Lifetime Fitness 2005 Annual Report Download - page 3

Dear Shareholders,
Life Time Fitness has distinguished itself as a category-redefining health and fitness company that delivers
an unsurpassed member experience and can successfully expand — both within existing centers and by
adding new centers nationally. The result is ongoing member satisfaction and long-term shareholder value,
as evidenced by our 2005 accomplishments:
• We opened six current model centers as planned, plus one smaller facility
• We grew membership dues revenue by 25.9 percent and total memberships by nearly 20 percent
• We grew in-center services revenue by more than 36 percent
• We grew pre-tax margins from 15.7 percent to 17.4 percent
As a result, overall revenue grew 25 percent to $390.1 million from $312.0 million in 2004. Net income
increased 42.6 percent to $41.2 million, or $1.13 per diluted common share. This compares to 2004 net
income of $28.9 million, or $0.87 per diluted common share.
The numbers prove that our philosophy resonates with Americans: If you offer comprehensive services
and programs in an attractive setting with certified staff that is friendly and inspiring, then people will view
going to their center as a pleasure and be more likely to meet their health and fitness goals.
We continually refine the member experience and support our growth goals by enhancing offerings across
our three focus areas: exercise, education and nutrition. For example, in 2005, we expanded the Marketplace
within several of our LifeCafes to provide more natural and organic foods, supplements and products.
We also began to roll out a team-based weight-loss program. Participants learn about nutrition and work
toward fitness goals with the guidance of a Nutrition Coach and certified Personal Trainer — all in a
motivational group setting.
In 2006, Life Time Fitness will broaden its national presence by adding eight new centers across the
United States, four of which will be located in new states for us. Two of the centers have already opened
and the other six are on schedule.
With each new center we open, there is renewed excitement among members and team members. We
take pride in the efficiency with which we’re able to develop and operate our centers. But the real joy is
in knowing that we are delivering on three very important promises — to help people maintain a healthy
way of life, to be a premier employer and to provide value for our shareholders.
As we seek to become one of the nation’s most respected brands, we must continually live up to our
promises — and we intend to do so well into the future.
Bahram Akradi
Chairman, President and CEO 1