Life Time Fitness Announces Second Quarter 2011 Financial Results
Revenue Grew 11.1%; Diluted EPS was $0.61 and Non-GAAP Diluted EPS was $0.63
CHANHASSEN, Minn.--(BUSINESS WIRE)-- Life Time Fitness, Inc. (NYSE:LTM), The Healthy Way of Life Company, today reported its financial results for the second quarter ended June 30, 2011.
Revenue for the quarter grew 11.1% to $256.7 million from $231.1 million during the same period last year. Net income for the quarter was $24.9 million, or $0.61 per diluted share, compared to net income of $21.9 million, or $0.53 per diluted share, for 2Q 2010. Non-GAAP net income for the quarter was $25.5 million, or $0.63 per diluted share. This non-GAAP net income excluded $1.0 million (pretax) of non-cash performance share-based compensation expense.
For the six months ended June 30, 2011, revenue grew 10.3% to $497.3 million from $450.9 million during the same period last year. Net income for the first six months of 2011 was $45.8 million, or $1.12 per diluted share, as compared with $39.7 million, or $0.98 per diluted share, for the first six months of 2010. Non-GAAP net income for the first six months of 2011 was $46.9 million, or $1.15 per diluted share.
"We delivered strong second quarter results, highlighted by revenue growth in membership dues and our in-center businesses, along with solid performance in same center sales and revenue per membership," said Bahram Akradi, chairman, president and chief executive officer. "Our unwavering focus remains on differentiating Life Time as The Healthy Way of Life Company that uniquely helps individuals, companies and communities achieve their total health objectives, athletic aspirations and fitness goals by participating in their areas of passion both within and outside of our centers. Moving forward, we will continue driving member engagement by providing the places, people and programs that help them pursue their passions and achieve their goals."
Akradi further commented, "Driven by the strength of our balance sheet and cash flow, our company retired $70 million of mortgage debt and entered into an amended and restated revolving credit agreement during the quarter, which supports our plans to drive future growth. This agreement increased the amount of our credit facility from $470 million to $660 million at favorable interest rates and extended its term to June 30, 2016."
During the quarter, Life Time opened large-format centers in Colorado Springs, Colorado, marking its fourth location in Colorado, and Summerlin, Nevada, the Company's first center in the Las Vegas market. Life Time also bolstered its offerings in the corporate wellness, yoga, training and certification, and athletic events businesses through several new program launches and acquisitions.
Three and Six Months Ended June 30, 2011, Financial Highlights:
Total revenue for the second quarter grew 11.1% to $256.7 million from $231.1 million. Total revenue for the first six months of 2011 grew 10.3% to $497.3 million from $450.9 million during the same period last year.
(Period-over-period growth) 2Q 2011 vs. 2Q 2010 YTD 2011 vs. YTD 2010
-- Membership dues 9.2% 9.1%
-- Enrollment fees (24.1%) (20.9%)
-- In-center revenue 17.3% 14.9%
-- Same-center revenue (open 5.4% 5.4%
13 months or longer)
-- Same-center revenue (open 4.5% 4.2%
37 months or longer)
-- Average center revenue per $389 - up 4.7% $768 - up 3.8%
membership
-- Average in-center revenue $124 - up 10.9% $242 - up 8.4%
per membership
Memberships grew 5.1% to 664,307 at June 30, 2011, from 631,862 at June 30, 2010.
-- Quarterly attrition in 2Q 2011 was 8.1%, down from 8.4% in the
prior-year period.
-- Attrition for the trailing 12-month period ended June 30, 2011, was
35.8% compared to trailing 12-month attrition of 38.2% at June 30, 2010.
Total operating expenses during 2Q 2011 totaled $210.4 million compared to $188.2 million for 2Q 2010. Total operating expenses for the first six months of 2011 were $410.8 million compared to $370.3 million in 2010. Excluding the $1.0 million (pretax) share-based compensation expense for 2Q 2011, operating expenses were $209.5 million. Excluding the $1.9 million (pretax) of performance share-based compensation expense for the first six months of 2011, operating expenses were $408.9 million.
-- Operating margin was 18.0% for 2Q 2011 compared to 18.6% in the
prior-year period and operating profit increased $3.3 million.
-- Operating margin for the first six months of 2011 was 17.4% compared to
17.9% in the prior-year period and operating profit increased $6.0
million.
-- Excluding the performance share-based compensation expense, operating
margins for 2Q 2011 and the first six months of 2011 were 18.4% and
17.8%, respectively.
(Expense as a percent of total 2Q 2011 vs. 2Q 2010 YTD 2011 vs. YTD 2010
revenue)
-- Center operations (includes
$0.3 million of performance 61.0% vs. 61.5% 61.6% vs. 62.0%
share-based compensation
expense in 2Q 2011 and $0.5
million YTD)
-- Advertising and marketing 3.5% vs. 2.6% 3.5% vs. 2.8%
-- General and administrative
(includes $0.7 million of 4.7% vs. 4.9% 5.0% vs. 4.9%
performance share-based
compensation expense in 2Q
2011 and $1.4 million YTD)
-- Other operating 3.1% vs. 2.4% 2.8% vs. 2.2%
-- Depreciation and 9.7% vs. 10.0% 9.7% vs. 10.2%
amortization
Net income for 2Q 2011 was $24.9 million, or $0.61 per diluted share, compared to net income of $21.9 million, or $0.53 per diluted share, for 2Q 2010. Net income for the first six months of 2011 was $45.8 million, or $1.12 per diluted share, compared to net income of $39.7 million, or $0.98 per diluted share, for the prior-year period.
Non-GAAP net income for the quarter, excluding the performance share-based compensation expense, was $25.5 million, or $0.63 per diluted share. For the first six months of 2011, non-GAAP net income, excluding the performance share-based compensation expense, was $46.9 million, or $1.15 per diluted share.
EBITDA for 2Q 2011 was $71.2 million compared with $66.4 million in 2Q 2010. For the first six months of 2011, EBITDA was $135.4 million compared with $127.2 million in the prior-year period.
-- As a percentage of total revenue, EBITDA in 2Q 2011 was 27.8% compared
to 28.8% in 2Q 2010 and EBITDA increased $4.8 million.
-- For the first six months of 2011, EBITDA, as a percentage of total
revenue, was 27.2% compared to 28.2% in the prior-year period and EBITDA
increased $8.3 million.
Adjusted EBITDA for the quarter, excluding performance share-based compensation expense, was $72.2 million. Adjusted EBITDA for the first six months of 2011, excluding performance share-based compensation expense, was $137.4 million.
-- As a percentage of total revenue, adjusted EBITDA in 2Q 2011 was 28.1%.
-- For the first six months of 2011, adjusted EBITDA was 27.6% of total
revenue.
Cash flows from operating activities for the first six months of 2011 totaled $118.5 million compared with $100.7 million in the prior-year period.
Weighted average fully diluted shares for 2Q 2011 totaled 40.8 million compared to 41.2 million in 2Q 2010. For the first six months of 2011, weighted average fully diluted shares totaled 40.8 million compared to 40.5 million for the prior-year period.
Updated 2011 Business Outlook:
The following statements, which incorporate 2011 operating trends and are subject to the risks and uncertainties described below, represent the Company's current expectations for fiscal year 2011:
-- Revenue is expected to increase 8-10%, or $985 million to $1 billion (up
from 7-9%, or $980-995 million), driven primarily by growth in in-center
revenue and corporate businesses, as well as membership growth in new
and ramping centers.
-- Net incomeis expected to increase 15-18%, or $93.0-95.0 million (updated
from 14-18%, or $92.0-95.0 million), driven by revenue growth and cost
efficiencies.
-- Non-GAAP net income(excluding the impact of performance share-based
compensation expense) is expected to be $95.5-97.5 million (updated from
$94.5-97.5 million).
-- Diluted earnings per common shareis expected to be $2.25-2.30 (updated
from $2.21-2.29).
-- Non-GAAP diluted earnings per common share (excluding the impact of
performance share-based compensation expense) is expected to be
$2.31-2.36 (updated from $2.27-2.35).
As announced on July 14, 2011, the Company will hold a conference call today at 10:00 a.m. ET to discuss second quarter 2011 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 1:00 p.m. ET.
About Life Time Fitness, Inc.
As the Healthy Way of Life Company, Life Time Fitness (NYSE: LTM) helps organizations, communities and individuals achieve their total health objectives, athletic aspirations and fitness goals by engaging in their areas of interest - or discovering new passions - both inside and outside of Life Time's distinctive and large sports, professional fitness, family recreation and spa destinations, most of which operate 24 hours a day, seven days a week. The Company's Healthy Way of Life approach enables customers to achieve this by providing the best places, people and programs of uncompromising quality and value. As of July 21, 2011, the Company operated 92 centers under the LIFE TIME FITNESS(R) and LIFE TIME ATHLETICSM brands primarily in suburban locations in 21 states and 26 major markets. Additional information about Life Time centers, programs and services is available at lifetimefitness.com.
Forward-Looking Statements
Certain information contained in this press release may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act 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. Among these factors are attracting and retaining members, risks related to our debt levels and debt covenants, our ability to access existing credit facilities and obtain additional financing, strains on our business from continued and future growth, including potential acquisitions and other strategic initiatives, risks related to maintenance and security of our data, competition from other health and fitness centers, identifying and acquiring suitable sites for new centers, delays in opening new centers and other factors set forth in the Company's filings with the Securities and Exchange Commission. Diluted earnings per common 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 as well as stock offerings. The Company's expectations for fiscal year 2011 exclude any unusual items that might occur during the fiscal year, such as litigation matters or the potential recognition of additional performance share-based compensation expense related to June 2009 performance share-based restricted stock grants. While the Company has determined that 2011 diluted earnings per common share performance criteria required for vesting of 50% of the stock is probable and anticipates recognizing additional performance share-based compensation expense in 2011, the Company may not be able to meet those criteria due to risks and uncertainties, including those factors described above.
The Company cautions 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 arising after such date. 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. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2011 2010
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 10,321 $ 12,227
Accounts receivable, net 4,933 5,806
Center operating supplies and inventories 20,736 17,281
Prepaid expenses and other current assets 18,208 13,318
Deferred membership origination costs 13,480 14,728
Deferred income taxes 3,453 3,628
Income tax receivable 2,458 9,916
Total current assets 73,589 76,904
PROPERTY AND EQUIPMENT, net 1,600,037 1,570,234
RESTRICTED CASH 561 2,572
DEFERRED MEMBERSHIP ORIGINATION COSTS 8,483 7,251
GOODWILL 13,322 13,322
OTHER ASSETS 59,097 48,197
TOTAL ASSETS $ 1,755,089 $ 1,718,480
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 6,486 $ 7,265
Accounts payable 19,877 18,913
Construction accounts payable 20,013 24,342
Accrued expenses 56,096 50,802
Deferred revenue 40,333 32,095
Total current liabilities 142,805 133,417
LONG-TERM DEBT, net of current portion 574,126 605,279
DEFERRED RENT LIABILITY 33,757 32,187
DEFERRED INCOME TAXES 88,944 89,839
DEFERRED REVENUE 8,595 7,279
OTHER LIABILITIES 10,216 9,901
Total liabilities 858,443 877,902
SHAREHOLDERS' EQUITY:
Common stock 847 839
Additional paid-in capital 425,147 414,922
Retained earnings 470,570 424,787
Accumulated other comprehensive income 82 30
Total shareholders' equity 896,646 840,578
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,755,089 $ 1,718,480
LIFE TIME FITNESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2011 2010 2011 2010
REVENUE:
Membership dues $ 167,013 $ 152,879 $ 325,026 $ 298,044
Enrollment fees 4,686 6,175 9,887 12,499
In-center revenue 80,299 68,457 153,988 133,989
Total center revenue 251,998 227,511 488,901 444,532
Other revenue 4,696 3,577 8,438 6,327
Total revenue 256,694 231,088 497,339 450,859
OPERATING EXPENSES:
Center operations 156,654 142,151 306,206 279,734
Advertising and marketing 8,997 5,903 17,560 12,675
General and 12,112 11,343 24,763 22,043
administrative
Other operating 8,013 5,549 14,005 9,858
Depreciation and 24,663 23,218 48,287 45,984
amortization
Total operating expenses 210,439 188,164 410,821 370,294
Income from operations 46,255 42,924 86,518 80,565
OTHER INCOME (EXPENSE):
Interest expense, net (4,697 ) (6,917 ) (10,201 ) (15,013 )
Equity in earnings of 326 303 627 603
affiliate
Total other income (4,371 ) (6,614 ) (9,574 ) (14,410 )
(expense)
INCOME BEFORE INCOME TAXES 41,884 36,310 76,944 66,155
PROVISION FOR INCOME TAXES 16,937 14,426 31,161 26,435
NET INCOME $ 24,947 $ 21,884 $ 45,783 $ 39,720
BASIC EARNINGS PER COMMON $ 0.62 $ 0.55 $ 1.14 $ 1.01
SHARE
DILUTED EARNINGS PER $ 0.61 $ 0.53 $ 1.12 $ 0.98
COMMON SHARE
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 40,381 39,885 40,259 39,401
- BASIC
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 40,771 41,154 40,763 40,533
- DILUTED
LIFE TIME FITNESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Six Months Ended
June 30,
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 45,783 $ 39,720
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 48,287 45,984
Deferred income taxes (896 ) (3,857 )
Loss on disposal of property and equipment, net 390 592
Amortization of deferred financing costs 1,297 1,437
Share-based compensation 6,408 3,561
Excess tax benefit related to share-based payment (2,765 ) (1,697 )
arrangements
Changes in operating assets and liabilities 20,563 15,150
Other (556 ) (182 )
Net cash provided by operating activities 118,511 100,708
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (83,023 ) (48,164 )
Acquisitions, net of cash acquired (7,181 ) (9,414 )
Proceeds from sale of property and equipment 453 720
Increase in other assets (111 ) (1,423 )
Decrease in restricted cash 2,011 961
Net cash used in investing activities (87,851 ) (57,320 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term borrowings (73,604 ) (35,152 )
Proceeds from revolving credit facility, net 41,600 5,101
Increase in deferred financing costs (4,342 ) (258 )
Excess tax benefit related to share-based payment 2,765 1,697
arrangements
Proceeds from stock option exercises 1,045 2,952
Proceeds from employee stock purchase plan 517 -
Stock purchased for employee stock purchase plan (547 ) -
Net cash used in financing activities (32,566 ) (25,660 )
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,906 ) 17,728
CASH AND CASH EQUIVALENTS - Beginning of period 12,227 6,282
CASH AND CASH EQUIVALENTS - End of period $ 10,321 $ 24,010
Non-GAAP Financial Measures
This release and the related conference call disclose certain non-GAAP financial measures.
EBITDA and Adjusted EBITDA. Earnings Before Interest, Income Taxes and Depreciation and Amortization (EBITDA) is a non-GAAP disclosure consisting 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 with GAAP. The Company uses EBITDA as a measure of operating performance. The funds depicted 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, net cash 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 that the Company filed with the Securities and Exchange Commission on the date of this press release.
In 4Q 2010, the Company determined that achieving a 2011 diluted earnings per common share performance criteria required for the vesting of 50% of performance share-based restricted stock granted in June 2009 was probable. As a result, the Company recognized a performance share-based compensation expense of $1.0 million (pretax) in 2Q 2011 and $1.9 million (pretax) in the first six months of 2011. Adjusted EBITDA is the Company's EBITDA excluding the above compensation expense.
Additional details related to EBITDA and Adjusted EBITDA are provided in the Form 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 and Adjusted EBITDA:
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
(In thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Net income $ 24,947 $ 21,884 $ 45,783 $ 39,720
Interest expense, net 4,697 6,917 10,201 15,013
Provision for income taxes 16,937 14,426 31,161 26,435
Depreciation and 24,663 23,218 48,287 45,984
amortization
EBITDA $ 71,244 $ 66,445 $ 135,432 $ 127,152
Performance share-based
compensation expense 959 - 1,919 -
(pretax)
Adjusted EBITDA $ 72,203 $ 66,445 $ 137,351 $ 127,152
Free Cash Flow. Free cash flow is a non-GAAP measure consisting of net cash provided by operating activities, less purchases of property and equipment. This term, as the Company defines it, may not be comparable to a similarly titled measure used by other companies and does not represent the total increase or decrease in the cash balance presented in accordance with GAAP. The Company uses free cash flow as a measure of cash generated after spending on property and equipment. Free cash flow should not be considered as a substitute for net cash provided by operating activities prepared in accordance with GAAP. Additional details related to free cash flow are provided in the Form 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 cash provided by operating activities, the most directly comparable GAAP measure, to free cash flow:
RECONCILIATION OF NET CASH PROVIDED BY
OPERATING ACTIVITIES TO FREE CASH FLOW
(In thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Net cash provided by $ 58,388 $ 46,833 $ 118,511 $ 100,708
operating activities
Less: Purchases of (44,660 ) (25,125 ) (83,023 ) (48,164 )
property and equipment
Free cash flow $ 13,728 $ 21,708 $ 35,488 $ 52,544
Additional Non-GAAP Financial Measures. In 4Q 2010, the Company determined that achieving a 2011 diluted earnings per common share performance criteria required for the vesting of 50% of performance-based restricted stock granted in June 2009 was probable. As a result, the Company recognized a performance share-based compensation expense of $1.0 million (pretax) in 2Q 2011 and $1.9 million (pretax) in the first six months of 2011. The Company believes that in order to properly understand its short-term and long-term financial trends from operations, investors may find it useful to exclude the impact of this expense from net income, diluted earnings per common share, income from operations and operating expenses. The resulting non-GAAP financial measures may also provide useful information to investors regarding the underlying business trends and performance of the Company's ongoing operations and may be useful for period over period comparisons of such operations. Each of the tables below reconciles these non-GAAP financial measures to the most directly comparable GAAP financial measures.
Non-GAAP Net Income. Non-GAAP net income is a non-GAAP financial measure consisting of net income excluding the performance share-based compensation expense recognized in the first six months of 2011. The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to non-GAAP net income.
RECONCILIATION OF CONSOLIDATED NET INCOME TO CONSOLIDATED NON-GAAP NET INCOME
(In thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Net income $ 24,947 $ 21,884 $ 45,783 $ 39,720
Performance share-based 571 - 1,142 -
compensation expense
Non-GAAP net income $ 25,518 $ 21,884 $ 46,925 $ 39,720
Non-GAAP Diluted Earnings Per Common Share. Non-GAAP diluted earnings per common share is a non-GAAP financial measure consisting of diluted earnings per common share excluding the per common share impact of the performance share-based compensation expense recognized in the first six months of 2011. The following table provides a reconciliation of diluted earnings per common share, the most directly comparable GAAP measure, to non-GAAP diluted earnings per common share.
RECONCILIATION OF CONSOLIDATED DILUTED EARNINGS PER COMMON SHARE
TO CONSOLIDATED NON-GAAP DILUTED EARNINGS PER COMMON SHARE
(In thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Diluted earnings per $ 0.61 $ 0.53 $ 1.12 $ 0.98
common share
Performance share-based 0.01 - 0.03 -
compensation expense
Non-GAAP diluted earnings $ 0.63 * $ 0.53 $ 1.15 $ 0.98
per common share
*rounding ($0.612 + $0.014 = $0.626)
Non-GAAP Income from Operations. Non-GAAP income from operations is a non-GAAP financial measure consisting of income from operations excluding the performance share-based compensation expense recognized in the first six months of 2011. The following table provides a reconciliation of income from operations, the most directly comparable GAAP measure, to non-GAAP income from operations.
RECONCILIATION OF CONSOLIDATED INCOME FROM OPERATIONS
TO CONSOLIDATED NON-GAAP INCOME FROM OPERATIONS
(In thousands, except percentages)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Income from operations $ 46,255 $ 42,924 $ 86,518 $ 80,565
Performance share-based
compensation expense 959 - 1,919 -
(pretax)
Non-GAAP income from $ 47,214 $ 42,924 $ 88,437 $ 80,565
operations
Income from operations as
a percentage of total 18.0 % 18.6 % 17.4 % 17.9 %
revenue
Performance share-based
compensation expense 0.4 % 0.0 % 0.4 % 0.0 %
(pretax) as a percentage
of total revenue
Non-GAAP income from
operations as a percentage 18.4 % 18.6 % 17.8 % 17.9 %
of total revenue
Non-GAAP Operating Expenses. Non-GAAP operating expenses is a non-GAAP financial measure consisting of operating expenses excluding the performance share-based compensation expense recognized in the first six months of 2011. The following table provides a reconciliation of operating expenses, the most directly comparable GAAP measure, to non-GAAP operating expenses.
RECONCILIATION OF CONSOLIDATED OPERATING EXPENSES
TO CONSOLIDATED NON-GAAP OPERATING EXPENSES
(In thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Operating expenses $ 210,439 $ 188,164 $ 410,821 $ 370,294
Less: Performance
share-based compensation (959 ) - (1,919 ) -
expense (pretax)
Non-GAAP operating $ 209,480 $ 188,164 $ 408,902 $ 370,294
expenses
Reconciliation of 2011 Business Outlook. In 4Q 2010, the Company determined that achieving a 2011 diluted earnings per common share performance criteria required for the vesting of 50% of performance-based restricted stock granted in June 2009 was probable. As a result, the Company anticipates recognizing approximately $4.0 million (pretax) of performance share-based compensation expense in 2011 relating to the June 2009 grants. The Company believes that in order to properly understand its short-term and long-term financial trends from operations, investors may find it useful to exclude the impact of this expense from the Company's 2011 business outlook. The resulting non-GAAP financial measures may also provide useful information to investors regarding the underlying business trends and performance of the Company's ongoing operations and may be useful for period-over-period comparisons of such operations.
As a consequence, the Company's 2011 business outlook included a non-GAAP net income range, which excludes the anticipated recognition of approximately $4.0 million (pretax) of performance share-based compensation expense. The following table provides a reconciliation of the Company's anticipated range of 2011 net income to the non-GAAP net income range.
RECONCILIATION OF 2011 BUSINESS OUTLOOK
RELATED TO CONSOLIDATED NET INCOME RANGE
TO CONSOLIDATED NON-GAAP NET INCOME RANGE
(In millions)
For the Year Ended
December 31, 2011
Low High
Net income $ 93.0 $ 95.0
Performance share-based compensation expense 2.5 2.5
Non-GAAP net income $ 95.5 $ 97.5
Similarly, the Company's 2011 business outlook also included a non-GAAP diluted earnings per common share range, which excludes the per common share impact of the anticipated recognition of approximately $4.0 million (pretax) of performance share-based compensation expense. The following table provides a reconciliation of the Company's anticipated range of 2011 diluted earnings per common share to the non-GAAP diluted earnings per common share range.
RECONCILIATION OF 2011 BUSINESS OUTLOOK RELATED TO
CONSOLIDATED DILUTED EARNINGS PER COMMON SHARE RANGE TO
CONSOLIDATED NON-GAAP DILUTED EARNINGS PER COMMON SHARE RANGE
For the Year Ended
December 31, 2011
Low High
Diluted earnings per common share $ 2.25 $ 2.30
Performance share-based compensation expense 0.06 0.06
Non-GAAP diluted earnings per common share $ 2.31 $ 2.36
Source: Life Time Fitness, Inc.
Released July 21, 2011