What changed in this filing

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Item 1. Financial Statements

2023-10-31 compared with 2023-07-31 · 87 added, 78 removed, 373 unchanged (31% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

September 30,

2023 December 31,

42 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

29 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

11 unchanged sentences

Shares Amount

Balance at March 31, 2023 194,998 $ 1,950 $ 2,794,657 $ ( 625,416 ) $ ( 9,154 ) $ 2,162,037

Balance at June 30, 2023 196,031 $ 1,960 $ 2,814,424 $ ( 608,412 ) $ ( 7,260 ) $ 2,200,712

Net income — — — 7,915 — 7,915

Other comprehensive income — — — — 1,894 1,894

Other comprehensive loss — — — — ( 2,265 ) ( 2,265 )

Share-based compensation — — 8,906 — — 8,906

Stock option exercises 152 2 1,619 — — 1,621

Issuances of common stock in connection with the vesting of restricted stock units 27 — ( 8 ) — — ( 8 )

Issuances of common stock in connection with the employee stock purchase plan 123 1 1,449 — — 1,450

Balance at June 30, 2023 196,031 $ 1,960 $ 2,814,424 $ ( 608,412 ) $ ( 7,260 ) $ 2,200,712

Balance at September 30, 2023 196,183 $ 1,962 $ 2,824,949 $ ( 600,497 ) $ ( 9,525 ) $ 2,216,889

Common Stock Additional Paid-In

3 unchanged sentences

Net income — — — 52,379 — 52,379

Other comprehensive income — — — — 1,962 1,962

Other comprehensive loss — — — — ( 303 ) ( 303 )

Share-based compensation — — 22,842 — — 22,842

3 unchanged sentences

Issuances of common stock in connection with business acquisitions 90 1 1,471 — — 1,472

Balance at June 30, 2023 196,031 $ 1,960 $ 2,814,424 $ ( 608,412 ) $ ( 7,260 ) $ 2,200,712

Balance at September 30, 2023 196,183 $ 1,962 $ 2,824,949 $ ( 600,497 ) $ ( 9,525 ) $ 2,216,889

Common Stock Additional Paid-In

1 unchanged sentence

Shares Amount

Balance at March 31, 2022 193,060 $ 1,931 $ 2,765,503 $ ( 689,049 ) $ ( 1,385 ) $ 2,077,000

Net loss — — — ( 2,285 ) — ( 2,285 )

Balance at June 30, 2022 193,796 $ 1,938 $ 2,772,393 $ ( 691,334 ) $ ( 4,340 ) $ 2,078,657

Net income — — — 24,732 — 24,732

Other comprehensive loss — — — — ( 6,015 ) ( 6,015 )

1 unchanged sentence

Stock option exercises 195 2 1,994 — — 1,996

Equity issuance costs — — ( 270 ) — — ( 270 )

Issuances of common stock in connection with the vesting of restricted stock units 622 6 ( 6 ) — — —

Balance at June 30, 2022 193,796 $ 1,938 $ 2,772,393 $ ( 691,334 ) $ ( 4,340 ) $ 2,078,657

Balance at September 30, 2022 193,991 $ 1,940 $ 2,780,190 $ ( 666,602 ) $ ( 10,355 ) $ 2,105,173

Common Stock Additional Paid-In

9 unchanged sentences

Settlement of accrued compensation liabilities through the issuance of share-based compensation awards — — 505 — — 505

Balance at June 30, 2022 193,796 $ 1,938 $ 2,772,393 $ ( 691,334 ) $ ( 4,340 ) $ 2,078,657

Balance at September 30, 2022 193,991 $ 1,940 $ 2,780,190 $ ( 666,602 ) $ ( 10,355 ) $ 2,105,173

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

22 unchanged sentences

Repayments of finance lease liabilities ( 771 ) ( 1,043 )

Proceeds from financing obligations 1,500 —

Payments of debt discounts and issuance costs ( 2,550 ) ( 43 )

2 unchanged sentences

Other ( 110 ) ( 476 )

Net cash provided by financing activities 48,420 27,139

Net cash provided by (used in) financing activities 72,505 ( 11,708 )

Effect of exchange rates on cash and cash equivalents 30 ( 700 )

Increase in cash and cash equivalents 5,349 29,652

(Decrease) increase in cash and cash equivalents ( 68 ) 75,432

Cash and cash equivalents – beginning of period 25,509 31,637

14 unchanged sentences

We design, build and operate our athletic country club destinations that are distinctive and large, multi-use sports and athletic, professional fitness, family recreation and spa centers in a resort-like environment.

As of June 30, 2023, we operated 164 centers in 30 states and one Canadian province.

As of September 30, 2023, we operated 170 centers in 31 states and one Canadian province.

Basis of Presentation

28 unchanged sentences

Fair Value Measurements on a Recurring Basis.

We had no material remeasurements of such assets or liabilities to fair value during the three and six months ended June 30, 2023 and 2022.

We had no material remeasurements of such assets or liabilities to fair value during the three and nine months ended September 30, 2023 and 2022.

Financial Assets and Liabilities.

At June 30, 2023 and December 31, 2022, the carrying value and fair value of our outstanding long-term debt was as follows:

At September 30, 2023 and December 31, 2022, the carrying value and fair value of our outstanding long-term debt was as follows:

September 30,

2023 December 31,

11 unchanged sentences

If we determine that impairment has occurred, the carrying value of the asset would be reduced to fair value and the difference would be recorded as a loss within operating income in our condensed consolidated statements of operations.

We had no material remeasurements of such assets or liabilities to fair value during the three and six months ended June 30, 2023 and 2022.

Except for an impairment charge of $ 5.3 million related to the sale of an outparcel of land that was recognized during the three months ended September 30, 2023 , we had no material remeasurements of such assets or liabilities to fair value during the three and nine months ended September 30, 2023 and 2022.

Supplemental Balance Sheet and Cash Flow Information

1 unchanged sentence

Prepaid expenses and other current assets consisted of the following:

September 30,

2023 December 31,

5 unchanged sentences

Prepaid expenses and other current assets $ 48,369 $ 45,743

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

September 30,

2023 December 31,

7 unchanged sentences

Accrued expenses and other current liabilities $ 179,382 $ 154,427

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Supplemental Cash Flow Information

(Increases) decreases in operating assets and increases (decreases) in operating liabilities are as follows:

Six Months Ended

Nine Months Ended

September 30,

Accounts receivable $ ( 8,044 ) $ ( 6,056 )

9 unchanged sentences

Additional supplemental cash flow information is as follows:

Six Months Ended

Nine Months Ended

September 30,

Net cash paid for income taxes, net of refunds received $ 13,172 $ 3,628

9 unchanged sentences

Non-cash increase in financing obligations as a result of interest accretion 83 —

The goodwill balance was $ 1,235.0 million and $ 1,233.2 million at June 30, 2023 and December 31, 2022, respectively.

The $ 1.8 million change in goodwill for the six months ended June 30, 2023 was related to a business acquisition during the first quarter of 2023.

There were no goodwill impairment charges recorded during the three and six months ended June 30, 2023 and 2022.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

The goodwill balance was $ 1,235.4 million and $ 1,233.2 million at September 30, 2023 and December 31, 2022, respectively.

The $ 2.2 million change in goodwill for the nine months ended September 30, 2023 was related to business acquisitions during the nine months ended September 30, 2023.

There were no goodwill impairment charges recorded during the three and nine months ended September 30, 2023 and 2022.

Revenue associated with our membership dues, enrollment fees, and certain services from our in-center businesses is recognized over time as earned.

Revenue associated with products and services offered in our cafes and spas, as well as through e-commerce, is recognized at a point in time.

The following is a summary of revenue, by major revenue stream, that we recognized during the three and six months ended June 30, 2023 and 2022:

The following is a summary of revenue, by major revenue stream, that we recognized during the three and nine months ended September 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

4 unchanged sentences

Total revenue $ 585,177 $ 496,381 $ 1,657,759 $ 1,349,902

The timing associated with the revenue we recognized during the three months ended June 30, 2023 and 2022 is as follows:

Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

The timing associated with the revenue we recognized during the three months ended September 30, 2023 and 2022 is as follows:

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

Revenue Other

6 unchanged sentences

Total revenue $ 568,402 $ 16,775 $ 585,177 $ 479,995 $ 16,386 $ 496,381

The timing associated with the revenue we recognized during the six months ended June 30, 2023 and 2022 is as follows:

Six Months Ended June 30, 2023 Six Months Ended June 30, 2022

The timing associated with the revenue we recognized during the nine months ended September 30, 2023 and 2022 is as follows:

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Revenue Other

8 unchanged sentences

Contract liabilities consist primarily of deferred revenue for fees collected in advance for membership dues, enrollment fees, Dynamic Personal Training and other center services offerings, as well as our media and athletic events.

Contract liabilities at June 30, 2023 and December 31, 2022 were $ 43.5 million and $ 38.9 million, respectively.

Contract liabilities that will be recognized within one year are classified as deferred revenue in our condensed consolidated balance sheets.

Deferred revenue at June 30, 2023 and December 31, 2022 was $ 41.3 million and $ 36.9 million, respectively, and consists primarily of prepaid membership dues, enrollment fees, Dynamic Personal Training and other in-center services, as well as media and athletic events .

Contract liabilities that will be recognized in a future period greater than one year are classified as a component of Other liabilities in our condensed consolidated balance sheets.

Long-term contract liabilities at June 30, 2023 and December 31, 2022 were $ 2.2 million and $ 2.0 million, respectively, and consist primarily of deferred enrollment fees.

Contract liabilities at September 30, 2023 and December 31, 2022 were $ 40.1 million and $ 38.9 million, respectively.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Contract liabilities that will be recognized within one year are classified as deferred revenue in our condensed consolidated balance sheets.

Deferred revenue at September 30, 2023 and December 31, 2022 was $ 39.4 million and $ 36.9 million, respectively, and consists primarily of prepaid membership dues, enrollment fees, Dynamic Personal Training and other in-center services, as well as media and athletic events .

Contract liabilities that will be recognized in a future period greater than one year are classified as a component of Other liabilities in our condensed consolidated balance sheets.

Long-term contract liabilities at September 30, 2023 and December 31, 2022 were $ 0.7 million and $ 2.0 million, respectively, and consist primarily of deferred enrollment fees.

Debt consisted of the following:

September 30,

2023 December 31, 2022

25 unchanged sentences

Revolving Credit Facility

At June 30, 2023, there were $ 20.0 million of outstanding borrowings under the Revolving Credit Facility and there were $ 30.5 million of outstanding letters of credit, resulting in total revolver availability of $ 424.5 million, which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus the applicable credit adjustment spread plus 3.50 % or base rate plus 2.50 %.

The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the six months ended June 30, 2023 was 8.56 % and $ 63.5 million, respectively.

At September 30, 2023, there were $ 45.0 million of outstanding borrowings under the Revolving Credit Facility and there were $ 32.6 million of outstanding letters of credit, resulting in total revolver availability of $ 397.4 million, which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus the applicable credit adjustment spread plus 3.50 % or base rate plus 2.50 %.

The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the nine months ended September 30, 2023 was 8.54 % and $ 59.5 million, respectively.

The highest balance during that same period was $ 120.0 million.

Debt Covenants

We are required to comply with certain affirmative and restrictive covenants under our Credit Facilities, Secured Notes, Unsecured Notes and Mortgage Notes.

We are also required to comply with a first lien net leverage ratio covenant under the Revolving Credit Facility, which requires us to maintain a first lien net leverage ratio, if 30.00 % or more of the Revolving Credit Facility commitments are outstanding shortly after the end of any fiscal quarter (excluding all cash collateralized undrawn letters of credit and other undrawn letters of credit up to $ 20.0 million).

As of June 30, 2023, we were either in compliance in all material respects with the covenants or the covenants were not applicable.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Debt Covenants

We are required to comply with certain affirmative and restrictive covenants under our Credit Facilities, Secured Notes, Unsecured Notes and Mortgage Notes.

As of September 30, 2023, we were either in compliance in all material respects with the covenants or the covenants were not applicable.

Future Maturities of Long-Term Debt

Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at June 30, 2023 were as follows:

July 2023 through June 2024 $ 64,814

July 2024 through June 2025 12,379

July 2025 through June 2026 1,751,066

July 2026 through June 2027 41,816

July 2027 through June 2028 1,496

Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at September 30, 2023 were as follows:

October 2023 through September 2024 $ 64,033

October 2024 through September 2025 12,515

October 2025 through September 2026 1,751,209

October 2026 through September 2027 64,877

October 2027 through September 2028 165

Thereafter 3,048

1 unchanged sentence

Sale-Leaseback Transactions

During the six months ended June 30, 2023, we entered into and consummated sale-leaseback transactions with two unrelated third parties.

Under these transactions, we sold two properties with a combined net book value of $ 84.7 million for $ 78.5 million, which was reduced by transaction costs of $ 0.5 million, for net cash proceeds of $ 78.0 million.

During the nine months ended September 30, 2023, we entered into and consummated sale-leaseback transactions with unrelated third parties.

Under these transactions, we sold three properties with a combined net book value of $ 141.1 million for $ 124.0 million, which was reduced by transaction costs of $ 0.7 million, for net cash proceeds of $ 123.3 million.

The estimated fair value of the property sold was $ 128.4 million.

1 unchanged sentence

This loss is inclu ded in Other operating expense (income) in o ur condensed consolidated statement of operations.

Right-of-use assets and lease liabilities recognized related to these sale-leaseback transactions were $ 49.9 million and $ 43.5 million, respectively.

On March 29, 2023, the Company entered into an agreement for the sale-leaseback of one property for gross proceeds of $ 45.5 million.

The closing on this property is expected to be completed on or before September 30, 2023.

Of the $ 4.4 million aggregate net sales price increase recognized in connection with these transactions, $ 5.9 million was associated with a property sale in which the sales price was less than the fair value of the properties sold, which was recognized as an increase in the aggregate sales price associated with this property and an increase in the related operating lease right-of-use asset, and $ 1.5 million was associated with a property sale in which the sales price was greater than the fair value of the property sold, which was recognized as a reduction in the aggregate sales price associated with this property and as a financing obligation separate from the related operating lease liability.

For cash flow purposes, the $ 1.5 million of proceeds we received from this financing obligation are reported within financing activities on our condensed consolidated statement of cash flows.

Right-of-use assets and lease liabilities recognized in connection with these sale-leaseback transactions were $ 74.0 million and $ 67.3 million, respectively.

Stockholders’ Equity

Share-Based Compensation Expense

For the three and six months ended June 30, 2023, total share-based compensation expense was $ 16.5 million and $ 22.2 million, respectively.

For the three and nine months ended September 30, 2023, total share-based compensation expense was $ 14.9 million and $ 37.0 million, respectively.

Of this amount, $ 8.9 million and $ 22.8 million, respectively, was associated with equity-classified awards and $ 6.0 million and $ 14.2 million, respectively, was associated with liability-classified awards.

For the three and six months ended June 30, 2022, total share-based compensation expense was $ 6.0 million and $ 27.4 million, respectively, all of which was associated with equity-classified awards.

The liability-classified awards granted during the three and six months ended June 30, 2023 were performance-based and relate to our short-term incentive compensation program.

For the three and nine months ended September 30, 2022, total share-based compensation expense was $ 5.8 million and $ 33.2 million, respectively, all of which was associated with equity-classified awards.

The liability-classified awards granted during the nine months ended September 30, 2023 were performance-based and relate to our short-term incentive compensation program.

In the event specified performance metrics are met, these awards will be settled through the issuance of fully-vested shares of the Company’s common stock at such time of determination in

Because the incentive compensation associated with these awards represents a fixed dollar amount that, if payable, will be settled in a variable number of shares of the Company’s common stock, we are currently accounting for these awards as liability-classified awards.

Accordingly, the offset to the $ 8.3 million of share-based compensation expense we have recognized in connection with these awards during the six months ended June 30, 2023 is included in Accrued expenses and other current liabilities on our June 30, 2023 condensed consolidated balance sheet.

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

Accordingly, the offset to the $ 14.2 million of share-based compensation expense we have recognized in connection with these awards during the nine months ended September 30, 2023 is included in Accrued expenses and other current liabilities on our September 30, 2023 condensed consolidated balance sheet.

Income (Loss) Per Share

For the three and six months ended June 30, 2023 , o ur potentially dilutive securities include stock options, restricted stock units and shares to be issued under our ESPP.

For the three and six months ended June 30, 2022 , o ur potentially diluti ve securities include stock options and restricted stock units.

Due to the net loss that we recognized during th e three and six months ended June 30, 2022, the potentially dilutive shares of common stock associated with these equity-based securities were determined to be antidilutive and, therefore, are excluded from the computation of diluted loss per share for the three and six months ended June 30, 2022.

The following table sets forth the calculation of basic and diluted income (loss) per share for the three and six months ended June 30, 2023 and 2022:

For the three and nine months ended September 30, 2023 , o ur potentially dilutive securities included stock options, restricted stock units and shares to be issued under our ESPP.

For the three and nine months ended September 30, 2022 , o ur potentially diluti ve securities included stock options and restricted stock units.

Due to the net loss that we recognized during th e nine months ended September 30, 2022, the potentially dilutive shares of common stock associated with these equity-based securities were determined to be antidilutive and, therefore, are excluded from the computation of diluted loss per share for the nine months ended September 30, 2022.

The following table sets forth the calculation of basic and diluted income (loss) per share for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

Income (loss) per common share – diluted $ 0.04 $ 0.12 $ 0.26 $ ( 0.08 )

The following is a summary of potential shares of common stock that were antidilutive and excluded from the weighted average share computations for the three and six months ended June 30, 2023 and 2022:

The following is a summary of potential shares of common stock that were antidilutive and excluded from the weighted average share computations for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

Potential common shares excluded from the weighted average share calculations 7,405 8,718 7,144 27,925

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Commitments and Contingencies

9 unchanged sentences

We establish reserves for matters that are probable and estimable in amounts we believe are adequate to cover reasonable adverse judgments.

Based upon the information available to us and discussions with legal counsel, it is our opinion that the outcome of the various legal actions and claims that are incidental to our business will not

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

have a material adverse impact on our consolidated financial position, results of operations or cash flows.

Based upon the information available to us and discussions with legal counsel, it is our opinion that the outcome of the various legal actions and claims that are incidental to our business will not have a material adverse impact on our consolidated financial position, results of operations or cash flows.

Such matters are subject to many uncertainties, and the outcomes of individual matters are not predictable with assurance.

Subsequent Events

In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from June 30, 2023 through the date the condensed consolidated financial statements were issued for material subsequent events.

In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from September 30, 2023 through the date the condensed consolidated financial statements were issued for material subsequent events.

There have been no such events or transactions during this time which would have a material effect on the condensed consolidated financial statements and therefore would require recognition or disclosure .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements