Life Time Group Holdings, Inc.

Greetings and welcome to the Lifetime Group Holdings, Inc. Q3 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ken Cooper, Investor Relations. Please go ahead.

Good morning and thank you for joining us for the third 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 the 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 also 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 8K filed with the SEC, and on the investor relations section of our website. With that, I will turn the call over to Eric.

Thank you, Ken, and good morning, everyone. We appreciate you joining us this morning. We're excited to share with you our third quarter results, the full details of which can be found in the earnings release we issued this morning. For the third quarter, total revenue increased 18% to $693 million, driven by a 20% increase in membership dues and enrollment fees and a 16% increase in in-center revenue. Center memberships increased 5% compared to last year to end the quarter at more than 826,000 memberships. When combined with our digital on-hold memberships, total memberships ended the quarter at approximately 877,000. Average monthly dues were $198, up approximately 13% from the third quarter of last year. Average revenue per center membership increased to $815 from $722 in the prior year period, as we continued to benefit from higher dues and increased in-center activity. Net income for the third quarter was $41.4 million versus $7.9 million in the third quarter 2023. Adjusted net income was $56.3 million versus $26.7 million in the prior year period, an increase of $29.6 million. Diluted earnings per share was $0.19 compared to $0.04 per share in the third quarter last year and $0.26 per share on an adjusted basis compared to $0.13 in the prior year period. This was an increase of 100% versus the prior year period. Adjusted EBITDA for the third quarter was $180.3 million, an increase of 26% versus $143.0 million in the third quarter 2023, and our adjusted EBITDA margin of 26.0% increased 160 basis points as compared to the third quarter 2023. Net cash provided by operating activities increased 32% to $151 million as compared to the third quarter 2023. For the second consecutive quarter, we achieved positive free cash flow. Free cash flow increased by $169 million to $138 million in the third quarter compared to the prior year period. While this number includes sale leaseback and land sale proceeds of $74 million for the quarter, we achieved positive free cash flow prior to these proceeds. We reduced our net debt to adjusted EBITDA leverage to 2.4 times in the third quarter versus 3.7 times in the prior year period. With that, I will now pass the call over to Bram. Bram?