Life Time Group Holdings, Inc.

Good morning and welcome to Lifetime Group Holdings second quarter of 2023 earnings conference call. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization from the company. As a reminder, this conference call is being recorded. I will now turn the call over to Ken Cooper with Investor Relations for Lifetime.

Good morning and thank you for joining us for the Lifetime second quarter of 2023 earnings conference call. With me today are Brahm McCarty, founder, chairman, and CEO, and Bob Houghton, CFO. During this call, the company will make forward-looking statements, which involve a number of risks and uncertainties that may cause actual results to differ materially from those forward-looking statements made today. There is a comprehensive discussion of risk factors in the company's SEC filings, which you are encouraged to review. Also, the company will discuss certain non-GAAP financial measures, including adjusted EBITDA, net debt to adjusted EBITDA, or what we refer to as our net debt leverage ratio and the free cash flow before growth capital expenditures. This information, along with reconciliations to the most directly comparable GAAP measures, are included in the company's earnings release issued this morning, our 8K filed at the SEC, and on the investor relations section of our website. I'm now pleased to turn the call over to Bob Houghton. Bob's

Thank you, Ken, and good morning. We appreciate you joining us for our business update. I will briefly review our second quarter 2023 financial results, which include continued strong revenue and adjusted EBITDA growth. Bram will then provide his thoughts on the quarter and our strategic initiatives, which are all working to grow our business, improve profitability, increase cash flow, and reduce leverage. Our second quarter revenue increased 22% to $562 million, driven by a 25% increase in membership dues and enrollment fees and a 13% increase in in-center revenue. Center memberships increased 26,000 from the first quarter, and we ended June with approximately 790,000 memberships. Total subscriptions, including digital on-hold memberships, are now at approximately $832,600. Second quarter average center revenue per membership increased to $701, up 10 percent from $639 in the prior year quarter. We generated net income for the second quarter of $17 million, compared with a net loss of $2 million in the prior year quarter. Adjusted EBITDA increased 116 percent to $136 million. our adjusted EBITDA margin increased by over 10 percentage points to 24.2% versus 13.7% in the second quarter of 2022. Rent as a percentage of revenue was 12% in the second quarter of 2023 and 13% in the prior year quarter. We delivered another quarter of improved cash flow with net cash provided by operating activities of $142 million versus $71 million in the prior year quarter. Year to date, we have generated net cash provided by operating activities of $216 million versus $80 million in the prior year to date period. We are incredibly pleased with our performance in the first half of this year. Our strategic initiatives are successfully driving growth in revenue and adjusted EBITDA at sustainably higher profit margins. We are seeing a significant increase in the number of asset-light opportunities to grow our business, and we are rapidly deleveraging our balance sheet. Looking forward, we remain confident in our ability to continue delivering growth in revenue and earnings while providing the unrivaled Athletic Country Club member experience that is unique to Lifetime. I will now turn the call over to Buram.