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Life Time Reports Third Quarter 2024 Financial Results

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Life Time Group Holdings (NYSE: LTH) reported strong Q3 2024 financial results with total revenue increasing 18.5% to $693.2 million. Net income surged 422.5% to $41.4 million, while Adjusted EBITDA grew 26.1% to $180.3 million. The company's center memberships increased 5.4% year-over-year to 826,502, with average center revenue per membership rising 12.9% to $815. The company reduced its net debt leverage ratio to 2.4x and delivered positive operating cash flow. Life Time opened two new centers during Q3, bringing the total to 177 centers.

Life Time Group Holdings (NYSE: LTH) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con ricavi totali in aumento del 18,5%, arrivando a 693,2 milioni di dollari. L'utile netto è schizzato del 422,5% a 41,4 milioni di dollari, mentre l'EBITDA rettificato è cresciuto del 26,1%, raggiungendo 180,3 milioni di dollari. Le iscrizioni ai centri dell'azienda sono aumentate del 5,4% rispetto all'anno precedente, toccando le 826.502 unità, con un ricavo medio per iscrizione a centro che è salito del 12,9% a 815 dollari. L'azienda ha ridotto il proprio rapporto di indebitamento netto a 2,4x e ha generato un flusso di cassa operativo positivo. Durante il terzo trimestre, Life Time ha aperto due nuovi centri, portando il totale a 177 centri.

Life Time Group Holdings (NYSE: LTH) reportó sólidos resultados financieros para el tercer trimestre de 2024, con ingresos totales aumentando un 18,5%, alcanzando 693,2 millones de dólares. El ingreso neto se disparó un 422,5% a 41,4 millones de dólares, mientras que el EBITDA ajustado creció un 26,1% hasta 180,3 millones de dólares. Las membresías de los centros de la empresa aumentaron un 5,4% en comparación con el año anterior, alcanzando las 826,502, y el ingreso promedio por membresía en el centro subió un 12,9% a 815 dólares. La empresa redujo su ratio de deuda neta a 2.4x y logró un flujo de efectivo operativo positivo. Durante el tercer trimestre, Life Time abrió dos nuevos centros, llevando el total a 177 centros.

라이프 타임 그룹 홀딩스 (NYSE: LTH)는 2024년 3분기 강력한 재무 결과를 보고했으며, 총 수익이 18.5% 증가하여 6억 9천 320만 달러에 이르렀습니다. 순이익은 422.5% 급증하여 4천 140만 달러에 달했으며, 조정 EBITDA는 26.1% 증가하여 1억 8천 30만 달러에 도달했습니다. 회사의 센터 멤버십은 전년 대비 5.4% 증가하여 826,502명에 이르렀으며, 평균 센터 수익은 12.9% 증가하여 815 달러로 상승했습니다. 회사는 순 부채 레버리지 비율을 2.4배로 낮추고 긍정적인 운영 현금 흐름을 창출했습니다. 라이프 타임은 3분기 동안 두 개의 새로운 센터를 열어 총 센터 수를 177개로 늘렸습니다.

Life Time Group Holdings (NYSE: LTH) a annoncé des résultats financiers solides pour le troisième trimestre 2024, avec des revenus totaux en hausse de 18,5%, atteignant 693,2 millions de dollars. Le bénéfice net a bondi de 422,5% pour atteindre 41,4 millions de dollars, tandis que l'EBITDA ajusté a progressé de 26,1% pour atteindre 180,3 millions de dollars. Le nombre d'adhésions aux centres de l'entreprise a augmenté de 5,4% par rapport à l'année précédente, totalisant 826 502, avec un revenu moyen par adhésion en hausse de 12,9% à 815 dollars. L'entreprise a réduit son ratio de levier d'endettement net à 2,4x et a généré un flux de trésorerie opérationnel positif. Au cours du troisième trimestre, Life Time a ouvert deux nouveaux centres, portant le total à 177 centres.

Life Time Group Holdings (NYSE: LTH) hat für das dritte Quartal 2024 starke Finanzresultate veröffentlicht, mit Gesamterlösen, die um 18,5% auf 693,2 Millionen US-Dollar gestiegen sind. Der Nettogewinn ist um 422,5% auf 41,4 Millionen US-Dollar gestiegen, während das bereinigte EBITDA um 26,1% auf 180,3 Millionen US-Dollar gewachsen ist. Die Mitgliederzahlen der Zentren des Unternehmens sind im Vergleich zum Vorjahr um 5,4% auf 826.502 gestiegen, mit einem durchschnittlichen Umsatz pro Mitgliedschaft, der um 12,9% auf 815 US-Dollar zugenommen hat. Das Unternehmen hat sein Nettoverschuldungsverhältnis auf 2,4x gesenkt und einen positiven operativen Cashflow erzielt. Während des dritten Quartals eröffnete Life Time zwei neue Zentren, sodass sich die Gesamtzahl auf 177 Zentren erhöht hat.

Positive
  • Revenue growth of 18.5% to $693.2 million in Q3 2024
  • Net income increased 422.5% to $41.4 million
  • Adjusted EBITDA grew 26.1% to $180.3 million
  • Net debt leverage ratio improved to 2.4x from 3.7x year-over-year
  • Average center revenue per membership increased 12.9% to $815
  • Positive operating cash flow with 31.8% increase to $151.1 million
Negative
  • Seasonal decrease in center memberships by approximately 6,100 from Q2 2024
  • Operating expenses increased 16.2% to $371.1 million
  • General, administrative and marketing expenses rose 11.7% to $57.7 million

Insights

Life Time Group Holdings delivered an exceptionally strong Q3 2024 performance with significant improvements across key metrics. $693.2 million in total revenue represents an 18.5% year-over-year increase, while net income surged by 422.5% to $41.4 million. The company's strategic initiatives are yielding results, with center memberships growing 5.4% to 826,502 members.

Particularly noteworthy is the company's improved financial health, with net debt leverage ratio dropping to 2.4x from 3.7x year-over-year. The successful equity offering of $124.4 million and debt refinancing have strengthened the balance sheet. Adjusted EBITDA margin expansion and positive free cash flow generation of $138.3 million demonstrate operational efficiency improvements.

The growth trajectory remains solid with two new center openings in Q3, bringing the total to 177 locations. The 12.9% increase in average center revenue per membership to $815 indicates strong pricing power and successful upselling of in-center services.

  • 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.

 

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SOURCE Life Time Group Holdings, Inc.

FAQ

What was Life Time's (LTH) revenue growth in Q3 2024?

Life Time's revenue grew 18.5% to $693.2 million in Q3 2024 compared to the same period last year.

How many centers does Life Time (LTH) operate as of Q3 2024?

Life Time operated 177 centers as of September 30, 2024, after opening two new centers during the third quarter.

What was Life Time's (LTH) net income in Q3 2024?

Life Time's net income was $41.4 million in Q3 2024, representing a 422.5% increase from the prior year quarter.

What is Life Time's (LTH) current net debt leverage ratio?

Life Time's net debt leverage ratio improved to 2.4x as of September 30, 2024, down from 3.7x in the previous year.

Life Time Group Holdings, Inc.

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