LAKE FOREST, IL -- Brunswick Corp.’s fitness segment had a significant decrease in sales in the fourth quarter of 2008, according to financial results released last week by the company. The fitness segment is comprised of the Life Fitness division, which manufactures and sells Life Fitness and Hammer Strength fitness equipment.
Fitness segment sales in fourth quarter 2008 totaled $171.8 million, down 20 percent compared to fourth quarter 2007, when the company reported $214.5 million. International sales, which represented 49 percent of total segment sales in the quarter, declined by 18 percent on a year-to-year basis. Operating earnings declined 21 percent to $25.6 million from $32.4 million. Also, the fitness segment recorded $1.2 million in restructuring charges during the fourth quarter of 2008.
For 2008, the fitness segment reported net sales of $639.5 million, down 2 percent from $653.7 million in 2007. International sales, which represented 49 percent of total segment sales in 2008, increased by 3 percent on a year-to-year basis. Operating earnings in 2008 declined 13 percent to $52.2 million from $59.7 million. Restructuring charges for 2008 totaled $3.3 million in the fitness segment.
In a release, Brunswick Corp. said commercial equipment sales, which account for the largest percentage of fitness segment sales, declined by double digits in the fourth quarter because gym and fitness club operators were cautious about ordering equipment in the final months of the year. The company also said that the weakening economy is to blame for the double-digit decline, year over year, in consumer sales as well as the drop-off in international sales.
Overall, the company’s fourth-quarter total revenue of $833.7 million was down 42 percent ($1.44 billion) from a year ago. The company also had a net loss of $66.3 million in fourth quarter 2008 compared to a net income of $12.1 million in fourth quarter 2007. The decline was the result of marine sales that had dropped 50 percent, as weakness in the global marine marketplace accelerated during the quarter, the company said.
“The continued decline in global recreational marine markets experienced throughout the first nine months of the year increased during the fourth quarter of 2008, driven by the accelerating decline in global economic conditions,” Dustan E. McCoy, Brunswick’s chairman and CEO, said in the company release. “We also began to see the weakening global economy affect our fitness and bowling and billiards segments in the quarter.”