Lifetime Fitness 2013 Annual Report Download - page 22

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Finally, if cash from available sources is insufficient or unavailable, or if cash is used for unanticipated needs, we
may require additional capital sooner than anticipated. In the event that we are required or choose to raise additional
funds, we may be unable to do so on favorable terms or at all. Furthermore, the cost of debt financing could
significantly increase, making it cost prohibitive to borrow, which could force us to issue new equity securities. If
we issue new equity securities, existing shareholders may experience additional dilution or the new equity securities
may have rights, preferences or privileges senior to those of existing holders of common stock.
Any inability to access our existing credit facility, to raise additional capital when required or with favorable terms,
or to repay scheduled indebtedness at maturity could have an adverse effect on our business plans and operating
results.
If we fail to properly maintain the integrity of our data or to strategically implement, upgrade or consolidate
existing information systems, our reputation and business could be materially adversely affected.
We increasingly use electronic means to interact with our customers and collect, maintain and store individually
identifiable information, including, but not limited to, personal financial information and health-related information.
Despite the security measures we have in place to ensure compliance with applicable laws and rules, our facilities
and systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of cyber
terrorism, vandalism or theft, computer viruses, misplaced or lost data, programming and/or human errors or other
similar events. Additionally, the collection, maintenance, use, disclosure and disposal of individually identifiable
data by our businesses are regulated at the federal and state levels as well as by certain financial industry groups,
such as the Payment Card Industry organization. Federal, state and financial industry groups may also consider from
time to time new privacy and security requirements that may apply to our businesses. Compliance with evolving
privacy and security laws, requirements, and regulations may result in cost increases due to necessary systems
changes, new limitations or constraints on our business models and the development of new administrative
processes. They also may impose further restrictions on our collection, disclosure and use of individually
identifiable information that are housed in one or more of our databases. Noncompliance with privacy laws,
financial industry group requirements or a security breach involving the misappropriation, loss or other unauthorized
disclosure of personal, sensitive and/or confidential information, whether by us or by one of our vendors, could have
material adverse effects on our business, operations, reputation and financial condition, including decreased revenue;
material fines and penalties; increased financial processing fees; compensatory, statutory, punitive or other damages;
adverse actions against our licenses to do business; and injunctive relief whether by court or consent order. Like
other large companies, we have, from time to time, experienced threats to our data and systems, including malware
and computer virus attacks, unauthorized access, systems failures and disruptions, none of which have had a
material impact on our business, results of operation or financial condition and none of which have required us to
provide formal notification to any parties.
Our planned accelerated growth could place strains on our management, employees, information systems and
internal controls which may adversely impact our business.
Over the past several years, we have experienced growth in our business activities and operations, including an
increase in the number of our centers, development of new businesses and acquisitions of other businesses. Our past
expansion has placed, and our planned accelerated future expansion may place, significant demands on our
administrative, operational, financial and other resources. Any failure to manage growth effectively could seriously
harm our business. To be successful, we will need to continue to implement management information systems and
improve our operating, administrative, financial and accounting systems and controls. We will also need to train new
employees and maintain close coordination among our executive, accounting, finance, legal, human resources, risk
management, marketing, sales and operations functions. These processes are time-consuming and expensive,
increase management responsibilities and divert management attention.
Our business could be adversely affected by strong competition in the highly competitive health and wellness
industry.
We compete with the following industry participants: other health and fitness centers; physical fitness and
recreational facilities established by non-profit organizations, governments, hospitals, and businesses; local salons,
cafés and businesses offering similar ancillary services; exercise and small fitness clubs and studios and other
boutique fitness offerings; racquet, tennis and other athletic clubs; amenity and condominium clubs; country clubs;
online personal training and fitness coaching; the home-use fitness equipment industry; athletic event operators and
related suppliers; and providers of wellness and other healthy way of life orientated products and services. We