Cybex International saw continued weakness from its strength segment in the fourth quarter of fiscal 2009, an issue that management said earlier in the year had prompted the company to expand focus to its other segments. Weak orders that carried over from the health club channel in Q3 pushed Strength Equipment down in strong double-digits for the quarter on a year-over-year basis, or slightly better than a 26% decline posted in the third quarter last year. In a conference call with analysts, Cybex management remained fairly general when discussing operational results, but confirmed that weakness from health club orders had prompted the company to move toward specialty markets where performance (is) relative to the products. Management added that the company would remain committed to value pricing while focusing more on universities and the military.

 

Strength Equipment revenues fell 21.7% to $12.3 million while Cardio Equipment slipped 5.9% to $19.2 million, dropping consolidated Q4 revenues 11.3% to $34.8 million from $39.3 million. The company posted net earnings of $993,000, or 6 cents per diluted share, after reporting a net loss of $10.0 million, or 62 cents per share, in the year-ago period.

 

By region, sales to North America slipped 7% while International sales plummeted 22%. Gross margins for the quarter improved to 33.9% from 29.6% last year on lower costs from direct materials, labor and a treadmill line — although management said margins are still not where we want them to be. Operating income improved to $2.1 million in Q4 from $1.5 million in the year-ago period.