Condensed consolidated balance sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
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Accounts receivable, allowance for bad debts | $ 84 | $ 111 |
Accumulated depreciation | $ 89,417 | $ 73,621 |
Class A Common Stock | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 79,994,000 | 78,525,000 |
Common stock, shares outstanding (in shares) | 79,994,000 | 78,525,000 |
Class B Common Stock | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 6,500,000 | 8,562,000 |
Common stock, shares outstanding (in shares) | 6,500,000 | 8,562,000 |
Condensed consolidated statements of operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Revenue: | ||||
Revenue | $ 40,234 | $ 181,661 | $ 167,464 | $ 330,478 |
Operating costs and expenses: | ||||
Cost of revenue | 8,478 | 54,391 | 30,323 | 88,877 |
Store operations | 14,681 | 20,163 | 40,838 | 41,068 |
Selling, general and administrative | 15,896 | 18,864 | 32,848 | 37,018 |
National advertising fund expense | 10,878 | 12,522 | 26,083 | 24,334 |
Depreciation and amortization | 13,008 | 10,577 | 25,800 | 20,484 |
Other loss (gain) | 15 | (122) | 26 | 246 |
Total operating costs and expenses | 62,956 | 116,395 | 155,918 | 212,027 |
(Loss) income from operations | (22,722) | 65,266 | 11,546 | 118,451 |
Other expense, net: | ||||
Interest income | 359 | 1,979 | 2,286 | 3,777 |
Interest expense | (20,467) | (14,636) | (40,708) | (29,385) |
Other expense | (73) | (1,444) | (760) | (4,762) |
Total other expense, net | (20,181) | (14,101) | (39,182) | (30,370) |
(Loss) income before income taxes | (42,903) | 51,165 | (27,636) | 88,081 |
(Benefit) provision for income taxes | (10,918) | 11,338 | (6,034) | 16,615 |
Net (loss) income | (31,985) | 39,827 | (21,602) | 71,466 |
Less net (loss) income attributable to non-controlling interests | (2,808) | 4,983 | (1,032) | 9,213 |
Net (loss) income attributable to Planet Fitness, Inc. | $ (29,177) | $ 34,844 | $ (20,570) | $ 62,253 |
Class A Common Stock | ||||
Net (loss) income per share of Class A common stock: | ||||
Basic (in dollars per share) | $ (0.36) | $ 0.41 | $ (0.26) | $ 0.74 |
Diluted (in dollars per share) | $ (0.36) | $ 0.41 | $ (0.26) | $ 0.74 |
Weighted-average shares of Class A common stock outstanding: | ||||
Basic (in shares) | 79,965,842 | 84,142,975 | 79,532,155 | 83,975,192 |
Diluted (in shares) | 79,965,842 | 84,835,183 | 79,532,155 | 84,638,650 |
Franchise | ||||
Revenue: | ||||
Revenue | $ 16,214 | $ 58,225 | $ 65,125 | $ 111,181 |
Commission income | ||||
Revenue: | ||||
Revenue | 45 | 1,065 | 435 | 2,059 |
National advertising fund revenue | ||||
Revenue: | ||||
Revenue | 4,743 | 12,522 | 13,971 | 24,334 |
Corporate-owned stores | ||||
Revenue: | ||||
Revenue | 9,419 | 39,695 | 49,935 | 77,739 |
Equipment | ||||
Revenue: | ||||
Revenue | $ 9,813 | $ 70,154 | $ 37,998 | $ 115,165 |
Condensed consolidated statements of comprehensive income (loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income including non-controlling interests | $ (31,985) | $ 39,827 | $ (21,602) | $ 71,466 |
Other comprehensive income (loss), net: | ||||
Foreign currency translation adjustments | 249 | 103 | (360) | 157 |
Total other comprehensive income, net | 249 | 103 | (360) | 157 |
Total comprehensive (loss) income including non-controlling interests | (31,736) | 39,930 | (21,962) | 71,623 |
Less: total comprehensive (loss) income attributable to non-controlling interests | (2,808) | 4,983 | (1,032) | 9,213 |
Total comprehensive (loss) income attributable to Planet Fitness, Inc. | $ (28,928) | $ 34,947 | $ (20,930) | $ 62,410 |
Business Organization |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Business Organization | Business Organization Planet Fitness, Inc. (the “Company”), through its subsidiaries, is a franchisor and operator of fitness centers, with more than 15.2 million members and 2,059 owned and franchised locations (referred to as stores) in 50 states, the District of Columbia, Puerto Rico, Canada, the Dominican Republic, Panama, Mexico and Australia as of June 30, 2020. In March 2020, the Company proactively closed all of its stores system wide in response to the novel coronavirus disease (“COVID-19”) pandemic in order to promote the health and safety of its members, team members and their communities. As of June 30, 2020, 1,490 stores had reopened, of which 1,451 were franchisee-owned stores and 39 were corporate-owned stores. The Company serves as the reporting entity for its various subsidiaries that operate three distinct lines of business:
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 through its subsidiaries. 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. 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 (“Holdings Units”) not owned by the Company. Unless otherwise specified, “the Company” refers to both Planet Fitness, Inc. and Pla-Fit Holdings throughout the remainder of these notes. As of June 30, 2020, Planet Fitness, Inc. held 100.0% of the voting interest and 92.5% of the economic interest of Pla-Fit Holdings and the holders of Holdings Units of Pla-Fit Holdings (the “Continuing LLC Owners”) held the remaining 7.5% economic interest in Pla-Fit Holdings.
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | 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 six months ended June 30, 2020 and 2019 are unaudited. The condensed consolidated balance sheet as of December 31, 2019 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, 2019 (the “Annual Report”) filed with the SEC on February 28, 2020. 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, Planet Fitness, Inc. consolidates Pla-Fit Holdings. 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”), PF Melville LLC (“PF Melville”), and Planet Fitness NAF, LLC (the “NAF”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. MMR and PF Melville 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. The NAF is an advertising fund on behalf of which the Company collects 2% of gross monthly membership dues from franchisees, in accordance with the provisions of the franchise agreements, and uses the amounts received to support our national marketing campaigns, its social media platforms and the development of local advertising materials. (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, the liability for the Company’s tax benefit arrangements, and the value of the lease liability and related right-of-use asset recorded in accordance with ASC 842 (see Note 7). (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 carrying value and estimated fair value of long-term debt as of June 30, 2020 and December 31, 2019 were as follows:
(1) The Company’s Variable Funding Notes are a variable rate loan and the fair value of this loan approximates book value based on the borrowing rates currently available for variable rate loans obtained from third party lending institutions. The estimated fair value of our fixed rate long-term debt is estimated primarily based on current bid prices for our long-term debt. Judgment is required to develop these estimates. As such, the fair value of our long-term debt is classified within Level 2, as defined under U.S. GAAP. As a result of the COVID-19 pandemic, the fair value of our long-term debt has fluctuated significantly and may continue to fluctuate based on market conditions and other factors, including changes in the target federal funds rate. (d) Recent accounting pronouncements The FASB issued ASU No. 2017-4, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, in January 2017. This guidance eliminates the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The Company adopted this guidance on January 1, 2020 noting no material impact on the Company’s consolidated financial statements. The FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, in August 2018. The guidance helps align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company adopted this guidance on January 1, 2020 on a prospective basis, noting no material impact on the Company’s consolidated financial statements.
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Variable Interest Entities |
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Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities The carrying values of VIEs included in the consolidated financial statements as of June 30, 2020 and December 31, 2019 are as follows:
The Company also has variable interests in certain franchisees mainly through the guarantee of lease agreements up to a maximum period of ten years with earlier expiration dates possible if certain conditions are met. The Company’s maximum obligation, as a result of its guarantees of leases, is approximately $14,412 and $10,309 as of June 30, 2020 and December 31, 2019, 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 estimated fair value of the guarantees, which is not material.
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Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions New Jersey Acquisition On December 16, 2019, the Company purchased from one of its franchisees certain assets associated with twelve franchisee-owned stores in New Jersey for a cash payment of $37,812. As a result of the transaction, the Company incurred a loss on unfavorable reacquired franchise rights of $1,810. The loss incurred reduced the net purchase price to $36,002. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment. The purchase consideration was allocated as follows:
The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years. The acquisition was not material to the results of operations of the Company. Maine Acquisition On May 30, 2019, the Company purchased from one of its franchisees certain assets associated with four franchisee-owned stores in Maine for a cash payment of $14,801. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment. The purchase consideration was allocated as follows:
The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years. The acquisition was not material to the results of operations of the Company.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible assets | Goodwill and Intangible Assets A summary of goodwill and intangible assets at June 30, 2020 and December 31, 2019 is as follows:
The Company determined that no impairment charges were required during any periods presented. Amortization expense related to the intangible assets totaled $4,222 and $4,019 for the three months ended June 30, 2020 and 2019, respectively and $8,445 and $8,025 for the six months ended June 30, 2020 and 2019, respectively. The anticipated annual amortization expense related to intangible assets to be recognized in future years as of June 30, 2020 is as follows:
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt as of June 30, 2020 and December 31, 2019 consists of the following:
Future annual principal payments of long-term debt as of June 30, 2020 are as follows:
On August 1, 2018, Planet Fitness Master Issuer LLC (the “Master Issuer”), a limited-purpose, bankruptcy remote, wholly-owned indirect subsidiary of Pla-Fit Holdings, LLC, entered into a base indenture and a related supplemental indenture (collectively, the “2018 Indenture”) under which the Master Issuer may issue multiple series of notes. On the same date, the Master Issuer issued Series 2018-1 4.262% Fixed Rate Senior Secured Notes, Class A-2-I (the “2018 Class A-2-I Notes”) with an initial principal amount of $575,000 and Series 2018-1 4.666% Fixed Rate Senior Secured Notes, Class A-2-II (the “2018 Class A-2-II Notes” and, together with the 2018 Class A-2-I Notes, the “2018 Notes”) with an initial principal amount of $625,000. In connection with the issuance of the 2018 Notes, the Master Issuer also entered into a revolving financing facility that allows for the incurrence of up to $75,000 in revolving loans and/or letters of credit under the Master Issuer’s Series 2018-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes”). The Company fully drew down on the Variable Funding Notes on March 20, 2020. Outstanding amounts under the Variable Funding Notes bear interest at a variable rate, which is currently 2.95%. On December 3, 2019 the Master Issuer issued Series 2019-1 3.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2019 Notes” and, together with the 2018 Notes, the “Notes”) with an initial principal amount of $550,000. The 2019 Notes were issued under the 2018 Indenture and a related supplemental indenture dated December 3, 2019 (together, the “Indenture”). Together the Notes and Variable Funding Notes will be referred to as the “Securitized Senior Notes”. The Notes were issued in a securitization transaction pursuant to which most of the Company’s domestic revenue-generating assets, consisting principally of franchise-related agreements, certain corporate-owned store assets, equipment supply agreements and intellectual property and license agreements for the use of intellectual property, were assigned to the Master Issuer and certain other limited-purpose, bankruptcy remote, wholly-owned indirect subsidiaries of the Company that act as guarantors of the Securitized Senior Notes and that have pledged substantially all of their assets to secure the Securitized Senior Notes. Interest and principal payments on the Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity date of the 2018 Notes is in September 2048, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2018 Class A-2-I Notes will be repaid in September 2022 and the 2018 Class A-2-II Notes will be repaid in September 2025. The legal final maturity date of the 2019 Notes is in December 2049, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2019 Notes will be repaid in December 2029 (together, the “Anticipated Repayment Dates”). If the Master Issuer has not repaid or refinanced the Notes prior to the respective Anticipated Repayment Dates, additional interest will accrue pursuant to the Indenture. As noted above, the Company borrowed the full $75,000 in Variable Funding Notes on March 20, 2020 at a current rate of 2.95%. The Variable Funding Notes accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the London interbank offered rate for U.S. Dollars, or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin and as specified in the Variable Funding Notes. There is a commitment fee on the unused portion of the Variable Funding Notes of 0.5% based on utilization. It is anticipated that the principal and interest on the Variable Funding Notes will be repaid in full on or prior to September 2023, subject to two additional one-year extension options. Following the anticipated repayment date (and any extensions thereof) additional interest will accrue on the Variable Funding Notes equal to 5.0% per year. In connection with the issuance of the 2018 Notes and 2019 Notes, the Company incurred debt issuance costs of $27,133 and $10,577, respectively. The debt issuance costs are being amortized to “Interest expense” through the Anticipated Repayment Dates of the Notes utilizing the effective interest rate method. The Securitized Senior Notes are subject to covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Securitized Senior Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Securitized Senior Notes are in stated ways defective or ineffective, (iv) a cap on non-securitized indebtedness of $50 million (provided that the Company may incur non-securitized indebtedness in excess of such amount, subject to the leverage ratio cap described below, under certain conditions, including if the relevant lenders execute a non-disturbance agreement that acknowledges the bankruptcy-remote status of the Master Issuer and its subsidiaries and of their respective assets), (v) a leverage ratio cap on the Company of 7.0x (calculated without regard for any indebtedness subject to the $50 million cap) and (vi) covenants relating to recordkeeping, access to information and similar matters. Pursuant to a parent company support agreement, the Company has agreed to cause its subsidiary to perform each of its obligations (including any indemnity obligations) and duties under the Management Agreement and under the contribution agreements entered into in connection with the securitized financing facility, in each case as and when due. To the extent that such subsidiary has not performed any such obligation or duty within the prescribed time frame after such obligation or duty was required to be performed, the Company has agreed to either (i) perform such obligation or duty or (ii) cause such obligations or duties to be performed on the Company’s behalf. The Securitized Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, certain manager termination events, an event of default, and the failure to repay or refinance the Notes on the applicable scheduled Anticipated Repayment Dates. The Securitized Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Securitized Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments. In accordance with the Indenture, certain cash accounts have been established with the Indenture trustee (the “Trustee”) for the benefit of the trustee and the noteholders, and are restricted in their use. The Company holds restricted cash which primarily represents cash collections held by the Trustee, interest, principal, and commitment fee reserves held by the Trustee related to the Securitized Senior Notes. As of June 30, 2020, the Company had restricted cash held by the Trustee of $70,399, which includes pre-funding of principal and interest payments through the remainder of 2020. Restricted cash has been combined with cash and cash equivalents when reconciling the beginning and end of period balances in the consolidated statements of cash flows.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company leases space to operate corporate-owned stores, equipment, office, and warehouse space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, we account for fixed lease and non-lease components together as a single, combined lease component. Variable lease costs, which may include common area maintenance, insurance, and taxes are not included in the lease liability and are expensed in the period incurred. Our corporate-owned store leases generally have remaining terms of one to ten years, and typically include one or more renewal options, with renewal terms that can generally extend the lease term from three to ten years or more. The exercise of lease renewal options is at our sole discretion. The Company includes options to renew in the expected term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease ROU assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs and lease incentives. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases based upon interpolated rates using our Class A-2 Notes. The Company has certain non-real estate leases that are accounted for as finance leases under ASC 842, which is similar to the accounting for capital leases under the previous standard. These leases are immaterial, and therefore the Company has not included them in them in the tables below, except for their location on the consolidated balance sheet. Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our ROU asset related to the lease. These tenant incentives are amortized as reduction of rent expense over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
During the three and six months ended June 30, 2020 and 2019, the components of lease cost were as follows:
The Company’s costs related to short-term leases, those with a duration between one and twelve months, were immaterial. Supplemental disclosures of cash flow information related to leases were as follows:
As of June 30, 2020, maturities of lease liabilities were as follows:
As of June 30, 2020, operating lease payments exclude approximately $20,323 of legally binding minimum lease payments for leases signed but not yet commenced.
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Leases | Leases The Company leases space to operate corporate-owned stores, equipment, office, and warehouse space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, we account for fixed lease and non-lease components together as a single, combined lease component. Variable lease costs, which may include common area maintenance, insurance, and taxes are not included in the lease liability and are expensed in the period incurred. Our corporate-owned store leases generally have remaining terms of one to ten years, and typically include one or more renewal options, with renewal terms that can generally extend the lease term from three to ten years or more. The exercise of lease renewal options is at our sole discretion. The Company includes options to renew in the expected term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease ROU assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs and lease incentives. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases based upon interpolated rates using our Class A-2 Notes. The Company has certain non-real estate leases that are accounted for as finance leases under ASC 842, which is similar to the accounting for capital leases under the previous standard. These leases are immaterial, and therefore the Company has not included them in them in the tables below, except for their location on the consolidated balance sheet. Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our ROU asset related to the lease. These tenant incentives are amortized as reduction of rent expense over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
During the three and six months ended June 30, 2020 and 2019, the components of lease cost were as follows:
The Company’s costs related to short-term leases, those with a duration between one and twelve months, were immaterial. Supplemental disclosures of cash flow information related to leases were as follows:
As of June 30, 2020, maturities of lease liabilities were as follows:
As of June 30, 2020, operating lease payments exclude approximately $20,323 of legally binding minimum lease payments for leases signed but not yet commenced.
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Revenue recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue recognition | Revenue recognition Contract Liabilities Contract liabilities consist primarily of deferred revenue resulting from initial and renewal franchise fees and area development agreement (“ADA”) fees paid by franchisees, as well as transfer fees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement. Also included are corporate-owned store enrollment fees, annual fees and monthly fees as well as deferred equipment rebates relating to our equipment business. We classify these contract liabilities as deferred revenue in our condensed consolidated balance sheets. Additionally, as of June 30, 2020, due to temporary store closures in March as a result of the COVID-19 pandemic, approximately $10.3 million remains of deferred revenue from March related to monthly membership billings of corporate-owned store and franchise revenue that the Company will recognize as the stores reopen. The following table reflects the change in contract liabilities between December 31, 2019 and June 30, 2020.
The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2020. The Company has elected to exclude short term contracts, sales and usage based royalties and any other variable consideration recognized on an “as invoiced” basis.
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Related Party Transactions |
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Related Party Transactions | Related Party Transactions Amounts due from related parties of $420 as of June 30, 2020 recorded within other receivables on the condensed consolidated balance sheet relate to a potential indemnification reimbursement for an outstanding legal matter, see Note 13. Activity with entities considered to be related parties is summarized below:
Additionally, the Company had deferred franchise agreement and area development agreement revenue from related parties of $188 and $256 as of June 30, 2020 and December 31, 2019, respectively. The Company had payables to related parties pursuant to tax benefit arrangements of $31,729 and $53,491, as of June 30, 2020 and December 31, 2019, respectively (see Note 12). The Company provides administrative services to the NAF and typically charges NAF a fee for providing these services. The services provided include accounting services, information technology, data processing, product development, legal and administrative support, and other operating expenses, which amounted to $224 and $695 for the three months ended June 30, 2020 and 2019, respectively, and $793 and $1,369 for the six months ended June 30, 2020 and 2019, respectively. In the three and six months ended June 30, 2020, the Company incurred approximately $11 and $60, respectively, which is included within selling, general and administrative expense on the consolidated statements of operations, for corporate travel to a third-party company which is affiliated with our Chief Executive Officer. During the three months ended June 30, 2020, the Company provided a short-term loan of approximately $8,950 to its third party payment processor related to amounts drafted by franchisee-owned stores in March that were not collected as part of the typical monthly process as a result of the impact of COVID-19. Repayment of this loan will occur over several months, once the stores reopen. As of June 30, 2020, approximately $8,777 of the loan balance is outstanding.
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Stockholder's Equity |
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Equity [Abstract] | |||||||||
Stockholder's Equity | Stockholder’s Equity Pursuant to the exchange agreement between the Company and the Continuing LLC Owners, 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. In connection with any exchange of Holdings Units for shares of Class A common stock by a Continuing LLC Owner, the number of Holdings Units held by the Company is correspondingly increased as it acquires the exchanged Holdings Units, and a corresponding number of shares of Class B common stock are canceled. During the six months ended June 30, 2020, certain existing holders of Holdings Units exercised their exchange rights and exchanged 2,062,433 Holdings Units for 2,062,433 newly-issued shares of Class A common stock. Simultaneously, and in connection with these exchanges, 2,062,433 shares of Class B common stock were surrendered by the holders of Holdings Units that exercised their exchange rights and canceled. Additionally, in connection with these exchanges, Planet Fitness, Inc. received 2,062,433 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings. As a result of the above transactions, as of June 30, 2020:
Share repurchase program 2019 share repurchase program On November 5, 2019, our board of directors approved a share repurchase program of up to $500,000. On December 4, 2019, the Company entered into a $300,000 accelerated share repurchase agreement (the “2019 ASR Agreement”) with JPMorgan Chase Bank, N.A. (“JPMC”). Pursuant to the terms of the 2019 ASR Agreement, on December 5, 2019, the Company paid JPMC $300,000 upfront in cash and received 3,289,924 shares of the Company’s Class A common stock, which were retired, and the Company elected to record as a reduction to retained earnings of $240,000. Final settlement of the ASR Agreement occurred on March 2, 2020. At final settlement, JPMC delivered 666,961 additional shares of the Company’s Class A common stock, based on a weighted average cost per share of $75.82 over the term of the 2019 ASR Agreement, which were retired. This had been evaluated as an unsettled forward contract indexed to our own stock, with $60,000 classified as a reduction to retained earnings at the original date of payment. On March 18, 2020, the Company announced the suspension of its 2019 share repurchase program. If the 2019 share repurchase program is reinstated, the timing of purchases and amount of stock repurchased will be subject to the Company’s discretion and will depend on market and business conditions, the Company’s general working capital needs, stock price, applicable legal requirements and other factors. Our ability to repurchase shares at any particular time is also subject to the terms of the Indenture governing the Securitized Senior Notes. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing. The Company may reinstate or terminate the program at any time. 2018 share repurchase program On August 3, 2018, our board of directors approved an increase to the total amount of the previously approved share repurchase program to $500,000. On November 13, 2018, the Company entered into a $300,000 accelerated share repurchase agreement (the “2018 ASR Agreement”) with Citibank, N.A. (“Citibank”). Pursuant to the terms of the 2018 ASR Agreement, on November 14, 2018, the Company paid Citibank $300,000 upfront in cash and received 4,607,410 shares of the Company’s Class A common stock, which were retired, and the Company elected to record as a reduction to retained earnings of $240,000. Final settlement of the 2018 ASR Agreement occurred on April 30, 2019. At final settlement, Citibank delivered 524,124 additional shares of the Company’s Class A common stock, based on a weighted average cost per share of $58.46 over the term of the 2018 ASR agreement, which were retired. This had been evaluated as an unsettled forward contract indexed to our own stock, with $60,000 classified as a reduction to retained earnings at the original date of payment. During the three months ended September 30, 2019, the Company purchased 2,272,001 shares of its Class A common stock for an average purchase price of $69.51 per share, completing its previously approved $500,000 share repurchase program. Preferred stock The Company had 50,000,000 shares of preferred stock authorized and none issued or outstanding for the six months ended June 30, 2020 and 2019.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | 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. 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:
Potentially dilutive stock options of 516,927 and 546,303 for the three and six months ended June 30, 2020 and restricted stock units of 31,811 and 41,189 for the three and six months ended June 30, 2020 were not included in the computation of diluted loss per share because the inclusion thereof would be antidilutive. Weighted average shares of Class B common stock of 6,500,908 and 8,585,294 for the three months ended June 30, 2020 and 2019, respectively, and 7,139,172 and 8,910,315 for the six months ended June 30, 2020 and 2019, respectively, were evaluated under the if-converted method for potential dilutive effects and were determined to be anti-dilutive. Weighted average stock options outstanding of 179,893 and 72,984 for the three months ended June 30, 2020 and 2019, respectively, and 147,118 and 36,648 for the six months ended June 30, 2020 and 2019, respectively, were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive. Weighted average restricted stock units outstanding of 2,331 and 0 for the three months ended June 30, 2020 and 2019, respectively, and 3,069 and 1,209 for the six months ended June 30, 2020 and 2019, respectively, were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company is the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and certain state and local income taxes. 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, 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. The Company’s effective tax rate was 25.4% and 22.2% for the three months ended June 30, 2020 and 2019, respectively. The effective tax rate for the three months ended June 30, 2020 differed from the U.S. federal statutory rate of 21% primarily due to state and local taxes, partially offset by income attributable to non-controlling interests. The effective tax rate for the three months ended June 30, 2019 differed from the U.S. federal statutory rate of 21% primarily due to state and local taxes, partially offset by income attributable to non-controlling interests. The Company’s effective tax rate was 21.8% and 18.9% for the six months ended June 30, 2020 and 2019, respectively. The effective tax rate for the six months ended June 30, 2020 differed from the U.S. federal statutory rate of 21% primarily due to state and local taxes, the recognition of a tax expense from the remeasurement of the Company's net deferred tax assets, partially offset by income attributable to non-controlling interests. The effective tax rate for the six months ended June 30, 2019 differed from the U.S. federal statutory rate of 21% primarily due the recognition of a tax benefit from the remeasurement of the Company's net deferred tax assets, and income attributable to non-controlling interests, offset by state and local taxes. The Company was also subject to taxes in foreign jurisdictions. Undistributed earnings of foreign operations were not material for the three and six months ended June 30, 2020 and 2019. Net deferred tax assets of $456,634 and $411,177 as of June 30, 2020 and December 31, 2019, respectively, relate primarily to the tax effects of temporary differences in the book basis as compared to the tax basis of our investment in Pla-Fit Holdings as a result of the secondary offerings, other exchanges, recapitalization transactions and the IPO. As of June 30, 2020 and December 31, 2019, the total liability related to uncertain tax positions was $420. The Company recognizes interest accrued and penalties, if applicable, related to unrecognized tax benefits in income tax expense. Interest and penalties for the three and six months ended June 30, 2020 and 2019 were not material. Tax benefit arrangements The Company’s acquisition of Holdings Units in connection with the IPO 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 certain existing and previous equity owners of Pla-Fit Holdings (the “TRA Holders”) 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 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 TSG AIV II-A L.P and TSG PF Co-Investors A L.P. (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. During the six months ended June 30, 2020, 2,062,433 Holdings Units were exchanged by the TRA Holders 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, we recorded a decrease to our net deferred tax assets of $1,331 during the six months ended June 30, 2020. As a result of these exchanges, during the six months ended June 30, 2020, we also recognized deferred tax assets in the amount of $49,518, and corresponding tax benefit arrangement liabilities of $41,997, representing approximately 85% of the tax benefits due to the TRA Holders. The offset to the entries recorded in connection with exchanges was to equity. As of June 30, 2020 and December 31, 2019, the Company had a liability of $469,017 and $427,216, respectively, related to its projected obligations under the tax benefit arrangements. Projected future payments under the tax benefit arrangements are as follows:
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Commitments and contingencies |
6 Months Ended |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 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. On May 3, 2019, the Company and other defendants received a joint and several judgment against them in the amount of $6,300, inclusive of accrued interest, in a civil action brought by a former employee. As of June 30, 2020, the Company has estimated its obligation related to this matter to be approximately $1,260, which is included in other current liabilities on the condensed consolidated balance sheet. In connection with 2012 acquisition of Pla-Fit Holdings on November 8, 2012, the sellers are obligated to indemnify the Company related to this specific matter. The Company has therefore recorded an offsetting indemnification receivable of $1,260 in other receivables on the Company’s condensed consolidated balance sheet, of which $420 is due from a related party. The Company has incurred, and may incur in the future, legal costs on behalf of the defendants in the case, which include a related party. These costs have not been and are not expected to be material in the future. The Company is not currently aware of any other 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. Mexico Acquisition On March 19, 2020, a franchisee in Mexico exercised a put option that requires the Company to acquire their franchisee-owned stores in Mexico. The transaction has not closed as of June 30, 2020 as the parties are in dispute over the final terms of the transaction and related matters. The Company analyzed the contract and estimates that the purchase price will approximate fair value of the acquired assets.
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Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | 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, the Dominican Republic, Panama, Mexico and Australia, including revenues and expenses from the NAF. The Corporate-owned stores segment includes operations with respect to all corporate-owned stores throughout the United States and Canada. The Equipment segment primarily includes the sale of equipment to our United States 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 six months ended June 30, 2020 and 2019. 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.
Franchise segment revenue includes franchise revenue, NAF revenue, and commission income. Franchise revenue includes revenue generated from placement services of $868 and $5,071 for the three months ended June 30, 2020 and 2019, respectively, and $2,880 and $7,836 for the six months June 30, 2020 and 2019, respectively.
The following table reconciles total Segment EBITDA to (loss) income before taxes:
The following table summarizes the Company’s assets by reportable segment:
The table above includes $867 and $1,039 of long-lived assets located in the Company’s international corporate-owned stores as of June 30, 2020 and December 31, 2019, respectively. All other assets are located in the U.S. The following table summarizes the Company’s goodwill by reportable segment:
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Corporate-Owned and Franchisee-Owned Stores |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Franchisors [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate-Owned and Franchisee-Owned Stores | Corporate-Owned and Franchisee-Owned Stores The following table shows changes in our corporate-owned and franchisee-owned stores for the three and six months ended June 30, 2020 and 2019:
(2) The “stores operated” include stores that have closed temporarily related to the COVID-19 pandemic. All stores were closed in March 2020 in response to COVID-19, and as of June 30, 2020, 1,490 were re-opened and operating, of which 1,451 were franchisee-owned stores and 39 were corporate-owned stores.
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Summary of significant accounting policies (Policies) |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | 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 six months ended June 30, 2020 and 2019 are unaudited. The condensed consolidated balance sheet as of December 31, 2019 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, 2019 (the “Annual Report”) filed with the SEC on February 28, 2020. 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, Planet Fitness, Inc. consolidates Pla-Fit Holdings. 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”), PF Melville LLC (“PF Melville”), and Planet Fitness NAF, LLC (the “NAF”) based on the determination that the Company is the primary beneficiary with respect to these VIEs. MMR and PF Melville 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. The NAF is an advertising fund on behalf of which the Company collects 2% of gross monthly membership dues from franchisees, in accordance with the provisions of the franchise agreements, and uses the amounts received to support our national marketing campaigns, its social media platforms and the development of local advertising materials.
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Use of estimates | 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, the liability for the Company’s tax benefit arrangements, and the value of the lease liability and related right-of-use asset recorded in accordance with ASC 842 (see Note 7).
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Fair Value | 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.
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Recent accounting pronouncements | Recent accounting pronouncements The FASB issued ASU No. 2017-4, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, in January 2017. This guidance eliminates the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The Company adopted this guidance on January 1, 2020 noting no material impact on the Company’s consolidated financial statements. The FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, in August 2018. The guidance helps align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company adopted this guidance on January 1, 2020 on a prospective basis, noting no material impact on the Company’s consolidated financial statements.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's Liabilities Measured at Fair Value | The carrying value and estimated fair value of long-term debt as of June 30, 2020 and December 31, 2019 were as follows:
(1) The Company’s Variable Funding Notes are a variable rate loan and the fair value of this loan approximates book value based on the borrowing rates currently available for variable rate loans obtained from third party lending institutions. The estimated fair value of our fixed rate long-term debt is estimated primarily based on current bid prices for our long-term debt. Judgment is required to develop these estimates. As such, the fair value of our long-term debt is classified within Level 2, as defined under U.S. GAAP.
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Variable Interest Entities (Tables) |
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Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value of Variable Interest Entities of Consolidated Financial Statements | The carrying values of VIEs included in the consolidated financial statements as of June 30, 2020 and December 31, 2019 are as follows:
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Acquisitions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase Consideration Allocation | The purchase consideration was allocated as follows:
The purchase consideration was allocated as follows:
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Goodwill and Intangible Assets | A summary of goodwill and intangible assets at June 30, 2020 and December 31, 2019 is as follows:
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Summary of Amortization expenses | The anticipated annual amortization expense related to intangible assets to be recognized in future years as of June 30, 2020 is as follows:
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Long-Term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | Long-term debt as of June 30, 2020 and December 31, 2019 consists of the following:
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Schedule of Future Annual Payments of Long-term Debt | Future annual principal payments of long-term debt as of June 30, 2020 are as follows:
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Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Classification of Lease Assets and Liabilities |
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Components of Lease Cost | Supplemental disclosures of cash flow information related to leases were as follows:
During the three and six months ended June 30, 2020 and 2019, the components of lease cost were as follows:
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Schedule of Supplemental Disclosures of Cash Flow Information Related to Leases | Supplemental disclosures of cash flow information related to leases were as follows:
During the three and six months ended June 30, 2020 and 2019, the components of lease cost were as follows:
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Maturities of Operating Lease Liabilities | As of June 30, 2020, maturities of lease liabilities were as follows:
|
Revenue recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Contract Liabilities | The following table reflects the change in contract liabilities between December 31, 2019 and June 30, 2020.
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Remaining Performance Obligation | The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2020. The Company has elected to exclude short term contracts, sales and usage based royalties and any other variable consideration recognized on an “as invoiced” basis.
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Related party transactions (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | Activity with entities considered to be related parties is summarized below:
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
|
Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Payments Under Tax Benefit Arrangements | Projected future payments under the tax benefit arrangements are as follows:
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Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Information for the Company's Reportable Segments | The tables below summarize the financial information for the Company’s reportable segments for the three and six months ended June 30, 2020 and 2019. 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.
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Reconciliation of Total Segment EBITDA to (Loss) Income Before Taxes | The following table reconciles total Segment EBITDA to (loss) income before taxes:
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Summary of Company's Assets by Reportable Segment | The following table summarizes the Company’s assets by reportable segment:
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Summary of Company's Goodwill by Reportable Segment | The following table summarizes the Company’s goodwill by reportable segment:
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Corporate-Owned and Franchisee-Owned Stores (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Franchisors [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 and six months ended June 30, 2020 and 2019:
(2) The “stores operated” include stores that have closed temporarily related to the COVID-19 pandemic. All stores were closed in March 2020 in response to COVID-19, and as of June 30, 2020, 1,490 were re-opened and operating, of which 1,451 were franchisee-owned stores and 39 were corporate-owned stores.
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Summary of Significant Accounting Policies - Additional Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Planet Fitness NAF, LLC | |
Significant Accounting Policies [Line Items] | |
Percentage of franchise membership billing revenue | 2.00% |
Summary of Significant Accounting Policies - Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,726,250 | $ 1,735,000 |
Variable Funding Notes | 75,000 | 0 |
Estimated fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 1,659,119 | 1,765,805 |
Variable Funding Notes | $ 75,000 | $ 0 |
Variable Interest Entities - Carrying Value of Variable Interest Entities of Consolidated Financial Statements (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Assets | $ 1,800,037 | $ 1,717,190 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | 4,756 | 4,888 |
Liabilities | 0 | 0 |
Variable Interest Entity, Primary Beneficiary | PF Melville | ||
Variable Interest Entity [Line Items] | ||
Assets | 2,603 | 2,682 |
Liabilities | 0 | 0 |
Variable Interest Entity, Primary Beneficiary | MMR | ||
Variable Interest Entity [Line Items] | ||
Assets | 2,153 | 2,206 |
Liabilities | $ 0 | $ 0 |
Variable Interest Entities - Additional Information (Detail) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
Franchisee lease term, maximum | 10 years | |
Maximum obligation of guarantees of leases and debt | $ 14,412 | $ 10,309 |
Acquisitions - Narrative (Details) $ in Thousands |
Dec. 16, 2019
USD ($)
store
|
May 30, 2019
USD ($)
store
|
Jun. 30, 2020
store
|
Mar. 31, 2020
store
|
Dec. 31, 2019
store
|
Jun. 30, 2019
store
|
Mar. 31, 2019
store
|
Dec. 31, 2018
store
|
---|---|---|---|---|---|---|---|---|
Business Acquisition [Line Items] | ||||||||
Number of owned and franchised locations | store | 2,059 | 2,039 | 2,001 | 1,859 | 1,806 | 1,742 | ||
New Jersey Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of owned and franchised locations | store | 12 | |||||||
Acquisition, gross cash payments | $ 37,812 | |||||||
Loss on reacquired franchise rights | 1,810 | |||||||
Consideration transferred | $ 36,002 | |||||||
Maine Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of owned and franchised locations | store | 4 | |||||||
Acquisition, gross cash payments | $ 14,801 |
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Impairment charges | $ 0 | $ 0 | |||
Amortization of intangible assets | $ 4,222,000 | $ 4,019,000 | $ 8,445,000 | $ 8,025,000 |
Goodwill and Intangible Assets - Summary of Amortization expenses (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2020 | $ 8,423 | |
2021 | 16,636 | |
2022 | 16,728 | |
2023 | 16,558 | |
2024 | 14,067 | |
Thereafter | 6,486 | |
Net carrying Amount | $ 78,898 | $ 87,321 |
Long-Term Debt - Schedule of Future Annual Payments of Long-term Debt (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Disclosure [Abstract] | ||
Remainder of 2020 | $ 8,750 | |
2021 | 17,500 | |
2022 | 568,063 | |
2023 | 86,750 | |
2024 | 11,750 | |
Thereafter | 1,108,437 | |
Total | $ 1,801,250 | $ 1,735,000 |
Leases - Additional Information (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Lessee, Lease, Description [Line Items] | |
Lease payments for leases signed but not yet commenced | $ 20,323 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Renewal term | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 10 years |
Renewal term | 10 years |
Leases - Balance Sheet Classification of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Operating lease assets | $ 155,523 | $ 155,633 |
Finance lease assets | 286 | 309 |
Total lease assets | 155,809 | 155,942 |
Current operating lease liabilities | 17,658 | 16,755 |
Noncurrent operating lease liabilities | 154,501 | 152,920 |
Noncurrent finance lease liabilities | 298 | 333 |
Total lease liabilities | $ 172,457 | $ 170,008 |
Weighted-average remaining lease term (years) - operating leases | 8 years 8 months 12 days | |
Weighted-average discount rate - operating leases | 5.00% |
Leases Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 5,957 | $ 4,951 | $ 12,348 | $ 9,796 |
Variable lease cost | 2,459 | 2,033 | 4,830 | 3,973 |
Total lease cost | $ 8,416 | $ 6,984 | $ 17,178 | $ 13,769 |
Leases Leases - Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||||
Cash paid for lease liabilities | $ 5,599 | $ 4,718 | $ 11,397 | $ 9,365 |
Operating assets obtained in exchange for operating lease liabilities | $ 6,102 | $ 2,981 | $ 6,102 | $ 2,981 |
Leases Leases - Maturities of Lease Liabilities (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of 2020 | $ 12,792 |
2021 | 26,313 |
2022 | 26,905 |
2023 | 26,928 |
2024 | 25,124 |
Thereafter | 105,812 |
Total lease payments | 223,874 |
Less: imputed interest | 51,417 |
Present value of lease liabilities | $ 172,457 |
Revenue recognition - Narrative (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | $ 65,732 | $ 62,054 |
COVID-19 | Corporate-owned stores and franchise segment | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | $ 10,300 |
Revenue recognition - Schedule of Contract Liabilities (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Contract liabilities | |
Beginning Balance | $ 62,054 |
Revenue recognized that was included in the contract liability at the beginning of the year | (18,621) |
Increase, excluding amounts recognized as revenue during the period | 22,299 |
Ending Balance | $ 65,732 |
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
May 08, 2020 |
Dec. 31, 2019 |
|
Related Party Transaction [Line Items] | ||||||
Liability payable under tax benefit obligations | $ 31,729 | $ 31,729 | $ 53,491 | |||
Administrative fees charged | 0 | $ 3,041 | 593 | $ 3,557 | ||
Short-term loan to third party payment processor | 8,777 | 8,777 | $ 8,950 | |||
Area Development Agreements | ||||||
Related Party Transaction [Line Items] | ||||||
Deferred area development revenue from related parties | 188 | 188 | $ 256 | |||
Corporate Travel | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Expense incurred for corporate travel to a third-party company | 11 | 60 | ||||
Administrative Service | Planet Fitness NAF, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Administrative fees charged | 224 | $ 695 | 793 | $ 1,369 | ||
Civil Action Brought By Former Employee | Pending Litigation | ||||||
Related Party Transaction [Line Items] | ||||||
Receivables due from related parties | $ 420 | $ 420 |
Related Party Transactions - Schedule of Related Party Transactions (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Related Party Transaction [Line Items] | ||||
Total revenue from related parties | $ 0 | $ 3,041 | $ 593 | $ 3,557 |
Franchise revenue | ||||
Related Party Transaction [Line Items] | ||||
Total revenue from related parties | 0 | 717 | 500 | 1,233 |
Equipment revenue | ||||
Related Party Transaction [Line Items] | ||||
Total revenue from related parties | $ 0 | $ 2,324 | $ 93 | $ 2,324 |
Income Taxes - Additional information (Detail) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019 |
Jun. 30, 2020
USD ($)
agreement
shares
|
Jun. 30, 2019 |
Dec. 31, 2019
USD ($)
|
|
Tax Credit Carryforward [Line Items] | |||||
Effective income tax rate | 25.40% | 22.20% | 21.80% | 18.90% | |
Net deferred tax assets | $ 456,634 | $ 456,634 | $ 411,177 | ||
Total liability related to uncertain tax positions | 420 | $ 420 | 420 | ||
Number of tax receivable agreements | agreement | 2 | ||||
Percentage of remaining tax savings | 15.00% | ||||
Tax benefit obligation | $ 469,017 | $ 469,017 | $ 427,216 | ||
TRA Holders | |||||
Tax Credit Carryforward [Line Items] | |||||
Applicable tax savings | 85.00% | 85.00% | |||
Decrease in deferred tax assets | $ 1,331 | ||||
Deferred tax asset | $ 49,518 | 49,518 | |||
Deferred tax liability | $ 41,997 | $ 41,997 | |||
Class A Common Stock | |||||
Tax Credit Carryforward [Line Items] | |||||
Number of shares exchanged | shares | 2,062,433 | ||||
Class A Common Stock | TRA Holders | |||||
Tax Credit Carryforward [Line Items] | |||||
Number of shares exchanged | shares | 2,062,433 |
Income Taxes - Schedule of Future Payments Under Tax Benefit Arrangements (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Remainder of 2020 | $ 26,551 | |
2021 | 6,229 | |
2022 | 33,106 | |
2023 | 41,510 | |
2024 | 37,345 | |
Thereafter | 324,276 | |
Total | $ 469,017 | $ 427,216 |
Commitments and contingencies - Additional Information (Details) - Pending Litigation - Civil Action Brought By Former Employee - USD ($) $ in Thousands |
May 03, 2019 |
Jun. 30, 2020 |
---|---|---|
Loss Contingencies [Line Items] | ||
Damages sought | $ 6,300 | |
Estimate of possible loss | $ 1,260 | |
Loss contingency, receivable | 1,260 | |
Receivables due from related parties | $ 420 |
Segments - Additional Information (Detail) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
segment
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 3 | ||||
Number of operating segments | segment | 0 | ||||
Revenue | $ 40,234,000 | $ 181,661,000 | $ 167,464,000 | $ 330,478,000 | |
Franchise revenue | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 21,002,000 | 71,812,000 | 79,531,000 | 137,574,000 | |
Franchise revenue | Placement Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 868,000 | 5,071,000 | 2,880,000 | 7,836,000 | |
Corporate-owned stores | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 9,419,000 | $ 39,695,000 | 49,935,000 | $ 77,739,000 | |
Corporate-owned stores | Canada | |||||
Segment Reporting Information [Line Items] | |||||
Long-lived assets | $ 867,000 | 867,000 | $ 1,039,000 | ||
Intersegment Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 0 |
Segments - Reconciliation of Total Segment EBITDA to (Loss) Income Before Taxes (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting [Abstract] | ||||
Total Segment EBITDA | $ (9,787) | $ 74,399 | $ 36,586 | $ 134,173 |
Depreciation and amortization | 13,008 | 10,577 | 25,800 | 20,484 |
Other expense | (73) | (1,444) | (760) | (4,762) |
(Loss) income from operations | (22,722) | 65,266 | 11,546 | 118,451 |
Interest income | 359 | 1,979 | 2,286 | 3,777 |
Interest expense | (20,467) | (14,636) | (40,708) | (29,385) |
(Loss) income before income taxes | $ (42,903) | $ 51,165 | $ (27,636) | $ 88,081 |
Segments - Summary of Company's Assets by Reportable Segment (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | $ 1,800,037 | $ 1,717,190 |
Operating Segments | Franchise revenue | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | 178,107 | 193,504 |
Operating Segments | Corporate-owned stores | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | 468,764 | 471,234 |
Operating Segments | Equipment revenue | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | 171,118 | 197,656 |
Unallocated | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | $ 982,048 | $ 854,796 |
Segments - Summary of Company's Goodwill by Reportable Segment (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Consolidated goodwill | $ 227,821 | $ 227,821 |
Franchise revenue | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Consolidated goodwill | 16,938 | 16,938 |
Corporate-owned stores | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Consolidated goodwill | 118,217 | 118,217 |
Equipment revenue | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Consolidated goodwill | $ 92,666 | $ 92,666 |