CHANHASSEN, Minn., May 1, 2024
/PRNewswire/ -- Life Time Group Holdings, Inc. ("Life Time," "we,"
"our," "us," or the "Company") (NYSE: LTH) today announced its
financial results for the fiscal first quarter ended March 31, 2024.
Bahram Akradi, Founder,
Chairman and CEO, stated: "We are extremely pleased with
our first quarter financial performance. The desirability of our
brand combined with historic levels of member retention and
engagement continues to drive strong financial results. As a
result, we are raising our full-year revenue and Adjusted EBITDA
guidance. We also remain on track to achieve our other 2024
financial goals, namely being free cash flow positive beginning in
the second quarter, further improving our balance sheet, and
reducing our net debt leverage ratio."
Financial Summary
|
Three Months
Ended
|
|
|
|
($ in millions, except
memberships and per membership data)
|
March
31,
|
|
|
|
2024
|
|
2023
|
|
Percent
Change
|
|
Total
revenue
|
$596.7
|
|
$510.9
|
|
16.8 %
|
|
Center operations
expenses
|
$321.9
|
|
$274.1
|
|
17.4 %
|
|
Rent
|
$72.3
|
|
$66.5
|
|
8.7 %
|
|
General, administrative
and marketing expenses (1)
|
$48.9
|
|
$42.5
|
|
15.1 %
|
|
Net income
(2)
|
$24.9
|
|
$27.5
|
|
(9.5) %
|
|
Adjusted net
income
|
$30.5
|
|
$23.2
|
|
31.5 %
|
|
Adjusted
EBITDA
|
$146.0
|
|
$120.1
|
|
21.6 %
|
|
Comparable center
revenue
|
11.1 %
|
|
24.6 %
|
|
|
|
Center memberships, end
of period
|
802,010
|
|
764,173
|
|
5.0 %
|
|
Average center revenue
per center membership
|
$745
|
|
$667
|
|
11.7 %
|
|
|
|
(1)
|
The three months ended
March 31, 2024, and 2023 included non-cash share-based compensation
expense of $7.1 million and $4.7 million, respectively.
|
|
(2)
|
Net income for the
three months ended March 31, 2023, included tax-effected one-time
net benefits of $8.7 million from sale-leasebacks and the sale
of two triathlon events.
|
|
|
First Quarter 2024 Information
- Revenue increased 16.8% to $596.7
million due to continued strong growth in membership dues
and in-center revenue.
- Center memberships increased by 37,837, or 5.0%, when compared
to March 31, 2023, and increased
sequentially from December 31, 2023,
by 38,794, consistent with typical seasonality.
- Total subscriptions, which include center memberships and our
digital on-hold memberships, increased 4.9% from March 31, 2023, to 853,072.
- Center operations expenses increased 17.4% to $321.9 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 15.1%
to $48.9 million primarily due to
higher share-based compensation expense in the current period,
timing of marketing expenses primarily related to our new club
openings, and increased information technology costs.
- Net income decreased $2.6 million
to $24.9 million primarily due to
tax-effected one-time net benefits of a $5.1
million gain from sale-leasebacks and a $3.6 million gain related to the sale of two
triathlon events in the prior year period, which gains were largely
offset by improved business performance in the current period.
- Adjusted net income increased $7.3
million to $30.5 million.
- Adjusted net income and Adjusted EBITDA improved significantly
as we experienced greater flow through of our increased revenue and
benefited from the structural improvements to our business that
have improved our margins.
New Center Openings
- The Company opened one new center in the first quarter of
2024.
- As of March 31, 2024, Life Time
operated a total of 172 centers.
Cash Flow Highlights
|
Three Months
Ended
|
|
|
|
($ in
millions)
|
March
31,
|
|
|
|
2024
|
|
2023
|
|
Percent
Change
|
|
Net cash provided by
operating activities
|
$90.4
|
|
$74.3
|
|
21.7 %
|
|
|
|
|
|
|
|
Growth capital
expenditures (1)
|
$105.2
|
|
$123.0
|
|
(14.5) %
|
|
Maintenance capital
expenditures (2)
|
$51.6
|
|
$47.8
|
|
7.9 %
|
|
Total capital
expenditures
|
$156.8
|
|
$170.8
|
|
(8.2) %
|
|
|
|
(1)
|
Includes new center
land and construction, asset acquisitions and initial major
remodels of acquired centers.
|
|
(2)
|
Includes general
maintenance and modernization of existing centers and
technology.
|
|
|
Liquidity and Capital Resources
- As of March 31, 2024, the
Company's total available liquidity was $242.7 million, which included availability on
our revolving credit facility and cash and cash equivalents.
- The Company's net debt leverage ratio improved to 3.6x as of
March 31, 2024, from 5.2x as of
March 31, 2023.
2024 Outlook
Full-Year 2024 Guidance
|
|
|
|
|
Percent
|
|
Year
Ended
|
|
Year
Ended
|
|
Year
Ended
|
|
Change
|
|
December 31,
2024
|
|
December 31,
2024
|
|
December 31,
2023
|
|
(Using
|
|
(Guidance as
of
|
|
($ in
millions)
|
(Guidance)
|
|
(Actual)
|
|
Midpoints)
|
|
February 28,
2024
|
|
Revenue
|
$2,500 –
$2,530
|
|
$2,216.6
|
|
13.5 %
|
|
$2,460 –
$2,500
|
|
Adjusted
EBITDA
|
$603 – $618
|
|
$536.8
|
|
13.7 %
|
|
$595 – $610
|
|
Rent
|
$300 – $312
|
|
$275.1
|
|
11.2 %
|
|
$300 – $312
|
|
|
|
|
|
|
|
|
Conference Call Details
A conference call to discuss the Company's first quarter
financial results is scheduled for today:
- Date: Wednesday, May 1,
2024
- 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 1Q 2024 Earnings Call
A link to the live audio webcast of the conference call will be
available at https://ir.lifetime.life.
Replay Information
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 May 15,
2024:
- U.S. replay number: 1-844-512-2921
- International replay number: 1-412-317-6671
- Replay ID: 1374 5673
About Life Time
Life Time (NYSE: LTH) empowers people to live healthy,
happy lives through its portfolio of more than 170 athletic country
clubs across the United States and
Canada. The health and wellness
pioneer also delivers a range of healthy way of life programs and
information via its complimentary Life Time Digital app. The
Company's healthy living, healthy aging, healthy entertainment
communities and ecosystem serve people 90 days to 90+ years old and
is supported by a team of more than 39,000 dedicated professionals.
In addition to delivering the best programs and experiences through
its clubs, Life Time owns and produces nearly 30 of the most iconic
athletic events in the country.
Use of Non-GAAP Financial Measures and Key Performance
Indicators
This press release includes certain financial measures that are
not presented in accordance with generally accepted accounting
principles in the United States
("GAAP"), including Adjusted net income, Adjusted net income per
common share, Adjusted EBITDA and net debt and ratios and
calculations with respect thereto. These non-GAAP financial
measures are not based on any comprehensive set of accounting rules
or principles and should be considered in addition to, and not as a
substitute for or superior to, net income, net income per common
share, or total debt (defined as long-term debt, net of current
portion, plus current maturities of debt) as a measure of
financial performance or any other performance measure derived in
accordance with GAAP, and should not be construed as an inference
that the Company's future results will be unaffected by unusual or
non-recurring items. In addition, these non-GAAP financial measures
should be read in conjunction with the Company's financial
statements prepared in accordance with GAAP. The reconciliations of
the Company's non-GAAP financial measures to the corresponding GAAP
measures should be carefully evaluated.
Adjusted net income is defined as net income excluding the
impact of share-based compensation expense, (gain) loss on
sale-leaseback transactions, capital transaction costs, legal
settlements, asset impairment, severance and other items that are
not indicative of our ongoing operations, including incremental
costs related to COVID-19, less the tax effect of these
adjustments. Adjusted EBITDA is defined as net income before
interest expense, net, provision for (benefit from) income taxes
and depreciation and amortization, excluding the impact of
share-based compensation expense, (gain) loss on sale-leaseback
transactions, capital transaction costs, legal settlements, asset
impairment, severance and other items that are not indicative of
the Company's ongoing operations, including incremental costs
related to COVID-19. Net debt is defined as long-term debt, net of
current portion, plus current maturities of debt, excluding fair
value adjustments, unamortized debt discounts and issuance costs,
minus cash and cash equivalents. Net debt is as of the last day of
the respective quarter or year. Our net debt leverage ratio is
calculated as our net debt divided by our trailing twelve months of
Adjusted EBITDA.
The Company presents these non-GAAP financial measures because
management believes that these measures assist investors and
analysts in comparing the Company's operating performance across
reporting periods on a consistent basis by excluding items that
management does not believe are indicative of the Company's ongoing
operating performance. Investors are encouraged to evaluate these
adjustments and the reasons the Company considers them appropriate
for supplemental analysis. In evaluating the non-GAAP financial
measures, investors should be aware that, in the future, the
Company may incur expenses that are the same as or similar to some
of the adjustments in the Company's presentation of its non-GAAP
financial measures. There can be no assurance that the Company will
not modify the presentation of non-GAAP financial measures in
future periods, and any such modification may be material. In
addition, the Company's non-GAAP financial measures may not be
comparable to similarly titled measures used by other companies in
the Company's industry or across different industries.
The non-GAAP financial measures have limitations as analytical
tools, and investors should not consider these measures in
isolation or as substitutes for analysis of the Company's results
as reported under GAAP.
Please note that the Company has not provided the most directly
comparable GAAP financial measure, or a quantitative reconciliation
thereto, for the Adjusted EBITDA forward-looking guidance for 2024
included in this press release in reliance on the unreasonable
efforts exception provided under Item 10(e)(1)(i)(B) of Regulation
S-K. Providing the most directly comparable GAAP financial measure,
or a quantitative reconciliation thereto, cannot be done without
unreasonable effort due to the inherent uncertainty and difficulty
in predicting certain non-cash, material and/or non-recurring
expenses or benefits; legal settlements or other matters; and
certain tax positions. The variability of these items could have an
unpredictable, and potentially significant, impact on our future
GAAP financial results.
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.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of federal securities regulations. Forward-looking
statements in this press release include, but are not limited to,
the Company's plans, strategies and prospects, both business and
financial, including its financial outlook for full year 2024,
growth, cost efficiencies and margin expansion, improvements to its
balance sheet, net debt and leverage ratio, capital expenditures
and free cash flow, consumer demand, industry and economic trends,
taxes, rent expense, expected number of new center openings and
successful signings and closings of center takeovers and
sale-leaseback transactions (including the amount, pricing and
timing thereof). These statements are based on the beliefs and
assumptions of the Company's management. Forward-looking statements
are inherently subject to risks, uncertainties and assumptions.
Generally, statements that are not historical facts, including
statements concerning the Company's possible or assumed future
actions, business strategies, events or results of operations, are
forward-looking statements. These statements may be preceded by,
followed by or include the words "believe," "expect," "anticipate,"
"intend," "plan," "estimate" or similar expressions. In addition,
any statements or information that refer to expectations, beliefs,
plans, projections, objectives, performance or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking.
Factors that could cause actual results to differ materially
from those forward-looking statements included in this press
release include, but are not limited to, risks relating to our
business operations and competitive and economic environment, risks
relating to our brand, risks relating to the growth of our
business, risks relating to our technological operations, risks
relating to our capital structure and lease obligations, risks
relating to our human capital, risks relating to legal compliance
and risk management and risks relating to ownership of our common
stock and the other important factors discussed under the caption
"Risk Factors" in the Company's Annual Report on Form 10-K for the
year ended December 31, 2023, filed
with the Securities and Exchange Commission (the "SEC") on
February 28, 2024, (File No.
001-40887), as such factors may be updated from time to time in the
Company's other filings with the SEC, which are accessible on the
SEC's website at www.sec.gov. These and other important factors
could cause actual results to differ materially from those
indicated by the forward-looking statements made in this press
release. Any forward-looking statement that the Company makes in
this press release speaks only as of the date of such statement.
Except as required by law, the Company does not have any obligation
to update or revise, or to publicly announce any update or revision
to, any of the forward-looking statements, whether as a result of
new information, future events or otherwise.
|
LIFE TIME GROUP
HOLDINGS, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands,
except per share data)
|
|
(Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
Revenue:
|
|
|
|
|
Center
revenue
|
$
580,485
|
|
$
497,752
|
|
Other
revenue
|
16,232
|
|
13,099
|
|
Total
revenue
|
596,717
|
|
510,851
|
|
Operating
expenses:
|
|
|
|
|
Center
operations
|
321,900
|
|
274,109
|
|
Rent
|
72,282
|
|
66,537
|
|
General,
administrative and marketing
|
48,853
|
|
42,497
|
|
Depreciation and
amortization
|
65,903
|
|
58,197
|
|
Other operating
expense
|
15,722
|
|
2,127
|
|
Total operating
expenses
|
524,660
|
|
443,467
|
|
Income from
operations
|
72,057
|
|
67,384
|
|
Other (expense)
income:
|
|
|
|
|
Interest expense, net
of interest income
|
(37,403)
|
|
(31,195)
|
|
Equity in earnings of
affiliates
|
177
|
|
143
|
|
Total other
expense
|
(37,226)
|
|
(31,052)
|
|
Income before income
taxes
|
34,831
|
|
36,332
|
|
Provision for income
taxes
|
9,914
|
|
8,872
|
|
Net income
|
$
24,917
|
|
$
27,460
|
|
|
|
|
|
Income per common
share:
|
|
|
|
|
Basic
|
$
0.13
|
|
$
0.14
|
|
Diluted
|
$
0.12
|
|
$
0.14
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
Basic
|
197,498
|
|
194,572
|
|
Diluted
|
202,756
|
|
202,855
|
|
LIFE TIME GROUP
HOLDINGS, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(In thousands,
except per share data)
|
|
(Unaudited)
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
18,598
|
|
$
11,161
|
|
Restricted cash and
cash equivalents
|
18,126
|
|
18,805
|
|
Accounts receivable,
net
|
22,854
|
|
23,903
|
|
Center operating
supplies and inventories
|
53,140
|
|
52,803
|
|
Prepaid expenses and
other current assets
|
71,000
|
|
57,751
|
|
Income tax
receivable
|
7,752
|
|
10,101
|
|
Total current
assets
|
191,470
|
|
174,524
|
|
Property and equipment,
net
|
3,234,238
|
|
3,171,616
|
|
Goodwill
|
1,235,359
|
|
1,235,359
|
|
Operating lease
right-of-use assets
|
2,183,544
|
|
2,202,601
|
|
Intangible assets,
net
|
172,364
|
|
172,127
|
|
Other assets
|
76,662
|
|
75,914
|
|
Total
assets
|
$
7,093,637
|
|
$
7,032,141
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
69,063
|
|
$
81,252
|
|
Construction accounts
payable
|
81,656
|
|
108,730
|
|
Deferred
revenue
|
53,217
|
|
49,299
|
|
Accrued expenses and
other current liabilities
|
161,550
|
|
185,305
|
|
Current maturities of
debt
|
23,261
|
|
73,848
|
|
Current maturities of
operating lease liabilities
|
60,772
|
|
58,764
|
|
Total current
liabilities
|
449,519
|
|
557,198
|
|
Long-term debt, net of
current portion
|
1,987,180
|
|
1,859,027
|
|
Operating lease
liabilities, net of current portion
|
2,254,736
|
|
2,268,863
|
|
Deferred income taxes,
net
|
61,962
|
|
56,066
|
|
Other
liabilities
|
37,381
|
|
36,875
|
|
Total
liabilities
|
4,790,778
|
|
4,778,029
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.01
par value per share; 500,000 shares authorized; 198,791 and 196,671
shares issued and outstanding, respectively.
|
1,988
|
|
1,967
|
|
Additional paid-in
capital
|
2,861,359
|
|
2,835,883
|
|
Accumulated
deficit
|
(551,896)
|
|
(576,813)
|
|
Accumulated other
comprehensive loss
|
(8,592)
|
|
(6,925)
|
|
Total stockholders'
equity
|
2,302,859
|
|
2,254,112
|
|
Total liabilities and
stockholders' equity
|
$
7,093,637
|
|
$
7,032,141
|
|
LIFE TIME GROUP
HOLDINGS, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
24,917
|
|
$
27,460
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
65,903
|
|
58,197
|
|
Deferred income
taxes
|
5,996
|
|
6,333
|
|
Share-based
compensation
|
7,626
|
|
5,622
|
|
Non-cash rent
expense
|
5,958
|
|
9,028
|
|
Loss (gain) on
disposal of property and equipment, net
|
245
|
|
(6,693)
|
|
Amortization of debt
discounts and issuance costs
|
2,003
|
|
1,966
|
|
Changes in operating
assets and liabilities
|
(23,820)
|
|
(23,650)
|
|
Other
|
1,579
|
|
(3,915)
|
|
Net cash provided by
operating activities
|
90,407
|
|
74,348
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(156,801)
|
|
(170,814)
|
|
Proceeds from
sale-leaseback transactions
|
—
|
|
32,676
|
|
Other
|
(1,787)
|
|
1,287
|
|
Net cash used in
investing activities
|
(158,588)
|
|
(136,851)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
borrowings
|
—
|
|
7,916
|
|
Repayments of
debt
|
(54,117)
|
|
(3,701)
|
|
Proceeds from
revolving credit facility
|
445,000
|
|
345,000
|
|
Repayments of
revolving credit facility
|
(315,000)
|
|
(280,000)
|
|
Repayments of finance
lease liabilities
|
(193)
|
|
(244)
|
|
Proceeds from stock
option exercises
|
484
|
|
3,456
|
|
Other
|
(1,199)
|
|
(102)
|
|
Net cash provided by
financing activities
|
74,975
|
|
72,325
|
|
Effect of exchange
rates on cash and cash equivalents and restricted cash and cash
equivalents
|
(36)
|
|
6
|
|
Increase in cash and
cash equivalents and restricted cash and cash
equivalents
|
6,758
|
|
9,828
|
|
Cash and cash
equivalents and restricted cash and cash equivalents—beginning of
period
|
29,966
|
|
25,509
|
|
Cash and cash
equivalents and restricted cash and cash equivalents—end of
period
|
$
36,724
|
|
$
35,337
|
|
Non-GAAP Measurements and Key Performance Indicators
See "Use of Non-GAAP Financial Measures and Key Performance
Indicators" for a discussion of the Non-GAAP financial measures
reconciled below.
|
Key Performance
Indicators
|
|
($ in thousands,
except for Average Center revenue per center
membership)
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2024
|
|
2023
|
|
Membership
Data
|
|
|
|
|
Center
memberships
|
802,010
|
|
764,173
|
|
Digital on-hold
memberships
|
51,062
|
|
49,333
|
|
Total
memberships
|
853,072
|
|
813,506
|
|
|
|
|
|
Revenue
Data
|
|
|
|
|
Membership dues and
enrollment fees
|
73.3 %
|
|
71.8 %
|
|
In-center
revenue
|
26.7 %
|
|
28.2 %
|
|
Total Center
revenue
|
100.0 %
|
|
100.0 %
|
|
|
|
|
|
Membership dues and
enrollment fees
|
$
425,411
|
|
$
357,488
|
|
In-center
revenue
|
155,074
|
|
140,264
|
|
Total Center
revenue
|
$
580,485
|
|
$
497,752
|
|
|
|
|
|
Average Center revenue
per center membership (1)
|
$
745
|
|
$
667
|
|
Comparable center
revenue (2)
|
11.1 %
|
|
24.6 %
|
|
|
|
|
|
Center
Data
|
|
|
|
|
Net new center openings
(3)
|
1
|
|
3
|
|
Total centers (end of
period) (3)
|
172
|
|
164
|
|
Total center square
footage (end of period) (4)
|
16,900,000
|
|
16,100,000
|
|
|
|
|
|
GAAP and Non-GAAP
Financial Measures
|
|
|
|
|
Net income
|
$
24,917
|
|
$
27,460
|
|
Net income margin
(5)
|
4.2 %
|
|
5.4 %
|
|
Adjusted net income
(6)
|
$
30,525
|
|
$
23,211
|
|
Adjusted net income
margin (6)
|
5.1 %
|
|
4.5 %
|
|
Adjusted EBITDA
(7)
|
$
145,977
|
|
$
120,102
|
|
Adjusted EBITDA margin
(7)
|
24.5 %
|
|
23.5 %
|
|
Center operations
expense
|
$
321,900
|
|
$
274,109
|
|
Pre-opening expenses
(8)
|
$
2,452
|
|
$
1,685
|
|
Rent
|
$
72,282
|
|
$
66,537
|
|
Non-cash rent expense
(open properties) (9)
|
$
4,184
|
|
$
6,378
|
|
Non-cash rent expense
(properties under development) (9)
|
$
1,774
|
|
$
2,650
|
|
|
|
|
(1)
|
We define Average
Center revenue per center membership as Center revenue less Digital
on-hold revenue, divided by the average number of Center
memberships for the period, where the average number of Center
memberships for the period is an average derived from dividing the
sum of the total Center memberships outstanding at the beginning of
the period and at the end of each month during the period by one
plus the number of months in each period.
|
|
|
|
|
(2)
|
We measure the results
of our centers based on how long each center has been open as of
the most recent measurement period. We include 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.
|
|
|
|
|
(3)
|
Net new center openings
is calculated as the number of centers that opened for the first
time to members during the period, less any centers that closed
during the period. Total centers (end of period) is the number of
centers operational as of the last day of the period. During the
first quarter of 2024, we opened one center, which excludes two
acquired centers that are not currently considered new center
openings as they are under major remodel.
|
|
|
|
|
(4)
|
Total center square
footage (end of period) reflects the aggregate square footage,
excluding the areas used for tennis courts, outdoor swimming pools,
outdoor play areas and stand-alone Work, Sport and Swim locations.
We use this metric for evaluating the efficiencies of a center as
of the end of the period. These figures are
approximations.
|
|
|
|
|
(5)
|
Net income margin is
calculated as net income divided by total revenue.
|
|
|
|
|
(6)
|
We present Adjusted net
income as a supplemental measure of our performance. We define
Adjusted net income as net income excluding the impact of
share-based compensation expense, (gain) loss on sale-leaseback
transactions, capital transaction costs, legal settlements, asset
impairment, severance and other items that are not indicative of
our ongoing operations, including incremental costs related to
COVID-19, less the tax effect of these adjustments.
|
|
|
|
|
|
Adjusted net income
margin is calculated as Adjusted net income divided by total
revenue.
|
|
|
|
|
The following table
provides a reconciliation of net income and income per common
share, the most directly comparable GAAP measures, to Adjusted net
income and Adjusted net income per common share:
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
($ in
thousands)
|
2024
|
|
2023
|
|
Net income
|
$
24,917
|
|
$
27,460
|
|
Share-based
compensation expense (a)
|
7,626
|
|
5,622
|
|
Gain on sale-leaseback
transactions (b)
|
—
|
|
(6,732)
|
|
Other
(c)
|
214
|
|
(4,512)
|
|
Taxes
(d)
|
(2,232)
|
|
1,373
|
|
Adjusted net
income
|
$
30,525
|
|
$
23,211
|
|
|
|
|
|
Income per common
share:
|
|
|
|
|
Basic
|
$
0.13
|
|
$
0.14
|
|
Diluted
|
$
0.12
|
|
$
0.14
|
|
Adjusted income per
common share:
|
|
|
|
|
Basic
|
$
0.15
|
|
$
0.12
|
|
Diluted
|
$
0.15
|
|
$
0.11
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
Basic
|
197,498
|
|
194,572
|
|
Diluted
|
202,756
|
|
202,855
|
|
|
|
|
(a)
|
Share-based
compensation expense recognized during the three months ended March
31, 2024, was associated with stock options, restricted stock
units, performance stock units and our employee stock purchase plan
("ESPP") that launched on December 1, 2022. Share-based
compensation expense recognized during the three months ended March
31, 2023, was associated with stock options, restricted stock,
restricted stock units, our ESPP and liability classified awards
related to our short-term incentive plan in 2023.
|
|
|
|
|
(b)
|
We adjust for the
impact of losses and gains on the sale-leaseback of our properties
as they do not reflect costs associated with our ongoing
operations.
|
|
|
|
|
(c)
|
Includes benefits and
costs associated with transactions that are unusual and
non-recurring in nature.
|
|
|
|
|
(d)
|
Represents the
estimated tax effect of the total adjustments made to arrive at
Adjusted net income using the effective income tax rates for the
respective periods.
|
|
|
|
|
(7)
|
We present Adjusted
EBITDA as a supplemental measure of our performance. We define
Adjusted EBITDA as net income before interest expense, net,
provision for (benefit from) income taxes and depreciation and
amortization, excluding the impact of share-based compensation
expense, loss (gain) on sale-leaseback transactions, capital
transaction costs, legal settlements, asset impairment, severance
and other items that are not indicative of our ongoing
operations.
|
|
|
|
|
Adjusted EBITDA margin
is calculated as Adjusted EBITDA divided by total
revenue.
|
|
|
|
|
The following table
provides a reconciliation of net income, the most directly
comparable GAAP measure, to Adjusted EBITDA:
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
($ in
thousands)
|
2024
|
|
2023
|
|
Net income
|
$
24,917
|
|
$
27,460
|
|
Interest expense, net
of interest income
|
37,403
|
|
31,195
|
|
Provision for income
taxes
|
9,914
|
|
8,872
|
|
Depreciation and
amortization
|
65,903
|
|
58,197
|
|
Share-based
compensation expense (a)
|
7,626
|
|
5,622
|
|
Gain on sale-leaseback
transactions (b)
|
—
|
|
(6,732)
|
|
Other
(c)
|
214
|
|
(4,512)
|
|
Adjusted
EBITDA
|
$
145,977
|
|
$
120,102
|
|
|
(a) – (c)
|
See the corresponding
footnotes to the table in footnote 6 immediately
above.
|
|
|
(8)
|
Represents non-capital
expenditures associated with opening new centers that are incurred
prior to the commencement of a new center opening. The number of
centers under construction or development, the types of centers and
our costs associated with any particular center opening can vary
significantly from period to period.
|
|
|
(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.
|
|
|
Proceeds from
Sale-Leaseback Transactions
|
|
($ in
thousands)
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2024
|
|
2023
|
|
Proceeds from
sale-leaseback transactions
|
$
—
|
|
$
32,676
|
|
Reconciliation of
Net Income to Adjusted EBITDA Trailing Twelve Months
|
|
($ in
thousands)
|
|
(Unaudited)
|
|
|
Twelve
|
|
Twelve
|
|
Months
Ended
|
|
Months
Ended
|
|
March 31,
2024
|
|
March 31,
2023
|
|
Net income
|
$
73,520
|
|
$
63,633
|
|
Interest expense, net
of interest income
|
137,005
|
|
114,789
|
|
Provision for income
taxes
|
19,769
|
|
10,914
|
|
Depreciation and
amortization
|
252,103
|
|
228,973
|
|
Share-based
compensation expense
|
52,148
|
|
21,475
|
|
Loss (gain) on
sale-leaseback transactions
|
20,356
|
|
(75,992)
|
|
Asset
impairments
|
5,340
|
|
—
|
|
Other
|
2,464
|
|
(2,592)
|
|
Adjusted
EBITDA
|
$
562,705
|
|
$
361,200
|
|
Reconciliation of
Net Debt and Leverage Calculation
|
|
($ in
thousands)
|
|
(Unaudited)
|
|
|
Twelve
|
|
Twelve
|
|
Months
Ended
|
|
Months
Ended
|
|
March 31,
2024
|
|
March 31,
2023
|
|
Current maturities of
debt
|
$
23,261
|
|
$
65,585
|
|
Long-term debt, net of
current portion
|
1,987,180
|
|
1,824,913
|
|
Total
Debt
|
$
2,010,441
|
|
$
1,890,498
|
|
Less: Fair value
adjustment
|
400
|
|
1,005
|
|
Less: Unamortized debt
discounts and issuance costs
|
(13,466)
|
|
(17,480)
|
|
Less: Cash and cash
equivalents
|
18,598
|
|
23,213
|
|
Net
Debt
|
$
2,004,909
|
|
$
1,883,760
|
|
Trailing twelve-month
Adjusted EBITDA
|
562,705
|
|
361,200
|
|
Net Debt Leverage
Ratio
|
3.6x
|
|
5.2x
|
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SOURCE Life Time Group Holdings, Inc.