8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 27, 2005

Life Time Fitness, Inc.

(Exact name of Registrant as specified in its charter)

Minnesota	001-32230	41-1689746
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6442 City West Parkway Eden Prairie, Minnesota	55344
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (952) 947-0000

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition.
	Item 9.01.Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
Press Release

Item 2.02. Results of Operations and Financial Condition.

     On October 27, 2005, Life Time Fitness, Inc. (the “Company”) reported its financial results for its fiscal quarter ended September 30, 2005. See the Company’s press release dated October 27, 2005, which is furnished as Exhibit 99 and incorporated by reference in this Current Report on Form 8-K.

     In addition to the information in the press release under the heading “Non-GAAP Financial Measures,” the Company provides the following additional information about the Company’s use of EBITDA. The Company believes EBITDA is useful to an investor in evaluating the Company’s operating performance and liquidity because:

• it is a widely accepted financial indicator of a company’s ability to service its debt and the Company is required to comply with certain covenants and borrowing limitations that are based on variations of EBITDA in certain of the Company’s financing documents;

• it is widely used to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of the Company’s capital structure and the method by which assets were acquired; and

• it helps investors to more meaningfully evaluate and compare the results of the Company’s operations from period to period by removing from the Company’s operating results the impact of its capital structure, primarily interest expense from the Company’s outstanding debt, and asset base, primarily depreciation and amortization of the Company’s properties.

     The Company’s management uses EBITDA:

• as a measurement of operating performance because it assists the Company in comparing its performance on a consistent basis, as it removes from the Company’s operating results the impact of the Company’s capital structure, which includes interest expense from the Company’s outstanding debt, and the Company’s asset base, which includes depreciation and amortization of the Company’s properties;

• in presentations to the members of the Company’s board of directors to enable the board to have the same consistent measurement basis of operating performance used by management; and

• as the basis for incentive bonuses paid to selected members of senior and center-level management.

Item 9.01. Financial Statements and Exhibits.

     The following Exhibit is being furnished herewith:

99 Press Release dated October 27, 2005.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LIFE TIME FITNESS, INC.
Date: October 27, 2005	By:	/s/ Michael R. Robinson
		Michael R. Robinson
		Executive Vice President and Chief Financial Officer

3

EXHIBIT INDEX

No.		Exhibit	Manner of Filing
	99	Press Release dated October 27, 2005.	Filed Electronically

EX-99

Exhibit 99

Investor Contact: Michael Robinson — 952-229-7427 or ir@lifetimefitness.com
Media Contact: Jason Thunstrom — 952-229-7435 or jthunstrom@lifetimefitness.com

FOR IMMEDIATE RELEASE

LIFE TIME FITNESS ANNOUNCES THIRD QUARTER 2005 FINANCIAL RESULTS
Company Reports Revenue Growth of 28.3% and Net Income Growth of 35.8% for the Quarter

EDEN PRAIRIE, Minn. (October 27, 2005) — Life Time Fitness, Inc. (NYSE: LTM), a national operator of distinctive and large health and fitness centers, today reported its operating results for the third quarter ended September 30, 2005.

     Third quarter 2005 revenue grew 28.3% to $101.6 million from $79.2 million during the same period last year. Net income during the quarter grew 35.8% to $10.7 million and earnings per diluted share grew 31.8% to $0.29. This compares to net income of $7.9 million, or $0.22 per diluted share, for Q3 2004. For the nine months ended September 30, 2005, revenue grew 24.6% to $286.5 million from $229.9 million during the same period last year. Net income grew 40.4% for the same period to $29.1 million, or $0.81 per diluted share, from $20.8 million, or $0.65 per diluted share for the first nine months of 2004.

     “We are pleased with our third quarter financial results,” said Bahram Akradi, Life Time Fitness chairman and chief executive officer. “These results reflect the company’s continued focus and execution on our fundamental growth strategies, including new center growth, membership ramp, and increasing in-center revenue. During the quarter, we opened new centers in Chanhassen, Minnesota, Austin, Texas, and Romeoville, Illinois. We now operate 44 centers nationally with one more planned center opening during the fourth quarter in San Antonio, Texas. Total memberships grew 20.9% to more than 345,000, driven primarily by the ramp at centers opened in 2004 and both new center and presale activities at seven locations since the beginning of 2005.”

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Life Time Fitness Third Quarter 2005 Results — Page 2

Three and Nine Months Ended September 30, 2005, Financial Highlights:
Total revenue for the third quarter grew 28.3% to $101.6 million driven primarily by growth in membership dues and in-center revenue. Total revenue for the first nine months of 2005 grew 24.6% to $286.5 million from $229.9 million during the same period last year.

• Membership dues revenue for the third quarter grew 28.8% to $67.6 million from $52.5 million in Q3 2004. Year-to-date membership dues revenue grew 26.0% to $192.4 million from $152.7 million during the same period last year.

• Enrollment fee revenue for the third quarter grew 1.8% to $5.3 million from $5.2 million in Q3 2004. Year-to-date enrollment fee revenue totaled $15.4 million, up 4.4% from $14.8 million during the prior-year period.

• In-center revenue for the third quarter grew 40.4% to $25.7 million from $18.3 million in Q3 2004. Year-to-date in-center revenue grew 35.5% to $72.4 million compared to $53.4 million during the same period last year.

• Same-center revenue increased 7.9% during the third quarter compared to the prior-year period.

• Total revenue per membership averaged $298 in the third quarter, up 6.4% from the prior-year period. Total in-center revenue per membership averaged $78 in the third quarter, up 15.2% from the prior-year period.

• Other revenue for the third quarter, including media division advertising, our restaurant and event sponsorships, totaled $3.1 million compared to $3.2 million in the prior-year period. Year-to-date other revenue totaled $6.4 million compared to $9.1 million in the same period last year.

Total operating expenses during Q3 2005 totaled $80.4 million compared to $61.8 million for Q3 2004, driven primarily by increased expenses to support new centers, membership growth and presale activities. Year-to-date operating expenses totaled $227.7 million compared with $182.2 million for the same period last year.

• Center operating expenses totaled $56.6 million in Q3 2005 compared to $42.5 million in Q3 2004. Year-to-date center operating expenses totaled $159.0 million compared with $122.0 million during the same period last year.

• Advertising and marketing expenses totaled $4.2 million for Q3 2005 compared to $2.8 million for the same period last year. Year-to-date advertising and marketing expenses totaled $11.1 million compared with $9.3 million during the prior-year period.

• General and administrative expenses totaled $6.5 million for the third quarter compared to $4.3 million in the prior-year period. For the nine months ended September 30, 2005, general and administrative expenses totaled $20.4 million compared with $15.9 million in the prior-year period.

• Other operating expenses and depreciation and amortization expenses totaled $13.1 million during Q3 2005 compared to $12.1 million in Q3 2004. Year-to-date operating expenses in the same areas were $37.2 million compared with $35.0 million in the prior-year period.

• Total operating margins were 20.8% for Q3 2005 compared to 22.0% in the same period last year. This margin reduction was driven primarily by the nine centers in their first year of operation at the end of the third quarter. Year-to-date operating margins were 20.6% compared with 20.8% for the prior-year period.

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Life Time Fitness Third Quarter 2005 Results — Page 3

Net income during Q3 2005 grew 35.8% to $10.7 million from $7.9 million in Q3 2004 driven by continued revenue growth and efficient use of capital.

• For the nine months ended September 30, 2005, net income grew 40.4% to $29.1 million compared with $20.8 million in the prior-year period.

• Net income margin for Q3 2005 was 10.6%, up from 10.0% in Q3 2004. The year-to-date net income margin was 10.2%, up from 9.0% for the same period last year.

EBITDA for Q3 2005 grew 25.5% to $31.6 million from $25.1 million in Q3 2004.

• Year-to-date EBITDA grew 25.5% to $87.7 million from $69.9 million for the same period last year.

• As a percentage of total revenue, EBITDA was 31.1% in Q3 2005, down from 31.7% in Q3 2004. Year-to-date EBITDA margin was 30.6%, up from 30.4% for the same period last year.

Cash flow from operations for the year-to-date period grew 56.6% to $81.0 from $51.7 million for the year-to-date period.

     Weighted average fully diluted shares for the third quarter totaled 36.5 million compared to 35.4 million shares in Q3 2004.

Updated 2005 Business Outlook:
The following statements are based on the Company’s expectations for fiscal year 2005, subject to the risks and uncertainties described below.

• 2005 full-year total revenue is expected to grow 22-24% (or $381-$387 million) driven by new center growth, membership ramp at new and existing centers, and in-center revenue growth.

• 2005 full-year net income is expected to grow 34-36% (or $38.7-$39.3 million), up from 32-34% (or $38.1-$38.7 million), driven by our growth strategies.

• 2005 diluted earnings per share are expected to grow 22-24% (or $1.06-$1.08), up from 21-23% (or $1.05-$1.07), driven by net income growth and offset by the increase in weighted average diluted shares resulting from the initial public offering in 2004.

     As announced on October 13, 2005, the Company will hold a conference call today at 10:00 a.m. (EDT) to discuss third quarter and nine months ended 2005 results. Bahram Akradi, chairman and chief executive officer, and Michael Robinson, executive vice president and chief financial officer, will host the conference call. The conference call will be Web cast and may be accessed via the Company’s Investor Relations section of its Web site at www.lifetimefitness.com. A replay of the call will be available via the Company’s Web site beginning at 1:00 p.m. (EDT) today.

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Life Time Fitness Third Quarter 2005 Results — Page 4

About Life Time Fitness, Inc.

     Life Time Fitness, Inc. (NYSE: LTM) operates distinctive and large sports and athletic, professional fitness, family recreation and resort/spa centers. As of October 27, 2005, the Company operated 44 centers in eight states, including Arizona, Illinois, Indiana, Michigan, Minnesota, Ohio, Texas and Virginia. The Company also provides consumers with personal training consultation, full-service spas and cafés, corporate wellness programs, health and nutrition education, the healthy lifestyle magazine — Experience Life, athletic events, and nutritional products and supplements. Life Time Fitness is headquartered in Eden Prairie, Minnesota (www.lifetimefitness.com). LIFE TIME FITNESS, the LIFE TIME FITNESS logo, and EXPERIENCE LIFE are registered trademarks of Life Time Fitness, Inc. All other trademarks or registered trademarks are the property of their respective owners.

Risks & Uncertainties

     Certain information contained in this press release, which does not relate to historical financial information, including the business outlook, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause the Company’s actual results in the future to differ materially from its historical results and those presently anticipated or projected. The Company wishes to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update such statement to reflect events or circumstances arising after such date. Among risks and uncertainties are identifying and acquiring suitable sites for new sports and athletic, professional fitness, family recreation and resort/spa centers, opening new centers, attracting and retaining members and other factors set forth in the Company’s filings with the Securities and Exchange Commission. Net earnings per share could also be affected by the number of shares outstanding, which depends on factors such as the number of shares issued upon exercise of stock options and future grants of awards pursuant to equity-based incentive plans. All remarks made during the Company’s financial results conference call will be current at the time of the call and the Company undertakes no obligation to update the replay.

LIFE TIME FITNESS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)

	September 30, 2005			December 31, 2004
	(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents	$	923		$	10,211
Accounts receivable, net		3,705			1,187
Inventories		4,984			4,971
Prepaid expenses and other current assets		7,274			7,275
Deferred membership origination costs		9,500			8,271
Deferred tax asset		—			1,597
Income tax receivable		1,879			4,579
Total current assets		28,265			38,091
Property and equipment, net		600,724			503,690
Restricted cash		5,200			12,092
Deferred membership origination costs		8,003			7,061
Other assets		13,473			11,153
Total assets	$	655,665		$	572,087
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Current maturities of long-term debt	$	14,964		$	47,477
Accounts payable		7,980			5,762
Construction accounts payable		22,142			17,633
Accrued expenses		25,764			19,152
Deferred revenue		23,184			20,019
Total current liabilities		94,034			110,043
Long-term debt, net of current portion		218,546			161,767
Deferred rent liability		5,354			3,678
Deferred income taxes		35,114			33,701
Deferred revenue		14,293			12,264
Total liabilities		367,341			321,453
Shareholders’ equity:
Undesignated preferred stock		—			—
Common stock		700			676
Additional paid-in capital		221,002			209,931
Deferred compensation		(2,616	)		(66	)
Retained earnings		69,238			40,093
Total shareholders’ equity		288,324			250,634
Total liabilities and shareholders’ equity	$	655,665		$	572,087

LIFE TIME FITNESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)

	For the						For the
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
REVENUE:
Membership dues	$	67,589		$	52,477		$	192,379		$	152,662
Enrollment fees		5,279			5,185			15,415			14,764
In-center revenue		25,680			18,290			72,383			53,404
Total center revenue		98,548			75,952			280,177			220,830
Other revenue		3,064			3,233			6,370			9,114
Total revenue		101,612			79,185			286,547			229,944
OPERATING EXPENSES:
Center operations		56,631			42,529			159,029			122,048
Advertising and marketing		4,161			2,838			11,072			9,292
General and administrative		6,536			4,302			20,357			15,852
Other operating		3,014			4,637			9,178			13,586
Depreciation and amortization		10,095			7,489			28,019			21,407
Total operating expenses		80,437			61,795			227,655			182,185
Income from operations		21,175			17,390			58,892			47,759
OTHER INCOME (EXPENSE):
Interest expense, net		(3,278	)		(4,285	)		(10,347	)		(13,346	)
Equity in earnings of affiliate		283			257			836			778
Total other income (expense)		(2,995	)		(4,028	)		(9,511	)		(12,568	)
INCOME BEFORE INCOME TAXES		18,180			13,362			49,381			35,191
Provision for income taxes		7,443			5,458			20,236			14,428
NET INCOME		10,737			7,904			29,145			20,763
Accretion on redeemable preferred stock		—			95			—			3,570
NET INCOME APPLICABLE TO COMMON SHAREHOLDERS	$	10,737		$	7,809		$	29,145		$	17,193
BASIC EARNINGS PER COMMON SHARE	$	0.31		$	0.24		$	0.85		$	0.79
DILUTED EARNINGS PER COMMON SHARE	$	0.29		$	0.22		$	0.81		$	0.65
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC		34,846			32,533			34,343			21,628
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED		36,476			35,385			36,201			32,177

LIFE TIME FITNESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	For the
	Nine Months Ended September 30,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	29,145		$	20,763
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		28,019			21,407
Deferred income taxes		3,011			3,505
Loss on disposal of property, net		421			318
Amortization of deferred financing costs		864			1,137
Compensation cost related to stock options		269			213
Tax benefit from exercise of stock options		4,916			733
Changes in operating assets and liabilities		14,362			3,650
Net cash provided by operating activities		81,007			51,726
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (excluding non-cash purchases supplementally noted below)		(122,790	)		(94,682	)
Increase (decrease) in construction accounts payable		(2,682	)		1,862
Proceeds from sale of property		3,842			1,249
Increase in other assets		(2,010	)		(1,761	)
Decrease (increase) in restricted cash		6,892			(1,995	)
Net cash used in investing activities		(116,748	)		(95,327	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings		228,581			26,977
Repayments on long-term borrowings		(204,314	)		(65,292	)
Increase in deferred financing costs		(1,174	)		(1,061	)
Proceeds from initial public offering, net of underwriting discounts and offering costs		—			80,653
Proceeds from exercise of stock options		3,360			887
Net cash provided by financing activities		26,453			42,164
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(9,288	)		(1,437	)
CASH AND CASH EQUIVALENTS — Beginning of period		10,211			18,446
CASH AND CASH EQUIVALENTS — End of period	$	923		$	17,009
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for interest, net of capitalized interest	$	11,714		$	12,549
Cash payments for income taxes	$	9,610		$	8,786
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment purchases financed through notes payable	$	—		$	2,954
Property and equipment purchases financed through capital leases	$	—		$	145

Non-GAAP Financial Measures

     This release contains a non-GAAP disclosure, EBITDA, which consists of net income plus interest expense, net, provision for income taxes and depreciation and amortization. This term, as the Company defines it, may not be comparable to a similarly titled measure used by other companies and is not a measure of performance presented in accordance with GAAP. The Company uses EBITDA as a measure of operating performance. The funds depicted by EBITDA are not necessarily available for discretionary use if they are reserved for particular capital purposes, to maintain compliance with debt covenants, to service debt or to pay taxes. EBITDA should not be considered as a substitute for net income, cash flows provided by operating activities or other income or cash flow data prepared in accordance with GAAP. Additional details related to EBITDA are provided in the Form 8-K that the Company filed with the Securities and Exchange Commission on the date of this press release.

     The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA:

LIFE TIME FITNESS, INC.
RECONCILIATION OF NET INCOME TO EARNINGS BEFORE INTEREST,
INCOME TAXES AND DEPRECIATION AND AMORTIZATION
(In thousands)
(Unaudited)

	For the				For the
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2005		2004		2005		2004
Net Income	$	10,737	$	7,904	$	29,145	$	20,763
Interest expense, net		3,278		4,285		10,347		13,346
Provision for income taxes		7,443		5,458		20,236		14,428
Depreciation and amortization		10,095		7,489		28,019		21,407
EBITDA	$	31,553	$	25,136	$	87,747	$	69,944