Sales growth was solid for Cybex International, Inc. during the second quarter ended June 25, but litigation related to the much-publicized Bardhard product liability judgement handed down in December continued to sink the companys bottom line.
Total revenues for the Medway, MA-based exercise equipment manufacturer rose 17.7 percent to $32.6 million from $27.7 million versus the year-ago period, but the companys net loss widened from $356,000, or 3 cents per diluted share, to $555,000, or 3 cents per diluted share.
Company Chairman and CEO John Aglialoro said first half sales to both the U.S. and International markets were strong, led by sales of the companys new treadmill models, the 77-T and 625T.
The 2011 results include additional litigation charges of $1.3 million and $1.6 million for the quarter and six months ended June 25, 2011, respectively, related to the Barnhard product liability judgment, primarily related to interest that is accruing at the annual rate of 9% on the judgment
In December, a New York court ruled the company must pay a sum of $66 million to a woman who was severely injured when a Cybex weight machine fell on her. Aglialoro issued a statement shortly following the ruling, calling the judgement an injustice and another example of a tort system run amok. Nonetheless, Cybex was forced to absorb a large amount of the damages as insurance coverage only accounted for about $4 million.
The company has filed an appeal of this judgment and enforcement of the judgment has been stayed during the continuance of the appellate process.
