CHANHASSEN, MN -- Life Time Fitness enjoyed an increase in revenue and a decrease in its attrition rate during the first quarter of the year.
In financial results announced today, the Chanhassen, MN-based company grew its revenue 6.5 percent to $219.8 million in first quarter 2010 compared to $206.4 million in first quarter 2009. Net income also increased period over period. Life Time had $17.8 million net income in first quarter 2010 compared to $15.1 million in first quarter 2009, a 15.2 percent increase.
More good news comes in the form of Life Time’s attrition rate, which was 8.5 percent in first quarter 2010 compared to 9.8 percent in first quarter 2009. Trailing 12-month attrition through March 31, 2010, improved to 39.3 percent. For the year ending Dec. 31, 2009, attrition was 40.6 percent.
“I have created a team of people who are focused entirely on membership retention, which we never had before,” Life Time CEO Bahram Akradi said during today’s call with financial analysts.
In a statement released prior to the call, Akradi said the 8.5 percent attrition rate in the first quarter was due to the company’s commitment to the members’ experiences and the impact of the company’s connectivity initiatives. Akradi added that the company also focused on growing same-center revenue.
“We saw our third consecutive quarter of mature same-center revenue improvement,” Akradi said. “This is indicative of our clear focus on delivering programs and services that truly help members achieve success with their fitness goals.”
Memberships grew 2.3 percent to 613,882 on March 31, 2010, compared to 599,919 on March 31, 2009.
During the quarter, Life Time opened two new clubs, one in January in the Cleveland suburb of Beachwood, OH, and the other in March in the Kansas City, MO, suburb of Lenexa, KS. Life Time also opened a Pilates, yoga and personal training boutique in February in Scottsdale, AZ.
Life Time plans to add another boutique center during the third quarter in Minneapolis and will open its third club of the year during the fourth quarter in the Denver suburb of Centennial, CO.
Looking forward in 2010, Life Time expects its revenue to be $880 million to $895 million (updated from $870 million to $895 million). Also, net income is expected to be $76.5 million to $79.5 million, up from $75 million to $79 million.
In late-morning trading on the New York Stock Exchange, Life Time shares were up $2.54, to $37.30, a 7 percent increase.
The company was scheduled to hold its annual shareholders meeting this afternoon.