Life Time (US:LTH)2024-10-28 20:20Financial Performance - Total center revenue increased to $1,900.3 million for the nine months ended September 30, 2024, up from $1,608.3 million for the same period in 2023, indicating a growth of approximately 18.1%[82] - Adjusted net income for the three months ended September 30, 2024, was $56,278, compared to $26,684 for the same period in 2023, reflecting a 111.5% increase[101] - Adjusted EBITDA for the three months ended September 30, 2024, was $180,293, up 26.0% from $142,981 in the prior year[97] - Net income for the three months ended September 30, 2024, was $41.4 million, compared to $7.9 million for the same period in 2023[136] - Total revenue increased by $300.0 million for the nine months ended September 30, 2024, driven by strong growth in membership dues and in-center revenue[137] - Net income for the nine months ended September 30, 2024, was $119.1 million, compared to $52.4 million for the same period in 2023[148] Membership Growth - Total memberships increased to 876,509 from 830,039, representing a growth of 5.6% year-over-year[97] - Membership dues and enrollment fees for the three months ended September 30, 2024, reached $488,105, up 19.6% from $407,903 in the same period last year[97] - Memberships grew to 826,502 as of September 30, 2024, up from 784,331 a year earlier, indicating a positive trend in member acquisition[127] Revenue and Expenses - Center revenue increased by $106.4 million to $674.8 million for the three months ended September 30, 2024, with 75.4% of this increase attributed to membership dues and enrollment fees[127] - Center operations expenses rose by $51.7 million to $371.1 million for the three months ended September 30, 2024, primarily due to costs associated with new and ramping centers[129] - Center revenue increased by $292.0 million for the nine months ended September 30, 2024, with 76.6% attributed to membership dues and enrollment fees[138] - Center operations expenses rose by $152.4 million for the nine months ended September 30, 2024, primarily due to costs related to new and ramping centers[140] Capital Expenditures and Cash Flow - Free cash flow for the three months ended September 30, 2024, was $138,332, a significant recovery from a negative cash flow of $(30,274) in the same period last year[97] - Free cash flow for the nine months ended September 30, 2024, was $247.1 million, a significant recovery from a negative free cash flow of $(73.0) million in the same period of 2023[114] - Total capital expenditures decreased to $87.1 million for the nine months ended September 30, 2024, down from $192.9 million in the same period in 2023[159] Debt and Financing - The company raised $130.5 million from the issuance of 6.0 million shares of common stock in August 2024, using $110.0 million to pay down debt[150] - The company plans to incur new term loans of $1,000 million due in 2031, with proceeds used to fund the discharge of existing senior secured and unsecured notes[152] - The company’s leverage ratio has improved significantly as profitability increases, following a period of elevated debt due to the impacts of COVID-19[117] - Interest expense for the three months ended September 30, 2024, was $36.0 million, compared to $33.1 million in 2023, reflecting increased borrowing costs[125] Operational Expansion - The company plans to open 10 to 12 new locations on average per year, targeting affluent markets to enhance revenue per membership and returns on invested capital[82] - The company has 27 centers open for less than three years and nine new centers under construction, with significant capital expenditures already invested[82] - The company operates 15 Life Time Work and four Life Time Living locations, expanding its ecosystem to integrate health and wellness into daily life[85] Economic Factors - The company continues to monitor macroeconomic factors such as inflation and interest rates, which have impacted expenses but has still achieved revenue growth[86] - Each one percentage point change in interest rates would result in an approximately $6.5 million change in annual interest expense on the indebtedness under the Credit Facilities as of September 30, 2024[166] Cash Management - The net cash provided by operating activities increased by $81.0 million for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to improved business performance and profitability[156] - The company had total cash and cash equivalents of $120.9 million as of September 30, 2024, leading to total cash and availability under the Revolving Credit Facility of $529.7 million[155] - The company expects to meet its short-term and long-term obligations through a combination of cash on hand, operational cash flows, and available borrowing capacity under its Revolving Credit Facility[162] Shareholder Compensation - The company recognized share-based compensation expense of approximately $30.5 million for the nine months ended September 30, 2024, down from $37.0 million in the same period of 2023[120]