Cybex Announces Third Quarter Results

Cybex Announces Third Quarter Results

MEDWAY, Mass.--(BUSINESS WIRE)-- Cybex International, Inc. (NAS: CYBI) , a leading U.S. manufacturer of premium exercise equipment, today reported results for its third quarter ended September 29, 2012. Net sales for the third quarter of 2012 were $34.4 million, compared to $33.5 million for the corresponding 2011 period. The Company reported net income for the third quarter of 2012 of $1.1 million, or $0.06 per diluted share, compared to a net loss of $0.3 million, or $0.02 per diluted share, for the corresponding 2011 period.

For the nine months ended September 29, 2012, net sales were $102.4 million, compared to $97.1 million for 2011. Net income for the nine months ended September 29, 2012 was $0.3 million, or $0.02 per diluted share, compared to a net loss of $0.5 million, or $0.03 per diluted share, for 2011.


The above results include litigation charges of $1.4 million and $3.0 million for the quarter and nine months ended September 24, 2011, respectively, and litigation charges (reduction) of ($0.1 million) for the quarter ended September 29, 2012, related to the Barnhard product liability judgment. As previously reported, this litigation was settled during the first quarter of 2012.

Cybex Chairman and CEO John Aglialoro stated, "Q3 showed improvement compared to the previous quarter although the current economic environment continues to be challenging. While it is difficult to predict the short-term impact of economic conditions, we remain optimistic about sales prospects over the longer-term."

Cybex President and COO Art Hicks stated, "We look forward to the Q4 introduction of our 525 cardio line which is targeted to better reach light commercial market segments. These products will feature lower price points, valuing ease of use and durability. Third quarter gross margins improved compared to Q2; and we expect this slow improvement trend to continue as we gain experience with our new 625 and 770 product lines. The Bravo strength series continues to be attractive to customers with functional training areas, which is a trend in the club market."

As previously announced, the Company's board of directors has approved an Agreement and Plan of Merger pursuant to which all of the Company's outstanding common stock - other than shares owned by the Company's largest shareholder, UM Holdings, Ltd. ("UM"), and UM's subsidiaries and shareholders, which include John Aglialoro and Joan Carter - would be converted into $2.55 per share payable in cash, in a "going private" merger transaction. Mr. Aglialoro is Cybex's chairman and CEO and Ms. Carter is a director.

Consummation of the merger is subject to various conditions, including approval of the Merger Agreement by the affirmative vote of two-thirds of all outstanding shares and a majority of the shares held by the public shareholders, and consummation of financing. While there can be no assurance that the merger will be approved by the shareholders or consummated, the Company anticipates that it will seek approval of the merger at a special Shareholders Meeting to be held during the first quarter of 2013 and that the transaction will close shortly thereafter.

If the merger is approved and consummated, shares of the Company's common stock (other than shares held by UM, Mr. Aglialoro and Ms. Carter) will be deregistered under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), the Company will no longer be subject to the reporting requirements of the Exchange Act, and the shares will no longer trade on any market.

There is no investor conference call scheduled this quarter.

About Cybex

Cybex International, Inc. is a leading manufacturer of premium exercise equipment primarily for commercial use. The Cybex product line, including a full range of strength and cardio training machines, is designed using exercise science to reflect the natural movement of the human body. Led by the Cybex Research Institute, Cybex fitness equipment is engineered to produce optimal results for users from the first-time exerciser to the professional athlete. Cybex designs and builds its products in the USA for a wide range of facilities, from commercial health clubs to home gyms, in more than 85 countries worldwide. For more information on Cybex and its products, visit the Company's website at www.cybexintl.com.

This news release may contain forward-looking statements.There are a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made above.These include, but are not limited to, the ability of the Company to comply with the terms of its credit facilities, competitive factors, technological and product developments, market demand, economic conditions, and the resolution of litigation involving the Company.Further information on these and other factors which could affect the Company's financial results can be found in the Company's previously filed Report on Form 10-K for the year ended December 31, 2011, its Reports on Form 10-Q, its Current Reports on Form 8-K, and its proxy statement dated April 12, 2012.

CYBEX INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

Three Months Ended

Nine Months Ended

September 29,

September 24,

September 29,

September 24,

2012

2011

2012

2011

Net sales

$

34,368

$

33,478

$

102,427

$

97,054

Cost of sales

22,942

21,728

69,686

63,053

Gross profit

11,426

11,750

32,741

34,001

As a percentage of sales

33.3

%

35.1

%

32.0

%

35.0

%

Selling, general and administrative expenses

10,154

10,404

31,498

30,818

Litigation charge (reduction)

(68

)

1,362

3,005

Operating income (loss)

1,340

(16

)

1,243

178

Interest expense, net

331

240

946

781

Income (loss) before income taxes

1,009

(256

)

297

(603

)

Income tax expense (benefit)

(74

)

22

(49

)

(149

)

Net income (loss)

$

1,083

$

(278

)

$

346

$

(454

)

Basic and diluted net income (loss) per share

$

0.06

$

(0.02

)

$

0.02

$

(0.03

)

Shares used in computing basic net income (loss) per share

17,141

17,120

17,130

17,120

Shares used in computing diluted net income (loss) per share

17,236

17,120

17,249

17,120

CYBEX INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

September 29,

December 31,

2012

2011

ASSETS

Current assets:

Cash and cash equivalents

$

2,181

$

11,958

Accounts receivable, net

18,620

20,251

Inventories

14,258

13,584

Prepaid expenses and other

1,596

2,070

Barnhard litigation related receivable

7,561

Total current assets

36,655

55,424

Property and equipment, net

27,131

28,194

Other assets

827

1,025

$

64,613

$

84,643

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current maturities of long-term debt

$

2,061

$

1,520

Accounts payable

5,302

5,364

Accrued expenses

12,295

13,674

Barnhard litigation reserve

27,004

Total current liabilities

19,658

47,562

Long-term debt

18,939

12,769

Other liabilities

5,579

4,674

Total liabilities

44,176

65,005

Stockholders' equity

20,437

19,638

$

64,613

$

84,643



Cybex International, Inc.
Arthur W. Hicks, Jr., 508-533-4300
President and COO

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS:

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