þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Minnesota (State or other jurisdiction of incorporation or organization) | 41-1689746 (I.R.S. Employer Identification No.) |
2902 Corporate Place Chanhassen, Minnesota (Address of principal executive offices) | 55317 (Zip Code) |
Large accelerated filer | þ | Accelerated filer | ¨ |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 13,126 | $ | 16,499 | |||
Accounts receivable, net | 8,151 | 9,272 | |||||
Center operating supplies and inventories | 30,195 | 27,240 | |||||
Prepaid expenses and other current assets | 28,881 | 26,826 | |||||
Deferred membership origination costs | 11,438 | 11,664 | |||||
Deferred income taxes | 2,912 | 8,813 | |||||
Income tax receivable | 1,813 | — | |||||
Total current assets | 96,516 | 100,314 | |||||
PROPERTY AND EQUIPMENT, net | 1,952,894 | 1,858,666 | |||||
RESTRICTED CASH | 447 | 2,087 | |||||
DEFERRED MEMBERSHIP ORIGINATION COSTS | 6,740 | 6,820 | |||||
GOODWILL | 40,198 | 37,176 | |||||
OTHER ASSETS | 66,134 | 67,111 | |||||
TOTAL ASSETS | $ | 2,162,929 | $ | 2,072,174 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Current maturities of long-term debt | $ | 12,288 | $ | 12,603 | |||
Accounts payable | 24,243 | 32,140 | |||||
Construction accounts payable | 40,163 | 25,208 | |||||
Accrued expenses | 64,191 | 63,333 | |||||
Deferred revenue | 42,555 | 34,753 | |||||
Total current liabilities | 183,440 | 168,037 | |||||
LONG-TERM DEBT, net of current portion | 723,133 | 691,867 | |||||
DEFERRED RENT LIABILITY | 23,810 | 22,490 | |||||
DEFERRED INCOME TAXES | 91,204 | 95,509 | |||||
DEFERRED REVENUE | 6,783 | 6,840 | |||||
OTHER LIABILITIES | 20,830 | 14,514 | |||||
Total liabilities | 1,049,200 | 999,257 | |||||
COMMITMENTS AND CONTINGENCIES (Note 6) | |||||||
SHAREHOLDERS’ EQUITY: | |||||||
Undesignated preferred stock, 10,000,000 shares authorized; none issued or outstanding | — | — | |||||
Common stock, $.02 par value, 75,000,000 shares authorized; 42,864,878 and 43,149,434 shares issued and outstanding, respectively | 858 | 864 | |||||
Additional paid-in capital | 427,761 | 447,912 | |||||
Retained earnings | 690,230 | 628,942 | |||||
Accumulated other comprehensive loss | (5,120 | ) | (4,801 | ) | |||
Total shareholders’ equity | 1,113,729 | 1,072,917 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 2,162,929 | $ | 2,072,174 |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
REVENUE: | |||||||||||||||
Membership dues | $ | 194,816 | $ | 184,895 | $ | 381,190 | $ | 360,365 | |||||||
Enrollment fees | 3,573 | 3,929 | 6,969 | 7,883 | |||||||||||
In-center revenue | 97,275 | 90,118 | 189,246 | 174,734 | |||||||||||
Total center revenue | 295,664 | 278,942 | 577,405 | 542,982 | |||||||||||
Other revenue | 12,444 | 9,362 | 21,450 | 13,769 | |||||||||||
Total revenue | 308,108 | 288,304 | 598,855 | 556,751 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Center operations | 176,798 | 166,554 | 346,760 | 327,269 | |||||||||||
Advertising and marketing | 9,629 | 9,689 | 20,588 | 20,045 | |||||||||||
General and administrative | 15,713 | 13,856 | 31,069 | 27,559 | |||||||||||
Other operating | 15,225 | 12,761 | 28,059 | 21,152 | |||||||||||
Depreciation and amortization | 30,017 | 28,861 | 59,279 | 55,821 | |||||||||||
Total operating expenses | 247,382 | 231,721 | 485,755 | 451,846 | |||||||||||
Income from operations | 60,726 | 56,583 | 113,100 | 104,905 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net of interest income | (6,434 | ) | (6,545 | ) | (12,563 | ) | (12,822 | ) | |||||||
Equity in earnings of affiliate | 378 | 395 | 724 | 768 | |||||||||||
Total other income (expense) | (6,056 | ) | (6,150 | ) | (11,839 | ) | (12,054 | ) | |||||||
INCOME BEFORE INCOME TAXES | 54,670 | 50,433 | 101,261 | 92,851 | |||||||||||
PROVISION FOR INCOME TAXES | 21,483 | 20,141 | 39,973 | 36,887 | |||||||||||
NET INCOME | $ | 33,187 | $ | 30,292 | $ | 61,288 | $ | 55,964 | |||||||
BASIC EARNINGS PER COMMON SHARE | $ | 0.80 | $ | 0.73 | $ | 1.48 | $ | 1.35 | |||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.80 | $ | 0.73 | $ | 1.47 | $ | 1.34 | |||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC | 41,456 | 41,462 | 41,376 | 41,313 | |||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – DILUTED | 41,659 | 41,750 | 41,644 | 41,777 |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
NET INCOME | $ | 33,187 | $ | 30,292 | $ | 61,288 | $ | 55,964 | |||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||
Foreign currency translation adjustments, net of taxes of $738, $276, $1,123 and $(11), respectively | $ | (1,123 | ) | $ | (691 | ) | $ | (1,707 | ) | $ | 37 | ||||
Unrealized gains (losses) on cash flow hedges, net of taxes of $(711), $904, $(925) and $983, respectively | 1,067 | (1,355 | ) | 1,388 | (1,474 | ) | |||||||||
Other comprehensive loss, net of tax: | (56 | ) | (2,046 | ) | (319 | ) | (1,437 | ) | |||||||
COMPREHENSIVE INCOME | $ | 33,131 | $ | 28,246 | $ | 60,969 | $ | 54,527 |
For the Six Months Ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 61,288 | $ | 55,964 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 59,279 | 55,821 | |||||
Deferred income taxes | 671 | (1,073 | ) | ||||
(Gain) loss on disposal of property and equipment, net | (216 | ) | 579 | ||||
Amortization of deferred financing costs | 1,100 | 1,006 | |||||
Share-based compensation | 6,286 | 7,312 | |||||
Excess tax benefit related to share-based compensation | (4,564 | ) | (8,365 | ) | |||
Changes in operating assets and liabilities | 1,726 | 31,450 | |||||
Other | (1,116 | ) | (504 | ) | |||
Net cash provided by operating activities | 124,454 | 142,190 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (137,433 | ) | (106,102 | ) | |||
Acquisitions, net of cash acquired | (437 | ) | (26,415 | ) | |||
Proceeds from sale of property and equipment | 763 | 362 | |||||
Proceeds from property insurance settlements | 175 | 790 | |||||
Increase in other assets | (736 | ) | (250 | ) | |||
Decrease in restricted cash | 1,640 | 651 | |||||
Net cash used in investing activities | (136,028 | ) | (130,964 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from long-term borrowings | 75,000 | — | |||||
Repayments of long-term borrowings | (28,272 | ) | (3,521 | ) | |||
Repayments of revolving credit facility, net | (13,500 | ) | (10,000 | ) | |||
Increase in deferred financing costs | (976 | ) | (256 | ) | |||
Excess tax benefit related to share-based compensation | 4,564 | 8,365 | |||||
Proceeds from stock option exercises | 1,108 | 1,982 | |||||
Proceeds from employee stock purchase plan | 607 | 590 | |||||
Stock purchased for employee stock purchase plan | (569 | ) | (649 | ) | |||
Repurchases of common stock | (28,157 | ) | — | ||||
Net cash provided by (used in) financing activities | 9,805 | (3,489 | ) | ||||
Effect of exchange rates on cash and cash equivalents | (1,604 | ) | 275 | ||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (3,373 | ) | 8,012 | ||||
CASH AND CASH EQUIVALENTS – Beginning of period | 16,499 | 7,487 | |||||
CASH AND CASH EQUIVALENTS – End of period | $ | 13,126 | $ | 15,499 |
1. | Basis of Presentation |
2. | Share-Based Compensation |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Share-based compensation expense related to restricted shares | $ | 3,426 | $ | 3,404 | $ | 6,226 | $ | 7,252 | |||||||
Share-based compensation expense related to ESPP | 30 | 30 | 60 | 60 | |||||||||||
Total share-based compensation expense | $ | 3,456 | $ | 3,434 | $ | 6,286 | $ | 7,312 |
Shares | Weighted Average Grant Date Fair Value | |||
Outstanding at December 31, 2012 | 2,069,168 | $36.55 | ||
Granted | 328,550 | $41.94 | ||
Canceled | (10,995 | ) | $34.63 | |
Vested | (817,688 | ) | $24.55 | |
Outstanding at March 31, 2013 | 1,569,035 | $43.95 | ||
Granted | 25,406 | $47.58 | ||
Canceled | (39,476 | ) | $43.40 | |
Vested | (31,809 | ) | $39.54 | |
Outstanding at June 30, 2013 | 1,523,156 | $44.11 |
Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||
Outstanding at December 31, 2012 | 291,510 | $24.96 | 2.0 | $7,073 | ||||
Exercised | (40,675 | ) | $21.44 | |||||
Canceled | — | $— | ||||||
Outstanding at March 31, 2013 | 250,835 | $25.53 | 1.8 | $4,441 | ||||
Exercised | (8,967 | ) | $26.33 | |||||
Canceled | (1,600 | ) | $8.00 | |||||
Outstanding at June 30, 2013 | 240,268 | $25.62 | 1.6 | $5,886 | ||||
Vested at June 30, 2013 | 240,268 | $25.62 | 1.6 | $5,886 |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income | $ | 33,187 | $ | 30,292 | $ | 61,288 | $ | 55,964 | |||||||
Weighted average number of common shares outstanding – basic | 41,456 | 41,462 | 41,376 | 41,313 | |||||||||||
Effect of dilutive stock options | 94 | 119 | 91 | 124 | |||||||||||
Effect of dilutive restricted stock awards | 109 | 169 | 177 | 340 | |||||||||||
Weighted average number of common shares outstanding – diluted | 41,659 | 41,750 | 41,644 | 41,777 | |||||||||||
Basic earnings per common share | $ | 0.80 | $ | 0.73 | $ | 1.48 | $ | 1.35 | |||||||
Diluted earnings per common share | $ | 0.80 | $ | 0.73 | $ | 1.47 | $ | 1.34 |
4. | Operating Segment |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Membership dues | $ | 194,816 | $ | 184,895 | $ | 381,190 | $ | 360,365 | |||||||
Enrollment fees | 3,573 | 3,929 | 6,969 | 7,883 | |||||||||||
Personal training | 46,794 | 42,777 | 92,808 | 84,537 | |||||||||||
Other in-center revenue | 50,481 | 47,341 | 96,438 | 90,197 | |||||||||||
Total center revenue | 295,664 | 278,942 | 577,405 | 542,982 | |||||||||||
Other revenue | 12,444 | 9,362 | 21,450 | 13,769 | |||||||||||
Total revenue | $ | 308,108 | $ | 288,304 | $ | 598,855 | $ | 556,751 |
5. | Supplemental Cash Flow Information |
For the Six Months Ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
Accounts receivable, net | $ | 960 | $ | (594 | ) | ||
Income tax receivable | (1,813 | ) | 5,022 | ||||
Center operating supplies and inventories | (2,968 | ) | (3,843 | ) | |||
Prepaid expenses and other current assets | (1,665 | ) | (365 | ) | |||
Deferred membership origination costs | 305 | (380 | ) | ||||
Accounts payable | (7,888 | ) | (3,141 | ) | |||
Accrued expenses | 5,892 | 23,704 | |||||
Deferred revenue | 1,349 | 1,710 | |||||
Deferred rent liability | 7,715 | 8,773 | |||||
Other liabilities | (161 | ) | 564 | ||||
Changes in operating assets and liabilities | $ | 1,726 | $ | 31,450 |
6. | Commitments and Contingencies |
7. | Recent Accounting Pronouncements |
8. | Derivative Instruments |
9. | Fair Value Measurements |
Fair Value Measurements Using: | |||||||
Quoted Prices in | Significant | Significant | |||||
Total | Active Markets for | Other Observable | Unobservable | ||||
Fair | Identical Assets | Inputs | Inputs | ||||
Value | (Level 1) | (Level 2) | (Level 3) | ||||
Interest rate swap liability as of | |||||||
June 30, 2013 | $3,740 | $— | $3,740 | $— | |||
Interest rate swap liability as of | |||||||
December 31, 2012 | $6,052 | $— | $6,052 | $— |
June 30, 2013 | December 31, 2012 | ||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||
Fixed-rate debt | $ | 444,334 | $ | 449,176 | $ | 396,591 | $ | 403,659 | |||||||
Obligations under capital leases | 15,032 | 15,201 | 15,441 | 15,582 | |||||||||||
Floating-rate debt | 276,055 | 276,055 | 292,437 | 292,437 | |||||||||||
Total | $ | 735,421 | $ | 740,432 | $ | 704,469 | $ | 711,678 |
10. | Changes in Accumulated Other Comprehensive Income by Component |
Gains (Losses) on Cash Flows Hedge | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | |||||||||
Balance at December 31, 2012 | $ | (3,631 | ) | $ | (1,170 | ) | $ | (4,801 | ) | ||
Other comprehensive income | 321 | (584 | ) | (263 | ) | ||||||
Balance at March 31, 2013 | (3,310 | ) | (1,754 | ) | (5,064 | ) | |||||
Other comprehensive income | 1,067 | (1,123 | ) | (56 | ) | ||||||
Balance at June 30, 2013 | $ | (2,243 | ) | $ | (2,877 | ) | $ | (5,120 | ) |
11. | Subsequent Event |
• | First, our largest source of revenue is membership dues (63.7% of total revenue for the six months ended June 30, 2013, compared to 64.7% for the six months ended June 30, 2012) and enrollment fees (1.2% of total revenue for the six months ended June 30, 2013, down from 1.4% for the six months ended June 30, 2012). We recognize revenue from monthly membership dues in the month to which they pertain. |
• | Second, we generate revenue within a center, which we refer to as in-center revenue or in-center businesses (31.5% of total revenue for the six months ended June 30, 2013, up from 31.4% for the six months ended June 30, 2012), including fees for personal training, registered dietitians, group fitness training and other member activities, sales of products at our cafés, sales of products and services offered at our spas and tennis programs. |
• | Third, we have expanded the LIFE TIME FITNESS® brand into other health and wellness-related offerings that generate revenue, which we refer to as other revenue or ancillary businesses (3.6% of total revenue for the six months ended June 30, 2013, up from 2.5% for the six months ended June 30, 2012), including media, athletic events and related services, including our race registration and timing businesses, our health promotion programs and training and certification programs. Our primary media offering is our magazine, Experience Life®. |
• | Center operations expenses (57.9% of total revenue for the six months ended June 30, 2013, down from 58.8% for the six months ended June 30, 2012) consist primarily of salaries, commissions, payroll taxes, benefits, real estate taxes and other occupancy costs, utilities, repairs and maintenance, supplies, administrative support and communications to operate our centers. |
• | Advertising and marketing expenses (3.4% of total revenue for the six months ended June 30, 2013, down from from 3.6% for the six months ended June 30, 2012) consist of our marketing department costs and media and advertising costs to support and grow center membership levels, in-center businesses, new center openings and our ancillary businesses. |
• | General and administrative expenses (5.2% of total revenue for the six months ended June 30, 2013, up from 4.9% for the six months ended June 30, 2012) include costs relating to our centralized support functions, such as accounting, information systems, procurement, real estate and development and member relations. |
• | Other operating expenses (4.7% of total revenue for the six months ended June 30, 2013, up from 3.8% for the six months ended June 30, 2012) include the costs associated with our media, health and athletic events businesses and other corporate expenses, as well as gains or losses on our disposal of assets. |
• | Depreciation and amortization (9.9% of total revenue for the six months ended June 30, 2013, down from 10.1% for the six months ended June 30, 2012) are computed primarily using the straight-line method over estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the improvement. |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
REVENUE: | |||||||||||||||
Membership dues | 63.2 | % | 64.1 | % | 63.7 | % | 64.7 | % | |||||||
Enrollment fees | 1.2 | 1.4 | 1.2 | 1.4 | |||||||||||
In-center revenue | 31.6 | 31.3 | 31.5 | 31.4 | |||||||||||
Total center revenue | 96.0 | 96.8 | 96.4 | 97.5 | |||||||||||
Other revenue | 4.0 | 3.2 | 3.6 | 2.5 | |||||||||||
Total revenue | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Center operations | 57.4 | 57.8 | 57.9 | 58.8 | |||||||||||
Advertising and marketing | 3.1 | 3.4 | 3.4 | 3.6 | |||||||||||
General and administrative | 5.1 | 4.8 | 5.2 | 4.9 | |||||||||||
Other operating | 4.9 | 4.4 | 4.7 | 3.8 | |||||||||||
Depreciation and amortization | 9.7 | 10.0 | 9.9 | 10.1 | |||||||||||
Total operating expenses | 80.2 | 80.4 | 81.1 | 81.2 | |||||||||||
Income from operations (operating profit) | 19.8 | 19.6 | 18.9 | 18.8 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net | (2.1 | ) | (2.2 | ) | (2.1 | ) | (2.3 | ) | |||||||
Equity in earnings of affiliate | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||||
Total other income (expense) | (2.0 | ) | (2.1 | ) | (2.0 | ) | (2.2 | ) | |||||||
INCOME BEFORE INCOME TAXES | 17.8 | 17.5 | 16.9 | 16.6 | |||||||||||
PROVISION FOR INCOME TAXES | 7.0 | 7.0 | 6.7 | 6.5 | |||||||||||
NET INCOME | 10.8 | % | 10.5 | % | 10.2 | % | 10.1 | % | |||||||
Other financial data: | |||||||||||||||
Same-center revenue growth (open 13 months or longer) (1) | 4.8 | % | 4.2 | % | 4.2 | % | 4.8 | % | |||||||
Same-center revenue growth (open 37 months or longer) (1) | 3.8 | % | 3.6 | % | 3.4 | % | 4.3 | % | |||||||
Average center revenue per Access membership (2) | $ | 416 | $ | 396 | $ | 821 | $ | 778 | |||||||
Average in-center revenue per Access membership (3) | $ | 139 | $ | 129 | $ | 272 | $ | 253 | |||||||
Trailing 12-month attrition rate (4) | 34.5 | % | 31.9 | % | 34.5 | % | 31.9 | % | |||||||
Quarterly attrition rate (5) | 8.2 | % | 7.6 | % | N/A | N/A | |||||||||
EBITDA (in thousands) (6) | $ | 91,121 | $ | 85,839 | $ | 173,103 | $ | 161,494 | |||||||
EBITDA margin (7) | 29.6 | % | 29.8 | % | 28.9 | % | 29.0 | % | |||||||
EBITDAR (in thousands) (6) | $ | 100,809 | $ | 95,521 | $ | 192,530 | $ | 180,760 | |||||||
EBITDAR margin (8) | 32.7 | % | 33.1 | % | 32.1 | % | 32.5 | % | |||||||
Capital expenditures (in thousands) (9) | $ | 78,288 | $ | 67,625 | $ | 137,433 | $ | 106,102 | |||||||
Free cash flow (in thousands) (10) | $ | (30,065 | ) | $ | 662 | $ | (12,979 | ) | $ | 36,088 |
Results of Operations (continued) | For the Three Months Ended | For the Six Months Ended | |||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Operating data (end of period) (11): | |||||||||||||||
Centers open | 106 | 105 | 106 | 105 | |||||||||||
Center square footage (12) | 10,004,755 | 9,901,108 | 10,004,755 | 9,901,108 | |||||||||||
Memberships: | |||||||||||||||
Access memberships | 713,138 | 708,585 | 713,138 | 708,585 | |||||||||||
Non-Access memberships | 99,728 | 94,304 | 99,728 | 94,304 | |||||||||||
Total memberships | 812,866 | 802,889 | 812,866 | 802,889 |
(1) | Membership dues, enrollment fees and in-center revenue for a center are included in same-center revenue growth – 13 month beginning on the first day of the thirteenth full calendar month of the center’s operation and are included in same-center revenue growth – 37 month beginning on the first day of the thirty-seventh full calendar month of the center’s operation. |
(2) | Average center revenue per Access membership is total center revenue derived from Access memberships for the period divided by the average number of Access memberships for the period, where the average number of Access memberships for the period is an average derived from dividing the sum of the total Access memberships outstanding at the beginning of the period and at the end of each month during the period by one plus the number of months in each period. |
(3) | Average in-center revenue per Access membership is total in-center revenue derived from Access memberships for the period divided by the average number of Access memberships for the period, where the average number of Access memberships for the period is an average derived from dividing the sum of the total Access memberships outstanding at the beginning of the period and at the end of each month during the period by one plus the number of months in each period. |
(4) | Trailing 12-month attrition rate (or annual attrition rate) is calculated as follows: total membership terminations for the trailing 12 months divided into the average beginning month total membership balance for the trailing 12 months. |
(5) | Quarterly attrition rate is calculated as follows: total membership terminations for the quarter divided into the average beginning month total membership balance for the quarter. |
(6) | EBITDA is a non-GAAP, non-cash measure which consists of net income plus interest expense, net, provision for income taxes and depreciation and amortization. EBITDAR adds rent expense to EBITDA. These terms, as we define them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP. We use EBITDA and EBITDAR as measures of operating performance. EBITDA or EBITDAR 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 funds depicted by EBITDA and EBITDAR are not necessarily available for discretionary use if they are reserved for particular capital purposes, to maintain debt covenants, to service debt or to pay taxes. |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income | $ | 33,187 | $ | 30,292 | $ | 61,288 | $ | 55,964 | |||||||
Interest expense, net | 6,434 | 6,545 | 12,563 | 12,822 | |||||||||||
Provision for income taxes | 21,483 | 20,141 | 39,973 | 36,887 | |||||||||||
Depreciation and amortization | 30,017 | 28,861 | 59,279 | 55,821 | |||||||||||
EBITDA | 91,121 | 85,839 | 173,103 | 161,494 | |||||||||||
Rent expense | 9,688 | 9,682 | 19,427 | 19,266 | |||||||||||
EBITDAR | $ | 100,809 | $ | 95,521 | $ | 192,530 | $ | 180,760 |
(7) | EBITDA margin is the ratio of EBITDA to total revenue. |
(8) | EBITDAR margin is the ratio of EBITDAR to total revenue. |
(9) | Capital expenditures represent investments in our new centers, costs related to updating and maintaining our existing centers and other infrastructure investments. For purposes of deriving capital expenditures from our cash flows statement, capital expenditures include our purchases of property and equipment, excluding purchases of property and equipment in accounts payable at period-end, property and equipment purchases financed through notes payable and capital lease obligations, and non-cash share-based compensation capitalized to projects under development. |
(10) | Free cash flow is a non-GAAP measure consisting of net cash provided by operating activities, less purchases of property and equipment, excluding acquisitions. This term, as we define it, may not be comparable to a similarly titled measure used by other companies and does not represent the total increase or decrease in the cash balance presented in accordance with GAAP. We use free cash flow to monitor cash available for repayment of indebtedness and in discussions with the investment community. The funds depicted by free cash flow are not necessarily available for discretionary use if they are reserved for particular capital purposes, to maintain debt covenants, to service debt or to pay taxes. Free cash flow should not be considered as a substitute for net cash provided by operating activities prepared in accordance with GAAP. |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net cash provided by operating activities | $ | 48,223 | $ | 68,287 | $ | 124,454 | $ | 142,190 | |||||||
Less: Purchases of property and equipment | (78,288 | ) | (67,625 | ) | (137,433 | ) | (106,102 | ) | |||||||
Free cash flow | $ | (30,065 | ) | $ | 662 | $ | (12,979 | ) | $ | 36,088 |
(11) | The operating data presented in these items includes the center owned by Bloomingdale LIFE TIME FITNESS, L.L.C. ("Bloomingdale LLC"), which is jointly-owned with two unrelated organizations. The data presented elsewhere in this section excludes the center owned by Bloomingdale LLC. |
(12) | The square footage presented in this table reflects fitness square footage, which we believe is the best metric for the efficiencies of a facility. We exclude outdoor swimming pools, outdoor play areas, tennis courts and satellite facility square footage. These figures are approximations. |
• | 59.3% was from membership dues, which increased $9.9 million, or 5.4%, due to higher average dues and increased memberships, primarily at centers open less than 37 months. Our number of Access memberships increased 0.6% to 713,138 at June 30, 2013, from 708,585 at June 30, 2012. |
• | 42.8% was from in-center revenue, which increased $7.2 million, or 7.9%, primarily as a result of a $4.0 million increase in personal training revenue and a $2.0 million increase in sales of our LifeSpa and LifeCafe products and services. Average in-center revenue per Access membership increased 7.2% to $139 for the three months ended June 30, 2013, from $129 for the three months ended June 30, 2012. |
• | (2.1)% was from enrollment fees, which are deferred until a center opens and recognized on a straight-line basis over our estimated average membership life. The estimated average membership life is 33 months. Enrollment fees decreased $0.3 million for the three months ended June 30, 2013 to $3.6 million. The revenue recognized from enrollment fees was lower in the second quarter of 2013 as compared to the second quarter of 2012 primarily due to lower total enrollment fees over the deferral period. |
• | 60.5% was from membership dues, which increased $20.8 million, or 5.8%, due to higher average dues and increased memberships, primarily at centers open less than 37 months. Our number of Access memberships increased 0.6% to 713,138 at June 30, 2013, from 708,585 at June 30, 2012. |
• | 42.2% was from in-center revenue, which increased $14.5 million, or 8.3%, primarily as a result of a $8.3 million increase in personal training revenue, a $3.9 million increase in sales of our LifeSpa and LifeCafe products and services and a $2.3 million increase in our member activities revenue. Average in-center revenue per Access membership increased to $272 for the six months ended June 30, 2013, from $253 for the six months ended June 30, 2012. |
• | (2.7)% was from enrollment fees, which are deferred until a center opens and recognized on a straight-line basis over our estimated average membership life. The estimated average membership life is 33 months. Enrollment fees decreased $0.9 million for the six months ended June 30, 2013 to $7.0 million. The revenue recognized from enrollment fees was lower in the first half of 2013 as compared to the first half of 2012 primarily due to lower total enrollment fees over the deferral period. |
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Debt | |||||||
Long-term debt | $ | 723,133 | $ | 691,867 | |||
Current maturities of long-term debt | 12,288 | 12,603 | |||||
Total debt | 735,421 | 704,470 | |||||
Shareholders’ Equity | |||||||
Common stock | 858 | 864 | |||||
Additional paid-in capital | 427,761 | 447,912 | |||||
Retained earnings | 690,230 | 628,942 | |||||
Accumulated other comprehensive loss | (5,120 | ) | (4,801 | ) | |||
Total shareholders’ equity | 1,113,729 | 1,072,917 | |||||
Total capitalization | $ | 1,849,150 | $ | 1,777,387 |
For the Six Months Ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Cash purchases of property and equipment | $ | 137,433 | $ | 106,102 | |||
Non-cash change in construction accounts payable | 14,955 | (5,226 | ) | ||||
Other non-cash changes to property and equipment | 2,175 | 204 | |||||
Total capital expenditures | $ | 154,563 | $ | 101,080 |
For the Six Months Ended | |||||||
June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
New center land and construction | $ | 93,561 | $ | 59,727 | |||
Maintenance of existing facilities, remodels of acquired centers and corporate capital expenditures | 61,002 | 41,353 | |||||
Total capital expenditures | $ | 154,563 | $ | 101,080 |
June 30, | December 31, | ||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Revolving credit facility, interest only due monthly at interest rates ranging from LIBOR plus 1.25% to 2.25% or base plus 0.25% to 1.25%, facility expires June 2016 | $ | 440,500 | $ | 454,000 | |||
Commercial mortgage-backed notes payable with monthly interest and principal payments totaling $632 including interest at 6.03% to February 2017 | 96,063 | 96,909 | |||||
Commercial mortgage-backed notes payable with monthly interest and principal payments totaling $775 including interest at 4.45% to March 2023 | 73,502 | — | |||||
Commercial mortgage-backed notes payable with monthly interest and principal payments totaling $503 including interest at 5.75% to December 2016 | 69,183 | 70,175 | |||||
Other | 41,141 | 67,945 | |||||
Total debt (excluding obligations under capital leases) | 720,389 | 689,029 | |||||
Obligations under capital leases | 15,032 | 15,441 | |||||
Total debt | 735,421 | 704,470 | |||||
Less current maturities | 12,288 | 12,603 | |||||
Total long-term debt | $ | 723,133 | $ | 691,867 |
Actual as of | Actual as of | |||||
June 30, | December 31, | |||||
Covenant | Requirement | 2013 | 2012 | |||
Total Consolidated Debt to Adjusted EBITDAR | Not more than 4.00 to 1.00 | 2.55 to 1.00 | 2.51 to 1.00 | |||
Fixed Charge Coverage Ratio | Not less than 1.50 to 1.00 | 2.23 to 1.00 | 3.00 to 1.00 | |||
Unencumbered Asset Ratio | Not less than 1.30 to 1.00 | 2.89 to 1.00 | 2.90 to 1.00 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Number of Shares that May Yet be Purchased Under the ESPP Authorization (1) | Maximum Dollar Value of Shares that May Yet be Purchased Under the Stock Repurchase Authorization (2) | |||||||
April 1-30, 2013 | — | $— | 274,387 | $21,552,449 | |||||||
May 1-31, 2013 | 100,000 | $48.57 | 274,387 | $16,694,999 | |||||||
June 1-30, 2013 | 78,000 | $50.64 | 274,387 | $12,745,047 | |||||||
Total | 178,000 | $49.48 | 274,387 | $12,745,047 |
(1) | In June 2006, our Board of Directors authorized the repurchase of 500,000 shares of our common stock from time to time in the open market or otherwise for the primary purpose of offsetting the dilutive effect of shares issued under our ESPP (the "ESPP Authorization"). From June 2006 through June 30, 2013, we repurchased 225,613 shares pursuant to the ESPP Authorization, of which 13,433 shares were repurchased during 2013. The shares repurchased to date have been purchased in the open market and, upon repurchase, became unissued shares of our common stock. |
(2) | In August 2011, our Board of Directors authorized the repurchase of up to $60.0 million of our outstanding common stock from time to time through the open market or privately negotiated transactions (the "Stock Repurchase Authorization"). The Stock Repurchase Authorization terminates when the aggregate repurchase amount totals $60.0 million or at the close of business on August 17, 2013, whichever comes earlier. As of June 30, 2013, 1,054,365 shares have been repurchased under the Stock Repurchase Authorization for $47.3 million. The shares repurchased to date have been purchased in the open market and, upon repurchase, became unissued shares of our common stock. |
Exhibit No. | Description | Method of Filing | ||
3.1 | Amended and Restated Articles of Incorporation of the Registrant. | Incorporated by reference to Exhibit 3.1 to the Registrant's Form 8-K dated April 20, 2009 (File No. 001-32230). | ||
3.2 | Amended and Restated By-Laws of the Registrant. | Incorporated by reference to Exhibit 3.1 to the Registrant's Form 8-K dated July 17, 2012 (File No. 001-32230). | ||
4 | Specimen of common stock certificate. | Incorporated by reference to Exhibit 4 to Amendment No. 4 to the Registrant's Registration Statement on Form S-1 (File No. 333-113764), filed with the Commission on June 23, 2004. | ||
10.1 | Life Time Fitness, Inc. Executive Cash Bonus Plan. | Incorporated by reference to Appendix A to the Registrant's Proxy Statement for its 2013 Annual Meeting of Shareholders (File No. 001-32230), filed with the Commission on March 7, 2013. | ||
10.2 | Form of 2013 Restricted Stock Agreement (Non-Employee Director) for 2011 Long-Term Incentive Plan. | Filed Electronically. | ||
31.1 | Rule 13a-14(a)/15d-14(a) Certification by Principal Executive Officer. | Filed Electronically. | ||
31.2 | Rule 13a-14(a)/15d-14(a) Certification by Principal Financial Officer. | Filed Electronically. | ||
32 | Section 1350 Certifications. | Filed Electronically. | ||
101 | The following materials from Life Time Fitness's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in eXtensible Business Reporting Language (XBRL): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of comprehensive income, (iv) consolidated statements of cash flows, and (v) notes to the unaudited consolidated financial statements. | Filed Electronically. |
LIFE TIME FITNESS, INC. | |
By: | /s/ Bahram Akradi |
Name: Bahram Akradi Title: Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer and Director) | |
By: | /s/ Michael R. Robinson |
Name: Michael R. Robinson Title: Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |
By: | /s/ John M. Hugo |
Name: John M. Hugo Title: Senior Vice President and Corporate Controller (Principal Accounting Officer) |
Exhibit No. | Description | Method of Filing | ||
3.1 | Amended and Restated Articles of Incorporation of the Registrant. | Incorporated by reference to Exhibit 3.1 to the Registrant's Form 8-K dated April 20, 2009 (File No. 001-32230). | ||
3.2 | Amended and Restated By-Laws of the Registrant. | Incorporated by reference to Exhibit 3.1 to the Registrant's Form 8-K dated July 17, 2012 (File No. 001-32230). | ||
4 | Specimen of common stock certificate. | Incorporated by reference to Exhibit 4 to Amendment No. 4 to the Registrant's Registration Statement on Form S-1 (File No. 333-113764), filed with the Commission on June 23, 2004. | ||
10.1 | Life Time Fitness, Inc. Executive Cash Bonus Plan. | Incorporated by reference to Appendix A to the Registrant's Proxy Statement for its 2013 Annual Meeting of Shareholders (File No. 001-32230), filed with the Commission on March 7, 2013. | ||
10.2 | Form of 2013 Restricted Stock Agreement (Non-Employee Director) for 2011 Long-Term Incentive Plan. | Filed Electronically. | ||
31.1 | Rule 13a-14(a)/15d-14(a) Certification by Principal Executive Officer. | Filed Electronically. | ||
31.2 | Rule 13a-14(a)/15d-14(a) Certification by Principal Financial Officer. | Filed Electronically. | ||
32 | Section 1350 Certifications. | Filed Electronically. | ||
101 | The following materials from Life Time Fitness's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in eXtensible Business Reporting Language (XBRL): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of comprehensive income (iv) consolidated statements of cash flows, and (v) notes to the unaudited consolidated financial statements. | Filed Electronically. |
Name of Non-Employee Director: | |
No. of Shares Covered: | Date of Issuance: |
Vesting Schedule pursuant to Section 2 (Cumulative): | |
Vesting Date(s) | No. of Shares Which Become Vested as of Such Date |
2. | Vesting. The Restricted Shares that have not previously been forfeited will vest in the numbers and on the dates specified in the Vesting Schedule at the beginning of this Agreement. In addition, the Restricted Shares that have not previously vested or been forfeited will vest immediately upon the first to occur of the following events: (i) death of the Director; (ii) Total Disability of the Director; (iii) Retirement of the Director; and (iv) a Change of Control as defined in the Plan. |
3. | Lapse of Restrictions; Issuance of Unrestricted Shares. Upon the vesting of any Restricted Shares, such vested Restricted Shares will no longer be subject to forfeiture as provided in Section 4 of this Agreement. Upon the vesting of any Restricted Shares, all restrictions on such Restricted Shares will lapse, and the Company will, subject to the provisions of the Plan, issue to the Director a certificate evidencing the Restricted Shares that is free of any transfer or other restrictions arising under this Agreement. |
4. | Forfeiture. If (i) the Director’s service as a member of the Board is terminated for any reason, whether by the Company, by the Director or otherwise, voluntarily or involuntarily, other than in the circumstances described in Section 2 of this Agreement, or (ii) the Director attempts to sell, assign, transfer or otherwise dispose of, or mortgage, pledge or otherwise encumber any of the Restricted Shares or the Restricted Shares become subject to attachment or any similar involuntary process, then any Restricted Shares that have not previously vested shall be forfeited by the Director to the Company, the Director shall thereafter have no right, title or interest whatsoever in such Restricted Shares (and any dividends accrued with respect to such Restricted Shares), and, if the Company does not have custody of any and all certificates representing Restricted Shares so forfeited, the Director shall immediately return to the Company any and all certificates representing Restricted Shares so forfeited. Additionally, the Director will deliver to the Company a stock power duly executed in blank relating to any and all certificates representing Restricted Shares forfeited to the Company in accordance with the previous sentence or, if such stock power has previously been tendered to the Company, the Company will be authorized to deem such previously tendered stock power delivered, and the Company will be authorized to cancel any and all certificates representing Restricted Shares so forfeited and to cause a book entry to be made in the records of the Company’s transfer agent in the name of the Director (or a new stock certificate to be issued, if requested by the Director) evidencing any Shares that vested prior to forfeiture. If the Restricted Shares are evidenced by a book entry made in the records of the Company’s transfer agent, then the Company will be authorized to cause such book entry to be adjusted to reflect the number of Restricted Shares so forfeited. |
5. | Shareholder Rights. As of the date of issuance specified at the beginning of this Agreement, the Director shall have all of the rights of a shareholder of the Company with respect to the Restricted Shares (including voting rights and the right to receive dividends and other distributions), except as otherwise specifically provided in this Agreement; provided, however, any dividends declared and paid on the Restricted Shares prior to vesting shall be accrued and held by the Company as a general obligation and paid to the Employee only if, when and to the extent the related Restricted Shares vest and become non-forfeitable as provided in Section 2 hereof. |
6. | Restrictive Legends and Stop-Transfer Orders. |
7. | Tax Consequences and Withholdings. The Director understands that unless a proper and timely Section 83(b) election has been made as further described below, generally under Section 83 of the Code, at the time the Restricted Shares vest, the Director will be obligated to recognize ordinary income and be taxed in an amount equal to the Fair Market Value as of the date of vesting for the Restricted Shares then vesting. The Director shall be solely responsible for any tax obligations that may arise as a result of the Restricted Shares. |
8. | Section 83(b) Election. The Director has been informed that, with respect to the grant of Restricted Shares, an election may be filed by the Director with the Internal Revenue Service, within 30 days of the date of issuance, electing pursuant to Section 83(b) of the Code to be taxed currently on the Fair Market Value of the Restricted Shares on the date of issuance. The Director acknowledges that it is the Director’s sole responsibility to timely file the election under Section 83(b) of the Code. |
9. | Interpretation of This Agreement. All decisions and interpretations made by the Committee with regard to any question arising hereunder or under the Plan shall be binding and conclusive upon the Company and the Director. If there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern. |
10. | Award Subject to Plan, Articles of Incorporation and By‑Laws. The Director acknowledges that the Restricted Shares are subject to the Plan, the Articles of Incorporation, as amended from time to time, and the By‑Laws, as amended from time to time, of the Company, and any applicable federal or state laws, rules or regulations. |
11. | Binding Effect. This Agreement shall be binding in all respects on the heirs, representatives, successors and assigns of the Director. |
12. | Choice of Law. This Agreement is entered into under the laws of the State of Minnesota and shall be construed and interpreted thereunder (without regard to its conflict of law principles). |
Date: | July 26, 2013 | ||
/s/ Bahram Akradi | |||
Bahram Akradi | |||
Chairman of the Board of Directors, President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Life Time Fitness, Inc.; |
Date: | July 26, 2013 | ||
/s/ Michael R. Robinson | |||
Michael R. Robinson | |||
Executive Vice President and Chief Financial Officer |
(1) | this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of Life Time Fitness, Inc. |
Dated: | July 26, 2013 | ||
/s/ Bahram Akradi | |||
Bahram Akradi | |||
Chairman of the Board of Directors, President and Chief Executive Officer | |||
/s/ Michael R. Robinson | |||
Michael R. Robinson | |||
Executive Vice President and Chief Financial Officer |
Changes in Accumulated Other Comprehensive Income by Component
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income by Component | Changes in Accumulated Other Comprehensive Income by Component The following table presents information about accumulated other comprehensive income (loss) by component for the six months ended June 30, 2013 (net of tax):
|
Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
REVENUE: | ||||
Membership dues | $ 194,816 | $ 184,895 | $ 381,190 | $ 360,365 |
Enrollment fees | 3,573 | 3,929 | 6,969 | 7,883 |
In-center revenue | 97,275 | 90,118 | 189,246 | 174,734 |
Total center revenue | 295,664 | 278,942 | 577,405 | 542,982 |
Other revenue | 12,444 | 9,362 | 21,450 | 13,769 |
Total revenue | 308,108 | 288,304 | 598,855 | 556,751 |
OPERATING EXPENSES: | ||||
Center operations | 176,798 | 166,554 | 346,760 | 327,269 |
Advertising and marketing | 9,629 | 9,689 | 20,588 | 20,045 |
General and administrative | 15,713 | 13,856 | 31,069 | 27,559 |
Other operating | 15,225 | 12,761 | 28,059 | 21,152 |
Depreciation and amortization | 30,017 | 28,861 | 59,279 | 55,821 |
Total operating expenses | 247,382 | 231,721 | 485,755 | 451,846 |
Income from operations | 60,726 | 56,583 | 113,100 | 104,905 |
OTHER INCOME (EXPENSE): | ||||
Interest expense, net of interest expense | (6,434) | (6,545) | (12,563) | (12,822) |
Equity in earnings of affiliate | 378 | 395 | 724 | 768 |
Total other income (expense) | (6,056) | (6,150) | (11,839) | (12,054) |
INCOME BEFORE INCOME TAXES | 54,670 | 50,433 | 101,261 | 92,851 |
PROVISION FOR INCOME TAXES | 21,483 | 20,141 | 39,973 | 36,887 |
NET INCOME | $ 33,187 | $ 30,292 | $ 61,288 | $ 55,964 |
BASIC EARNINGS PER COMMON SHARE (in dollars per share) | $ 0.80 | $ 0.73 | $ 1.48 | $ 1.35 |
DILUTED EARNINGS PER COMMON SHARE (in dollars per share) | $ 0.80 | $ 0.73 | $ 1.47 | $ 1.34 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC (in shares) | 41,456 | 41,462 | 41,376 | 41,313 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED (in shares) | 41,659 | 41,750 | 41,644 | 41,777 |
Earnings per Share
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share Basic EPS is computed by dividing net income applicable to common shareholders by the weighted average number of shares of common stock outstanding for each period. Diluted EPS is computed similarly to basic EPS, except that the denominator is increased for the conversion of any dilutive common stock equivalents, the assumed exercise of dilutive stock options using the treasury stock method and unvested restricted stock awards using the treasury stock method. Stock options excluded from the calculation of diluted EPS because the option exercise price was greater than the average market price of the common share were 2,477 and 30,037 for the three months ended June 30, 2013 and 2012, respectively, and 15,540 and 2,477 for the six months ended June 30, 2013 and 2012, respectively. The basic and diluted EPS calculations are shown below:
|
Fair Value Measurements (Policies)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | The accounting guidance establishes a framework for measuring fair value and expanded disclosures about fair value measurements. The guidance applies to all assets and liabilities that are measured and reported on a fair value basis. This enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The guidance requires that each asset and liability carried at fair value be classified into one of the following categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. Fair Value Measurements on a Recurring Basis The fair value of the interest rate swap is determined using observable current market information such as the prevailing LIBOR interest rates, LIBOR yield curve rates and current fair values as quoted by recognized dealers, and also includes consideration of counterparty credit risk. The following table presents the fair value of our derivative financial instrument as of June 30, 2013 and December 31, 2012:
Fair Value Measurements on a Nonrecurring Basis Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed assets, goodwill and other intangible assets, which are remeasured when the derived fair value is below carrying value on our consolidated balance sheets. For these assets, we do not periodically adjust carrying value to fair value except in the event of impairment. If we determine that impairment has occurred, the carrying value of the asset would be reduced to fair value and the difference would be recorded as a loss within operating income in our consolidated statements of operations. We had no remeasurements of such assets or liabilities to fair value during the six months ended June 30, 2013 or June 30, 2012. Financial Assets and Liabilities Not Measured at Fair Value The carrying amounts related to cash and cash equivalents (Level 1), accounts receivable, income tax receivable, accounts payable and accrued liabilities approximate fair value due to the relatively short maturities of such instruments. The fair value of our long-term debt and capital leases are estimated based on estimated current rates for debt with similar terms, credit worthiness and the same remaining maturities. For variable rate loans that re-price frequently, fair values are based on carrying values. The fair value of fixed rate loans is estimated based on the discounted cash flows of the loans using current market rates, which are estimated based on recent financing transactions (Level 3). The fair value estimates presented are based on information available to us as of June 30, 2013. These fair value estimates have not been comprehensively revalued for purposes of these consolidated financial statements since that date, and current estimates of fair values may differ significantly. |
Subsequent Event
|
3 Months Ended |
---|---|
Jun. 30, 2013
|
|
Subsequent Event [Abstract] | |
Subsequent Event | Subsequent Event On July 24, 2013, we agreed to amend and extend effective July 31, 2013 our Third Amended and Restated Credit Agreement (the “Credit Agreement”) with U.S. Bank National Association, as administrative agent and lender, and other lenders from time to time a party thereto. The material amendments to the Credit Agreement are (i) an increase to the amount of the facility from $660.0 million to $860.0 million, which may be increased by an additional $240.0 million upon the exercise of an accordion feature if one or more lenders commit the additional $240.0 million and (ii) an extension of the term of the facility to July 31, 2018. Of the increase in the facility, $100.0 million comes in the form of a term loan on July 31, 2013 that amortizes at the rate of 5.0% of the original term loan amount on an annual basis. The facility remains floating rate with a spread over LIBOR or Prime. The spreads under the leverage-based pricing grid in the facility remain unchanged, as do the financial covenant ratio thresholds. |
Supplementary Cash Flow Information - Additional Information (Detail) (USD $)
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
|
Supplemental Cash Flow Information [Abstract] | |||
Cash payments for income taxes | $ 35,600,000 | $ 21,800,000 | |
Cash payments for interest, net of capitalized interest | 10,800,000 | 11,700,000 | |
Capitalized interest | 1,200,000 | 600,000 | |
Construction accounts payable | $ 40,163,000 | $ 16,700,000 | $ 25,208,000 |
Operating Segment (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Products and Services | The following table presents revenue for the three and six months ended June 30, 2013 and 2012:
|
Earnings per Share (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The basic and diluted EPS calculations are shown below:
|
Earnings per Share - Additional Information (Detail) (Stock Options [Member])
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Stock Options [Member]
|
||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options excluded from the calculation of diluted EPS (shares) | 2,477 | 30,037 | 15,540 | 2,477 |
Share-Based Compensation (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Share-Based Compensation Expense Included in our Consolidated Statements of Operations | Total share-based compensation expense included in our consolidated statements of operations for the three and six months ended June 30, 2013 and 2012, was as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Activity | Summary of Restricted Stock Activity
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | Summary of Stock Option Activity
|
Consolidated Statements of Comprehensive Income (parenthetical) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax | $ 738 | $ 276 | $ 1,123 | $ (11) |
Unrealized gains (losses) on cash flow hedges, tax | $ (711) | $ 904 | $ (925) | $ 983 |
Basis of Presentation
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present financial position, results of operations and cash flows for the periods have been included. These interim consolidated financial statements and the related notes should be read in conjunction with the annual consolidated financial statements and notes included in the latest Form 10-K, as filed with the Securities and Exchange Commission (“SEC”), which includes audited consolidated financial statements for the three fiscal years ended December 31, 2012. |
Operating Segment
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segment | Operating Segment Our operations are conducted mainly through our distinctive and large, multi-use sports and athletic, professional fitness, family recreation and spa centers in a resort-like environment. We aggregate the activities of our centers and other ancillary products and services into one reportable segment. Each of the centers has similar economic characteristics, services, product offerings and customers, and in-center revenues are derived primarily from services to our members. Each of the other ancillary products and services either directly or indirectly, through advertising or branding, complement the operations of the centers. Our chief operating decision maker, our Chief Executive Officer, uses EBITDA as the primary measure of operating segment performance. The following table presents revenue for the three and six months ended June 30, 2013 and 2012:
|
AA(%>24^$Q`,#3`XO(R4O=9:9$6!F%'2'*3*
MP+DI2].`13.,E8DQ39:0O(:>]7.^6\G:IC,'?+&A2YJ);&R9V(:_TX!$$C1Q
M31R%T3J5K:6KB@@_$# 2G
MP].O16&6^HDW][%P\?T+O2)(Z?&]@$0ON(4O;F<`F9=\1/[%BB$OZ[U1.,,`
M$^]Q^9#L:F$:^N#>9S7S:"F]U:_SQM"F>=%"3<(@>PO6&,):4EXL.#-:?\B=
M8EE)Z"XMJA9F0IPX<._,B?Y+DDP^V'A:N0@%4"@_>4=ENB9,>C%[\;)!YY1F
MNU`AKUQMK;ET0L%;5S^V'EE]5JN1_>IJ]3NY[++,= LB!0L%$/D3,3QB'!954PKO>@I2CU-%X;*R=X@ G,Z\%<[ C?+SZZ[CZK5CE-[=&4R_%\<3FUU8S+:V\(RF=0*NHC1.*=2(/9$OM
MK5-O]'.UW@$".(&8:X0O__B8?[-QZH%B[0099\O)>/[?Q;B"KXD'X/[V2=,\
MW69V9@(&3YWUF91H[I[]N2KO[_!>$\XK1Y@T<`$SQ)GH7>P2\Y3V0U/T7.-M
M0W*O8Q[X*Y@'(J)'S,$QIECTD1.#1>N"$\$,`=7HG#]WJ[RZJ?@.6X+L31AD
M+!*$%*48ZY"2:T5KK$D%6^4[3D4VR)Z.R3OCD?,\05C:6,%Y=*J[GR'<
M3C[/X0\?X_1#^AEQ?R`[J'],TL]#'-)6WW;9-/S]']&J)H>N$1D1]5TB3,OV
M/)<9I
=A`(=K#0!LLIV[6P@YG>*]\A#ZX$*[!F6@:=2#L,TIE
4SU8%G#3
M^LEX7%SS\QOCC?R>S>)^^?WXU-O#:#`?PD=@1%']#L-AQ+9WY8<:-Y9$K=:'
M7U;$,[<6_']"B7E)S,]O./G^8+&]]2*"Q8TGWTK\W&K&.Z_"+MMYQ33>T
MZW?\ZYQ$\,
1HXV@KHLTF+DT:%!`G4\0=72".D]Z%,%2O`<,#PKP^,`=Y>$-C14Y_
M''?UX&ZXB)\Q4<'1Q]''68_C[K7C[A+6X]MM=F-UY#V3\6T$DJ5IUVLJ]$Z)
M%S:%-?=@X/*V%EZPIJD*255P`)>FB6J):YY:C1N\CZ_=;-+:S2HHK"EH:P1+
M-8B(+%$NL31ZTT>?<\U;X)I6F+U&$%$[W"75,D2]AI*AK<`-IS!.80V!(J>P
MXQTM22VUIDBK<7,IA;5D/K-*$7Z]A^?2U9RQ`"C`$V*
J?`=A#5!VV)W.>R)QD@'EIKL::9@*;QG6XXH:!8O&4)EC&@+
M[K8Q,B\8^@G&W-`:%F.'ER4+.\%&D"M(^;?UQH-%(!F1XKCO_A/)W2>`.LF@
M7O2S]0UDGOQ+$J,O61)A*ZSZ%;)G,MH05=OP>`CB*L1JA_=TB(6EBY9E=UP4
M8/I48'"WKSJK`=6DJN+2F"9BJ>"CQUD1ERE?0LS5`[L"FRJO$_/VJ'\I:C
M:+:$JUAP-(DW;-4SW1(R3S>,3NQ4>%F2W@1DA]:G)7JB);JV:JN6+:@>#SFS
MJJYLS1*W43-$R*I#0,V%>_KE^C-9SI/@)GZ`HXMB^9D+C5
U69(3`HQ,&%L44P&>&Q
M%4$P)%`X)0,Y"J42SK6)$D((4%V3@C(,#^ZG`PB7B]?O0]/Z1]_9\)C^]>JW
MVT^/G_S]:G7_]\U%!?UF<#G@VYT#^_;QE_6FS2\5`H+*E>W]?L"5W3=Q)@+M
M`Z:8T9'^"#J374:,I`-C2"]]V4S\`U6J\E]^OJRLI/0>[W-E)?KF4C
IMK!]T([@TI\JMGA&76D,
!",PP^;Q?Z9T[9S
MRPDNE-$:D1@%%5+"SFM+J1'+AY`+6).8/I>Y^>KVO>GL_^$@GU`'>'WJ@C+-
MRH[G*4CO\TU1Y'(H%U=F/M^HA?JE#A;])]S]?VFB3_L/[74E;KENF0Z6$JUB
M1#3ENP75+NW@+.FY/A5K/)]_)H=K&;LB-17_V+;Z_GQ_=S>?Y9S@BT6R1,!Z
M>^#,W^=;]2@@.%J]XU;)0((+J&O`("T::"N,->\DZ7,^`O.S72).$H9.0GW'H.F3Q2`W$A*(\M?ADECD6X-Q0+;SHI%*]
M;L!8"METY-E!Q?%D[CH"(K;8.,VDM8Y0QI1BO+.^N.XUO,6Y6<2+T+A+WZ$@
MO)+.>$MAYD/*`VM1[%2`I^=VIZG7K3X]F7M,!1H]Q@K,]6"-88E0;;I-9FRO
MBSI83%(\LDR'R/3%Y6I=B\K4-]C\W4^@/CYGKR\HG11;"0I]0#]LMA3Y4"ZN
MT^4OO;17I.L#7`B7-3S6_>W!;:CWS(//]W8@(99B[CD3",/ZHZDQ`G(^:"YM
M5&BXN2OBM:B.D\2F!*^*JBJF-7'+F]G=Q_HBG!YUY7*U=/?P^4"!J%W:B3'L
M-1=!10I3[Q35AG86<""]ML,8MM%Z$QU,TRG8V'5&I'+5'A0!908'S`,+HNOY
MZGRT?38852_+QM_*Q>0)$Q*0<8PSN$4YYP+WL/],=VN.L7=<"$70$8RLJ3H1
M+[MF)9DR<%H8$A5308$EXUO=EZJX]IO*2_9\7I:3:I:#L#Y>@9F3MM@D]T-.
MZ&]5+N#'29TFMQ.
PX
MQ[A!*6Q;8T-Y9,82++&BS/1FG75)4L_A<5M*Y8,WM`^N`9SN!1;I>RQ+F6(V
M)8>E)"A&.FBCNRH+Q/>+=[R55#R7]'6V-]S/<]'&[%N&3VH?<^_6=\`46(&(
M0('A0#QAT;G`VBFPWJ)^016FA]@XA+33\;3/ZA>,&)X:3UB-'$I]PUN+R2O=
M#\O@X@0\-=LES6-85.5\GEX3BV&GW2ZKFW"XA#*G*1PR.%)/31NSGWK.QGZD
M&M]PI#Y*Q5,(W;-T)-9*:V8((,9XS)3Q-9KJ&$Z[S2@CUL-?9NK3*
MJ1D^A1CWM8AU7=GLGZN]".])FKQSI%B(41.A.$-PW'K?(DP6>SV8'B+!U"#X
MN1(^5A;?0_X_UZ5N_[P&[YHC2YWA04?+K`B1=,6R0J2VYUQIH/9G+_=G">;U
MS