Fitness financials: Bally asks lenders for Q3 filing extension, plus Life Time Fitness, Finish Line, Crocs

Bally asks lenders for Q3 filing extension, selected to join Russell 3000 Index
Although Bally Total Fitness (NYSE: BFT) reported that it would be filing its full-year 2005 report and first-quarter 2006 reports with the SEC before the July 10 expiration, it is asking its senior secured credit facility lenders for an extended deadline for its third-quarter report.

The company said it would like to increase its cross default deadline from 10 days to 28 days after receipt of any covenant default notice under its public bond indentures for the report. Bally said it anticipates filing the third-quarter report by the SEC deadline of Nov. 9.

Bally said it also expects to file its second-quarter report, which was also granted an extension via a waiver, by Sept. 11, or to extend the period until Oct. 11. With its first-quarter filing reportedly on track, the company added that it would announce details for a conference call for investors and analysts that will be held shortly after the filings.

Bally CFO Ron Eidell and Tatum LLC are imposing new accounting processes and technologies to speed up report filings, the company said in a statement.

>> In other company news, Bally said that it has been selected to join the Russell 3000 Index when Russell Investment Group reconstitutes its family of U.S. indexes on June 30, according to a preliminary list of additions posted on www.russell.com .

Russell 3000 membership, which remains in place for one year, means automatic inclusion in the large-cap Russell 1000 Index or small-cap Russell 2000 Index as well as the appropriate growth and style indices, Bally said in a statement. Russell determines membership for its equity indices primarily by objective measures such as market capitalization rankings and style attributes, it added.

“Inclusion in the Russell 3000 highlights Bally’s unique position as the leading player in the high-growth fitness, nutrition and wellness industry in North America,” said Paul Toback, Bally’s CEO, in a statement.

Reportedly, Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies. Annual reconstitution of Russell indexes captures the 3,000 largest U.S. stocks as of the end of May, ranking them by total market capitalization to create the Russell 3000. The largest 1,000 companies in the ranking comprise the Russell 1000 while the remaining 2,000 companies become the widely used Russell 2000.

Life Time Fitness shares get a boost from analyst report
Shares of Life Time Fitness (NYSE: LTM) rose more than 8 percent on June 21 after a Bank of America analyst issued a bullish outlook on the company’s growth prospects.

Life Time closed the day at $44.75 on the New York Stock Exchange, up $3.64. The stock has been trading between $30.93 and $49.82 over the last 52 weeks.

Bank of America analyst Scott A. Mushkin upgraded the company to “Buy” from “Neutral” and raised the price target to $50 from $47.

He noted that the company’s “unique customer-focused model, disciplined development process and expertise in managing resort-like clubs” will allow it to expand faster than an already rapidly growing industry.

Mushkin also has an “Overweight” rating for the sector, citing a high growth outlook. But Life Time will most likely grow faster than the industry based on its “customer-focused model, disciplined development process, and expertise in managing its resort-like clubs,” he wrote. Much of the growth is being spurred by a renewed societal interest in health and fitness, he added.

Mushkin maintained his earnings estimate of $1.29 per share for the year, driven by a projected 27 percent increase in revenue.

Finish Line Q1 profit declines on higher costs
First-quarter profit for Finish Line (Nasdaq: FINL) slipped significantly while expenses ballooned 12 percent. Net income slid to $4.4 million, or $0.09 per share — in line with analysts’ expectations — from $12.7 million, or $0.26 cents per share, in the year-earlier quarter. Sales were down 1 percent to $289 million from $291.3 million a year ago. Same-store sales dropped 7.2 percent during the quarter, compared with a 1.7 percent increase in the 2005 quarter. The company reported a 12 percent jump in selling, general and administrative expenses to $79.6 million.

Crocs settles a third lawsuit
Crocs (Nasdaq: CROX) is on a tear having settled a third patent infringement lawsuit in the last month. The company and Inter-Pacific Trading Corp., a Canadian import and export company, have agreed to settle a lawsuit concerning Crocs’ proprietary footwear for an undisclosed sum.

The lawsuit, pending in the United States District for the District of Colorado, charged that Inter-Pacific infringed Crocs’ U.S. patents and its trade dress. A separate complaint pending in the International Trade Commission alleged unfair acts regarding the importation of infringing footwear.

As part of the settlement, Inter-Pacific has agreed to not infringe Crocs’ patents and trade dress in the future, and Crocs has released Inter-Pacific and its customers of any past liability.

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