Life Time Group Holdings, Inc.

And our adjusted EBITDA margin of 24.6% increased 200 basis points as compared to the fourth quarter 2022. Our strong financial performance continues to drive growth in cash flow and a reduction of our net debt leverage. Net cash provided by operating activities increased 74.7% to $132.1 million as compared to the fourth quarter 2022. We reduced our net debt to adjusted EBITDA leverage to 3.6 times in the fourth quarter versus 6.5 times in the prior year period. For the full year, total revenue increased 21.6% to $2.217 billion, driven by a 24.4% increase in membership dues and enrollment fees and a 15.3% increase in incentive revenue. Net income for 2023 was $76.1 million, versus a $1.8 million net loss in 2022. Adjusted net income was $129.7 million, which increased by $171.3 million versus a net loss in the prior year. Adjusted diluted earnings per share was 64 cents compared to a loss of 21 cents per share for the prior year. Adjusted EBITDA increased 90.6% to $536.8 million, and our adjusted EBITDA margin of 24.2% increased 8.8 percentage points compared to the full year in 2022. We are extremely pleased with the company's financial performance in 2023. With momentum on our side, we are very excited about the opportunities in front of us in 2024. I will now turn the call over to Brahm.

Thank you, Eric, for your commitment to the company for the past 20 years and for excelling at your new role as interim CFO. Let me begin by expressing my gratitude to our 37,000 plus team members at Lifetime. Our continued progress and success would not be possible without their passionate and relentless commitment to elevating our brand and delivering the finest member experiences in the leisure industry. We accomplished this through our innovative programming and services designed to delight our 1.5 million members across North America. I'm extraordinarily proud of our accomplishment this past year. 2023 was a great year of outstanding progress for Lifetime. We achieved every one of our operating and strategic objectives while exceeding our financial goals, and our progress is continuing this year and has set us up very nicely for 2024. Early 2024 has been among the strongest starts we have ever seen in terms of member engagement, member visits, and member retention. In terms of financial goals during 2023, we increased our revenue by over 20%. Even more impressively, our adjusted EBITDA almost doubled compared to the prior year. In addition, a primary financial objective has been to lower our net debt to adjusted EBITDA. We are making progress here, and we expect this ratio to be under three times by the end of 2024. As it relates to our operating and strategic progress, we continue to elevate our brand, our programming, and our member experiences are the finest in the high-end leisure industry. The enhancements we have developed in the areas such as a small group training, pickleball, and Aurora offering have increased the desirability of our brand and the engagement of our members. As a measure of remarkable progress we achieved during 2023, by the back half of the year, member visits in our same store clubs had essentially caught up to the very high levels of 2019. The clubs look and feel healthy and energized, a trend that we're seeing into the 2024. With the increased demand for our membership, we have now more than 20 clubs with wait lists and we expect to have additional clubs on the waitlist by the April-May timetable. While establishing waitlists for our busiest club is designed to maintain our extraordinary member experience, it also improves our member retention. We are experiencing record visits per membership as a result of the strategic initiatives we developed and implemented over the last several years. Increased visits per membership translates into higher retention rates and enhanced member satisfaction. We expect to realize the highest retention rates in the history of the lifetime for 2024. Like most high-end leisure brands, we're not seeing any weaknesses in our demands or traffic so far in 2024. Right now, we see no reason to suggest that positive trends we're experiencing today should change going forward. Importantly, we're not seeing any negative impact on our business from the new weight loss drugs we're all hearing so much about. For individuals on such programs, Exercise and strength training is absolutely vital for avoiding the loss of lean muscle mass and for maintaining healthy weight long term. We are confident that this mega trend will be particularly positive for lifetime. I will be glad to expand on this with more details during Q&A. Our key financial objectives for 2024 are, first, to deliver double-digit growth for revenue and adjusted EBITDA, as stated in our earnings release this morning. We're guiding to a revenue of 2.46 billion to 2.5 billion, an adjusted EBITDA of 595 million, to 610 million for 2024. And secondly, to be cash flow positive after all capital expenditure for the year. At this point, we're still expecting to turn positive during the second quarter of this year. Again, we'll be glad to expand on this during Q&A. Now that lifetime recovery is very much behind us, going forward, Our intention is to issue guidance on an annual basis consistent with our high-end leisure industry peers, such as Vail Resorts. We plan to visit this annual guidance quarterly and update as needed throughout the year. To help with this transition, we're providing first quarter revenue and adjusted EBITDA guidance. and this will be our last quarterly guidance. With that, we're guiding to the revenue of $585 million to $595 million and adjusted EBITDA of $142 million to $146 million for the first quarter. Over the last 30 years, Lifetime has repeatedly demonstrated the ability to respond to major challenges and emerge better and stronger every time. We have become a highly coveted high-end leisure brand, and as such, our growth opportunities have continued to expand as our business has evolved. As a highly evolved subscription business, our priority is to be the most desirable brand in the leisure industry by providing the finest destinations, the strongest programming, and the best customer experiences. To track our success, we constantly measure member engagement, which has never been higher, as illustrated by visits per membership and our improving retention rates. In sum, for 2024, we look forward to continue to build upon the progress and the successes that we delivered in 2023 and the momentum we're enjoying so far this year. Thank you. We're happy to take your questions now.

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