Fitness financials: Cybex 3Q profit jumps on tax benefit, plus Brunswick, Amer Sports, Life Time Fitness, Forzani, GSI, Nike

Fitness financials: Cybex 3Q profit jumps on tax benefit. Brunswick 3Q profit slides on charge, fitness segment sales up 10 percent. Precor-parent Amer Sports reports drop in sales. Life Time Fitness' Q3 net income up 35 percent, raises fiscal '07 guidance. Forzani conducts common stock buyback. GSI narrows Q3 loss. Nike to buy Umbro.

Cybex 3Q profit jumps on tax benefit

Cybex International (Nasdaq: CYBI) said third-quarter profit jumped, boosted by a reduction of a reserve for taxes.

The company reported income of $4.6 million, or $0.25 per share, compared with $503,000, or $0.03 per share, in the year-ago period.

Results include a benefit of $5.2 million, or $0.29 per share, from the reduction of the company’s tax valuation reserve during the quarter. The results also include pretax charges of about $1.7 million, or $0.05 per share, for the relocation of a facility, the estimated cost to repair certain treadmills and asset write-downs.

Revenue for the quarter rose 9 percent to $32.6 million from $29.8 million in the third quarter of 2006. The increase in revenue was driven by strong sales of the company’s cardio products and continued growth in the commercial equipment market, Cybex said.

“Although third-quarter sales were negatively impacted by production delays caused by the relocation of our manufacturing facility, our backlog is double the year-ago level and the general health of our business is strong,” said Chairman and CEO John Aglialoro in a statement.

Brunswick 3Q profit slides on charge, fitness segment sales up 10 percent

Despite a 10 percent rise in its fitness segment revenue on higher sales of commercial equipment, Brunswick Corp.’s (NYSE: BC) third-quarter profit plunged on a hefty impairment charge.

The manufacturer of boats, marine engines, fitness equipment and bowling and billiards products reported net income of $1.9 million, or $0.02 per share, down sharply from $36.5 million, or $0.39 per share, in the prior-year period.

Excluding an impairment charge of $0.47 per share to write down trade names of certain outboard boat brands, and a tax gain of $0.04 per share, Brunswick reported earnings from continuing operations of $0.16 per share in the latest period.

Quarterly revenue dropped 1 percent to $1.33 billion from $1.34 billion a year ago.

Third-quarter net sales for Brunswick’s fitness segment, which includes Life Fitness, Hammer Strength and ParaBody, increased 10 percent in the third quarter of 2007 to $150.2 million, up from $136.6 million in the year-ago quarter. Segment operating earnings for the quarter totaled $11.8 million, down from $12.6 million in the third quarter of 2006, and operating margins were 7.9 percent compared with 9.2 percent a year ago.

“The segment reported higher sales of commercial equipment in both the United States and non-U.S. markets,” CEO Dustan McCoy said in a statement. “Our lower operating earnings reflect higher research and development and marketing spending associated with new cardiovascular product introductions, as well as a shift in product mix to lower-margin strength equipment in non-U.S. markets.”

The company said that during the third quarter of 2007, it acquired 1 million shares of its common stock for approximately $28 million. Since the beginning of the year, approximately 3.6 million shares have been acquired for about $115 million. Diluted shares outstanding averaged 89.0 million in the third quarter of 2007, down from 93.7 million for the third quarter of 2006. The company said it had approximately $251 million remaining under a $500 million repurchase authorization.

Brunswick maintained its full-year earnings guidance, saying it still expects 2007 net income in a range of $1.20 to $1.30 per share.

Additionally, the company’s board of directors declared a regular annual dividend on its common stock of $0.60 per share payable Dec. 14, 2007, to shareholders of record on Nov. 21, 2007.

Precor-parent Amer Sports reports drop in sales

While its Precor fitness division posted sales gains, total net sales for Amer Sports for January-September 2007 time period decreased 5 percent to EUR 1.154 billion (USD $1.656 billion) from EUR 1.211 billion (USD $1.738 billion) in 2006, hit partly by a decline in wintersports equipment. Net sales in local currency terms matched the corresponding period last year.

The group’s EBIT was EUR 38.5 million (USD $55.2 million) versus EUR 50.5 million (USD $72.4 million) last year. Amer said the decrease was caused by the decline in net sales of wintersports equipment and from the slower-than-expected development of Wilson’s Team Sports business.

Earnings before taxes were EUR 22.9 million (USD $32.8 million), or EUR 0.23 per share (USD $0.33), compared to EUR 32.2 million (USD $46.2 million), or EUR 0.33 per share (USD $0.47), in the same period a year before.

Net financial expenses totaled EUR 15.6 million (USD $22.3 million) compared to EUR 18.3 million (USD $26.2 million) last year, reduced by interest-rate swaps executed in May, which resulted in a gain of EUR 6.4 million (USD $9.1 million).

In the July-September quarter, Amer’s net sales decreased 2 percent to EUR 462.8 million (USD $664.3 million) from EUR 471.9 million (USD $677.3 million) in the same period a year before. In local currency terms, net sales were on par with the previous year. EBIT was EUR 59.1 million (USD $84.8 million) compared to last year’s EUR 57.9 million (USD $83.1 million).

For the nine-month period, Amer said Precor’s net sales continued to develop favorably, increasing 14 percent in local currency terms. The Americas accounted for 77 percent, EMEA for 16 percent, and Asia for 7 percent of net sales. Sales in local currencies were up 21 percent in Asia, 14 percent in the Americas, and 12 percent in EMEA.

Precor’s EBIT increased 19 percent in local currency terms, totaling EUR 24.2 million (USD $34.7 million). Net sales were up 7 percent to EUR 205.8 million (USD $143.0 million) Precor’s full-year outlook is good, and earnings are expected to improve, the company added.

For the third quarter, net sales were up 20 percent to EUR 72.3 million (USD $103.7 million) from EUR 60.4 million (USD $86.7 million) last year.

The company noted that Precor’s sales to health clubs continued to grow, adding that successful market launches, particularly at hotels, supported the strong growth.

A statement from the company said, “The demand for Precor’s products in the North American consumer markets continues to be strong. Precor has launched more products this year than ever before. In the third quarter, the consumer product range saw a considerable expansion with the launch of, for example, four new elliptical cross-trainers for home use and two new treadmills.”

(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Oct. 24.)

Life Time Fitness’ Q3 net income up 35 percent, raises fiscal ’07 guidance

Life Time Fitness (NYSE: LTM), which operates fitness centers in 15 states, said third-quarter net income rose 35 percent, helped by growth in membership and revenue at its centers.

Earnings for the quarter rose to $18.4 million, or $0.48 per share, from $13.6 million, or $0.37 per share, last year. Revenue rose 26 percent to $169.5 million from $134.7 million last year.

The company said memberships grew 15.1 percent year-over-year. Dues increased 25.9 percent, and in-center revenue gained 30.8 percent.

EBITDA for third quarter 2007 grew 32.9 percent to $52.8 million from $39.7 million last year.

Life Time Fitness raised its fiscal 2007 guidance. It now expects earnings between $1.76 and $1.78 per share, from previous guidance of between $1.74 and $1.76 per share. And, it expects revenue between $652 million and $657 million, from a previous range of $645 million to $655 million.

Forzani conducts common stock buyback

The Forzani Group Ltd. (TSX: FGL) said it plans to buyback a portion of its common stock, believing that its common shares are undervalued in the market and are a good investment for the company at current prices.

From March 27, 2007, to March 26, 2008, Forzani is permitted to purchase up to 2.3 million common shares. Under the normal course issuer bid, Forzani has purchased 462,900 common shares since March 27, 2007, at an average price of CDN $21.40 (USD $22.20).

The Forzani Group is Canada’s largest national retailer of sporting goods, operating stores under the corporate banners: Sport Chek, Coast Mountain Sports, Sport Mart and National Sports. The Forzani Group is also a franchisor of The Fitness Source.

GSI narrows Q3 loss

GSI Commerce (Nasdaq: GSIC) reported a third-quarter net loss of $6.1 million, or $0.13 a share, compared with a loss of $6.2 million, or $0.14 a share, in the year-earlier period.

The company’s net revenue increased 16 percent to $137.3 million in the quarter from $118.5 million a year ago. Merchandise sales increased 36 percent to $315.8 million from $233.0 million.

Loss from operations was $11.5 million this quarter compared to a loss of $6.1 million. Adjusted EBITDA was a loss of $200,000 compared to a profit of $1.5 million last year.

Nike to buy Umbro

Nike (NYSE: NKE) is snapping up Umbro plc for $582 million as it looks to seize more territory on the global soccer field.

The Beaverton, Ore., company is paying GBP 193.06 (USD $396.32) cash per share for Cheadle, England-based, Umbro, which sells soccer clothes and products in more than 90 countries, owns the license to outfit England’s soccer team until 2014 and outfits Arsenal and Manchester United, among other soccer teams in Britain and on the Continent.

The transaction requires the backing of 75 percent of Umbro shareholders voting at a meeting. With sportswear retailer JJB Sports plc holding 10 percent of Umbro and rival Sports Direct International plc owning 15 percent, approval is not guaranteed. However, analysts reportedly have said a counterbid is unlikely.

Umbro won’t be merged with Nike, but the company says it will use its branding expertise to improve the U.K. target’s sales. And while Umbro sponsors the English national team, Nike doesn’t plan to put the swoosh on the Three Lions’ jersey.

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