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) April 27, 2006

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 April 27, 2006, Life Time Fitness, Inc. (the “Company”) reported its financial results for its fiscal quarter ended March 31, 2006. See the Company’s press release dated April 27, 2006, which is furnished as Exhibit 99 and incorporated by reference in this Current Report on Form 8-K.

     The press release furnished as Exhibit 99 and certain information the Company intends to disclose on the conference call scheduled for 10:00 a.m. eastern time on April 27, 2006 include certain non-GAAP financial measures. The reconciliations of these measures to the most directly comparable GAAP financial measures are included in the earnings release and/or are included below. 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 the non-GAAP financial measures presented in the press release.

RECONCILIATION OF THE IMPACT OF SHARE-BASED COMPENSATION EXPENSE ON
CENTER OPERATIONS EXPENSE, GENERAL AND ADMINISTRATIVE EXPENSE,
INCOME FROM OPERATIONS, NET INCOME AND EARNINGS PER SHARE
(In thousands except per share data)
(Unaudited)

	For the Three Months Ended March 31, 2006												For the Three Months Ended March 31, 2005
								Adjusted for												Adjusted for
								Exclusion of												Exclusion of
						Share-based		Share-based										Share-based		Share-based
	As		% of			Compensation		Compensation		% of			As		% of			Compensation		Compensation		% of
	Reported		Revenue			Expense		Expense		Revenue			Reported		Revenue			Expense		Expense		Revenue
Operating Expenses:
Center operations	$	65,093		56.4	%	$	388	$	64,705		56.1	%	$	49,571		55.5	%	$	—	$	49,571		55.5	%
General and administrative	$	8,815		7.6	%	$	822	$	7,993		6.9	%	$	6,490		7.3	%	$	28	$	6,462		7.2	%
Income from operations	$	21,172		18.3	%	$	1,210	$	22,382		19.4	%	$	17,303		19.4	%	$	28	$	17,331		19.4	%
Net income (1)	$	10,433		9.0	%	$	730	$	11,163		9.7	%	$	8,121		9.1	%	$	17	$	8,138		9.1	%
Basic earnings per common share	$	0.29						$	0.31				$	0.24						$	0.24
Diluted earnings per common share	$	0.28						$	0.30				$	0.23						$	0.23
Weighted average number of common shares outstanding — basic		35,701							35,701					33,824							33,824
Weighted average number of common shares outstanding — diluted		36,971							36,971					35,928							35,928

Notes:

(1) Share-based compensation expense calculated using assumed effective tax rates of 39.7% and 41.0% for the three months ended March 31, 2006 and 2005, respectively.

     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.

2

     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.

     Financial Measures Excluding the Impact of Share-Based Compensation Expense. The Company provides certain financial measures for the first quarter of 2006, as well as guidance for fiscal 2006 with respect to net income and diluted earnings per common share, excluding the impact of share-based compensation expense. The Company’s management uses these measures to monitor and evaluate operating results and trends and to gain an understanding of the comparative operating performance of the Company. The Company believes these measures enable investors to assess the Company’s performance on the same basis applied by management and to ease comparisons of the Company’s operating performance from period to period and among other companies that separately identify share-based compensation expenses.

Item 9.01. Financial Statements and Exhibits.

     The following Exhibit is being furnished herewith:

     99     Press Release dated April 27, 2006.

3

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: April 27, 2006	By	/s/ Michael R. Robinson
		Michael R. Robinson
		Executive Vice President and Chief Financial Officer

4

EXHIBIT INDEX

No.	Exhibit	Manner of Filing
99	Press Release dated April 27, 2006.	Filed Electronically

EX-99

Exhibit 99

Investor Contact: Ken Cooper – 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 FIRST QUARTER 2006 FINANCIAL RESULTS
Company Reports Revenue Growth of 29.2% and Net Income Growth of 28.5%

EDEN PRAIRIE, Minn. (April 27, 2006) – Life Time Fitness, Inc. (NYSE: LTM), a national operator of distinctive and large health and fitness centers, today reported its operating results for the first quarter ended March 31, 2006.

     First quarter 2006 revenue grew 29.2% to $115.4 million from $89.3 million during the same period last year. Net income during the quarter grew 28.5% to $10.4 million, or $0.28 per diluted share. This compares to net income of $8.1 million, or $0.23 per diluted share, for 1Q 2005.

     “We are pleased with our first quarter 2006 performance, which was driven by continued focus and execution on our fundamental growth strategies,” said Bahram Akradi, Life Time Fitness chairman and chief executive officer. “During the quarter, we continued our expansion efforts with openings in Columbia, Maryland and Minnetonka, Minnesota. We closed the quarter with a total of 48 open centers in nine states and have commenced construction on the six additional new centers we plan to open this year. Total memberships grew 17.9%, ending with more than 383,000. We also are pleased with our in-center revenue growth of 42.6%, which was driven primarily by membership ramp, targeted marketing programs, and new products and services.”

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Life Time Fitness First Quarter 2006 Results – Page 2

Three Months Ended March 31, 2006, Financial Highlights:
Total revenue for the first quarter grew 29.2% to $115.4 million, driven primarily by growth in membership dues and in-center revenue.

(Period-over-period growth)		1Q 2006 vs. 1Q 2005
•	Membership dues		25.3	%
•	Enrollment fees		8.5	%
•	In-center revenue		42.6	%
•	Same-center revenue		7.7	%
•	Average center revenue / membership	$313 – up 8.1%
•	Average in-center revenue / membership	$89 — up 19.0%

Total operating expenses during 1Q 2006 totaled $94.3 million compared to $72.0 million for 1Q 2005, driven primarily by increased expenses to support new centers, membership growth and presale activities. Share-based compensation expense, including stock option expense from the adoption of FAS 123R and restricted stock expense, totaled $1.2 million for the quarter. Operating margin was 18.3% for 1Q 2006, down from 19.4% in the prior-year period. Excluding share-based compensation expense, operating margin was 19.4% for 1Q 2006.

(Expense as a percent of total revenue)		1Q 2006 vs. 1Q 2005
•	Center operations (including $0.4 million of share-based compensation expense in 1Q 2006)	56.4% vs. 55.5%
•	Advertising and marketing	5.1% vs. 4.8%
•	General and administrative (including $0.8 million of share-based compensation expense in 1Q 2006)	7.6% vs. 7.3%
•	Other operating	2.6% vs. 3.3%
•	Depreciation and amortization	10.0% vs. 9.8%

Net income during 1Q 2006 grew 28.5% to $10.4 million from $8.1 million in 1Q 2005, driven by continued top-line growth, efficient use of capital and a lower effective tax rate. Net income margin for 1Q 2006 was 9.0%, down slightly from 9.1% in the prior-year period.

EBITDA for 1Q 2006 grew 25.1% to $32.9 million from $26.3 million in 1Q 2005. As a percentage of total revenue, EBITDA was 28.5% in 1Q 2006, compared to 29.5% in 1Q 2005.

Cash flows from operations for the first quarter grew 35.2% to $33.8 million from $25.0 million in the prior-year period.

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Life Time Fitness First Quarter 2006 Results – Page 3

Weighted average fully diluted shares for 1Q 2006 totaled 37.0 million compared to 35.9 million shares in 1Q 2005.

Updated 2006 Business Outlook:
The following statements are based on the Company’s current expectations for fiscal year 2006 compared to previously stated expectations and subject to the risks and uncertainties described below:

• Total revenue is expected to be $480-$488 million (approximately 23-25% growth), up from $475-485 million (or 22-24% growth), driven by new center growth, membership ramp at new and existing centers, and in-center revenue growth.

• Net income (excluding share-based compensation expense) is expected to be $51.2-$51.8 million (approximately 24-26% growth), up from $50.7-$51.3 million (or 23-25% growth), driven by our growth strategies. Including share-based compensation expense, net income is expected to be $46.7-$47.3 million, up from $46.2-$46.8 million.

• Diluted earnings per common share (excluding share-based compensation expense) is expected to be $1.38-$1.40 (approximately 22-24% growth), up from $1.37-$1.39 (or 21-23% growth), driven by net income growth. Including share-based compensation expense, diluted earnings per common share is expected to be $1.26-$1.28, up from $1.25-$1.27.

     As announced on April 17, 2006, the Company will hold a conference call today at 10:00 a.m. Eastern time to discuss its first quarter 2006 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. Eastern time on April 27, 2006.

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 April 27, 2006, the Company operated 48 centers in nine states, including Arizona, Illinois, Indiana, Maryland, 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.

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Life Time Fitness First Quarter 2006 Results – Page 4

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 these factors are identifying and acquiring suitable sites for new centers, opening new centers, attracting and retaining members and other factors set forth in the Company’s filings with the Securities and Exchange Commission. Diluted 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)

	March 31, 2006			December 31, 2005
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,548		$	4,680
Accounts receivable, net		1,661			4,267
Inventories		6,009			5,669
Prepaid expenses and other current assets		9,514			7,187
Deferred membership origination costs		10,745			10,082
Income tax receivable		2,134			3,510
Total current assets		32,611			35,395
PROPERTY AND EQUIPMENT, net		695,771			661,371
RESTRICTED CASH		2,809			3,915
DEFERRED MEMBERSHIP ORIGINATION COSTS		9,259			8,410
OTHER ASSETS		14,660			14,369
TOTAL ASSETS	$	755,110		$	723,460
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	15,888		$	14,447
Accounts payable		7,151			9,964
Construction accounts payable		23,989			25,811
Accrued expenses		35,641			27,862
Deferred revenue		26,105			23,434
Total current liabilities		108,774			101,518
LONG-TERM DEBT, net of current portion		257,124			258,835
DEFERRED RENT LIABILITY		5,642			5,492
DEFERRED INCOME TAXES		35,503			35,419
DEFERRED REVENUE		15,957			14,352
Total liabilities		423,000			415,616
SHAREHOLDERS’ EQUITY
Common stock		723			712
Additional paid-in capital		241,740			228,132
Deferred compensation		(2,090	)		(2,306	)
Retained earnings		91,737			81,306
Total shareholders’ equity		332,110			307,844
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	755,110		$	723,460

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

	For the
	Three Months Ended
	March 31,
	2006			2005
REVENUE:
Membership dues	$	75,799		$	60,477
Enrollment fees		5,083			4,684
In-center revenue		32,334			22,674
Total center revenue		113,216			87,835
Other revenue		2,209			1,493
Total revenue		115,425			89,328
OPERATING EXPENSES:
Center operations (including $388 and $0 related to share-based compensation expense, respectively)		65,093			49,571
Advertising and marketing		5,839			4,292
General and administrative (including $822 and $28 related to share-based compensation expense, respectively)		8,815			6,490
Other operating		2,987			2,938
Depreciation and amortization		11,519			8,734
Total operating expenses		94,253			72,025
Income from operations		21,172			17,303
OTHER INCOME (EXPENSE):
Interest expense, net		(4,117	)		(3,826	)
Equity in earnings of affiliate		243			287
Total other income (expense)		(3,874	)		(3,539	)
INCOME BEFORE INCOME TAXES		17,298			13,764
PROVISION FOR INCOME TAXES		6,865			5,643
NET INCOME	$	10,433		$	8,121
BASIC EARNINGS PER COMMON SHARE	$	0.29		$	0.24
DILUTED EARNINGS PER COMMON SHARE	$	0.28		$	0.23
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC		35,701			33,824
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – DILUTED		36,971			35,928

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

	For the
	Three Months Ended
	March 31,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	10,433		$	8,121
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		11,519			8,734
Deferred income taxes		85			(1,440	)
Loss on disposal of property, net		196			286
Amortization of deferred financing costs		159			291
Share-based compensation		1,210			28
Tax benefit from exercise of stock options		—			479
Excess tax benefit from stock options		(5,331	)		—
Changes in operating assets and liabilities		15,478			8,438
Other		64			64
Net cash provided by operating activities		33,813			25,001
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(47,673	)		(36,995	)
Decrease in construction accounts payable		(1,147	)		(194	)
Proceeds from sale of property and equipment		20			3,772
Increase in other assets		(455	)		(539	)
Decrease in restricted cash		1,106			792
Net cash used in investing activities		(48,149	)		(33,164	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings		—			50,328
Repayments on long-term borrowings		(3,656	)		(48,904	)
Proceeds from revolving credit facility, net		3,400			—
Excess tax benefit from stock options		5,331			—
Proceeds from exercise of stock options		7,129			577
Net cash used in financing activities		12,204			2,001
DECREASE IN CASH AND CASH EQUIVALENTS		(2,132	)		(6,162	)
CASH AND CASH EQUIVALENTS — Beginning of period		4,680			10,211
CASH AND CASH EQUIVALENTS — End of period	$	2,548		$	4,049
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for interest, net of capitalized interest	$	4,558		$	4,147
Cash payments for income taxes	$	74		$	115
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of restricted stock	$	100		$	142

Non-GAAP Financial Measures

     This release contains three non-GAAP disclosures. The first is 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. The second is guidance concerning diluted earnings per share, excluding the impact of share-based compensation expense. The third is operating margins excluding the impact of share-based compensation expense. Additional details related to these non-GAAP disclosures 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 tables provide reconciliations of these non-GAAP measures to the most directly comparable GAAP measures:

RECONCILIATION OF NET INCOME TO EARNINGS BEFORE INTEREST,
INCOME TAXES AND DEPRECIATION AND AMORTIZATION
(In thousands)
(Unaudited)

	For the
	Three Months Ended
	March 31,
	2006		2005
Net income	$	10,433	$	8,121
Interest expense, net		4,117		3,826
Provision for income taxes		6,865		5,643
Depreciation and amortization		11,519		8,734
EBITDA	$	32,934	$	26,324

RECONCILIATION OF THE IMPACT OF SHARE-BASED COMPENSATION EXPENSE
ON 2006 EARNINGS GUIDANCE
(In thousands except per common share data)
(Unaudited)

	GUIDANCE
	Fiscal 2006 - Estimated Range
	Low		High
Net Income
Estimated net income for fiscal 2006	$	46,700	$	47,300
Estimated impact of share-based compensation expense in fiscal 2006 for time-vesting options and restricted shares		3,400		3,400
Estimated impact of share-based compensation expense in fiscal 2006 for market condition vesting of initial public offering options 1		1,100		1,100
Estimated net income for fiscal 2006, excluding the impact of estimated share-based compensation expense	$	51,200	$	51,800
Diluted Earnings per Common Share
Estimated diluted earnings per common share for fiscal 2006	$	1.26	$	1.28
Estimated impact of share-based compensation expense in fiscal 2006 for time- vesting options and restricted shares		0.09		0.09
Estimated impact of share-based compensation expense in fiscal 2006 for market condition vesting of initial public offering options 1		0.03		0.03
Estimated diluted earnings per common share for fiscal 2006, excluding the impact of estimated share-based compensation expense	$	1.38	$	1.40

¹ In connection with the Company’s initial public offering, the Company granted options to certain members of senior management, which have a market condition vesting component. At March 31, 2006, approximately 40% of these options remain unvested. Approximately half of these unvested options vested in early April 2006, when the Company’s stock price remained above $40 per share for sixty consecutive days. The balance of these unvested options will vest when the Company’s stock price remains above $45 per share for sixty consecutive days. If the market condition vesting criteria are achieved in fiscal 2006, the share-based compensation expense identified above will be recognized in fiscal 2006.

RECONCILIATION OF THE IMPACT OF SHARE-BASED COMPENSATION EXPENSE
ON OPERATING MARGINS
(In thousands except percentages)
(Unaudited)

	1Q 2006			1Q 2005
Income from operations	$	21,172		$	17,303
Add back share-based compensation expense		1,210			28
Income from operations excluding share-based compensation expense	$	22,382		$	17,331
Operating margin		18.3	%		19.4	%
Operating margin excluding share-based compensation expense as % of total revenue		19.4	%		19.4	%