$LTH reports Strong Fiscal 2022 Results and Plans for Continued Growth
Mar 8th 2023, 11:54 am
Analyst Summary: Life Time Group Holdings, Inc. reported strong fourth-quarter and full-year fiscal 2022 financial results that show the strategic investments and pricing strategy are driving club usage and memberships. The company's top priority for 2023 is to improve its balance sheet by growing revenues and increasing operating margins to reduce leverage. The increase in revenue during the fiscal year 2022 was due to growth in membership dues and in-center revenues, driven by the pricing strategy, increased memberships and higher utilization of in-center offerings by members. Life Time plans to open 10 new centers in 2023 to continue to drive growth. The company's net income and Adjusted EBITDA improved significantly due to increased revenue and benefited from margin expansion efforts. The company continues to explore alternative sale-leaseback structures to optimize financing costs in a tax-efficient manner. Life Time aims to achieve leverage of approximately four times net debt to adjusted EBITDA by year-end. The company will offset a large portion of 2023 cash taxes by utilizing a portion of its net operating loss carryforwards. Life Time plans to open 10 athletic country clubs in 2023. Quotes from CEO: "We had a strong 2022 and believe we are entering 2023 with great momentum in our business. Our strategies are working. The strategic investments we have made are driving increased club usage and memberships. We are also optimizing our pricing to continue to enhance our member experience, increase center revenue per center membership and deliver margin expansion. In 2023, our top priority is to improve our balance sheet, including by growing our revenue and increasing our operating margin to reduce our leverage. Our entire organization is united in delivering incredible experiences to our members and continued strong financial performance." Forward-Looking Statements: Life Time's forward-looking statements should be evaluated carefully. The company presents Adjusted EBITDA as a supplemental measure of its performance. Adjustments and the reasons the company considers them appropriate for supplemental analysis should be evaluated. The presentation of non-GAAP financial measures may be modified in future periods. The impact of variability in legal settlements, tax positions or income, and other factors could have an unpredictable, material impact on future GAAP financial results. The company's forward-looking statements are subject to risks, uncertainties and assumptions.