Fitness financials: Brunswick's Q2 fitness segment sales up 9 percent, plus Nautilus, Life Time Fitness

Life Fitness parent, Brunswick, reported that Q2 fitness sales rose 9 percent, Nautilus said it would consolidate manufacturing facilities, and Life Time Fitness posted a Q2 profit.
Author:
Updated:
Original:

Life Fitness parent, Brunswick, shows Q2 fitness segment sales up 9 percent

While Brunswick Corp. (NYSE: BC) swung to a second-quarter loss because it posted a hefty restructuring charge due to scaled-back production in its marine segment, its fitness segment posted a 9-percent increase in sales on higher sales of commercial equipment.

Brunswick lost $6 million, or $0.07 per share, during the April-to-July period. That compares to a year-ago profit of $57.3 million, or $0.63 per share. Revenue fell 2 percent to $1.49 billion from $1.52 billion.

The company had an operating loss of $17.2 million for the second quarter, which included $83.1 million of restructuring charges, compared with operating earnings of $86.3 million in the year-ago quarter, including the $1.1 million of restructuring charges.

Brunswick was hit by a restructuring charge of $0.59 per share, mainly related to efforts to reduce fixed costs by $300 million from 2007 spending levels by the end of next year.

Hardest hit by the declining economy was the company's boat segment, where net sales were down 6 percent to $687.9 million. The unit posted a $37.7 million operating loss.

“Life Fitness delivered a 9-percent sales increase even though the consumer portion of its business has suffered the same downward pressure I've been describing in our marine businesses,” said CEO and Chairman Dustan McCoy in a July 24 call with analysts. “Their new products and great efforts by the commercial businesses in Life Fitness were the foundation of this nice growth in sales and earnings.”

Sales for the fitness segment, with brands Life Fitness, Hammer Strength and ParaBody, were $156.9 million, up from $144.0 million in the year-ago quarter. Operating earnings for the quarter totaled $8.2 million, up from $7.4 million for the second quarter of 2007, and operating margins were 5.2 percent versus 5.1 percent a year ago.

"Sales of commercial equipment were up double digits worldwide, as Life Fitness continued to benefit from a number of new products introduced since the beginning of the year," said McCoy in a statement. "The strength in commercial equipment helped to offset a decline in the segment's consumer business. Operating earnings, which included $1.3 million in restructuring charges, improved slightly as efforts to trim costs and improve productivity continued to show results."

The company announced in June that it would reduce its hourly and salaried work force by 1,000 jobs. Furthermore, the company said it may slash up to 1,700 more jobs as further cost-cutting initiatives are completed.

Brunswick has already laid off about 1,500 marine employees and announced plans to close eight boat plants. By the time the most recent rounds of layoffs and closures are completed, Brunswick's marine division will have been cut by about 25 percent since January.

The moves are expected to reduce costs by $300 million this year. On the call, CFO Peter Leemputte said operating expenses were actually down but the decline in gross margin was driven by reduced fixed cost absorption on lower production volumes. Plus, he noted there are higher freight costs due to fuel surcharges. This will affect both the third and fourth quarters, he noted, although Life Fitness will enter its strongest selling season at that time.



Nautilus to consolidate manufacturing facilities


Nautilus (NYSE: NLS) said it is consolidating its U.S. manufacturing and distribution facilities, closing its facilities in Tulsa, Okla., by the end of the year and transferring the work to its Independence, Va., site. Nautilus distribution will be consolidated into its two centers located in Independence and Portland, Ore.

"By streamlining these functions it supports our restructuring activity to provide better efficiency in our manufacturing processes and better service for our customers," said Tim Joyce, senior vice president/general manager, in a statement.

The company said it does not plan to eliminate any major product lines as a result of the consolidation. Nautilus said it is still calculating the related cost and will release further information during its July 31 earnings conference call.

Nautilus has struggled as it tries to execute a turnaround plan amid a weak consumer spending environment. Former CEO Gregg Hamman left nearly a year ago, and a shareholder group took over control of its board in December. The company posted a loss of $6.4 million, or $0.20 per share, in the first quarter.

Shares of the company fell $0.35 to close at $5.15 on July 24.

Life Time Fitness posts Q2 profit

Life Time Fitness (NYSE:LTM) experienced a 20-percent growth spurt in its second-quarter earnings, helped by increased membership.

Net income rose to $19.8 million, or $0.50 a share, for the three months ended June 30, from $16.5 million, or $0.44 a share, in the same period last year.

Revenue rose 19 percent to $192.4 million from $162.1 million.

It said membership rose 12 percent to 547,497 in the second quarter compared with last year.

Total operating expenses during the quarter totaled $152.5 million compared to $128.6 million last year, driven primarily by increased expenses to support new centers, membership growth and presale activities.

EBITDA for the quarter grew 18.4 percent to $57.4 million from $48.5 million in 2007.

Shares of the company fell $3.94 to close at $33.63 on July 24.



For more information about any public company on this page or its financial reports, as well as to view stock prices updated every 15 minutes, visit the SNEWS® Stock Market Updates. Click on: www.snewsnet.com/cgi-bin/snews/stock_report.html.

Related

Fitness financials: Nautilus "bullish" on year, plus Brunswick, Under Armour, Life Time Fitness, Wal-Mart

Nautilus says it is "bullish" on the yearSummarizing its net sales and growth plans, Nautilus (NYSE: NLS) told analysts on a conference call announcing results for the second quarter ended June 30, 2006, that it was bullish on how it will do as the busy fitness season ramps up ...read more

Fitness financials: Brunswick's Q1 profit drops 71 percent, Life Time Fitness, Nautilus, The Sports Club, Accell Group, GSI Commerce

Brunswick's Q1 profit drops 71 percent Despite a 3-percent rise in sales for its Life Fitness division, Brunswick Corp.'s (NYSE: BC) first-quarter profit plunged 71 percent, weighed down by weaker demand for its core boat products, as well as restructuring and other charges. For ...read more

Fitness financials: Fitness segment only bright spot in Brunswick's Q4, FY06, plus Life Time Fitness, Town Sports, adidas

Fitness segment only bright spot in Brunswick's Q4, FY06 Brunswick Corp. (NYSE: BC) swung to a loss in the fourth quarter on asset impairment charges and a hefty loss from the sale of a unit, as revenue dipped 1 percent. Additionally, a decline in its marine division was ...read more

Financials.jpg

Fitness financials: Nike's Q2 profit up 9 percent

Nike's Q2 profit up 9 percent Despite weak domestic sales, Nike (NYSE: NKE) said its profit grew 9 percent in the second-quarter on strong sales overseas. Its net income rose to $391 million, or $0.80 per share, compared with net income of $359.4 million, or $0.71 per share in ...read more

Fitness financials: Q4 profit up 41 percent for Life Time Fitness, plus Wal-Mart

Q4 profit up 41 percent for Life Time Fitness Life Time Fitness (NYSE: LTM) said its quarterly profit rose 41 percent, helped by more revenue from membership dues and from in-center sales. Quarterly profit rose 41 percent to $18.4 million, or $0.46 per share, from $13 million, ...read more

Fitness financials: Cybex jumps sales 17 percent, Icon posts profit, plus Brunswick/Life Fitness, Under Armour, Life Time Fitness, Everlast, Dick's, Puma, Wal-Mart

Cybex jumps sales 17 percentContinuing its Phoenix-like rise, Cybex International (AMEX: CYB) reported that its net sales for the first quarter of 2006 ended April 1, 2006, jumped 17 percent, or $28,912,000 from $24,759,000 a year ago. Net income was $667,000, or $0.04 per ...read more

Fitness financials: Q2 revenue for Life Time Fitness up 8.7 percent, plus Accell, Finish Line

Q2 revenue for Life Time Fitness up 8.7 percent Life Time Fitness (NYSE: LTM), which operates 89 centers in 19 states, reported better-than-expected earnings and revenue for the second quarter. It posted revenue of $231.1 million for the quarter ended June 30, up 8.7 percent ...read more

Financials09sm.jpg

Fitness financials: Life Time Fitness’ Q4 revenue up 9.8 percent, plus Iconix, Hanesbrands/Champion, Nike

Life Time Fitness’ Q4 revenue up 9.8 percent Life Time Fitness (NYSE:LTM) said increasing member retention and growing same center sales boosted both its fourth-quarter and FY 2010 revenues nearly 10 percent. Fourth quarter ended Dec. 31, revenue grew 9.8 percent to $223.7 ...read more

Fitness financials: Tobacco exit drops Amer's net sales, Nautilus in position to consider acquisitions, plus Brunswick, Gaiam, Big 5, Puma, Saucony, Russell, Life Time Fitness

Tobacco exit drops Amer's YTD net sales, Precor-driven fitness division strongThe fitness equipment segment of Amer Group's sports equipment business helped bolster the Finnish company's bottom line, showing net sales in local currencies up 30 percent for the first nine months of ...read more