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Brunswick will continue to expand its fitness segment CEO Dustan McCoy noted in Thursday39s conference call with financial analysts Photo by Thinkstock
<p>Brunswick will continue to expand its fitness segment, CEO Dustan McCoy noted in Thursday&#39;s conference call with financial analysts. (Photo by Thinkstock.)</p>

Life Fitness' Second Quarter Net Sales Increase to $173.8 Million, Plans Additional Expansion

The $173.8 million in net sales marked a year-over-year quarterly increase of 5 percent.

Life Fitness reported net sales of $173.8 million and operating earnings of $23.2 million in the second quarter of 2015, according to financials released Wednesday by parent company Brunswick, Lake Forest, Illinois.

In addition, Brunswick, which purchased SCIFIT Systems Inc. earlier this month for its Life Fitness Division, will continue to expand its fitness segment, Brunswick CEO Dustan McCoy noted in Thursday's conference call with financial analysts. 

The SCIFIT acquisition provides Life Fitness with an expanded product line-up and increased access to the active aging market. Though terms of the deal were not disclosed, Brunswick said SCIFIT's 2014 revenues were approximately $17 million.

"As we make these acquisitions, the (fitness division) business is a base from which we will be building," McCoy said in the conference call.  "You'll see additional expansion as we work and develop the product line."

Brunswick's growth strategy for Life Fitness includes developing new products and services complementary to its existing portfolio and that may extend into new markets, according to the earnings presentation. The growth strategy includes continued innovation to drive market share in cardio, strength and group training categories.

For the second quarter, net sales marked a year-over-year quarterly increase of 5 percent and a drop of $11.8 million from the first quarter. Operating earnings marked a year-over-year quarterly increase of 4.2 percent and a decline of $2.6 million from the first quarter.

The growth in net sales reflected gains in the United States at health clubs and hospitality customers, gains in international markets and benefits from new product introductions. Sales across all of Life Fitness' regions increased 10 percent on a constant currency basis.

Net sales grew 23 percent in Europe in constant currency and accounted for 21 percent of Life Fitness' total sales. The United States accounted for 50 percent of net sales and grew six percent in constant currency. Net sales outside of the United States and Europe grew 8 percent in constant currency and accounted for 29 percent of total sales.

Life Fitness' operating margin in the second quarter was 13.3 percent. The increase in operating earnings included benefits from higher sales. Operating earnings were partially offset by an unfavorable foreign exchange impact. Costs associated with planned capacity expansion and new product integrations also were cited as a factor affecting operating earnings.

Brunswick's 2015 revenue target for Life Fitness is in the mid-to-single digit range for 2015, with a flat to slightly up operating margin. Life Fitness reported 2014 sales of $769.3 million.

Brunswick reported an overall net sales increase of $68.9 million (six percent) for the second quarter for a total of $1.14 billion. Brunswick's marine segment reported $968.2 million in net sales.

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