Aug 1, 2006 12:00 PM
Life Time Sees Financial Growth, Makes a Deal
EDEN PRAIRIE, MN — Life Time Fitness' revenues are climbing along with its health club numbers.
In late July, Life Time Fitness of Eden Prairie, MN, released its second quarter 2006 financials showing its earnings had increased 20.4 percent over the same period last year ($12.4 million or 33 cents per share in second quarter 2006 from $10.3 million or 28 cents per share in the second quarter of 2005). The company's revenue grew to $122.5 million from $95.6 million, a 28 percent increase.
Memberships increased 17 percent, ending with 393,011 members. In-center revenue grew 40.6 percent during the second quarter, driven primarily by a membership ramp, targeted marketing programs and new products and services, says Bahram Akradi, CEO.
The growth, which stems from the opening of several clubs in the second quarter, is only expected to grow in the third quarter as five centers under construction are scheduled to open this year.
In addition, late last month Life Time entered into a lease agreement to manage seven Northwest Athletic Clubs, its long-time rival in the Twin Cities. The clubs are owned by real-estate company W.P. Carey but had been managed by Wellbridge Co. During the next two years, Life Time plans to invest $25 million in capital improvements among the leased centers. As part of the agreement and in exchange for financial help to renovate the leased facilities, W.P. Carey transferred ownership of two other Minneapolis-area facilities — Minnetonka Tennis Club in Minnetonka, MN, and a facility in Burnsville, MN — to Life Time, which plans to keep the employees of all the facilities on board, according to a statement.
As part of the deal, Wellbridge closed two facilities in the Minneapolis area this month — one in Brooklyn, MN, and one in Edina, MN.
This isn't the first time Wellbridge and Life Time had dealings. In December 2005, Wellbridge sold a Northwest Athletic Club in Maple Grove, MN, to Life Time.
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