Brunswick Corporation faced a 45.4 percent drop in revenues to $734.7 million for the first quarter ended April 4, with sales from the fitness segment falling by 20.5 percent to $118.6 million. Operating earnings at Life Fitness sagged to $300,000 from $8.1 million, including $1.0 million in restructuring charges. Sales outside the U.S. slipped by 16 percent, and made up 45 percent of total sales in this segment.
Turnover from commercial fitness, which makes up the biggest part of fitness revenues, was impacted by the hesitancy of many fitness club owners to buy new equipment. Consumer sales fell even more.
In the Bowling & Billiards segment, sales fell by 12.1 percent to $99.9 million as sales at retail bowling centers slipped by the mid-single digits. Operating income for the quarter grew to $10.6 million from $900,000 thanks to cost cutting and much lower restructuring charges compared with 2008 ($800,000 versus $5.6 million).
Brunswick overall had a net loss of $184.2 million, compared with a profit of $13.3 million for the same period last year. The loss includes $39.6 million in restructuring charges. The sales decline was chiefly attributed to poor turnover in its marine segment, which fell by 52.4 percent. The gross margin dropped by 7.6 percentage points to 12.4 percent.
For all of 2009, the company expects restructuring charges of about $75 million. An additional $40 million in cost reductions has been found for a total of $240 million in savings for the year, compared with previous estimates of $200 million. Brunswick plans to keep inventories low, produce and sell at wholesale below retail levels, and carefully manage cash levels.