8-K
Life Time Group Holdings, Inc. (LTH)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 11, 2022
Life Time Group Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40887 | 47-3481985 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (IRS Employer<br><br>Identification No.) |
2902 Corporate Place
Chanhassen, Minnesota 55317
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (952) 947-0000
N/A (Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
|---|---|---|
| Common stock, par value $0.01 per share | LTH | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 11, 2022, Life Time Group Holdings, Inc., a Delaware corporation (the “Company”), issued a press release announcing its financial results for the first quarter ended March 31, 2022. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit<br><br>Number | Description |
|---|---|
| 99.1 | Earnings Release of Life Time Group Holdings, Inc., dated May11, 2022. |
| 104 | Cover page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Life Time Group Holdings, Inc. | ||
|---|---|---|
| Date: May 11, 2022 | By: | /s/ Thomas E. Bergmann |
| Thomas E. Bergmann | ||
| President and Chief Financial Officer |
3
Document
Exhibit 99.1
Life Time Reports First Quarter Fiscal 2022 Financial Results
CHANHASSEN, Minn. (May 11, 2022) – Life Time Group Holdings, Inc. (“Life Time,” “we,” “our,” “us,” or the “Company”) (NYSE: LTH) today announced its financial results for the fiscal first quarter ended March 31, 2022.
Bahram Akradi, Founder, Chairman and CEO, stated: “We are very pleased with the momentum in our business and the pace of our recovery as Omicron-related restrictions were lifted in our markets. Our investments to elevate and broaden our member experiences are strengthening our position as the premium athletic country club destination with nearly 1.3 million members. We continue to see significant opportunities for new club growth and remain on track to open 12 new athletic country clubs this year. We also remain committed to strengthening our balance sheet and, on or about May 13, we will have closed on four sale leaseback transactions during 2022 with year-to-date proceeds of $175 million. Further, we are currently evaluating opportunities to monetize up to an additional $500 million of our owned real estate prior to the end of the third quarter.”
First Quarter 2022 Results and Prior Year Comparisons
•Total revenue increased 57.3% to $392.3 million from $249.3 million.
•Comparable center sales increased 50.3%.
•Center memberships totaled 673,983 on March 31, 2022, an increase of 23.8% from 544,216 on March 31, 2021, and up by 24,610 from December 31, 2021.
•Net loss was $38.0 million and included a tax-effected one-time net benefit of $6.1 million, including a $26.4 million gain on sale leasebacks offset by $19.9 million in non-cash share-based compensation expense and $0.4 million in IPO- and COVID-19-related expenses.
•Adjusted EBITDA increased to $40.6 million from $(18.9) million.
New Center Openings
•During the first quarter of 2022, the Company opened two new centers and operated a total of 153 centers as of March 31, 2022.
•The Company currently plans to open a total of 12 new centers in 2022 and 11 or more during 2023.
Cash Flow Highlights
•As of March 31, 2022, the Company had total cash and cash equivalents of $41.1 million and had $30.0 million in borrowings under its $475 million revolving credit facility.
•Net cash provided by operating activities totaled $9.1 million for the quarter ended March 31, 2022, compared to net cash used of $38.2 million in the prior year period.
•Free cash flow before growth capital expenditures totaled $(35.3) million for the quarter ended March 31, 2022, compared to $(53.9) million in the prior year period.
Sale Leaseback
As previously announced, the Company entered into definitive agreements for the sale-leaseback of four properties in transactions valued in the aggregate at $175 million with an institutional real estate investor that has entered into multiple sale-leaseback transactions with the Company previously. Two of these properties closed during March for approximately $80 million in gross proceeds and the remaining two are planned to close on or about May 13, 2022, for approximately $95 million in gross proceeds to Life Time. The Company is also evaluating opportunities to monetize up to an additional $500 million in real estate prior to September 30, 2022.
Outlook
For the second quarter ending June 30, 2022, the Company is projecting revenue, net loss, and Adjusted EBITDA to be in the ranges of $450 to $470 million, $(25) to $(20) million, and $63 to $68 million, respectively.
Conference Call Details
A conference call to discuss the Company’s first quarter financial results is scheduled for today, May 11, 2022, at 8:30 a.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 877-451-6152 (international callers should dial 1-201-389-0879) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at https://ir.lifetime.life/. A recorded replay of the conference call will be available after the conclusion of the call and will be available for a period of time online at https://ir.lifetime.life/.
#
About Life Time®
Life Time (NYSE: LTH) empowers people to live healthy, happy lives through its portfolio of nearly 160 athletic country clubs across the United States and Canada. The Company's healthy way of life communities address all aspects of healthy living, healthy aging and healthy entertainment for those 90 days to 90+ years with integrity and respect for everyone. With a team of more than 30,000, Life Time is committed to providing the best programs and experiences through its athletic country clubs, iconic athletic events and via a complementary and comprehensive digital platform.
Use of Non-GAAP Financial Measures and Key Performance Indicators
This press release includes certain financial measures that are not presented in accordance with the generally accepted accounting principles in the United States (“GAAP”), including Adjusted EBITDA and free cash flow before growth capital expenditures. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should be considered in addition to, and not as a substitute for or superior to, net loss as a measure of financial performance or any other performance measure derived in accordance with GAAP and should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP financial measures should be read in conjunction with the Company’s financial statements prepared in accordance with GAAP. The reconciliations of the Company’s non-GAAP financial measures to the corresponding GAAP measures should be carefully evaluated.
Adjusted EBITDA is defined as net income (loss) before interest expense, net, provision for (benefit from) income taxes and depreciation and amortization, excluding the impact of share-based compensation expense, (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of the Company’s ongoing operations, including incremental costs related to COVID-19. Free cash flow before growth capital expenditures is defined as net cash provided by (used in) operating activities less center maintenance capital expenditures and corporate capital expenditures.
The Company presents these non-GAAP financial measures because management believes that these measures assist investors and analysts in comparing the Company’s operating performance across reporting periods on a consistent basis by excluding items that management does not believe are indicative of the Company’s ongoing operating performance. Investors are encouraged to evaluate these adjustments and the reasons the Company considers them appropriate for supplemental analysis. In evaluating the non-GAAP financial measures, investors should be aware that, in the future, the Company may incur expenses that are the same as or similar to some of the adjustments in the Company’s presentation of its non-GAAP financial measures. There can be no assurance that the Company will not modify the presentation of non-GAAP financial measures in future periods, and any such modification may be material. In addition, the Company’s non-GAAP financial measures may not be comparable to similarly titled measures used by other companies in the Company’s industry or across different industries.
The non-GAAP financial measures have limitations as analytical tools, and investors should not consider these measures in isolation or as substitutes for analysis of the Company’s results as reported under GAAP.
The Company includes a center, for comparable center sales purposes, beginning on the first day of the 13th full calendar month of the center’s operation, in order to assess the center’s growth rate after one year of operation.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of federal securities regulations. Forward-looking statements in this press release include, but are not limited to, the Company’s plans, strategies and prospects, both business and financial, including its financial outlook for the second quarter ending June 30, 2022, opportunities for growth, consumer demand, industry trends, expected number of new center openings and successful closings of sale-leaseback transactions (including the amount, pricing and timing thereof). These statements are based on the beliefs and assumptions of the Company’s management. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning the Company’s possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.
Factors that could cause actual results to differ materially from those forward-looking statements included in this press release include, but are not limited to, risks relating to our business operations and competitive environment, risks relating to our brand, risks relating to the growth of our business, risks relating to our technological operations, risks relating to our capital structure, risks relating to our human capital, risks relating to legal compliance and risk management, risks relating to our financial performance and risks relating to ownership of our common stock and the other important factors discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on March 10, 2022 (File No. 001-40887), as such factors may be updated from time to time in the Company’s other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov.
These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any forward-looking statement that the Company makes in this press release speaks only as of the date of such statement. Except as required by law, the Company does not have any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise.
Contacts
Investors
John Rouleau, ICR // investorrelations@lifetime.life
Media
Jason Thunstrom, Life Time Corporate Communications // jthunstrom@lifetime.life or 952-229-7435
LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended<br>March 31, | ||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| Revenue: | ||||
| Center revenue | $ | 381,621 | $ | 245,094 |
| Other revenue | 10,633 | 4,204 | ||
| Total revenue | 392,254 | 249,298 | ||
| Operating expenses: | ||||
| Center operations | 239,573 | 174,615 | ||
| Rent | 55,964 | 50,517 | ||
| General, administrative and marketing | 66,561 | 38,270 | ||
| Depreciation and amortization | 58,107 | 61,206 | ||
| Other operating (income) expense | (17,035) | 6,934 | ||
| Total operating expenses | 403,170 | 331,542 | ||
| Loss from operations | (10,916) | (82,244) | ||
| Other (expense) income: | ||||
| Interest expense, net of interest income | (29,943) | (96,217) | ||
| Equity in earnings (loss) of affiliate | 26 | (293) | ||
| Total other expense | (29,917) | (96,510) | ||
| Loss before income taxes | (40,833) | (178,754) | ||
| Benefit from income taxes | (2,867) | (25,953) | ||
| Net loss | $ | (37,966) | $ | (152,801) |
| Loss per common share—basic and diluted | $ | (0.20) | $ | (1.08) |
| Weighted-average common shares outstanding—basic and diluted | 192,465 | 145,196 |
LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
| March 31,<br>2022 | December 31,<br>2021 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 41,096 | $ | 31,637 |
| Accounts receivable, net | 9,716 | 6,464 | ||
| Center operating supplies and inventories | 41,966 | 41,007 | ||
| Prepaid expenses and other current assets | 47,818 | 48,883 | ||
| Income tax receivable | 2,465 | 3,533 | ||
| Total current assets | 143,061 | 131,524 | ||
| Property and equipment, net | 2,789,418 | 2,791,464 | ||
| Goodwill | 1,233,176 | 1,233,176 | ||
| Operating lease right-of-use assets | 1,935,352 | 1,864,528 | ||
| Intangible assets, net | 173,766 | 174,241 | ||
| Other assets | 58,667 | 61,742 | ||
| Total assets | $ | 6,333,440 | $ | 6,256,675 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 75,592 | $ | 71,308 |
| Construction accounts payable | 86,038 | 83,311 | ||
| Deferred revenue | 40,565 | 33,871 | ||
| Accrued expenses and other current liabilities | 141,175 | 147,920 | ||
| Current maturities of debt | 23,793 | 23,527 | ||
| Current maturities of operating lease liabilities | 46,679 | 46,315 | ||
| Total current liabilities | 413,842 | 406,252 | ||
| Long-term debt, net of current portion | 1,804,082 | 1,775,719 | ||
| Operating lease liabilities, net of current portion | 1,971,743 | 1,909,883 | ||
| Deferred income taxes | 51,391 | 55,213 | ||
| Other liabilities | 15,382 | 18,216 | ||
| Total liabilities | 4,256,440 | 4,165,283 | ||
| Stockholders’ equity: | ||||
| Common stock, $0.01 par value per share; 500,000 shares authorized; 193,060 shares issued and outstanding | 1,931 | 1,931 | ||
| Additional paid-in capital | 2,765,503 | 2,743,560 | ||
| Accumulated deficit | (689,049) | (651,083) | ||
| Accumulated other comprehensive loss | (1,385) | (3,016) | ||
| Total stockholders’ equity | 2,077,000 | 2,091,392 | ||
| Total liabilities and stockholders’ equity | $ | 6,333,440 | $ | 6,256,675 |
LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Three Months Ended<br>March 31, | ||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| Cash flows from operating activities: | ||||
| Net loss | $ | (37,966) | $ | (152,801) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
| Depreciation and amortization | 58,107 | 61,206 | ||
| Deferred income taxes | (3,885) | (28,632) | ||
| Share-based compensation | 21,438 | — | ||
| Non-cash rent expense | 6,009 | 4,323 | ||
| Impairment charges associated with long-lived assets | 227 | 900 | ||
| (Gain) loss on disposal of property and equipment, net | (28,597) | 862 | ||
| Loss on debt extinguishment | — | 40,993 | ||
| Write-off of discounts and debt issuance costs | — | 18,325 | ||
| Amortization of debt discounts and issuance costs | 1,945 | 2,473 | ||
| Changes in operating assets and liabilities | (5,638) | 16,963 | ||
| Other | (2,578) | (2,768) | ||
| Net cash provided by (used in) operating activities | 9,062 | (38,156) | ||
| Cash flows from investing activities: | ||||
| Capital expenditures | (110,754) | (43,329) | ||
| Proceeds from sale-leaseback transactions | 79,666 | 33,423 | ||
| Other | 4,805 | (1,167) | ||
| Net cash used in investing activities | (26,283) | (11,073) | ||
| Cash flows from financing activities: | ||||
| Proceeds from borrowings | 3,198 | 1,907,577 | ||
| Repayments of debt | (5,745) | (1,586,777) | ||
| Proceeds from senior secured credit facility | 230,000 | 15,000 | ||
| Repayments of senior secured credit facility | (200,000) | (109,000) | ||
| Repayments of finance lease liabilities | (358) | (372) | ||
| Increase in debt discounts and issuance costs | — | (42,246) | ||
| Other | (476) | — | ||
| Net cash provided by financing activities | 26,619 | 184,182 | ||
| Effect of exchange rates on cash and cash equivalents | 61 | 18 | ||
| Increase in cash and cash equivalents | 9,459 | 134,971 | ||
| Cash and cash equivalents—beginning of period | 31,637 | 33,195 | ||
| Cash and cash equivalents—end of period | $ | 41,096 | $ | 168,166 |
Non-GAAP Measurements and Key Performance Indicators
See “Use of Non-GAAP Financial Measures and Key Performance Indicators” for a discussion of the Non-GAAP financial measures reconciled below.
Key Performance Indicators
($ in thousands, except for Average Center revenue per center membership)
(Unaudited)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | ||||||
| 2022 | 2021 | |||||
| Membership Data | ||||||
| Center memberships | 673,983 | 544,216 | ||||
| Digital On-hold memberships | 70,289 | 196,746 | ||||
| Total memberships | 744,272 | 740,962 | ||||
| Revenue Data | ||||||
| Membership dues and enrollment fees | 71.3 | % | 71.5 | % | ||
| In-center revenue | 28.7 | % | 28.5 | % | ||
| Total Center revenue | 100.0 | % | 100.0 | % | ||
| Membership dues and enrollment fees | $ | 271,915 | $ | 175,307 | ||
| In-center revenue | 109,706 | 69,787 | ||||
| Total Center revenue | $ | 381,621 | $ | 245,094 | ||
| Average Center revenue per center membership (1) | $ | 580 | $ | 459 | ||
| Comparable center sales (2) | 50.3 | % | (39.4) | % | ||
| Center Data | ||||||
| Net new center openings (3) | 2 | 1 | ||||
| Total centers (end of period) (3) | 153 | 150 | ||||
| Total center square footage (end of period) (4) | 15,300,000 | 14,900,000 | ||||
| GAAP and Non-GAAP Financial Measures | ||||||
| Net loss | $ | (37,966) | $ | (152,801) | ||
| Net loss margin (5) | (9.7) | % | (61.3) | % | ||
| Adjusted EBITDA (6) | $ | 40,626 | $ | (18,947) | ||
| Adjusted EBITDA margin (6) | 10.4 | % | (7.6) | % | ||
| Center operations expense | $ | 239,573 | $ | 174,615 | ||
| Pre-opening expenses (7) | $ | 1,387 | $ | 2,560 | ||
| Rent | $ | 55,964 | $ | 50,517 | ||
| Non-cash rent expense (open properties) (8) | $ | 1,068 | $ | 237 | ||
| Non-cash rent expense (properties under development) (8) | $ | 4,941 | $ | 4,086 | ||
| Net cash provided by (used in) operating activities | $ | 9,062 | $ | (38,156) | ||
| Free cash flow before growth capital expenditures (9) | $ | (35,256) | $ | (53,915) |
(1) We define Average Center revenue per center membership as Center revenue less Digital On-hold revenue, divided by the average number of Center memberships for the period, where the average number of Center
memberships for the period is an average derived from dividing the sum of the total Center memberships outstanding at the beginning of the period and at the end of each month during the period by one plus the number of months in each period.
(2) We measure the results of our centers based on how long each center has been open as of the most recent measurement period. We include a center, for comparable center sales purposes, beginning on the first day of the 13th full calendar month of the center’s operation, in order to assess the center’s growth rate after one year of operation.
(3) Net new center openings are the number of centers that opened for the first time to members during the period, less any centers that closed during the period. Total centers (end of period) is the number of centers operational as of the last day of the period. As of March 31, 2022, all of our 153 centers were open.
(4) Total center square footage (end of period) reflects the aggregate fitness square footage, which we use as a metric for evaluating the efficiencies of a center as of the end of the period. The square footage figures exclude areas used for tennis courts, outdoor swimming pools, outdoor play areas and stand-alone Work, Sport and Swim locations. These figures are approximations.
(5) Net loss margin is calculated as net loss divided by total revenue.
(6) We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net income (loss) before interest expense, net, provision for (benefit from) income taxes and depreciation and amortization, excluding the impact of share-based compensation expense, (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, including incremental costs related to COVID-19.
Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue.
The following table provides a reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA:
| Three Months Ended | |||
|---|---|---|---|
| March 31, | |||
| 2022 | 2021 | ||
| ( in thousands) | |||
| Net loss | $ | (152,801) | |
| Interest expense, net of interest income (a) | 29,943 | 96,217 | |
| Benefit from income taxes | (2,867) | (25,953) | |
| Depreciation and amortization | 58,107 | 61,206 | |
| Share-based compensation expense (b) | 21,438 | — | |
| COVID-19 related expenses (c) | 212 | 298 | |
| (Gain) loss on sale-leaseback transactions (d) | (28,372) | 798 | |
| Other (e) | 131 | 1,288 | |
| Adjusted EBITDA | $ | (18,947) |
All values are in US Dollars.
(a) For the three months ended March 31, 2021, we incurred a non-cash expense of $41.0 million related to the extinguishment of a related party secured loan and $18.3 million related to the write-off of debt discounts and issuances costs in connection with the extinguishment of senior secured notes and the related party secured loan.
(b) Share-based compensation expense recognized during the three months ended March 31, 2022 is associated with stock options, restricted stock and restricted stock units. The majority of this expense was associated with awards which were fully vested and exercisable as of April 4, 2022. No share-based compensation expense was recognized during the three months ended March 31, 2021, because the vesting and exercisability of stock options granted by the Company up through March 31, 2021 was contingent upon the occurrence of a change of control or an initial public offering.
(c) Represents the incremental net expenses we recognized related to the COVID-19 pandemic. We adjust for these costs as they do not represent costs associated with our normal ongoing operations. We believe that adjusting for these costs provides a more accurate and consistent representation of our actual operating performance from period to period. For the three months ended March 31, 2022 and 2021, COVID-19 related expenses primarily consisted of legal related costs.
(d) We adjust for the impact of gains or losses on the sale-leaseback of our properties as they do not reflect costs associated with our ongoing operations.
(e) Includes costs associated with incremental expenses related to a winter storm resulting in historical freezing temperatures affecting our Texas region and other transactions which are unusual and non-recurring in nature.
(7) Represents non-capital expenditures associated with opening new centers which are incurred prior to the commencement of a new center opening. The number of centers under construction or development, the types of centers and our costs associated with any particular center opening can vary significantly from period to period.
(8) Reflects the non-cash portion of our annual GAAP operating lease expense that is greater or less than the cash operating lease payments. Non-cash rent expense for our open properties represents non-cash expense associated with properties that were operating at the end of each period presented. Non-cash rent expense for our properties under development represents non-cash expense associated with properties that are still under development at the end of each period presented.
(9) Free cash flow before growth capital expenditures, a non-GAAP financial measure, is calculated as net cash provided by (used in) operating activities less center maintenance capital expenditures and corporate capital expenditures.
The following table provides a reconciliation from net cash provided by (used in) operating activities to free cash flow before growth capital expenditures:
| Three Months Ended | |||
|---|---|---|---|
| March 31, | |||
| 2022 | 2021 | ||
| ( in thousands) | |||
| Net cash provided by (used in) operating activities | $ | (38,156) | |
| Center maintenance capital expenditures | (16,396) | (7,692) | |
| Corporate capital expenditures | (27,922) | (8,067) | |
| Free cash flow before growth capital expenditures | $ | (53,915) |
All values are in US Dollars.
Capital Expenditures Summary
($ in thousands)
(Unaudited)
| Three Months Ended | ||||
|---|---|---|---|---|
| March 31, | ||||
| 2022 | 2021 | |||
| Growth capital expenditures (new center land and construction, growth initiatives, major remodels of acquired centers and the purchase of previously leased centers), net of construction reimbursements | $ | 66,436 | $ | 27,570 |
| Center maintenance capital expenditures | 16,396 | 7,692 | ||
| Corporate capital expenditures | 27,922 | 8,067 | ||
| Total capital expenditures | $ | 110,754 | $ | 43,329 |
Proceeds from Sale-Leaseback Transactions
($ in thousands)
(Unaudited)
| Three Months Ended | ||||
|---|---|---|---|---|
| March 31, | ||||
| 2022 | 2021 | |||
| Proceeds from sale-leaseback transactions | $ | 79,666 | $ | 33,423 |
Reconciliation of Net Loss to Adjusted EBITDA Guidance for Second Quarter of 2022
($ in millions)
(Unaudited)
| Three Months Ended | |
|---|---|
| June 30, 2022 | |
| Net loss | $(25.0) - (20.0) |
| Interest expense, net of interest income | 29.0 - 28.1 |
| Benefit from income taxes | (2.9) - (2.5) |
| Depreciation and amortization | 56.6 - 57.1 |
| Share-based compensation expense | 5.3 - 5.3 |
| Adjusted EBITDA | $63.0 - 68.0 |