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Life Time Fitness Announces Fourth Quarter And Full Year 2013 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, 2013.

Fourth quarter 2013 revenue grew 5.7% to $291.0 million from $275.3 million during the same period last year. Revenue for the full year grew 7.0% to $1.206 billion from $1.127 billion during the same period last year.

Net income for the quarter was $26.0 million, or $0.63 per diluted share, compared to net income of $23.4 million, or $0.56 per diluted share, for 4Q 2012. Net income for the full year was $121.7 million, or $2.93 per diluted share, compared to net income of $111.5 million, or $2.66 per diluted share for the prior-year period.

“2013 served as an important transition year for our company,” said Bahram Akradi, chairman, president and chief executive officer. “We continued to differentiate Life Time in keeping with our strategy to operate a high barrier to entry business model in what is a low barrier to entry industry. We also concentrated on further aligning our company for higher growth in 2014 and beyond by ensuring our businesses operate in highly synergistic fashion and our comprehensive array of healthy way of life programs and services are optimized to deliver tremendous value for communities, organizations and individuals.”

During the quarter, the Company opened its third center in New Jersey, located in Montvale (greater New York market). In 2014, plans call for six new center openings in existing and new markets, led by Westchester County, New York, the Company’s second New York location, which opened on February 6. The remaining planned new center openings will be in the Tampa, Florida; Orange County, California; Des Moines, Iowa; Detroit, Michigan; and Las Vegas, Nevada markets.

Three and Twelve Months Ended December 31, 2013, Financial Highlights:

Total revenue for the fourth quarter grew 5.7% to $291.0 million from $275.3 million in 4Q 2012. Total revenue for the full year grew 7.0% to $1.206 billion from $1.127 billion during the prior-year period.

 

  4Q 2013 vs. 4Q 2012

(in millions except revenue per membership data)

 

Membership dues

$190.0 vs. $179.7 (up 5.8%)

In-center revenue $89.0 vs. $83.0 (up 7.3%)
Other revenue $8.6 vs. $9.1 (down 4.9%)
 
Average center revenue per Access membership $412 vs. $388 (up 6.4%)
Average in-center revenue per Access membership $132 vs. $122 (up 7.6%)
Same-center revenue (open 13 months or longer) Up 3.6%
Same-center revenue (open 37 months or longer) Up 2.7%
 

 

2013 vs. 2012

(in millions except revenue per membership data)

 

Membership dues

$766.8 vs. $727.6 (up 5.4%)

In-center revenue $375.5 vs. $348.3 (up 7.8%)
Other revenue $49.6 vs. $35.7 (up 38.8%)
 
Average center revenue per Access membership $1,656 vs. $1,567 (up 5.7%)
Average in-center revenue per Access membership $545 vs. $507 (up 7.5%)
Same-center revenue (open 13 months or longer) Up 4.0%
Same-center revenue (open 37 months or longer) Up 3.2%
 

Total memberships grew 0.3% to 789,490 at December 31, 2013, from 787,003 at December 31, 2012.

  • Access memberships were down 0.6% to 678,619 at December 31, 2013, from 682,621 at December 31, 2012.
  • Non-Access memberships grew 6.2% to 110,871 at December 31, 2013, from 104,382 at December 31, 2012.
  • Attrition in 4Q 2013 was 9.8% compared to 9.1% in the prior-year period. Attrition for the trailing 12-month period ended December 31, 2013, was 35.8% compared to trailing 12-month attrition of 33.5% at December 31, 2012.

Total operating expenses during 4Q 2013 were $242.4 million compared to $231.4 million for 4Q 2012. Total operating expenses for the full year were $981.3 million compared to $918.7 million in 2012.

  • Income from operations margin was 16.7% for 4Q 2013 compared to 16.0% in the prior-year period.
  • Income from operations margin was 18.6% for the full year compared to 18.5% in 2012.
(Expense as a percent of total revenue)   4Q 2013 vs. 4Q 2012   2013 vs. 2012
Center operations 58.1% vs. 57.8% 57.7% vs. 58.2%
Advertising and marketing 4.2% vs. 4.0% 3.6% vs. 3.5%
General and administrative 4.6% vs. 5.3% 4.9% vs. 5.0%
Other operating 6.2% vs. 6.1% 5.3% vs. 4.6%
Depreciation and amortization 10.2% vs. 10.8% 9.9% vs. 10.2%
 

Net income for 4Q 2013 was $26.0 million, or $0.63 per diluted share, compared to net income of $23.4 million, or $0.56 per diluted share, for 4Q 2012. Net income for the full year was $121.7 million, or $2.93 per diluted share, compared to net income of $111.5 million, or $2.66 per diluted share, for the prior-year period.

EBITDA for 4Q 2013 was $78.7 million compared to $74.1 million in 4Q 2012. For the full year, EBITDA was $345.0 million compared with $324.7 million in the prior-year period.

  • As a percentage of total revenue, EBITDA in 4Q 2013 was 27.0% in 4Q 2013, compared to 26.9% in the prior year period.
  • For the full year, EBITDA, as a percentage of total revenue, was 28.6% compared to 28.8% in the prior-year period.

Cash flows from operating activities for the full year totaled $258.4 million compared to $255.7 million in the prior-year period.

Weighted average fully diluted shares for 4Q 2013 totaled 41.3 million compared to 42.0 million in 4Q 2012. For the full year, weighted average fully diluted shares totaled 41.5 million compared to 42.0 million for the prior-year period.

2014 Business Outlook:

The following statements are based on the Company’s current expectations for fiscal year 2014 and incorporate 2013 operating trends. These 2014 expectations are subject to the risks and uncertainties further described in the Company’s forward-looking statements:

  • Revenue is expected to be up 8-9.5%, or $1.300-1.320 billion, driven primarily by price and mix optimization, square foot expansion, and growth in in-center and ancillary business revenue.
  • Net income is expected to be up 3-7%, or $125.0-130.0 million, driven by revenue growth, partially offset by increased costs associated with the acceleration of new center growth.
  • Diluted earnings per common share is expected to be $3.05-3.15.

As announced on February 13, 2014, the Company will hold a conference call today at 10:00 a.m. ET to discuss its fourth quarter and full year 2013 results. Bahram Akradi, Michael Robinson, executive vice president and chief financial officer, and John Heller, vice president, Finance and Investor Relations, 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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