Life Time Fitness Announces Second Quarter 2005 Financial Results; Company Reports Revenue Growth of 24.8% and Net Income Growth of 42.7% for the Quarter.EDEN PRAIRIE Eden Prairie A city of eastern Minnesota, a residential suburb of Minneapolis. Population: 57,300. , Minn. -- Life Time Fitness, Inc. (NYSE NYSE See: New York Stock Exchange :LTM LTM abbr. long-term memory ), a national operator of distinctive and large health and fitness centers, today reported its operating results for the second quarter ended June June: see month. 30, 2005. Second quarter 2005 revenue grew 24.8% to $95.6 million from $76.6 million during the same period last year. Net income during the quarter grew 42.7% to $10.3 million, or $0.28 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share on 36.2 million shares. This compares to net income of $7.2 million, or $0.25 per diluted share on 29.1 million shares, for Q2 2004. For the six months ended June 30, 2005, revenue grew 22.7% to $184.9 million from $150.8 million during the same period last year. Net income grew 43.2% for the same period to $18.4 million, or $0.51 per diluted share, from $12.9 million, or $0.44 per diluted share for the first six months of 2004. "Our second quarter financial results demonstrate our continued focus and execution on our fundamental growth strategies, including new center growth, membership ramp, and increasing in-center revenue," said Bahram Bahram or Vahram (Persian: بهرام), alternative spelling Bahran or Vahran, (Uzbek: Баҳром, Bahrom Akradi, Life Time Fitness chairman and chief executive officer. "During the quarter, we opened a new center in Cinco Ranch, Texas Cinco Ranch is a census-designated place and master-planned, unincorporated community located in the extraterritorial jurisdiction of Houston within Fort Bend County and Harris County, Texas. The population was 11,196 at the 2000 census. , - the company's third location in Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; . In early July July: see month. , we opened our Chanhassen, Minnesota Chanhassen is a city located in the U.S. state of Minnesota. The population was estimated to be 23,864 in 2006.[1] Although the bulk of Chanhassen is in Carver County, it also extends into Hennepin County. , location, which is our 42nd center nationally. Three additional center openings are planned for the second half of the year. Total memberships grew 20.8% to more than 335,000, driven primarily by the ramp at centers opened in 2004 and both new center and presale pre·sale n. 1. The period before something, such as a work of art, is available for sale to the public. 2. An exclusive or private sale held before an advertised sale. activities at six locations since the beginning of 2005. We also are pleased with our in-center revenue growth of 34.6% to $24.0 million during Q2 2005, which was driven primarily by membership ramp, targeted marketing programs, and new products and services. Finally, on July 16, we held our 2005 Life Time Fitness Triathlon The Life Time Fitness Triathlon is a triathlon race held annually in Minneapolis MN. An Olympic Distance length course winds its way through the city, drafting is not permitted. , which in just its fourth year, drew more than 2,500 participants from 11 countries and 40 states. Coupled with a same-day national broadcast of the event, the Triathlon triathlon, athletic event made up of three contests. Since the 1970s the term has come to mean especially a race combining swimming, bicycling, and running. A notable example is Hawaii's Ironman Triathlon, held since 1978, which features a 2. represents a powerful branding initiative for our company and a key supporting aspect of our healthy-way-of-life mission." Three and Six Months Ended June 30, 2005, Financial Highlights: Total revenue for the second quarter grew 24.8% to $95.6 million, driven primarily by growth in membership dues and in-center revenue. Total revenue for the first six months of 2005 grew 22.7% to $184.9 million from $150.8 million during the same period last year. --Membership dues revenue for the second quarter grew 26.1% to $64.3 million from $51.0 million in Q2 2004. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. membership dues revenue grew 24.6% to $124.8 million from $100.2 million during the same period last year. --Enrollment fee revenue for the second quarter grew 7.5% to $5.5 million, from $5.1 million in Q2 2004. Year-to-date enrollment fee revenue totaled $10.1 million, up from $9.6 million during the prior-year period. --In-center revenue for the second quarter grew 34.6% to $24.0 million, from $17.9 million in Q2 2004. Year-to-date in-center revenue grew 33.0% to $46.7 million, compared to $35.1 million during the same period last year. --Same-center revenue increased 7.0% during the second quarter compared to the prior-year period. --Total revenue per membership averaged $294 in the second quarter, up 4.3% from the prior-year period. Total in-center revenue per membership averaged $75 in the second quarter, up 10.6% from the prior-year period. --Other revenue for the second quarter, including media division advertising, our restaurant and external nutritional nutritional pertaining to or emanating from nutrition. nutritional anemia see nutritional anemia. nutritional assessment products sales, totaled $1.8 million compared to $2.7 million in the prior-year period. Year-to-date other revenue totaled $3.3 million compared to $5.9 million in the same period last year. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. during Q2 2005 totaled $75.2 million compared to $60.2 million for Q2 2004, driven primarily by increased expenses to support new centers, membership growth and presale activities at six locations. Year-to-date operating expenses totaled $147.2 million, compared with $120.4 million for the same period last year. --Center operating expenses totaled $52.8 million in Q2 2005, compared to $40.5 million in Q2 2004. Year-to-date center operating expenses totaled $102.4 million, compared with $79.5 million during the same period last year. --Advertising and marketing expenses totaled $2.6 million for Q2 2005, compared to $2.8 million for the same period last year. Year-to-date advertising and marketing expenses totaled $6.9 million, compared with $6.5 million during the prior-year period. --General and administrative expenses totaled $7.3 million for the second quarter, compared to $5.6 million in the prior-year period. For the six months ended June 30, 2005, general and administrative expenses totaled $13.8 million, compared with $11.5 million in the prior-year period. --Other operating expenses and depreciation and amortization expenses totaled $12.4 million during Q2 2005, compared to $11.4 million in Q2 2004. Year-to-date operating expenses in the same areas were $24.1 million, compared with $22.9 million in the prior-year period. --Total operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 21.4% for Q2 2005, the same as the prior-year period. Year-to-date operating margins were 20.4%, compared with 20.1% for the prior-year period. Net income during Q2 2005 grew 42.7% to $10.3 million from $7.2 million in Q2 2004, driven by continued revenue growth and efficient use of capital. --For the six months ended June 30, 2005, net income grew 43.2% to $18.4 million compared with $12.9 million in the prior-year period. --Net income margin for Q2 2005 was 10.8%, up from 9.4% in Q2 2004. The year-to-date net income margin was 10.0%, up from 8.5% for the same period last year. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for Q2 2005 grew 26.4% to $29.9 million from $23.6 million in Q2 2004. --Year-to-date EBITDA grew 25.4% to $56.2 million from $44.8 million for the same period last year. --As a percentage of total revenue, EBITDA was 31.2% in Q2 2005, up from 30.8% in Q2 2004. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the year-to-date period grew 48.6% to $54.0 million from $36.4 million for the year-to-date period. Weighted average fully diluted shares for the second quarter totaled 36.2 million, compared to 29.1 million shares in Q2 2004. The increase in weighted average fully diluted shares is a result of the Company's initial public offering, which became effective on June 29, 2004. Raised 2005 Business Outlook: The following statements are based on the Company's expectations for fiscal year 2005, subject to the risks and uncertainties described below. --2005 full-year total revenue is expected to grow 22-24% (or $381-$387 million), up from 21-23%, driven by new center growth, membership ramp at new and existing centers, and in-center revenue growth. --2005 full-year net income is expected to grow 32-34% (or $38.1-$38.7 million), up from 30-32%, driven by our growth strategies. --2005 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of are expected to grow 21-23% (or $1.05-$1.07), up from 20-22%, driven by net income growth and offset by the increase in weighted average diluted shares resulting from the initial public offering in 2004. As announced on July 15, 2005, the Company will hold a conference call today at 10:00 a.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) to discuss second quarter and six-months ended 2005 results. Bahram Akradi, chairman and chief executive officer, and Michael Robinson Michael Robinson may refer to:
The process by which the corporation communicates with its investors. section of its Web site at www.lifetimefitness.com. A replay of the call will be available via the Company's Web site beginning at 1:00 p.m. (EDT) on July 28, 2005. About Life Time Fitness, Inc. Life Time Fitness, Inc. (NYSE:LTM) operates distinctive and large sports and athletic athletic (athlet´ik), adj pertaining to a bodily constitution characterized by a strong, muscular, robust appearance. athletic injuries, n. , professional fitness, family recreation and resort/spa centers. As of July 28, 2005, the Company operated 42 centers in eight states, including Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). , Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). , Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces , Ohio, Texas and Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). . The Company also provides consumers with personal training consultation, full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. spas and cafes, corporate wellness programs, health and nutrition nutrition, study of the materials that nourish an organism and of the manner in which the separate components are used for maintenance, repair, growth, and reproduction. Nutrition is achieved in various ways by different forms of life. education, the healthy lifestyle magazine - Experience Life, athletic events, and nutritional products and supplements. Life Time Fitness is headquartered in Eden Prairie, Minnesota The creator of this article, or someone who has substantially contributed to it, may have a conflict of interest regarding its subject matter. It may require cleanup to comply with Wikipedia's content policies, particularly neutral point of view. (www.lifetimefitness.com). LIFE TIME FITNESS, the LIFE TIME FITNESS logo, and EXPERIENCE LIFE are registered trademarks of Life Time Fitness, Inc. All other trademarks or registered trademarks are the property of their respective owners. Risks & Uncertainties Certain information contained in this press release, which does not relate to historical financial information, including the business outlook, may be deemed to constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements are subject to certain risks and uncertainties that could cause the Company's actual results in the future to differ materially from its historical results and those presently anticipated or projected. The Company wishes to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update such statement to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or arising after such date. Among risks and uncertainties are identifying and acquiring suitable sites for new sports and athletic, professional fitness, family recreation and resort/spa centers, opening new centers, attracting and retaining members and other factors set forth in the Company's filings with the Securities and Exchange Commission. Net earnings per share could also be affected by the number of shares outstanding, which depends on factors such as the number of shares issued upon exercise of stock options and future grants of awards pursuant to equity-based incentive plans. All remarks made during the Company's financial results conference call will be current at the time of the call and the Company undertakes no obligation to update the replay.
LIFE TIME FITNESS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, 2005 December 31, 2004
------------------ ------------------
(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $346 $10,211
Accounts receivable, net 3,336 1,187
Inventories 4,733 4,971
Prepaid expenses and other
current assets 7,890 7,275
Deferred membership
origination costs 9,369 8,271
Deferred tax asset 1,597 1,597
Income tax receivable 1,682 4,579
------------------ ------------------
Total current assets 28,953 38,091
Property and equipment, net 564,883 503,690
Restricted cash 3,873 12,092
Deferred membership
origination costs 7,603 7,061
Other assets 12,050 11,153
------------------ ------------------
Total assets $617,362 $572,087
================== ==================
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Current liabilities:
Current maturities of long-
term debt $15,870 $47,477
Accounts payable 7,629 5,762
Construction accounts payable 22,389 17,633
Accrued expenses 24,555 19,152
Deferred revenue 24,361 20,019
------------------ ------------------
Total current liabilities 94,804 110,043
Long-term debt, net of current
portion 194,402 161,767
Deferred rent liability 5,132 3,678
Deferred income taxes 32,827 33,701
Deferred revenue 13,966 12,264
------------------ ------------------
Total liabilities 341,131 321,453
------------------ ------------------
Shareholders' equity:
Common stock 696 676
Additional paid-in capital 217,187 209,931
Deferred compensation (154) (66)
Retained earnings 58,502 40,093
------------------ ------------------
Total shareholders'
equity 276,231 250,634
------------------ ------------------
Total liabilities and
shareholders' equity $617,362 $572,087
================== ==================
LIFE TIME FITNESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
REVENUE:
Membership dues $64,313 $51,005 $124,790 $100,184
Enrollment fees 5,452 5,073 10,137 9,580
In-center revenue 24,029 17,856 46,702 35,114
--------- --------- --------- ---------
Total center revenue 93,794 73,934 181,629 144,878
Other revenue 1,813 2,655 3,306 5,881
--------- --------- --------- ---------
Total revenue 95,607 76,589 184,935 150,759
OPERATING EXPENSES:
Center operations 52,827 40,466 102,398 79,519
Advertising and marketing 2,619 2,774 6,910 6,454
General and administrative 7,331 5,599 13,821 11,549
Other operating 3,226 4,393 6,164 8,949
Depreciation and amortization 9,190 6,971 17,924 13,918
--------- --------- --------- ---------
Total operating expenses 75,193 60,203 147,217 120,389
--------- --------- --------- ---------
Income from operations 20,414 16,386 37,718 30,370
OTHER INCOME (EXPENSE):
Interest expense, net (3,243) (4,449) (7,069) (9,061)
Equity in earnings of
affiliate 266 267 554 520
--------- --------- --------- ---------
Total other income
(expense) (2,977) (4,182) (6,515) (8,541)
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 17,437 12,204 31,203 21,829
Provision for income taxes 7,150 4,993 12,794 8,970
--------- --------- --------- ---------
NET INCOME 10,287 7,211 18,409 12,859
Accretion on redeemable
preferred stock - 1,737 - 3,474
--------- --------- --------- ---------
NET INCOME APPLICABLE TO
COMMON SHAREHOLDERS $10,287 $5,474 $18,409 $9,385
========= ========= ========= =========
BASIC EARNINGS PER COMMON SHARE $0.30 $0.34 $0.54 $0.58
========= ========= ========= =========
DILUTED EARNINGS PER COMMON
SHARE $0.28 $0.25 $0.51 $0.44
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON
SHARES OUTSTANDING - BASIC 34,360 16,195 34,091 16,175
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON
SHARES OUTSTANDING - DILUTED 36,161 29,123 36,047 29,124
========= ========= ========= =========
LIFE TIME FITNESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Six
Months Ended June 30,
---------------------
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $18,409 $12,859
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 17,924 13,918
Deferred income taxes (874) (118)
Loss on disposal of property, net 370 128
Amortization of deferred financing costs 701 704
Compensation related to stock options and
restricted stock (215) 149
Tax benefit from exercise of stock options 4,222 -
Changes in operating assets and liabilities 13,499 8,719
---------- ----------
Net cash provided by operating activities 54,036 36,359
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(excluding non-cash purchases
supplementally noted below) (83,266) (58,721)
Increase in construction accounts payable 4,756 9,894
Proceeds from sale of property 3,778 1,247
Increase in other assets (425) (2,592)
Decrease (increase) in restricted cash 8,219 (771)
---------- ----------
Net cash used in investing activities (66,938) (50,943)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowings 112,641 26,466
Repayments on long-term borrowings (111,613) (29,172)
Increase in deferred financing costs (1,174) (976)
Proceeds from exercise of stock options 3,183 246
---------- ----------
Net cash provided by (used in) financing
activities 3,037 (3,436)
---------- ----------
DECREASE IN CASH AND CASH EQUIVALENTS (9,865) (18,020)
CASH AND CASH EQUIVALENTS--Beginning of period 10,211 18,446
---------- ----------
CASH AND CASH EQUIVALENTS--End of period $346 $426
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash payments for interest, net of
capitalized interest of $2,037 and $789
respectively $7,934 $8,410
========== ==========
Cash payments for income taxes $6,549 $6,819
========== ==========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Property and equipment purchases financed
through notes payable $- $2,954
========== ==========
Property and equipment purchases financed
through capital lease obligations $- $145
========== ==========
Non-GAAP Financial Measures This release contains a non-GAAP disclosure, EBITDA, which consists of net income plus interest expense, net, provision for income taxes and depreciation and amortization. This term, as the Company defines it, may not be comparable to a similarly titled measure used by other companies and is not a measure of performance presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . The Company uses EBITDA as a measure of operating performance. The funds depicted de·pict tr.v. de·pict·ed, de·pict·ing, de·picts 1. To represent in a picture or sculpture. 2. To represent in words; describe. See Synonyms at represent. by EBITDA are not necessarily available for discretionary use if they are reserved for particular capital purposes, to maintain compliance with debt covenants, to service debt or to pay taxes. EBITDA should not be considered as a substitute for net income, cash flows provided by operating activities or other income or cash flow data prepared in accordance with GAAP. Additional details related to EBITDA are provided in the Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. that the Company filed with the Securities and Exchange Commission on the date of this press release. The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA:
LIFE TIME FITNESS, INC.
RECONCILIATION OF NET INCOME TO EARNINGS BEFORE INTEREST,
INCOME TAXES AND DEPRECIATION AND AMORTIZATION
(In thousands)
(Unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net Income $10,287 $7,211 $18,409 $12,859
Interest expense, net 3,243 4,449 7,069 9,061
Provision for income taxes 7,150 4,993 12,794 8,970
Depreciation and amortization 9,190 6,971 17,924 13,918
--------- --------- --------- ---------
EBITDA $29,870 $23,624 $56,196 $44,808
========= ========= ========= =========
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