, 3) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and 4) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU No. 2015-02 as of January 1, 2016, noting no material impact to the consolidated financial statements.

The FASB issued ASU No. 2015-05: Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Fees Paid in a Cloud Computing Arrangement, in April 2015. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. The update further specifies that the customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU No. 2015-05 as of January 1, 2016 on a prospective basis, noting no material impact to the consolidated financial statements.

The FASB issued ASU No. 2016-02, Leases, in February 2016. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public companies. Early application of the amendments in this update is permitted for all entities. The Company is currently evaluating the effect that implementation of this guidance will have on its consolidated financial statements.

The FASB issued ASU No. 2016-09, Stock Compensation, in March 2016. This guidance is intended to simplify several aspects of the accounting for share-based payment award transactions. This guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Company is currently evaluating the effect of the standard on its consolidated financial statements.

The FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, in August 2016. This guidance is intended to reduce diversity in practice of the classification of certain cash receipts and cash payments. This guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. The Company is currently evaluating the effect of the standard on its consolidated financial statements.

Variable interest entities
Variable interest entities

(3) Variable interest entities

The carrying values of VIEs included in the consolidated financial statements as of September 30, 2016 and December 31, 2015 are as follows:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

Assets

 

 

Liabilities

 

 

Assets

 

 

Liabilities

 

PF Melville

 

$

3,984

 

 

$

 

 

$

3,728

 

 

$

 

MMR

 

 

3,105

 

 

 

 

 

 

2,953

 

 

 

 

Total

 

$

7,089

 

 

$

 

 

$

6,681

 

 

$

 

 

The Company also has variable interests in certain franchisees mainly through the guarantee of certain debt and lease agreements as well as financing provided by the Company and by certain related parties to franchisees. The Company’s maximum obligation, as a result of its guarantees of leases and debt, is approximately $1,459 and $1,871 as of September 30, 2016 and December 31, 2015, respectively.

The amount of the Company’s maximum obligation represents a loss that the Company could incur from the variability in credit exposure without consideration of possible recoveries through insurance or other means. In addition, the amount bears no relation to the ultimate settlement anticipated to be incurred from the Company’s involvement with these entities, which is estimated at $0.

Goodwill and intangible assets
Goodwill and intangible assets

(4) Goodwill and intangible assets

A summary of goodwill and intangible assets at September 30, 2016 and December 31, 2015 is as follows:

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

average

 

Gross

 

 

 

 

 

 

 

 

 

 

 

amortization

 

carrying

 

 

Accumulated

 

 

Net carrying

 

September 30, 2016

 

period (years)

 

amount

 

 

amortization

 

 

Amount

 

Customer relationships

 

11.1

 

$

171,782

 

 

 

(68,926

)

 

$

102,856

 

Noncompete agreements

 

5.0

 

 

14,500

 

 

 

(11,302

)

 

 

3,198

 

Favorable leases

 

7.5

 

 

2,935

 

 

 

(1,549

)

 

 

1,386

 

Order backlog

 

0.4

 

 

3,400

 

 

 

(3,400

)

 

 

 

Reacquired franchise rights

 

5.8

 

 

8,950

 

 

 

(3,891

)

 

 

5,059

 

 

 

 

 

 

201,567

 

 

 

(89,068

)

 

 

112,499

 

Indefinite-lived intangible:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and brand names

 

N/A

 

 

146,300

 

 

 

 

 

 

146,300

 

Total intangible assets

 

 

 

$

347,867

 

 

$

(89,068

)

 

$

258,799

 

Goodwill

 

 

 

$

176,981

 

 

$

 

 

$

176,981

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

average

 

Gross

 

 

 

 

 

 

 

 

 

 

 

amortization

 

carrying

 

 

Accumulated

 

 

Net carrying

 

December 31, 2015

 

period (years)

 

amount

 

 

amortization

 

 

Amount

 

Customer relationships

 

11.1

 

$

171,782

 

 

$

(57,741

)

 

$

114,041

 

Noncompete agreements

 

5.0

 

 

14,500

 

 

 

(9,127

)

 

 

5,373

 

Favorable leases

 

7.5

 

 

2,935

 

 

 

(1,256

)

 

 

1,679

 

Order backlog

 

0.4

 

 

3,400

 

 

 

(3,400

)

 

 

 

Reacquired franchise rights

 

5.8

 

 

8,950

 

 

 

(2,724

)

 

 

6,226

 

 

 

 

 

 

201,567

 

 

 

(74,248

)

 

 

127,319

 

Indefinite-lived intangible:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and brand names

 

N/A

 

 

146,300

 

 

 

 

 

 

146,300

 

Total intangible assets

 

 

 

$

347,867

 

 

$

(74,248

)

 

$

273,619

 

Goodwill

 

 

 

$

176,981

 

 

$

 

 

$

176,981

 

 

The Company determined that no impairment charges were required during any periods presented.

 

Amortization expense related to the intangible assets totaled $4,940 and $5,404 for the three months ended September 30, 2016 and 2015, respectively and $14,820 and $16,181 for the nine months ended September 30, 2016 and 2015, respectively. Included within these total amortization expense amounts are $97 and $143 related to amortization of favorable and unfavorable leases for the three months ended September 30, 2016 and 2015, respectively and $292 and $380 for the nine months ended September 30, 2016 and 2015. Amortization of favorable and unfavorable leases is recorded within store operations as a component of rent expense in the consolidated statements of operations. The anticipated annual amortization expense to be recognized in future years as of September 30, 2016 is as follows:

 

 

Amount

 

Remainder of 2016

 

$

4,936

 

2017

 

 

18,215

 

2018

 

 

14,583

 

2019

 

 

14,215

 

2020

 

 

12,517

 

Thereafter

 

 

48,033

 

Total

 

$

112,499

 

 

Long-term debt
Long-term debt

(5) Long-term debt

Long-term debt as of September 30, 2016 and December 31, 2015 consists of the following:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

Term loan B requires quarterly installments

   plus interest through the term of the loan, maturing

   March 31, 2021. Outstanding borrowings bear

   interest at LIBOR or base rate (as defined) plus a

   margin at the election of the borrower

 

 

 

 

 

 

 

 

   (4.50% at September 30, 2016 and 4.75% at December 31, 2015)

 

$

488,450

 

 

$

492,275

 

Revolving credit line, requires interest only

   payments through the term of the loan, maturing

   March 31, 2019. Outstanding borrowings bear

   interest at LIBOR or base rate (as defined) plus a

   margin at the election of the borrower

 

 

 

 

 

 

 

 

   (4.25% at September 30, 2016 and December 31, 2015)

 

 

 

 

 

 

Total debt, excluding deferred financing costs

 

$

488,450

 

 

 

492,275

 

Deferred financing costs, net of accumulated amortization

 

 

(6,283

)

 

 

(7,396

)

Total debt

 

 

482,167

 

 

 

484,879

 

Current portion of long-term debt and line of credit

 

 

5,100

 

 

 

5,100

 

Long-term debt, net of current portion

 

$

477,067

 

 

$

479,779

 

 

Future annual principal payments of long-term debt as of September 30, 2016 are as follows:

 

 

 

Amount

 

Remainder of 2016

 

$

1,275

 

2017

 

 

5,100

 

2018

 

 

5,100

 

2019

 

 

5,100

 

2020

 

 

5,100

 

Thereafter

 

 

466,775

 

Total

 

$

488,450

 

 

Derivative instruments and hedging activities
Derivative instruments and hedging activities

(6) Derivative instruments and hedging activities

The Company utilizes interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments. The Company does not enter into derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments.

By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is an asset, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is a liability, the Company owes the counterparty and, therefore, the Company is not exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high-quality counterparties whose credit rating is higher than A1/A+ at the inception of the derivative transaction. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features.

Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company monitors interest rate risk attributable to both the Company’s outstanding or forecasted debt obligations as well as the Company’s offsetting hedge positions.

In September 2014 and September 2015, the Company entered into a series of interest rate caps. As of September 30, 2016, the Company had interest rate cap agreements with notional amounts of $209,000 outstanding that were entered into in order to hedge LIBOR greater than 1.5%.

The interest rate cap balances of $134 and $1,147 were recorded within other assets in the condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively. These amounts have been measured at fair value and are considered to be a Level 2 fair value measurement. The Company recorded a reduction to the value of its interest rate caps of $469, net of tax of $83, within other comprehensive loss during the nine months ended September 30, 2016.

As of September 30, 2016, the Company does not expect to reclassify any amounts included in accumulated other comprehensive income (loss) into earnings during the next 12 months. Transactions and events expected to occur over the next 12 months that will necessitate reclassifying these derivatives’ loss to earnings include the re-pricing of variable-rate debt.

Related party transactions
Related party transactions

(7) Related party transactions

Amounts due from related parties consist of:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

Accounts receivable – related entities

 

$

31

 

 

$

39

 

Accounts receivable – stockholders/members

 

 

66

 

 

 

4,901

 

Due from related parties

 

$

97

 

 

$

4,940

 

 

 

 

 

 

 

 

 

 

Accounts payable – related entities

 

 

3,966

 

 

 

 

Due to related parties

 

$

3,966

 

 

$

 

 

Amounts due from stockholders/members as of September 30, 2016 and December 31, 2015 relate to reimbursements for certain taxes owed or paid by the Company.

 

Activity with entities considered to be related parties is summarized below:

 

 

 

For the three months ended

September 30,

 

 

 

For the nine months ended

September 30,

 

 

 

2016

 

 

2015

 

 

 

2016

 

 

2015

 

Franchise revenue

 

$

359

 

 

$

298

 

 

 

$

1,174

 

 

$

868

 

Equipment revenue

 

 

3

 

 

 

425

 

 

 

 

770

 

 

 

1,108

 

Total revenue from related parties

 

$

362

 

 

$

723

 

 

 

$

1,944

 

 

$

1,976

 

 

The Company paid management fees to TSG Consumer Partners, LLC (“TSG”) totaling $0 and $1,384 during the three months ended September 30, 2016 and 2015, respectively and $0 and $1,899 during the nine months ended September 30, 2016 and 2015. In connection with the IPO, the management agreement with TSG was terminated, and the Company paid TSG a $1,000 termination fee, which is included in the fees paid for the three and nine months ended September 30, 2015.

Stockholder's equity
Stockholder's equity

(8) Stockholder’s equity

The recapitalization transactions

We refer to the Merger, Reclassification and entry into the exchange agreement, each as described below, as the “recapitalization transactions.” The Merger was effected pursuant to a merger agreement by and among the Company and Planet Fitness Holdings, L.P. (a predecessor entity to the Company that held indirect interests in Pla-Fit Holdings, LLC) and the recapitalization transactions were effected pursuant to a recapitalization agreement by and among the Company, Pla-Fit Holdings, Continuing LLC Owners, and Direct TSG Investors.

Merger

Prior to the Merger, the Direct TSG Investors held interests in Planet Fitness Holdings, L.P., which was formed in October 2014 and had no material assets, liabilities or operations, other than as a holding company owning indirect interests in Pla-Fit Holdings. The Direct TSG Investors consist of investment funds affiliated with TSG. Pursuant to a merger agreement dated June 22, 2015, Planet Fitness Holdings, L.P. merged with and into the Company, and the interests in Planet Fitness Holdings, L.P. held by the Direct TSG Investors were converted into 26,106,930 shares of Class A common stock of the Company. We refer to this as the “Merger.” All shares of Class A common stock have both voting and economic rights in Planet Fitness, Inc.

The Merger was effected on August 5, 2015, prior to the time our Class A common stock was registered under the Exchange Act and prior to the completion of the IPO.

Reclassification

The equity interests of Pla-Fit Holdings, LLC previously consisted of three different classes of limited liability company units (Class M, Class T and Class O). Prior to the completion of the IPO, the limited liability company agreement of Pla-Fit Holdings was amended and restated to, among other things, modify its capital structure to create a single new class of units, the Holdings Units. We refer to this capital structure modification as the “Reclassification.”

The Direct TSG Investors’ indirect interest in Pla-Fit Holdings was held through Planet Fitness Holdings, L.P. As a result, following the Merger, the Direct TSG Investors’ indirect interests in Pla-Fit Holdings are held through the Company. Therefore, the Holdings Units received in the Reclassification were allocated to: (1) the Continuing LLC Owners based on their existing interests in Pla-Fit Holdings; and (2) the Company to the extent of the Direct TSG Investors’ indirect interest in Pla-Fit Holdings. The number of Holdings Units allocated to the Company in the Reclassification was equal to the number of shares of Class A common stock that the Direct TSG Investors received in the Merger (on a one-for-one basis).

The Reclassification was effected on August 5, 2015, prior to the time our Class A common stock was registered under the Exchange Act and prior to the completion of the IPO.

Following the Merger and the Reclassification, the Company issued to Continuing LLC Owners 72,602,810 shares of Class B common stock in addition to their Holdings Units, with each Continuing LLC Owner receiving one share of Class B common stock for each Holdings Unit held. The shares of Class B common stock have no rights to dividends or distributions, whether in cash or stock, but entitle the holder to one vote per share on matters presented to stockholders of the Company. The Holdings Units entitle the Continuing LLC Owners to participate pro rata in distributions made by Pla-Fit Holdings to its members, including the Continuing LLC Owners and the Company, but do not entitle the Continuing LLC Owners to any voting rights. The Continuing LLC Owners consist of investment funds affiliated with TSG and certain current and former employees and directors.

Pursuant to the LLC agreement that went into effect at the time of the Reclassification (“New LLC Agreement”), the Company was designated as the sole managing member of Pla-Fit Holdings. Accordingly, the Company has the right to determine when distributions will be made by Pla-Fit Holdings to its members, including the Company, and the amount of any such distributions (subject to the requirements with respect to the tax distributions described below). If the Company authorizes a distribution by Pla-Fit Holdings, the distribution will be made to the members of Pla-Fit Holdings, including the Company, pro rata in accordance with the percentages of their respective Holdings Units.

The holders of Holdings Units will incur U.S. federal, state and local income taxes on their allocable share of any taxable income of Pla-Fit Holdings (as calculated pursuant to the New LLC Agreement). Net profits and net losses of Pla-Fit Holdings will generally be allocated to its members pursuant to the New LLC Agreement pro rata in accordance with the percentages of their respective Holdings Units. The New LLC Agreement provides for cash distributions to the holders of Holdings Units for purposes of funding their tax obligations in respect of the income of Pla-Fit Holdings that is allocated to them, to the extent other distributions from Pla-Fit Holdings for the relevant year have been insufficient to cover such liability. Generally, these tax distributions are computed based on the estimated taxable income of Pla-Fit Holdings allocable to the holders of Holdings Units multiplied by an assumed, combined tax rate equal to the maximum rate applicable to an individual or corporation resident in San Francisco, California (taking into account the non-deductibility of certain expenses and the character of the Company’s income).

Exchange agreement

Following the Merger and the Reclassification, the Company and the Continuing LLC Owners entered into an exchange agreement under which the Continuing LLC Owners (or certain permitted transferees thereof) have the right, from time to time and subject to the terms of the exchange agreement, to exchange their Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock (or cash at the option of the Company) on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and similar transactions. As a Continuing LLC Owner exchanges Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock, the number of Holdings Units held by the Company will be correspondingly increased as it acquires the exchanged Holdings Units and cancels a corresponding number of shares of Class B common stock.

IPO transactions

In connection with the completion of the IPO on August 11, 2015, in order to facilitate the disposition of equity interests in Pla-Fit Holdings held by Continuing LLC Owners affiliated with TSG, the Company used the net proceeds received to purchase issued and outstanding Holdings Units from these Continuing LLC Owners that they received in the Reclassification. In connection with the IPO, the Company purchased 10,491,055 issued and outstanding Holdings Units from these Continuing LLC Owners for an aggregate of $156,946. This is in addition to the 26,106,930 Holdings Units that the Company acquired in the Reclassification on a one-for-one basis in relation to the number of shares of Class A common stock issued to the Direct TSG Investors in the Merger. Accordingly, following the IPO, the Company held 36,597,985 Holdings Units, which was equal to the number of shares of Class A common stock that were issued to the Direct TSG Investors and investors in the IPO. The Direct TSG Investors, who did not receive Holdings Units in the Reclassification but received shares of Class A common stock in the Merger, sold 5,033,945 shares of Class A common stock in the IPO.   

June Secondary Offering

As described in Note 1, on June 28, 2016 the Company completed the June Secondary Offering of 11,500,000 shares of our Class A common stock at a price of $16.50 per share. All of the shares sold in the offering were offered by Direct TSG Investors and the participating Continuing LLC Owners. The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Direct TSG Investors and the participating Continuing LLC Owners. The shares sold in the offering consisted of (i) 3,608,840 existing shares of Class A common stock held by the Direct TSG Investors and (ii) 7,891,160 newly-issued shares of Class A common stock issued in connection with the exercise of the exchange right by the Continuing LLC Owners that participated in the June Secondary Offering. Simultaneously, and in connection with the exchange, 7,891,160 shares of Class B common stock were surrendered by the Continuing LLC Owners that participated in the June Secondary Offering and canceled. Additionally, in connection with the exchange, we received 7,891,160 Holdings Units, increasing Planet Fitness Inc.’s total ownership interest in Pla-Fit Holdings.

September Secondary Offering

As described in Note 1, on September 28, 2016, the Company completed the September Secondary Offering of 8,000,000 shares of our Class A common stock at a price of 19.62 per share. All of the shares sold in the offering were offered by the Direct TSG Investors and participating Continuing LLC Owners. The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Direct TSG Investors and the participating Continuing LLC Owners. The shares sold in the offering consisted of (i) 2,593,981 existing shares of Class A common stock held by the Direct TSG Investors and (ii) 5,406,019 newly-issued shares of Class A common stock issued in connection with the exercise of the exchange right by the Continuing LLC Owners that participated in the September Secondary Offering. Simultaneously, and in connection with the exchange, 5,406,019 shares of Class B common stock were surrendered by the Continuing LLC Owners that participated in the September Secondary Offering and canceled. Additionally, in connection with the exchange, Planet Fitness, Inc received 5,406,019 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings. Future exchanges of Holdings Units by the Continuing LLC Owners will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital on our consolidated balance sheets.

As a result of the recapitalization transactions, the offering transactions, the IPO, completion of our secondary offerings, and other exchanges and equity activity during the quarter:

 

the investors in the IPO and the Company’s secondary offerings collectively own 35,043,641 shares of Planet Fitness, Inc. Class A common stock, representing 35.5% of the voting power in the Company and, through the Company, 35.5% of the economic interest in Pla-Fit Holdings;

 

the Direct TSG Investors own 14,870,164 shares of Planet Fitness, Inc. Class A common stock, representing 15.1% of the voting power in the Company and, through the Company, 15.1% of the economic interest in Pla-Fit Holdings; and

 

the Continuing LLC Owners collectively hold 48,665,585 Holdings Units, representing 49.4% of the economic interest in Pla-Fit Holdings and 48,665,585 shares of Planet Fitness, Inc. Class B common stock, representing 49.4% of the voting power in the Company.

Earnings per share
Earnings per share

(9) Earnings per share

Basic earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. There were no shares of Class A or Class B common stock outstanding prior to August 6, 2015, therefore no earnings per share information has been presented for any period prior to that date.

Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to Planet Fitness, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of the Company’s Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related Holdings Units, are exchangeable into shares of Class A common stock on a one-for-one basis.

The following table sets forth reconciliations used to compute basic and diluted earnings per share of Class A common stock:

 

Net income per share:

 

For the three months ended

September 30, 2016

 

 

For the nine months ended

September 30, 2016

 

 

August 6, 2015 through September 30, 2015

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

14,863

 

 

$

49,300

 

 

$

6,214

 

Less: net income attributable to non-controlling interests

 

 

11,438

 

 

 

38,374

 

 

 

4,593

 

Net income attributable to Planet Fitness, Inc. - basic

 

$

3,425

 

 

$

10,926

 

 

$

1,621

 

Reallocation of net income assuming conversion of Holdings Units

 

 

-

 

 

 

-

 

 

 

4,518

 

Incremental tax effect of reallocation of net income assuming

   conversion of Holdings Units

 

 

-

 

 

 

-

 

 

 

(1,740

)

Net income attributable to Planet Fitness, Inc. - diluted

 

$

3,425

 

 

$

10,926

 

 

$

4,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding - basic

 

 

44,668,875

 

 

 

39,394,318

 

 

 

35,661,284

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

Class B common stock

 

 

-

 

 

 

-

 

 

 

63,048,456

 

Stock options

 

 

12,539

 

 

 

138

 

 

 

-

 

Restricted stock units

 

 

4,282

 

 

 

3,030

 

 

 

-

 

Weighted-average shares of Class A common stock outstanding - diluted

 

 

44,685,696

 

 

 

39,397,486

 

 

 

98,709,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock - basic

 

$

0.08

 

 

$

0.28

 

 

$

0.05

 

Earnings per share of Class A common stock - diluted

 

$

0.08

 

 

$

0.28

 

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class B common stock of 53,898,536 and 59,218,127 for the three and nine months ended September 30, 2016, respectively, were evaluated under the if-converted method for potential dilutive effects and determined to be anti-dilutive. Weighted average stock options outstanding of 250,141 and 230,633 for the three and nine months ending September 30, 2016, respectively, were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive. Weighted average stock options outstanding of 116,690 and restricted stock units of 8,160 for the period from August 6, 2015 through September 30, 2015 were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive.

 

Income taxes
Income taxes

(10) Income taxes

As a result of the recapitalization transactions, the Company became the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including the Company following the recapitalization transactions, on a pro rata basis. Planet Fitness, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of Pla-Fit Holdings following the recapitalization transactions. The Company is also subject to taxes in foreign jurisdictions.

The Company incurs U.S. federal and state income taxes on its pro rata share of income flowed through from Pla-Fit Holdings. The effective tax rate on such income was approximately 39.5%. The provision for income taxes also reflects an effective state tax rate of 2.1% applied to non-controlling interests, excluding income from variable interest entities, related to Pla-Fit Holdings.

Net deferred tax assets of $255,729 and $117,358 as of September 30, 2016 and December 31, 2015, respectively, relate primarily to the tax effects of temporary differences in the book basis as compared to the tax basis of Planet Fitness, Inc.’s investment in Pla-Fit Holdings as a result of the recapitalization transactions, IPO, and secondary offerings. The Company has net operating loss carryforwards related to its Canada operations of approximately $1,911, which begin to expire in 2034. It is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets. The net deferred tax liabilities of $1,275 as of September 30, 2016 and $0 as of December 31, 2015 relate primarily to the tax effects of temporary differences in the book basis as compared to the tax basis of certain assets of Pla-Fit Holdings.

As of September 30, 2016, the total liability related to uncertain tax positions is $300. The Company recognizes interest accrued and penalties, if applicable, related to unrecognized tax benefits in income tax expense. Interest and penalties for the nine months ended September 30, 2016 were not material.

Tax benefit arrangements

The Company’s acquisition of Holdings Units in connection with the IPO, secondary offerings and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements. Under the first of those agreements, the Company generally is required to pay to the Continuing LLC Owners 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales or exchanges of their Holdings Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay to the Direct TSG Investors 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of the Holdings Units held in respect of the Direct TSG Investors’ interest in the Company, which resulted from the Direct TSG Investors’ purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the benefit of the remaining 15% of the applicable tax savings. Also, pursuant to the exchange agreement (see Note 8), to the extent an exchange results in Pla-Fit Holdings, LLC incurring a current tax liability relating to the New Hampshire business profits tax, the Continuing LLC Owners have agreed that they will contribute to Pla-Fit Holdings, LLC an amount sufficient to pay such tax liability (up to 3.5% of the value received upon exchange). If and when the Company subsequently realizes a related tax benefit, Pla-Fit Holdings, LLC will distribute the amount of any such tax benefit to the relevant Continuing LLC Owner in respect of its contribution. Due to changes in New Hampshire tax law, the Company no longer expects to incur any such liability under the New Hampshire business profits tax.

In June 2016, in connection with the June Secondary Offering, 7,891,160 Holdings Units were redeemed by the participating Continuing LLC Owners for newly-issued shares of Class A common stock, resulting in an increase in the tax basis of the net assets of Pla-Fit Holdings subject to the provisions of the tax receivable agreements. As a result of the change in Planet Fitness, Inc.’s ownership percentage of Pla-Fit Holdings that occurred in conjunction with the exchange, we recorded a decrease to our net deferred tax assets of $7,638 during the three months ended June 30, 2016. As a result of the exchange, we also recognized a deferred tax asset in the amount of $89,876 and a corresponding tax benefit arrangement liability of $78,152, representing 85% of the tax benefits due to the participating Continuing LLC Owners.

In September 2016, in connection with the September Secondary Offering, 5,406,019 Holdings Units were redeemed by the participating Continuing LLC Owners for newly-issued shares of Class A common stock, resulting in an increase in the tax basis of the net assets of Pla-Fit Holdings subject to the provisions of the tax receivable agreements. As a result of the change in Planet Fitness, Inc.’s ownership percentage of Pla-Fit Holdings that occurred in conjunction with the exchange, we recorded a decrease to our net deferred tax assets of $5,378 during the three months ended September 30, 2016. As a result of the exchange, we also recognized a deferred tax asset in the amount of $71,174 and a corresponding tax benefit arrangement liability of $61,735, representing 85% of the tax benefits due to the participating Continuing LLC Owners.

As of September 30, 2016, the Company has a liability of $274,072 related to its projected obligations under the tax benefit arrangements. Projected future payments under the tax benefit arrangements are as follows:

 

 

 

Amount

 

Remainder of 2016

 

$

922

 

2017

 

 

10,658

 

2018

 

 

13,438

 

2019

 

 

13,569

 

2020

 

 

13,910

 

Thereafter

 

 

221,575

 

Total

 

$

274,072

 

 

Commitments and contingencies
Commitments and contingencies

(11) Commitments and contingencies

From time to time, and in the ordinary course of business, the Company is subject to various claims, charges, and litigation, such as employment-related claims and slip and fall cases. The Company is not currently aware of any legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on the Company’s financial position or result of operations.        

Segments
Segments

(12) Segments

The Company has three reportable segments: (i) Franchise; (ii) Corporate-owned stores; and (iii) Equipment.  

The Company’s operations are organized and managed by type of products and services and segment information is reported accordingly. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. The CODM reviews financial performance and allocates resources by reportable segment. There have been no operating segments aggregated to arrive at the Company’s reportable segments.

The Franchise segment includes operations related to the Company’s franchising business in the United States, Puerto Rico, Canada and the Dominican Republic. The Corporate-owned stores segment includes operations with respect to all Corporate-owned stores throughout the United States and Canada. The Equipment segment includes the sale of equipment to franchisee-owned stores.

The accounting policies of the reportable segments are the same as those described in Note 2. The Company evaluates the performance of its segments and allocates resources to them based on revenue and earnings before interest, taxes, depreciation, and amortization, referred to as Segment EBITDA. Revenues for all operating segments include only transactions with unaffiliated customers and include no intersegment revenues.

The tables below summarize the financial information for the Company’s reportable segments for the three and nine months ended September 30, 2016 and 2015. The “Corporate and other” category, as it relates to Segment EBITDA, primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services which are not directly attributable to any individual segment.

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise segment revenue - U.S.

 

$

26,940

 

 

$

19,785

 

 

$

83,312

 

 

$

63,371

 

Franchise segment revenue - International

 

 

285

 

 

 

9

 

 

 

1,068

 

 

 

59

 

Franchise segment total

 

 

27,225

 

 

 

19,794

 

 

 

84,380

 

 

 

63,430

 

Corporate-owned stores - U.S.

 

 

25,591

 

 

 

24,203

 

 

 

75,595

 

 

 

71,716

 

Corporate-owned stores - International

 

 

1,084

 

 

 

950

 

 

 

3,161

 

 

 

1,958

 

Corporate-owned stores total

 

 

26,675

 

 

 

25,153

 

 

 

78,756

 

 

 

73,674

 

Equipment segment - U.S.

 

 

33,107

 

 

 

23,870

 

 

 

98,686

 

 

 

87,588

 

Equipment segment total

 

 

33,107

 

 

 

23,870

 

 

 

98,686

 

 

 

87,588

 

Total revenue

 

$

87,007

 

 

$

68,817

 

 

$

261,822

 

 

$

224,692

 

 

Franchise segment revenue includes franchise revenue and commission income.

Franchise revenue includes revenue generated from placement services of $2,224 and $1,623 for the three months ended September 30, 2016 and 2015, respectively and $6,952 and $5,895 for the nine months ended September 30, 2016 and 2015, respectively.

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Segment EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

22,814

 

 

$

15,496

 

 

$

71,308

 

 

$

46,778

 

Corporate-owned stores

 

 

10,550

 

 

 

9,256

 

 

 

30,259

 

 

 

26,342

 

Equipment

 

 

7,153

 

 

 

4,910

 

 

 

21,330

 

 

 

18,914

 

Corporate and other

 

 

(6,823

)

 

 

(13,162

)

 

 

(20,147

)

 

 

(27,191

)

Total Segment EBITDA

 

$

33,694

 

 

$

16,500

 

 

$

102,750

 

 

$

64,843

 

 

The following table reconciles total Segment EBITDA to income before income taxes:

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Total Segment EBITDA

 

$

33,694

 

 

$

16,500

 

 

$

102,750

 

 

$

64,843

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

7,745

 

 

 

7,976

 

 

 

23,127

 

 

 

24,160

 

Other (expense) income

 

 

(204

)

 

 

(1,815

)

 

 

30

 

 

 

(2,627

)

Income from operations

 

 

26,153

 

 

 

10,339

 

 

 

79,593

 

 

 

43,310

 

Interest expense, net

 

 

(6,291

)

 

 

(6,556

)

 

 

(18,819

)

 

 

(17,872

)

Other (expense) income

 

 

(204

)

 

 

(1,815

)

 

 

30

 

 

 

(2,627

)

Income before income taxes

 

$

19,658

 

 

$

1,968

 

 

$

60,804

 

 

$

22,811

 

 

The following table summarizes the Company’s assets by reportable segment:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

Franchise

 

$

204,137

 

 

$

206,997

 

Corporate-owned stores

 

 

157,509

 

 

 

151,620

 

Equipment

 

 

210,997

 

 

 

208,168

 

Unallocated

 

 

279,695

 

 

 

132,392

 

Total consolidated assets

 

$

852,338

 

 

$

699,177

 

 

The table above includes $2,940 and $3,149 of long-lived assets located in the Company’s corporate-owned stores in Canada as of September 30, 2016 and December 31, 2015, respectively. All other assets are located in the U.S.

The following table summarizes the Company’s goodwill by reportable segment:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

Franchise

 

$

16,938

 

 

$

16,938

 

Corporate-owned stores

 

 

67,377

 

 

 

67,377

 

Equipment

 

 

92,666

 

 

 

92,666

 

Consolidated goodwill

 

$

176,981

 

 

$

176,981

 

 

Corporate-owned and franchisee-owned stores
Corporate-owned and franchisee-owned stores

(13) Corporate-owned and franchisee-owned stores

The following table shows changes in our corporate-owned and franchisee-owned stores for the three months ended September 30, 2016 and 2015:

 

 

 

For the three months ended

September 30,

 

 

For the nine months ended

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Franchisee-owned stores:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stores operated at beginning of period

 

 

1,148

 

 

 

956

 

 

 

1,066

 

 

 

863

 

New stores opened

 

 

37

 

 

 

26

 

 

 

121

 

 

 

122

 

Stores debranded or consolidated(1)

 

 

(1

)

 

 

-

 

 

 

(3

)

 

 

(3

)

Stores operated at end of period

 

 

1,184

 

 

 

982

 

 

 

1,184

 

 

 

982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate-owned stores:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stores operated at beginning of period

 

 

58

 

 

 

58

 

 

 

58

 

 

 

55

 

New stores opened

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3

 

Stores operated at end of period

 

 

58

 

 

 

58

 

 

 

58

 

 

 

58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stores:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stores operated at beginning of period

 

 

1,206

 

 

 

1,014

 

 

 

1,124

 

 

 

918

 

New stores opened

 

 

37

 

 

 

26

 

 

 

121

 

 

 

125

 

Stores debranded or consolidated(1)

 

 

(1

)

 

 

-

 

 

 

(3

)

 

 

(3

)

Stores operated at end of period

 

 

1,242

 

 

 

1,040

 

 

 

1,242

 

 

 

1,040

 

 

(1)

The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity, with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.

Summary of significant accounting policies (Policies)

(a) Basis of presentation and consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All significant intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated financial statements as of and for the three and nine months ended September 30, 2016 and 2015 are unaudited. The condensed consolidated balance sheet as of December 31, 2015 has been derived from the audited financial statements at that date but does not include all of the disclosures required by U.S. GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “Annual Report”) filed with the SEC on March 4, 2016. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year.

As discussed in Note 1, as a result of the recapitalization transactions, Planet Fitness, Inc. consolidates Pla-Fit Holdings and Pla-Fit Holdings is considered to be the predecessor to Planet Fitness, Inc. for accounting and reporting purposes. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated.

The results of the Company have been consolidated with Matthew Michael Realty LLC (“MMR”) and PF Melville LLC (“PF Melville”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. These entities are real estate holding companies that derive a majority of their financial support from the Company through lease agreements for corporate stores. See Note 3 for further information related to the Company’s VIEs.

(b) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, valuation of assets and liabilities in connection with acquisitions, valuation of equity-based compensation awards, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, income taxes, including deferred tax assets and liabilities and reserves for unrecognized tax benefits, and the liability for the Company’s tax benefit arrangements.

(c) Fair Value

ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The table below presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:

 

 

 

 

 

 

 

Quoted

 

 

Significant

 

 

 

 

 

 

 

Total fair

 

 

prices

 

 

other

 

 

Significant

 

 

 

value at

 

 

in active

 

 

observable

 

 

unobservable

 

 

 

September 30,

 

 

markets

 

 

inputs

 

 

inputs

 

 

 

2016

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Interest rate caps

 

$

134

 

 

$

 

 

$

134

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quoted

 

 

Significant

 

 

 

 

 

 

 

Total fair

 

 

prices

 

 

other

 

 

Significant

 

 

 

value at

 

 

in active

 

 

observable

 

 

unobservable

 

 

 

December 31,

 

 

markets

 

 

inputs

 

 

inputs

 

 

 

2015

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Interest rate caps

 

$

1,147

 

 

$

 

 

$

1,147

 

 

$

 

 

(d) Recent accounting pronouncements

The FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, in September 2014. This guidance requires that an entity recognize revenue to depict the transfer of a promised good or service to its customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for such transfer. This guidance also specifies accounting for certain costs incurred by an entity to obtain or fulfill a contract with a customer and provides for enhancements to revenue specific disclosures intended to allow users of the financial statements to clearly understand the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with its customers. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 for public companies. In March 2016, the FASB issued ASU 2016-08, which further clarifies the implementation guidance on principal versus agent considerations contained in ASU 2014-09. This guidance is to be applied either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements.

The FASB issued ASU No. 2015-02, Income Statement—Consolidation, in February 2015. This guidance affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the guidance 1) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, 2) eliminates the presumption that a general partner should consolidate a limited partnership, 3) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and 4) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU No. 2015-02 as of January 1, 2016, noting no material impact to the consolidated financial statements.

The FASB issued ASU No. 2015-05: Intangibles - Goodwill and Other - Internal-Use Software: Customer's Accounting for Fees Paid in a Cloud Computing Arrangement, in April 2015. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. The update further specifies that the customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. The guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted ASU No. 2015-05 as of January 1, 2016 on a prospective basis, noting no material impact to the consolidated financial statements.

The FASB issued ASU No. 2016-02, Leases, in February 2016. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public companies. Early application of the amendments in this update is permitted for all entities. The Company is currently evaluating the effect that implementation of this guidance will have on its consolidated financial statements.

The FASB issued ASU No. 2016-09, Stock Compensation, in March 2016. This guidance is intended to simplify several aspects of the accounting for share-based payment award transactions. This guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Company is currently evaluating the effect of the standard on its consolidated financial statements.

The FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, in August 2016. This guidance is intended to reduce diversity in practice of the classification of certain cash receipts and cash payments. This guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. The Company is currently evaluating the effect of the standard on its consolidated financial statements.

Summary of significant accounting policies (Tables)
Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis

The table below presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:

 

 

 

 

 

 

 

Quoted

 

 

Significant

 

 

 

 

 

 

 

Total fair

 

 

prices

 

 

other

 

 

Significant

 

 

 

value at

 

 

in active

 

 

observable

 

 

unobservable

 

 

 

September 30,

 

 

markets

 

 

inputs

 

 

inputs

 

 

 

2016

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Interest rate caps

 

$

134

 

 

$

 

 

$

134

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quoted

 

 

Significant

 

 

 

 

 

 

 

Total fair

 

 

prices

 

 

other

 

 

Significant

 

 

 

value at

 

 

in active

 

 

observable

 

 

unobservable

 

 

 

December 31,

 

 

markets

 

 

inputs

 

 

inputs

 

 

 

2015

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Interest rate caps

 

$

1,147

 

 

$

 

 

$

1,147

 

 

$

 

 

Variable interest entities (Tables)
Carrying Value of Variable Interest Entities of Consolidated Financial Statements

The carrying values of VIEs included in the consolidated financial statements as of September 30, 2016 and December 31, 2015 are as follows:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

Assets

 

 

Liabilities

 

 

Assets

 

 

Liabilities

 

PF Melville

 

$

3,984

 

 

$

 

 

$

3,728

 

 

$

 

MMR

 

 

3,105

 

 

 

 

 

 

2,953

 

 

 

 

Total

 

$

7,089

 

 

$

 

 

$

6,681

 

 

$

 

 

Goodwill and intangible assets (Tables)

A summary of goodwill and intangible assets at September 30, 2016 and December 31, 2015 is as follows:

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

average

 

Gross

 

 

 

 

 

 

 

 

 

 

 

amortization

 

carrying

 

 

Accumulated

 

 

Net carrying

 

September 30, 2016

 

period (years)

 

amount

 

 

amortization

 

 

Amount

 

Customer relationships

 

11.1

 

$

171,782

 

 

 

(68,926

)

 

$

102,856

 

Noncompete agreements

 

5.0

 

 

14,500

 

 

 

(11,302

)

 

 

3,198

 

Favorable leases

 

7.5

 

 

2,935

 

 

 

(1,549

)

 

 

1,386

 

Order backlog

 

0.4

 

 

3,400

 

 

 

(3,400

)

 

 

 

Reacquired franchise rights

 

5.8

 

 

8,950

 

 

 

(3,891

)

 

 

5,059

 

 

 

 

 

 

201,567

 

 

 

(89,068

)

 

 

112,499

 

Indefinite-lived intangible:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and brand names

 

N/A

 

 

146,300

 

 

 

 

 

 

146,300

 

Total intangible assets

 

 

 

$

347,867

 

 

$

(89,068

)

 

$

258,799

 

Goodwill

 

 

 

$

176,981

 

 

$

 

 

$

176,981

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

average

 

Gross

 

 

 

 

 

 

 

 

 

 

 

amortization

 

carrying

 

 

Accumulated

 

 

Net carrying

 

December 31, 2015

 

period (years)

 

amount

 

 

amortization

 

 

Amount

 

Customer relationships

 

11.1

 

$

171,782

 

 

$

(57,741

)

 

$

114,041

 

Noncompete agreements

 

5.0

 

 

14,500

 

 

 

(9,127

)

 

 

5,373

 

Favorable leases

 

7.5

 

 

2,935

 

 

 

(1,256

)

 

 

1,679

 

Order backlog

 

0.4

 

 

3,400

 

 

 

(3,400

)

 

 

 

Reacquired franchise rights

 

5.8

 

 

8,950

 

 

 

(2,724

)

 

 

6,226

 

 

 

 

 

 

201,567

 

 

 

(74,248

)

 

 

127,319

 

Indefinite-lived intangible:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and brand names

 

N/A

 

 

146,300

 

 

 

 

 

 

146,300

 

Total intangible assets

 

 

 

$

347,867

 

 

$

(74,248

)

 

$

273,619

 

Goodwill

 

 

 

$

176,981

 

 

$

 

 

$

176,981

 

 

The anticipated annual amortization expense to be recognized in future years as of September 30, 2016 is as follows:

 

 

Amount

 

Remainder of 2016

 

$

4,936

 

2017

 

 

18,215

 

2018

 

 

14,583

 

2019

 

 

14,215

 

2020

 

 

12,517

 

Thereafter

 

 

48,033

 

Total

 

$

112,499

 

 

Long-term debt (Tables)

Long-term debt as of September 30, 2016 and December 31, 2015 consists of the following:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

Term loan B requires quarterly installments

   plus interest through the term of the loan, maturing

   March 31, 2021. Outstanding borrowings bear

   interest at LIBOR or base rate (as defined) plus a

   margin at the election of the borrower

 

 

 

 

 

 

 

 

   (4.50% at September 30, 2016 and 4.75% at December 31, 2015)

 

$

488,450

 

 

$

492,275

 

Revolving credit line, requires interest only

   payments through the term of the loan, maturing

   March 31, 2019. Outstanding borrowings bear

   interest at LIBOR or base rate (as defined) plus a

   margin at the election of the borrower

 

 

 

 

 

 

 

 

   (4.25% at September 30, 2016 and December 31, 2015)

 

 

 

 

 

 

Total debt, excluding deferred financing costs

 

$

488,450

 

 

 

492,275

 

Deferred financing costs, net of accumulated amortization

 

 

(6,283

)

 

 

(7,396

)

Total debt

 

 

482,167

 

 

 

484,879

 

Current portion of long-term debt and line of credit

 

 

5,100

 

 

 

5,100

 

Long-term debt, net of current portion

 

$

477,067

 

 

$

479,779

 

 

Future annual principal payments of long-term debt as of September 30, 2016 are as follows:

 

 

 

Amount

 

Remainder of 2016

 

$

1,275

 

2017

 

 

5,100

 

2018

 

 

5,100

 

2019

 

 

5,100

 

2020

 

 

5,100

 

Thereafter

 

 

466,775

 

Total

 

$

488,450

 

 

Related party transactions (Tables)

Amounts due from related parties consist of:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

Accounts receivable – related entities

 

$

31

 

 

$

39

 

Accounts receivable – stockholders/members

 

 

66

 

 

 

4,901

 

Due from related parties

 

$

97

 

 

$

4,940

 

 

 

 

 

 

 

 

 

 

Accounts payable – related entities

 

 

3,966

 

 

 

 

Due to related parties

 

$

3,966

 

 

$

 

 

Activity with entities considered to be related parties is summarized below:

 

 

 

For the three months ended

September 30,

 

 

 

For the nine months ended

September 30,

 

 

 

2016

 

 

2015

 

 

 

2016

 

 

2015

 

Franchise revenue

 

$

359

 

 

$

298

 

 

 

$

1,174

 

 

$

868

 

Equipment revenue

 

 

3

 

 

 

425

 

 

 

 

770

 

 

 

1,108

 

Total revenue from related parties

 

$

362

 

 

$

723

 

 

 

$

1,944

 

 

$

1,976

 

 

Earnings per share (Tables) (Class A Common Stock [Member])
Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share

The following table sets forth reconciliations used to compute basic and diluted earnings per share of Class A common stock:

 

Net income per share:

 

For the three months ended

September 30, 2016

 

 

For the nine months ended

September 30, 2016

 

 

August 6, 2015 through September 30, 2015

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

14,863

 

 

$

49,300

 

 

$

6,214

 

Less: net income attributable to non-controlling interests

 

 

11,438

 

 

 

38,374

 

 

 

4,593

 

Net income attributable to Planet Fitness, Inc. - basic

 

$

3,425

 

 

$

10,926

 

 

$

1,621

 

Reallocation of net income assuming conversion of Holdings Units

 

 

-

 

 

 

-

 

 

 

4,518

 

Incremental tax effect of reallocation of net income assuming

   conversion of Holdings Units

 

 

-

 

 

 

-

 

 

 

(1,740

)

Net income attributable to Planet Fitness, Inc. - diluted

 

$

3,425

 

 

$

10,926

 

 

$

4,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding - basic

 

 

44,668,875

 

 

 

39,394,318

 

 

 

35,661,284

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

Class B common stock

 

 

-

 

 

 

-

 

 

 

63,048,456

 

Stock options

 

 

12,539

 

 

 

138

 

 

 

-

 

Restricted stock units

 

 

4,282

 

 

 

3,030

 

 

 

-

 

Weighted-average shares of Class A common stock outstanding - diluted

 

 

44,685,696

 

 

 

39,397,486

 

 

 

98,709,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock - basic

 

$

0.08

 

 

$

0.28

 

 

$

0.05

 

Earnings per share of Class A common stock - diluted

 

$

0.08

 

 

$

0.28

 

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes (Tables)
Schedule of Future Payments Under Tax Benefit Arrangements

Projected future payments under the tax benefit arrangements are as follows:

 

 

 

Amount

 

Remainder of 2016

 

$

922

 

2017

 

 

10,658

 

2018

 

 

13,438

 

2019

 

 

13,569

 

2020

 

 

13,910

 

Thereafter

 

 

221,575

 

Total

 

$

274,072

 

 

Segments (Tables)

The tables below summarize the financial information for the Company’s reportable segments for the three and nine months ended September 30, 2016 and 2015.

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise segment revenue - U.S.

 

$

26,940

 

 

$

19,785

 

 

$

83,312

 

 

$

63,371

 

Franchise segment revenue - International

 

 

285

 

 

 

9

 

 

 

1,068

 

 

 

59

 

Franchise segment total

 

 

27,225

 

 

 

19,794

 

 

 

84,380

 

 

 

63,430

 

Corporate-owned stores - U.S.

 

 

25,591

 

 

 

24,203

 

 

 

75,595

 

 

 

71,716

 

Corporate-owned stores - International

 

 

1,084

 

 

 

950

 

 

 

3,161

 

 

 

1,958

 

Corporate-owned stores total

 

 

26,675

 

 

 

25,153

 

 

 

78,756

 

 

 

73,674

 

Equipment segment - U.S.

 

 

33,107

 

 

 

23,870

 

 

 

98,686

 

 

 

87,588

 

Equipment segment total

 

 

33,107

 

 

 

23,870

 

 

 

98,686

 

 

 

87,588

 

Total revenue

 

$

87,007

 

 

$

68,817

 

 

$

261,822

 

 

$

224,692

 

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Segment EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

22,814

 

 

$

15,496

 

 

$

71,308

 

 

$

46,778

 

Corporate-owned stores

 

 

10,550

 

 

 

9,256

 

 

 

30,259

 

 

 

26,342

 

Equipment

 

 

7,153

 

 

 

4,910

 

 

 

21,330

 

 

 

18,914

 

Corporate and other

 

 

(6,823

)

 

 

(13,162

)

 

 

(20,147

)

 

 

(27,191

)

Total Segment EBITDA

 

$

33,694

 

 

$

16,500

 

 

$

102,750

 

 

$

64,843

 

 

The following table reconciles total Segment EBITDA to income before income taxes:

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Total Segment EBITDA

 

$

33,694

 

 

$

16,500

 

 

$

102,750

 

 

$

64,843

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

7,745

 

 

 

7,976

 

 

 

23,127

 

 

 

24,160

 

Other (expense) income

 

 

(204

)

 

 

(1,815

)

 

 

30

 

 

 

(2,627

)

Income from operations

 

 

26,153

 

 

 

10,339

 

 

 

79,593

 

 

 

43,310

 

Interest expense, net

 

 

(6,291

)

 

 

(6,556

)

 

 

(18,819

)

 

 

(17,872

)

Other (expense) income

 

 

(204

)

 

 

(1,815

)

 

 

30

 

 

 

(2,627

)

Income before income taxes

 

$

19,658

 

 

$

1,968

 

 

$

60,804

 

 

$

22,811

 

 

The following table summarizes the Company’s assets by reportable segment:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

Franchise

 

$

204,137

 

 

$

206,997

 

Corporate-owned stores

 

 

157,509

 

 

 

151,620

 

Equipment

 

 

210,997

 

 

 

208,168

 

Unallocated

 

 

279,695

 

 

 

132,392

 

Total consolidated assets

 

$

852,338

 

 

$

699,177

 

 

The following table summarizes the Company’s goodwill by reportable segment:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

Franchise

 

$

16,938

 

 

$

16,938

 

Corporate-owned stores

 

 

67,377

 

 

 

67,377

 

Equipment

 

 

92,666

 

 

 

92,666

 

Consolidated goodwill

 

$

176,981

 

 

$

176,981

 

 

Corporate-owned and franchisee-owned stores (Tables)
Schedule of Changes in Corporate-owned and Franchisee-owned Stores

The following table shows changes in our corporate-owned and franchisee-owned stores for the three months ended September 30, 2016 and 2015:

 

 

 

For the three months ended

September 30,

 

 

For the nine months ended

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Franchisee-owned stores:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stores operated at beginning of period

 

 

1,148

 

 

 

956

 

 

 

1,066

 

 

 

863

 

New stores opened

 

 

37

 

 

 

26

 

 

 

121

 

 

 

122

 

Stores debranded or consolidated(1)

 

 

(1

)

 

 

-

 

 

 

(3

)

 

 

(3

)

Stores operated at end of period

 

 

1,184

 

 

 

982

 

 

 

1,184

 

 

 

982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate-owned stores:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stores operated at beginning of period

 

 

58

 

 

 

58

 

 

 

58

 

 

 

55

 

New stores opened

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3

 

Stores operated at end of period

 

 

58

 

 

 

58

 

 

 

58

 

 

 

58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stores:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stores operated at beginning of period

 

 

1,206

 

 

 

1,014

 

 

 

1,124

 

 

 

918

 

New stores opened

 

 

37

 

 

 

26

 

 

 

121

 

 

 

125

 

Stores debranded or consolidated(1)

 

 

(1

)

 

 

-

 

 

 

(3

)

 

 

(3

)

Stores operated at end of period

 

 

1,242

 

 

 

1,040

 

 

 

1,242

 

 

 

1,040

 

 

(1)

The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity, with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.

Business Organization - Additional Information (Detail) (USD $)
9 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended
Sep. 30, 2016
Member
Store
State
Jun. 30, 2016
Store
Dec. 31, 2015
Store
Sep. 30, 2015
Store
Jun. 30, 2015
Store
Dec. 31, 2014
Store
Sep. 30, 2016
Continuing LLC Owners [Member]
Sep. 27, 2016
Continuing LLC Owners [Member]
Jun. 27, 2016
Continuing LLC Owners [Member]
Sep. 28, 2016
Class A Common Stock [Member]
Jun. 28, 2016
Class A Common Stock [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Jun. 30, 2016
Class A Common Stock [Member]
Sep. 28, 2016
Class A Common Stock [Member]
Direct TSG Investors [Member]
Jun. 28, 2016
Class A Common Stock [Member]
Direct TSG Investors [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Direct TSG Investors [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Direct TSG Investors [Member]
Jun. 30, 2016
Class A Common Stock [Member]
Direct TSG Investors [Member]
Sep. 28, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Jun. 28, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Jun. 30, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Sep. 28, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Jun. 28, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Aug. 5, 2015
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Sep. 30, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Jun. 30, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Sep. 30, 2016
Pla-Fit Holdings, LLC [Member]
Sep. 28, 2016
Pla-Fit Holdings, LLC [Member]
Sep. 27, 2016
Pla-Fit Holdings, LLC [Member]
Jun. 30, 2016
Pla-Fit Holdings, LLC [Member]
Jun. 28, 2016
Pla-Fit Holdings, LLC [Member]
Jun. 27, 2016
Pla-Fit Holdings, LLC [Member]
Aug. 5, 2015
Pla-Fit Holdings, LLC [Member]
Aug. 5, 2015
Pla-Fit Holdings, LLC [Member]
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Aug. 5, 2015
Planet Intermediate, LLC [Member]
Aug. 5, 2015
Planet Fitness Holdings, LLC [Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of members
8,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of owned and franchised locations
1,242 
1,206 
1,124 
1,040 
1,014 
918 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of states in which entity operates
47 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Date of formation
Mar. 16, 2015 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of ownership
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
100.00% 
 
 
100.00% 
100.00% 
 
100.00% 
100.00% 
Number of stock issued during period
 
 
 
 
 
 
 
 
 
8,000,000 
11,500,000 
8,000,000 
11,500,000 
2,593,981 
3,608,840 
5,033,945 
2,593,981 
3,608,840 
5,406,019 
7,891,160 
5,406,019 
7,891,160 
 
 
72,602,810 
 
 
 
 
 
 
 
 
 
72,602,810 
 
 
Share price
 
 
 
 
 
 
 
 
 
$ 19.62 
$ 16.50 
$ 19.62 
$ 16.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares exchanged
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,406,019 
7,891,160 
5,406,019 
7,891,160 
 
5,406,019 
7,891,160 
 
 
 
 
 
 
 
 
 
 
Number of units held by owners
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,406,019 
5,406,019 
 
7,891,160 
7,891,160 
 
 
 
 
 
Percentage of economic interest
 
 
 
 
 
 
49.40% 
54.90% 
62.90% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.60% 
 
45.10% 
 
 
37.10% 
 
 
 
 
Summary of Significant Accounting Policies - Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (Interest Rate Cap [Member], Fair Value Measurements Recurring, USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Interest rate caps
$ 134 
$ 1,147 
Significant Other Observable Inputs (Level 2) [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Interest rate caps
$ 134 
$ 1,147 
Variable Interest Entities - Carrying Value of Variable Interest Entities of Consolidated Financial Statements (Detail) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Variable Interest Entity [Line Items]
 
 
Assets
$ 7,089 
$ 6,681 
PF Melville [Member]
 
 
Variable Interest Entity [Line Items]
 
 
Assets
3,984 
3,728 
MMR [Member]
 
 
Variable Interest Entity [Line Items]
 
 
Assets
$ 3,105 
$ 2,953 
Variable Interest Entities - Additional Information (Detail) (USD $)
Sep. 30, 2016
Dec. 31, 2015
Variable Interest Entity Consolidated Carrying Amount Assets And Liabilities [Abstract]
 
 
Maximum obligation of guarantees of leases and debt
$ 1,459,000 
$ 1,871,000 
Maximum loss exposure Involvement of estimated value
$ 0 
 
Goodwill and Intangible Assets - Summary of Goodwill and Intangible Assets (Detail) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2016
Dec. 31, 2015
Goodwill And Intangible Assets [Line Items]
 
 
Total intangible assets, Gross carrying amount
$ 347,867 
$ 347,867 
Gross carrying amount
201,567 
201,567 
Accumulated amortization
(89,068)
(74,248)
Net carrying Amount
112,499 
127,319 
Total intangible assets, Net carrying Amount
258,799 
273,619 
Goodwill, Gross carrying amount
176,981 
176,981 
Goodwill, Net carrying Amount
176,981 
176,981 
Trade and Brand Names [Member]
 
 
Goodwill And Intangible Assets [Line Items]
 
 
Indefinite-lived intangible, Net carrying Amount
146,300 
146,300 
Customer Relationships [Member]
 
 
Goodwill And Intangible Assets [Line Items]
 
 
Weighted average amortization period (years)
11 years 1 month 6 days 
11 years 1 month 6 days 
Gross carrying amount
171,782 
171,782 
Accumulated amortization
(68,926)
(57,741)
Net carrying Amount
102,856 
114,041 
Noncompete Agreements [Member]
 
 
Goodwill And Intangible Assets [Line Items]
 
 
Weighted average amortization period (years)
5 years 
5 years 
Gross carrying amount
14,500 
14,500 
Accumulated amortization
(11,302)
(9,127)
Net carrying Amount
3,198 
5,373 
Favorable Leases [Member]
 
 
Goodwill And Intangible Assets [Line Items]
 
 
Weighted average amortization period (years)
7 years 6 months 
7 years 6 months 
Gross carrying amount
2,935 
2,935 
Accumulated amortization
(1,549)
(1,256)
Net carrying Amount
1,386 
1,679 
Order Backlog [Member]
 
 
Goodwill And Intangible Assets [Line Items]
 
 
Weighted average amortization period (years)
4 months 24 days 
4 months 24 days 
Gross carrying amount
3,400 
3,400 
Accumulated amortization
(3,400)
(3,400)
Reacquired Franchise Rights [Member]
 
 
Goodwill And Intangible Assets [Line Items]
 
 
Weighted average amortization period (years)
5 years 9 months 18 days 
5 years 9 months 18 days 
Gross carrying amount
8,950 
8,950 
Accumulated amortization
(3,891)
(2,724)
Net carrying Amount
$ 5,059 
$ 6,226 
Goodwill and Intangible Assets - Additional Information (Detail) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Dec. 31, 2015
Goodwill And Intangible Assets [Line Items]
 
 
 
 
 
Impairment charges
 
 
$ 0 
 
$ 0 
Amortization of intangible assets
4,940,000 
5,404,000 
14,820,000 
16,181,000 
 
Favorable And Unfavorable Leases [Member]
 
 
 
 
 
Goodwill And Intangible Assets [Line Items]
 
 
 
 
 
Amortization of intangible assets
$ 97,000 
$ 143,000 
$ 292,000 
$ 380,000 
 
Goodwill and Intangible Assets - Summary of Amortization expenses (Detail) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
 
 
Remainder of 2016
$ 4,936 
 
2017
18,215 
 
2018
14,583 
 
2019
14,215 
 
2020
12,517 
 
Thereafter
48,033 
 
Net carrying Amount
$ 112,499 
$ 127,319 
Long-term Debt - Schedule of Long-term Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Total debt, excluding deferred financing costs
$ 488,450 
$ 492,275 
Deferred financing costs, net of accumulated amortization
(6,283)
(7,396)
Total debt
482,167 
484,879 
Current portion of long-term debt and line of credit
5,100 
5,100 
Long-term debt, net of current portion
477,067 
479,779 
Term Loan B [Member]
 
 
Debt Instrument [Line Items]
 
 
Total debt, excluding deferred financing costs
$ 488,450 
$ 492,275 
Long-term Debt - Schedule of Long-term Debt (Parenthetical) (Detail)
9 Months Ended 12 Months Ended
Sep. 30, 2016
Dec. 31, 2015
Revolving Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt instrument maturity date
Mar. 31, 2019 
Mar. 31, 2019 
Total rate - base plus spread
4.25% 
4.25% 
Term Loan B [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt instrument maturity date
Mar. 31, 2021 
Mar. 31, 2021 
Total rate - base plus spread
4.50% 
4.75% 
Long-term Debt - Schedule of Future Annual Payments of Long-term Debt (Detail) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Debt Disclosure [Abstract]
 
 
Remainder of 2016
$ 1,275 
 
2017
5,100 
 
2018
5,100 
 
2019
5,100 
 
2020
5,100 
 
Thereafter
466,775 
 
Total
$ 488,450 
$ 492,275 
Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Interest Rate Cap [Member]
Dec. 31, 2015
Interest Rate Cap [Member]
Derivative Instruments And Hedging Activities Disclosures [Line Items]
 
 
 
 
 
 
Derivative, notional amount
 
 
 
 
$ 209,000,000 
 
Derivative, interest rate cap floor
1.50% 
 
1.50% 
 
 
 
Interest rate caps
 
 
 
 
134,000 
1,147,000 
Unrealized loss on interest rate caps, net of tax
193,000 
(557,000)
(469,000)
(1,497,000)
(469,000)
 
Unrealized loss on interest rate caps, tax
 
 
 
 
$ (83,000)
 
Related Party Transactions - Summary of Amounts Due From Stockholders/Members (Detail) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Related Party Transaction Due From To Related Party Current [Abstract]
 
 
Accounts receivable – related entities
$ 31 
$ 39 
Accounts receivable – stockholders/members
66 
4,901 
Due from related parties
97 
4,940 
Accounts payable – related entities
3,966 
 
Due to related parties
$ 3,966 
 
Related Party Transactions - Additional Information (Detail) (Direct TSG Investors [Member], USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Related Party Transaction [Line Items]
 
 
 
 
Payment for management fee
$ 0 
$ 1,384 
$ 0 
$ 1,899 
Management Agreement Termination [Member]
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
Management agreement termination fee
 
$ 1,000 
 
$ 1,000 
Stockholder's Equity - Additional Information (Detail) (USD $)
9 Months Ended 3 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 1 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2016
Sep. 30, 2016
Pla-Fit Holdings, LLC [Member]
Sep. 28, 2016
Pla-Fit Holdings, LLC [Member]
Jun. 30, 2016
Pla-Fit Holdings, LLC [Member]
Jun. 28, 2016
Pla-Fit Holdings, LLC [Member]
Sep. 30, 2016
Continuing LLC Owners [Member]
IPO and Secondary Offering [Member]
Sep. 28, 2016
Class A Common Stock [Member]
Jun. 28, 2016
Class A Common Stock [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Jun. 30, 2016
Class A Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Aug. 6, 2015
Class A Common Stock [Member]
Sep. 28, 2016
Class A Common Stock [Member]
Direct TSG Investors [Member]
Jun. 28, 2016
Class A Common Stock [Member]
Direct TSG Investors [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Direct TSG Investors [Member]
Jun. 22, 2015
Class A Common Stock [Member]
Direct TSG Investors [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Direct TSG Investors [Member]
Jun. 30, 2016
Class A Common Stock [Member]
Direct TSG Investors [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Direct TSG Investors [Member]
IPO and Secondary Offering [Member]
Sep. 28, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Jun. 28, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Jun. 30, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Pla-Fit Holdings, LLC [Member]
IPO [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Investor
IPO and Secondary Offering [Member]
Sep. 30, 2016
Class B Common Stock [Member]
Dec. 31, 2015
Class B Common Stock [Member]
Aug. 6, 2015
Class B Common Stock [Member]
Sep. 28, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Jun. 28, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Aug. 5, 2015
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Sep. 30, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Jun. 30, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Sep. 30, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Sep. 30, 2016
Class B Common Stock [Member]
Continuing LLC Owners [Member]
IPO and Secondary Offering [Member]
Aug. 5, 2015
Class B Common Stock [Member]
Continuing LLC Owners [Member]
Pla-Fit Holdings, LLC [Member]
Jun. 22, 2015
Merger Agreement [Member]
Class A Common Stock [Member]
Direct TSG Investors [Member]
Class Of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares converted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26,106,930 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26,106,930 
Number of stock issued during period
 
 
 
 
 
 
8,000,000 
11,500,000 
8,000,000 
11,500,000 
 
 
 
2,593,981 
3,608,840 
5,033,945 
 
2,593,981 
3,608,840 
14,870,164 
5,406,019 
7,891,160 
5,406,019 
7,891,160 
10,491,055 
35,043,641 
 
 
 
 
 
72,602,810 
 
 
 
 
72,602,810 
 
Common stock dividend and voting rights description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The shares of Class B common stock have no rights to dividends or distributions, whether in cash or stock, but entitle the holder to one vote per share on matters presented to stockholders of the Company. 
 
 
 
Convertible stock, conversion description
Following the Merger and the Reclassification, the Company and the Continuing LLC Owners entered into an exchange agreement under which the Continuing LLC Owners (or certain permitted transferees thereof) have the right, from time to time and subject to the terms of the exchange agreement, to exchange their Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock (or cash at the option of the Company) on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and similar transactions. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate amount of units issued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 156,946,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock, shares outstanding
 
 
 
 
 
 
 
 
49,914,000 
 
36,598,000 
36,597,985 
 
 
 
 
 
 
 
 
 
 
 
 
 
48,665,000 
62,112,000 
 
 
 
 
 
 
 
 
 
Share price
 
 
 
 
 
 
$ 19.62 
$ 16.50 
$ 19.62 
$ 16.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from sale of shares
 
 
 
 
 
 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares exchanged
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,406,019 
7,891,160 
 
 
 
 
 
5,406,019 
7,891,160 
 
5,406,019 
7,891,160 
 
 
 
 
Percentage of economic interest
 
 
 
 
 
49.40% 
 
 
 
 
 
 
 
 
 
 
 
 
 
15.10% 
 
 
 
 
 
35.50% 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of voting power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15.10% 
 
 
 
 
 
35.50% 
 
 
 
 
 
 
 
 
 
49.40% 
 
 
Number of units held by owners
 
5,406,019 
5,406,019 
7,891,160 
7,891,160 
48,665,585 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
48,665,585 
 
 
Earnings per share - Additional Information (Detail)
2 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2015
Restricted Stock Units [Member]
Sep. 30, 2015
Stock Options [Member]
Sep. 30, 2016
Stock Options [Member]
Sep. 30, 2016
Stock Options [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Dec. 31, 2015
Class A Common Stock [Member]
Aug. 11, 2015
Class A Common Stock [Member]
Aug. 6, 2015
Class A Common Stock [Member]
Sep. 30, 2016
Class B Common Stock [Member]
Dec. 31, 2015
Class B Common Stock [Member]
Aug. 6, 2015
Class B Common Stock [Member]
Sep. 30, 2016
Class B Common Stock [Member]
Continuing LLC Owners Exchange Agreement
Sep. 30, 2016
Class B Common Stock [Member]
Continuing LLC Owners Exchange Agreement
Earnings Per Share Diluted [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock, shares outstanding
 
 
 
 
49,914,000 
36,598,000 
36,597,985 
48,665,000 
62,112,000 
 
 
Anti-dilutive securities excluded from the calculation of earnings per share
8,160 
116,690 
250,141 
230,633 
 
 
 
 
 
 
 
53,898,536 
59,218,127 
Earnings per share - Reconciliation of Numerators and Denominators Used to Compute Basic and Diluted Earnings per Share (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
2 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Numerator
 
 
 
 
 
Net income
$ 6,214 
$ 14,863 
$ 738 
$ 49,300 
$ 20,890 
Less: net income attributable to non-controlling interests
4,593 
11,438 
4,631 
38,374 
4,857 
Net income attributable to Planet Fitness, Inc. - basic
1,621 
3,425 
 
10,926 
 
Incremental tax effect of reallocation of net income assuming conversion of Holdings Units
(1,740)
 
 
 
 
Net income attributable to Planet Fitness, Inc. - diluted
4,399 
3,425 
 
10,926 
 
Restricted Stock Units [Member]
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
Weighted-average shares outstanding adjustment
 
4,282 
 
3,030 
 
Stock Options [Member]
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
Weighted-average shares outstanding adjustment
 
12,539 
 
138 
 
Conversion Of Holdings Units [Member]
 
 
 
 
 
Numerator
 
 
 
 
 
Reallocation of net income assuming conversion of Holdings Units
$ 4,518 
 
 
 
 
Class A Common Stock [Member]
 
 
 
 
 
Denominator
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding - basic
35,661,284 
44,668,875 1
35,661 1
39,394,318 1
35,661 1
Effect of dilutive securities:
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding - diluted
98,709,740 
44,685,696 1
98,710 1
39,397,486 1
98,710 1
Earnings per share of Class A common stock - basic
$ 0.05 
$ 0.08 1
$ 0.05 1
$ 0.28 1
$ 0.05 1
Earnings per share of Class A common stock - diluted
$ 0.04 
$ 0.08 1
$ 0.04 1
$ 0.28 1
$ 0.04 1
Class B Common Stock [Member]
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
Weighted-average shares outstanding adjustment
63,048,456 
 
 
 
 
Income Taxes - Additional information (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
9 Months Ended 3 Months Ended 1 Months Ended 9 Months Ended
Sep. 30, 2016
Agreement
Jun. 30, 2016
Dec. 31, 2015
Sep. 30, 2016
Continuing LLC Owners [Member]
Jun. 30, 2016
Continuing LLC Owners [Member]
Sep. 30, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Jun. 30, 2016
Class A Common Stock [Member]
Continuing LLC Owners [Member]
Sep. 30, 2016
Canada [Member]
Tax Credit Carryforward [Line Items]
 
 
 
 
 
 
 
 
Effective income tax rate
39.50% 
 
 
 
 
 
 
 
Effective income tax rate reconciliation noncontrolling interest
2.10% 
 
 
 
 
 
 
 
Net deferred tax assets
$ 255,729 
 
$ 117,358 
 
 
 
 
 
Net operating loss carryforwards
 
 
 
 
 
 
 
1,911 
Operating loss carryforwards, expiration date
 
 
 
 
 
 
 
2034 
Net deferred tax liabilities
1,275 
 
 
 
 
 
 
Total liability related to uncertain tax positions
300 
 
 
 
 
 
 
 
Number of tax receivable agreements
 
 
 
 
 
 
 
Applicable percentage of cash savings
85.00% 
85.00% 
 
 
 
 
 
 
Percentage of remaining tax savings
15.00% 
 
 
 
 
 
 
 
Income tax rate maximum tax liability
3.50% 
 
 
 
 
 
 
 
Number of shares exchanged
 
 
 
 
 
5,406,019 
7,891,160 
 
Decrease in deferred tax assets
 
 
 
(5,378)
(7,638)
 
 
 
Deferred tax asset
 
 
 
71,174 
89,876 
 
 
 
Deferred tax liability
 
 
 
61,735 
78,152 
 
 
 
Tax benefit obligation
$ 274,072 
 
 
 
 
 
 
 
Income Taxes - Schedule of Future Payments Under Tax Benefit Arrangements (Detail) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Income Tax Contingency [Line Items]
 
Total
$ 274,072 
IPO [Member]
 
Income Tax Contingency [Line Items]
 
Remainder of 2016
922 
2017
10,658 
2018
13,438 
2019
13,569 
2020
13,910 
Thereafter
221,575 
Total
$ 274,072 
Segments - Additional Information (Detail) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Segment
Sep. 30, 2015
Sep. 30, 2016
Franchise [Member]
Sep. 30, 2015
Franchise [Member]
Sep. 30, 2016
Franchise [Member]
Sep. 30, 2015
Franchise [Member]
Sep. 30, 2016
Franchise [Member]
Placement Services [Member]
Sep. 30, 2015
Franchise [Member]
Placement Services [Member]
Sep. 30, 2016
Franchise [Member]
Placement Services [Member]
Sep. 30, 2015
Franchise [Member]
Placement Services [Member]
Sep. 30, 2016
Corporate-owned Stores [Member]
Sep. 30, 2015
Corporate-owned Stores [Member]
Sep. 30, 2016
Corporate-owned Stores [Member]
Sep. 30, 2015
Corporate-owned Stores [Member]
Sep. 30, 2016
Corporate-owned Stores [Member]
Canada [Member]
Dec. 31, 2015
Corporate-owned Stores [Member]
Canada [Member]
Sep. 30, 2016
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of reportable segments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of operating segments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Description of factors used to identify entity's reportable segments
 
 
No operating segments aggregated to arrive at the Company?s reportable segments 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 87,007,000 
$ 68,817,000 
$ 261,822,000 
$ 224,692,000 
$ 27,225,000 
$ 19,794,000 
$ 84,380,000 
$ 63,430,000 
$ 2,224,000 
$ 1,623,000 
$ 6,952,000 
$ 5,895,000 
$ 26,675,000 
$ 25,153,000 
$ 78,756,000 
$ 73,674,000 
 
 
$ 0 
Long-lived assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,940,000 
$ 3,149,000 
 
Segments - Summary of Financial Information for the Company's Reportable Segments (Detail) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
$ 87,007,000 
$ 68,817,000 
$ 261,822,000 
$ 224,692,000 
Total Segment EBITDA
33,694,000 
16,500,000 
102,750,000 
64,843,000 
Corporate And Other Non Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Segment EBITDA
(6,823,000)
(13,162,000)
(20,147,000)
(27,191,000)
Franchise [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
27,225,000 
19,794,000 
84,380,000 
63,430,000 
Franchise [Member] |
Operating Segments [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Segment EBITDA
22,814,000 
15,496,000 
71,308,000 
46,778,000 
Franchise [Member] |
US [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
26,940,000 
19,785,000 
83,312,000 
63,371,000 
Franchise [Member] |
International [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
285,000 
9,000 
1,068,000 
59,000 
Corporate-owned Stores [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
26,675,000 
25,153,000 
78,756,000 
73,674,000 
Corporate-owned Stores [Member] |
Operating Segments [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Segment EBITDA
10,550,000 
9,256,000 
30,259,000 
26,342,000 
Corporate-owned Stores [Member] |
US [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
25,591,000 
24,203,000 
75,595,000 
71,716,000 
Corporate-owned Stores [Member] |
International [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
1,084,000 
950,000 
3,161,000 
1,958,000 
Equipment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
33,107,000 
23,870,000 
98,686,000 
87,588,000 
Equipment [Member] |
Operating Segments [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Segment EBITDA
7,153,000 
4,910,000 
21,330,000 
18,914,000 
Equipment [Member] |
US [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
$ 33,107,000 
$ 23,870,000 
$ 98,686,000 
$ 87,588,000 
Segments - Reconciliation of Total Segment EBITDA to Income Before Income Taxes (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Segment Reporting [Abstract]
 
 
 
 
Total Segment EBITDA
$ 33,694 
$ 16,500 
$ 102,750 
$ 64,843 
Depreciation and amortization
7,745 
7,976 
23,127 
24,160 
Other (expense) income
(204)
(1,815)
30 
(2,627)
Income from operations
26,153 
10,339 
79,593 
43,310 
Interest expense, net
(6,291)
(6,556)
(18,819)
(17,872)
Income before income taxes
$ 19,658 
$ 1,968 
$ 60,804 
$ 22,811 
Segments - Summary of Company's Assets by Reportable Segment (Detail) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Total consolidated assets
$ 852,338 
$ 699,177 
Operating Segments [Member] |
Franchise [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Total consolidated assets
204,137 
206,997 
Operating Segments [Member] |
Corporate-owned Stores [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Total consolidated assets
157,509 
151,620 
Operating Segments [Member] |
Equipment [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Total consolidated assets
210,997 
208,168 
Unallocated [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Total consolidated assets
$ 279,695 
$ 132,392 
Segments - Summary of Company's Goodwill by Reportable Segment (Detail) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Segment Reporting Other Significant Reconciling Item [Line Items]
 
 
Goodwill, Net carrying Amount
$ 176,981 
$ 176,981 
Franchise [Member]
 
 
Segment Reporting Other Significant Reconciling Item [Line Items]
 
 
Goodwill, Net carrying Amount
16,938 
16,938 
Corporate-owned Stores [Member]
 
 
Segment Reporting Other Significant Reconciling Item [Line Items]
 
 
Goodwill, Net carrying Amount
67,377 
67,377 
Equipment [Member]
 
 
Segment Reporting Other Significant Reconciling Item [Line Items]
 
 
Goodwill, Net carrying Amount
$ 92,666 
$ 92,666 
Corporate-owned and Franchisee-owned Stores - Schedule of Changes in Corporate-owned and Franchisee-owned Stores (Detail)
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2016
Store
Sep. 30, 2015
Store
Sep. 30, 2016
Store
Sep. 30, 2015
Store
Sep. 30, 2016
Franchisee-Owned Stores [Member]
Store
Sep. 30, 2015
Franchisee-Owned Stores [Member]
Store
Sep. 30, 2016
Franchisee-Owned Stores [Member]
Store
Sep. 30, 2015
Franchisee-Owned Stores [Member]
Store
Sep. 30, 2015
Corporate-Owned Stores [Member]
Store
Sep. 30, 2016
Corporate-Owned Stores [Member]
Store
Jun. 30, 2016
Corporate-Owned Stores [Member]
Store
Dec. 31, 2015
Corporate-Owned Stores [Member]
Store
Jun. 30, 2015
Corporate-Owned Stores [Member]
Store
Franchisor Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Stores operated at beginning of period
1,206 
1,014 
1,124 
918 
1,148 
956 
1,066 
863 
55 
58 
58 
58 
58 
New stores opened
37 
26 
121 
125 
37 
26 
121 
122 
 
 
 
 
Stores debranded or consolidated
(1)1
 
(3)1
(3)1
(1)1
 
(3)1
(3)1
 
 
 
 
 
Stores operated at end of period
1,242 
1,040 
1,242 
1,040 
1,184 
982 
1,184 
982 
58 
58 
58 
58 
58