What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-07 · 124 added, 47 removed, 333 unchanged (34% of the section changed)

49 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Center revenue $ 645,007 $ 542,125 $ 1,225,492 $ 1,039,877

11 unchanged sentences

Interest expense, net of interest income ( 37,669 ) ( 31,979 ) ( 75,072 ) ( 63,174 )

Equity in earnings of affiliates 177 143

Equity in (loss) earnings of affiliates ( 464 ) 88 ( 287 ) 231

Total other expense ( 38,133 ) ( 31,891 ) ( 75,359 ) ( 62,943 )

14 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net income $ 52,805 $ 17,004 $ 77,722 $ 44,464

Foreign currency translation adjustments, net of tax of $ 0

( 649 ) 1,894 ( 2,316 ) 1,962

Comprehensive income $ 52,156 $ 18,898 $ 75,406 $ 46,426

7 unchanged sentences

Shares Amount

Balance at March 31, 2024 198,791 $ 1,988 $ 2,861,359 $ ( 551,896 ) $ ( 8,592 ) $ 2,302,859

Net income — — — 52,805 — 52,805

Other comprehensive loss — — — — ( 649 ) ( 649 )

Share-based compensation — — 10,120 — — 10,120

Stock option exercises 98 1 1,005 — — 1,006

Issuances of common stock in connection with the vesting of restricted stock units 60 — ( 106 ) — — ( 106 )

Issuances of common stock in connection with the employee stock purchase plan 103 1 1,461 — — 1,462

Balance at June 30, 2024 199,052 $ 1,990 $ 2,873,839 $ ( 499,091 ) $ ( 9,241 ) $ 2,367,497

Common Stock Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total

Shares Amount

Balance at December 31, 2023 196,671 $ 1,967 $ 2,835,883 $ ( 576,813 ) $ ( 6,925 ) $ 2,254,112

4 unchanged sentences

Issuances of common stock in connection with the vesting of restricted stock units 686 6 ( 988 ) — — ( 982 )

Issuances of common stock in connection with the employee stock purchase plan 103 1 1,461 — — 1,462

Settlement of accrued compensation liabilities through the issuance of common stock 1,447 15 18,043 — — 18,058

Balance at June 30, 2024 199,052 $ 1,990 $ 2,873,839 $ ( 499,091 ) $ ( 9,241 ) $ 2,367,497

Common Stock Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total

Shares Amount

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

Net income — — — 17,004 — 17,004

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

Share-based compensation — — 8,515 — — 8,515

Stock option exercises 883 9 9,811 — — 9,820

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

Common Stock Additional Paid-In

7 unchanged sentences

Issuances of common stock in connection with the vesting of restricted stock units 337 3 ( 113 ) — — ( 110 )

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

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

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

See notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

5 unchanged sentences

Non-cash rent expense 13,650 17,630

Loss (gain) on disposal of property and equipment, net 245 ( 6,693 )

Impairment charges associated with long-lived assets 1,420 1,280

(Gain) loss on disposal of property and equipment, net ( 11,067 ) 904

Amortization of debt discounts and issuance costs 4,006 3,919

5 unchanged sentences

Proceeds from sale-leaseback transactions 142,671 78,040

Proceeds from the sale of land 6,328 —

Other ( 2,173 ) ( 462 )

6 unchanged sentences

Repayments of finance lease liabilities ( 403 ) ( 508 )

Proceeds from financing obligations 4,300 —

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

Proceeds from stock option exercises 1,490 13,276

Proceeds from issuances of common stock in connection with the employee stock purchase plan 1,462 1,450

Other ( 1,304 ) ( 109 )

Net cash provided by financing activities 74,975 72,325

Net cash (used in) provided by financing activities ( 87,102 ) 48,420

Effect of exchange rates on cash and cash equivalents and restricted cash and cash equivalents ( 55 ) 136

16 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 March 31, 2024, we operated 172 centers in 31 states and one Canadian province.

As of June 30, 2024, we operated 175 centers in 31 states and one Canadian province.

Basis of Presentation

22 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 months ended March 31, 2024 and 2023.

We had no material remeasurements of such assets or liabilities to fair value during the three and six months ended June 30, 2024 and 2023.

LIFE TIME GROUP HOLDINGS, INC.

3 unchanged sentences

Financial Assets and Liabilities.

At March 31, 2024 and December 31, 2023, the carrying value and fair value of our outstanding long-term debt was as follows:

At June 30, 2024 and December 31, 2023, the carrying value and fair value of our outstanding long-term debt was as follows:

2024 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 months ended March 31, 2024 and 2023.

We had no material remeasurements of such assets or liabilities to fair value during the three and six months ended June 30, 2024 and 2023.

Supplemental Balance Sheet and Cash Flow Information

5 unchanged sentences

Prepaid insurance 5,680 2,393

Prepaid commissions 5,683 5,059

Prepaid software licenses and maintenance 6,729 5,481

17 unchanged sentences

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

Three Months Ended

Six Months Ended

Accounts receivable $ ( 1,802 ) $ ( 6,610 )

9 unchanged sentences

Additional supplemental cash flow information is as follows:

Three Months Ended

Six Months Ended

Net cash paid for income taxes, net of refunds received $ 9,235 $ 12,445

7 unchanged sentences

Right-of-use asset adjustments recognized as a result of the remeasurement of existing operating lease liabilities 4,631 16,429

Non-cash increase in operating lease right-of-use assets associated with below-market sale-leaseback transactions — 5,900

Non-cash increase in financing obligations as a result of interest accretion 70 46

1 unchanged sentence

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 months ended March 31, 2024 and 2023:

The following is a summary of revenue, by major revenue stream, that we recognized during the three and six months ended June 30, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Membership dues and enrollment fees $ 462,696 $ 387,115 $ 888,107 $ 744,603

7 unchanged sentences

(Table amounts in thousands except per share data)

The timing associated with the revenue we recognized during the three months ended March 31, 2024 and 2023 is as follows:

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

The timing associated with the revenue we recognized during the three months ended June 30, 2024 and 2023 is as follows:

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Revenue Other

6 unchanged sentences

Total revenue $ 645,007 $ 22,754 $ 667,761 $ 542,125 $ 19,606 $ 561,731

The timing associated with the revenue we recognized during the six months ended June 30, 2024 and 2023 is as follows:

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Revenue Other

Revenue Total

Revenue Center

Revenue Other

Revenue Total

Goods and services transferred over time $ 1,084,753 $ 38,986 $ 1,123,739 $ 915,349 $ 32,705 $ 948,054

Goods and services transferred at a point in time 140,739 — 140,739 124,528 — 124,528

Total revenue $ 1,225,492 $ 38,986 $ 1,264,478 $ 1,039,877 $ 32,705 $ 1,072,582

Contract liabilities represent payments or consideration received in advance for goods or services that the Company has not yet transferred to the customer.

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 March 31, 2024 and December 31, 2023 were $ 53.6 million and $ 49.9 million, respectively.

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

Contract liabilities at June 30, 2024 and December 31, 2023 were $ 52.1 million and $ 49.9 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 March 31, 2024 and December 31, 2023 was $ 53.2 million and $ 49.3 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 .

Deferred revenue at June 30, 2024 and December 31, 2023 was $ 51.9 million and $ 49.3 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 March 31, 2024 and December 31, 2023 were $ 0.4 million and $ 0.6 million, respectively, and consist primarily of deferred enrollment fees.

Long-term contract liabilities at June 30, 2024 and December 31, 2023 were $ 0.2 million and $ 0.6 million, respectively, and consist primarily of deferred enrollment fees.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Debt consisted of the following:

19 unchanged sentences

We are not required to make principal payments on the Term Loan Facility prior to its maturity.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Revolving Credit Facility

At March 31, 2024, there were $ 220.0 million of outstanding borrowings under the $ 475.0 million Revolving Credit Facility and there were $ 30.9 million of outstanding letters of credit, resulting in total revolver availability of $ 224.1 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 three months ended March 31, 2024 was 9.26 % and $ 183.6 million, respectively.

At June 30, 2024, there were $ 65.0 million of outstanding borrowings under the $ 475.0 million Revolving Credit Facility and there were $ 30.9 million of outstanding letters of credit, resulting in total revolver availability of $ 379.1 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 %.

During the three months ended June 30, 2024, we amended the credit agreement governing the Revolving Credit Facility to replace the Canadian Dollar Offered Rate (CDOR), which ceased at the end of June 2024, with the Canadian Overnight Repo Rate Average (CORRA).

We do no t have any outstanding borrowings in Canadian dollars under the Revolving Credit Facility.

The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the six months ended June 30, 2024 was 9.51 % and $ 187.7 million , respectively.

The highest balance during that same period was $ 285.0 million.

Mortgage Notes

In February 2024, we fully paid at maturity the principal balance and remaining accrued interest associated with one of our Mortgage Notes totaling $ 51.0 million.

During the six months ended June 30, 2024 , we fully paid at maturity the principal balance and remaining accrued interest associated with two of our Mortgage Notes totaling $ 62.9 million.

Debt Covenants

1 unchanged sentence

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 March 31, 2024, we were either in compliance in all material respects with the covenants or the covenants were not applicable.

As of June 30, 2024, we were either in compliance in all material respects with the covenants or the covenants were not applicable.

LIFE TIME GROUP HOLDINGS, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Table amounts in thousands except per share data)

Future Maturities of Long-Term Debt

Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at March 31, 2024 were as follows:

April 2024 through March 2025 $ 23,261

April 2025 through March 2026 1,275,530

April 2026 through March 2027 705,747

April 2027 through March 2028 15,799

April 2028 through March 2029 181

Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at June 30, 2024 were as follows:

July 2024 through June 2025 $ 12,755

July 2025 through June 2026 1,750,386

July 2026 through June 2027 86,816

July 2027 through June 2028 1,495

July 2028 through June 2029 173

Thereafter 2,670

Total future maturities of long-term debt $ 1,854,295

Sale-Leaseback Transactions

During the six months ended June 30, 2024 , we entered into and consummated sale-leaseback transactions with two unrelated third parties.

Under these transactions, we sold four properties for gross proceeds of $ 147.9 million , which was reduced by transaction costs of $ 0.9 million , for net cash proceeds of $ 147.0 million .

The estimated fair value of the properties sold was $ 143.6 million .

Accordingly, the aggregate cash sales price associated with these arrangements was decreased by a $ 4.3 million aggregate off-market adjustment to $ 142.7 million .

This aggregate off-market adjustment was recognized as financing obligations and the proceeds are reported within financing activities on our condensed consolidated statement of cash flows.

During the six months ended June 30, 2024, we recognized a net gain of $ 7.5 million on the sale-leaseback transactions, which is inclu ded in Other operating expense in o ur condensed consolidated statement of operations.

Right-of-use assets and lease liabilities recognized in connection with these sale-leaseback transactions were $ 93.6 million and $ 92.8 million , respectively.

Stockholders’ Equity

Share-Based Compensation Expense

Share-based compensation expense for the three months ended March 31, 2024 and 2023 was $ 7.6 million and $ 5.6 million, respectively.

Share-based compensation expense for the three months ended June 30, 2024 was $ 11.1 million, of which $ 10.1 million and $ 1.0 million was associated with equity-classified awards and liability-classified awards, respectively.

Share-based compensation expense for the six months ended June 30, 2024 was $ 18.7 million, of which $ 18.0 million and $ 0.7 million was associated with equity-classified awards and liability-classified awards, respectively.

Share-based compensation expense for the three months ended June 30, 2023 was $ 16.5 million, of which $ 8.5 million and $ 8.0 million was associated with equity-classified awards and liability-classified awards, respectively.

Share-based compensation expense for the six months ended June 30, 2023 was $ 22.2 million, of which $ 13.9 million and $ 8.3 million was associated with equity-classified awards and liability-classified awards, respectively.

Restricted Stock Units

During the three months ended March 31, 2024 , the Company granted approximately 1.6 million restricted stock unit awards under the 2021 Incentive Award Plan, of which approximately 1.1 million were time-based vesting awards that vest in three to four ratable annual installments, and approximately 0.5 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation program.

During the six months ended June 30, 2024, the Company granted approximately 1.6 million restricted stock unit awards under the 2021 Incentive Award Plan, of which approximately 1.1 million were time-based vesting awards and approximately 0.5 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation program.

We determine the grant date fair value of restricted stock unit awards by multiplying the number of restricted stock unit awards by the closing trading price of our common stock on the grant date.

4 unchanged sentences

Performance Stock Units

During the three months ended March 31, 2024 , the Company granted approximately 0.5 million three-year performance stock unit awards under the 2021 Incentive Award Plan, all of which were granted to our executives in connection with our long-term incentive compensation program.

During the six months ended June 30, 2024, the Company granted approximately 0.5 million three-year performance stock unit awards under the 2021 Incentive Award Plan, all of which were granted to our executives in connection with our long-term incentive compensation program.

Approximately 0.3 million of the performance stock unit awards are based on our Adjusted EBITDA with performance determined each year for one-third of such award but the entire award does not vest until the end of the three-year period and approximately 0.2 million of the performance stock unit awards are based on our leverage ratio at the end of each year with one-third vesting each year dependent on achieving the leverage ratio target for such year.

1 unchanged sentence

Other Share-Based Payment Awards

Our Board of Directors determined in February 2024 that our 2023 performance exceeded the maximum performance metric under our short-term incentive program and issued corresponding shares of common stock to our employees.

As a result, the $ 18.1 million liability we had recognized in connection with these liability-classified share-based payment awards, which was included in Accrued expenses and other current liabilities on our December 31, 2023 condensed consolidated balance sheet, was reclassified out of Accrued expenses and other current liabilities and into Common stock and Additional paid-in capital on our condensed consolidated balance sheet during the three months ended March 31, 2024.

In the event specified performance metrics are met under our 2024 incentive compensation program for team members who are not executive officers, awards thereunder will be paid out in cash or through the issuance of fully-vested shares of the Company’s common stock or a combination thereof at the time of such performance determination in 2025.

As of June 30, 2024, we expect that these awards will be settled in a combination of cash and shares of the Company’s common stock.

Because the portion of incentive compensation that we currently expect to pay through the issuance of shares of the Company’s common stock represents a fixed dollar that, if payable, will be settled in a variable number of shares of the Company’s common stock, we are currently accounting for this portion of these awards as liability-classified share-based payment awards.

Accordingly, the offset to the share-based compensation expense we have recognized in connection with these awards during the six months ended June 30, 2024 is included in Accrued expenses and other current liabilities on our June 30, 2024 condensed consolidated balance sheet.

In February 2024, our Board of Directors determined that our 2023 performance exceeded the maximum performance metric under our 2023 short-term incentive program and issued corresponding shares of common stock to our employees.

As a result, the $ 18.1 million liability we had recognized in connection with liability-classified share-based payment awards, which was included in Accrued expenses and other current liabilities on our December 31, 2023 condensed consolidated balance sheet, was reclassified out of Accrued expenses and other current liabilities and into Common stock and Additional paid-in capital on our condensed consolidated balance sheet during the six months ended June 30, 2024.

Income Per Share

For the three months ended March 31, 2024 and 2023 , o ur potentially dilutive securities included stock options, restricted stock units and shares to be issued under our employee stock purchase plan.

The following table sets forth the calculation of basic and diluted income per share for the three months ended March 31, 2024 and 2023:

For the three and six months ended June 30, 2024 and 2023 , o ur potentially dilutive securities included stock options, restricted stock units and shares to be issued under our employee stock purchase plan.

The following table sets forth the calculation of basic and diluted income per share for the three and six months ended June 30, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net income $ 52,805 $ 17,004 $ 77,722 $ 44,464

4 unchanged sentences

Income per common share – diluted $ 0.26 $ 0.08 $ 0.38 $ 0.22

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 months ended March 31, 2024 and 2023:

Three Months Ended

Stock options 6,849 6,044

Restricted stock units 354 693

Potential common shares excluded from the weighted average share calculations 7,203 6,737

LIFE TIME GROUP HOLDINGS, INC.

2 unchanged sentences

(Table amounts in thousands except per share data)

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, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Stock options 5,843 5,370 5,843 6,310

Restricted stock units 382 766 382 824

Potential common shares excluded from the weighted average share calculations 6,225 6,136 6,225 7,134

Commitments and Contingencies

3 unchanged sentences

27-CV-20-10599) (the “Action”) seeking declaratory relief and damages with respect to Zurich’s failure under a property/business interruption insurance policy to provide certain coverage to the Life Time Parties related to the closure or suspension by governmental authorities of their business activities due to the spread or threat of the spread of COVID-19.

On March 15, 2021, certain of the Life Time Parties filed a First Amended Complaint in the Action adding claims against Zurich under a Builders’ Risk policy related to the suspension of multiple construction project s.

The Court granted Zurich’s dispositive motions on July 25, 2024, dismissing Life Time’s claims with prejudice, and entered judgment on July 26, 2024.

Life Time intends to appeal from that judgment, in whole or in part, to the Minnesota Court of Appeals.

The Action is subject to many uncertainties, and the outcome of the matter is not predictable with any assurance.

5 unchanged sentences

Subsequent Events

In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from March 31, 2024 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 .

On July 29, 2024, the Company entered into an agreement for the sale-leaseback of one property for gross proceeds of $ 25.0 million.

The closing on this property is expected to be completed early in the fourth quarter 2024.

In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from June 30, 2024 through the date the condensed consolidated financial statements were issued for material subsequent events.

There have been no other 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