•Total revenue increased 17.9% to $585.2 million from $496.4 million in the third quarter of 2022.

•Net income decreased to $7.9 million from $24.7 million in the third quarter of 2022.

•Adjusted net income increased to $26.7 million from an adjusted net loss of $11.5 million in the third quarter of 2022.

•Adjusted EBITDA increased 101.4% to $143.0 million from $71.0 million in the third quarter of 2022.

•Diluted EPS decreased to $0.04 from $0.12 in the third quarter of 2022.

•Adjusted diluted EPS increased to $0.13 from an adjusted net loss per share of $0.06 in the third quarter of 2022.

CHANHASSEN, Minn. (October 25, 2023) – Life Time Group Holdings, Inc. (“Life Time,” “we,” “our,” “us,” or the “Company”) (NYSE: LTH) today announced its financial results for the fiscal third quarter ended September 30, 2023.

Bahram Akradi, Founder, Chairman and CEO, stated: “I am very appreciative of our team and the milestones we achieved this quarter. We generated record levels of revenue and Adjusted EBITDA, and our trailing 12-month Adjusted EBITDA surpassed $500 million for the first time in our history. Our investments in programming are working to increase member engagement at our clubs with average member visits up 24 percent versus 2019. As we look to next year, we expect to be free cash flow positive after all capital investment including new club growth by the middle of 2024, two years earlier than originally anticipated. With expectations for continued Adjusted EBITDA growth and significant asset light opportunities, we expect to fund our targeted growth in 2024 and beyond with internally generated cash flow. We are well positioned for continued success.”

•Revenue increased 17.9% to $585.2 million due to continued strong growth in membership dues and in-center revenue.

•Center memberships increased by 55,602, or 7.6%, when compared to the prior year third quarter, and decreased consistent with seasonality expectations by approximately 5,900 from the second quarter to 784,331.

•Total subscriptions, which include center memberships and our digital on-hold memberships, increased 7.0% from the prior year third quarter to 830,039.

•Center operations expenses increased 8.2% to $319.4 million primarily due to increased operating costs related to our new and ramping centers as well as growth in memberships and in-center business revenue.

•General, administrative and marketing expenses decreased 9.5% to $51.7 million primarily due to reduced center support overhead, advertising and marketing and cash incentive compensation expenses, partially offset by higher share-based compensation expense.

•Net income declined $16.8 million to $7.9 million, primarily due to gain from sale-leasebacks of $48.6 million in the prior year period and a loss from a sale-leaseback transaction in the current year period of $12.7 million, partially offset by improved business performance in the current year period.

•Adjusted net income increased $38.2 million to $26.7 million.

•Adjusted net income and Adjusted EBITDA improved significantly as we experienced greater flow through of our increased revenue and benefited from the structural improvements to our business that have improved our margins.

•Revenue increased 22.8% to $1,657.8 million due to continued strong growth in membership dues and in-center revenue.

•Center operations expenses increased 10.0% to $896.1 million primarily due to increased operating costs related to our new and ramping centers as well as growth in memberships and in-center business revenue.

•General, administrative and marketing expenses decreased 16.3% to $147.0 million primarily due to lower cash incentive compensation expense and reduced center support overhead and advertising and marketing expenses.

•Net income increased $67.9 million to $52.4 million, primarily due to improved business performance in the current year period.

•Adjusted net income increased $157.9 million to $91.1 million.

•Adjusted net income and Adjusted EBITDA improved significantly for the same reasons identified for the quarter.

•The Company opened six new centers in the third quarter of 2023 and has opened 10 new centers through the first nine months of 2023.

•As of September 30, 2023, Life Time operated a total of 170 centers.

•The Company plans to open a total of 12 new centers in 2023, with the remaining two expected to open in the fourth quarter.

•As the Company moves toward positive free cash flow after all capital expenditures (including growth capital), the Company will be reporting total capital expenditures going forward and will not be providing guidance on the Company’s capital expenditures for the balance of 2023.

•The Company continues to explore sale-leaseback transactions, but is being selective on whether to execute any additional sale-leasebacks in the current macroeconomic environment given the Company’s ability to add new centers through asset light opportunities and its expectation to be free cash flow positive after capital expenditures by the end of the second quarter in 2024.

•As of September 30, 2023, the Company had total cash and cash equivalents of $25.4 million, and $45.0 million in outstanding borrowings under its $475 million revolving credit facility.

•Date: Wednesday, October 25, 2023

•Time: 10:00 a.m. ET (9:00 a.m. CT)

•U.S. dial-in number: 1-877-451-6152

•International dial-in number: 1-201-389-0879

•Webcast: LTH 3Q 2023

A link to the live audio webcast of the conference call will be available at https://ir.lifetime.life.

Webcast – A recorded replay of the webcast will be available within approximately three hours of the conclusion of the call and may be accessed online at https://ir.lifetime.life.

Conference call – A replay of the conference call will be available after 1:00 p.m. ET the same day through November 8, 2023, and may be accessed as follows:

•U.S. replay number: 1-844-512-2921

•International replay number: 1-412-317-6671

•Replay ID: 1374 1575

Life Time (NYSE: LTH) empowers people to live healthy, happy lives through its portfolio of 170 athletic country clubs across the United States and Canada. The Company’s healthy way of life communities and ecosystem address all aspects of healthy living, healthy aging and healthy entertainment for people 90 days to 90+ years old. Supported by a team of more than 37,000 dedicated professionals, Life Time is committed to providing the best programs and experiences through its clubs, iconic athletic events and comprehensive digital platform.

The Company includes a center, for comparable center revenue purposes, beginning on the first day of the 13th full calendar month of the center’s operation, in order to assess the center’s growth rate after one year of operation.

Ken Cooper, Investor Relations // kcooper2@lt.life or 952-406-2322

Jason Thunstrom, Corporate Communications // jthunstrom@lt.life or 952-229-7435

(a)    Share-based compensation expense recognized during the three and nine months ended September 30, 2023 was associated with stock options, restricted stock units, our employee stock purchase plan (“ESPP”) that launched on December 1, 2022, and liability classified awards related to our short-term incentive plan in 2023. Share-based compensation expense recognized during the three and nine months ended September 30, 2022 was associated with stock options, restricted stock and restricted stock units. The majority of this expense in 2022 was associated with awards that were fully vested and became exercisable on April 4, 2022 in connection with the expiration of the lock-up period following our initial public offering (“IPO”).

(b)    Represents the incremental expenses we recognized related to the COVID-19 pandemic. We adjust for these expenses as they do not represent expenses associated with our normal ongoing operations. We believe that adjusting for these expenses provides a more accurate and consistent representation of our actual operating performance from period to period. For the three months ended September 30, 2023 and the three and nine months ended September 30, 2022, COVID-19 related expenses primarily consisted of legal-related costs in pursuit of our claim against Zurich. For the nine months ended September 30, 2023, COVID-19 related expenses primarily consisted of legal-related costs in pursuit of our claim against Zurich, partially offset by a subsidy for our Canadian operations.

(d)    Represents costs related to capital transactions, including debt and equity offerings that are non-recurring in nature, but excluding direct costs related to the IPO, which were netted against the proceeds of the IPO.

The following table provides a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA:

			Three Months Ended												Nine Months Ended
			September 30,												September 30,
($ in thousands)			2023						2022						2023						2022
Net income (loss)			$	7,915					$	24,732					$	52,379					$	(15,519)
Interest expense, net of interest income			33,075						27,696						96,249						84,732
Provision for (benefit from) income taxes			5,815						3,401						18,200						(3,456)
Depreciation and amortization			63,618						56,400						180,067						171,680
Share-based compensation expense (a)			14,858						5,803						37,029						33,214
COVID-19 related expenses (a)			93						354						339						937
Loss (gain) on sale-leaseback transactions (a)			12,672						(48,583)						13,431						(98,167)
Capital transaction costs (a)			—						—						—						255
Asset impairments (a)			5,340						—						5,340						—
Other (a)			(405)						1,172						(3,911)						1,021
Adjusted EBITDA			$	142,981					$	70,975					$	399,123					$	174,697

(9)    Reflects the non-cash portion of our annual GAAP operating lease expense that is greater or less than the cash operating lease payments. Non-cash rent expense for our open properties represents non-cash expense associated with properties that were operating at the end of each period presented. Non-cash rent expense for our properties under development represents non-cash expense associated with properties that are still under development at the end of each period presented.

(1)    Sale-leaseback proceeds for the three and nine months ended September 30, 2023 include $1.5 million that was recognized as financing obligations and reported within financing activities on our consolidated statement of cash flows.