Condensed consolidated balance sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
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Current assets: | ||
Accounts receivable, allowance for bad debts | $ 0 | $ 0 |
Accumulated depreciation | 189,742 | 152,296 |
Allowance for expected credit loss | $ 15,617 | $ 17,462 |
Class A Common Stock | ||
Stockholders’ equity (deficit): | ||
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) | 84,230,000 | 83,804,000 |
Common stock, shares outstanding (in shares) | 84,230,000 | 83,804,000 |
Class B Common Stock | ||
Stockholders’ equity (deficit): | ||
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) | 6,146,000 | 3,056,000 |
Common stock, shares outstanding (in shares) | 6,146,000 | 3,056,000 |
Condensed consolidated statements of operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Revenue: | ||||
Revenue | $ 224,442 | $ 137,251 | $ 411,118 | $ 249,128 |
Operating costs and expenses: | ||||
Cost of revenue | 32,544 | 18,497 | 54,905 | 26,482 |
Store operations | 56,362 | 28,430 | 103,897 | 54,337 |
Selling, general and administrative | 28,202 | 21,789 | 59,028 | 44,279 |
National advertising fund expense | 18,889 | 13,529 | 33,436 | 26,282 |
Depreciation and amortization | 32,172 | 15,036 | 57,855 | 30,510 |
Other (gains) losses, net | 1,181 | (282) | (1,752) | (2,420) |
Total operating costs and expenses | 169,350 | 96,999 | 307,369 | 179,470 |
Income from operations | 55,092 | 40,252 | 103,749 | 69,658 |
Other expense, net: | ||||
Interest income | 474 | 195 | 683 | 412 |
Interest expense | (21,979) | (20,125) | (44,610) | (40,369) |
Other income (expense) | 148 | (147) | 4,238 | 18 |
Total other expense, net | (21,357) | (20,077) | (39,689) | (39,939) |
Income before income taxes | 33,735 | 20,175 | 64,060 | 29,719 |
Equity earnings (losses) of unconsolidated entities, net of tax | (94) | 0 | (332) | 0 |
Provision for income taxes | 8,570 | 5,159 | 20,281 | 8,513 |
Net income | 25,071 | 15,016 | 43,447 | 21,206 |
Less net income attributable to non-controlling interests | 2,729 | 1,006 | 4,641 | 1,615 |
Net income attributable to Planet Fitness, Inc. | $ 22,342 | $ 14,010 | $ 38,806 | $ 19,591 |
Class A Common Stock | ||||
Net income per share of Class A common stock: | ||||
Basic (in usd per share) | $ 0.26 | $ 0.17 | $ 0.46 | $ 0.24 |
Diluted (in usd per share) | $ 0.26 | $ 0.17 | $ 0.46 | $ 0.23 |
Weighted-average shares of Class A common stock outstanding: | ||||
Basic (in shares) | 84,809,563 | 83,222,601 | 84,489,573 | 83,153,731 |
Diluted (in shares) | 85,197,147 | 83,837,096 | 84,918,670 | 83,771,291 |
Franchise | ||||
Revenue: | ||||
Revenue | $ 67,917 | $ 59,758 | $ 133,531 | $ 111,938 |
Commission income | ||||
Revenue: | ||||
Revenue | 41 | 70 | 544 | 342 |
National advertising fund revenue | ||||
Revenue: | ||||
Revenue | 14,585 | 13,021 | 28,552 | 24,630 |
Corporate-owned stores | ||||
Revenue: | ||||
Revenue | 101,453 | 40,579 | 177,610 | 78,456 |
Equipment | ||||
Revenue: | ||||
Revenue | $ 40,446 | $ 23,823 | $ 70,881 | $ 33,762 |
Condensed consolidated statements of comprehensive income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income including non-controlling interests | $ 25,071 | $ 15,016 | $ 43,447 | $ 21,206 |
Other comprehensive income, net: | ||||
Foreign currency translation adjustments | (207) | 18 | (122) | 29 |
Total other comprehensive income (loss), net | (207) | 18 | (122) | 29 |
Total comprehensive income including non-controlling interests | 24,864 | 15,034 | 43,325 | 21,235 |
Less: total comprehensive income attributable to non-controlling interests | 2,729 | 1,006 | 4,641 | 1,615 |
Total comprehensive income attributable to Planet Fitness, Inc. | $ 22,135 | $ 14,028 | $ 38,684 | $ 19,620 |
Business Organization |
6 Months Ended |
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Jun. 30, 2022 | |
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 16.5 million members and 2,324 owned and franchised locations (referred to as stores) in 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia as of June 30, 2022. In March 2020, the Company proactively closed all of its stores system wide in response to COVID-19 in order to promote the health and safety of its members, team members and their communities. As of June 30, 2022, there were no store closures related to COVID-19. The Company serves as the reporting entity for its various subsidiaries that operate three distinct lines of business: •Licensing and selling franchises under the Planet Fitness trade name. •Owning and operating fitness centers under the Planet Fitness trade name. •Selling fitness-related equipment to franchisee-owned stores. The Company was formed as a Delaware corporation on March 16, 2015 for the purpose of facilitating an initial public offering (the “IPO”), which was completed on August 11, 2015, and related transactions in order to carry on the business of Pla-Fit Holdings, LLC and its subsidiaries (“Pla-Fit Holdings”). As of August 5, 2015, in connection with the recapitalization transactions that occurred prior to the IPO, the Company became the sole managing member and holder of 100% of the voting power of Pla-Fit Holdings. Pla-Fit Holdings owns 100% of Planet Intermediate, LLC, which has no operations but is the 100% owner of Planet Fitness Holdings, LLC, a franchisor and operator of fitness centers 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, 2022, Planet Fitness, Inc. held 100.0% of the voting interest and 93.2% 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 6.8% economic interest in Pla-Fit Holdings. During the three months ended June 30, 2022 the Company reallocated amounts between non-controlling interest and additional paid in capital to appropriately reflect its 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, 2022 and 2021 are unaudited. The condensed consolidated balance sheet as of December 31, 2021 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, 2021 (the “Annual Report”) filed with the SEC on March 1, 2021. The Company’s significant interim accounting policies include the proportional recognition of national advertising fund expenses within interim periods. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. (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 equity-based compensation awards, valuation of long-lived and intangible assets acquired in a business combination, 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 certain liabilities as of June 30, 2022 and December 31, 2021 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. (d) Recent accounting pronouncements The FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, in October 2021. The guidance improves the accounting for acquired revenue contracts with customers in a business combination by requiring contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. This guidance will be effective for fiscal years beginning after December 15, 2022, including interim periods within that year, with early adoption permitted. The Company early adopted this guidance as of January 1, 2022, for all acquisitions subsequent to the adoption date.
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Investments |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Investments - Debt securities As of June 30, 2022, the Company’s debt security investments consist of redeemable preferred shares that are accounted for as held-to-maturity debt securities. The Company’s investments are measured at amortized cost within Investments in the condensed consolidated balance sheets. The Company reviews its held-to-maturity securities for expected credit losses under ASC Topic 326, Credit Impairment, on an ongoing basis. During the three and six months ended June 30, 2022, the Company’s review of the investee’s operations and financial position indicated that an adjustment to its allowance for expected credit losses was necessary. The Company utilized a probability-of-default (“PD”) and loss-given-default (“LGD”) methodology to calculate the allowance for expected credit losses. The Company derived its estimate using historical lifetime loss information for assets with similar risk characteristics, adjusted for management’s expectations. Adjustments for management’s expectations were based on the investee’s recent financial results, current financial position, and forward-looking financial forecasts. Based upon its analysis, the Company recorded a loss for the three months ended June 30, 2022 of $265 and a gain on the adjustment of its allowance for credit losses for the six months ended June 30, 2022 of $1,845 within other (gains) losses, net on the consolidated statements of operations. The amortized cost, including accrued dividends, of the Company’s held-to-maturity debt security investments was $27,315 and $26,401 and the allowance for expected credit losses was $15,617 and $17,462, as of June 30, 2022 and December 31, 2021, respectively. During the three and six months ended June 30, 2022, the Company recognized dividend income of $463 and $914, respectively, within other income on the consolidated statements of operations. As of June 30, 2022, all of the Company’s held-to-maturity investments had a contractual maturity in 2026. A roll forward of the Company’s allowance for expected credit losses on held-to-maturity investments is as follows:
Equity method investments On April 9, 2021, the Company acquired a 21% ownership in Planet Fitness Australia Holdings, the Company’s franchisee and store operator in Australia, which is deemed to be a related party, for $10,000, which is accounted for under the equity method. For the three and six months ended June 30, 2022, the Company’s proportionate share of the earnings in accordance with the equity method was a loss of $94 and $332, respectively, recorded within equity earnings of unconsolidated entities on the condensed consolidated statement of operations. The adjusted carrying value of the equity method investment was $9,488 and $9,820 as of June 30, 2022 and December 31, 2021, respectively.
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Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisition Sunshine Fitness Acquisition On February 10, 2022, the Company and Pla-Fit Holdings (together with the Company, the “Buyers”), acquired 100% of the equity interests (“Sunshine Acquisition”) of Sunshine Fitness Growth Holdings, LLC, a Delaware limited liability company and Planet Fitness franchisee (“Sunshine Fitness”). The Company acquired 114 stores in Alabama, Florida, Georgia, North Carolina, and South Carolina from Sunshine Fitness. The preliminary purchase price of the acquisition was $824,587 consisting of $430,857 in cash consideration, and $393,730 of equity consideration, including 517,348 shares of Class A Common Stock, par value $0.0001, of the Company and 3,637,678 membership units of Pla-Fit Holdings, LLC, together with shares of Class B Common Stock, par value $0.0001, of the Company, valued based on the closing trading price of the Company’s Class A common stock on the acquisition date. As a result of the transaction, the Company incurred a loss on unfavorable reacquired franchise rights of $1,160, which has been reflected in other (gains) losses, net in the condensed consolidated statement of operations. The loss reduced the net purchase price to $823,427. In connection with the acquisition, the Company recorded a gain of $2,059 related to the settlement of preexisting contracts with Sunshine Fitness within other (gains) losses, net on the condensed consolidated statement of operations. The acquired stores are included in the corporate-owned stores segment. The preliminary allocation of the estimated purchase consideration was as follows:
The fair values assigned to tangible and intangible assets acquired and liabilities assumed are preliminary based on management’s estimates and assumptions, which include Level 3 unobservable inputs, and are determined using generally accepted valuation techniques. Certain adjustments were made during the three months ended June 30, 2022 to the preliminary fair values, resulting in a net increase to goodwill of $17,854, primarily related to the valuation of the reacquired franchise rights intangible asset and the corresponding deferred income taxes. Additionally, the Company reallocated amounts between non-controlling interest and additional paid in capital to appropriately reflect the change in its economic interest in Pla-Fit Holdings as a result of the share issuance in connection with the Sunshine Acquisition. Estimates may be subject to change as additional information is received and certain tax matters are finalized. The excess of purchase consideration over the fair value of other assets acquired and liabilities assumed was recorded as goodwill. The resulting goodwill is primarily attributable to increased expansion for market opportunities, the expansion of store membership and synergies from the integration of the stores into the broader corporate-owned store portfolio. Approximately $168,800 of the preliminary goodwill recorded is expected to be amortizable and deductible for tax purposes, the majority of which is deductible over 15 years. The following table sets forth the components of identifiable intangible assets acquired in the Sunshine Acquisition and their preliminary estimated useful lives as of the date of the acquisition:
(1) Reacquired franchise rights represent the fair value of the reacquired franchise agreements using the income approach, specifically, the multi-period excess earnings method. (2) Customer relationships represent the fair value of the existing contractual customer relationships using the income approach, specifically, the multi-period excess earnings method. (3) Reacquired area development rights represent the fair value of the undeveloped area development agreement rights using the cost approach. The fair value of the identified intangible assets subject to amortization will be amortized over the assets’ preliminary estimated useful lives based on the pattern in which the economic benefits are expected to be received. The primary areas that remain preliminary relate to the fair values of certain tangible and intangible assets acquired, income and non-income-based taxes and residual goodwill. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. Revenues and income before taxes of Sunshine Fitness included in the Company’s consolidated statement of operations from the acquisition date of February 10, 2022 to June 30, 2022 are as follows:
The following pro forma financial information summarizes the combined results of operations for the Company and Sunshine Fitness, as though the companies were combined as of the beginning of 2021. The pro forma financial information was as follows:
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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, 2022 and December 31, 2021 is as follows:
A roll forward of goodwill between December 31, 2021 and June 30, 2022 is as follows:
The Company determined that no impairment charges were required during any periods presented. Amortization expense related to the intangible assets totaled $10,750 and $4,159 for the three months ended June 30, 2022 and 2021, respectively, and $19,320 and $8,339 for the six months ended June 30, 2022 and 2021, respectively. The anticipated annual amortization expense related to intangible assets to be recognized in future years as of June 30, 2022 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, 2022 and December 31, 2021 consists of the following:
Future annual principal payments of long-term debt as of June 30, 2022 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 “2018 Variable Funding Notes”). The Company fully drew down on the Variable Funding Notes on March 20, 2020. On December 3, 2019, the Master Issuer issued Series 2019-1 3.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2019 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 “2019 Indenture”). On February 10, 2022, the Company completed a prepayment in full of its 2018-1 Class A-2-I Notes and an issuance of Series 2022-1 3.251% Fixed Rate Senior Secured Notes, Class A-2-I with an initial principal amount of $425,000 and Series 2022-1 4.008% Fixed Rate Senior Secured Notes, Class A-2-II with an initial principal amount of $475,000 (the “2022 Notes” and, together with the 2018 Notes and 2019 Notes, the “Notes”), and also entered into a new revolving financing facility that allows for the issuance of up to $75,000 in Variable Funding Notes (“2022 Variable Funding Notes”) and certain letters of credit (the issuance of such notes, the “Series 2022-I Issuance”). The 2022 Notes were issued under the 2018 Indenture and a related supplemental indenture dated February 10, 2022 (together, with the 2019 Indenture, the “Indenture”). Together, the Notes, 2018 Variable Funding Notes and 2022 Variable Funding Notes will be referred to as the “Securitized Senior Notes”. On February 10, 2022, the Company borrowed the full amount of the $75,000 2022 Variable Funding Notes and used such proceeds to repay the outstanding principal amount (together with all accrued and unpaid interest thereon) of the 2018 Variable Funding Notes in full. On May 9, 2022, the Company repaid in full its $75,000 of borrowings under the 2022 Variable Funding Notes using cash on hand. The Notes were issued in securitization transactions 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 Class A-2-II 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-II Notes will be repaid in or prior to 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 or prior to December 2029. The legal final maturity date of the 2022 Notes is in February 2052, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2022 Class A-2-I Notes will be repaid in or prior to December 2026 and the 2022 Class A-2-II Notes will be repaid in or prior to December 2031 (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 2022 Variable Funding Notes on February 10, 2022, which was repaid in full using cash on hand on May 9, 2022. If outstanding, the 2022 Variable Funding Notes will accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the secured overnight financing rate (or “SOFR”) 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 2022 Variable Funding Notes. There is a commitment fee on the unused portion of the 2022 Variable Funding Notes of 0.5% based on utilization. It is anticipated that the principal and interest on the 2022 Variable Funding Notes will be repaid in full on or prior to December 2026, subject to two additional one-year extension options. Following the anticipated repayment date (and any extensions thereof), additional interest will accrue on the 2022 Variable Funding Notes equal to 5.0% per year. In connection with the issuance of the 2018 Notes, 2019 Notes, and 2022 Notes the Company incurred debt issuance costs of $27,133, $10,577, and $16,193 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. As a result of the repayment of the 2018 Class A-2-I Notes prior to the Anticipated Repayment Date, the Company recorded a loss on early extinguishment of debt of $1,583 within interest expense on the Consolidated statements of operations, consisting of the write-off of remaining unamortized deferred financing costs related to the issuance of the 2018 Class A-2-I Notes. 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 $50,000 (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 incurrence test on the Company of 7.0x (calculated without regard for any indebtedness subject to the $50,000 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, 2022, the Company had restricted cash held by the Trustee of $46,754. 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 | Leases
During the three and six months ended June 30, 2022 and 2021, 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, 2022, maturities of lease liabilities were as follows:
As of June 30, 2022, future operating lease payments exclude approximately $16,207 of legally binding minimum lease payments for leases signed but not yet commenced.
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Leases | Leases
During the three and six months ended June 30, 2022 and 2021, 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, 2022, maturities of lease liabilities were as follows:
As of June 30, 2022, future operating lease payments exclude approximately $16,207 of legally binding minimum lease payments for leases signed but not yet commenced.
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Revenue recognition |
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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, and national advertising fund (“NAF”) revenue billed in advance of satisfaction of the Company’s performance obligation. 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. The following table reflects the change in contract liabilities between December 31, 2021 and June 30, 2022:
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, 2022. 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.
Equipment deposits received in advance of delivery as of June 30, 2022 and December 31, 2021 were $22,861 and $6,036, respectively, and are expected to be recognized as revenue in the next twelve months.
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Related Party Transactions |
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Related Party Transactions | Related Party Transactions 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 $87 and $164 as of June 30, 2022 and December 31, 2021, respectively. The Company had payables to related parties pursuant to tax benefit arrangements of $82,807 and $84,595, as of June 30, 2022 and December 31, 2021, 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 $619 and $500 for the three months ended June 30, 2022 and 2021, respectively, and $1,304 and $999 for the six months ended June 30, 2022 and 2021, respectively. For the three months ended June 30, 2022 and 2021, the Company incurred approximately $69 and $0, respectively, and $175 and $0 for the six months ended June 30, 2022 and 2021, respectively, for corporate travel to a third-party company which is affiliated with our Chief Executive Officer and included within selling, general and administrative expense on the consolidated statements of operations. In April 2021, the Company made an equity method investment in a franchisee. See Note 3.
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Stockholders' Equity |
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Jun. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ 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, 2022, in connection with the Sunshine Acquisition, the Company issued 517,348 shares of Class A Common Stock and 3,637,678 membership units of Pla-Fit Holdings, LLC, together with shares of Class B Common Stock. See Note 4. During the six months ended June 30, 2022, certain existing holders of Holdings Units exercised their exchange rights and exchanged 548,175 Holdings Units for 548,175 newly-issued shares of Class A common stock. Simultaneously, and in connection with these exchanges, 548,175 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 548,175 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings. As a result of the above transactions, as of June 30, 2022: •Holders of our Class A common stock owned 84,230,229 shares of our Class A common stock, representing 93.2% of the voting power in the Company and, through the Company, 84,230,229 Holdings Units representing 93.2% of the economic interest in Pla-Fit Holdings; and •the Continuing LLC Owners collectively owned 6,145,722 Holdings Units, representing 6.8% of the economic interest in Pla-Fit Holdings, and 6,145,722 shares of our Class B common stock, representing 6.8% of the voting power in the Company. During the three months ended June 30, 2022 the Company reallocated amounts between non-controlling interest and additional paid in capital to appropriately reflect its economic interest in Pla-Fit Holdings. 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. During the three and six months ended June 30, 2022, the Company purchased 697,691 shares of Class A common stock for a total cost of $44,299. All purchased shares were retired. Subsequent to these repurchases, there is $155,701 remaining under the 2019 share repurchase program. The timing of purchases and amount of stock repurchased are subject to the Company’s discretion and dependent upon 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. Preferred stock The Company had 50,000,000 shares of preferred stock authorized and none issued or outstanding as of June 30, 2022 and December 31, 2021.
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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:
Weighted average shares of Class B common stock of 6,145,722 and 3,363,075 for the three months ended June 30, 2022 and 2021, respectively, and 5,584,398 and 3,417,158 for the six months ended June 30, 2022 and 2021, 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 269,878 and 207,382 for the three months ended June 30, 2022 and 2021, respectively, and 225,195 and 126,270 for the six months ended June 30, 2022 and 2021, 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 54,693 and 866 for the three months ended June 30, 2022 and 2021, respectively, and 15,901 and 435 for the six months ended June 30, 2022 and 2021, respectively, were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive. Weighted average performance stock units outstanding of 79,551 and 0 for the three months ended June 30, 2022 and 2021, respectively, and 41,993 and 0 for the six months ended June 30, 2022 and 2021, 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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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 25.6% for the three months ended June 30, 2022 and 2021, respectively. The effective tax rate for the three months ended June 30, 2022 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 31.7% and 28.6% for the six months ended June 30, 2022 and 2021, respectively. The effective tax rate for the six months ended June 30, 2022 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 Company was also subject to taxes in foreign jurisdictions. Net deferred tax assets of $486,808 and $539,264 as of June 30, 2022 and December 31, 2021, 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, 2022 and December 31, 2021, the total liability related to uncertain tax positions was $328 and $420, respectively. The Company recognizes accrued interest 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, 2022 and 2021 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. As of June 30, 2022 and December 31, 2021, the Company had a liability of $510,024 and $528,107, respectively, related to its projected obligations under the tax benefit arrangements. During the three and six months ended June 30, 2022, the Company reduced its tax benefit arrangement liability and recognized a gain of $83 and $3,871, respectively, on the remeasurement of our tax benefit arrangements due to changes in our deferred state rate. Projected future payments under the tax benefit arrangements are as follows:
During the six months ended June 30, 2022, 548,175 Holdings Units were exchanged 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. As a result of the change in Planet Fitness, Inc.’s ownership percentage of Pla-Fit Holdings, we recorded an increase to our net deferred tax assets of $1,416 during the six months ended June 30, 2022. As a result of these exchanges, during the six months ended June 30, 2022, we also recognized deferred tax assets in the amount of $16,170 as a result of the increase in tax basis. These exchanges were not made by TRA holders and did not result in an increase in the tax benefit arrangement liability. The offset to the entries recorded in connection with exchanges was to additional paid in capital within stockholders’ deficit.
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Commitments and contingencies |
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Jun. 30, 2022 | |
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 27, 2022, the Company and other defendants, including an officer of the Company who is a related party, received a final judgment after appeal to the joint and several judgment against them in a civil action brought by a former employee. As of June 30, 2022, the Company has estimated its obligation related to this matter to be approximately $3,176, 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 $3,176 in other receivables on the Company’s condensed consolidated balance sheet, for which it has determined to record a full reserve as a result of potential uncertainty around collectability. Due to the joint and several nature of the judgment, the Company has determined that the amount of estimated obligation recorded constitutes a related party transaction. 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. 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, 2022 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. 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.
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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, 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 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, 2022 and 2021. 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 $3,387 and $1,712 for the three months ended June 30, 2022 and 2021, respectively, and $5,726 and $2,491 for the six months June 30, 2022 and 2021, respectively.
The following table reconciles total Segment EBITDA to income before taxes:
The following table summarizes the Company’s assets by reportable segment:
The table above includes $1,115 and $1,203 of long-lived assets located in the Company’s international corporate-owned stores as of June 30, 2022 and December 31, 2021, 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 |
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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, 2022 and 2021:
(1) The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. The Company retains the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
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Summary of significant accounting policies (Policies) |
6 Months Ended |
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Jun. 30, 2022 | |
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, 2022 and 2021 are unaudited. The condensed consolidated balance sheet as of December 31, 2021 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, 2021 (the “Annual Report”) filed with the SEC on March 1, 2021. The Company’s significant interim accounting policies include the proportional recognition of national advertising fund expenses within interim periods. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year.
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Use of estimates | Use of estimatesThe 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 equity-based compensation awards, valuation of long-lived and intangible assets acquired in a business combination, 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). |
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 pronouncementsThe FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, in October 2021. The guidance improves the accounting for acquired revenue contracts with customers in a business combination by requiring contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. This guidance will be effective for fiscal years beginning after December 15, 2022, including interim periods within that year, with early adoption permitted. The Company early adopted this guidance as of January 1, 2022, for all acquisitions subsequent to the adoption date. |
Investments | Investments - Debt securities As of June 30, 2022, the Company’s debt security investments consist of redeemable preferred shares that are accounted for as held-to-maturity debt securities. The Company’s investments are measured at amortized cost within Investments in the condensed consolidated balance sheets. The Company reviews its held-to-maturity securities for expected credit losses under ASC Topic 326, Credit Impairment, on an ongoing basis. During the three and six months ended June 30, 2022, the Company’s review of the investee’s operations and financial position indicated that an adjustment to its allowance for expected credit losses was necessary. The Company utilized a probability-of-default (“PD”) and loss-given-default (“LGD”) methodology to calculate the allowance for expected credit losses. The Company derived its estimate using historical lifetime loss information for assets with similar risk characteristics, adjusted for management’s expectations. Adjustments for management’s expectations were based on the investee’s recent financial results, current financial position, and forward-looking financial forecasts. Based upon its analysis, the Company recorded a loss for the three months ended June 30, 2022 of $265 and a gain on the adjustment of its allowance for credit losses for the six months ended June 30, 2022 of $1,845 within other (gains) losses, net on the consolidated statements of operations.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Carrying Value and Estimated Fair Value of Certain Assets and Liabilities | The carrying value and estimated fair value of certain liabilities as of June 30, 2022 and December 31, 2021 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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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities, Held-to-maturity, Allowance for Credit Loss | A roll forward of the Company’s allowance for expected credit losses on held-to-maturity investments is as follows:
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Acquisitions (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Consideration | The preliminary allocation of the estimated purchase consideration was as follows:
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Components of Identifiable Intangible Assets Acquired | The following table sets forth the components of identifiable intangible assets acquired in the Sunshine Acquisition and their preliminary estimated useful lives as of the date of the acquisition:
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Schedule of Revenues and Income Before Taxes | Revenues and income before taxes of Sunshine Fitness included in the Company’s consolidated statement of operations from the acquisition date of February 10, 2022 to June 30, 2022 are as follows:
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Schedule of Pro Forma Financial Information | The following pro forma financial information summarizes the combined results of operations for the Company and Sunshine Fitness, as though the companies were combined as of the beginning of 2021. The pro forma financial information was 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, 2022 and December 31, 2021 is as follows:
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Schedule of Rollforward of Goodwill | A roll forward of goodwill between December 31, 2021 and June 30, 2022 is as follows:
The following table summarizes the Company’s goodwill by reportable segment:
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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, 2022 is as follows:
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | Long-term debt as of June 30, 2022 and December 31, 2021 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, 2022 are as follows:
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Classification of Lease Assets and Liabilities |
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Components of Lease Cost | During the three and six months ended June 30, 2022 and 2021, the components of lease cost were as follows:
Supplemental disclosures of cash flow information related to leases were as follows:
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Schedule of Supplemental Disclosures of Cash Flow Information Related to Leases | During the three and six months ended June 30, 2022 and 2021, the components of lease cost were as follows:
Supplemental disclosures of cash flow information related to leases were as follows:
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Maturities of Lease Liabilities | As of June 30, 2022, maturities of lease liabilities were as follows:
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Maturities of Lease Liabilities | As of June 30, 2022, maturities of lease liabilities were as follows:
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Revenue recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Contract Liabilities | The following table reflects the change in contract liabilities between December 31, 2021 and June 30, 2022:
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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, 2022. 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) |
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Schedule of Related Party Transactions | Activity with entities considered to be related parties is summarized below:
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Earnings Per Share (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2022 and 2021. 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 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 | A roll forward of goodwill between December 31, 2021 and June 30, 2022 is as follows:
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, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2022 and 2021:
(1) The term “debrand” refers to a franchisee-owned store whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. The Company retains the right to prevent debranded stores from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s store with another store located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining store.
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Summary of Significant Accounting Policies - Schedule of the Carrying Value and Estimated Fair Value of Certain Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Carrying value | ||
Liabilities | ||
Long-term debt | $ 2,035,562 | $ 1,700,000 |
Variable Funding Notes | 0 | 75,000 |
Estimated fair value | ||
Liabilities | ||
Long-term debt | 1,822,990 | 1,725,021 |
Variable Funding Notes | $ 0 | $ 75,000 |
Investments - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Apr. 09, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
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Schedule of Equity Method Investments [Line Items] | ||||||
Gain on adjustment of allowance for credit losses on held-to-maturity investment | $ 265 | $ (1,845) | $ 0 | |||
Amortized cost of held-to-maturity debt security investments | 27,315 | 27,315 | $ 26,401 | |||
Allowance for expected credit loss | 15,617 | 15,617 | 17,462 | |||
Dividends accrued on investment | 463 | 914 | ||||
Equity earnings (losses) of unconsolidated entities, net of tax | (94) | $ 0 | (332) | $ 0 | ||
Underlying equity in net assets | $ 9,488 | $ 9,488 | $ 9,820 | |||
Planet Fitness Australia Holdings | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 21.00% | |||||
Payment to acquire equity method investment | $ 10,000 |
Investments - Held-to-Maturity Debt Security Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward] | |||
Beginning allowance for expected credit losses | $ 17,462 | ||
Gain (loss) on adjustment of allowance for expected credit losses | $ 265 | (1,845) | $ 0 |
Write-offs, net of recoveries | 0 | ||
Ending allowance for expected credit losses | $ 15,617 | $ 15,617 |
Acquisitions - Schedule of Purchase Consideration (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Feb. 10, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 714,153 | $ 228,569 | |
Sunshine Fitness | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 5,917 | ||
Other current assets | 4,226 | ||
Property and equipment | 154,153 | ||
Right of use assets | 162,827 | ||
Other long term assets | 1,830 | ||
Intangible assets | 259,640 | ||
Goodwill | 485,584 | ||
Deferred income taxes, net | (51,188) | ||
Deferred revenue | (16,973) | ||
Other current liabilities | (15,638) | ||
Lease liabilities | (165,736) | ||
Other long term liabilities | (1,215) | ||
Net assets acquired | $ 823,427 |
Acquisitions - Components of Identifiable Intangible Assets Acquired (Details) - Sunshine Fitness $ in Thousands |
Feb. 10, 2022
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Fair value | $ 259,640 |
Reacquired franchise and area development rights | |
Business Acquisition [Line Items] | |
Fair value | $ 233,230 |
Useful life | 11 years 10 months 24 days |
Customer relationships | |
Business Acquisition [Line Items] | |
Fair value | $ 24,970 |
Useful life | 8 years |
Reacquired area development rights | |
Business Acquisition [Line Items] | |
Fair value | $ 1,440 |
Useful life | 5 years |
Acquisitions - Schedule of Revenues and Income Before Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Business Acquisition [Line Items] | ||||
Total revenues | $ 224,442 | $ 137,251 | $ 411,118 | $ 249,128 |
Income before taxes | 33,735 | $ 20,175 | 64,060 | $ 29,719 |
Sunshine Fitness | ||||
Business Acquisition [Line Items] | ||||
Total revenues | 49,803 | 78,498 | ||
Income before taxes | $ 4,140 | $ 7,112 |
Acquisitions - Schedule of Pro Forma Financial Information (Details) - Sunshine Fitness - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Business Acquisition [Line Items] | |||
Total revenues | $ 179,650 | $ 431,568 | $ 328,311 |
Income before taxes | 20,197 | 63,906 | 29,835 |
Net income | $ 15,033 | $ 43,331 | $ 21,293 |
Goodwill and Intangible Assets - Schedule of Rollforward of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
As of December 31, 2021 | $ 228,569 |
Acquisition of franchisee-owned stores | 485,584 |
As of June 30, 2022 | 714,153 |
Franchise | |
Goodwill [Roll Forward] | |
As of December 31, 2021 | 16,938 |
Acquisition of franchisee-owned stores | 0 |
As of June 30, 2022 | 16,938 |
Corporate-owned stores | |
Goodwill [Roll Forward] | |
As of December 31, 2021 | 118,965 |
Acquisition of franchisee-owned stores | 485,584 |
As of June 30, 2022 | 604,549 |
Equipment | |
Goodwill [Roll Forward] | |
As of December 31, 2021 | 92,666 |
Acquisition of franchisee-owned stores | 0 |
As of June 30, 2022 | $ 92,666 |
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment charges | $ 0 | |||
Amortization of intangible assets | $ 10,750,000 | $ 4,159,000 | $ 19,320,000 | $ 8,339,000 |
Goodwill and Intangible Assets - Summary of Amortization expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2022 | $ 21,475 | |
2023 | 51,303 | |
2024 | 48,525 | |
2025 | 36,364 | |
2026 | 31,389 | |
Thereafter | 105,622 | |
Net carrying Amount | $ 294,678 | $ 54,337 |
Long-Term Debt - Schedule of Future Annual Payments of Long-term Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Disclosure [Abstract] | ||
Remainder of 2022 | $ 10,375 | |
2023 | 20,750 | |
2024 | 20,750 | |
2025 | 600,438 | |
2026 | 419,313 | |
Thereafter | 963,936 | |
Total | $ 2,035,562 | $ 1,775,000 |
Leases - Balance Sheet Classification of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Assets | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property and equipment, net of accumulated depreciation of $189,742 and $152,296 as of June 30, 2022 and December 31, 2021, respectively | Property and equipment, net of accumulated depreciation of $189,742 and $152,296 as of June 30, 2022 and December 31, 2021, respectively |
Operating lease ROU assets | $ 357,615 | $ 190,330 |
Finance lease assets | 485 | 222 |
Total lease assets | $ 358,100 | $ 190,552 |
Liabilities | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Current operating lease liabilities | $ 38,026 | $ 22,523 |
Noncurrent operating lease liabilities | 351,462 | 197,682 |
Noncurrent finance lease liabilities | 495 | 230 |
Total lease liabilities | $ 389,983 | $ 220,435 |
Weighted-average remaining lease term (years) - operating leases | 8 years 4 months 24 days | 8 years 8 months 12 days |
Weighted-average discount rate - operating leases | 4.60% | 5.00% |
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 16,067 | $ 7,283 | $ 26,735 | $ 13,976 |
Variable lease cost | 4,184 | 2,836 | 9,725 | 5,210 |
Total lease cost | $ 20,251 | $ 10,119 | $ 36,460 | $ 19,186 |
Leases - Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Leases [Abstract] | ||||
Cash paid for lease liabilities | $ 16,126 | $ 7,062 | $ 25,876 | $ 13,639 |
Operating lease ROU assets obtained in exchange for operating lease liabilities, excluding the Sunshine Acquisition | 17,010 | 8,013 | 23,008 | 12,640 |
Preliminary Sunshine Acquisition operating lease ROU assets obtained in exchange for operating lease liabilities | $ 0 | $ 0 | $ 162,827 | $ 0 |
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
Remainder of 2022 | $ 24,413 | |
2023 | 60,586 | |
2024 | 60,768 | |
2025 | 60,687 | |
2026 | 56,890 | |
Thereafter | 210,289 | |
Total lease payments | 473,633 | |
Less: imputed interest | 83,650 | |
Present value of lease liabilities | $ 389,983 | $ 220,435 |
Leases - Additional Information (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Leases [Abstract] | |
Lease payments for leases signed but not yet commenced | $ 16,207 |
Revenue recognition - Schedule of Contract Liabilities (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
| |
Contract liabilities | |
Beginning Balance | $ 61,779 |
Revenue recognized that was included in the contract liability at the beginning of the year | (21,183) |
Other gain on settlement of preexisting contracts in connection with the Sunshine Acquisition | (2,059) |
Deferred revenue acquired in the Sunshine Acquisition | 16,973 |
Increase, excluding amounts recognized or acquired in the Sunshine Acquisition during the period | 40,968 |
Ending Balance | $ 96,478 |
Revenue recognition - Narrative (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Equipment deposits | $ 22,861 | $ 6,036 |
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Related Party Transaction [Line Items] | ||||
Total revenue from related parties | $ 1,364 | $ 676 | $ 1,639 | $ 1,434 |
Franchise revenue | ||||
Related Party Transaction [Line Items] | ||||
Total revenue from related parties | 1,361 | 676 | 1,625 | 1,434 |
Equipment revenue | ||||
Related Party Transaction [Line Items] | ||||
Total revenue from related parties | $ 3 | $ 0 | $ 14 | $ 0 |
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Related Party Transaction [Line Items] | |||||
Liability payable under tax benefit obligations | $ 82,807 | $ 82,807 | $ 84,595 | ||
Administrative fees charged | 1,364 | $ 676 | 1,639 | $ 1,434 | |
Expense incurred for corporate travel to a third-party company | 175 | 0 | |||
Planet Fitness NAF, LLC | Administrative Service | |||||
Related Party Transaction [Line Items] | |||||
Administrative fees charged | 619 | 500 | 1,304 | $ 999 | |
Reacquired area development rights | |||||
Related Party Transaction [Line Items] | |||||
Deferred area development revenue from related parties | 87 | $ 87 | $ 164 | ||
Corporate Travel | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Expense incurred for corporate travel to a third-party company | $ 69 | $ 0 |
Income Taxes - Schedule of Future Payments Under Tax Benefit Arrangements (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Remainder of 2022 | $ 6,090 | |
2023 | 33,877 | |
2024 | 45,591 | |
2025 | 55,529 | |
2026 | 55,861 | |
Thereafter | 313,076 | |
Total | $ 510,024 | $ 528,107 |
Commitments and contingencies - Additional Information (Details) - Pending Litigation - Civil Action Brought By Former Employee $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Loss Contingencies [Line Items] | |
Estimate of possible loss | $ 3,176 |
Loss contingency, receivable | $ 3,176 |
Segments - Additional Information (Details) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2022
USD ($)
segment
|
Jun. 30, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 3 | ||||
Number of operating segments | segment | 0 | ||||
Revenue | $ 224,442,000 | $ 137,251,000 | $ 411,118,000 | $ 249,128,000 | |
Franchise revenue | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 82,543,000 | 72,849,000 | 162,627,000 | 136,910,000 | |
Franchise revenue | Placement Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 3,387,000 | 1,712,000 | 5,726,000 | 2,491,000 | |
Corporate-owned stores | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 101,453,000 | $ 40,579,000 | 177,610,000 | $ 78,456,000 | |
Corporate-owned stores | International corporate-owned stores | |||||
Segment Reporting Information [Line Items] | |||||
Long-lived assets | $ 1,115,000 | 1,115,000 | $ 1,203,000 | ||
Intersegment Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 0 |
Segments - Reconciliation of Total Segment EBITDA to (Loss) Income Before Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Segment Reporting [Abstract] | ||||
Total Segment EBITDA | $ 87,318 | $ 55,141 | $ 165,510 | $ 100,186 |
Depreciation and amortization | 32,172 | 15,036 | 57,855 | 30,510 |
Other income (expense) | 148 | (147) | 4,238 | 18 |
Equity earnings (losses) of unconsolidated entities, net of tax | (94) | 0 | (332) | 0 |
Income from operations | 55,092 | 40,252 | 103,749 | 69,658 |
Interest income | 474 | 195 | 683 | 412 |
Interest expense | (21,979) | (20,125) | (44,610) | (40,369) |
Income before income taxes | $ 33,735 | $ 20,175 | $ 64,060 | $ 29,719 |
Segments - Summary of Company's Assets by Reportable Segment (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | $ 2,884,086 | $ 2,015,983 |
Operating Segments | Franchise | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | 178,555 | 172,822 |
Operating Segments | Corporate-owned stores | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | 1,616,078 | 516,714 |
Operating Segments | Equipment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | 197,857 | 193,983 |
Unallocated | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total consolidated assets | $ 891,596 | $ 1,132,464 |
Segments - Summary of Company's Goodwill by Reportable Segment (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Consolidated goodwill | $ 714,153 | $ 228,569 |
Franchise | ||
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 | 604,549 | 118,965 |
Equipment | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Consolidated goodwill | $ 92,666 | $ 92,666 |
Corporate-Owned and Franchisee-Owned Stores - Schedule of Changes in Corporate-owned and Franchisee-owned Stores (Details) - store |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Number Of Stores [Roll Forward] | ||||
Stores operated at beginning of period | 2,291 | 2,146 | 2,254 | 2,124 |
New stores opened | 34 | 24 | 71 | 46 |
Stores acquired, debranded, sold, closed or consolidated | (1) | 0 | (1) | 0 |
Stores operated at end of period | 2,324 | 2,170 | 2,324 | 2,170 |
Franchisee-Owned Stores | ||||
Number Of Stores [Roll Forward] | ||||
Stores operated at beginning of period | 2,062 | 2,043 | 2,142 | 2,021 |
New stores opened | 30 | 21 | 64 | 43 |
Stores acquired, debranded, sold, closed or consolidated | (1) | 0 | (115) | 0 |
Stores operated at end of period | 2,091 | 2,064 | 2,091 | 2,064 |
Corporate-Owned Stores | ||||
Number Of Stores [Roll Forward] | ||||
Stores operated at beginning of period | 229 | 103 | 112 | 103 |
New stores opened | 4 | 3 | 7 | 3 |
Stores acquired from franchisees | 0 | 0 | 114 | 0 |
Stores operated at end of period | 233 | 106 | 233 | 106 |