Life Time Group Holdings, Inc. · NYSE:LTH
Life Time — Debt Investor Presentation (October 2024)
38 slides from Life Time's debt investor presentation, Oct 15, 2024
Slide 1: Lender Presentation
October 15, 2024 Lender Presentation MIDDLETOWN
Slide 2: Legal: Forward-Looking Statements
LEGAL FORWARD-LOOKING STATEMENTS This presentation includes “forward-looking statements” within the meaning of federal securities regulations. Forward-looking statements in this presentation include, but are not limited to, the plans, strategies and prospects, both business and financial, of Life Ti
Slide 3: Today's Presenters & Agenda
81nidZpGqzkSDMpD T O D AY ’ S P R E S E N T E R S & A G E N D A 1. Transaction Overview BAHRAM AKRADI 2. Company Overview Chairman Chief Executive Officer & Founder 3. Key Credit Highlights 4. Financial Overview 5. Appendix E R I K W EAV E R Executive Vice President Chief Financial Officer 3
Slide 4: Transaction Overview
ransaction Overview
Slide 5: Executive Summary
81nidZpGqzkSDMpD Executive Summary Life Time, Inc. (“Life Time” or the “Company”), the “Healthy Way of Life Company,” has established itself as a premium lifestyle and leisure brand offering premium health, fitness and wellness experiences to a community of more than 1.5 million individual members F
Slide 6: Sources, Uses and Pro Forma Capitalization
81nidZpGqzkSDMpD Sources, Uses and Pro Forma Capitalization ($ in millions) SOURCES OF FUNDS USES OF FUNDS New Term Loan B $1,000 Refinance Existing Senior Secured Notes $925 New Other Secured Debt 400 Refinance Existing Senior Unsecured Notes 475 Cash from the Balance Sheet 19 Estimated Fees, Expen
Slide 7: Summary of Indicative Terms – New Term Loan B
81nidZpGqzkSDMpD Summary of Indicative Terms – New Term Loan B Borrower: Life Time, Inc. (the “Borrower”) The Senior Secured Credit Facility shall be unconditionally guaranteed on a senior secured basis by the Borrower’s immediate parent and Guarantors: each of its direct and indirect wholly owned d
Slide 8: Transaction Timeline
81nidZpGqzkSDMpD Transaction Timeline October 2024 S M T W Th F Sa 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Denotes holiday Denotes key dates Date Key Transaction Milestones October 15, 2024 • Lender conference call at 3:00pm ET October 22, 2024 • Lender Co
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Slide 10: Life Time has a Unique Strategic Position
81nidZpGqzkSDMpD Life Time has a Unique Strategic Position 175 1.5M+ / 878k+ Total Clubs (1) Individual Members / Memberships (1) $2,408M $600M TTM Adjusted EBITDA (3) TTM Total Revenue 3.0x ~25% Net Debt Leverage (1) Adjusted EBITDA Margin (3) 20+ YEAR HISTORY OF CONSISTENTLY DELIVERING REVENUE AND
Slide 11: Diversified Portfolio in High End Markets Across North America
81nidZpGqzkSDMpD Diversified Portfolio in High End Markets Across North America 31 States 1 Canadian Province Total Club Footprint: 17mm+ sq ft Average Club Size: ~100k sq ft 1 1 3 22 6 1 12 7 1 Flexible Real Estate Strategy: 2 1 1 3 7 67% of clubs leased(1) 13 2 6 86% of new centers since 2015 1 4
Slide 12: Large Addressable Health & Wellness Market
81nidZpGqzkSDMpD Large Addressable Health & Wellness Market (1) ~$5.6 Trillion Global Market ~$1.9 Trillion North American Market S PA S & H E A LT H Y E AT I N G WORKPLACE WELLNESS O T H E R H E A LT H & FITNESS CLUBS PERSONALIZED AND NUTRITION WELLNESS R E A L E S TAT E W E L L N E S S V E R T I C
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Slide 14: Key Credit Highlights
81nidZpGqzkSDMpD Key Credit Highlights Trusted, Premium Leisure Brand Highly Predictable Recurring Difficult to Replicate Impressive Track Record of 1 Offering Highly Differentiated 2 3 4 Subscription-Based Revenue Model & Scale Financial Performance Experiences Model ~123B $2.5B / $1.9B 13.5% 70%+
Slide 15: Trusted, Premium Leisure Brand Offering Highly Differentiated Experiences
81nidZpGqzkSDMpD 1 Trusted, Premium Leisure Brand Offering Highly Differentiated Experiences …DRIVING INCREASED MEMBER ENGAGEMENT… 139 ~$3,000 TTM Q2 2024 Average Annual Visits / Center TTM Q2 2024 Average Revenue / Membership (1), Up 29% Since 2019 Center Membership (1), Up 37% Since 2019 ~123B ~10
Slide 16: Difficult to Replicate Model & Scale
81nidZpGqzkSDMpD BEAVERTON, OR IRVINE, CA 2 Difficult to Replicate Model & Scale HIGH-PROFILE PREMIUM REAL ESTATE FOOTPRINT OF 175 CLUBS(1) WITH SIGNIFICANT PORTFOLIO OF OWNED REAL ESTATE AND ATTRACTIVE REAL ESTATE COVERAGE SHENANDOAH, TX $2.5B (2) $1.9B (2) CHICAGO, IL Gross Book Value Net Book Val
Slide 17: Impressive Track Record of Financial Performance
81nidZpGqzkSDMpD 3 Impressive Track Record of Financial Performance Elevation of Brand to Higher Level Life Time as a Lifestyle Brand & Reposition to High-End Refinement of Resort-Like Format with Focus on Top Tier Markets Transition to Asset-Light Model Leisure Brand Total Revenue ($ in millions) T
Slide 18: Leverage Profile Over Time
81nidZpGqzkSDMpD 3 Leverage Profile Over Time • The Company has aggressively focused on strengthening its balance sheet through continued deleveraging and achieving positive free cash flow, before sale-leaseback proceeds • Life Time leverages sale-leasebacks to accelerate growth. In Q2 2024, the Com
Slide 19: Highly Recurring Revenue Model
81nidZpGqzkSDMpD 4 Highly Recurring Revenue Model Center Revenue ($ in millions) Membership Dues + Enrollment Fees In-Center Revenue $2,340 $2,154 Government mandated closures $639 $1,851 & restrictions $1,770 $597 $1,702 $643 $518 $589 $1,287 $380 $930 $1,701 $279 $1,557 $1,208 $1,252 $1,113 $907 $
Slide 20: Loyal & Engaged Multi-Generational Membership Base
81nidZpGqzkSDMpD 5 Loyal & Engaged Multi-Generational Membership Base With Attractive Demographics (1) $157,000 ~74% ~46% ~79% Member Median Household Income of Members Own a Home of Members are Under 35 of Members are Under 55 Years of Age Years of Age 1.6x ~59% ~60% Balanced Median Household Incom
Slide 21: Pickleball and 55+ Community Programs
81nidZpGqzkSDMpD 5 NATION’S LARGEST 55+ COMMUNITY PICKLEBALL PROVIDER (1) FOR ACTIVE OLDER ADULTS 680+ 180K+ 39K+ 8,900+ Dedicated Courts (2) Sessions Per Month (3) Sessions Per Month (3) Classes Per Month (3) 2.4MM+ 14% 34% 40% Year-Over-Year Increase in Total Year-Over-Year Increase in Total Year-
Slide 22: Highly Engaged Membership Base
81nidZpGqzkSDMpD 5 Highly Engaged Membership Base REVENUE PER MEMBERSHIP MEMBER ENGAGEMENT IS GROWING CONTINUES TO INCREASE +29% +25% $2,969 139 $2,810 135 $2,528 124 $2,172 108 2019 2022 2023 TTM (1) 2019 2022 2023 TTM (1) Q2 2024 Q2 2024 Average Center Revenue Per Center Membership (2) Average Ann
Slide 23: Significant White Space Opportunities
81nidZpGqzkSDMpD 6 Significant White Space Opportunities Creating pathways to every market with healthy ROIC LAND & CONSTRUCTION CONTRIBUTIONS FROM: MALL OWNERS MULTI-FAMILY RESIDENTIAL DEVELOPERS OFFICE OWNERS/DEVELOPERS COMPETITOR TAKEOVERS GROUND-UP DEVELOPMENT 23
Slide 24: Flexible Asset-Light Real Estate Model With Attractive Returns on Capital
81nidZpGqzkSDMpD 6 Flexible Asset-Light Real Estate Model With Attractive Returns on Capital Pre Sale-Leaseback Strategy Post Sale-Leaseback Strategy (1) Prior Public Company (Pre-2015) Today (Post-2015) Traditional Traditional Vertical Center Growth Mall / Retail Urban Suburban Suburban Residential
Slide 25: Additional Long-Term Growth Accelerators Through Brand Expansion & Innovation
81nidZpGqzkSDMpD 7 Additional Long-Term Growth Accelerators Through Brand Expansion & Innovation HORMONES PEPTIDES IV THERAPY RECOVERY R E J U V E N AT I O N S U P P L E M E N TAT I O N AESTHETICS BODYWORK 25
Slide 26: Talented, Proven Management Team
81nidZpGqzkSDMpD 8 Talented, Proven Management Team – Founder & CEO Plus Long Tenured and Newer Executives BAHRAM AKRADI ERIK WEAVER Founder, Chairman and Chief Executive Officer Executive Vice President and Chief Financial Officer Mr. Akradi has over 35 years experience in healthy way of life Joine
Slide 27: Business Leaders
81nidZpGqzkSDMpD 8 Business Leaders Fartash Akradi Matthew Brinza Keith Dieruf Joe Gallagher John Griffith SVP of Life Time SVP, Architecture and SVP - Digital Marketing SVP, Corporate SVP, Real Estate and Technology Engineering Concierge and New Club Development Openings Matthew Heinrichs Bryan Jan
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Slide 29: Preliminary Q3 2024 Financials
81nidZpGqzkSDMpD Preliminary Q3 2024 Financials(1) Confidential Revenue ~$693.2M Net income ~$41.4M Adjusted net income(3) ~$56.3M Adjusted EBITDA(3) ~$180.3M Free cash flow(2)(3) ~$138.3M Net debt leverage(3) ~2.4x Notes: 1. These figures represent the Company’s preliminary results for the three mo
Slide 30: Historical Financial Profile
81nidZpGqzkSDMpD Confidential Historical Financial Profile CENTERS 171 161 151 149 146 2019A 2020A 2021A 2022A 2023A CENTER MEMBERSHIPS (000’S) 854 763 725 649 501 2019A 2020A 2021A 2022A 2023A 30
Slide 31: Historical Financial Profile (cont.)
81nidZpGqzkSDMpD Confidential Historical Financial Profile (cont.) TOTAL REVENUE ($M) $2,217 $1,900 $1,823 $1,318 $948 2019A 2020A 2021A 2022A 2023A ADJUSTED EBITDA & RENT EXPENSE ($M)(2) $275 $166 $245 $438 $537 $210 $186 $282 $80 ($63) 2019A 2020A 2021A 2022A 2023A ADJUSTED EBITDA 23.0% 24.2% (6.6
Slide 32: Historical Financial Profile (cont.)
81nidZpGqzkSDMpD Confidential Historical Financial Profile (cont.) CASH FLOW FROM OPERATING ACTIVITIES ($M) $463 $359 $201 ($20) ($96) 2019A 2020A 2021A 2022A 2023A FREE CASH FLOW(1) ($M) ($38) ($70) ($103) ($109) ($275) 2019A 2020A 2021A 2022A 2023A NET PROCEEDS FROM SLBS ($M) $352 $236 $195 $122 $
Slide 33: Appendix
ppendix
Slide 34: Significant Underlying Real Estate Value
81nidZpGqzkSDMpD Significant Underlying Real Estate Value Gross Book Value(1) Net Book Value ($ in millions) Collateral - mandatory TLB prepayment on SLB (2) $857 $600 Collateral - no mandatory TLB prepayment on SLB 259 222 No collateral (ground leases) - mandatory TLB prepayment on SLB (2) 422 276
Slide 35: Reconciliation of Net Income (Loss) to Adjusted EBITDA
81nidZpGqzkSDMpD Reconciliation of Net Income (Loss) to Adjusted EBITDA Fiscal Year Ended TTM Q3 Adjustment detail ($ in millions) Dec-15 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Jun-23 Jun-24 Sep-24(1) Sep-24(1) 1. Share-based compensation expense is associated with stock options, restricted 1 stock unit
Slide 36: Reconciliation of Total Debt to Net Debt Leverage
81nidZpGqzkSDMpD Reconciliation of Total Debt to Net Debt Leverage 2015 2019 2021 2022 2023 Q2 2023 Q2 2024 Q3 2024(1) ($ in millions) Current maturities of debt $30 $36 $23 $15 $74 $65 $13 $12 Long-term debt, net of current portion $1,926 $2,224 $1,776 $1,806 $1,859 $1,792 $1,830 $1,640 Total Debt
Slide 37: Reconciliation of Cash Flow from Operating Activities to Free Cash Flow
81nidZpGqzkSDMpD Reconciliation of Cash Flow from Operating Activities to Free Cash Flow 2019 2020 2021 2022 2023 Q3 2024(1) ($ in millions) Net cash flow provided by operating activities $359 ($96) ($20) $201 $463 $151 Capital expenditures, net of construction ($624) ($266) ($329) ($591) ($698) ($8
Slide 38: Reconciliation of Interest Coverage Ratio
81nidZpGqzkSDMpD Reconciliation of Interest Coverage Ratio Fiscal Year Ended TTM ($ in millions) Dec-15 Dec-19 Dec-21 Jun-23 Jun-24 Interest expense, net of interest income $108 $131 $225 $120 $144 Less: Accrued interest (non-cash) (14) 1 (21) (4) (2) Less: Debt issuance cost amortization (13) (11)
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