Life Time Fitness Announces Third Quarter 2005 Financial Results; Company Reports Revenue Growth of 28.3% and Net Income Growth of 35.8% 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 third quarter ended September September: see month. 30, 2005. Third quarter 2005 revenue grew 28.3% to $101.6 million from $79.2 million during the same period last year. Net income during the quarter grew 35.8% to $10.7 million and earnings 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 grew 31.8% to $0.29. This compares to net income of $7.9 million, or $0.22 per diluted share, for Q3 2004. For the nine months ended September 30, 2005, revenue grew 24.6% to $286.5 million from $229.9 million during the same period last year. Net income grew 40.4% for the same period to $29.1 million, or $0.81 per diluted share, from $20.8 million, or $0.65 per diluted share for the first nine months of 2004. "We are pleased with our third quarter financial results," said Bahram Bahram or Vahram (Persian: بهرام), alternative spelling Bahran or Vahran, (Uzbek: Баҳром, Bahrom Akradi, Life Time Fitness chairman and chief executive officer. "These results reflect the company's continued focus and execution on our fundamental growth strategies, including new center growth, membership ramp, and increasing in-center revenue. During the quarter, we opened new centers in 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. , Austin Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas, and Romeoville, Illinois Romeoville is a village in Will County, Illinois, United States. The population was 21,153 at the 2000 census. As of 2005 the population has grown to 35,020. Geography Romeoville is located at (41.640480, -88.102907). . We now operate 44 centers nationally with one more planned center opening during the fourth quarter in San Antonio, Texas “San Antonio” redirects here. For other uses, see San Antonio (disambiguation). San Antonio is the second most populous city in Texas, the third most populous metropolitan area in Texas, and is the seventh most populous city in the United States. As of the 2006 U.S. . Total memberships grew 20.9% to more than 345,000, 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 seven locations since the beginning of 2005." Three and Nine Months Ended September 30, 2005, Financial Highlights: Total revenue for the third quarter grew 28.3% to $101.6 million driven primarily by growth in membership dues and in-center revenue. Total revenue for the first nine months of 2005 grew 24.6% to $286.5 million from $229.9 million during the same period last year. --Membership dues revenue for the third quarter grew 28.8% to $67.6 million from $52.5 million in Q3 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 26.0% to $192.4 million from $152.7 million during the same period last year. --Enrollment fee revenue for the third quarter grew 1.8% to $5.3 million from $5.2 million in Q3 2004. Year-to-date enrollment fee revenue totaled $15.4 million, up 4.4% from $14.8 million during the prior-year period. --In-center revenue for the third quarter grew 40.4% to $25.7 million from $18.3 million in Q3 2004. Year-to-date in-center revenue grew 35.5% to $72.4 million compared to $53.4 million during the same period last year. --Same-center revenue increased 7.9% during the third quarter compared to the prior-year period. --Total revenue per membership averaged $298 in the third quarter, up 6.4% from the prior-year period. Total in-center revenue per membership averaged $78 in the third quarter, up 15.2% from the prior-year period. --Other revenue for the third quarter, including media division advertising, our restaurant and event sponsorships, totaled $3.1 million compared to $3.2 million in the prior-year period. Year-to-date other revenue totaled $6.4 million compared to $9.1 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 Q3 2005 totaled $80.4 million compared to $61.8 million for Q3 2004, driven primarily by increased expenses to support new centers, membership growth and presale activities. Year-to-date operating expenses totaled $227.7 million compared with $182.2 million for the same period last year. --Center operating expenses totaled $56.6 million in Q3 2005 compared to $42.5 million in Q3 2004. Year-to-date center operating expenses totaled $159.0 million compared with $122.0 million during the same period last year. --Advertising and marketing expenses totaled $4.2 million for Q3 2005 compared to $2.8 million for the same period last year. Year-to-date advertising and marketing expenses totaled $11.1 million compared with $9.3 million during the prior-year period. --General and administrative expenses totaled $6.5 million for the third quarter compared to $4.3 million in the prior-year period. For the nine months ended September 30, 2005, general and administrative expenses totaled $20.4 million compared with $15.9 million in the prior-year period. --Other operating expenses and depreciation and amortization expenses totaled $13.1 million during Q3 2005 compared to $12.1 million in Q3 2004. Year-to-date operating expenses in the same areas were $37.2 million compared with $35.0 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 20.8% for Q3 2005 compared to 22.0% in the same period last year. This margin reduction was driven primarily by the nine centers in their first year of operation at the end of the third quarter. Year-to-date operating margins were 20.6% compared with 20.8% for the prior-year period. Net income during Q3 2005 grew 35.8% to $10.7 million from $7.9 million in Q3 2004 driven by continued revenue growth and efficient use of capital. --For the nine months ended September 30, 2005, net income grew 40.4% to $29.1 million compared with $20.8 million in the prior-year period. --Net income margin for Q3 2005 was 10.6%, up from 10.0% in Q3 2004. The year-to-date net income margin was 10.2%, up from 9.0% 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 Q3 2005 grew 25.5% to $31.6 million from $25.1 million in Q3 2004. --Year-to-date EBITDA grew 25.5% to $87.7 million from $69.9 million for the same period last year. --As a percentage of total revenue, EBITDA was 31.1% in Q3 2005, down from 31.7% in Q3 2004. Year-to-date EBITDA margin was 30.6%, up from 30.4% for the same period last year. 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 56.6% to $81.0 from $51.7 million for the year-to-date period. Weighted average fully diluted shares for the third quarter totaled 36.5 million compared to 35.4 million shares in Q3 2004. Updated 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) 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 34-36% (or $38.7-$39.3 million), up from 32-34% (or $38.1-$38.7 million), 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 22-24% (or $1.06-$1.08), up from 21-23% (or $1.05-$1.07), 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 October October: see month. 13, 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 third quarter and nine 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) today. 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 October 27, 2005, the Company operated 44 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 nutritional pertaining to or emanating from nutrition. nutritional anemia see nutritional anemia. nutritional assessment 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)
September 30, 2005 December 31, 2004
------------------- -----------------
ASSETS: (Unaudited)
Current assets:
Cash and cash equivalents $923 $10,211
Accounts receivable, net 3,705 1,187
Inventories 4,984 4,971
Prepaid expenses and other
current assets 7,274 7,275
Deferred membership
origination costs 9,500 8,271
Deferred tax asset - 1,597
Income tax receivable 1,879 4,579
------------------- -----------------
Total current assets 28,265 38,091
Property and equipment, net 600,724 503,690
Restricted cash 5,200 12,092
Deferred membership
origination costs 8,003 7,061
Other assets 13,473 11,153
------------------- -----------------
Total assets $655,665 $572,087
=================== =================
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Current liabilities:
Current maturities of long-
term debt $14,964 $47,477
Accounts payable 7,980 5,762
Construction accounts payable 22,142 17,633
Accrued expenses 25,764 19,152
Deferred revenue 23,184 20,019
------------------- -----------------
Total current liabilities 94,034 110,043
Long-term debt, net of
current portion 218,546 161,767
Deferred rent liability 5,354 3,678
Deferred income taxes 35,114 33,701
Deferred revenue 14,293 12,264
------------------- -----------------
Total liabilities 367,341 321,453
------------------- -----------------
Shareholders' equity:
Undesignated preferred stock - -
Common stock 700 676
Additional paid-in capital 221,002 209,931
Deferred compensation (2,616) (66)
Retained earnings 69,238 40,093
------------------- -----------------
Total shareholders' equity 288,324 250,634
------------------- -----------------
Total liabilities and
shareholders' equity $655,665 $572,087
=================== =================
LIFE TIME FITNESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2005 2004 2005 2004
---- ---- ---- ----
REVENUE:
Membership dues $67,589 $52,477 $192,379 $152,662
Enrollment fees 5,279 5,185 15,415 14,764
In-center revenue 25,680 18,290 72,383 53,404
--------- -------- --------- ---------
Total center revenue 98,548 75,952 280,177 220,830
Other revenue 3,064 3,233 6,370 9,114
--------- -------- --------- ---------
Total revenue 101,612 79,185 286,547 229,944
OPERATING EXPENSES:
Center operations 56,631 42,529 159,029 122,048
Advertising and marketing 4,161 2,838 11,072 9,292
General and administrative 6,536 4,302 20,357 15,852
Other operating 3,014 4,637 9,178 13,586
Depreciation and amortization 10,095 7,489 28,019 21,407
--------- -------- --------- ---------
Total operating expenses 80,437 61,795 227,655 182,185
--------- -------- --------- ---------
Income from operations 21,175 17,390 58,892 47,759
OTHER INCOME (EXPENSE):
Interest expense, net (3,278) (4,285) (10,347) (13,346)
Equity in earnings of
affiliate 283 257 836 778
--------- -------- --------- ---------
Total other income
(expense) (2,995) (4,028) (9,511) (12,568)
--------- -------- --------- ---------
INCOME BEFORE INCOME TAXES 18,180 13,362 49,381 35,191
Provision for income taxes 7,443 5,458 20,236 14,428
--------- -------- --------- ---------
NET INCOME 10,737 7,904 29,145 20,763
Accretion on redeemable
preferred stock - 95 - 3,570
--------- -------- --------- ---------
NET INCOME APPLICABLE TO
COMMON SHAREHOLDERS $10,737 $7,809 $29,145 $17,193
========= ======== ========= =========
BASIC EARNINGS PER COMMON SHARE $0.31 $0.24 $0.85 $0.79
========= ======== ========= =========
DILUTED EARNINGS PER COMMON
SHARE $0.29 $0.22 $0.81 $0.65
========= ======== ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC 34,846 32,533 34,343 21,628
========= ======== ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
DILUTED 36,476 35,385 36,201 32,177
========= ======== ========= =========
LIFE TIME FITNESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the
Nine Months Ended September 30,
-------------------------------
2005 2004
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $29,145 $20,763
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 28,019 21,407
Deferred income taxes 3,011 3,505
Loss on disposal of property, net 421 318
Amortization of deferred
financing costs 864 1,137
Compensation cost related to
stock options 269 213
Tax benefit from exercise of
stock options 4,916 733
Changes in operating assets and
liabilities 14,362 3,650
--------------- ---------------
Net cash provided by operating
activities 81,007 51,726
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(excluding non-cash purchases
supplementally noted below) (122,790) (94,682)
Increase (decrease) in construction
accounts payable (2,682) 1,862
Proceeds from sale of property 3,842 1,249
Increase in other assets (2,010) (1,761)
Decrease (increase) in restricted
cash 6,892 (1,995)
--------------- ---------------
Net cash used in investing
activities (116,748) (95,327)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings 228,581 26,977
Repayments on long-term borrowings (204,314) (65,292)
Increase in deferred financing costs (1,174) (1,061)
Proceeds from initial public
offering, net of underwriting
discounts and offering costs - 80,653
Proceeds from exercise of stock
options 3,360 887
--------------- ---------------
Net cash provided by financing
activities 26,453 42,164
--------------- ---------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (9,288) (1,437)
CASH AND CASH EQUIVALENTS - Beginning
of period 10,211 18,446
--------------- ---------------
CASH AND CASH EQUIVALENTS - End of
period $923 $17,009
=============== ===============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash payments for interest, net of
capitalized interest $11,714 $12,549
=============== ===============
Cash payments for income taxes $9,610 $8,786
=============== ===============
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 leases $- $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 Nine Months Ended
September 30, September 30,
------------- -------------
2005 2004 2005 2004
---- ---- ---- ----
Net Income $10,737 $7,904 $29,145 $20,763
Interest expense, net 3,278 4,285 10,347 13,346
Provision for income taxes 7,443 5,458 20,236 14,428
Depreciation and amortization 10,095 7,489 28,019 21,407
--------- -------- -------- --------
EBITDA $31,553 $25,136 $87,747 $69,944
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