Cybex is currently operating in what company Chairman and CEO John Aglialoro calls a “slugfest”, meaning that despite improving economic conditions, some companies are still searching for a new identity as they bounce back from lackluster sales in recent years. In a recent conference call with analysts, Aglialoro stated, “ I see clarity, where a year or two ago we all knew where we were in the general economy globally in this country, in our industry, the fitness market, and certainly for Cybex. So that is really the state of affairs at this point.”
Cybex International reported sales for the third quarter were roughly flat at $29.2 million compared to $29.0 million for the corresponding 2009 period. The company reported a net loss for the second quarter of 2010 of $400,000, or 2 cents per diluted share, compared to a net income of $81,000, or 0 cents per diluted share.
As the company continues its shift from the health club market, due mostly to negatively impacted sales, Cybex remains optimistic that catering to the military, fire departments and university types of sales is the way to go.
Aglialoro professed that such ventures “ are longer sales.
But they really do work to our advantage, and in doing so, we see better gross margins.” Those margins, of course, continue to remain strong at 35.9%, up 4.3 margin points versus the third quarter in the prior year. Contributing to the improved margins was improved pricing, which counted for approximately 2 of the 4.3 points.
In summary, Aglialoro said, “The third quarter of 2010 continued the stabilizing trend of Q2 with sales slightly higher than Q3 2009 and gross margins improving from both Q2 2010 and 2009 levels… to result in higher future sales as we penetrate new markets.”
