Cybex International, Inc., reported a fourth quarter decline in sales and expects first quarter 2009 results to be similar due to the current “general economic conditions.”
The maker of fitness equipment reported sales in the fourth quarter decreased 11.7% to $39.3 million from $44.5 million a year ago. The company reported a net loss for the fourth quarter of $10.9 million, or a loss of 62 cents per diluted share, compared to net income of $3.0 million, or 17 cents per diluted share, for the corresponding 2007 period.
The 2008 results include a fourth quarter non-cash, non-deductible goodwill impairment charge of $11.3 million, or 64 cents per diluted share, triggered by declines in the companys stock price in the period. Various factors, principally the reduction in the companys market capitalization resulting from the decline in its stock price, resulted in a complete write-off of the carrying value of the goodwill.
John Aglialoro, chairman and CEO, said he expects first quarter sales to be below sales in Q1 last year. He suggested that fitness clubs appear to be cautious in making expansion investments and have reduced their capital expenditures, reflecting the general economic conditions. “Looking forward,” he said, “while the company is not certain how long these conditions will persist, we expect sales to rebound as the economy recovers.
In the meantime, expenses are being closely monitored as they were throughout 2008, and some initiatives are being delayed until we are more confident of the sales horizon. Gross margin in the quarter continued to be negatively impacted by higher material costs compared to Q4 2007 although we have seen some decreases in commodity prices in Q1 2009.”
