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Life Time Fitness Announces Fourth Quarter And Full-Year 2012 Financial Results

Life Time Fitness, Inc. (NYSE: LTM), The Healthy Way of Life Company, today reported its financial results for the fourth quarter and full year ended December 31, 2012.

Fourth quarter 2012 revenue grew 9.7% to $275.3 million from $250.9 million during the same period last year. Total revenue for the year grew 11.2% to $1.127 billion from $1.014 billion in 2011.

Net income for the quarter was $23.4 million, or $0.56 per diluted share, compared to net income of $19.8 million, or $0.48 per diluted share, for 4Q 2011. Net income for the year was $111.5 million, or $2.66 per diluted share, compared to net income of $92.6 million, or $2.26 per diluted share, in 2011.

“For 2012, I am pleased to report double-digit growth in revenue, operating profit, net income, and earnings per share,” said Bahram Akradi, chairman, president and chief executive officer. “We also saw total-center revenue growth above 10%, along with solid revenue-per-membership and same-store-sales. Looking ahead, we are positioning our company for top-line growth through center expansion, new membership and programming initiatives, and expanded products and services. For 2013, we plan to open one new center in the first half of the year, our first in Alabama, and two in the second half, including one in Virginia and one in New Jersey. We also have initial plans to double our center openings in 2014, led by openings in New York and California early in the year.”

Three and Twelve Months Ended December 31, 2012, Financial Highlights:

Total revenue for the fourth quarter grew 9.7% to $275.3 million from $250.9 million in 4Q 2011. Total revenue for the year grew 11.2% to $1.127 billion from $1.014 billion in 2011.

(Period-over-period growth)  

4Q 2012 vs. 4Q 2011

(in millions except revenue per membership data)

  • Membership dues
$179.7 vs. $166.9 (up 7.6%)
  • In-center revenue
$83.0 vs. $73.7 (up 12.5%)
  • Other revenue
$9.1 vs. $6.1 (up 48.6%)
 
  • Average center revenue per membership (up 4.5% to $399 excluding the Lifestyle Family Fitness transaction (“LFF”))
$393 vs. $380 (up 3.5%)
  • Average in-center revenue per membership (up 8.1% to $125 excluding LFF)
$122 vs. $114 (up 7.1%)
  • Same-center revenue (open 13 months or longer)
Up 3.6%
  • Same-center revenue (open 37 months or longer)
Up 3.0%
(Period-over-period growth)  

2012 vs. 2011

(in millions except revenue per membership data)

  • Membership dues
$727.6 vs. $663.4 (up 9.7%)
  • In-center revenue
$348.3 vs. $308.5 (up 12.9%)
  • Other revenue
$35.7 vs. $23.3 (up 53.3%)
 
  • Average center revenue per membership (up 4.7% to $1,618 excluding LFF)
$1,587 vs. $1,543 (up 2.9%)
  • Average in-center revenue per membership (up 7.6% to $518 excluding LFF)
$507 vs. $481 (up 5.4%)
  • Same-center revenue (open 13 months or longer)
Up 4.3%
  • Same-center revenue (open 37 months or longer)
Up 3.7%

Memberships grew 1.0% to 682,621 at December 31, 2012, from 676,054 at December 31, 2011.

  • Excluding memberships acquired in connection with LFF, memberships grew 2.4%.
  • Attrition in 4Q 2012 was 10.4% compared to 9.6% in the prior-year period. Excluding LFF, 4Q 2012 attrition was 10.1%.
  • Attrition for the trailing 12-month period ended December 31, 2012, was 38.2% compared to trailing 12-month attrition of 35.0% at December 31, 2011. Excluding LFF, trailing 12-month attrition was 36.9%.

Total operating expenses during 4Q 2012 were $231.4 million compared to $214.0 million for 4Q 2011. Total operating expenses for the year were $918.7 million compared to $840.4 million in 2011.

  • Income from operations margin was 16.0% for 4Q 2012 compared to 14.7% in the prior-year period.
  • Income from operations margin for the year was 18.5% compared to 17.1% in 2011.
(Expense as a percent of total revenue)  

4Q 2012 vs. 4Q 2011

 

2012 vs. 2011

  • Center operations
57.8% vs. 59.6% 58.2% vs. 60.7%
  • Advertising and marketing
4.0% vs. 3.9% 3.5% vs. 3.5%
  • General and administrative
5.3% vs. 6.9% 5.0% vs. 5.4%
  • Other operating
6.1% vs. 4.8% 4.6% vs. 3.5%
  • Depreciation and amortization
10.8% vs. 10.1% 10.2% vs. 9.8%

Net income for 4Q 2012 was $23.4 million, or $0.56 per diluted share, compared to net income of $19.8 million, or $0.48 per diluted share, for 4Q 2011. Net income for the year was $111.5 million, or $2.66 per diluted share, compared to net income of $92.6 million, or $2.26 per diluted share, in 2011.

EBITDA for 4Q 2012 was $74.1 million compared to $62.4 million in 4Q 2011. For the year, EBITDA was $324.7 million compared to $273.4 million in 2011.

  • As a percentage of total revenue, EBITDA in 4Q 2012 was 26.9% compared to 24.9% in 4Q 2011.
  • For the year, EBITDA, as a percentage of total revenue, was 28.8% compared to 27.0% in 2011.

Cash flows from operating activities for the year totaled $255.7 million compared to $227.9 million in 2011.

Weighted average fully diluted shares for 4Q 2012 totaled 42.0 million compared to 41.3 million in 4Q 2011. For the year, weighted average fully diluted shares totaled 42.0 million compared to 40.9 million in 2011.

2013 Business Outlook:

The following statements are based on the Company’s current expectations for fiscal year 2013 and incorporate 2012 operating trends. These 2013 expectations are subject to the risks and uncertainties further described in the Company’s forward-looking statements:

  • Revenue is expected to be up 6.5-8%, or $1.200-1.220 billion, driven primarily by price and mix optimization, and growth in in-center and ancillary business revenue.
  • Net income is expected to be up 8-11%, or $120.0-124.0 million, driven by revenue growth and cost efficiencies.
  • Diluted earnings per common share is expected to be $2.85-2.95.

As announced on February 14, 2013, the Company will hold a conference call today at 10:00 a.m. ET to discuss its fourth quarter and full-year 2012 results. Bahram Akradi, Michael Robinson, executive vice president and chief financial officer, and John Heller, senior director, investor relations & treasurer, will host the conference call. The conference call will be webcast and may be accessed via the Company’s Investor Relations section of its website at lifetimefitness.com. A replay of the call will be available the same day via the Company’s website beginning at approximately 2:00 p.m. ET.

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