Life Time Fitness, Chanhassen, MN, generated $312 million in first quarter 2014 revenue, according to financials the company released today.
The revenue grew 7.3 percent from $290.7 million in first quarter 2013. Net income for Life Time Fitness grew slightly, from $28.1 million in first quarter 2013 to $28.3 million in first quarter 2014. EBITDA (earnings before interest, taxes, depreciation and amortization) in first quarter 2014 was $86.5 million compared to $82 million in the same period last year.
"It has been extremely active at Life Time," Bahram Akradi, founder and CEO of Life Time Fitness, said in today's call with analysts. "We're focused on opening five new centers in the first half of the year, preparing for a busy summer of athletic events and activity challenges, and continuing to build our amazing healthy way of life brand."
Life Time Fitness had 812,011 total memberships on March 31, 2014, compared to 809,813 on March 31, 2013. Attrition in first quarter 2014 was the same as first quarter 2013: 8.2 percent. Year-over-year attrition was 35.7 percent for the 12-month period ending March 31, 2014, an increase from 33.9 percent for 12-month attrition on March 31, 2013.
"Overall, it remains a challenging environment to attract and retain members," Akradi said in the call.
Life Time opened two new clubs in Harrison, NY, and Tampa, FL, in the first quarter and will open its first club in California (Laguna Niguel) this week. Two more clubs, in West Des Moines, IA, and Bloomfield Hills, MI, are in pre-sale and are expected to open in the second quarter. The company will open its sixth club in Henderson, NV, in the second half of the year.
New club pre-opening costs in first quarter 2014 led to a decrease in income from operations margin, the company said. Income from operations margin dropped from 18 percent in first quarter 2013 to 17.3 percent in first quarter 2014. Total operating expenses in first quarter 2014 were $257.9 million compared to $238.4 million in the same period last year.
Eric Buss, executive vice president and interim CFO at Life Time, said in the call the company plans to open a new club every other month after 2014.
Akradi said Life Time is still searching for a permanent replacement for its CFO and expects to have a decision made by the end of second quarter, which is the end of June.
Akradi also referenced the company's acquisition of several running events in January.
"The jewel of this portfolio was the Miami Marathon, which saw approximately 25,000 runners participate in this iconic event in early February," Akradi said. "The remaining events will occur at the regular interval throughout the calendar year."
For 2014, Life Time expects revenue to increase 8 percent to 9.5 percent, or $1.3 billion to $1.32 billion. Net income is expected to increase 3 percent to 7 percent, or $125 million to $130 million.
Life Time's stock was at $48.29 during midday trading and closed at $49.97 on the New York Stock Exchange, down from today's open of $50.10.