Cybex Reports Another Quarter of Sales Growth

Cybex International Inc., Medway, MA, reported net sales for third quarter 2011 of $33.5 million, a 15 percent increase compared to $29.2 million for the same period last year, according to financials released by the company.

This is the fourth consecutive quarter of double-digit sales growth, CEO John Aglialoro noted on a conference call with analysts today. Net sales in second quarter 2011 were $32.6 million, an 18 percent increase from the $27.7 million it reported in second quarter 2010. First quarter 2011 net sales were $31 million compared to $26.1 million in first quarter 2010, a 19 percent increase. Net sales in fourth quarter 2010 were $39.9 million, a 15 percent increase from fourth quarter 2009 (with $34.8 million in sales).

For the nine months ended Sept. 24, 2011, net sales were $97.1 million compared to $83 million for the same period in 2010, a 17 percent increase.

“We’re continuing to enjoy solid revenue growth,” Aglialoro said. “Our international sales team continues to strengthen. This will be vital because I believe that most companies that truly want to be global today are going to have less than 50 percent of their revenues in the United States and more than 2/3 percent international sales. Exercise is medicine. We’re beginning to see that more and more.”

In terms of net loss, Cybex reported a net loss of $0.3 million for third quarter 2011 compared to a net loss of $15,000 for the corresponding period in 2010. The net loss for the first nine months of this year was $0.5 million compared a net loss of $1.1 million for the same period in 2010.

The 2011 results include additional litigation charges of $1.4 million and $3 million for third quarter 2011 and the nine months ended Sept. 24, 2011, respectively. Those charges are related to the Barnhard v. Cybex International Inc. product liability judgment, primarily related to interest that is accruing at the annual rate of 9 percent on the judgment.

Aglialoro said on the call that a five-judge appellate court will hear the company’s position in the Barnhard case on Oct. 26 in Rochester, NY. Last spring, Cybex received a stay of enforcement on a $66 million judgment in the Barnhard case, in which a jury found Cybex 75 percent liable for the judgment.

“The sense is, and there’s nothing firm about this, but generally speaking, we probably would hear before the end of the year their verdict,” Aglialoro said, “whether it’s sent back to the lower courts, whether the plaintiffs’ numbers are approved, as such, by the appellate court and this jury trial in Buffalo, NY, or somewhere in between.”

Cybex President and COO Art Hicks said on the call that international sales were up 18 percent, and North America sales were up 13 percent in third quarter 2011. Cardio sales were up 11 percent to $17.7 million in third quarter 2011, strength sales were up 20 percent to $12.3 million in the quarter and other sales (mostly freight) were up 13 percent to $3.5 million, Hicks said.

“A good strong showing all around,” he added.

Cybex officials will appear before a NASDAQ Stock Market Panel on Nov. 10 to present a plan to regain compliance with NASDAQ’s listing rule.

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