Life Time Fitness fell just short of its attrition goal, but CEO Bahram Akradi still was pleased with his company’s overall performance in 2010.
Life Time grew its revenue 9.8 percent in fourth quarter 2010 and 9.1 percent for 2010, the Chanhassen, MN-based company announced today. Memberships grew 5.8 percent in 2010 while attrition dropped from 40.6 percent at the end of 2009 to 36.3 percent at the end of 2010, just shy of Akradi’s attrition goal of 36 percent.
“Almost all of our financial and business metrics showed meaningful improvement this year,” Akradi said today during a call with analysts. “We grew our memberships, square footage, average revenue per membership, operating margins and cash flow from operations. The strongest area of growth in the company came from our in-center businesses, which grew over 14 percent versus 2009. Our management team is very proud of these achievements.”
In fourth quarter 2010, Life Time’s revenue grew to $223.7 million from $203.7 million during fourth quarter 2009. Overall, revenue in 2010 was $912.8 million, up from $837.0 million during 2009. Memberships increased to 612,556 on Dec. 31, 2010 from 578,937 on Dec. 31, 2009.
Net income dipped slightly in fourth quarter 2010 ($17.6 million) compared to the same period the previous year ($18.4 million). However, net income for 2010 increased to $80.7 million from $72.4 million in 2009.
During fourth quarter 2010, Life Time opened its third planned large-format center for the year in Centennial, CO. Last month, Life Time opened a large-format center in Syosset, NY, the first Life Time location in the state of New York.
In May, Life Time plans to open its second and third large-format centers planned for 2011 in Colorado Springs, CO, and Summerlin, NV, the company’s first club in the Las Vegas market. Life Time CFO Mike Robinson also said during today’s call that the company planned to open its first club in Canada in 2012.
Life Time already is enjoying a good 2011. It had 21,000 memberships in January compared to 18,000 memberships generated in January 2010.
For 2011, Life Time expects its revenue will increase 6 percent to 8 percent, or $970 million to $990 million. The company also expects its net income will increase 13 percent to 18 percent, or $91 million to $95 million.
Akradi says $1 billion in revenue is not out of the question.
“We will do all within our power to achieve this $1 billion milestone this year,” Akradi said today.
Life Time’s stock price was $42.98 at the end of today’s trading on the New York Stock Exchange.