>> Although a settlement in the lawsuit brought by Precor against Life Fitness for alleged patent infringement on its elliptical was expected to be finalized in late May, the two companies are continuing their negotiations, according to court documents for the U.S. District Court, Western Washington, in Seattle, Wash. The pending settlement was announced on May 15 by both Precor parent Amer Group and Life Fitness parent Brunswick because of a Brunswick 10-Q filing that listed an expected $25 million cost to the company for the settlement. But court filings show an extension of 30 days approved on May 21 by the judge, then another 30-day extension approved on June 20. In the June 20 filing, the court ruling said that the discussions had “proved sufficiently productive” and both parties had intent to settle but “due to personal and business schedules, the parties have not been able to fully enter into a settlement agreement.” A trial had been set for July but is stayed. “We’re still working on the final details on the agreement,” Vice President of Corporate and Investor Relations Kathryn Chieger told SNEWS, who declined to speculate on when it would be completed. Precor had alleged in a suit filed in January 2000 that Life Fitness was infringing on the inventor’s patent No. 5,383,829 in a rear-drive “cross-trainer” – Life Fitness’s name for an elliptical motion trainer.
>> GERMANY — Body-Solid’s German distributor has just announced the company there will begin offering the United State’s lifetime warranty. Simple Products GmbH supplies the product in Germany, Austria and Switzerland. According to the U.S. office, the warranty offered here is for the United States only, but any international distributor may offer it as an after-market item, which many do at their own expense. The warranty is the same: If anything goes wrong the machine can be exchanged at no cost, good for original purchasers only.
>> In its annual personal training survey by IDEA, the association for fitness professionals, the group has found that balance/agility/posture training and yoga/stretching are two of the most popular programs or formats offered by trainers. In addition, the survey found the five most popular pieces of equipment clients use with trainers are: ellipticals, stationary cycles of all kinds, weighted bars, core conditioning products such as BOSU or balance boards; and Pilates equipment or props. Also, one-on-one training remains the primary source of revenue for most trainers.
>>As Cybex’s refinancing deal was expected to close, stocks on June 30 closed at 1.40 or down 4.76 percent from Friday’s close of 1.47, which is still significantly higher than its 52-week low of 0.98 on May 5.
>> GERMANY– At a round-table discussion with journalists at the ispo trade show in Munich, Germany going on now, adidas-Salomon CEO Herbert Hainer re-confirmed full year projections of 5 percent currency-neutral sales growth, a gross margin of 42-43 percent and earnings growth of between 10 percent and 15 percent. Stronger than expected sales and margin development in Europe, the group’s largest and most profitable region, and solid sales growth in Asia will be the drivers of this performance, he said. The core brand, adidas, continues to set the pace with strong currency-neutral growth in Asia, Europe and Latin America. adidas’ growth is fueled by the Sport Performance categories running and football as well as continued momentum in the Sport Heritage Division. “The extremely difficult retail conditions which affected first quarter North American adidas sales and backlogs continued in the second quarter,” he said. “Therefore adidas-Salomon does not anticipate sales growth in North America for 2003.”
>> Wal-Mart Stores has said last week’s sales put it on pace to meet its June forecast, as the first day of summer brought a much-needed dose of warmer weather.
>> The Sports Club Company Inc. (AMEX: SCY) has announced that the company has completed the previously announced restatement of its financial statements and has filed an amended 2002 Annual Report on Form 10-K/A with the Securities and Exchange Commission. The company also filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2003. During the course of the review of the first quarter results, independent accountants informed the company’s Audit Committee that it had not been accounting for private training revenues in accordance with generally accepted accounting principles. The Company agreed to restate its financial statements. The restatement also includes certain other corrections which the Company does not believe are material. The restatement does not result in any change in cash flows for the periods restated nor does it result in any material change in the Company’s total revenues over time; rather, the changes affect the periods in which such revenues are recognized. Revenues for the quarter ended March 31, 2003 increased 8.1 percent to $32,403,000, compared to $29,968,000 for the first quarter of 2002, an increase of $2,435,000.
>> Life Time Fitness has announced it will hold a two-day Multisport Adventure Expo on July 31 and Aug. 1 in Minneapolis, Minn., partly in conjunction with a triathlon it is sponsoring that weekend. With more than 60 exhibits, the expo will be free and open to t he public and is designed for any fitness enthusiast, triathlete, cyclist, runner, swimmer or other multisport athletes and participants. Demos and exhibits will include rock climbing, heart-rate training, and triathlon training. Nokia is the triathlon’s presenting sponsor, with Gold level including Life Fitness, and Silver level including Galyan’s. www.lifetimefitness.com.
>> Stott Pilates has signed on as an educational partner for IDEA, the association for fitness professionals, and Kashi food company will also partner with IDEA to provide nutritional information. IDEA’s annual educational conference is in mid-July, and both companies will take key spots in the expo.
>> Nike has reported overall increased revenues for the fourth quarter ended May 31 of 11 percent to $3.0 billion compared to $2.7 billion for the same period last year. Fourth quarter net income totaled $246.2 million, or $0.92 per diluted share, compared to $208.4 million, or $0.77 per diluted share in the prior year. For the fiscal year ended May 31, 2003, revenues increased eight percent to $10.7 billion, compared to $9.9 billion in fiscal year 2002. “Nike’s performance during fiscal year 2003 was one for the record books, a year that positions the company well for fiscal 2004,” said Philip H. Knight, chairman and CEO, in a statement. “We surpassed the $10 billion revenue mark and delivered record earnings per share despite a challenging geopolitical and economic environment.” The company reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery between June and November 2003, totaling $4.9 billion, 4.4 percent higher than such orders reported for the same period last year. By region, the USA was down 10 percent; Europe increased 17 percent; Asia Pacific grew 20 percent; and the Americas increased 4 percent. Of the growth in Europe, 13 points were due to currency exchange rates. Details at www.nikebiz.com.
>> adidas-Salomon and the Intersport International Corporation (IIC) buying group has announced they have signed a four-year strategic agreement that lays a foundation for future business strategies and strengthens the selling and distribution process of both groups. Both companies have agreed to keep the financial terms confidential. The agreement is intended to help increase sales of adidas Sport Performance categories such as football, running and swimwear, as well as casual and leisure adidas product categories, plus strengthen Intersport’s position as a professional multisport retailer.