CHANHASSEN, MN -- Life Time Fitness CEO Bahram Akradi, along with CFO Mike Robinson, spelled out their company's highs and lows during a year-end and fourth-quarter earnings call with analysts today. The highs included increased revenue, and the lows included decreased net income. However, Akradi remains confident in Life Time’s business model.

Revenue for Life Time grew both in fourth quarter 2008 and in the year 2008. Fourth quarter 2008 revenue grew 13.4 percent to $194 million from $171.1 million during fourth quarter 2007. The growth was driven primarily by growth in membership dues and in-center revenue. Revenue for the year grew 17.4 percent to $769.6 million, up from $655.8 million in 2007.

Life Time’s income in the fourth quarter, however, decreased significantly. Net income in fourth quarter 2008 was $13 million, or 33 cents per share, down 32 percent from $19.1 million, or 48 cents per share, in fourth quarter 2007. For the year, net income grew 5.6 percent to $71.8 million from $68 million in 2007.

“2008 was a bittersweet year for our company,” Akradi said during the call. “We had many significant accomplishments. We also had some tremendous challenges, and overall, it did not meet our expectations. There are things we did well, and some things we did not perform to our satisfaction.”

Later, Akradi added: “There was much to be proud of. We firmly believe in our business model. It has proven to be resilient and successful. Our most valuable asset, our membership base, maintains strong usage levels, and our feedback from our members continues to get better. We are a profitable company, and we intend to stay that way.”

Life Time took a charge from its earnings of 8 cents per share related to previously announced plans to slow the development of new centers. The charges included severance costs and the write-off of assets related to land developments cancelled during the fourth quarter.

The numbers announced today are similar to preliminary results the company announced on Feb. 5. As previously announced, memberships grew 13.6 percent to 567,110 on Dec. 31, 2008 compared to 499,092 on Dec. 31, 2007.

Membership dues increased by 14.5 percent in fourth quarter 2008 and by 17.2 percent for the year. In-center revenue grew 13.1 percent in fourth quarter 2008 and 19.7 percent for the year.

Total operating expenses during fourth quarter 2008 totaled $164.6 million compared to $133.5 million for fourth quarter 2007. Full-year operating expenses for 2008 were $622.3 million compared with $518.4 million in 2007.

In the fourth quarter, Life Time opened four new centers in Mansfield, TX; Loudoun County, VA; Florham Park, NJ; and Westminster, CO. This month, the company opened two clubs, one in Berkeley Heights, NJ, and one in Atascocita, TX.

Akradi said that four more openings are scheduled for this year but added that the company is moving cautiously with its growth, keeping an eye on the credit market and internal cash flow.

The company’s revenue for 2009 is expected to be between $830 million and $860 million. Akradi said that January was a strong month for Life Time, thanks in part to intensive marketing efforts and promotions.

“In many of our clubs—two, three, four, five, six years old—we sold probably more membership units than we have ever sold before,” Akradi said. “We had a great January. Parking lots are packed. Some of our clubs were shuttling people back and forth from crossover parking. I don’t think that the consumer has walked away from exercise whatsoever. They are dealing with pinching stuff in every way they can, but I don’t think that this is one of those things that they will easily let go.”

When an analyst asked if Akradi had thought about his company expanding with smaller-sized clubs, Akradi didn’t rule it out, adding that he and the company are examining every possibility.

Life Time’s stock closed at $10.69—up 18 cents—today on the New York Stock Exchange.