Cybex International, Inc. reported net sales for the quarter ended June 28, 2003 were $21,114,000 versus $18,005,000 for the comparable 2002 period. The net profit for the quarter ended June 28, 2003 was $183,000, or $0.02 per diluted share, compared to a net loss of $22,243,000, or $2.53 per share, for the second quarter of 2002.
Net sales for the six months ended June 28, 2003 were $41,722,000, compared to $36,918,000 for the comparable 2002 period. The net loss for the six months ended June 28, 2003 was $1,604,000, or $0.18 per share, compared to a net loss of $22,184,000, or $2.52 per share, for the same prior year period. The results for the second quarter and six months ended June 29, 2002 included a non-cash charge to establish a valuation reserve for deferred taxes of $21,316,000 in accordance with SFAS 109. In the future, such related deferred tax valuation reserve will continue to be re-evaluated and a benefit will be recorded upon realization of the deferred tax assets or the reversal of the valuation reserve.
John Aglialoro, Chairman and CEO, commented, “This quarter represents the fourth consecutive quarter of revenue growth. The increase in revenue is a result of the Company's focus on new and differentiated products. Our new Eagle strength line and treadmill offerings have been marketed since mid-2002 and, as a result, selectorized strength equipment and treadmill sales have increased from 2002 levels. In addition, the ArcTrainer continues to outpace our expectations and we anticipate increasing sales in this line to existing customers as well as to first time purchasers. We expect to introduce a totally new line of bikes in the first half of 2004. Besides our traditional fitness market, Cybex will proceed with plans to concentrate on the needs of particular market segments which the Company believes we can best serve, including the physical therapy/wellness, military, school/university as well as other vertical market customers who have space constraints such as hotels and corporate fitness centers. By dedicating sales and product development efforts to these market segments we hope to spark additional growth initiatives.”
As previously announced, Cybex refinanced in full its prior credit facility on July 16, 2003. The new credit arrangements include a $19,000,000 working capital and term loan facility from CIT Group/Business Credit, Inc. and an $11,000,000 mortgage loan from Hilco Capital LP. As part of the refinancing, Cybex' principal shareholder, UM Holdings Ltd, exchanged $4,900,000 of subordinated notes for a new series of Preferred Stock, and provided additional credit support.
CYBEX INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
-------- --------- -------- ---------
Net sales $21,114 $18,005 $41,722 $36,918
Cost of sales 13,897 11,755 27,805 23,425
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Gross profit 7,217 6,250 13,917 13,493
As a percentage of sales 34.2% 34.7% 33.4% 36.5%
Selling, general and
administrative expenses 6,387 6,981 13,914 13,513
-------- --------- -------- ---------
Operating income (loss) 830 (731) 3 (20)
Interest expense, net 647 868 1,664 1,478
-------- --------- -------- ---------
Income (loss) before
income taxes 183 (1,599) (1,661) (1,498)
Income tax provision (benefit) - 20,644 (57) 20,686
-------- --------- -------- ---------
Net income (loss) $ 183 $(22,243) $(1,604) $(22,184)
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Basic and diluted net income
(loss) per share $ .02 $ (2.53) $ (.18) $ (2.52)
