LAKE FOREST, IL -- Brunswick Corp.’s fitness segment had an 8 percent increase in sales with a strong demand for commercial product in the third quarter compared to the third quarter of last year, providing Brunswick with at least one bright spot in an otherwise dismal third quarter. The fitness segment is comprised of the Life Fitness division, which includes Life Fitness, Hammer Strength and ParaBody. Brunswick, which has seen difficulties in its marine division, released results for the third quarter of 2008 yesterday.
The fitness segment had $161.6 million in sales for the quarter, up from $150.2 million in the year-ago quarter.
“Commercial sales, which account for almost 90 percent of Life Fitness’ sales, were the key driver behind this growth as a number of new products such as the Elevation series of cardio products that include treadmills and feature iPod compatibility as well as the signature series of strength equipment have proven popular with health club managers,” Brunswick Chairman and Chief Executive Officer Dustan E. McCoy said in a conference call yesterday with analysts. “We also continue to make further end roads with educational institutions and the hospitality industry.”
The strong commercial equipment sales helped offset the drop in sales of consumer products in the United States, he said.
Operating earnings for the quarter totaled $10.3 million, down from $11.8 million for the third quarter of 2007, and operating margins were 6.4 percent versus 7.9 percent a year ago.
“Operating earnings were down during the quarter, reflecting higher material prices and increased freight costs due to fuel surcharges from suppliers,” McCoy said. “These higher costs were partially offset by a reduction in operating expenses, as Life Fitness continues efforts to focus on reducing costs and improving productivity.”
The Fitness segment recorded $800,000 in restructuring charges during the third quarter of 2008.
Brunswick had a net loss of $591.4 million for the third quarter of 2008. Total sales were down 22 percent versus a year ago to approximately $1 billion, driven by a 28 percent drop in marine sales. The company had cash on hand of $342.9 million at quarter’s end.