Cybex International, Inc. reported that a jury verdict has been rendered in the patent infringement litigation, Colassi v. Cybex International, Inc. The jury held that Cybex's Stableflex deck system utilized in its treadmills infringes a patent held by the plaintiff, and awarded to the plaintiff damages of $2.5 million. Cybex is disappointed in this verdict which it believes is unsupported both by the record and by sound engineering principles. It believes that strong grounds exist to appeal the decision, which it will vigorously pursue.
Cybex anticipates recording a third quarter 2005 pre-tax charge of approximately $3.5 million including costs and legal fees with respect to the Colassi litigation. While Cybex intends to pursue relief from the verdict, it has sufficient liquidity to satisfy the award if its appeal is ultimately unsuccessful. Cybex is also implementing a redesigned deck system and does not expect the court decision to have a significant impact on sales of its treadmill products.
