Lifetime Leadership Raises as Q3 Beats Plan


Life Time Group Holdings, Inc. raised its guidance for the year slightly after reporting its third-quarter results. Sales advanced 28.9 percent as fitness center memberships increased 9.0 percent year-over-year.

Bahram Akradi, Founder, Chairman and CEO: “We are pleased with our continued progress this quarter. While the macroeconomic backdrop remains a headwind, our delinquent strategy is working to enhance the member experience and restore our revenues and drive growth, and we are rapidly focusing on margin expansion. As we continue to grow revenues, optimize the execution of our key strategic initiatives, optimize pricing across our club and corporate structure, and improve efficiency, we see significant opportunities to improve our margins by capturing operating leverage. In addition, our recently opened athletic resorts are performing well and we are pleased to conclude 2022 with a total of 12 new openings, with another 11 opening in 2023.”

Third quarter 2022 results and prior year comparisons

  • Total revenue increased 28.9 percent to $496.4 million from $385.0 million;
  • Comparable center sales increased 25.6 percent;
  • Center membership was 728,729 on September 30, 2022, an increase of 9.0 percent from 668,310 on September 30, 2021 and an increase of approximately 4,000 from June 30, 2022;
  • Net income was $24.7 million and included $42.7 million of taxable income from the sale-leaseback and $5.1 million of taxable non-cash share-based compensation expense; and
  • Adjusted EBITDA increased 50.9 percent from $47.0 million to $71.0 million.

Life Time’s guidance was calling for revenue, net loss and Adjusted EBITDA to be in the range of $490 million to $510 million, $(24) to $(15) million and $65 to $75 million, respectively.

Results for the Nine Months of 2022 and Prior Year Comparisons

  • Total revenue rose 41.0 percent to $1.350 billion from $957.5 million;
  • Comparable center sales increased 35.7 percent;
  • The net loss was $15.5 million, which included a $80.3 million taxable gain on the sale-leaseback and a $27.2 million taxable non-cash share-based compensation expense; and
  • Adjusted EBITDA increased 441.2 percent from $32.3 million to $174.7 million.

New Center Openings
The company opened three new centers in the third quarter of 2022 and had 156 centers operating as of September 30, 2022. The company opened five new centers in the nine months ending September 30, 2022, and plans to open seven new centers in the country. fourth quarter, for 12 new centers in 2022. The company plans to open 11 new centers in 2023.

Cash flow considerations

  • As of September 30, 2022, the company had total cash and cash equivalents of $107.1 million and had no outstanding revolving credit facility of $475 million;
  • Net cash provided (used) by operating activities for the three-month and nine-month periods ended September 30, 2022 was $45.0 million and $125.3 million, respectively. corresponding periods of the previous year; and
  • Free cash flow before growth capital expenditures was $7.4 million and $5.5 million for the three-month and nine-month periods ended September 30, 2022, respectively. periods of the year respectively.

Sale-Back
During the third quarter of 2022, the company completed sale-leaseback transactions on five properties for gross proceeds of $200 million. Aggregate proceeds from sale-leaseback transactions for the nine-month period ended September 30, 2022 were approximately $375 million. The Company is exploring alternative sale-leaseback structures to optimize our financing costs and preserve the use of our net operating losses to offset our increased future taxable income.

Outlook
For the fourth quarter ended December 31, 2022, the company expects revenue, net loss and Adjusted EBITDA to be in the range of $460 million to $490 million, (10) to (2) million and $80 to $90 million. according to.

For the full year ending December 31, 2022, the company expects revenue, net loss and Adjusted EBITDA to be in the range of $1.81 to $1.84 billion, $(26) to $(17) million and $255 to $265 million predicts. according to. Previously, guidance for the year called for revenue, net loss and Adjusted EBITDA to be in the range of $1.80 to $1.85 billion, $(73.6) to ($55.6) million and $250 to $270 million, respectively .



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