Life Time Fitness Announces Fourth Quarter and Full Year 2014 Financial Results
Posted: February 26, 2015 in Chains
Life Time – The Healthy Way Of Life Company
CHANHASSEN, MN – Life Time Fitness, Inc. (NYSE:LTM), The Healthy Way of Life Company, reported its financial results for the fourth quarter and year ended December 31, 2014.
Fourth quarter 2014 revenue grew 8.3% to $315.3 million from $291.0 million during the same period last year. Revenue for the full year grew 7.0% to $1.291 billion from $1.206 billion in 2013.
Net income for the quarter was $22.4 million, or $0.59 per diluted share, compared to net income of $25.9 million, or $0.63 per diluted share, for 4Q 2013. Adjusted net income for the quarter was $27.0 million, or $0.71 per diluted share, compared to adjusted net income of $26.0 million, or $0.63 per diluted share, for 4Q 2013. Net income for the full year was $114.4 million, or $2.94 per diluted share, compared to net income of $121.0 million, or $2.92 per diluted share, for 2013. Adjusted net income for the full year was $117.8 million, or $3.03 per diluted share, compared to adjusted net income of $121.7 million, or $2.93 per diluted share, for 2013. The adjustments to net income and diluted earnings per share are reflected in the reconciliations of net income to adjusted net income and diluted earnings per share to adjusted diluted earnings per share, provided below.
“Our core focus in 2014 was on reducing membership attrition rates and I am pleased with the progress we achieved via our connectivity and engagement initiatives,” said Bahram Akradi, chairman, president and chief executive officer. “For the quarter and full year, we also saw steady growth in our revenue, including dues and in-center revenue. Additionally, we experienced the second straight quarter of sequential improvement in our same-center sales metrics, which we expect to be positive in 2015, along with growth in membership levels. We are off to a good start this year and look forward to continuing our improvement across these metrics. As always, we remain focused on delivering an unparalleled Healthy Way of Life experience to our members, while driving shareholder value.”
As previously announced, the Company’s board of directors continues to review strategic alternatives, including the exploration of a conversion of real estate assets into a Real Estate Investment Trust (REIT), which the Board believes could provide substantial benefits to the Company and its shareholders. The Company is unable to comment further at this time but expects to provide shareholders with additional information, as appropriate.
During the fourth quarter, the Company opened its sixth planned center for the year, located in Henderson, Nevada, marking the Company’s second center in the Las Vegas market. In 2015, plans call for six new center openings in existing and new markets, led by Raleigh, North Carolina, the Company’s seventh North Carolina location, in March. The remaining planned new center openings will be in the Sacramento, California; Toronto, Ontario; Boston, Massachusetts; Mt. Laurel, New Jersey (greater Philadelphia market); and, Long Island, New York markets.
Three and Twelve Months Ended December 31, 2014, Financial Highlights:
Total revenue for the fourth quarter grew 8.3% to $315.3 million from $291.0 million in 4Q 2013. Total revenue for 2014 grew 7.0% to $1.291 billion from $1.206 billion during the prior-year period.
Category | 4Q 2014 vs. 4Q 2013
(in millions except revenue per membership data)
Membership dues | $200.5 vs. $190.0 (up 5.5%)
In-center revenue | $100.3 vs. $89.0 (up 12.6%)
Other revenue | $11.5 vs. $8.6 (up 33.4%)
Average center revenue per Access membership | $441 vs. $412 (up 6.8%)
Average in-center revenue per Access membership | $148 vs. $132 (up 11.9%)
Same-center revenue (open 13 months or longer) | Up 0.6%
Same-center revenue (open 37 months or longer) | Down 0.2%
Category | YTD 2014 vs. YTD 2013
(in millions except revenue per membership data)
Membership dues | $810.7 vs. $766.8 (up 5.7%)
In-center revenue | $411.0 vs. $375.5 (up 9.4%)
Other revenue | $56.7 vs. $49.6 (up 14.4%)
Average center revenue per Access membership | $1,767 vs. $1,656 (up 6.7%)
Average in-center revenue per Access membership | $597 vs. $545 (up 9.6%)
Same-center revenue (open 13 months or longer) | Up 0.2%
Same-center revenue (open 37 months or longer) | Down 0.3%
Total memberships grew 2.5% to 809,445 at December 31, 2014, from 789,490 at December 31, 2013.
- Access memberships were 683,530 at December 31, 2014, compared to 678,619 at December 31, 2013.
- Non-Access memberships were 125,915 at December 31, 2014, compared to 110,871 at December 31, 2013.
- Attrition in 4Q 2014 was 9.4% compared to 9.8% in the prior-year period. Attrition for the 12-month period ended December 31, 2014, was 35.2% compared to attrition of 35.8% during the 12-month period ended December 31, 2013.
Total operating expenses during 4Q 2014 were $267.2 million compared to $241.4 million for 4Q 2013. Total operating expenses for 2014 were $1.061 billion compared to $977.3 million for 2013.
- Income from operations margin was 15.2% for 4Q 2014 compared to 17.1% in the prior-year period.
- Income from operations margin was 17.8% for 2014 compared to 19.0% for 2013.
Category | 4Q 2014 vs. 4Q 2013
(expense as a percent of total revenue)
Center operations | 56.9% vs. 57.5%
Advertising and marketing | 3.6% vs. 4.2%
General and administrative | 5.3% vs. 4.6%
Other operating | 6.8% vs. 6.2%
Depreciation and amortization | 12.2% vs. 10.5%
Category | YTD 2014 vs. YTD 2013
(expense as a percent of total revenue)
Center operations | 57.7% vs. 57.1%
Advertising and marketing | 3.3% vs. 3.5%
General and administrative | 4.9% vs. 4.9%
Other operating | 5.2% vs. 5.4%
Depreciation and amortization | 11.1% vs. 10.1%
Net income for the quarter was $22.4 million, or $0.59 per diluted share, compared to net income of $25.9 million, or $0.63 per diluted share, for 4Q 2013. Adjusted net income for the quarter was $27.0 million, or $0.71 per diluted share, compared to adjusted net income of $26.0 million, or $0.63 per diluted share, for 4Q 2013. Net income for the full year was $114.4 million, or $2.94 per diluted share, compared to net income of $121.0 million, or $2.92 per diluted share for 2013. Adjusted net income for the full year was $117.8 million, or $3.03 per diluted share, compared to adjusted net income of $121.7 million, or $2.93 per diluted share for 2013. The adjustments to net income and diluted earnings per share are reflected in the reconciliations of net income to adjusted net income and diluted earnings per share to adjusted diluted earnings per share.
EBITDA for 4Q 2014 was $86.8 million compared to $80.4 million in 4Q 2013. For 2014, EBITDA was $374.3 million compared with $351.8 million in the prior-year period.
- As a percentage of total revenue, EBITDA in 4Q 2014 was 27.5% compared to 27.6% in the prior-year period.
- For full year 2014, EBITDA, as a percentage of total revenue, was 29.0% compared to 29.2% for 2013.
Cash flows from operating activities for 2014 totaled $260.7 million compared to $259.4 million in the prior-year period.
Weighted average fully diluted shares for 4Q 2014 totaled 38.0 million compared to 41.3 million in 4Q 2013. For 2014, weighted average fully diluted shares totaled 38.9 million compared to 41.5 million for the prior-year period.
2015 Business Outlook:
The following statements are based on the Company’s current expectations for fiscal year 2015. These 2015 expectations are subject to the risks and uncertainties further described in the Company’s forward-looking statements:
- Revenue is expected to be $1.390-1.415 billion.
- Net income is expected to be $120.0-128.0 million.
- Diluted earnings per share is expected to be $3.15-3.35.
Expected net income and diluted earnings per share for 2015 exclude any expenses related to the Company’s exploration of strategic alternatives, including the REIT, which may be incurred in 2015.
