EX-99.1 2 c50793exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
(LIFETIME LOGO)
Investor Contact: Ken Cooper — 952-229-7427 or ir@lifetimefitness.com
Media Contact: Jason Thunstrom — 952-229-7435 or pr@lifetimefitness.com
FOR IMMEDIATE RELEASE
LIFE TIME FITNESS ANNOUNCES FIRST QUARTER 2009 FINANCIAL RESULTS
Company Reports Revenue Growth of 11.9% and
Earnings Per Diluted Share of $0.38 for the Quarter
CHANHASSEN, Minn. (April 23, 2009) — Life Time Fitness, Inc. (NYSE: LTM) today reported its operating results for the first quarter ended March 31, 2009.
     Revenue for the first quarter of 2009 grew 11.9% to $206.4 million from $184.5 million during the same period last year. Net income during the quarter was $15.1 million, or $0.38 per diluted share. This compares to net income of $17.4 million, or $0.44 per diluted share, for 1Q 2008.
     “We remain focused on driving connectivity initiatives that make Life Time an ever-increasing part of members’ lives,” said Bahram Akradi, Life Time Fitness chairman and chief executive officer. “We’re also concentrating on delivering additional membership value and creating strong social networks within our centers to enhance the impact we can have on members’ health and wellness. As expected, our centers experienced ongoing, strong usage, and membership growth increased for the fourth consecutive quarter. At the same time, we saw reduced revenue per membership, driven by lower average dues and slower in-center revenue growth. We will continue to manage this aggressively and eliminate unnecessary expenses from our cost structure, while also upholding the experience our members expect. Finally, as it relates to our near-term center growth plan, we will open new locations at a rate that is within the boundaries of our cash flow generated by operations.”
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Life Time Fitness First Quarter 2009 Results — Page 2
     During the first quarter, Life Time Fitness opened two centers, including Berkeley Heights, its second location in New Jersey, and Lake Houston, its fifth location in Houston, Texas. The Company is scheduled to open its third and final planned center for 2009 in June, located in Collierville, Tennessee (Memphis area). This location will mark the Company’s first center in Tennessee.
Three Months Ended March 31, 2009, Financial Highlights:
Total revenue for the first quarter grew 11.9% to $206.4 million, driven primarily by growth in membership dues.
     
(Period-over-period growth)   1Q 2009 vs. 1Q 2008
•       Membership dues
  14.8% 
•       Enrollment fees
  (0.9%) 
•       In-center revenue
  7.3% 
•       Same-center revenue
  (2.7%) 
•       Average center revenue / membership
  $352 — down 2.9%
•       Average in-center revenue / membership
  $103 — down 7.0%
Memberships grew 15.1% to 599,919 at March 31, 2009, from 521,177 at March 31, 2008.
Total operating expenses during 1Q 2009 totaled $173.9 million compared to $148.4 million for 1Q 2008, driven by expenses associated with our revenue growth as well as increased lease expense from the sale and leaseback of six centers in the second half of 2008 and increased depreciation from recent large format center openings and remodels. Operating margin was 15.7% for 1Q 2009, compared to 19.5% in the prior-year period.
     
(Expense as a percent of total revenue)   1Q 2009 vs. 1Q 2008
•       Center operations
  61.5% vs. 58.3%
•       Advertising and marketing
  4.0% vs. 5.1%
•       General and administrative
  5.7% vs. 5.8%
•       Other operating
  2.4% vs. 2.3%
•       Depreciation and amortization
  10.7% vs. 9.0%
Net income during 1Q 2009 was $15.1 million compared with $17.4 million in 1Q 2008. Net income margin for 1Q 2009 was 7.3% compared with 9.4% in the prior-year period.
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Life Time Fitness First Quarter 2009 Results — Page 3
EBITDA for 1Q 2009 grew 3.7% to $54.9 million from $52.9 million in 1Q 2008. As a percentage of total revenue, EBITDA was 26.6% in 1Q 2009, compared to 28.7% in the prior-year period.
Cash flows from operations for the first quarter were $49.7 million as compared with $49.3 million in the prior-year period.
Weighted average diluted shares for 1Q 2009 totaled 39.4 million, the same as the prior-year period.
Updated 2009 Business Outlook:
The following statements are based on the Company’s current expectations for fiscal year 2009 and are subject to the risks and uncertainties described below:
  •   Revenue is expected to be $830-$860 million.
 
  •   Net income is expected to be $62-$68 million (updated from $60-$68 million).
 
  •   Diluted earnings per common share is expected to be $1.55-$1.70 (updated from $1.50-$1.70).
     As announced on April 16, 2009, the Company will hold a conference call today at 10:00 a.m. ET to discuss its first quarter 2009 results. Bahram Akradi, chairman and chief executive officer, Michael Robinson, executive vice president and chief financial officer, and Kenneth Cooper, vice president of finance, 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 lifetimefitness.com. A replay of the call will be available the same day via the Company’s Web site beginning at approximately 1:00 p.m. ET.
     The Company also announced on April 16, 2009, that its Annual Meeting of Shareholders will be held at the Life Time Fitness headquarters (2902 Corporate Place in Chanhassen, Minnesota) at 2:00 p.m. ET on Thursday, April 23, 2009. The meeting will be Web cast and may be accessed live via the Company’s Investor Relations section of its Web site at lifetimefitness.com. A replay of the Web cast will be available beginning at approximately 4:00 p.m. CT on April 23, 2009, and remain available for 30 days.
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About Life Time Fitness, Inc.
Life Time Fitness, Inc. (NYSE:LTM) operates distinctive and large, multi-use sports and athletic, professional fitness, family recreation and resort and spa centers. The Company also provides consumers with personal training consultation, full-service spas and cafes, corporate wellness programs, health and nutrition education, the healthy lifestyle magazine, Experience Life, athletic events and nutritional products. As of April 23, 2009, Life Time Fitness operated 83 centers in 18 states, including Arizona, Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Maryland, Michigan, Minnesota, Missouri, Nebraska, New Jersey, North Carolina, Ohio, Texas, Utah and Virginia. Life Time Fitness is headquartered in Chanhassen, Minnesota, and can be located on the Web at lifetimefitness.com. LIFE TIME FITNESS, LIFE TIME ATHLETIC, EXPERIENCE LIFE, and the LIFE TIME FITNESS TRIATHLON SERIES are trademarks of Life Time Fitness, Inc. All other trademarks or registered trademarks are the property of their respective owners.
Risks and Uncertainties
Certain information contained in this press release 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. Among these factors are attracting and retaining members, risks related to our debt levels and debt covenants, our ability to access existing credit facilities and obtain additional financing, competition from other health and fitness centers, identifying and acquiring suitable sites for new centers, delays in opening new centers 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 as well as stock offerings. The Company cautions 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. 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. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
    March 31, 2009     December 31, 2008  
    (Unaudited)          
ASSETS
                
CURRENT ASSETS:
                
Cash and cash equivalents
   $ 10,576     $ 10,829  
Accounts receivable, net
     3,477       6,114  
Inventories and center operating supplies
     14,126       14,632  
Prepaid expenses and other current assets
     14,265       10,994  
Deferred membership origination costs
     20,976       19,877  
Deferred income taxes
     1,668       1,365  
 
            
Total current assets
     65,088       63,811  
PROPERTY AND EQUIPMENT, net
     1,523,265       1,515,957  
RESTRICTED CASH
     3,792       3,936  
DEFERRED MEMBERSHIP ORIGINATION COSTS
     14,205       14,210  
OTHER ASSETS
     50,933       49,789  
 
            
TOTAL ASSETS
   $ 1,657,283     $ 1,647,703  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
CURRENT LIABILITIES:
                
Current maturities of long-term debt
   $ 10,712     $ 10,335  
Accounts payable
     14,224       14,842  
Construction accounts payable
     43,347       63,418  
Accrued expenses
     54,585       46,230  
Deferred revenue
     39,251       36,098  
 
            
Total current liabilities
     162,119       170,923  
LONG-TERM DEBT, net of current portion
     703,704       702,569  
DEFERRED RENT LIABILITY
     27,274       27,925  
DEFERRED INCOME TAXES
     51,502       51,982  
DEFERRED REVENUE
     13,050       13,719  
OTHER LIABILITIES
     28,860       27,684  
 
            
Total liabilities
     986,509       994,802  
 
            
SHAREHOLDERS’ EQUITY:
                
Common stock
     806       793  
Additional paid-in capital
     387,424       385,095  
Retained earnings
     286,825       271,711  
Accumulated other comprehensive loss
     (4,281 )     (4,698 )
 
            
Total shareholders’ equity
     670,774       652,901  
 
            
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 1,657,283     $ 1,647,703  
 
            

 

 

LIFE TIME FITNESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
                 
    For the  
    Three Months Ended  
    March 31,  
    2009     2008  
REVENUE:
                
Membership dues
   $ 137,397     $ 119,648  
Enrollment fees
     6,473       6,533  
In-center revenue
     59,302       55,265  
 
            
Total center revenue
     203,172       181,446  
Other revenue
     3,262       3,005  
 
            
Total revenue
     206,434       184,451  
 
            
OPERATING EXPENSES:
                
Center operations
     126,974       107,580  
Advertising and marketing
     8,298       9,498  
General and administrative
     11,708       10,672  
Other operating
     4,887       4,095  
Depreciation and amortization
     22,064       16,590  
 
            
Total operating expenses
     173,931       148,435  
 
            
Income from operations
     32,503       36,016  
 
            
OTHER INCOME (EXPENSE):
                
Interest expense, net
     (7,474 )     (7,211 )
Equity in earnings of affiliate
     337       323  
 
            
Total other income (expense)
     (7,137 )     (6,888 )
 
            
INCOME BEFORE INCOME TAXES
     25,366       29,128  
PROVISION FOR INCOME TAXES
     10,252       11,724  
 
            
NET INCOME
   $ 15,114     $ 17,404  
 
            
BASIC EARNINGS PER COMMON SHARE
   $ 0.39     $ 0.45  
 
            
DILUTED EARNINGS PER COMMON SHARE
   $ 0.38     $ 0.44  
 
            
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC
     39,226       38,895  
 
            
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED
     39,392       39,363  
 
            

 

 

LIFE TIME FITNESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                 
    For the  
    Three Months Ended  
    March 31,  
    2009     2008  
CASH FLOWS FROM OPERATING ACTIVITIES:
                
Net income
   $ 15,114     $ 17,404  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
     22,064       16,590  
Deferred income taxes
     303       3,252  
Provision for doubtful accounts
     106       30  
Loss on disposal of property and equipment, net
     119       831  
Amortization of deferred financing costs
     669       235  
Share-based compensation
     2,234       1,782  
Excess tax benefit related to share-based payment arrangements
     —       (65 )
Equity in earnings of affiliate
     (337 )     (323 )
Changes in operating assets and liabilities
     8,218       9,568  
Other
     1,170       18  
 
            
Net cash provided by operating activities
     49,660       49,322  
 
            
 
                
CASH FLOWS FROM INVESTING ACTIVITIES:
                
Purchases of property and equipment
     (48,900 )     (100,485 )
Proceeds from sale of property and equipment
     4       392  
Increase in other assets
     (1,634 )     (7,215 )
Decrease in restricted cash
     144       3,252  
 
            
Net cash used in investing activities
     (50,386 )     (104,056 )
 
            
 
                
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Proceeds from long-term borrowings
     4,813       —  
Repayments of long-term borrowings
     (3,694 )     (2,415 )
Proceeds from (repayments of) revolving credit facility, net
     (300 )     54,200  
Increase in deferred financing costs
     (346 )     (310 )
Excess tax benefit related to share-based payment arrangements
     —       65  
Proceeds from exercise of stock options
     —       299  
 
            
Net cash provided by financing activities
     473       51,839  
 
            
 
                
DECREASE IN CASH AND CASH EQUIVALENTS
     (253 )     (2,895 )
CASH AND CASH EQUIVALENTS — Beginning of period
     10,829       5,354  
 
            
CASH AND CASH EQUIVALENTS — End of period
   $ 10,576     $ 2,459  
 
            

 

 

Non-GAAP Financial Measures
     This release contains a non-GAAP disclosure, Earnings Before Interest, Income Taxes and Depreciation and Amortization (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:
RECONCILIATION OF NET INCOME TO EBITDA
(In thousands)
(Unaudited)
                 
    For the  
    Three Months Ended  
    March 31,  
    2009     2008  
Net income
   $ 15,114     $ 17,404  
Interest expense, net
     7,474       7,211  
Provision for income taxes
     10,252       11,724  
Depreciation and amortization
     22,064       16,590  
 
            
EBITDA
   $ 54,904     $ 52,929