Second Quarter 2012 Sales Decrease for Cybex

Cybex International Inc., Medway, MA, had a 5 percent decrease in second quarter 2012 net sales compared to the same period last year, the company reported yesterday.

Net sales for second quarter 2012 were $30.8 million compared to $32.6 million for the corresponding 2011 period. For second quarter 2012, Cybex reported a net loss of $1.2 million compared to a net loss of $0.6 million for the corresponding 2011 period.

The decrease came after Cybex experienced a 20 percent increase in first quarter 2012 sales, which were $37.3 million. Because of the first quarter increase, net sales for the first six months of 2012 were higher. For the six month period, net sales were $68.1 million compared to $63.6 million for 2011. The loss for the six months ended June 30, 2012 was $0.7 million compared to a net loss of $0.2 million for 2011.

The results include litigation charges of $1.3 million and $1.6 million for the quarter and six months related to the Barnhard product liability case, which was settled during first quarter 2012.

In the second quarter, cardio equipment sales decreased 4 percent to $17.49 million. Strength equipment sales decreased 10 percent to $9.56 million.

North American sales decreased 3 percent to $20.81 million, which was 68 percent of Cybex’s total sales in the second quarter. International sales decreased 10 percent to $9.98 million or 32 percent of total sales.

Margins were also impacted in the quarter, down to 29.4 percent compared to 33.8 percent in second quarter 2011.


In a call with analysts, John Aglialoro, Cybex chairman and CEO, said that the lower sales were due to an uncertain economy reflecting negatively within the fitness industry, but he expressed optimism for the future.

“Having been in this business for many years, I believe people are less likely to forego fitness club dues compared to even one decade ago, certainly two decades ago,” he said. “So there’s an underlying stability and revenue base that bodes well for our industry and Cybex.”

More clarity about the economy, the industry and Cybex would come in the fall, he said, as small business owners still are uncertain about whether to buy.

Part of Aglialoro’s optimism about the future came from the company’s scheduled fourth quarter introduction of its 525 series of cardio products. The line was designed to reach light commercial market segments, such as hotels and police and fire departments, that have lower price points. These markets are ones that Cybex had not been successful in targeting previously because of the cost of its products.

By the end of the year, Cybex will have introduced more new products than in any other year, and all of its cardio equipment will be new.

Aglialoro also revealed that the company’s insurance premiums are higher as the company increased its insurance protection to a maximum of $25 million with a $1 million deductible compared to the $5 million policy it had in place before the Barnhard case.

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