Life Fitness Reports Record Earnings

Equipment manufacturer Life Fitness reported another strong quarter with sales for second quarter 2011 up 15 percent compared to the same period last year.

The total sales figure of $141.6 million, up from $123.2 million in second quarter 2010, was supported by a 13 percent increase in international sales, which accounts for 53 percent of Life Fitness’s business, according to data released by the brand’s parent company, Brunswick Corp., Lake Forest, IL, on Thursday.

In a call with analysts, Dustan McCoy, Brunswick’s chairman and CEO, said he is optimistic that the growth will continue, thanks in part to the low-price club market.

“Those club owners look for great equipment that has a long life and performs well, and we are certainly serving that market well and capturing a big chunk of it,” McCoy said.

Brunswick’s fitness segment (which includes Hammer Strength brand equipment in addition to Life Fitness) also more than doubled its operating earnings, from $8.7 million in second quarter 2010 to $19.1 million in second quarter 2011. These factors contributed to making the first half of 2011 one of Life Fitness’ best to date, according to McCoy.

“During the first half, revenues increased by greater than 20 percent, to slightly less than $300 million, which represents the second highest first half in its history,” McCoy said. “Operating earnings in the first half grew about $10 million, resulting in more than $40 million in earnings in the first half—a record for Life Fitness.”

McCoy attributed the brand’s higher level of profits over the last few quarters to increased unit volumes, a more favorable product mix, increased fixed cost absorption and an improved warranty experience. Looking ahead, the CEO said that the outlook for 2012 is favorable and that Life Fitness will benefit as new clubs open and as operators of existing clubs expand or replace their equipment.

“This is a business with a great product and a fabulous sales force and distribution mechanism that is attacking the market all over the world wherever there’s an opportunity—and it doesn’t feel like they’re missing many opportunities right now,” McCoy said. “They’re doing a great job.”

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