Life Time Fitness, Chanhassen, MN, once again reached the $1 billion mark in revenue in 2012 as the company released its fourth quarter and year-end financials today.

Officially, Life Time generated $1.127 billion in 2012, an 11.2 percent increase from the $1.014 billion it had in 2011. Net income for the year was $111.5 million, or $2.66 per diluted share, compared to net income of $92.6 million, or $2.26 per diluted share, in 2011.

In fourth quarter 2012, Life Time generated $275.3 million, a 9.7 percent increase from $250.9 million in fourth quarter 2011. Net income for the quarter was $23.4 million, or $0.56 per diluted share, compared to net income of $19.8 million, or $0.48 per diluted share, for fourth quarter 2011.

Life Time Chairman, President and CEO Bahram Akradi said on today's call that the company reached double-digit percentage improvements in total revenue, in-center revenue (almost 13 percent), ancillary revenue (53 percent) operating income (20 percent) EBITDA (earnings before interest, taxes, depreciation and amortization, 19 percent), net income (more than 20 percent) and EPS (earnings per share, more than 17 percent).

"We are proud of these results," Akradi said on the call. "I want to thank all Life Time team members for all their effort in the past year. It is their passion and hard work that delivers the excellent member experience that is the foundation of our success all these years. To be exact, 2012 is a full 20 years we have driven strong growth in revenue, EBITDA and net income."

Memberships grew 1 percent to 682,621 on Dec. 31, 2012, from 676,054 on Dec. 31, 2011. Excluding memberships acquired in connection with Lifestyle Family Fitness (Life Time acquired nine clubs in 2011), memberships grew 2.4 percent. Membership dues revenue increased 9.7 percent from 2011 to 2012, Life Time reported.

"This speaks clearly to our long-term stated strategy of growing dues, something we have been doing consistently for almost 20 years," Akradi said. "We see no reason to believe we cannot continue this well into the future."

Life Time Increases Growth Plans

Attrition in fourth quarter 2012 was 10.4 percent compared to 9.6 percent in the same period in 2011. Excluding the former Lifestyle Family Fitness clubs, the fourth quarter 2012 attrition rate was 10.1 percent.

Trailing 12-month attrition on Dec. 31, 2012, was 38.2 percent compared to trailing 12-month attrition of 35 percent on Dec. 31, 2011. Excluding the Lifestyle clubs, the trailing 12-month attrition was 36.9 percent.

Akradi said Life Time will soon be reporting membership and attrition metrics in two categories: access membership or subscription (bronze and gold tiers) and non-access membership or subscription (platinum and onyx tiers).

"We believe this provides the most accurate reflection of our true attrition rate in our business," Akradi said.

The results released today fall in line with Life Time's preliminary results released on Jan. 31. The company expected 2012 revenue to be between $1.125 billion and $1.127 billion and net income for 2012 to be between $110 million and $111.5 million.

For 2013, Life Time expects revenue to increase 6.5 percent to 8 percent ($1.2 billion to $1.22 billion), and net income is expected to be up 8 percent to 11 percent ($120 million to $124 million).

Life Time will open three new clubs in 2013. The first one was announced Tuesday, in Vestavia Hills, AL, just outside of Birmingham. That club will open in mid-April. Life Time CFO Michael Robinson said the company will open clubs in Reston, VA, and Montvale, NJ, in the second half of this year.

Akradi confirmed the 2014 openings of clubs in Harrison, NY, and Laguna Nigel, CA. Beginning this fall, Life Time will open a new large center every other month, Akradi said.

"Our real estate pipeline for potential new centers in 2014 and 2015 and beyond is filling up very nicely," Akradi said. "Our development and construction group is ready to deliver the unit level growth we are talking about."

Life Time's stock price was $42.80 during midday trading on the New York Stock Exchange.