Lifetime Fitness 2010 Shareholder Presentation
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Lifetime Fitness 2010 Shareholder Presentation

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    Lifetime Fitness 2010 Shareholder Presentation Lifetime Fitness 2010 Shareholder Presentation Presentation Transcript

    • Annual Meeting of Shareholders April 22, 2010
    • Welcome and Opening Remarks Kenneth E. Cooper Vice President of Finance
    • 2009 Annual Meeting of Shareholders1. Formal Business Meeting2. Management Presentation Business Overview Financial Overview3. Question and Answer Session 3
    • Forward-Looking StatementsDuring this presentation, we may make forward-looking statements. These statementsinvolve known and unknown risks, uncertainties and other factors which may cause ouractual results, performance or achievements to be materially different from any futureresults, performances or achievements expressed or implied by the forward-lookingstatements. Forward-looking statements include statements about: our estimates of future expenses, revenue, profitability and returns; trends affecting our financial condition and results of operations; our ability to attract and retain members or achieve our targeted membership capacity; the availability and terms of debt financing; our ability to identify sites, open new centers on schedule, and our ability to integrate acquired facilities; new initiatives to enhance our brand in the areas of exercise, nutrition and education; industry trends and the competitive environment; the impact of losing one or more senior executives or failing to attract additional key personnel; other forward- 4
    • Formal Business Meeting Eric J. BussExecutive Vice President, General Counsel and Secretary
    • Formal Business Meeting1. Election of Directors Bahram Akradi Giles H. Bateman Jack W. Eugster Guy C. Jackson John K. Lloyd Martha A. Morfitt John B. Richards Joseph S. Vassalluzzo2. Ratification of Deloitte & Touche LLP as Independent Registered Public Accounting Firm3. Transact other business properly brought forth - NONE 6
    • Business Overview Bahram AkradiFounder, Chairman and Chief Executive Officer
    • We are changing our culture2009 Key Goals Free Cash Flow Generation - ACCOMPLISHED Become a leaner, more capable company - ACCOMPLISHED Deliver $1.70 diluted EPS ACCOMPLISHED2009 Stretch Goals Achieve positive SSS for mature clubs MADE PROGRESS Attrition rate in the mid- MADE PROGRESS2010 Key Goals Achieve positive SSS for mature clubs in second half of 2010 Improve our attrition rate throughout the year Accomplish goals by connecting with members in a way never seen before. 8
    • 2010 Key ObjectiveReestablish Life Time as a healthy-way-of-life growthcompany Grow square footage Grow memberships Grow in-center programs Grow our corporate businesses Grow top-line revenue and EPS Continue to strengthen our balance sheet 9
    • Financial Overview Michael R. RobinsonExecutive Vice President and Chief Financial Officer
    • Strong Historical Financial Performance Total Revenue EBITDA ($ in millions) ($ in millions) $837.0 $769.6 $655.8 $240.9 $221.5 $197.7 $511.9 $390.1 $149.0 $120.4 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 7.7% 7.3% 6.1% 2.8% (3.1)% 30.9% 29.1% 30.1% 28.8% 28.8% Comparable Center Revenue Growth EBITDA Margin 11
    • 2010 Key Goal: Reduce Attrition Quarterly Attrition Q1 Q2 Q3 Q4 Total Year % 2006 7.6% 8.2% 9.3% 9.4% 34.6% 2007 7.4% 7.9% 9.1% 9.6% 34.2% 2008 9.3% 10.6% 11.5% 10.8% 42.3% 2009 9.8% 9.5% 10.6% 10.8% 40.6% Enhance value proposition everywhere Drive connectivity and involvement Enhanced energy to work with members indicating a desire to leave Continued membership growth expected, while driving to reduce attrition 12
    • 2010 Key Goal: Same Store Sales ImprovementGet to Positive Mature SSS in the 2nd half of 2010: 13-month SSS Q1 Q2 Q3 Q4 Total Year 2007 7.5% 6.6% 5.1% 5.3% 6.1% 2008 4.3% 3.3% 3.9% 0.0% 2.8% 2009 (2.7)% (4.4)% (5.4)% 0.3% (3.1%) Mature (37- Q1 Q2 Q3 Q4 Total Year month) SSS 2007 2.6% 1.6% (0.3)% (0.5)% 0.8% 2008 (1.8)% (2.0)% (1.9)% (5.2)% (2.8)% 2009 (7.9)% (9.0)% (8.7)% (4.7)% (7.5)% 13
    • Revenue per Membership Revenue per Q1 Q2 Q3 Q4 Total Year Membership 2007 $334 $338 $345 $344 $1,360 (+6.5%) (+6.3%) (+5.3%) (6.8%) (+6.2%) 2008 $363 $361 $358 $345 $1,427 (+8.7%) (+6.9%) (+3.9%) (+0.3%) (+4.9%) 2009 $352 $354 $358 $350 $1,414 (-2.9%) (-2.0%) (-0.2%) (+1.6%) (-0.9%) In-Center Q1 Q2 Q3 Q4 Total Year Revenue per Membership 2007 $98 $98 $99 $93 $387 (+9.1%) (+8.9%) (+9.0%) (+9.4%) (+9.1%) 2008 $111 $107 $104 $93 $414 (+13.3%) (+9.8%) (+4.8%) (flat) (+7.0%) 2009 $103 $102 $100 $95 $400 (-7.0%) (-5.1%) (-3.1%) (+2.4%) (-3.4%) 14
    • Generate Free Cash Flow Generate free cash flow and maintain prudent capital structure: Key Statistics ($ in millions) FY 2009 FY 2008 FY 2007 Free Cash Flow $39.6 $(280.2) $(273.6) Net Debt to total capital 47.0% 51.8% 49.4% TTM cash flow/ops as % debt 28.2% 25.7% 25.2% Cash and revolver availability $107 $56 $72 Total Debt to EBITDAR (covenant is 4.00) 3.29 3.51 2.88 Capital Structure ($ in millions) FY 2009 FY 2008 FY 2007 Long Term Debt $643.6 $702.6 $555.0 Short Term Debt 16.7 10.3 9.6 Total Debt 660.3 712.9 564.6 $737.4 $652.9 $572.6 15
    • Maintain Lean and Efficient Cost Structure Operating Margin Rate Q1 Q2 Q3 Q4 Total 2006 18.3% 19.2% 20.6% 20.1% 19.6% 2007 18.8% 20.7% 22.2% 22.0% 21.0% 2008 19.5% 20.7% 21.2% 15.1% 19.1% 2009 15.7% 18.0% 18.7% 18.7% 17.8% 2010 Target Areas: Recent Cost Structure Changes: Marketing and acquisition 3Q 2008 sale-leasebacks costs on 6 centers Central infrastructure 4Q 2008 charge related to Maturity curve of center growth slow-down ($5 million base pre-tax) Center level efficiencies 2008/2009 higher member (labor/supplies) acquisition costs Execute to our Economic Model 16
    • Question and Answer Session 17
    • LIFE TIME FITNESS, INC. For more information, please send your request to: ir@lifetimefitness.com 18