Fitness financials: Reebok reports 11 percent increase in Q1 net income, plus Life Time Fitness, Costco

Reebok reports 11 percent increase in Q1 net income, Life Time Fitness gets $200 million revolving credit , Costco lowers Q3 forecast
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Reebok reports 11 percent increase in Q1 net income
For the 2005 first quarter, Reebok International (NYSE: RBK) reported net income of $43 million, or $0.70 per diluted share, an earnings per share increase of 11 percent when compared to net income of $41 million, or $0.63 per diluted share for the first quarter of 2004. The company beat analyst estimates of $0.69 a share.  

Net sales for the 2005 first quarter were $925 million, an increase of 11 percent from 2004's first quarter net sales of $832 million. The acquisition of The Hockey Company, effective in June 2004, favorably impacted sales comparisons, as did foreign currency exchange rate fluctuations.

For the Reebok Brand, worldwide sales in the 2005 first quarter increased 12 percent to $783 million compared to 2004's first quarter sales of $697 million.

In the United States, sales for the Reebok Brand increased 8 percent in the first quarter as compared with 2004's first quarter. Reebok's U.S. footwear sales in the first quarter were $273 million, an increase of 5 percent over last year's $261 million -- marking the 11th consecutive quarter of sales growth for its U.S. footwear business.

The company's international sales of Reebok branded products amounted to $397 million in the quarter, an increase of 17 percent over 2004. On a constant dollar basis, first-quarter international sales increased approximately 13 percent over the prior year's first quarter sales. Internationally, sales of footwear products increased 22 percent and sales of apparel products increased 11 percent. On a constant dollar basis international footwear sales increased 17 percent, and international apparel sales increased 7 percent.

Reebok also reported that its total worldwide backlog of open customer orders (including those of The Hockey Company) scheduled for delivery from April 2005 through September 2005 for the Reebok Brand increased 4 percent from the prior year's comparable amount. On a constant dollar basis, worldwide backlog for the Reebok Brand increased 2 percent.

Life Time Fitness gets $200 million revolving credit
Life Time Fitness (NYSE: LTM) has entered into a $200 million, five-year revolving credit facility with a syndicate of eight banks to refinance its existing revolving credit facility, finance the construction and development of new centers, and for other general corporate purposes. U.S. Bank, N.A., is the lead arranger, JPMorgan Chase Bank, N.A., is the syndication agent, and the additional members of the syndicate include M&I Marshall & Ilsley Bank; National City Bank of the Midwest; Merrill Lynch Capital; Harris Trust and Savings Bank; Associated Bank, N.A.; and MB Financial Bank, N.A. The revolving credit facility bears interest at LIBOR plus a spread of 100 to 200 basis points based on the company's consolidated leverage ratio. The new agreement replaces the company's existing $55 million revolving credit facility, led by Antares Capital Corp., and $75 million construction credit facility, led by U.S. Bank, N.A.

Costco lowers Q3 forecast
Costco Wholesale Corp. warned profit for the second half of its fiscal year will fall below Wall Street's expectations, because surging wholesale gasoline prices have squeezed margins at the company's retail pumps. It now expects earnings of 41 cents to 43 cents a share for the third quarter ending May 8, and forecast earnings between $1.98 and $2.04 a share for the year ending Aug. 28. Analysts said they are expecting 46 cents and $2.10 a share for the third quarter and full year, respectively. Shares of Costco dropped as much as 10 percent on April 22, ultimately ending the day at $40.17, down 8.75 percent. Separately, Costco raised its quarterly dividend to 11.5 cents from 10 cents. The new dividend rate is payable May 27 to shareholders of record May 6.

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