Executive Financial Summary

The big picture first. Revenue and EBITDA both improved month-over-month, and the studios produced cash. The catch: the revenue lift was driven by one-time and event income, not recurring dues — recurring membership was essentially flat and the active base declined.

Dollar figures from the consolidated P&L for the six operating LLCs. Prior-year revenue and member counts are sourced from the Monthly KPI dashboard; the financial workbook provided covers Jun 2025–May 2026, so prior-year P&L lines (labor, occupancy, EBITDA) are not available here and budget/targets were not supplied. Controllables = repairs & maintenance, cleaning, utilities, telephone/internet, security, merchant fees, local marketing, equipment R&M, operating supplies, and software.

Did revenue improve or decline?

Improved — up $20,765 (+4.7%) month-over-month, with COGS down $5,108, which is what drove the margin expansion.

Did EBITDA improve or decline?

Improved sharply — up $16,184 (+34.9%) to $62,485, margin from 10.5% to 13.5%.

Are studios producing cash?

Yes in aggregate — the portfolio funded a $39,833 owner distribution and still closed with studio cash of $482,550 ($585,943 including the fund entity). Five of six studios are free-cash-flow positive; Sandy is the exception.

Biggest positive / biggest concern

Positive: gross margin recovery (40.0% vs 36.3% in April) lifting EBITDA. Concern: recurring member attrition — net −26 for the month and dues flat — meaning the top line is leaning on event and penalty revenue rather than the membership base.

Studio Ranking

Every studio ranked by EBITDA margin. Two studios carry the portfolio; Sandy is the clear outlier and the only loss-maker this month.

Member counts and net change from the Monthly KPI dashboard (recurring members). Labor % = payroll (5200) ÷ revenue. Occupancy % = rent + CAM/property tax ÷ revenue.

Revenue & Membership Review

Where the revenue came from, and whether it reflects real membership growth.

Month-over-month by revenue line. Almost the entire $20,765 increase comes from event fees (+$16,552) plus a smaller returns/discounts drag (+$3,482) — together +$20,034. Recurring dues actually slipped −$358 and Premier, the largest tier, fell −$2,336. The top line grew on one-time activity, not membership.

Same revenue lines, broken out by studio (ordered by total revenue). "Other & inter-clinic adj." captures freeze fees, prepaid transfers between clinics, non-recurring membership, and uncategorized items so each column foots to total revenue. Figures are rounded to the nearest dollar and may not sum exactly.

Recurring joins (new + win-back) and revenue/member from the Orange Cup dashboard, May 2026. Net member change from the Monthly KPI dashboard.

Is growth from true membership or one-time revenue?

One-time. Dues were flat and the active base fell 26; the +4.7% came from event and penalty fees.

Are we adding enough new members to offset cancels?

Not in aggregate — 133 recurring joins were outweighed by cancels, freezes and exhaustions, leaving net −26. Only South Jordan and Herriman were net-positive.

Which studios have a membership problem?

Holladay (−20) and Draper (−15) are the immediate concerns; Sandy is smaller in absolute terms but down −18 year-over-year, the worst YoY trend in the portfolio.

Sales Funnel Review

Lead → booked intro → shown intro → join, by studio. The portfolio has a lead-volume problem at the bottom and a closing problem at a couple of high-traffic studios.

Source: Orange Cup sales dashboard, May 2026.

Labor & Class Economics

Payroll was 30.4% of revenue — healthy at the portfolio level and down from 31.5% in April. Labor as a share of revenue varies widely by studio. The tables below set each studio's labor dollars and their split across coaching, front desk and management against the revenue base and class utilization behind the rate.

Labor dollars from payroll (5200): coaching = trainer + head-coach comp, front desk = reception + sales comp, management = manager salary, bonus and commission. Revenue from the consolidated P&L, May 2026. Studios ordered by labor %.

Capacity utilization, sessions per member per week, and HRM utilization from the Orange Cup coaching dashboard, May 2026.

Are we running too many classes / are class sizes large enough?

At the top four studios, class sizes are healthy — Holladay (76%), South Jordan (75%), Cottonwood (72%) and Herriman (71%) all fill above 70% of capacity. Draper (67%) and Sandy (59%) run under-filled. At Sandy the low fill mirrors its membership — 425 members, the smallest in the portfolio — so the problem is too few members, not too many classes. Cutting Sandy's schedule would reduce availability at the one studio that most needs to grow; the answer is filling existing classes by adding members.

Are front-desk / sales hours producing member growth?

Not in a straight line. The two studios that grew got there differently: South Jordan (+18) spends the least on front desk ($3,063) but converts efficiently (35 joins on a strong close rate), while Herriman (+6) spends the most ($7,141) and books aggressively (26 joins). Cottonwood and Draper carry mid-to-high front-desk cost ($6,198 and $5,503) and still lost members. Front-desk dollars buy joins, but net growth depends on conversion and retention — the lever is funnel effectiveness, not headcount.

Is the management load proportionate?

At five studios, yes. As a share of revenue, management runs 6–9% and is well-earned at the top performers (Holladay 9.1%, South Jordan 8.5%). Sandy is the exception: its $6,607 load is higher in dollars than Herriman, Draper or Cottonwood, but on the smallest revenue base it reaches 11.2% of revenue — the heaviest in the portfolio. Herriman runs the leanest management (6.0%) and is the only other studio adding members.

Is labor aligned with revenue and utilization?

Yes for five studios, no for Sandy. The studios above $70K revenue all run 27–32% labor on 67–76% utilization — labor tracks their scale. Sandy spends the fewest labor dollars in the portfolio ($20,917) yet lands at 35.4%, because its revenue ($59,035) and utilization (59%) are both the lowest. Labor is not out of line in dollars; the revenue and fill underneath it are too small to carry even a lean cost base. Bringing Sandy into line means growing revenue and utilization, not cutting labor.

Controllable Expenses & Anomalies

Only the unusual items. Several lines moved enough month-over-month to warrant an explanation; each cause below is confirmed from the general ledger.

Local store marketing, per studio — spend vs the studio's member result. Digital marketing and Shows (local events) are the two accounts driving the increase.

South Jordan drove most of the increase (+$2,102, the bulk of it digital) and was the only studio with meaningful member growth (+18, 35 joins) — the one case where higher marketing tracked a better member result. Cottonwood and Holladay also raised spend but lost members, so their May revenue lift came from one-time event fees, not the marketing. The portfolio's recurring base still slipped −26 overall.

Net effect on run-rate EBITDA?

About $5,500 of May's controllable spend does not recur monthly — the $4,234 annual EPLI/D&O premium booked in full this month, and South Jordan's ~$1,235 HVAC job — and should be normalized out when reading the run-rate. Everything else is recurring operational spend.

Occupancy & Fixed Cost Review

Portfolio occupancy ran 15.6% of revenue — healthy. The story is entirely at the studio level: two studios carry a rent burden the others don't.

Occupancy % = (rent + CAM + property tax) ÷ revenue. Draper's CAM line nets to −$919 this month — normal CAM of $2,655 offset by a −$3,574 landlord refund (see §6).

Which studios have a rent-burden problem — and is it rent or revenue?

Sandy (22.1%) and Herriman (20.7%). For both, rent is in the normal $10–11K band — the problem is low revenue, not high rent. Sandy at $59K and Herriman at $71K simply don't have the top line to carry standard occupancy.

Is it fixable through sales growth? Structural?

Herriman is fixable: it added members (+6), has the portfolio's best funnel conversion (21%), and just needs volume — occupancy ratio falls as revenue climbs. Sandy is closer to structural: negative EBITDA, declining members, and the highest combined labor-plus-occupancy load. Sandy needs a specific, dated revenue plan or a harder look at the unit economics.

EBITDA & Cash Flow

EBITDA is converting to cash, accounts payable is being paid down rather than built, and the portfolio funded a distribution while still growing cash.

The updated workbook's cash-flow statement now spans a trailing-twelve-month period (Jun 2025–May 2026) and consolidates the fund entity alongside the six studios, so a clean single-month cash-flow statement is not drawn from this version. Studio-level cash at close ($482,550) is unchanged from the prior reporting close; the higher consolidated figure adds the fund entity's $103,393. Payroll and sales-tax liabilities remain current.

Is EBITDA turning into cash? Are we building AP?

Yes — the EBITDA-to-cash bridge holds, and accounts payable sits at a modest $20,963 consolidated with no build-up. There is no delayed-expense overhang; sales-tax and payroll liabilities are current.

Upcoming CapEx?

None recorded this month. With studio cash at $482,550 (and $585,943 consolidated including the fund entity) the portfolio has room, but a forward CapEx plan for studio refreshes should be confirmed.

Which studios fund the business — and which consume cash?

Funders: Holladay (FCF $17,117) and South Jordan ($12,585) generate the bulk of distributable cash. Consumer: Sandy (−$7,439) is the only cash-negative studio and is effectively subsidized by the others.

Action Plan

A written list with owners, deadlines and expected impact — the meeting's output.