- Total revenue of $693.2
million, an increase of 18.5% over the prior year
quarter
- Net income of $41.4
million, an increase of 422.5% over the prior year
quarter
- Adjusted net income of $56.3
million, an increase of 110.9% over the prior year
quarter
- Adjusted EBITDA of $180.3
million, an increase of 26.1% over the prior year
quarter
- Diluted EPS increased to $0.19 from $0.04 in
the prior year quarter
- Reduced net debt leverage ratio to 2.4 times
- Delivered positive net cash provided by operating
activities and free cash flow before sale-leaseback
transactions
CHANHASSEN, Minn., Oct. 24,
2024 /PRNewswire/ -- Life Time Group Holdings, Inc.
("Life Time," "we," "our," "us," or the "Company") (NYSE: LTH)
today announced its financial results for the fiscal third quarter
ended September 30, 2024.
Bahram Akradi, Founder,
Chairman and CEO, stated: "Having achieved another quarter
of strong financial performance, we remain confident in the
strength and trajectory of our business. In the third quarter, we
continued deleveraging to under 2.5 times and once again delivered
significant cash from our operating activities and achieved
positive free cash flow before sale-leaseback proceeds. With our
equity offering complete and our debt refinancing in place, we are
now even better positioned to continue growing our business by
taking advantage of the significant opportunities in front of us.
I'd like to thank all our team members for their passion and
dedication to building a company that is stronger, bigger and the
best version of itself."
Financial Summary
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
($ in millions, except
memberships and per membership data)
|
September
30,
|
|
|
|
September
30,
|
|
|
|
2024
|
|
2023
|
|
Percent
Change
|
|
2024
|
|
2023
|
|
Percent
Change
|
|
Total
revenue
|
$693.2
|
|
$585.2
|
|
18.5 %
|
|
$1,957.7
|
|
$1,657.8
|
|
18.1 %
|
|
Center operations
expenses
|
$371.1
|
|
$319.4
|
|
16.2 %
|
|
$1,048.5
|
|
$896.1
|
|
17.0 %
|
|
Rent
|
$78.6
|
|
$69.2
|
|
13.5 %
|
|
$225.8
|
|
$203.2
|
|
11.1 %
|
|
General, administrative
and marketing expenses (1)
|
$57.7
|
|
$51.7
|
|
11.7 %
|
|
$159.8
|
|
$147.0
|
|
8.7 %
|
|
Net income
|
$41.4
|
|
$7.9
|
|
422.5 %
|
|
$119.1
|
|
$52.4
|
|
127.3 %
|
|
Adjusted net
income
|
$56.3
|
|
$26.7
|
|
110.9 %
|
|
$140.2
|
|
$91.1
|
|
53.9 %
|
|
Adjusted
EBITDA
|
$180.3
|
|
$143.0
|
|
26.1 %
|
|
$499.8
|
|
$399.1
|
|
25.2 %
|
|
Comparable center
revenue (2)
|
12.1 %
|
|
11.4 %
|
|
|
|
11.8 %
|
|
16.6 %
|
|
|
|
Center memberships, end
of period
|
826,502
|
|
784,331
|
|
5.4 %
|
|
826,502
|
|
784,331
|
|
5.4 %
|
|
Average center revenue
per center membership
|
$815
|
|
$722
|
|
12.9 %
|
|
$2,361
|
|
$2,095
|
|
12.7 %
|
|
|
|
(1)
|
The three months ended
September 30, 2024 and 2023 included non-cash share-based
compensation expense of $10.3 million and $13.4 million,
respectively. The nine months ended September 30, 2024 and 2023
included non-cash share-based compensation expense of $27.1 million
and $32.9 million, respectively.
|
|
(2)
|
The Company includes a
center, for comparable center revenue purposes, beginning on the
first day of the 13th full calendar month of the center's
operation, in order to assess the center's growth rate after one
year of operation.
|
Third Quarter 2024 Information
- Revenue increased 18.5% to $693.2million due to continued strong growth in
membership dues and in-center revenue, driven by an increase in
average dues, membership growth in our new and ramping centers, and
higher member utilization of our in-center offerings.
- Center memberships increased by 42,171, or 5.4%, when compared
to September 30, 2023, and decreased
consistent with seasonality expectations by approximately 6,100
from the second quarter 2024 to 826,502.
- Total subscriptions, which include center memberships and our
digital on-hold memberships, increased 5.6% to 876,509 as compared
to September 30, 2023.
- Center operations expenses increased 16.2% to $371.1 million primarily due to operating costs
related to our new and ramping centers as well as costs to support
growth in memberships and in-center business revenue.
- General, administrative and marketing expenses increased 11.7%
to $57.7 million primarily due to
increases in cash incentive compensation and benefit-related
expenses, information technology costs, and center support overhead
to enhance and broaden our member services and experiences,
partially offset by lower share-based compensation expense.
- Net income increased $33.5
million to $41.4 million
primarily due to improved business performance and to a lesser
extent a $3.8 million decrease in the
tax-effected one-time net losses from sale-leaseback transactions
in the current period and a tax-effected one-time gain of
$0.5 million on sales of land in the
current year period as compared to a tax-effected one-time loss of
$3.3 million in the prior year
period.
- Adjusted net income increased $29.6
million to $56.3 million.
- Adjusted net income and Adjusted EBITDA improved significantly
as we experienced greater flow through of our increased revenue and
benefited from the structural improvements to our business that
have improved our margins.
Nine-Month 2024 Information
- Revenue increased 18.1% to $1,957.7million due to continued strong growth in
membership dues and in-center revenue, driven by an increase in
average dues, membership growth in our new and ramping centers, and
higher member utilization of our in-center offerings.
- Center operations expenses increased 17.0% to $1,048.5million primarily due to operating costs
related to our new and ramping centers as well as costs to support
growth in memberships and in-center business revenue.
- General, administrative and marketing expenses increased 8.7%
to $159.8million primarily due to
increases in cash incentive compensation and benefit-related
expenses, information technology costs, center support overhead to
enhance and broaden our member services and experiences, and the
timing of marketing expenses primarily related to our new club
openings, partially offset by lower share-based compensation
expense.
- Net income increased $66.7
million to $119.1 million
primarily due to improved business performance and to a lesser
extent tax-effected one-time net gains of $3.7 million on sales of land and $2.0 million on sale-leaseback transactions in
the current year period as compared to tax-effected one-time net
losses of $10.0 million on
sale-leaseback transactions and $4.2
million on the sale of land in the prior year period. Net
income in the prior year period also included a $3.5 million tax-effected one-time gain on the
sale of two triathlon events.
- Adjusted net income increased $49.1
million to $140.2
million.
- Adjusted net income and Adjusted EBITDA improved significantly
as we experienced greater flow through of our increased revenue and
benefited from the structural improvements to our business that
have improved our margins.
New Center Openings
- We opened two new centers during the third quarter.
- As of September 30, 2024, we
operated a total of 177 centers.
Cash Flow Highlights
- Net cash provided by operating activities increased 31.8% to
$151.1 million.
- We achieved free cash flow of $138.3
million, including approximately $65.0 million of net proceeds from sale-leaseback
transactions.
- Our capital expenditures by type of expenditure were as
follows:
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
($ in
millions)
|
September
30,
|
|
|
|
September
30,
|
|
|
|
2024
|
|
2023
|
|
Percent
Change
|
|
2024
|
|
2023
|
|
Percent
Change
|
|
Growth capital
expenditures (1)
|
$46.4
|
|
$131.9
|
|
(64.8) %
|
|
$259.9
|
|
$368.8
|
|
(29.5) %
|
|
Maintenance capital
expenditures (2)
|
$21.6
|
|
$29.7
|
|
(27.3) %
|
|
$70.0
|
|
$81.8
|
|
(14.4) %
|
|
Modernization and
technology capital expenditures (3)
|
$19.1
|
|
$31.3
|
|
(39.0) %
|
|
$58.3
|
|
$79.3
|
|
(26.5) %
|
|
Total capital
expenditures
|
$87.1
|
|
$192.9
|
|
(54.8) %
|
|
$388.2
|
|
$529.9
|
|
(26.7) %
|
|
|
|
(1)
|
Consist of new center
land and construction, initial major remodels of acquired centers,
major remodels of existing centers that expand existing square
footage, asset acquisitions including the purchase of previously
leased centers and other growth initiatives.
|
|
(2)
|
Consist of general
maintenance of existing centers.
|
|
(3)
|
Consist of
modernization of existing centers and technology.
|
Liquidity and Capital Resources
- As of September 30, 2024, our
total available liquidity was $529.7
million, which included availability on our $650.0 million revolving credit facility and cash
and cash equivalents.
- Our net debt leverage ratio improved to 2.4x as of September 30, 2024, from 3.7x as of September 30, 2023.
- We completed sale-leaseback transactions on two properties for
net proceeds of approximately $65.0
million.
- We completed an equity offering of 6.0 million primary shares
resulting in net proceeds of $124.4
million. We used a portion of these net proceeds to pay down
an aggregate principal amount of $110.0
million of our former term loan facility. We also upsized
and extended our revolving credit facility and paid the remaining
aggregate principal amount of $200.0
million of our former term loan facility and no borrowings
remained outstanding thereunder.
2024 Outlook
Full-Year 2024 Guidance
|
|
|
|
|
Percent
|
|
Year
Ended
|
|
Year
Ended
|
|
Year
Ended
|
|
Change
|
|
December 31,
2024
|
|
December 31,
2024
|
|
December 31,
2023
|
|
(Using
|
|
(Guidance as
of
|
|
($ in
millions)
|
(Guidance)
|
|
(Actual)
|
|
Midpoints)
|
|
August 1,
2024)
|
|
Revenue
|
$2,595 –
$2,605
|
|
$2,216.6
|
|
17.3 %
|
|
$2,560 –
$2,590
|
|
Net Income
(1)
|
$138 – $140
|
|
$76.1
|
|
82.7 %
|
|
$142 – $148
|
|
Adjusted
EBITDA
|
$658 – $662
|
|
$536.8
|
|
23.0 %
|
|
$642 – $652
|
|
Rent
|
$305 – $310
|
|
$275.1
|
|
11.8 %
|
|
$300 – $312
|
|
|
|
(1)
|
Includes approximately
$15 million of estimated one-time interest expense related to the
refinancing of our senior secured and unsecured notes.
|
Conference Call Details
A conference call to discuss our third quarter financial results
is scheduled for today:
- Date: Thursday, October 24,
2024
- Time: 10:00 a.m. ET
(9:00 a.m. CT)
- U.S. dial-in number: 1-877-451-6152
- International dial-in number: 1-201-389-0879
- Webcast: LTH 3Q 2024 Earnings Call
A link to the live audio webcast of the conference call will be
available at https://ir.lifetime.life
Replay Information
Webcast – A recorded replay of the webcast will be
available within approximately three hours of the call's conclusion
and may be accessed at: https://ir.lifetime.life.
Conference Call – A replay of the conference call
will be available after 1:00 p.m. ET
the same day through November 7,
2024:
- U.S. replay number: 1-844-512-2921
- International replay number: 1-412-317-6671
- Replay ID: 1374 9346
About Life Time
Life Time (NYSE: LTH) empowers people
to live healthy, happy lives through its portfolio of more than 175
athletic country clubs across the United
States and Canada. The
health and wellness pioneer also delivers a range of healthy way of
life programs and information via its complimentary Life Time
Digital app. The Company's healthy living, healthy aging, healthy
entertainment communities and ecosystem serve people 90 days to 90+
years old and is supported by a team of more than 41,000 dedicated
professionals. In addition to delivering the best programs and
experiences through its clubs, Life Time owns and produces nearly
30 of the most iconic athletic events in the country.
Use of Non-GAAP Financial Measures and Key Performance
Indicators
This press release includes certain financial
measures that are not presented in accordance with generally
accepted accounting principles in the
United States ("GAAP"), including Adjusted net income,
Adjusted net income per common share, Adjusted EBITDA, free cash
flow and net debt and ratios and calculations with respect thereto.
These non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles and should be
considered in addition to, and not as a substitute for or superior
to, net income, net income per common share, net cash provided by
operating activities or total debt (defined as long-term debt, net
of current portion, plus current maturities of debt) as a measure
of financial performance or liquidity or any other performance
measure derived in accordance with GAAP, and should not be
construed as an inference that the Company's future results will be
unaffected by unusual or non-recurring items. In addition, these
non-GAAP financial measures should be read in conjunction with the
Company's financial statements prepared in accordance with GAAP.
The reconciliations of the Company's non-GAAP financial measures to
the corresponding GAAP measures should be carefully evaluated.
Adjusted net income is defined as net income excluding the
impact of share-based compensation expense as well as (gain) loss
on sale-leaseback transactions, capital transaction costs, legal
settlements, asset impairment, severance and other items that are
not indicative of our ongoing operations, less the tax effect of
these adjustments. Adjusted EBITDA is defined as net income before
interest expense, net, provision for income taxes and depreciation
and amortization, excluding the impact of share-based compensation
expense as well as (gain) loss on sale-leaseback transactions,
capital transaction costs, legal settlements, asset impairment,
severance and other items that are not indicative of the Company's
ongoing operations. Free cash flow is defined as net cash provided
by operating activities less capital expenditures, net of
construction reimbursements, plus net proceeds from sale-leaseback
transactions and land sales. Net debt is defined as long-term debt,
net of current portion, plus current maturities of debt, excluding
fair value adjustments, unamortized debt discounts and issuance
costs, minus cash and cash equivalents. Net debt is as of the last
day of the respective quarter or year. Our net debt leverage ratio
is calculated as our net debt divided by our trailing twelve months
of Adjusted EBITDA.
The Company presents these non-GAAP financial measures because
management believes that these measures assist investors and
analysts in comparing the Company's operating performance across
reporting periods on a consistent basis by excluding items that
management does not believe are indicative of the Company's ongoing
operating performance, and management believes that free cash flow
assists investors and analysts in evaluating our liquidity and cash
flows, including our ability to make principal payments on our
indebtedness and to fund our capital expenditures and working
capital requirements. Investors are encouraged to evaluate these
adjustments and the reasons the Company considers them appropriate
for supplemental analysis. In evaluating the non-GAAP financial
measures, investors should be aware that, in the future, the
Company may incur expenses that are the same as or similar to some
of the adjustments in the Company's presentation of its non-GAAP
financial measures. There can be no assurance that the Company will
not modify the presentation of non-GAAP financial measures in
future periods, and any such modification may be material. In
addition, the Company's non-GAAP financial measures may not be
comparable to similarly titled measures used by other companies in
the Company's industry or across different industries.
The non-GAAP financial measures have limitations as analytical
tools, and investors should not consider these measures in
isolation or as substitutes for analysis of the Company's results
as reported under GAAP.
Forward-Looking Statements
This press release includes
"forward-looking statements" within the meaning of federal
securities regulations. Forward-looking statements in this press
release include, but are not limited to, the Company's plans,
strategies and prospects, both business and financial, including
its financial outlook for full year 2024, growth, cost efficiencies
and margin expansion, improvements to its balance sheet, net debt
and leverage ratio, capital expenditures and free cash flow,
consumer demand, industry and economic trends, taxes, and rent
expense. These statements are based on the beliefs and assumptions
of the Company's management. Forward-looking statements are
inherently subject to risks, uncertainties and assumptions.
Generally, statements that are not historical facts, including
statements concerning the Company's possible or assumed future
actions, business strategies, events or results of operations, are
forward-looking statements. These statements may be preceded by,
followed by or include the words "believe," "expect," "anticipate,"
"intend," "plan," "estimate" or similar expressions. In addition,
any statements or information that refer to expectations, beliefs,
plans, projections, objectives, performance or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking.
Factors that could cause actual results to differ materially
from those forward-looking statements included in this press
release include, but are not limited to, risks relating to our
business operations and competitive and economic environment, risks
relating to our brand, risks relating to the growth of our
business, risks relating to our technological operations, risks
relating to our capital structure and lease obligations, risks
relating to our human capital, risks relating to legal compliance
and risk management and risks relating to ownership of our common
stock and the other important factors discussed under the caption
"Risk Factors" in the Company's Annual Report on Form 10-K for the
year ended December 31, 2023, filed
with the Securities and Exchange Commission (the "SEC") on
February 28, 2024, (File No.
001-40887), as such factors may be updated from time to time in the
Company's other filings with the SEC, which are accessible on the
SEC's website at www.sec.gov. These and other important factors
could cause actual results to differ materially from those
indicated by the forward-looking statements made in this press
release. Any forward-looking statement that the Company makes in
this press release speaks only as of the date of such statement.
Except as required by law, the Company does not have any obligation
to update or revise, or to publicly announce any update or revision
to, any of the forward-looking statements, whether as a result of
new information, future events or otherwise.
|
LIFE TIME GROUP
HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share
data)
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Center
revenue
|
$
674,775
|
|
$
568,402
|
|
$ 1,900,267
|
|
$ 1,608,279
|
|
Other
revenue
|
18,459
|
|
16,775
|
|
57,445
|
|
49,480
|
|
Total
revenue
|
693,234
|
|
585,177
|
|
1,957,712
|
|
1,657,759
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Center
operations
|
371,134
|
|
319,401
|
|
1,048,544
|
|
896,113
|
|
Rent
|
78,575
|
|
69,225
|
|
225,804
|
|
203,196
|
|
General,
administrative and marketing
|
57,737
|
|
51,668
|
|
159,836
|
|
147,005
|
|
Depreciation and
amortization
|
69,451
|
|
63,618
|
|
205,068
|
|
180,067
|
|
Other operating
expense
|
22,642
|
|
34,516
|
|
47,952
|
|
64,837
|
|
Total operating
expenses
|
599,539
|
|
538,428
|
|
1,687,204
|
|
1,491,218
|
|
Income from
operations
|
93,695
|
|
46,749
|
|
270,508
|
|
166,541
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(36,011)
|
|
(33,075)
|
|
(111,083)
|
|
(96,249)
|
|
Equity in (loss)
earnings of affiliates
|
(116)
|
|
56
|
|
(403)
|
|
287
|
|
Total other
expense
|
(36,127)
|
|
(33,019)
|
|
(111,486)
|
|
(95,962)
|
|
Income before income
taxes
|
57,568
|
|
13,730
|
|
159,022
|
|
70,579
|
|
Provision for income
taxes
|
16,213
|
|
5,815
|
|
39,945
|
|
18,200
|
|
Net income
|
$
41,355
|
|
$
7,915
|
|
$
119,077
|
|
$
52,379
|
|
|
|
|
|
|
|
|
|
Income per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.20
|
|
$
0.04
|
|
$
0.60
|
|
$
0.27
|
|
Diluted
|
$
0.19
|
|
$
0.04
|
|
$
0.57
|
|
$
0.26
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
202,945
|
|
196,146
|
|
199,793
|
|
195,404
|
|
Diluted
|
214,633
|
|
204,298
|
|
207,841
|
|
203,954
|
|
LIFE TIME GROUP
HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
BALANCE SHEETS
(In thousands, except per share
data)
(Unaudited)
|
|
|
September
30,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
120,947
|
|
$
11,161
|
|
Restricted cash and
cash equivalents
|
16,106
|
|
18,805
|
|
Accounts receivable,
net
|
26,230
|
|
23,903
|
|
Center operating
supplies and inventories
|
59,237
|
|
52,803
|
|
Prepaid expenses and
other current assets
|
41,374
|
|
57,751
|
|
Income tax
receivable
|
5,298
|
|
10,101
|
|
Total current
assets
|
269,192
|
|
174,524
|
|
Property and equipment,
net
|
3,095,145
|
|
3,171,616
|
|
Goodwill
|
1,235,359
|
|
1,235,359
|
|
Operating lease
right-of-use assets
|
2,335,206
|
|
2,202,601
|
|
Intangible assets,
net
|
171,917
|
|
172,127
|
|
Other assets
|
72,840
|
|
75,914
|
|
Total
assets
|
$
7,179,659
|
|
$
7,032,141
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
70,592
|
|
$
81,252
|
|
Construction accounts
payable
|
61,562
|
|
108,730
|
|
Deferred
revenue
|
48,836
|
|
49,299
|
|
Accrued expenses and
other current liabilities
|
196,290
|
|
185,305
|
|
Current maturities of
debt
|
12,439
|
|
73,848
|
|
Current maturities of
operating lease liabilities
|
67,016
|
|
58,764
|
|
Total current
liabilities
|
456,735
|
|
557,198
|
|
Long-term debt, net of
current portion
|
1,639,752
|
|
1,859,027
|
|
Operating lease
liabilities, net of current portion
|
2,401,711
|
|
2,268,863
|
|
Deferred income taxes,
net
|
77,657
|
|
56,066
|
|
Other
liabilities
|
42,004
|
|
36,875
|
|
Total
liabilities
|
4,617,859
|
|
4,778,029
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.01
par value per share; 500,000 shares authorized; 206,613 and 196,671
shares issued and outstanding, respectively.
|
2,066
|
|
1,967
|
|
Additional paid-in
capital
|
3,025,445
|
|
2,835,883
|
|
Accumulated
deficit
|
(457,736)
|
|
(576,813)
|
|
Accumulated other
comprehensive loss
|
(7,975)
|
|
(6,925)
|
|
Total stockholders'
equity
|
2,561,800
|
|
2,254,112
|
|
Total liabilities and
stockholders' equity
|
$
7,179,659
|
|
$
7,032,141
|
|
LIFE TIME GROUP
HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
Nine Months
Ended
September
30,
|
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
119,077
|
|
$
52,379
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
205,068
|
|
180,067
|
|
Deferred income
taxes
|
21,693
|
|
15,994
|
|
Share-based
compensation
|
30,450
|
|
37,029
|
|
Non-cash rent
expense
|
25,181
|
|
26,900
|
|
Impairment charges
associated with long-lived assets
|
2,941
|
|
6,620
|
|
(Gain) loss on
disposal of property and equipment, net
|
(6,548)
|
|
13,742
|
|
Write-off of debt
discounts and issuance costs
|
3,510
|
|
—
|
|
Amortization of debt
discounts and issuance costs
|
5,891
|
|
5,862
|
|
Changes in operating
assets and liabilities
|
1,794
|
|
(4,407)
|
|
Other
|
2,919
|
|
(3,240)
|
|
Net cash provided by
operating activities
|
411,976
|
|
330,946
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(388,213)
|
|
(529,965)
|
|
Proceeds from
sale-leaseback transactions
|
207,714
|
|
121,831
|
|
Proceeds from the sale
of land
|
15,577
|
|
4,169
|
|
Other
|
2,819
|
|
416
|
|
Net cash used in
investing activities
|
(162,103)
|
|
(403,549)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
borrowings
|
—
|
|
44,291
|
|
Repayments of
debt
|
(408,612)
|
|
(11,202)
|
|
Proceeds from
revolving credit facility
|
1,045,000
|
|
986,000
|
|
Repayments of
revolving credit facility
|
(925,000)
|
|
(961,000)
|
|
Repayments of finance
lease liabilities
|
(626)
|
|
(771)
|
|
Proceeds from
financing obligations
|
4,300
|
|
1,500
|
|
Payments of debt
discounts and issuance costs
|
(1,873)
|
|
(2,550)
|
|
Proceeds from the
issuance of common stock, net of issuance costs
|
124,357
|
|
—
|
|
Proceeds from stock
option exercises
|
19,548
|
|
14,897
|
|
Proceeds from
issuances of common stock in connection with the employee stock
purchase plan
|
1,462
|
|
1,450
|
|
Other
|
(1,304)
|
|
(110)
|
|
Net cash (used in)
provided by financing activities
|
(142,748)
|
|
72,505
|
|
Effect of exchange
rates on cash and cash equivalents and restricted cash and cash
equivalents
|
(38)
|
|
30
|
|
Increase (decrease) in
cash and cash equivalents and restricted cash and cash
equivalents
|
107,087
|
|
(68)
|
|
Cash and cash
equivalents and restricted cash and cash equivalents—beginning of
period
|
29,966
|
|
25,509
|
|
Cash and cash
equivalents and restricted cash and cash equivalents—end of
period
|
$
137,053
|
|
$
25,441
|
Non-GAAP Measurements and Key Performance Indicators
See "Use of Non-GAAP Financial Measures and Key Performance
Indicators" for a discussion of the Non-GAAP financial measures
reconciled below.
|
Key Performance
Indicators
($ in thousands, except for Average Center
revenue per center membership)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Membership
Data
|
|
|
|
|
|
|
|
|
Center
memberships
|
826,502
|
|
784,331
|
|
826,502
|
|
784,331
|
|
Digital on-hold
memberships
|
50,007
|
|
45,708
|
|
50,007
|
|
45,708
|
|
Total
memberships
|
876,509
|
|
830,039
|
|
876,509
|
|
830,039
|
|
|
|
|
|
|
|
|
|
Revenue
Data
|
|
|
|
|
|
|
|
|
Membership dues and
enrollment fees
|
72.3 %
|
|
71.8 %
|
|
72.4 %
|
|
71.7 %
|
|
In-center
revenue
|
27.7 %
|
|
28.2 %
|
|
27.6 %
|
|
28.3 %
|
|
Total Center
revenue
|
100.0 %
|
|
100.0 %
|
|
100.0 %
|
|
100.0 %
|
|
|
|
|
|
|
|
|
|
Membership dues and
enrollment fees
|
$
488,105
|
|
$
407,903
|
|
$
1,376,212
|
|
$
1,152,506
|
|
In-center
revenue
|
186,670
|
|
160,499
|
|
524,055
|
|
455,773
|
|
Total Center
revenue
|
$
674,775
|
|
$
568,402
|
|
$
1,900,267
|
|
$
1,608,279
|
|
|
|
|
|
|
|
|
|
Average Center revenue
per center membership (1)
|
$
815
|
|
$
722
|
|
$
2,361
|
|
$
2,095
|
|
Comparable center
revenue (2)
|
12.1 %
|
|
11.4 %
|
|
11.8 %
|
|
16.6 %
|
|
|
|
|
|
|
|
|
|
Center
Data
|
|
|
|
|
|
|
|
|
Net new center openings
(3)
|
2
|
|
6
|
|
6
|
|
9
|
|
Total centers (end of
period) (3)
|
177
|
|
170
|
|
177
|
|
170
|
|
Total center square
footage (end of period) (4)
|
17,400,000
|
|
16,700,000
|
|
17,400,000
|
|
16,700,000
|
|
|
|
|
|
|
|
|
|
GAAP and Non-GAAP
Financial Measures
|
|
|
|
|
|
|
|
|
Net income
|
$
41,355
|
|
$
7,915
|
|
$
119,077
|
|
$
52,379
|
|
Net income margin
(5)
|
6.0 %
|
|
1.4 %
|
|
6.1 %
|
|
3.2 %
|
|
Adjusted net income
(6)
|
$
56,278
|
|
$
26,684
|
|
$
140,158
|
|
$
91,139
|
|
Adjusted net income
margin (6)
|
8.1 %
|
|
4.6 %
|
|
7.2 %
|
|
5.5 %
|
|
Adjusted EBITDA
(7)
|
$
180,293
|
|
$
142,981
|
|
$
499,816
|
|
$
399,123
|
|
Adjusted EBITDA margin
(7)
|
26.0 %
|
|
24.4 %
|
|
25.5 %
|
|
24.1 %
|
|
Center operations
expense
|
$
371,134
|
|
$
319,401
|
|
$
1,048,544
|
|
$
896,113
|
|
Pre-opening expenses
(8)
|
$
1,164
|
|
$
1,477
|
|
$
4,819
|
|
$
6,146
|
|
Rent
|
$
78,575
|
|
$
69,225
|
|
$
225,804
|
|
$
203,196
|
|
Non-cash rent expense
(open properties) (9)
|
$
9,684
|
|
$
8,409
|
|
$
20,734
|
|
$
25,662
|
|
Non-cash rent expense
(properties under development) (9)
|
$
1,847
|
|
$
861
|
|
$
4,447
|
|
$
1,238
|
|
Net cash provided by
operating activities
|
$
151,146
|
|
$
114,655
|
|
$
411,976
|
|
$
330,946
|
|
Free cash flow
(10)
|
$
138,332
|
|
$
(30,274)
|
|
$
247,054
|
|
$
(73,019)
|
|
|
|
(1)
|
We define Average
Center revenue per center membership as Center revenue less Digital
on-hold revenue, divided by the average number of Center
memberships for the period, where the average number of Center
memberships for the period is an average derived from dividing the
sum of the total Center 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.
|
|
|
|
(2)
|
We measure the results
of our centers based on how long each center has been open as of
the most recent measurement period. We include a center, for
comparable center revenue purposes, beginning on the first day of
the 13th full calendar month of the center's operation, in order to
assess the center's growth rate after one year of
operation.
|
|
|
|
(3)
|
Net new center openings
is calculated as the number of centers that opened for the first
time to members during the period, less any centers that closed
during the period. Total centers (end of period) is the number of
centers operational as of the last day of the period. During the
three months ended September 30, 2024, we opened two
centers.
|
|
|
|
(4)
|
Total center square
footage (end of period) reflects the aggregate square footage,
excluding the areas used for tennis courts, outdoor swimming pools,
outdoor play areas and stand-alone Work, Sport and Swim locations.
We use this metric for evaluating the efficiencies of a center as
of the end of the period. These figures are
approximations.
|
|
|
|
(5)
|
Net income margin is
calculated as net income divided by total revenue.
|
|
|
|
(6)
|
We present Adjusted net
income as a supplemental measure of our performance. We define
Adjusted net income as net income excluding the impact of
share-based compensation expense as well as (gain) loss on
sale-leaseback transactions, capital transaction costs, legal
settlements, asset impairment, severance and other items that are
not indicative of our ongoing operations, less the tax effect of
these adjustments.
|
|
|
|
Adjusted net income
margin is calculated as Adjusted net income divided by total
revenue.
|
|
|
|
The following table
provides a reconciliation of net income and income per common
share, the most directly comparable GAAP
measures, to Adjusted net income and Adjusted net income per common
share:
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
($ in
thousands)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income
|
$
41,355
|
|
$
7,915
|
|
$
119,077
|
|
$
52,379
|
|
Share-based
compensation expense (a)
|
11,752
|
|
14,858
|
|
30,450
|
|
37,029
|
|
Loss (gain) on
sale-leaseback transactions (b)
|
4,902
|
|
12,672
|
|
(2,620)
|
|
13,431
|
|
Legal settlements
(c)
|
1,250
|
|
—
|
|
1,250
|
|
—
|
|
Asset impairments
(d)
|
—
|
|
5,340
|
|
—
|
|
6,620
|
|
Other
(e)
|
2,869
|
|
(312)
|
|
(927)
|
|
(4,852)
|
|
Taxes
(f)
|
(5,850)
|
|
(13,789)
|
|
(7,072)
|
|
(13,468)
|
|
Adjusted net
income
|
$
56,278
|
|
$
26,684
|
|
$
140,158
|
|
$
91,139
|
|
|
|
|
|
|
|
|
|
Income per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.20
|
|
$
0.04
|
|
$
0.60
|
|
$
0.27
|
|
Diluted
|
$
0.19
|
|
$
0.04
|
|
$
0.57
|
|
$
0.26
|
|
Adjusted income per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.28
|
|
$
0.14
|
|
$
0.70
|
|
$
0.47
|
|
Diluted
|
$
0.26
|
|
$
0.13
|
|
$
0.67
|
|
$
0.45
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
202,945
|
|
196,146
|
|
199,793
|
|
195,404
|
|
Diluted
|
214,633
|
|
204,298
|
|
207,841
|
|
203,954
|
|
|
|
|
(a)
|
Share-based
compensation expense recognized during the three and nine months
ended September 30, 2024, was associated with stock options,
restricted stock units, performance stock units, our employee stock
purchase plan ("ESPP") that launched on December 1, 2022, and
liability-classified awards related to our 2024 short-term
incentive plan. Share-based compensation expense recognized during
the three and nine months ended September 30, 2023, was associated
with stock options, restricted stock units, our ESPP and
liability-classified awards related to our 2023 short-term
incentive plan.
|
|
|
|
|
(b)
|
We adjust for the
impact of gains and losses on the sale-leaseback of our properties
as they do not reflect costs associated with our ongoing
operations.
|
|
|
|
|
(c)
|
We adjust for the
impact of unusual legal settlements. These costs are non-recurring
in nature and do not reflect costs associated with our normal
ongoing operations.
|
|
|
|
|
(d)
|
Represents non-cash
asset impairments of our long-lived assets.
|
|
|
|
|
(e)
|
Includes (i) a
$3.5million write-off of the unamortized debt discounts and
issuance costs associated with the extinguishment of our former
term loan facility and construction loan for the three and nine
months ended September30, 2024, (ii) (gain) loss on sales of land
of $(0.6)million and $0.4million for the three months ended
September30, 2024 and 2023, respectively, and $(5.0)million and
$0.4million for the nine months ended September30, 2024 and 2023,
respectively, and (iii) legal-related expenses in pursuit of our
claim against Zurich of $0.1million for the three months ended
September30, 2023, and $0.6million and $0.7million for the nine
months ended September30, 2024 and 2023, respectively. For 2023,
also includes a subsidy (credit) for our Canadian operations in
connection with COVID-19 of $(0.3)million for the nine months ended
September30, 2023 and gain on sales of the Company's triathlons and
certain other assets of $(0.8)million and $(5.7)million for the
three and nine months ended September30, 2023,
respectively.
|
|
|
|
|
(f)
|
Represents the
estimated tax effect of the total adjustments made to arrive at
Adjusted net income using the effective income tax rates for the
respective periods.
|
|
|
|
|
(7)
|
We present Adjusted
EBITDA as a supplemental measure of our performance. We define
Adjusted EBITDA as net income before interest expense, net,
provision for income taxes and depreciation and amortization,
excluding the impact of share-based compensation expense as well as
(gain) loss on sale-leaseback transactions, capital transaction
costs, legal settlements, asset impairment, severance and other
items that are not indicative of our ongoing operations.
|
|
|
|
|
Adjusted EBITDA margin
is calculated as Adjusted EBITDA divided by total
revenue.
|
|
|
|
The following table
provides a reconciliation of net income, the most directly
comparable GAAP measure, to Adjusted EBITDA:
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
($ in
thousands)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income
|
$
41,355
|
|
$
7,915
|
|
$
119,077
|
|
$
52,379
|
|
Interest expense, net
of interest income
|
36,011
|
|
33,075
|
|
111,083
|
|
96,249
|
|
Provision for income
taxes
|
16,213
|
|
5,815
|
|
39,945
|
|
18,200
|
|
Depreciation and
amortization
|
69,451
|
|
63,618
|
|
205,068
|
|
180,067
|
|
Share-based
compensation expense (a)
|
11,752
|
|
14,858
|
|
30,450
|
|
37,029
|
|
Loss (gain) on
sale-leaseback transactions (b)
|
4,902
|
|
12,672
|
|
(2,620)
|
|
13,431
|
|
Legal settlements
(c)
|
1,250
|
|
—
|
|
1,250
|
|
—
|
|
Asset impairments
(d)
|
—
|
|
5,340
|
|
—
|
|
6,620
|
|
Other
(e)
|
(641)
|
|
(312)
|
|
(4,437)
|
|
(4,852)
|
|
Adjusted
EBITDA
|
$
180,293
|
|
$
142,981
|
|
$
499,816
|
|
$
399,123
|
|
|
|
|
(a) – (d)
|
See the corresponding
footnotes to the table in footnote 6 immediately
above.
|
|
|
|
|
(e)
|
Includes (i) (gain)
loss on sales of land of $(0.6)million and $0.4million for the
three months ended September30, 2024 and 2023, respectively, and
$(5.0)million and $0.4million for the nine months ended
September30, 2024 and 2023, respectively, and (ii) legal-related
expenses in pursuit of our claim against Zurich of $0.1million for
the three months ended September30, 2023, and $0.6million and
$0.7million for the nine months ended September30, 2024 and 2023,
respectively. For 2023, also includes a subsidy (credit) for our
Canadian operations in connection with COVID-19 of $(0.3)million
for the nine months ended September30, 2023 and gain on sales of
the Company's triathlons and certain other assets of $(0.8)million
and $(5.7)million for the three and nine months ended September30,
2023, respectively.
|
|
|
|
(8)
|
Represents non-capital
expenditures associated with opening new centers that are incurred
prior to the commencement of a new center opening. The number of
centers under construction or development, the types of centers and
our costs associated with any particular center opening can vary
significantly from period to period.
|
|
|
|
(9)
|
Reflects the non-cash
portion of our annual GAAP operating lease expense that is greater
or less than the cash operating lease payments. Non-cash rent
expense for our open properties represents non-cash expense
associated with properties that were operating at the end of each
period presented. Non-cash rent expense for our properties under
development represents non-cash expense associated with properties
that are still under development at the end of each period
presented.
|
|
|
|
(10)
|
Free cash flow, a
non-GAAP financial measure, is calculated as net cash provided by
operating activities less capital expenditures, net of construction
reimbursements, plus net proceeds from sale-leaseback transactions
and land sales.
|
|
|
|
The following table
provides a reconciliation from net cash provided by operating
activities to free cash flow:
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
($ in
thousands)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net cash provided by
operating activities
|
$
151,146
|
|
$
114,655
|
|
$
411,976
|
|
$
330,946
|
|
Capital expenditures,
net of construction reimbursements
|
(87,106)
|
|
(192,889)
|
|
(388,213)
|
|
(529,965)
|
|
Proceeds from
sale-leaseback transactions
|
65,043
|
|
43,791
|
|
207,714
|
|
121,831
|
|
Proceeds from land
sales
|
9,249
|
|
4,169
|
|
15,577
|
|
4,169
|
|
Free cash
flow
|
$
138,332
|
|
$
(30,274)
|
|
$
247,054
|
|
$
(73,019)
|
|
Reconciliation of
Net Income to Adjusted EBITDA Trailing Twelve Months
($
in thousands)
(Unaudited)
|
|
|
Twelve
|
|
Twelve
|
|
Months
Ended
|
|
Months
Ended
|
|
September 30,
2024
|
|
September 30,
2023
|
|
Net income
|
$
142,761
|
|
$
66,105
|
|
Interest expense, net
of interest income
|
145,631
|
|
125,054
|
|
Provision for income
taxes
|
40,472
|
|
20,831
|
|
Depreciation and
amortization
|
269,398
|
|
237,270
|
|
Share-based
compensation expense
|
43,564
|
|
41,106
|
|
(Gain) loss on
sale-leaseback transactions
|
(2,463)
|
|
13,966
|
|
Legal
settlements
|
1,250
|
|
—
|
|
Asset
impairments
|
—
|
|
5,340
|
|
Other
|
(3,090)
|
|
(3,523)
|
|
Adjusted
EBITDA
|
$
637,523
|
|
$
506,149
|
|
Reconciliation of
Net Debt and Leverage Calculation
($ in
thousands)
(Unaudited)
|
|
|
Twelve
|
|
Twelve
|
|
Months
Ended
|
|
Months
Ended
|
|
September 30,
2024
|
|
September 30,
2023
|
|
Current maturities of
debt
|
$
12,439
|
|
$
64,033
|
|
Long-term debt, net of
current portion
|
1,639,752
|
|
1,815,965
|
|
Total
Debt
|
$
1,652,191
|
|
$
1,879,998
|
|
Less: Fair value
adjustment
|
323
|
|
682
|
|
Less: Unamortized debt
discounts and issuance costs
|
(6,462)
|
|
(16,531)
|
|
Less: Cash and cash
equivalents
|
120,947
|
|
9,199
|
|
Net
Debt
|
$
1,537,383
|
|
$
1,886,648
|
|
Trailing twelve-month
Adjusted EBITDA
|
637,523
|
|
506,149
|
|
Net Debt Leverage
Ratio
|
2.4x
|
|
3.7x
|
|
Reconciliation of
Net Income to Adjusted EBITDA Guidance for 2024
($ in
millions)
(Unaudited)
|
|
|
Year
Ended
|
|
December 31,
2024
|
|
Net income
|
$138 – $140
|
|
Interest expense, net
of interest income (1)
|
155 – 151
|
|
Provision for income
taxes
|
51 – 52
|
|
Depreciation and
amortization
|
272 – 275
|
|
Share-based
compensation expense
|
48 – 50
|
|
(Gain) on
sale-leaseback transactions
|
(3) – (3)
|
|
Other
|
(3) – (3)
|
|
Adjusted
EBITDA
|
$658 –
$662
|
|
|
|
(1)
|
Includes approximately
$15 million of estimated one-time interest expense related to the
refinancing of our senior secured and unsecured notes.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/life-time-reports-third-quarter-2024-financial-results-302285492.html
SOURCE Life Time Group Holdings, Inc.