CHANHASSEN, MN -- Life Time Fitness founder and CEO Bahram Akradi said today at the company’s annual shareholders meeting that he wants to focus on improving the company’s communication process to its members.
“This year, member communication and member connectivity are at the top of our lists in terms of things that we can do better,” Akradi said at the meeting. “I would give us a very low mark in our member communication.”
Akradi also said the company will launch several new programs in the next 90 days with added emphasis on delivering information through the Internet.
“By the early part of third quarter, we will have a whole new way of communicating with our members,” he said. “We’re going to continue to change as a company. By delivering the right product to our members, our shareholders will also be taken care of.”
Akradi’s comments come on the same day Life Time released its first quarter earnings statement. Buoyed by membership dues growth and higher in-center revenue, Life Time’s first-quarter profit rose 23 percent to $17.4 million, or 44 cents per share. That’s up from $14.1 million, or 38 cents per share, in the first quarter of 2007.
First-quarter revenue rose 21 percent to $184.5 million from $153.1 million during the same period last year. Membership rose 10 percent to 521,177, while dues rose 19 percent and enrollment fees rose 15 percent. In-center revenue rose 25.9 percent.
The company also raised, by one cent, 2008 earnings expectations of $2.06 to $2.09 per share. Previously, the guidance was of $2.05 to $2.08 per share. Net income is expected to be between $82 million and $83.5 million, or approximately 21 to 23 percent growth, up from $81.5 million to $83 million, or approximately 20 to 22 percent growth. Revenue is expected to be between $780 million and $800 million, or approximately 19 to 22 percent growth.
Michael Robinson, Life Time’s executive vice president and chief financial officer, said at today’s meeting that the company plans to open 11 centers this year and 11 more in 2009. Life Time is entering new markets this year in Parker, CO; St. Louis, MO; and Florham Park, NJ. The New Jersey location marks the first time the company has entered the New York tri-state area. The Parker, CO, location opened in the first quarter.
During the formal business portion of the shareholder meeting, Eric Buss, executive vice president, general counsel and secretary, announced the election of Akradi, Giles Bateman, James Halpin, Guy Jackson, John Richards, Stephen Sefton and Joseph Vassalluzzo as Life Time directors.
Akradi was asked one question during the question-and-answer portion of the meeting. The questioner asked how the company is coping with rising energy costs. Akradi responded by saying that for the past two years Life Time has been building more energy-efficient green buildings that cost more to build but will cost the company less over time.