Lifetime Fitness 2008 Annual Report Download - page 10

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seminars, assessments and innovative partnerships with health insurance companies with the goal of further
extending our Healthy Way of Life mission to corporate America.
In 2004, we completed our initial public offering and our stock is listed on the New York Stock Exchange (Ticker:
LTM).
We have only closed one facility in our history – the previously mentioned Brooklyn Park, Minnesota center. We
decided not to renew our lease at that location in December 2006 because we had since opened five other locations
in the vicinity that continue to serve the membership from this former location.
Since inception, we have led the creation not of a health club chain, but rather a comprehensive, Healthy Way of
Life company and brand that continues to have a significant impact on the health and wellness of consumers.
Our Competitive Strengths
We offer comprehensive and convenient programs and services.
Our large format centers offer a vast array of high quality, high value programs and services in a resort-like setting.
Unlike traditional health clubs, these centers typically offer large indoor and outdoor family recreation pools,
climbing walls and basketball and racquet/squash courts, in addition to approximately 400 pieces of cardiovascular,
and resistance training equipment, free weights and an extensive offering of health and fitness classes. Our national
team of member-focused employees, each trained through our specifically designed program of classes and/or
certifications, is committed to providing an environment that is clean, educational and entertaining, friendly and
inviting, and functional and innovative. Our large format centers generally include luxurious reception areas and
locker rooms, child center facilities with spacious play areas, spas offering massage and beauty services and cafes
with healthy product offerings throughout the day.
We offer a value proposition that encourages membership loyalty.
The broad range of amenities, programs and services we offer exceed that of most other health and fitness center
alternatives available to our members. We offer different types of membership plans for individuals, couples and
families. Our typical monthly membership dues range from $50 to $80 per month for an individual membership and
from $100 to $150 per month for a couple or family membership. Our memberships include the primary member’s
children under the age of 12 at a nominal per child monthly cost. We provide the majority of our members with a
variety of complimentary services, including group fitness classes, educational seminars and fitness assessments,
towel and locker service and a subscription to our award-winning magazine, Experience Life. Our membership plans
include initial 30-day money back guarantees and are month-to-month, cancelable at any time by giving advance
notice. We believe our value proposition and member focused approach creates loyalty among our members.
We offer a product that is convenient for our members.
Our centers are generally situated in high-traffic residential areas and are easily accessed and centrally located
among the residential, business and shopping districts of the surrounding community. We design, develop and
operate our centers to accommodate a large and active membership base by generally providing access to the centers
24 hours a day, seven days a week. In addition, we provide sufficient parking spaces, lockers and equipment to
allow our members to exercise with little or no waiting time, even at peak hours and when center membership levels
are at targeted capacity. Our child center services are available to the majority of our members for a modest monthly
fee per child for up to two hours per day. Most of our centers offer the convenience of spa and cafe services. Most
members have access to attend more than one center in markets where we operate more than one location.
We have an established and profitable economic model.
Our economic model is both based and dependent on attracting a large membership base within the first three years
after a new center is opened, as well as retaining those members and maintaining tight expense control. For each of
the fiscal years from 2006 to 2008, this economic model has resulted in annual revenue growth of 31%, 28% and
17%, respectively, with revenue of $769.6 million in 2008; annual EBITDA growth of 24%, 33% and 12%,
respectively, with EBITDA of $221.5 million in 2008; and annual net income growth of 23%, 35% and 6%,
respectively, with net income of $71.8 million in 2008. We expect the typical membership base at our large format
centers to grow from approximately 35% of targeted membership capacity at the end of the first month of operations