The Sports Club Company, Inc. Announces Operating Results for the Fourth Quarter and Year Ended December 31, 2008

LOS ANGELES--(Business Wire)--
The Sports Club Company, Inc. (Pink Sheets: SCYL) today announced financial
results for the fourth quarter and year ended December 31, 2008.

Revenues from operations for the fourth quarter ended December 31, 2008 were
$15,619,000 compared to $15,541,000 for the fourth quarter ended December 31,
2007, an increase of $78,000 or less than 1.0%. Net loss, before Preferred Stock
dividends, for the fourth quarter ended December 31, 2008 was $2,959,000
compared to a net loss of $2,631,000 for the fourth quarter ended December 31,
2007. After Preferred Stock dividends of $299,000 for both the fourth quarter
ended December 31, 2008 and 2007, the net loss attributable to common
stockholders for the fourth quarter ended December 31, 2008 was $3,258,000 or
$0.15 per basic and diluted share, compared to a net loss attributable to common
stockholders for the fourth quarter ended December 31, 2007 of $2,930,000 or
$0.14 per basic and diluted share. The weighted average number of basic and
diluted shares outstanding for the fourth quarter ended December 31, 2008 was
21,474,000 shares compared to 20,854,000 shares for the fourth quarter ended
December 31, 2007.

Revenues from operations for the year ended December 31, 2008 were $63,474,000
compared to $61,671,000 for the year ended December 31, 2007, an increase of
$1,803,000 or 2.9%. After Preferred Stock dividends of $1,194,000 and $1,193,000
for the year ended December 31, 2008 and 2007, respectively, the net loss
attributable to common stockholders for the year ended December 31, 2008 was
$6,167,000 or $0.29 per basic and diluted share, compared to a net loss
attributable to common stockholders for the year ended December 31, 2007 of
$7,289,000 or $0.35 per basic and diluted share. The weighted average number of
basic and diluted shares outstanding for the year ended December 31, 2008 was
21,386,000 shares compared to 20,537,000 shares for the year ended December 31,
2007.

All statements in this press release other than statements of historical fact
are forward looking statements within the meaning of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. These
statements are based on management`s current expectations and beliefs and are
subject to a number of factors and uncertainties that could cause actual results
to differ materially from those described in this press release. The forward
looking statements speak only as of the date of this press release, and the
Company expressly disclaims any obligations to release publicly, update or
revise any forward looking statement contained herein if there are changes in
the Company`s expectations or if any events, conditions or circumstances on
which any such forward looking statement is based.

The Sports Club Company, based in Los Angeles, California operates and owns
luxury sports and fitness complexes nationwide under the brand name The Sports
Club/LA.

THE SPORTS CLUB COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2007 and December 31, 2008

(in thousands, except per share amounts)

ASSETS
December 31, December 31,
2007 2008
(Audited) (Audited)
Current assets:
Cash and cash $ 2,765 $ 1,280
equivalents
Marketable securities 5,936 3,224
Restricted cash 1,769 1,019
Accounts receivable, net 1,354 920
of allowance for
doubtful accounts of
$367 and $398 at
December 31, 2007 and
December 31, 2008,
respectively
Inventories 492 426
Prepaid expenses 549 548
Total current assets 12,865 7,417

Property and equipment, 60,545 56,456
net
Goodwill 7,315 7,315
Restricted cash 75 75
Other assets 1,994 1,450
$ 82,794 $ 72,713

LIABILITIES AND STOCKHOLDERS` DEFICIT
Current liabilities:
Current installments of $ 1,378 $ 1,474
notes payable and
equipment financing
loans
Accounts payable 749 655
Accrued liabilities 5,264 4,799
Deferred lease 738 810
obligations
Deferred revenues 8,185 4,973
Redeemable Convertible -- 11,145
Preferred Stock, Series
B
Total current 16,314 23,856
liabilities

Notes payable and 77,692 76,218
equipment financing
loans, less current
installments
Deferred lease 7,031 6,569
obligations, less
current portion
Deferred revenues, less 427 285
current portion
Minority interest 600 600
Total liabilities 102,064 107,528

Commitments and
contingencies

Redeemable Convertible 10,486 --
Preferred Stock, Series
B, $.01 par value,
10,500 shares
authorized; 9,252 shares
issued and outstanding
at December 31, 2007
(liquidation preference
of $10,573 at December
31, 2007)

Stockholders` deficit:
Convertible Preferred 4,578 4,939
Stock, Series C, $.01
par value, 5,000 shares
authorized; 4,005 shares
issued and outstanding
at December 31, 2007 and
December 31, 2008
(liquidation preference
of $4,578 and $4,939 at
December 31, 2007 and
December 31, 2008,
respectively)
Common Stock, $.01 par 211 215
value, 80,000,000 shares
authorized; 21,074,717
and 21,473,914 shares
issued and outstanding
at December 31, 2007 and
December 31, 2008,
respectively
Additional paid-in 106,835 104,964
capital
Accumulated deficit (139,960 ) (144,933 )
Treasury Stock, at cost, (1,420 ) --
220,782 and zero shares
at December 31, 2007 and
December 31, 2008,
respectively
Total Stockholders` (29,756 ) (34,815 )
deficit
$ 82,794 $ 72,713

THE SPORTS CLUB COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months and Twelve Months Ended December 31, 2007 and 2008

(in thousands, except per share amounts)

Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2008 2007 2008
Revenues: (Unaudited) (Unaudited) (Audited) (Audited)
Membership revenues $ 10,313 $ 10,108 $ 41,032 $ 42,791
Products and services 5,228 5,511 20,639 20,683
Total revenue 15,541 15,619 61,671 63,474

Operating expenses:
Club operating costs 7,201 7,556 28,789 29,042
Cost of products and services 4,601 3,353 17,610 15,437
Selling and marketing 647 389 2,134 2,363
General and administrative 2,037 3,889 7,646 9,529
Impairment charge 877 863 1,248 2,081
Depreciation and amortization 1,245 1,105 4,541 4,374
Total operating expenses 16,608 17,155 61,968 62,826
Operating income (1,067 ) (1,536 ) (297 ) 648

Other income (expense):
Interest, net (1,527 ) (1,386 ) (6,084 ) (5,473 )
Other income -- -- 433 --
Minority interests (37 ) (37 ) (148 ) (148 )

Net income (loss) before income taxes (2,631 ) (2,959 ) (6,096 ) (4,973 )

Provision (benefit) for income taxes -- -- -- --
Net income (loss) (2,631 ) (2,959 ) (6,096 ) (4,973 )

Dividends on Preferred Stock 299 299 1,193 1,194

Net income (loss) attributable to common stockholders $ (2,930 ) $ (3,258 ) $ (7,289 ) $ (6,167 )

Net income (loss) per share attributable to common stockholders:
Basic and diluted $ (0.14 ) $ (0.15 ) $ (0.35 ) $ (0.29 )
Weighted average number of common shares outstanding:
Basic and diluted 20,854 21,474 20,537 21,386

The Sports Club Company, Inc.
Timothy O`Brien,Chief Financial Officer
310-479-5200

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