Ending its first full year as a member of Finland's Amer Sports Group, Precor showed all-time highs in results, with big jumps in operating profits.
Operating profits were Euro 26.8 million, compared to 2002's pro forma results of Euro 23.4 million. Net sales were up 3 percent when using comparable figures in local currencies (Euro 177 million for the year).
Those figures from its fitness division helped Helsinki-based Amer maintain similar sales to its 2002 report -- and boost its operating profit by Euro 14.9 million -- despite an unprofitable year for its golf division and a weak dollar lowering operating profits slightly.
"Market conditions in the sports equipment industry were challenging," Amer's year-end report stated. "In the first half of the year, the market suffered from weak demand for sports equipment, especially in the United States."
However, the group said it sees an upswing in the future and that it believes "demand will be somewhat brisker in 2004."
In the past, Amer has said its goal of being the worldwide leader in sporting goods cannot come only from organic growth; however, now Amer said it is aiming to increase its net sales by at least 10 percent annually and to keep operating profit to about 10 percent of net sales -- with its "primary focus" now being organic.
"The company actively monitors structural change within the industry and is ready to make acquisitions that fit in with its strategy and thereby will strengthen Amer Sports as a whole," the year-end report summarized.
Being a part of a larger family has been good for Precor. Sales of its stationary bikes showed the strongest growth; it has begun to tap in successfully and to reap the benefits by Amer's distribution network; and Amer has added to Precor's strength by acquiring both strength brand Icarian (FPI) and entertainment network ClubCom, both in the first quarter of 2004.
The stage is now set, according to the report, for Precor's net sales in local currencies "to rise substantially" along with operating profit.
Precor's net sales for the fourth quarter of 2003 were Euro 48.4 million, compared to Euro 39.5 million for the fourth quarter of 2002. Operating profit was Euro 7.5 million, or Euro 1.2 million higher than its fourth-quarter 2002 figure of Euro 6.3 million. (Note that we haven't translated the Euros in Amer's reports to USD because of currency fluctuations that would taint the numbers.)
Company-wide, Amer Sports (also parent to winter sports specialist Atomic, sporting goods giant Wilson, and sports instrument company Suunto) experienced similar net sales to 2002 (Euro 1,104.4 million), with 51 percent of sales in North America and 37 percent in Europe (both flat).
"Withdrawal from the tobacco business will complete Amer Group's evolution into a pure sports equipment company focused on achieving its goal of becoming the world leader in its field," the report stated, noting the company's expected retreat from tobacco by the end of March 2004. "Amer Group is convinced that the sports equipment market will grow as people's leisure time, living standards and awareness of the importance of physical and mental well-being increase."
SNEWS View: It's been a good year for Precor with the backing and financial support of a parent the likes of Amer. With Icarian and ClubCom, Precor's family is now mostly complete with the focus in the next year likely to be on integration. Plus, now is the time for Amer to work toward applying the technology and markets available across its brands to improve and increase them all -- most notably will be the application of wrist-top computer specialist Suunto's new heart-rate and activity-monitoring devices into Precor's equipment, an obvious marriage that is bound to happen in the coming months. Certainly Precor's appearance at the coming IHRSA show will be a grand one.