By David Clucas
Brunswick Corp. (NYSE:BC) is doubling down on its fitness equipment segment, including Life Fitness, Cybex and Hammer Strength, as it reported another strong quarter of results from the category and announced an additional acquisition.
The Lake Forest, IL-based company, also known for its boating and billiards equipment, signed an agreement to acquire Germany’s Indoor Cycling Group (ICG), which specializes in the design of indoor cycling equipment.
Terms of the transaction were not disclosed, but officials said ICG’s 2015 revenues were approximately €37 million ($41 million). The deal is expected to close late in the third quarter. ICG CEO Bernd Puerschel will continue to lead the brand and report to Life Fitness President Chris Clawson.
“Our vision is to build and augment our product and technology portfolio to establish a strong leadership position in the global group exercise market,” Brunswick CEO Mark Schwabero said. “Group exercise is a growing sector of fitness and represents another important adjacency that we have targeted to expand our fitness business.”
He continued, “Blending ICG’s integrated technology and programming capabilities in the indoor cycling space, with our broader Life Fitness product assortment, is an important component of our strategy to grow our fitness business, and consequently, Brunswick.”
ICG is Brunswick’s second fitness purchase of the year, after acquiring the Cybex brand for $195 million in January. The company’s goal is to double the size of its fitness operations by 2020, Schwabero said.
“Our fitness business continues to benefit from solid demand, particularly in the global health club and hospitality markets, he said. “This foundational core growth, combined with favorable trends in the rehabilitation and active aging category, as well as increased participation in group exercise activities, is providing a healthy marketplace in which to execute our fitness strategy.”
Moving to its second-quarter 2016 results, the company reported net sales up nearly 9 percent to $1.24 billion. Quarterly net income came in at $108.1 million, or $1.17 per diluted share, up from $107.6 million, $1.14 per diluted share, during the same period a year ago.
Brunswick’s fitness segment sales jumped 32 percent to $229.8 million in the second quarter, largely due to its recent acquisitions, but organic growth was healthy as well, thanks to strong sales to health clubs, the federal government and in Europe and Asia, rising 12 percent (minus acquisitions) for quarter versus the same period a year ago. Operating earnings for the segment rose to $24.1 million for the quarter versus $23.2 million a year ago.
In the the company’s other segments, marine sales rose 4 percent to $719.7 million and boating sales rose 5 percent to $368.1 million.
Looking ahead, the company expects 2016 sales growth to be between 10-11 percent, including about 5-percent growth from acquisitions. Officials maintained their EPS range of between $3.40-$3.50.
Photo Courtesy Life Fitness/Brunswick Corp.
