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Today's news...7/27/05

JULY 27, 2005 -- Brunswick Fitness Unit's Operating Profit Up 76%

The Fitness segment of Brunswick Corp. is comprised of the Life Fitness Division, which manufactures and sells Life Fitness, Hammer Strength and ParaBody fitness equipment. Fitness equipment sales increased 2% in 2Q, excluding sales from the Omni retail stores which were sold in late '04. Including Omni, segment sales in 2Q reached $120.4 million, down from $122.3 million. Fitness segment operating earnings for the quarter totaled $5.1 million, up 76% from $2.9 million, and operating margins advanced 180 basis points to 4.2% from 2.4% a year ago.

"The increase in fitness equipment sales was driven by strong demand in the domestic commercial markets," said Brunswick COB/CEO George Buckley. "Double-digit growth in the US was partially offset by a decline in European sales where we continue to face competitive pricing pressure. Our many efforts to improve productivity and operating results within the Fitness segment are beginning to bear fruit, with improvement in operating margins evident during the most recent quarter. By concentrating on manufacturing and supply chain efficiencies, as well as expense control, we have been able to improve our margins and operating performance at Life Fitness. It is for these reasons and others we anticipate that improvement in financial performance will continue as our Fitness operations sharpen their focus on market segments to better leverage the enduring power of our brands and the excitement of new products."


European Outdoor Market Larger Than Previously Thought

The European Outdoor Group's membership, which includes some of the largest brands in the sector, has participated in a major study of the European market. The figures provided have been analyzed, with each member brand receiving a detailed report that shows the overall size and structure of the market, along with their percentage market share of each area covered.

Each participating brand provided sales data for '03 and '04, which has been analyzed and now forms the foundation of the first industry sector report.

The key findings include:

The average growth across the outdoor sector is just over 1% ('04 vs '03). Growth rates vary from category to category, with Outdoor Lifestyle being seen as a significant growth area. The study has shown that the specialist outdoor sector is much larger than previously estimated. Previously, it was thought to be EUR 2.6 billion, but new figures show it to be well in excess of EUR 3 billion.

The wider outdoor market which includes private brands and lifestyle product is now estimated to be worth over EUR 5 billion.

The EOG's results are based on a mathematical formula which has then been compared to other available data. The comparison shows the EOG's figures to be extremely close to those countries where data has been collected on a regular basis giving a true indication of the industry as a whole for Europe.

The complete results of this research are the property of the participants. As with all market research projects, the greater the number of participants, the better the data, and with this in mind the EOG has opened up the program to non-EOG members.

Originally founded in '03 by 19 of the world's largest outdoor companies, the EOG now has 32 members. Further information about the EOG can be found on its website: www.EuropeanOutdoorGroup.com


Cabela's Moves Closer To Louisiana Site

The Louisiana State Bond Commission voted unanimously to authorize the use of tax increment bonds to fund the construction of a Cabela's branch in Gonzales, LA. It is now up to the state's Joint Legislative Finance Committee to approve the project. If that happens, as expected, ground can be broken at a 32-acre site. Construction can begin as early as September 1 and will take approximately 10 months to complete, with a grand opening in June '06. The city believes the Cabela's door will employ 350 and reap $250,000 in tax revenue for Gonzales. Three million visitors a year may be drawn to the area as a result of the store. The 175,000-square-foot store construction and infrastructure costs are expected to run between $45 million and $50 million.


Yukon Advanced Optics will move from its current 1,500-square-foot office to a newly built 10,000-square-foot facility at by the end of the summer. The new office will allow for the recent increases in staffing, as well as additional expected hires this coming year. Yukon's address is the only thing to change; Contact information, including email addresses and phone numbers will not change. It can be reached at: Yukon Advanced Optics; 201 Regency Pkwy; Mansfield, TX 76063; and www.yukonamericas.com.

McAdams, Wright, Ragen initiated coverage of Zumiez with a hold rating.


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Categories
Sporting goods industry
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Companies
Life Fitness
Omni
Brunswick Corp.
European Outdoor Group's
non-EOG

Concepts
fitness equipment
Outdoor Market
outdoor sector
competitive pricing pressure
domestic commercial markets

People
George Buckley





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