Fitbit (FIT) exploded for an open-day gain of 48.4 percent on June 18 and that opened the calendar to fitness IPOs. This week has two deals from this sector: Amplify Snack Brands (BETR – proposed) and Planet Fitness (PLNT – proposed) and both are reportedly on everybody’s “most wanted” list. There is more. Last week SoulCycle filed to go public.
Passing point of interest: For an IPO industrial sector to emerge as “hot,” several things are needed. First, it takes an industrial leader to point the way in going public and, second, its IPO must pop in the aftermarket. If this doesn’t happen, what chance does a lesser competitor have? Fitbit’s IPO is a classic case.
Fitbit provides wearable fitness-tracking devices worldwide. It makes both wrist bands and clippable devices that monitor users’ fitness activity by tracking the calories burned or distance covered.
On the evening of June 17, 2015, Fitbit priced 36.6 million shares at $20 each to raise $732 million. (That was well above its original terms of 29.9 million shares at $14 to $16 each set on June 15.) The IPO opened on June 18 at $30.40, sold as high as $31.60, and closed its opening day at $29.68. It closed Friday, July 31, at $47.60 – UP 138 percent from its IPO price.
Size does matter when it comes to leadership in an emerging IPO sector. Consider this. Thomson One Analytics reports the following mean estimates for Fitbit: For 2015, Fitbit is expected to report estimated earnings per share of 61 cents on estimated revenue of about $1.41 billion; for 2016, the company is projected to report estimated EPS of 80 cents on estimated revenue of about $1.87 billion; and for 2017, the company is expected to report estimated EPS of $1.04 on estimated revenue of about $2.31 billion.
Worth noting: In 2014, Fitbit reported EPS of 63 cents on revenue of $745 million.
Here’s the Fitness 411
This week the eyes and ears of the IPO market will be on the fitness IPOs: Amplify Snack Brands and Planet Fitness.
What good does it do to work out if you don’t eat right as well? Those two concepts come together in this week’s marquee deals.
Snack Yourself Skinny
Amplify Snack Brands, based in Austin, Texas, is a snack food company focusing on developing and marketing products that appeal to consumers’ growing preference for better-for-you snacks. Its anchor brand is SkinnyPop. This brand of popcorn in a bag weighs in at 150 calories per serving – with a serving defined as 3-3/4 cups, according to the company’s website.
The company was founded in 2010. For the six months ended June 30, 2015, Amplify Snack reported net income of $8.5 million on net sales of $91.6 million, versus net income of $28.6 million on net sales of $61.2 million for the same period a year ago.
Bankers plan to offer 15 million shares at $16 to $18 each on Tuesday evening to trade on the New York Stock Exchange on Wednesday morning. Note: All the shares are being offered by insiders. The company will not receive any of the proceeds from the offering.
(For more information, please click here: Amplify Snack Brands)
Fitness for Everyone
Planet Fitness, based in Newington, New Hampshire, believes it is one of the largest and fastest-growing franchisors and operators of fitness centers in the United States. The company – known for its award-winning TV commercials that poke fun at oiled-up body builders and dance-aerobics divas – markets its gyms as the “Judgement Free Zone” where “anyone — and we mean anyone — can feel they belong,” according to its website. Planet Fitness offers “a large selection of high-quality purple and yellow Planet Fitness-branded cardio, circuit- and weight-training equipment and friendly staff trainers who offer unlimited free fitness instruction to all its members in small groups through its PE@PF program,” the website says.
Founded in 1992, Planet Fitness reported net income of $8.4 million on total revenues of $76.9 million for the three months ended March 31, 2015, versus net income of $6.1 million on total revenues of $57.6 million for the same period a year ago.
Bankers plan to price 13.5 million shares at $14 to $16 each on Wednesday evening to trade on the New York Stock Exchange on Thursday morning. Note: The company plans to offer about 9.1 million shares of the offering and selling shareholders plan to offer about 4.4 million shares.
(For more information, please click here: Planet Fitness)
Body and Soul
SoulCycle filed for an IPO to raise $100 million. The company, based in New York City, is a fitness company with about 38 studios located in New York, Washington D.C., Connecticut, New Jersey, Massachusetts, Maryland, Florida, Illinois and California.
The company was founded in 2006 by Elizabeth Cutler and Julie Rice as a single indoor cycling studio on New York’s Upper West Side, according to SoulCycle’s prospectus. Their concept was to take the drudgery out of working out by turning a cycling class into “a cardio party.” The classes are set in a dark candle-lit room with riders moving to the beat of the music. SoulCycle’s studio class includes about 35 to 40 minutes of riding, a five- to eight-minute upper-body strength series using hand weights, and a three-minute cool-down stretch.
SoulCycle reported net income of $8.1 million on total revenue of $34.8 million for the three months ended March 31, 2015, versus net income of $5.4 million on total revenue of $22.8 million for the same period a year ago.
(For more information, please click here: SoulCycle)
August’s Promising Start
To round out the first week of August, the calendar has a total of nine deals expecting to raise about $1.3 billion. (For more information, please click here: IPO Calendar for the week of Aug. 3, 2015, and beyond.)
Looking into the week of Aug. 10, the IPO calendar lists only two deals. They expect to raise about $157 million. Nevertheless, the calendar has been known to fill up quickly on Monday mornings.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinions.