ICON Health & Fitness, Inc. reported net sales declined 6.4% to $265.4 million for the fiscal second quarter ended December 3, 2005, compared to $283.4 million for the prior-year period. ICON posted a $5.9 million net loss for the fiscal Q2 period, compared to a net loss of $18.1 million for the three months ended November 27, 2004.
For the six months ended December 3, 2005, the company reported net sales of $409.6 million, compared to $418.0 million for the six months ended November 27, 2004, which represents an $8.4 million, or 2.0%, decrease over the corresponding six-month period ended November 27, 2004. The decrease in product sales was primarily due to lower customer demand for certain products and available product mix. The net loss for the six months ended December 3, 2005 was $30.7 million, compared to a net loss of $38.8 million for the six months ended November 27, 2004.
Income before interest expense, income tax expense, depreciation and amortization and certain non-recurring items (“EBITDA”) for the three months ended December 3, 2005 was $19.2 million compared to $12.8 million for the three months ended November 27, 2004. Income before interest expense, income tax expense, depreciation and amortization and certain non-recurring items (“EBITDA”) for the six months ended December 3, 2005 was $12.5 million compared to a negative $1.5 million for the six months ended November 27, 2004. The loss on extinguishment of debt and the loss from discontinued operations incurred in the period ended December 3, 2005 meets the definition of “non-recurring” in relevant SEC guidelines.
Total assets as of December 3, 2005 and May 31, 2005 were $508.9 million and $460.7 million, respectively. The increase in assets was primarily attributable to the increases in accounts receivable and inventory. Accounts receivable increased as a result of the Company entering into its peak periods for sales. Inventory increased as a result of peak period production, changes in inventory mix and transportation costs. Net debt (current portion of long-term debt plus long-term debt less cash) for the six-month period ended December 3, 2005 and the fiscal year ended May 31, 2005 was $354.7 million and $282.1 million, respectively. This increase represents the amounts to fund operating activities for the period, including capital expenditures purchases which were $5.4 million compared to capital expenditures of $11.6 million in the six months ended November 27, 2004.
