>> Icon Health & Fitness for the first quarter of its 2004 fiscal year has reported increased net sales of 16.2 percent over the same quarter a year ago. For the three-month period ended Aug. 30, Icon reported net sales of $197.8 million, compared to $170.2 million for the three-month period ended a year earlier. That represents a $27.6 million increase over the prior-year period. EBITDA for the period ended Aug. 30, 2003 was $10.2 million, or 5.2 percent of net sales, compared to $6.3 million, or 3.7 percent of net sales, for the three-month period ended a year earlier. Interest expense for the quarter ended this year was $5.99 million compared to last year’s quarter of $6.39 million. All in all, the company had a net loss for the three-month period ended Aug. 30, 2003 of $1.7 million, compared to double the net loss of $3.4 million for the same quarter last year. Sales of cardiovascular and other equipment in the first quarter fiscal 2004 increased $12.0 million, or 8.2 percent, to $158.7 million. Sales of strength-training equipment in the first quarter of fiscal 2004 increased $15.6 million, or 66.4 percent, to $39.1 million. To view the entire 10Q filing, click here or search at www.sec.gov using the CIK of 934798 to find a list of other filings.
>> Catching up on some club industry bits:Missy Giove, now-retired world champion mountain bike dude-ette now working with Matrix on its X-Bike indoor-mountain-biking program, sure doesn’t fit the look or talk of many in fitness. Her right upper arm and shoulder are covered with a tattoo. She may at any time have black-and-blue spots or eyes due to crashes (still biking hard despite “retirement” after too many concussions). And we hope she doesn’t bring her pet piranha to shows. And the industry may need a translation guide to go with the X-bike program. In one class at the Club Industry show, she verbally visualized with terms like “bad downhill” and “sick view.” At one point she said participants were going to “kick butt,” then glanced around nervously at Matrix staff and said, “I’m not sure I can say that here.” Go Missy!
>> More Club Industry catch-up: Under Armour had a small 10-by-10 booth with its garments, which have been sold in club pro shops for awhile. But this was the first year it outfitted several companies’ staff members for their early morning workout apparel. In fact, they looked so much alike, that we’re not sure they would have been happy … if they’d known. Life Fitness looked particularly cool in pure black long-sleeve loose-fitting Under Armour tees (but one staffer said he didn’t like the durability of them as much as the tight stuff). True had white ones with black trim. And SciFit had yellow ones. Put ’em together for the bumble-bee look.
>> Play It Again Sports parent Winmark Corp. (Nasdaq: WINA) has reported a net income for the third quarter ended Sept. 27 of $1,104,100, or $.17 per share diluted, compared to net income of $1,058,700, or $.17 per share diluted, in the third quarter of 2002. For the nine months ended Sept. 27, 2003, net income was $2,982,700, or $.48 per share diluted, compared to net income of $2,858,600, or $.47 per share diluted, for the same period last year. The company has 816 stores in operation and an additional 24 franchises awarded but not open. Of the stores in operation, there were 458 Play It Again Sports outlets. Check the SNEWS Stock Market Report (with updated prices every 15 minutes!); find it on the left nav bar under SNEWS Extras.
>> SNEWS dropped into a few specialty fitness stores on a swing through the Chicago area and a subsequent swing through Madison, Wis., before and after the Club Industry show. In our visit to a Chicago Home Fitness minutes after it opened on a weekday, we were actually surprised to already see a woman contemplating treadmills. Not wanting to bother the one sales staffer on duty, we dropped some information and a card on the counter, glanced around a moment and went to leave. But the woman — obviously desperate for info and seemingly nearly panicked about her treadmill purchase since she had per common practice come equipped with the latest Consumer Reports article in hand — nearly tripped us on our way out the door: What treadmill do you have? Well, uh, well, we actually write about treadmills, we answered. Oh, well then, what do you think of these? She said, gesturing at two Trimlines and two Precors. Now, SNEWS doesn’t want to butt into sales, but the staffer had already left the woman who had wanted to think a bit on her own. So SNEWS tried to be diplomatic and direct the talk back to the staffer, who then encouraged us to dive right in. What she really wanted, she admitted, was the Precor model for $3,600 but she didn’t think she could legitimize the extra $1,000 for what seemed only like handrails being added. I pointed out the programs as another added benefit — if she thought she (a walker) or her runner husband would use them. Basically, SNEWS advised her, at this price, you have to know what you need and will use, as well as a little about the warranty, and what feels best to you with the controls and buttons. Then we escaped out the door to leave the sales to the staff. Are all customers this needy?
>> Galyan’s Trading Company Inc. (Nasdaq: GLYN), the $600 million sports and outdoor adventure store, opened The Nasdaq Stock Market on Oct. 17, launching a weekend of activities to celebrate the opening of a new 100,000-square-foot store in the Roosevelt Field Mall in Garden City, N.Y. The store, which is the company’s first in the New York City area, will offer customers a 45-foot rock climbing wall, golf simulator, putting green and archery range. Galyan’s calls itself an “active lifestyle retailer that anticipates and focuses on the latest trends in sports, fitness, outdoor recreation and apparel.” It has 42 stores in 19 states.
>> Exiting the sports drink category a couple of years ago, claiming it was going to take too much of an investment to be a true player, PowerBar has announced it will re-enter the category with a duo of drinks done in tandem with Carmichael Training Systems of Coach Chris Carmichael fame, the coach of Lance Armstrong who happens to be sponsored by PowerBar. Announced at the Interbike show last week, the company will introduce the so-called PowerBar Beverage System that includes two powdered sports drink mixes — one for hydration (PowerBar Endurance) and one for post-workout/race recovery (PowerBar Recovery). They will be at retail in January. The endurance drink, at a 7-percent carbohydrate solution and higher sodium than others, is touted as not incorporating “any unproven ingredients that could slow hydration or energy delivery, affect taste or that may cause gastrointestinal upset.” The recovery drink, with 8-percent carbohydrate solution, emphasizes potassium, magnesium and more than twice the sodium per serving of leading recovery drinks.
>> The winter ispo sporting goods show in Germany Feb. 1-4, 2004, will offer a pre-conference on fitness and wellness that will emphasize scientific research and will be done in cooperation with the Institute for Medical Psychology of the Ludwig Maximilian University in Munich and the Mueller-Wohlfahrt Health & Fitness AG. The all-day symposium will include such topics as: the significance of the psyche, healthy eating, free radicals, how much sports and activity is healthy, body weight management and proper hydration. It will be held at the International Congress Centre Munich, the ICM, at the fairgrounds. Anyone interested in fitness and wellness can participate. Admission to the symposium will be 35 Euros, with advance tickets available at www.ispo.com for 25 Euros.
>> Fitness companies made a showing at the Interbike event last week (see our story from Oct. 13) and the report was so-so, sources said. Although a couple said the event was “great” for their companies, others weren’t so positive. One in fact told SNEWS that although the company saw appointments and signed up new accounts, they were surprised the bike dealers weren’t more “progressive” in looking for ways to enhance their business during the bike off-season. “We came, we saw, now we know, and we won’t have to wonder about it anymore,” the company said. “We won’t be going back.” Another report from the show floor said the fitness company booths seemed pretty empty and they were in fact “not overrun by business,” but just did “OK.” SNEWS View: Too bad. It makes perfect cross-seasonal sense. We thought the bike dealers had grown up and would grab this with gusto. Guess not. One source called it a “bomb,” and he didn’t mean “da bomb!”
>> Jack Faris, president and CEO of the National Federation of Independent Business (NFIB), the largest advocacy organization representing small and independent businesses in Washington, D.C., and all 50 state capitals, will deliver a presentation on the power of small business in America at IHRSA’s 23rd Annual International Convention & Trade Show, which will be held from March 22-25, 2004, at the Las Vegas Hilton in Las Vegas. Faris’ talk will be March 24. Under the leadership of Faris since 1992, the NFIB’s primary purpose is to influence public policy at the state and federal level. The NFIB was recently ranked the most influential business organization (and third overall) in “Washington’s Power 25” survey conducted by Fortune magazine.
>> The Sports Authority Inc. (NYSE: TSA) has increased its sales and earnings guidance for the third quarter ending Nov. 1, 2003, and fiscal year 2003 ending Jan. 31, 2004. The company announced that based on recent trends, it expects to report third quarter total sales of approximately $550 million and comparable store sales ranging between +1 percent to +2 percent. The company now expects third quarter earnings to range between $0.13 and $0.15 per fully diluted share which compares to the company’s previous earnings guidance of $0.03 to $0.05 per fully diluted share. For fiscal year 2003, the company now expects full year earnings to be between $1.98 and $2.03 per fully diluted share. All earnings estimates are exclusive of one-time merger integration costs of the Gart Sports acquisition. TSA is headquartered in Englewood, Colo., and operates 383 stores in 45 states under The Sports Authority, Gart Sports, Sportmart and Oshman’s names. Track TSA prices in the SNEWS Stock Market Report (with updated prices every 15 minutes!); find it on the left nav bar under SNEWS Extras.
>> Vitamin Branding Corp., a New York-based manufacturer and distributor of nutritional products, has unveiled its new line of sports supplement products to be marketed under the brand Everlast Nutrition. The assortment, which consists of energy bars, liquid meal replacements, energy gels, protein powders and everyday nutritional sports supplements, will be sold in various channels of distribution including natural health food and vitamin stores, gyms, supermarkets, clubs, mass merchandisers and sporting goods stores. The logo for the brand utilizes the traditional bell-shaped Everlast logo with the word “nutrition” clearly listed beneath. Product labels will have the Everlast Nutrition logo in widely recognized black and yellow.
>> With fitness still showing a strong performance despite lower earnings overall, Sears, Roebuck and Co. (NYSE: S) has reported net income of $147 million, or $0.52 per share, for the third quarter ended Sept. 27, 2003, compared with net income of $189 million, or $0.59 per share, in the third quarter of 2002. Sears’ third quarter 2003 earnings included a pretax charge of $141 million ($89 million after-tax), or $0.32 per share, related to the company’s previously announced refinement of its business strategy for The Great Indoors. Revenues for the third quarter were $7.3 billion, an increase of 1.1 percent over the same period last year primarily due to the 1.2 percent increase in domestic comparable store sales. In the home group, the lawn and garden and fitness businesses continued to experience strong performances across all formats.
>> What do the majority of senior executives and managers do with their non-work-related personal time during a work day? Turns out that nearly 29 percent exercise! That’s good news. But the first way of spending non-work time? At meals, 71 percent; running personal errands, 53 percent; browsing the Internet, 37 percent; and tending to family matters, 34 percent. Of course not many have that much time to spend. The survey by the Net Future Institute found that 62 percent of senior executives and managers have 60 minutes or less of personal time during a typical workday, and 6 percent have virtually no personal time. Almost a quarter (24 percent) percent have one to 30 minutes of personal time a day, and 32 percent have 31 to 60 minutes. Exercise fast!