•Total revenue of $667.8 million increased 18.9% over the prior year quarter

•Net income of $52.8 million increased by $35.8 million over the prior year quarter

•Adjusted EBITDA of $173.5 million increased by 27.6% over the prior year quarter

•Diluted EPS increased to $0.26

•Achieved positive free cash flow

•Reduced net debt leverage ratio to 3.0 times

CHANHASSEN, Minn. (August 1, 2024) – Life Time Group Holdings, Inc. (“Life Time,” “we,” “our,” “us,” or the “Company”) (NYSE: LTH) today announced its financial results for the fiscal second quarter ended June 30, 2024.

Bahram Akradi, Founder, Chairman and CEO, stated: “We are very pleased with our second quarter performance and the progress we have made toward achieving our financial objectives. Once again this quarter, our results demonstrate the momentum of our business as we continue to deliver strong revenue and adjusted EBITDA growth. The second quarter also was an important inflection point for the Company as we achieved positive free cash flow as expected, and a net debt leverage ratio of 3.0 times, which was two quarters earlier than our plan. As a result of our strong performance, we are raising our full-year revenue and adjusted EBITDA guidance. We are enthusiastic about the trajectory of our business and remain committed to funding our growth while generating positive free cash flow and further reducing our leverage.”

•Revenue increased 18.9% to $667.8 million due to continued strong growth in membership dues and in-center revenue, driven by an increase in average dues, membership growth in our new and ramping centers, and higher member utilization of our in-center offerings.

•Center memberships increased by 42,398, or 5.4%, when compared to June 30, 2023, and increased sequentially from March 31, 2024, by 30,626, which was due in part to typical seasonality.

•Total subscriptions, which include center memberships and our digital on-hold memberships, increased 5.5% to 878,767 as compared to June 30, 2023.

•Center operations expenses increased 17.5% to $355.5 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 increased 0.8% to $53.2 million primarily due to increases in cash incentive compensation expenses, information technology costs, and center support overhead to enhance and broaden our member services and experiences, and were partially offset by lower share-based compensation expense.

•Net income increased $35.8 million to $52.8 million primarily due to improved business performance and to a lesser extent tax-effected one-time net benefits of $6.0 million from net gains on sale-leaseback transactions and $3.4 million from a gain on the sale of land in the current year period, as compared to a tax-effected one-time loss of $6.2 million on a sale-leaseback transaction in the prior year period.

•Adjusted net income increased $14.4 million to $52.4 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 17.9% to $1,264.5 million due to continued strong growth in membership dues and in-center revenue, driven by an increase in average dues, membership growth in our new and ramping centers, and higher member utilization of our in-center offerings.

•Center operations expenses increased 17.5% to $677.4 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 increased 7.1% to $102.1 million primarily due to increases in our cash-based incentive compensation and information technology costs, the timing of marketing expenses primarily related to our new club openings, and center support overhead to enhance and broaden our member services and experiences, and were partially offset by lower share-based compensation expense.

•Net income increased $33.2 million to $77.7 million primarily due to improved business performance and to a lesser extent tax-effected one-time net benefits of $5.8 million from net gains on sale-leaseback transactions and $3.3 million from a gain on the sale of land in the current year period. Net income in the prior year period included a tax-effected one-time gain of $3.8 million on the sale of two triathlon events and a tax-effected one-time net loss of $0.6 million on sale-leaseback transactions.

•Adjusted net income increased $23.6 million to $83.4 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.

•We opened three new centers during the second quarter.

•As of June 30, 2024, we operated a total of 175 centers.

•Net cash provided by operating activities of $170.4 million increased 20.1% compared to the prior year quarter.

•We achieved free cash flow of $175.1 million, including $149.0 million of proceeds from sale-leaseback transactions and a sale of land.

•Our capital expenditures by type of expenditure were as follows:

(1)    Consist of new center land and construction, initial major remodels of acquired centers, major remodels of existing centers that expand existing square footage, asset acquisitions including the purchase of previously leased centers and other growth initiatives.

•As of June 30, 2024, our total available liquidity was $413.6 million, which included availability on our revolving credit facility and cash and cash equivalents.

•Our net debt leverage ratio improved to 3.0x as of June 30, 2024, from 4.3x as of June 30, 2023.

•We completed sale-leaseback transactions on four properties for net proceeds of $142.7 million.

•We paid down $169.2 million of debt.

•Date: Thursday, August 1, 2024

•Time: 10:00 a.m. ET (9:00 a.m. CT)

•U.S. dial-in number: 1-844-826-3035

•International dial-in number: 1-412-317-5195

•Webcast: LTH 2Q 2024 Earnings Call

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 call’s conclusion and may be accessed 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 August 15, 2024:

•U.S. replay number: 1-844-512-2921

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

•Replay ID: 1019 0514

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 six months ended June 30, 2024, was associated with stock options, restricted stock units, performance stock units, our employee stock purchase plan (“ESPP”) that launched on December 1, 2022, and liability-classified awards related to our 2024 short-term incentive plan. Share-based compensation expense recognized during the three and six months ended June 30, 2023, was associated with stock options, restricted stock units, our ESPP and liability-classified awards related to our 2023 short-term incentive plan.

(b)    We adjust for the impact of gains and losses on the sale-leaseback of our properties as they do not reflect costs associated with our ongoing operations.

(a) – (c)    See the corresponding footnotes to the table in footnote 6 immediately above.    

(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.