Life Time Group Holdings, Inc.

Good morning and welcome to the Lifetime Group Holdings Inc. Q2 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 in your telephone keypad. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Ken Cooper, Investor Relations. Please go ahead.

Good morning, and thank you for joining us for the second quarter 2024 Lifetime Group Holdings Earnings Conference Call. With me today are Bram McCrotty, Founder, Chairman, and CEO, and Eric Weaver, Executive Vice President, 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. The company will discuss certain non-GAAP financial measures, including adjusted net income, adjusted EBITDA, adjusted diluted EPS, net debt to adjusted EBITDA, or what we refer to as net debt leverage ratio, and free cash flow. This information, along with the reconciliations to the most directly comparable GAAP measures are included, when applicable, in the company's earnings release issued this morning, our 8-K filed with the SEC, and on the investor relations section of our website. With that, I'll turn the call over to Eric.

Thank you, Ken, and good morning, everyone. As always, we appreciate you being on the call with us. We are pleased to share with you our second quarter results, the full details of which can be found in the earnings release we issued this morning. For the second quarter, total revenue increased 19% to $668 million versus the prior year quarter driven by a 20% increase in membership dues and enrollment fees and an 18% increase in in-center revenue. Access memberships increased 5% compared to last year to end the quarter at nearly 833,000 memberships. When combined with our digital on-hold memberships, total memberships ended the quarter at approximately 879,000. Average monthly dues were $198, up approximately 13% from the second quarter of last year. Revenue per actus membership increased to $794 from $701 in the prior year period as we continue to benefit from higher dues and increased consent or activity. Net income for the quarter was $53 million versus $17 million in the second quarter of 2023. Adjusted net income was $52 million, an increase of $14 million versus the second quarter, 2023. Diluted earnings per share was 26 cents compared to 8 cents per share in the second quarter last year. Adjusted EBITDA for the second quarter was $173.5 million, an increase of 28% versus the second quarter 2023, and our adjusted EBITDA margin of 26.0% increased 180 basis points as compared to the second quarter 2023. Net cash provided by operating activities increased 20% to $170 million as compared to the second quarter 2023. As a result of our strong financial performance, we generated positive free cash flow in the second quarter, In addition, we received net sale leaseback proceeds of approximately $143 million in the second quarter. Free cash flow was $175 million in the second quarter compared to $21 million in the prior year period. As a reminder, we include proceeds from sale leasebacks and the sale of land in the calculation of free cash flow. However, we are pleased to note that we delivered approximately $26 million of positive free cash flow this quarter before sale leasebacks or land sale proceeds. We reduced our net debt to adjusted EBITDA leverage to 3.0 times in the second quarter versus 4.3 times in the prior year period. We are extremely pleased with our continued financial performance and the expedited fashion in which we are achieving our key financial objectives. I will now turn the call over to Ron.