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Cybex Reports 20 Percent Sales Increase in First Quarter

Cybex International Inc., Medway, MA, had improved sales in first quarter 2012, but second quarter sales are sluggish so far, according to Chairman and CEO John Aglialoro.

First quarter net sales increased 20.2 percent to $37.3 million compared to $31 million for the same quarter last year. The increase was led by the company’s new products, in particular, its treadmills, sales of which increased 60 percent, Aglialoro said in a call with analysts today. The company introduced the 770T and the 625T treadmills this year.

Despite the improved first quarter numbers, Aglialoro said that the company is experiencing sluggishness in second quarter sales, which he says reflects uncertainty in the U.S. and international economies.

“The backlog is not what I would have thought at this point,” Aglialoro said. “I have talked to others in the industry, and I don’t think we’ll find that the industry will be as strong in the second quarter.”

Cybex’s North American sales in first quarter 2012 increased 14 percent to $25.1 million. International sales were up 34 percent to $12 million. Cardio equipment sales increased 26 percent to $20.9 million. Strength sales increased 6 percent to $11.7 million. Sales in the other category (freight, parts, miscellaneous services) increased 39 percent to $4.6 million.

Cybex’s net profit for the first quarter was $0.5 million compared to a net profit in first quarter 2011 of $0.4 million. Included in the results were charges of $93,000 and $356,000 for 2012 and 2011, respectively, related to the Barnhard v. Cybex International Inc. product liability lawsuit. This litigation was settled in February for $19.5 million.

Cash is down about $9 million from the end of the year 2011, and debt is up about $10 million from that same period, according to Cybex President and COO Art Hicks.

Gross margins were lower than 2011, which the company expected due to product mix and to higher initial costs of the new products, Hicks said, but he added that the company expects to be able to lower the costs of these products in the second half of the year.

Cybex also announced today that its patented progressive stabilization system won the FIBO Innovation Award 2012 last week at the FIBO trade show in Essen, Germany. The system is featured on Cybex’s Bravo Press and Bravo Pull strength machines.

“We set out to combine the advantages of isolative strength training equipment with the advantages of cable press and pull equipment, and progressive stabilization was born,” Ray Giannelli, senior vice president of research and development for Cybex, said in a release. “We’re thrilled that the FIBO Innovation Award jury saw fit to recognize this advancement in exercise technology. It inspires us to continue creating better ways to work out.”

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