Cybex Sees 20% Q2 Sales Jump, Bottom Line Down on LY Benefit

Cybex International, Inc. reported a 15.7% jump in net sales for the second quarter to $34.7 million from $30.0 million last year, driven by “strong sales” of both the strength and cardio products. The company reported net income for the second quarter of $1.1 million, or 6 cents per diluted share,  well down from last year's $16.1 million or 96 cents per diluted share, which included a $14.4 million, or 86 cents per diluted share benefit due to a reduction in the company's tax valuation reserve. In addition, the company's effective tax rate was 41.5% in the second quarter of 2007 compared to 3.5% in the corresponding 2006 period. The difference between the 2007 and 2006 effective tax rates would equate to additional tax expense of $663,000, or 4 cents per diluted share, for the 2006 period.

For the six months ended June 30, 2007, net sales increased by 18% to $69.4 million compared to $58.9 million for 2006. Net income for the six months ended June 30, 2007 was $2.2 million, or 12 cents per diluted share, compared to net income of $16.8 million, or $1.03 per diluted share for 2006. The 2006 results included the second quarter reduction in the tax valuation reserve referred to above which impacted the 2006 six month results by 89 cents per diluted share. The difference between the 2007 and 2006 effective tax rates for the six month period would equate to additional tax expense of $904,000, or 5 cents per diluted share for 2006.

John Aglialoro, chairman and CEO, stated, “CYBEX's strong growth continued during the second quarter, in large part driven by new products. We believe that sales of the home product lines will supplement our growth, particularly in the traditionally strong fourth quarter. At the same time as we grow our revenues, we continue to make the investments in manufacturing and corporate capabilities necessary to drive growth and to create significant efficiencies and economies of scale in the future. The Selling, general and administrative costs incurred during the quarter include investments for the future including the eNova new product development and the hospitality and home market marketing initiatives. The gross margins were negatively impacted by product mix including a high percentage of sales from new products which typically are introduced at a high cost of goods and can often be reduced with experience and volume. As we look ahead we expect to retain a leadership position in the commercial market, develop a robust home business, improve our product quality and pricing, and reduce unit cost levels. More specifically, we are very excited about working hard to fully leverage our new, state-of-the-art Owatonna manufacturing facility. Although this investment will increase aggregate manufacturing costs in the near term, we expect it to enable us to achieve significant cost savings in the future and enable CYBEX to meet capacity issues associated with our growth plans.”

                     CYBEX INTERNATIONAL, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                (In thousands, except per share data)

                             (unaudited)

                               Three Months Ended   Six Months Ended

                               ——————- ——————-

                               June 30,   July 1,  June 30,   July 1,

                                 2007      2006      2007      2006

                               ——— ——— ——— ———
Net sales                      $  34,740 $  29,951 $  69,416 $  58,863

Cost of sales                     22,535    19,089    44,317    37,450

                               ——— ——— ——— ———

     Gross profit                 12,205    10,862    25,099    21,413

     As a percentage of sales      35.1%     36.3%     36.2%     36.4%

Selling, general and

 administrative expenses          10,380     8,659    21,176    17,921

                               ——— ——— ——— ———

Operating income                   1,825     2,203     3,923     3,492

Interest expense, net               (48)       454       162     1,013

                               ——— ——— ——— ———

Income before income taxes         1,873     1,749     3,761     2,479

Income tax provision (benefit)       778  (14,359)     1,562  (14,296)

                               ——— ——— ——— ———

Net income                     $   1,095 $  16,108 $   2,199 $  16,775

                               ========= ========= ========= =========

Basic net income per share     $    0.06 $    1.00 $    0.13 $    1.08

                               ========= ========= ========= =========

Diluted net income per share   $    0.06 $    0.96 $    0.12 $    1.03

                               ========= ========= ========= =========

Shares used in computing basic

 net income per share             17,309    16,041    17,288    15,599

                               ========= ========= ========= =========

Shares used in computing

 diluted net income per share     17,911    16,698    17,902    16,264

                               ========= ========= ========= =========