Precor Second Quarter Revenue Declines to $89.6 Million

Precor39s Queenax functional fitness training system Photo by Precor
<p>Precor&#39;s Queenax functional fitness training system. (Photo by Precor.)</p>

Precor, Woodinville, Washington, reported net sales of EUR80.9 million ($89.6 million) in the second quarter, according to financials released July 28 by parent company Amer Sports, Helsinki, Finland.

The EUR80.9 million is a 1.34 percent decrease over second quarter 2015 (EUR82.0 million). Precor's new product and service program that includes Spinning, Queenax, cardio-related products, new consoles and new content are being rolled out, Amer Sports said in its earnings release and in the conference call with analysts. Further details on business performance for Precor's Queenax and Spinning lines were not disclosed in the release.

"Fitness was basically at last year's level," Heikki Takala, CEO, Amer Sports, said in a conference call with analysts. "All of the building blocks are nicely in place. However, the ramp up takes some time. The operating model in our factory is taking some time as we ramp up production and make sure that quality is good. We actually expect to reach full speed in quarter four in the current year, and we believe that our outlook based on fundamentals is positive."

Second quarter 2016 sales in the Americas region remained flat in local currencies compared to second quarter 2015 at EUR48 million ($53.2 million). The Europe, Middle East, and Africa region declined 3 percent in local currencies over 2015 to EUR17.4 million ($19.3 million), while the Asia-Pacific region grew 11 percent  in local currencies to EUR15.5 million ($17.2 million). Precor's second quarter total of EUR80.9 million grew one percent in local currencies.

Precor's net sales through the first six months of 2016 was EUR155.3 million ($172 million), marking a 2 percent increase over the EUR151.9 million reported in the first half of 2015. There were 957 employees in the fitness segment as of June 30, marking a two employee increase over June 30, 2015.

Precor contributed 14 percent of Amer Sports' total net sales through the first six months of 2016, marking a one percent decline from the first half of 2015. Amer Sports reported total net sales of EUR477.4 million ($528.7 million) in the second quarter and total net sales of EUR1.13 billion ($1.26 billion) through the first six months of 2016.

In April, Amer Sports reported fitness segment net sales of EUR74.4 million ($84.1 million). Amer Sports attributed first quarter fitness segment results to the completion of go-to-market integration and improved capabilities, and a strong pipeline of initiatives kicking in. 

In February, Precor reported 2015 net sales fell 3 percent in local currencies to EUR357.3 million ($389.7 million) despite year-over-year growth in the fourth quarter and in international sales. Precor's sales in the fourth quarter of 2015 were EUR116.1 million ($126.7 million), marking a four percent growth over the fourth quarter of 2014.

Editor's note: Euro to U.S. dollar conversions for the second quarter and the first half of 2016 are based on the July 28 exchange rate. All other conversions were calculated on previous exchange rates.

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