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Life Time will be at pre-pandemic levels by end of the year: CEO

Bahram Akradi, Life Time Group Holdings Chairman, CEO & Founder, joins Yahoo Finance Live following his company's public debut.

Video Transcript

ZACK GUZMAN: Welcome back in to "Yahoo Finance Live." We are watching shares as this IPO trend continues to run hot here in 2021. But one company here making its debut is seeing shares drop by about 3 and 1/2% in their debut. After opening at $16.57, we're seeing lifetime shares come down a bit from the $18 pricing in that IPO. That was at the bottom of its range of $18 to $21 a share.

It's an interesting time for a gym company to becoming public. As we've talked about, a lot of questions around what the future of gyms in the post-pandemic world might look like. And for more on all of that, I'm happy to welcome in here the founder and CEO of Life Time Group Holdings. Bahram Akradi joins us right now. I mean, when we look at it, it's interesting, because we've seen so much enthusiasm for some of these companies coming out stronger on the other side of the pandemic. So talk to me about what you guys are seeing at Life Time now.

BAHRAM AKRADI: So everything is going fantastic. Our members are coming back. And members of other places that have shut down are coming to Life Time. Life Time is a healthy-way-of-life company. It's an athletic resort of complexes that we have, everything from swimming to basketball to tennis. Outdoor pools. These are not gyms. They are not fitness centers. They're not studios. They are more like a Vail resort or Disney World, in a way.

Each club takes, you know, four, five, six years of time to find the land, develop, build. The barrier to entry is significant. It's a one-of-a-kind company. We address all aspects of healthy living and healthy aging. And members love the company. Shareholders who were shareholders before are some of the biggest shareholders who signed up again this time.

So we're super excited. We're positioned to win. And over the pandemic, we basically revolutionarily changed the company and created everything to go into an omnichannel. See, from a digital standpoint, Life Time has the ability to be one of the most formidable companies in the world. We have more than 750 studios. We have more than 6,000 performers. We have more than 30, 40 different brands. So we have the ability to continue to deliver an omnichannel experience that addresses all aspects of healthy living and healthy aging.

AKIKO FUJITA: So talk to me a bit more about that omnichannel experience, how you think fundamentally the way in which people approach these gyms, fitness centers-- however you want to characterize it-- coming out of the pandemic. And where do you position yourself? Who's your biggest competitor?

BAHRAM AKRADI: Yeah, so we don't have a competitor in US or around the world. These athletic resorts, if you ever get the chance to go to one, you'll see. There are about 120,000, 150,000 square feet under roof. There are another 60,000, 70,000 square feet of outdoor resort space. And we deliver a Four Seasons, Ritz Carleton experience.

Many of the customers, as clubs had the opportunity to reopen, when they came back, they basically said this is the safest place they feel out of any place. We spent an enormous amount of time. During pandemic, we put a 450-page manual that basically helped people come in super safe, super healthy. This was hailed by many of the health department stores as the absolutely best they had ever seen in terms of health and well-being. But that's how we do everything at Life Time.

ZACK GUZMAN: Yeah, I mean, I guess, you know, when you dig into the price action of the IPO coming in below where shares priced at 18 bucks-- and trading below on day one here-- I mean, I wonder what investors are cluing into. And I suppose one thing worth highlighting is the net loss in the first six months of the year larger than what you guys posted last year, 229 million versus 183 million. When you look ahead in terms of profitability and getting that increased, I mean, what does it look like in the post-pandemic world, and what should investors know on that front?

BAHRAM AKRADI: Great question. First of all, Life Time-- half of our customers that come to us, they come to us for reasons other than fitness. Like I said, swimming, tennis, basketball, you know, and kids academy or summer camps or the outdoor pool resorts. These are not things you cannot do from home. So when other people in just the gym space or a fitness space get hurt and they can't keep their doors back open, they have orphaned customers that come to Life Time.

Furthermore, in the 3Q, we basically substantially improved our EBITDA. Because after June, where we turned positive, most of our revenue, when it comes in forms of dues, once we are profitable, 85%, 90% of the revenue coming in from our subscription is pure profit. So the company is accelerating rapidly under recovery of our EBITDA and our membership. So we expect sometime next year we will see our clubs reaching those levels of 2019, even the levels that are higher. But by end of the year, we'll have-- towards the end of the year, we'll have our memberships back to high levels. So we are very confident, based on the trends we see, that we're going to be where we used to be and get far beyond it.