CHANHASSEN, MN — Despite its strong second quarter financial results, Life Time Fitness is still taking it slow when it comes to expansion.
Last month, Life Time opened a new yoga studio in Minneapolis called LifePower Yoga. In December, Life Time plans to open a new 129,000-square-foot club in Centennial, CO, marking the company's third club in the Denver area. Life Time also opened new clubs in Beachwood, OH, and Lenexa, KS, earlier this year.
Those will be the only three large clubs that the Chanhassen, MN-based company opens in 2010. (Life Time also purchased QLS Family Fitness in Humble, TX, in June.) Life Time has been in negotiations for other opportunities, too, CEO Bahram Akradi said during July's second-quarter earnings call.
“We are looking at a number of deals, and we do not have a shortage of ways to grow the clubs,” Akradi told analysts. “There are some facilities that we are looking at negotiating [where] we haven't signed anything.”
Akradi also said that Life Time could grow more clubs by the end of 2011.
“For us to ramp from three or four clubs to five or six or seven clubs [by the] end of next year does not at all concern me,” Akradi said. “It's not difficult. Would we be able to go from three large clubs to 12 large clubs in 18 months? The answer is no, but we also have no plans to do that.”
Life Time reported an increase in sales, net income and memberships for second quarter 2010. The company's revenue for the second quarter grew 8.7 percent to $231.1 million from $212.5 million during the same period last year. Net income in second quarter 2010 was $21.9 million compared to $18.3 million in second quarter 2009.
“I am very happy with our same-store sales and retention performance since it has been such a strong focus for the company,” Akradi said. “I am very pleased with the cohesiveness and alignment, energy and focus of our entire team towards building a multi-billion-dollar healthy-way-of-life company.”
For the six months ended June 30, 2010, revenue grew 7.6 percent to $450.9 million from $419.0 million during the same period last year. Net income for the same period was $39.7 million compared with $33.4 million for the first six months of 2009.
Memberships increased as well, up 3.9 percent to 631,862 at June 30, 2010, from 608,281 at June 30, 2009. Attrition rate for the quarter dropped to 8.4 percent.
Life Time updated its forward-looking statements for 2010. The company expects revenue to be $890 million to $905 million (up from $880 million to $895 million), and net income to be $79 million to $81 million (up from $76.5 million to $79.5 million).
Both Akradi and Life Time CFO Michael Robinson cautioned that expectations could change with the end of the summer pool season.