Fitness Segment Is a Bright Spot for Brunswick

Lake Forest, IL — Brunswick Corp.'s fitness segment had an 8 percent increase in sales due to a strong demand for commercial products in the third quarter of this year compared to last year, providing Brunswick with at least one bright spot in an otherwise dismal third quarter, according to financials released by the company last month. The fitness segment is comprised of the Life Fitness division, which includes Life Fitness, Hammer Strength and ParaBody. Brunswick has had difficulties in its marine division.

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 as well as the Signature series of strength equipment, have proven popular with health club managers,” Brunswick Chairman and CEO Dustan E. McCoy said in a conference call with analysts. “We also continue to make further inroads with educational institutions and the hospitality industry.”

Sales of consumer fitness products in the United States decreased, McCoy said.

Operating earnings for the quarter totaled $10.3 million, down from $11.8 million for third quarter 2007, and operating margins were 6.4 percent versus 7.9 percent a year ago. The lower operating earnings reflected 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,” he said.

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 $343 million at quarter's end. Brunswick has had layoffs in its marine division.

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