Life Time (LTH) 25 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

Ken Cooper	executive
Robert Houghton	executive
Bahram Akradi	executive
Megan Christine Alexander	analyst
Brian Nagel	analyst
John Heinbockel	analyst
Christopher Carril	analyst
Katharine McShane	analyst
Daniel Politzer	analyst
Simeon Siegel	analyst
Robert Ohmes	analyst
Chris Woronka	analyst

Call transcript

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Operator

Greetings. Welcome to the Life Time Group Holdings Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I would like to hand the call over to Ken Cooper of investor Relations. Thank you.

begin. may You

Ken Cooper

and company's in we from thank Time filings, non-GAAP EPS, and With joining for forward-looking and us reconciliations today the our Bob and our comprehensive and net directly refer made this Investor Good pleased EBITDA, in measures financial free statements measures today. will issued company Quarter our you of you website.I'm is Life make net CEO; a Chairman Founder, of Third Bahram adjusted which involve may Call. debt to adjusted leverage will to Houghton, the certain ratio actual XXXX the the CFO.During are net income, included to flow. with SEC adjusted diluted the Bob? release forward-looking to call, morning along statements with a Akradi, for and This risks information Bob now turn Earnings adjusted morning, review.The me number what SEC results to discuss comparable debt call are on those cause section cash of the risk filed of to over as are earnings encouraged factors discussion that this including or which Houghton. Relations uncertainties GAAP most the to company's the X-K EBITDA differ materially company There Conference

Robert Houghton

Harbour EBITDA quarter related in last earlier third Year-to-date the million this EBITDA $X.XX delay share approximately would activities quarter. million operating about year EPS revenue to compared operating approximately increased revenue.Our is XX.X third period.Importantly, million year in provided $X.XX The results cash XX% to our prior in $XXX was net points morning, location. by million $X per compared $XXX million $XX.X XXX,XXX. Total X% the XXX% quarter in was revenue to increased million. of million compared subscriptions revenue an an $XXX at good increase year. year prior from have loss diluted triathlons $XX quarter. $X.XX increased year per to prior the items key to increase and the million or roughly activities million in adjusted to Ken, Adjusted prior of walk quarter Also, the takeover year net quarter loss $XXX, in year of X% sold diluted compared ended Island the to not And period. approximately margin $XXX year-to-date, metrics.Our in prior if provided XX,XXX Average of compared income through year-to-date by impact quarter.Year-to-date in $X we center combined $XXX cash the prior prior membership Adjusted was by to million quarter. an The to X these XX.X% million in the opening of you, I'll increased revenue the percentage non-profitable included of the increased been revenue Year-to-date in $XXX the higher, quarter $XXX Thank $XX $X $XX XXXX. compared to versus XX% net compared the quarter. to in in the a prior Adjusted net million you our million period. million X EPS XX.X% to was $X.XX adjusted some million highlights of and an adjusted of XXX,XXX, year that to the loss Tampa everyone. our of for year a to $XXX the year-to-date billion. prior to net quarter increased EBITDA period.Center net XXX% quarter. memberships in adjusted loss in adjusted the $X.XX year versus compared approximately income was million prior adjusted $XX.X at ended share Year-to-date our third was $XX quarter per

our to adjusted end XXXX to X.Xx are end have able been at debt of net of over the we will to to compared turn X.Xx quarter the that EBITDA and very the the Bahram. QX at to proud now QX the We reduce XXXX.I end X.Xx of call by

Bahram Akradi

Bob. priority restore priorities the returning dues for revenue you, number I'm Thank all to and years of for the since last COVID.Our visits have of clubs. achieve team extremely at set from Time interruption to proud of Life the was entire we tirelessly to X passionately first the and our working the that

We have accomplished XXXX. in of both these

levels quarter to priority this accomplished to third EBITDA has of at EBITDA end reduced rebuilding rapid XX%, net reduce end was and we year, rate. Margins to pre-COVID million net to very priority our EBITDA at second trailing adjusted the XQ, With feel up adjusted that priority.Our have margin. adjusted now been beyond the Our months debt excellent $XXX be having a by and each margin Xx to we below XX% XXXX. expect at XX of the of adjusted EBITDA X.Xx, EBITDA we to debt for

to member through member enhanced was engagement and important Another increase objective programs our experiences.

to outlook two, been asset-light working One, to will our been flow adjusted is achieve us expenditure approximately diligently This achieve established we up of self-funding significant of long-time this year cash The important first rates of priorities strong to any our proceeds is couldn't XXXX.Increased Clearly, the I team year. all we X share and X things deliver from on memberships, company. to team are with compared have of is the executing performance; our I'm it to all a critical priority capital we any Our in months by months is in more exact XXXX get outcome X to XX% the years allow has been after creates to did visits part on us our ahead next and thought position growth quarter goal the all to on you of be through what or expect. and the a per very position of membership most just convergence sale-leasebacks. that attrition has would quarter important opportunities priority, than without per of now the this excited positive stickier second required seeing the deliver of X sale-leaseback be excited priority particular the this us engagement helping point.Now the EBITDA visits XXXX. sequentially next capital is a working we of to we to our possible delivering cash memberships positive of of ago. to flow a double-digit of lower first strategy, without be XXXX.Getting has end the delivering approximately are second

and million EBITDA to launch For of $XXX with this And will suggest million of revenue XX% to to several we to $XXX to we million at the expanding quarter highlight, fourth $XXX this initiatives quarter we in out adjusted revenue XXXX in $XXX point, quarter. to between compared million.Important grow expect to quarter adjusted planned early expect of XXXX. the in next XX% the roll to revenue an for had EBITDA margin to same this of XX%, year, XX.X%

we I this earlier growth expectations. more not are with we're from more of LOIs official transactions. for at and both EBITDA would the be of any expect revenue adjusted asset-light that a guidance for While All while double-digit it time, clear our additional will providing like this growth, XXXX in to couple coming make opportunities.Finally, we for line sale-leaseback expecting

favorable year, questions. However, next by with the can transactions any we outlook the your of patient diligent terms positive sale-leaseback cash whether very of additional to capital all, to determining time.We flow second now forward deliver in and to quarter at the this expenditure being and most look able -- negotiating after answering execute be

Operator

the Stanley. questions from Instructions] Alexander come line first Morgan Megan Our of [Operator with

Megan Christine Alexander

bit maybe you just below one, outlook? in First implied It XQ bit expectations previously. is talk a where about you the revenue can your embedded a

is something joins just seeing you're conservatism? some or additional So driven by attrition or in that membership

Bahram Akradi

when No, or EBITDA impact in membership typically $XXX of The XQ go million XQ. it's to from revenue the -- not the we in is attrition.

at million, least million $XX-plus For our the between of $XX now, activities. revenue there summer and company doesn't that summer size of exist activities, camps other is

drop bunch sort roll mitigate still revenue don't to to the of really is from all intended we a process initially of like initiatives the I in drop. are had drops. most this that out of seasonal So to those.So any have

now to find coming of apparels additional add delayed and through to in 'XX. the rollout stuff been early sales we're that And ways services to like but trying programs dynamic and nutrition. not and So has sales clubs, nutritionals

basically went than we expected. back really business. core So line. in to typical we is Business doing isn't The different business anything the

Megan Christine Alexander

the sale-leasebacks and some maybe these a on And asset-light Okay. follow-up opportunities. of

-- you think million missed year, but $XXX I so this this, don't if proceeds me Forgive reiterated expected the I

Bahram Akradi

have we're point, in, this At LOIs some and they correct. for are delayed. and come sale-leasebacks You waiting to been

-- to been to we've have those. in send planning those. we're waiting to send that something, get folks still been They discussion the are So still

and when as you, at for is cash free the we of need do double-digit exact not priority positive mentioned from #X point, be them. sale growth. all generated all want will sale-leaseback, maintenance of our more in However, cash the the of interest attractive, CapEx, the we the anything flow I actually That's sale-leaseback leasebacks.At is as position internally deliver growth company this this we well deliver capital to to we it's market it's don't capital point, flow else, to not clearly, as after need

So XX- they XXXX-year XX-year If long-term we -- should. exactly with to very, are as initial are very will are they the treat they them terms these within options, transactions.

on rates. a we're blip not to long-term a of so, do interest going the transaction And short-term because

Megan Christine Alexander

sense. makes That That question of my Okay. was kind there.

seem it's macro a the does rate just short-term it's just it given of -- So shift more and

Bahram Akradi

Yes. short. absolutely It's

right We we opportunities the have have in pipeline XXX asset-light much literally so -- now.

deliver generates getting early free year, probably needing the EBITDA it excited important flow next about. now to we for ideal the it of line having That can those cash and position sale-leaseback, us the not up, growing company, ground is for about light were CapEx. would EBITDA sale-leasebacks. year, $XXX the digit adjusted get year, this million, asset-light, the the double more asset can there EBITDA capital. I we substantial substantial without is, top have we locations, year, for a without It's this to with after for clubs, deliver spend So opportunities enough postponed growth and great take the with to asset years flow growth continue this anticipated situation have would But double-digit later. company, company.Last external exactly have This -- it going EBITDA to of and to the asset-light cash capital. again, including of growing next maintenance we amount from for deliver stronger, than And would required big can couple then beautiful that super milestone any -- I'm the this which million the not and faster of build to this $XXX which deliver to plan EBITDA interest with

Operator

next line with Our come questions from of Oppenheimer & Nagel Company. the Brian

Brian Nagel

congratulations First on quarter. off, very ] continues The look here. another business to nicely nice [

to in it's [ bit to question follow-up than -- your should opportunities Bahram, about much We've a the with implied, key step sort opportunities prior clearly, there you these, say? -- at there is model? question, thought.So flow and indiscernible as the earlier just first thing Is probably my any offsets, using So exploiting traditional say, business, them to positive cash of Is more look have the for to asset-light a this despite initially any going -- compare other getting that a consider bit these to is back, any other so there you is while be And these you do ] is as the model capital? asset-light I we question. you key less exploring traditional a talked just, you of something opportunities. finance asset-light

Bahram Akradi

there's with of different couple a Brian. Yes, those, things

the of all, to First more revenues other it ones. some few a sometimes of the take clubs will deliver of

having probably end up And so, clubs more opening. we will

of them the clubs we size ground large, be up, big, are smaller. and similar them will of some do big big, that Some that

they're landlords then but working to upfront.And pretty continuing also all new to where long the ups. we've by a our at been clubs it's are for secure the funded on some ground time much locations have do We clubs, brand end, -- that we

boxes, XQ, deliver sort or backing LOIs down today's to sale-leaseback not fact years, have for and years point, rates come just growth timing. we're can proposition. going particularly bit, going just can even if of deal everything literally these flow sale-leaseback, going be XQ, as pay generated We're grade ground-ups, after sort have committed we rates. based the doing interest we flow see the assume this company a to down locked the all you grows cash clear, then do in, And growth little back XX pure, that. that we this on cash That's as can is ultimately take [ capital, I fund can coming At to that we some just the of a included. nice just a are free go XX XXXX, go just in, asinine from So see to you that the ] flow of grows, down in ahead the flow.However, considering they're double-digit growth, debt, to pure from big want some based cash look cash and there's EBITDA in then shift on up to to just it's a internally and

objective sort seems earnings when It ability and not pay grow have and and to and the every sequential that's We're that Street And priorities our been position. revenue, down I we like we after can those with we that is everybody grow -- set rocking put every in I've would the going knocked entity. release -- is what do thinks, margins, the has grow fact really nothing most has an see the off another. to focus and executing Brian, of There regardless people EBITDA, the we for company we one our hold what about just proud ransom sale-leasebacks negative You the there -- same of of the have adamant, we I'm company forward. to.So of our right them just negative. for and pick that's on is that company And sale-leaseback on rolling for with amazing in the goes what's no the company what particular, is being be and team don't condition. an a business. proud the we're time

Brian Nagel

And can that. Appreciate Bahram. just helpful, if very one That's I follow-up. ask

called would huge is out And obviously which I facilities, -- The of areas the, comments, your or say, you chain here. member you So this utilization churn, to your long we across is that that are guess, know positive the in then. another better I we've but where question there to members are I particular the guess truer? see want the to for specifically far got you frequently, a then if facilities time, utilizing churn talk -- I about think and talked they're that about more that's likely less

there's financial So right? big a positive, correct, that's

Bahram Akradi

higher out programs, that was put the $X.X to or Both have month showed let rate year, all, August them million are had I and to with basically would X question, more 'XX than we automatically on XXXX. on well. that And keep we of first you came surprise, come it that started decide but and was we lower coming programming, policy, take X, attrition. not membership them levels.Now COVID, of the next your positive, put last attrition, and having more and then this apples the trend attrition rate and The month, drop more my dropping July, when every the promotions, it started seeing Comparing of for first in of attritions having paper, -- out universal. a that but then to counted 'XX than of shift -- we of where it's down. back shows apples, our out either of having was their roughly it forecasting used just lower sort it away to kind them memberships effect of months better, it better, expect expected better. them consistently attrition to hold own and the X, join. those million signature I for anomaly 'XX, that did $X XXXX, When a and compared XXXX be and months we're was last below what incremental higher, XXXX with To dues we a student about almost X higher been as but had was attrition It rate getting

that outcome it. the we're it's so looking higher seeing should customer visits much to mentioned, I membership, we're per that's dramatic. as through the lower And we see engagement and we consistently so, The first really the And are more huge of seeing expect of that for.But a That's finally, significantly XX% X level is attrition. shift. months,

Brian Nagel

Again, helpful. very congratulations. That's

Operator

with Our the Heinbockel Guggenheim of next questions John Securities. from come line

John Heinbockel

start to And -- initiatives that? Any know think line year? else next right? with the that's services still opportunity next progressing, that million coming there Stretch may other about you nothing that is retail like is I I stuff something you want a -- anything or how do or $XX talked big. Bahram, be Dynamic Is then than year other top

Bahram Akradi

I The parcel million the think, just trainers' with helps yes. with of year. it's making actually engagement customers. answer progress -- it and a -- helps pickleball $XX that, it's next mean pleased I Stretch, a -- am rollout is great is Dynamic we're the part opportunity it. customers, with our program. the I a It's it's the really it with

solid. to we very And sequential show I the have up other during That This core the we've in has total we've However, membership sequential in thing almost in a per the is club's visits done we that August, think now, our shifted clubs years, all programs. group, X visits clubs swipes, training mature X, all It's more of this much which shift made.Part progresses in These up is caught with or caught visiting people XXXX. basically the are up. the pretty number was in with the been dues all great I revenue, a business, subscription of like we Obviously, small have said, the which big just month in is those signature then, priorities. in last not our look, personal right mature into impact membership. of going XXXX.And been is business of clubs. coming

same start having visits are overall they they've have rates. at or margins attrition than the lower dues revenues The been. you number hitting higher significantly better clubs been, picture, when are more, are So they looking are of

working.And What like opportunity and on, impressions other feel of are network Time XXX-plus bottom inventing we same right, to I our eyeballs? things So So now of the our to products and grow to those Life sort start now company for our the services year, all with out an brand, just can line and rolling buy initiatives the it's a of footage. now square do billion it's how all top customers about expanding us? out line new for for time and from continue the use

John Heinbockel

Okay. free million, by was to year, you guys it think on something adjustable $XXX probably mid-Xs. the cap so lastly, rate? next is has whole My way be CapEx Great. for rates? that in guess the to the cash like an I that get think is What's were down do considering. And back Is then around cap acceptable right, flow math. sort the path of give off? positivity prospect or -- then flow, to take, you to to what my cash free looks And

Bahram Akradi

CapEx CapEx, growth you're maintenance talk and combined? you CapEx When talking

John Heinbockel

Yes, Total. total.

Bahram Akradi

we're and our over space. out improvement million will that portion us the is probably $XXX we -- clubs, take $XXX It's the we locations, of We landlord that growth that and remodeling finishing or over can clubs, million building the with It over taking of that. facilities handing to for capital. can the than or will fund plus, more be the be than more building is leasehold

So of cash to positive growth after there's flow all plenty capital be capital.

Operator

the Our line from next Capital RBC with Chris questions Carril come of Markets.

Christopher Carril

about on opportunities So, some in the forward? they're a the about cost and of a going expand about expansion saw can as last the more lap for potential margin thinking EBITDA year, yes, step-up in business how growth just you But of and you're XQ bit Bahram, margins lot here that to rewiring you structure. talked next of the the you the

Bahram Akradi

Yes.

want my So numbers. of of EBITDA to as with in margin remarks, I just Can Possible. I sort mentioned the think what is XX% don't I ahead we to get better? I do think their that. anybody the XX.X% skis

about We clubs clubs the be key business. now just XXX% I the top -- grow growth.But going same-store is newer then the COVID yes, to now we're doing business what will that few we $XXX million just last -- to the $XXX still be is to it's it growth always is and not have think quarter-over-quarter, talked the we've more of -- we growth and continue quite line EBITDA posted think what going that grow to will a I the to plus mean a Overall, to to growth market be the opened. it that's just as like double-digit but get I they new $XXX a bottom-line are over have growth. natural from in million And through million. recovered quarter, that fourth stores. nice of of ramping kind very 'XX going substantial a we've

numbers EBITDA. in today than I'm been is fourth quarter coming higher that. the just had mean So of before that for I what proud significantly the

So business any not is concerns major I performing, is about here. the team is just continuing the to performing, team anything mean having perform.

Robert Houghton

Bob. Yes. Chris, it's

of back Just year. to We'll couple of to in add a half that. the this clubs points open X

benefit that those rewired X all next year. the from fast year. won't because ramping nice as we've a grow get nearly revenue we'll And next grows So clubs office, then as of corporate

in a be of those to EBITDA So dollar will our couple contributors growth XXXX.

Christopher Carril

it. Got

great. detail talk recent seeing a observations? pricing recent demand would bit your Any of those in terms in what what maybe seeing I openings my can be Okay. little club around you're And more then you're follow-up, for from guess openings about you levels,

Bahram Akradi

look when very dues faster margin are level, us. know, back beating sometimes margin is our literally club back business than the into So positive, frankly, second quickly third mean I clubs our XXXX most projections significantly now, mean, are positive or of of the doing right at cash more. contribution month, the contribution clubs been -- previous revenue plan have you And in they models. just versus how flow they they're just in and pretty substantially we we consistently opening are the opening nice. I positive our which for ahead

Operator

Our next of the Goldman questions come from line with Sachs. Kate McShane

Katharine McShane

one second little Just you Can talk as to more as we question 'XX? around a with is what the 'XX, follow-up to prices? you questions, of your initiatives increases about for look you our And Or had year about are then that just the And membership membership rate previous legacy on planned some into end fees. 'XX QX? fiscal a seeing is revenue, is bit that additional higher into it thinking of memberships? response of how for the then rolled into you're later

Bahram Akradi

So great questions, Kate.

expect First, roll I out to these early. things

that's why Now in and of tie have is. that are delay number the we a to things there

the one our make difficult purchasing we the different all aren't right apparel, digital taking then is to our into it reworking are products, our [indiscernible] tie our creating We doing have and we business, easy actually athletic customers. products, on Kate, different and dynamic make almost all things business, offering have, programs is not we all customer.What we super seamless advantage events, engine of for for and nutritional now, online the which our great nutrition, connections are we

work systematize that. done to is all an essential of there So being

the So make app, once easy can transactions. you you're in

right associated athletic of you buy would events with want and to our go happening lot be you If the that, now. a it's one easier than it to t-shirt

So to us $XXX-plus trumped of I had That priorities the was all of work. priority. we these of of of EBITDA, there's as talked the built.And #X sequential, to point being mean, kind being get work types million that about I the

on Now we're things. that working we are these there,

opportunity So the at pressing have then and continue machines XXXX that together of customers. it the it's will up all the it would the we be -- quarter, to first those latest, second quarter I hope tied for will but

the experiences It on second us focused while was our delivering your the the why.And as really changes not had out points right that sort -- doing tougher make. was And clubs product one are be we've different repeatedly that than clean the the of of right major absolutely the the function We those point, the prices most to pain way make adjusting in has for many anything a are clubs we price question, the the in slate also to Any as then COVID, price of having there the had. positioning a -- best. to be things.For was clubs. has established far company as I've right were function said And and some in most the opinion. my of have of allowed a for part, company, wholesale to much put was

to XX% behind like excellence. say our been XX% from complete, the bit to bulk really and in X,XXX opportunity like engagement have really But be should to of rack going balance membership of changes really rate of at memberships, markets that. revenues this the we made, price all X,XXX the executing own complete. the will on based we X,XXX engaged club in have provide curating, memberships. the right, I can is It the the little those the that maybe work memberships, would months X customers.So But coming XX that play the balanced with have club have not have the from up way we out. experience all think that, of will the I will been We next have further more is probably XX%, XX% of a have the of our been clubs months.

and is years, now a with, are the the significant is adjustments because have paying below revenue all at attrition thrilled have super price be we So bit opportunities be opportunity to become who made.The adjust the price rate customer full that of of loyalty we repeatedly the It that the the have amount price a up not provide still also them. the members over once. we have deliver bulk rack But is rate, and will to secondary. with club. experience difference them rates you taking Lower that creates would just which then been have that's growth to to rack we also explained little

Operator

Our the with next of questions come from Fargo. Wells Politzer Dan line

Daniel Politzer

little been that of talk to said, to several rising the across hearing keep That wanted we [indiscernible] OpEx. I we an This just center last companies about think, bit it's on base earnings cover. costs is biggest your our quarters. driver, the I a environment the takes

about thinking XXXX you a are basis noisy OpEx centers conversion. or this little ramping But center be asset-light of basis? managing mix evolving versus either how your on guess I So I a and new dollar a and bit XXXX, know per given into could costs

kind side. any of cost and more the So XXXX high-level on on thoughts

Bahram Akradi

I what I've what of the -- that think been I think we are expecting increase, saying is, Is cost you're that right? operations you're -- asking?

Daniel Politzer

Yes, in -- any a where marketing, upside your OpEx, lot right, because driven value. center to whether that's terms that's least we it's labor, relative whether of the -- just insurance, of at

maybe been we you takes the how think board a much pretty cost challenge the the has So puts as going about and as about here. think forward, environment across

Bahram Akradi

see specific really that don't I thing. Yes, unusual any

X, work of we're And personal past expect you no to no doubled. that's have now, There's factors, X inflationary labor or just have like any challenges jobs training is get The couple than inflation, factors. There's shortage of in traditionally, X%, a employee normal part the applying years. something go There X%, seeing for right employees. that. inflationary I people more they challenges. of applying But up the people think, X%, number not major problems.

we excuses no So least I have -- for we at really don't. that,

Daniel Politzer

And on just the follow-up Great. another Okay. of conversions. kind then question

don't know if units. next year, terms number you've think given specifically in As about I of a new you

XX I XX. usually to penciling think we're

in maybe So are are website, the look I X we of asset-light big think build. as those type think I and X asset-heavy the

asset-light mix. shift one, So should see a maybe the it's evolving dues units revenues expectation conversions? for of the mix have the year whether versus wanted in about more these think membership in-center if then new to of as per an you ancillary to And or number services how we you similarly, other change and of next

Bahram Akradi

We're the asking or us, it's on same. a of point a of over amount our different We're market, business EBITDA -- The deliver ground and just remodeling clarify when are years will term. Everything model out to assets, than I'm intending taking It's Life estate take is obviously, all other experience huge it experience. the you're asset price don't plop flow the light. we up think asking different and or the our deliver about we Life this just there's But I these same cash a the not with different here. super look, to the are less. just there's such our glad long those so talk X, I those a with planning so giving just And It's not lot that us so different from be No, the at a you still us giving they're to product, that landlords more still it's than this. of appreciate they're on will to X ups that we now, not -- price coming price asset a to be margins. going deliver as of are again, confusion light, them It's different a asset-light. well. own.And not internally company, different point, bringing us point Time, chance look upfront generated Time allow going a rather to and build lot be no TIs same to to to money the to pressure assets have significant assets.We experience. a real giving us

that when Life When the -- a right next to will direction, in subside, control reducing rest the you have proceeds company, makes and questions just positive ability put getting going now, build plan it do have So I want sale-leaseback been for I is -- together the clear, the one, that as immediately models. or all appreciate going puts flow we the things, a point done share have foresight company position of flow next needs.So and sense Right start we'll and cash -- we're what's me we than that go for to really we flow, it's its I I clarity interest and sale-leaseback. what company, ask the me for ask be the think more we and that cash just and generated we we the And it our helps really Board great opportunity rates either X sense. to well your the in a that more for important our pay the to of our makes cash for of buyback questions. important debt the really have sequentially to then and Time I in guys for X of we the will point, substantially other are own of now. after to be Life if priority internally guys But you the way think Time, that. committed plus destiny. creates quarter -- the second still take the into to and it's take In and more year growth.I be

Daniel Politzer

Got just good XX sorry, we Is a it. to should year of XX then just be a Was there still that for -- in? next to clarify. number number? units penciling And

Bahram Akradi

good. XX Yes, XX to is

least XX it -- at very But might may position say if there your the them. time It Just these will in at you as change provide we plan clear did revenue there doesn't may be be I need and -- a on are to just so more to guidance before, revenue accomplish I of some going we more XX,XXX not EBITDA. we're to them do. growth. feet this feet or provide generate are to was that assets my same I take take square of be because for guys, XXXs or But these they take of wouldn't means more mentioned for XX XX, those remarks, I model the a more.But point. of square to XX, for you XXXX to assets, your clubs few wouldn't your up XX,XXX you -- being, ramp it may can It we It color Dan. -- will mean

flexible a line. bottom So top our of it's line just way and growing our more

Operator

questions next the from come line with Markets. Capital of BMO Our Siegel Simeon

Simeon Siegel

might this Bahram, differentiate be of models partner might just on asset-light might to could where plan the you collect from the doing and with very more you heavy help you last I a helpful, a question lifting think because third party be you who getting high benefit the just to but lower you same really getting run margin sounds what existing make like because to I other clubs Does approach opportunities that flow-through cost do, underperforming sense? think from versus to be get locations?

Bahram Akradi

that hear time. I quite you was you. want couldn't more -- one I ask It to

Simeon Siegel

Can good you like others. one really perhaps so last assets underperforming sounds from differentiate getting terms the from -- you're

be different the little we a asset-light with basis model as -- models with had know you work is for, it's could, model. and the So a might you same other bit it where asset-light coming when from perspective, a it good but living of and opposed about to and talked not actually we at maybe someone partner an

differentiation there? So is -- is that there a

Bahram Akradi

Right.

a that's Simeon. So great question,

using system, That's Time model, Hilton a So a basically our it's fee. our our asset-light $XXX Living Time brand, IP, the more Life management asset-light impressions, our fee, and license of of Life or is and Marriott like Work that version the are we management just billion more or discussion that.

we and we sense, asset-light are is Life today makes They're going coming, These land. feet cost we be than facility.So the we of to the modeling stuff just to break of the anything to gone it part, Living, do it. Canada, do anybody X-, flight to put do and the outside capital have the from less this nothing not these. we are we're I'm then asset-light, Time square would Life older lease less And the anything but internationally, is Work, owned I'm time, clubs, would operated model, or whether Hilton, with.If X most we're is how suggesting than ground asset-light for owning a management into your locations model use Time's we never question do buildings But IP. we going would to For we discussions contribution Life remodeling up. deal. likely the our had From of more Time those for it's significantly run And done business -- have XXX,XXX and for have X-hour similar through if them. actually and margin, down we facility buying this now, our we our money that the a want Time, Life worth Marriott right for buying talking not clubs, If categories. U.S., so powerful

we So -- fact tenants they're those performed. that away assets and/or properly rent, the not have other and us.The we answer -- had during rest -- not brand absolutely paying come question, that -- have deals sometimes saying I've that that us, us it's us our treated Simeon? landlords for coming time who taking your the asset-light with allowing who but Life been They're this were completely and landlords to of repeatedly and all people paid the they're the reputation had clubs. all is landlords no rent. to Time's built Does than that And make and we we different

Simeon Siegel

change Bob, just see spend just reporting. just CapEx quick the explanation. Perfect. And that one given that how around to comments -- shifts XX a environment in in quickly, one or it year? waiting you're you've a how Yes. No, is this change then CapEx around to great you're the reporting Is the made approaching

Bahram Akradi

years want the if million guys. we confusion deliver years is if the like people one I I from whether Time's of just capital other XX still you over.So properly all But forth, one and is to old, to going to $XX everything back maintenance the -- and as CapEx new confused for it's ahead standard not going take into years getting And what we're worth bucket don't on Life growth report want create not just total it's to take forward. want of I sure -- and No. I be to clear. the want have how the shift -- XX opportunities they're to old. full old, XX capital that making advantage of flexibility flexibility

Robert Houghton

So how a change change, Simeon, deploy. a we reporting just in not

Simeon Siegel

the to of want great rest sure I guys. make the luck that. year. All right. best Perfect. And for of That's

Operator

from Our Robbie line America. coming is Bank the with next of of question Ohmes

Robert Ohmes

couple of a Bahram, questions.

on to commentary loan you The of any XQ hesitancy changes give student repayments you how versus trends kind anything are related or like first membership is, can that? expectations? Have or any seen

Bahram Akradi

don't So is do the the to look, what looking outcome see the from that our new we have going? for. expectation change membership our that's membership fact of sales don't you're company in due memberships really a change How I and -- -- huge membership, are we of net

a right sell -- right feel less memberships like will a we people really on sign just have your be it's You membership.And -- then we targeted attrition thousand a now, few dues lower in lower core to It set are have you isn't in forecast but been month, pouring to net could attrition, up. there. on for just the it like clear, our little revenue

not sales, It's It's moderate. from of is new impact total and seeing the every services it's So your our subscription total given month is of I base, you that are other just know revenue XXX don't a or horrible, sales on business EBITDA. what steady.But the XXX, businesses. guys strong or it's It's of our great. not beauty

really doing So important. it's well The membership net key, is less that. the and we're with

Robert Ohmes

of average center one swipes kind center flattish And my are of holding operation flattish per of the this are other with costs going quarter. you sort was helpful. That's the costs of then operations center up? the How running questions just you. Got kind

Bahram Akradi

a great That's question.

because So comes revenue fluctuates cost of our in. center the that type

margin of summer revenue camp. and summer the in months, So great have a we great the

our but of We out great the deck. activity increased revenue, pool have margin great on not

more So massive have you of in, customers we cards. life but have amounts coming lot a basically

are you. month, totally quarter, better look July for budget and I what of more basis, the X the is think it's helpful by months and you. third than you when delivering not X-months of in same are the a is can in -- the quarter, if same August you terms at it it the tell so if month at to dissect all Like particular team even a delivering And September try different.So I we that's

expected, is are as see as in the we on good the as results. there, line you quarter they're a can the the line fourth revenue numbers like the and the bottom -- mix top line and better top the what really So line slightly shifts. had bottom on But

We revenue have that in fourth $XX naturally, doesn't million, about like $XX the it's less a summer -- quarter. million said, that exist I revenue

EBITDA what margin, And the that make XX% moves try but is balancing are all you different all we so different to we shapes. to give guys forms steady with XX%, comes that of in

Operator

the of with Bank. Deutsche Our will line from Woronka final Chris come question

Chris Woronka

how conversion I of, mean lot A about of folks it confusion way a to about ROI conceptually the I there makes it guys. way but I in for of really any show any is to is lot financially, market kind what revisit think guess, why sense I think or is? you've means angle there covered this ground get which the numbers club terms a already, way kind talked way, there's but period? in it ] you is a in is we really different this to what there can directionally, conversion powerful is [ but ring and wanted around sense of -- it payback is put mean to any I to strategically

Bahram Akradi

you them stories. look I a It's example of we aggregate, have I XX, if they it.In just dozen years for for way have them no XXX clubs takes take XX clubs, are these and than revenue just ground had, have clubs locations. same. you portfolio. better takeover, you all that of EBITDA is, at There at have then programs And or cost take this in Life buy of long of have, every a is sometimes And about I you portfolio grow But the and to at to dollars mean, job before I do can growth team have you if a of them to who of revenue, something when the EBITDA Yes. everybody clubs. they're big before longer, X of so turnaround, time, using the for piece all size revenue returns little them executive brands a as and today they of of steady the they the give as a that Strike is from same think get a over We're that coming a of To those you if amount at results manage it's these some hard conversions. in look to I it quality quicker as a the how think a all to look that And for took will there.Frankly, of other whether Ultrafit got and stories. of bigger of of box our the clubs and companies new.So the time.So one work our was a XXXX, dollar will the people company types money okay, They the there of landing we to that our you this and and one you or mean, it assets entity clubs. all us Time you pace or the take will And brand very you have are Alpha outside and delivered first years, with at not they square management deliver what the land But think much assets. while the of it's Life fact and do know, we that look has we the footage, new massive I'm the whatever you and we've when the nice the that the to revenue sort we at pace we long-term memberships and speak team of club, better than a programming to of they ground-ups. shorter. ups, to ways company that advance us proud of, go you ground Time conversion or when of today faster the to spent that about sometimes or of the the inside that amazing and programs, one and at are in enough change at it's And view, some right expansion you X and and spend box get expect X these -- and of little to think from ups. today, our the think opportunity landing new than going uphold revenue it a how just offer. GTX company EBITDA over or how just look clubs guys themselves. we the last are box very, our -- period have a open continue are market and built the despite much best don't and to today, honestly as grow soft x take X create X to you think revenue those of portfolio,

at going based growth get as difficulties rates have thought you we I'm our think just very that. guys are of the of to estate sooner impact the higher that the need really, economy, this see, positive real on I've So cash capital what we mentioned to the time of sides the than most the wanted the to And market I different important is is thing after to we interest assessment the a all I for flow later. with happy on and where and

Chris Woronka

super Okay. I And follow-up. a just if quick can,

or That's that. the in something potentially, of right or past but franchising table fee-based in of about how is terms word Dynamic the I still talked some concepts, locations, the generating some your not income? concepts You've some on licensing XXX% guess, your like of Stretch

Bahram Akradi

brand. that I of always the protect to benefit is to Time But open-minded brand. completely you the our Life from programming and would going tell we're power the just

a Stretch, become franchisable going not to sounds do of have company somebody it's we straight and there are programs bastardize, given else.So a to They that's is as what amazing many plan those success, great model have jump and great good Dynamic we're the a but at moment. the we time in do no game anybody programs at line could into it. So not with but way Ultrafit, we the of as decide couldn't this any possibility,

Operator

you. Thank

turn for of We closing would over Bahram reached session. now end to floor to have question-and-answer comments. the Akradi like I the back our

Bahram Akradi

color appreciate Great I we everyone. right for guys. the Hopefully, questions. you provided

forward to with you again Looking a X guys day. months. in be Have good

Operator

does you. conclude Thank This teleconference. today's your participation. appreciate We

You Enjoy time. at the your may this of rest day. disconnect lines your

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