1281774--3/5/2009--TOWN_SPORTS_INTERNATIONAL_HOLDINGS

related topics

{debt, indebtedness, cash}

{cost, operation, labor}

{system, service, information}

{loan, real, estate}

{acquisition, growth, future}

{condition, economic, financial}

{operation, natural, condition}

{personnel, key, retain}

{cost, regulation, environmental}

{control, financial, internal}

Our geographic concentration heightens our exposure to adverse regional developments. The level of competition in the fitness club industry could negatively impact our revenue growth rates and profits. If we are unable to identify and acquire suitable sites for new clubs, our revenue growth rate and profits may be negatively impacted. We may experience prolonged periods of losses in our recently opened clubs. We could be subject to claims related to health or safety risks at our clubs. Security and privacy breaches may expose us to liability and cause us to lose customers. Loss of key personnel and/or failure to attract and retain highly qualified personnel could make it more difficult for us to develop our business and enhance our financial performance. Terrorism and the uncertainty of armed conflicts may have a material adverse effect on clubs and our operating results. Disruptions and failures involving our information systems could cause customer dissatisfaction and adversely affect our billing and other administrative functions. The opening of new clubs by us in existing locations may negatively impact our comparable club revenue increases and our operating margins. Our continued growth could place strains on our management, employees, information systems and internal controls, which may adversely impact our business. Our cash and cash equivalents are concentrated in one bank. Because of the capital-intensive nature of our business, we may have to incur additional indebtedness or issue new equity securities and, if we are not able to obtain additional capital, our ability to operate or expand our business may be impaired and our results of operations could be adversely affected. We may incur rising costs related to construction of new clubs and maintaining our existing clubs. If we are not able to pass these cost increases through to our members, our returns may be adversely affected. Risks Related to Our Leverage and Our Indebtedness We may be negatively affected by the economic crisis in the United States and key international markets. Our leverage may impair our financial condition and we may incur significant additional debt. We may not have access to the cash flow and other assets of our subsidiaries that may be needed to make payments on our outstanding Indebtedness. Covenant restrictions under our indebtedness may limit our ability to operate our business and, in such an event, we may not have sufficient assets to settle our indebtedness.

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1281774--3/5/2009--TOWN_SPORTS_INTERNATIONAL_HOLDINGS_INC