Life Time Group Holdings (LTH) risk factors, FY2024 10-K

Risks Relating to Our Business Operations and Competitive Environment

1. 01We may be unable to attract and retain members and we may not effectively optimize revenue per center membership, either of which could have a negative effect on our business, results of operations and financial condition
2. 02Our business, results of operations and prospects may be adversely affected by the environments in which we operate, including with respect to the macroeconomy, the political climate, global pandemics or other health crises, severe weather, natural disasters, hostilities, gun violence and social unrest
3. 03Our business could be adversely affected by competition in the competitive health, fitness and wellness industry
4. 04Our dependence on third-party suppliers for equipment and certain products and services could result in disruptions to our business and could adversely affect our business, results of operations and financial condition

Risks Relating to Our Brand

1. 05Our business depends on the quality and reputation of our brand, and any deterioration in the quality or reputation of our brand or in the health, fitness and wellness industry could materially adversely affect our market share, business, results of operations and financial condition
2. 06Use of social media platforms, and email, text messaging, phone and social media marketing, may adversely impact our reputation, business, results of operations, and financial condition or subject us to fines or other penalties
3. 07Our intellectual property rights may be inadequate to protect our business or may be infringed, misappropriated or challenged by others. We may also become involved in costly litigation or be required to pay royalties or fees

Risks Relating to the Growth of Our Business

1. 08If we are unable to successfully execute our asset-light growth strategy, our results of operations, cash flow and return on invested capital may be negatively impacted. Our center profitability may decline as we open new centers
2. 09Delays in new center openings could have an adverse effect on our growth
3. 10Our growth and changes in the industry could place strains on our management, employees, information systems and internal controls, which may adversely impact our business
4. 11We may incur significant costs in the development and implementation of new or re-imagined businesses or strategies with no guarantee of success

Risks Relating to Our Technological Operations

1. 12We rely on technology and if we are unable to adapt to significant and rapid technological change and deliver connected and digital experiences, we may not compete effectively and our business could be adversely affected
2. 13Risks related to our acceptance of ACH, credit card, debit card and digital payments could harm our brand or our results of operations

Risks Relating to Our Capital Structure and Lease Obligations

1. 14Our indebtedness and lease obligations, and the restrictive covenants in the documents governing such indebtedness and lease obligations, could adversely affect our financial condition and impact our ability to grow our business, take certain actions or respond to changes in the economy or our industry
2. 15economic conditions, pandemics or epidemics and changes in regulations, and there is no assurance that we will be able to comply with such covenants
3. 16Rates under our senior secured credit facility are variable, which has and could result in increased debt service obligations and decreased net income and cash flows
4. 17We may not be able to generate sufficient cash to service all of our indebtedness and lease obligations and may be forced to take other actions to satisfy our obligations, which may not be successful
5. 18Our ability to raise capital in the future may be limited, which could impact our operations and ability to grow

Risks Relating to Our Human Capital

1. 19If we cannot retain our key employees and hire additional qualified employees, we may not be able to successfully lead and run our businesses, achieve our growth targets and pursue our strategic objectives. We may also continue to face increased labor costs that could reduce our profitability
2. 20Attempts by labor organizations to organize groups of our employees or changes in labor laws could disrupt our operations or increase our labor costs

Risks Relating to Legal Compliance and Risk Management

1. 21We are subject to extensive governmental laws and regulations, and changes in these laws and regulations could have a negative effect on our results of operations and financial condition
2. 22We could be subject to claims related to the development, construction or operation of our facilities and the use, condition or content of our premises, facilities, equipment, mobile application, services, activities or products, which could have a negative effect on our results of operations and financial condition
3. 23We could be subject to claims related to our health, fitness and wellness-related offerings or other claims, and the value and reputation of our brand may suffer
4. 24We may not be able to maintain the required type or level of insurance coverage on acceptable terms or at an acceptable cost

Risks Relating to Ownership of Our Common Stock

1. 25Our share price has and may change significantly, and stockholders may not be able to resell our common stock at or above the price per share paid or at all
2. 26These broad market and industry fluctuations may materially adversely affect the market price of our common stock, regardless of our actual operating performance
3. 27Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market price for our common stock to decline
4. 28We are controlled by certain of our stockholders, whose interests may not be aligned with yours
5. 29We are a “controlled company” within the meaning of the NYSE rules and the rules of the SEC. As a result, we qualify for and are currently relying on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies
6. 30Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management
7. 31Our ability to use our net operating loss carryforwards and certain other tax attributes may become subject to limitation