Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CYBEX INTERNATIONAL INC | d8k.htm |
Exhibit 99.1
| COMPANY | Arthur W. Hicks, Jr. | |
| CONTACT: | President and COO (508) 533-4300 |
FOR IMMEDIATE RELEASE
CYBEX ANNOUNCES 2010 RESULTS
MEDWAY, MA, March 31, 2011 — Cybex International, Inc. (NASDAQ: CYBI), a leading manufacturer of premium exercise equipment, today reported results for the fourth quarter and year ended December 31, 2010. Net sales for the fourth quarter of 2010 were $39.9 million compared to $34.8 million for the corresponding 2009 period, a 15% increase. The Company’s net loss of $57.1 million, or $3.34 per diluted share, reported for the 2010 fourth quarter included a $46.0 million or $2.69 per diluted share pre-tax charge to reserve for an unfavorable jury verdict in the product liability suit, Barnhard v. Cybex International, Inc., and a $12.7 million, or $.74 per diluted share, incremental tax provision, primarily due to the valuation allowance recorded against deferred tax assets as a result of the uncertainty of realization caused by the litigation charge. Net income for the quarter excluding these charges would have been $1.5 million or $0.09 per fully diluted share.
For the year ended December 31, 2010, net sales were $123.0 million compared to $120.5 million for 2009, a 2% increase. The loss for the year ended December 31, 2010 was $58.2 million, or $3.40 per diluted share, compared to a net loss of $2.4 million, or $0.14 per diluted share, for 2009. The 2010 results included the fourth quarter litigation charge and related tax impact referred to above which decreased the 2010 full year results by $3.43 per diluted share. Net income excluding these charges would have been $0.4 million or $0.03 per fully diluted share.
CYBEX Chairman and CEO John Aglialoro stated, ““CYBEX sales, which stabilized in mid-2010, showed strong growth in Q4. This trend continued in the first quarter, with Q1 2011 sales exceeding Q1 2010 sales by over 10%. Our focus on improving gross margins continued the trend throughout 2010 of improved margin results compared to 2009. I have never been more excited by our new product pipeline; and several new products and product lines at the IHRSA trade show in March were favorably received. We have also entered research partnerships with several prestigious institutions which will reinforce the CYBEX exercise science legacy and generate the research results that will help CYBEX to continue to develop innovative products that provide better results. We will continue to vigorously defend ourselves with respect to the product liability verdict, which we believe was in error. This process may result in a long and uncertain path, but we have faith that our judicial system can produce a reasonable resolution. In the meantime we are determined to concentrate on our business and hope to build on the momentum established in 2010.”
- more -
The Company will hold a conference call on Thursday, April 7, 2011 at 4:30 p.m. ET. Those who wish to participate in the conference call may telephone (800) 967-7184 from the U.S. or (719) 457-2707 for international callers. A live webcast of the conference call will be available at www.cybexintl.com or www.viavid.net. On CYBEX’s website under the category Company, click on Press, scroll to the bottom and select Q4 Earnings Release Conference Call. Please visit the website at least 15 minutes early to register for the teleconference webcast and download any necessary software. Real Player or Windows Media Player is required to listen to the webcast.
A replay of the call will be available through Thursday, April 14, 2011 by dialing (877) 870-5176 or (858) 384-5517 for international callers. The access code for the replay is 8205550.
About CYBEX
Cybex International, Inc. is a leading manufacturer of premium exercise equipment primarily for commercial use. The CYBEX product line, including a full range of strength and cardio training machines, is designed using exercise science to reflect the natural movement of the human body. Led by the Cybex Institute for Exercise Science, CYBEX fitness equipment is engineered to produce optimal results for users from the first-time exerciser to the professional athlete. Products are available for a wide range of facilities, from commercial health clubs to home gyms, and are sold in more than 85 countries worldwide. For more information on CYBEX and its product lines, visit the Company’s website at www.cybexintl.com.
This news release may contain forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made above. These include, but are not limited to, the resolution of litigation involving the Company, the ability of the Company to comply with the terms of its credit facilities, competitive factors, technological and product developments, market demand, and economic conditions. Further information on these and other factors which could affect the Company’s financial results can be found in the Company’s previously filed Report on Form 10-K for the year ended December 31, 2009, its Report on Form 10-K for the year ended December 31, 2010, which it expects to file shortly, its Reports on Form 10-Q, its Current Reports on Form 8-K, and its proxy statement dated March 25, 2010.
- Financial Tables to Follow -
-2-
CYBEX INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net sales |
$ | 39,938 | $ | 34,812 | $ | 122,961 | $ | 120,474 | ||||||||
| Cost of sales |
24,555 | 23,005 | 78,114 | 84,466 | ||||||||||||
| Gross profit |
15,383 | 11,807 | 44,847 | 36,008 | ||||||||||||
| As a percentage of sales |
38.5 | % | 33.9 | % | 36.5 | % | 29.9 | % | ||||||||
| Selling, general and administrative expenses |
11,778 | 9,748 | 42,072 | 37,680 | ||||||||||||
| Litigation charge |
45,991 | — | 45,991 | — | ||||||||||||
| Operating income (loss) |
(42,386 | ) | 2,059 | (43,216 | ) | (1,672 | ) | |||||||||
| Interest expense, net |
277 | 367 | 1,260 | 1,274 | ||||||||||||
| Income (loss) before income taxes |
(42,663 | ) | 1,692 | (44,476 | ) | (2,946 | ) | |||||||||
| Income tax (benefit) |
14,450 | 699 | 13,761 | (509 | ) | |||||||||||
| Net income (loss) |
$ | (57,113 | ) | $ | 993 | $ | (58,237 | ) | $ | (2,437 | ) | |||||
| Basic net income (loss) per share |
$ | (3.34 | ) | $ | 0.06 | $ | (3.40 | ) | $ | (0.14 | ) | |||||
| Diluted net income (loss) per share |
$ | (3.34 | ) | $ | 0.06 | $ | (3.40 | ) | $ | (0.14 | ) | |||||
| Shares used in computing basic net income (loss) per share |
17,120 | 17,101 | 17,120 | 17,175 | ||||||||||||
| Shares used in computing diluted net income (loss) per share |
17,120 | 17,133 | 17,120 | 17,175 | ||||||||||||
- more -
-3-
CYBEX INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
| December 31, 2010 |
December 31, 2009 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 7,030 | $ | 6,879 | ||||
| Accounts receivable, net |
18,806 | 16,815 | ||||||
| Inventories |
11,060 | 10,054 | ||||||
| Prepaid expenses and other |
1,574 | 1,216 | ||||||
| Barnhard litigation related receivable |
15,904 | — | ||||||
| Deferred income taxes |
— | 5,040 | ||||||
| Total current assets |
54,574 | 40,004 | ||||||
| Property and equipment, net |
29,693 | 31,835 | ||||||
| Deferred income taxes |
— | 8,815 | ||||||
| Other assets |
1,347 | 7,981 | ||||||
| $ | 85,414 | $ | 88,635 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
||||||||
| Current liabilities: |
||||||||
| Current maturities of long-term debt |
$ | 1,520 | $ | 2,415 | ||||
| Accounts payable |
3,913 | 4,436 | ||||||
| Accrued liabilities |
12,856 | 12,046 | ||||||
| Barnhard litigation reserve |
62,696 | — | ||||||
| Total current liabilities |
80,985 | 18,897 | ||||||
| Long-term debt |
14,289 | 15,191 | ||||||
| Other liabilities |
5,150 | 11,438 | ||||||
| Total liabilities |
100,424 | 45,526 | ||||||
| Stockholders’ equity (deficit) |
(15,010 | ) | 43,109 | |||||
| $ | 85,414 | $ | 88,635 | |||||
- more -
-4-
CYBEX INTERNATIONAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share data)
(unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, 2010 |
December 31, 2009 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||
| GAAP net income (loss) |
$ | (57,113 | ) | $ | 993 | $ | (58,237 | ) | $ | (2,437 | ) | |||||
| Adjustments |
||||||||||||||||
| Eliminate litigation charge |
45,991 | — | 45,991 | — | ||||||||||||
| Adjustment to income tax provision to exclude impact of litigation charge |
12,665 | — | 12,665 | — | ||||||||||||
| Non-GAAP net income (loss) |
$ | 1,543 | $ | 993 | $ | 419 | $ | (2,437 | ) | |||||||
| Basic net income (loss) per share |
$ | (3.34 | ) | $ | 0.06 | $ | (3.40 | ) | $ | (0.14 | ) | |||||
| Adjustments |
3.43 | — | 3.43 | — | ||||||||||||
| Non-GAAP basic net income (loss) per share |
$ | 0.09 | $ | 0.06 | $ | 0.03 | $ | (0.14 | ) | |||||||
| Diluted net income (loss) per share |
$ | (3.34 | ) | $ | 0.06 | $ | (3.40 | ) | $ | (0.14 | ) | |||||
| Adjustments |
3.43 | — | 3.43 | — | ||||||||||||
| Non-GAAP diluted net income (loss) per share |
$ | 0.09 | $ | 0.06 | $ | 0.03 | $ | (0.14 | ) | |||||||
| Shares used in computing basic net income (loss) per share |
17,120 | 17,101 | 17,120 | 17,175 | ||||||||||||
| Shares used in computing diluted net income (loss) per share |
17,120 | 17,133 | 17,120 | 17,175 | ||||||||||||
- more -
-5-
CYBEX INTERNATIONAL, INC.
CONDENSED CONSOLIDATED GAAP TO NON-GAAP BALANCE SHEET
(In thousands)
(unaudited)
| GAAP | NON-GAAP | |||||||||||
| December 31, | December 31, | |||||||||||
| 2010 | Adjustments | 2010 | ||||||||||
| ASSETS |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
$ | 7,030 | $ | — | $ | 7,030 | ||||||
| Accounts receivable, net |
18,806 | — | 18,806 | |||||||||
| Inventories |
11,060 | — | 11,060 | |||||||||
| Prepaid expenses and other |
1,574 | — | 1,574 | |||||||||
| Barnhard litigation related receivable |
15,904 | (15,904 | ) | — | ||||||||
| Deferred income taxes |
— | 5,614 | 5,614 | |||||||||
| Total current assets |
54,374 | (10,290 | ) | 44,084 | ||||||||
| Property and equipment, net |
29,693 | — | 29,693 | |||||||||
| Deferred income taxes |
— | 7,196 | 7,196 | |||||||||
| Other assets |
1,347 | — | 1,347 | |||||||||
| $ | 85,414 | $ | (3,094 | ) | $ | 82,320 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
||||||||||||
| Current liabilities: |
||||||||||||
| Current maturities of long-term debt |
$ | 1,520 | $ | — | $ | 1,520 | ||||||
| Accounts payable |
3,913 | — | 3,913 | |||||||||
| Accrued liabilities |
12,856 | 929 | 13,785 | |||||||||
| Barnhard litigation reserve |
62,696 | (62,696 | ) | — | ||||||||
| Total current liabilities |
80,985 | (61,767 | ) | 19,218 | ||||||||
| Long-term debt |
14,289 | — | 14,289 | |||||||||
| Other liabilities |
5,150 | — | 5,150 | |||||||||
| Total liabilities |
100,424 | (61,767 | ) | 38,657 | ||||||||
| Stockholders’ equity (deficit) |
(15,010 | ) | 58,673 | 43,663 | ||||||||
| $ | 85,414 | $ | (3,094 | ) | $ | 82,320 | ||||||
###
-6-