Lifetime Fitness 2008 Annual Report Download - page 78

72
Quarterly Results (Unaudited)
Our quarterly operating results may fluctuate significantly because of several factors, including the timing of new
center openings and related expenses, timing of price increases for enrollment fees and membership dues and
general economic conditions.
In the past, our pre-opening costs, which primarily consist of compensation and related expenses, as well as
marketing, have varied significantly from quarter to quarter, primarily due to the timing of center openings. In
addition, our compensation and related expenses as well as our operating costs in the beginning of a center’s
operations are greater than what can be expected in the future, both in aggregate dollars and as a percentage of
membership revenue. Accordingly, the volume and timing of new center openings in any quarter have had, and are
expected to continue to have, an impact on quarterly pre-opening costs, compensation and related expenses and
occupancy and real estate costs. Due to these factors, results for a quarter may not indicate results to be expected for
any other quarter or for a full fiscal year.
2007 2008
1st
Quarter 2nd
Quarter
3rd
Quarter
4th
Quarter
1st
Quarter
2nd
Quarter 3rd
Quarter
4th
Quarter
(In thousands, except for number of centers and per share data)
Total revenue ..................... $153,101 $162,137 $169,450 $171,098 $184,451 $192,407 $198,809 $193,954
Income from operations
(1) ...................................... 28,741 33,500 37,543 37,626 36,016 39,878 42,123 29,337
Net income ........................ 14,134 16,485 18,350 19,050 17,404 19,828 21,574 13,015
Earnings per share .............
Basic (2) ......................... $0.39 $0.45 $0.49 $0.48 $0.45 $0.51 $0.55 $0.33
Diluted (2) ...................... 0.38 0.44 0.48 0.48 0.44 0.50 0.55 0.33
Cash Flow Data:
Net cash provided by
(used in):
Operating activities ........ $39,027 27,150 41,167 34,862 49,322 56,338 37,852 39,554
Investing activities ......... (85,189) (125,727) (103,671) (102,620) (104,056) (145,260) 42,006 (98,685)
Financing activities ........ 45,197 100,925 55,014 72,339 51,839 90,137 (76,413) 62,841
EBITDA (3) ....................... $42,744 $48,463 $52,776 $53,713 $52,929 $57,394 $61,179 $50,042
Centers open at end of
quarter (4) ...................... 60 64 67 70 71 74 77 81
(1) Total operating expenses in the fourth quarter of 2008 include expenses totaling $5.0 million associated with
plans to slow the development of new centers. These expenses include severance costs, lower-of-cost-or-market
adjustments in connection with assets held for sale and write-offs associated with land development cancelled in
the fourth quarter of 2008.
(2) The basic and diluted earnings per share by quarter include the impact of rounding within each quarter.
(3) EBITDA consists of net income plus interest expense, net, provision for income taxes and depreciation and
amortization. This term, as we define it, may not be comparable to a similarly titled measure used by other
companies and is not a measure of performance presented in accordance with GAAP. We use EBITDA as a
measure of operating performance. EBITDA should not be considered as a substitute for net income, cash flows
provided by operating activities, or other income or cash flow data prepared in accordance with GAAP. The
funds depicted by EBITDA are not necessarily available for discretionary use if they are reserved for particular
capital purposes, to maintain debt covenants, to service debt or to pay taxes. Additional details related to
EBITDA are provided in “Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Non-GAAP Financial Measures.”