Life Time Fitness’ Q4 Results Impress, No Update On Spinoff

Life Time Fitness’ Q4 Results Impress, No Update On Spinoff

The company is still exploring the option of dividing a portion of the company to independently manage its properties.

Life Time Fitness beat Wall Street’s expectations in its latest quarter but said it was still exploring options to spin off part of the company into a real estate investment trust (REIT).

The Chanhassen-based fitness center operator reported revenue growth of more than 8 percent to $315 million for the quarter ending Dec. 31. Net income was $22.4 million or 61 cents per share. That’s down slightly from about $26 million during the same time last year, but beat analysts’ expectations of 59 cents per share.

Full-year net income for Life Time was about $114.4 million, or $2.94 per share, down from $121.7 million last year.

Following last summer’s worse-than-expected earnings, Life Time’s board of directors said they were exploring the option of forming an REIT that would own, acquire and lease the company’s properties, while retaining Life Time’s fitness functions within the current structure. The company said in a statement that it was “unable to comment” on further news, but that “the board believes (an REIT) could provide substantial benefits to the company and its shareholders.”

Life Time said it expects 2015 net income of $120 million to $128 million, or $3.15 to $3.35 per share.

In recent years, a growing segment of the company has been outside of its fitness centers, including buying up rights for full- and half-marathons and the company’s Experience Life magazine.

Life Time’s stock is up 26 percent from last year. Share prices for the company dropped suddenly when the markets opened, but shot back above the previous day’s close not long after. By midday, shares were trading up slightly $58.97 per share.