Cybex International, Inc. reported sales in the fourth quarter dropped to $39.3 million from $44.5 million a year ago. The company reported a net loss for the fourth quarter of 2008 of $10.9 million, including an $11.3 million goodwill impairment charge, or 62 cents per share, compared to net income of $3 million, or 17 cents, for the corresponding 2007 period.

For the year ended December 31, 2008, net sales were $147.9 million compared to $146.5 million for 2007. The net loss for the year ended December 31, 2008 was $9.1 million, or $0.52 per diluted share, compared to net income of $9.8 million, or $0.55 per diluted share, for 2007.

The 2008 results include a fourth quarter non-cash non-deductible goodwill impairment charge of $11.3 million, or $0.64 per diluted share, triggered by declines in the Company’s stock price in the period. The write-off is in accordance with the requirements of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.” Various factors, principally the reduction in the Company’s market capitalization resulting from the decline in its stock price, resulted in a complete write-off of the carrying value of the goodwill. Without the goodwill impairment charge, net income would have been $373,000 or $0.02 per diluted share for the fourth quarter of 2008 and $2.2 million or $0.12 per diluted share for 2008 and operating income would have been $1.5 million for the fourth quarter of 2008 and $5.7 million for 2008.

During the third quarter of 2007, the Company reevaluated, in accordance with SFAS 109, the need for the remaining deferred tax valuation allowance originally established in 2002 and, based on this review, substantially reduced the reserve as of September 29, 2007. The reduction of the tax valuation allowance increased net income by $5.4 million, or $0.30 per diluted share, for the year ended December 31, 2007.

John Aglialoro, Chairman and CEO stated, “Q4 sales were down 12% compared to Q4 2007 and I expect Q1 2009 sales to be below Q1 2008. Fitness clubs appear to be cautious in making expansion investments and have reduced their capital expenditures. This is reflective, of course, of general economic conditions. Looking forward, 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.”