Icon Health & Fitness, Inc. reported a slight decrease in sales for the fourth quarter, but saw a decrease in expenses help to shrink the net loss. For the fiscal fourth quarter, the company reported net sales of $161.3 million, down 1.3% from $163.4 million for the same period last year. For the fourth quarter, sales in the companys Cardio division decreased 0.4% to $138.6 million, while sales in the Strength unit increased 87.5% to $4.5 million.
During Q4, Icon discontinued its NordicTrack retail subsidiary, which consists of more than 60 stores, because the chain had run an operating loss for “several years” with the loss for this year topping out at $19.2 million. The company will continue to use the NordicTrack brand in its manufacturing, but will no longer operate the retail segment. The back-end was especially strong for the company with gross margins increasing 380 basis points to 23.9% of net sales, while SG&A expenses decreased 1,550 basis points to 22.4% of sales. Combining these improvements, the company was able to slim its net loss 58.3% to $29.3 million for the quarter from $70.3 million last year.
| Icon Health & Fitness | |||
| Fiscal Year Results | |||
| (in $ millions) | 2006 | 2005 | Change |
| Total Sales | $852.2 | $871.0 | -2.2% |
| Strength | $741.1 | $738.7 | +0.3% |
| Cardio | $111.1 | $132.3 | -16.0% |
| Gross Margins | 26.7% | 24.6% | +210 bps |
| Net Income | ($49.7) | ($110.0) | -54.8% |
| Inventories* | $151.5 | $152.7 | -0.8% |
| Receivables* | $126.4 | $123.3 | +2.5% |
| *at year-end | |||
