EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

 

FROM:    Porter, Le Vay & Rose, Inc.
   Michael J. Porter, President
   212-564-4700
COMPANY    John Aglialoro
CONTACT:    Chairman & CEO
   508-533-4300

FOR IMMEDIATE RELEASE

CYBEX ANNOUNCES Q2 RESULTS;

PRO FORMA EPS OF $.10 vs $.07

MEDWAY, MA, August 3, 2006 — Cybex International, Inc. (AMEX: CYB), a leading exercise equipment manufacturer, today reported results for the second quarter ended July 1, 2006. Net sales for the second quarter 2006 were $29,951,000, compared to $27,197,000 for the corresponding 2005 period, an increase of 10.1%. For the six months ended July 1, 2006, net sales were $58,863,000, compared to $51,956,000 for 2005, an increase of 13.3%. On a GAAP basis, the Company reported net income for the second quarter of 2006 of $16,108,000, or $0.96 per diluted share, and for the six months ended July 1, 2006 of $16,775,000, or $1.03 per diluted share. Excluding a second quarter 2006 reduction of the valuation reserve for deferred taxes, the Company’s second quarter 2006 pro forma net income would have been $1,687,000, or $0.10 per diluted share, compared to net income for the second quarter of 2005 of $1,038,000, or $0.07 per diluted share. The pro forma net income for the six months ended July 1, 2006 would have been $2,354,000, or $0.14 per diluted share, compared to net income of $1,157,000, or $0.07 per diluted share for the corresponding 2005 period.

Actual GAAP results for the second quarter ended July 1, 2006, include a $14,421,000 reduction in the Company’s deferred tax valuation reserve, resulting in a net tax benefit of $14,359,000 and $14,296,000, respectively, for the three and six months ended July 1, 2006. In 2002 the Company recorded a $20,773,000 non-cash charge to establish a valuation reserve for deferred taxes. During the second quarter ended July 1, 2006, the Company reevaluated the need for a valuation allowance in accordance with SFAS No. 109, “Accounting for Income Taxes,” as a result of the cumulative profits generated in the most recent three year period as well as other positive evidence, including the repayment of outstanding debt and the Company’s stock offering, which was completed in May 2006. Accordingly, the net deferred tax asset of $14,421,000 at July 1, 2006 represents the amount that management believes is more likely than not to be realized. At July 1, 2006, the remaining valuation allowance is approximately $6,600,000. Management will continue to assess the need for the remaining valuation allowance in future periods.

John Aglialoro, Chairman and CEO, stated, “We are working hard to accelerate our re-entry into the high-end consumer fitness equipment market. CYBEX is expanding its specialty fitness dealer relationships and expects to begin shipping two premium consumer products by the end of 2006. This will mean incurring expenses planned for 2007 beginning in the third quarter of 2006. However, the Company believes these investments will begin paying off in the fourth quarter of 2006 and will provide a good foundation for 2007 and beyond.”

Cybex International, Inc. is a leading manufacturer of premium exercise equipment for commercial and consumer use. The CYBEX product line includes a full range of both strength training and cardio training machines sold worldwide under the CYBEX brand. Products and programs are designed and engineered to reflect the natural movement of the human body, assisting each unique user – from the professional athlete to the first-time exerciser – to improve daily human performance. For more information on CYBEX and its product line, please visit the Company’s website at www.cybexinternational.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, competitive factors, technological and product developments, market demand, economic conditions, the resolution of litigation involving the Company, and the ability of the Company to comply with the terms of its credit facilities. 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, its Reports on Form 10-Q, its Current Reports on Form 8-K, and its proxy statement dated April 4, 2006.

- Financial Tables to Follow -


CYBEX INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - ACTUAL

(In thousands, except per share data)

(unaudited)

 

     Three Months Ended

    Six Months Ended

 
   July 1,
2006


    June 25,
2005


    July 1,
2006


    June 25,
2005


 

Net sales

   $ 29,951     $ 27,197     $ 58,863     $ 51,956  

Cost of sales

     19,089       17,546       37,450       33,450  
    


 


 


 


Gross profit

     10,862       9,651       21,413       18,506  

As a percentage of sales

     36.3 %     35.5 %     36.4 %     35.6 %

Selling, general and administrative expenses

     8,659       7,966       17,921       16,049  
    


 


 


 


Operating income

     2,203       1,685       3,492       2,457  

Interest expense, net

     454       619       1,013       1,215  
    


 


 


 


Income before income taxes

     1,749       1,066       2,479       1,242  

Income tax provision (benefit)

     (14,359 )     28       (14,296 )     85  
    


 


 


 


Net income

   $ 16,108     $ 1,038     $ 16,775     $ 1,157  
    


 


 


 


Basic net income per share

   $ 1.00     $ .07     $ 1.08     $ .08  
    


 


 


 


Diluted net income per share

   $ .96     $ .07     $ 1.03     $ .07  
    


 


 


 


Shares used in computing basic net income per share

     16,041       15,121       15,599       15,113  
    


 


 


 


Shares used in computing diluted net income per share

     16,727       15,690       16,287       15,708  
    


 


 


 


 

-more-


CYBEX INTERNATIONAL, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

 

     Three Months Ended

    Six Months Ended

 
   July 1,
2006


    June 25,
2005


    July 1,
2006


    June 25,
2005


 

Net sales

   $ 29,951     $ 27,197     $ 58,863     $ 51,956  

Cost of sales

     19,089       17,546       37,450       33,450  
    


 


 


 


Gross profit

     10,862       9,651       21,413       18,506  

As a percentage of sales

     36.3 %     35.5 %     36.4 %     35.6 %

Selling, general and administrative expenses

     8,659       7,966       17,921       16,049  
    


 


 


 


Operating income

     2,203       1,685       3,492       2,457  

Interest expense, net

     454       619       1,013       1,215  
    


 


 


 


Income before income Taxes

     1,749       1,066       2,479       1,242  

Income taxes

     62       28       125       85  
    


 


 


 


Net income

   $ 1,687       1,038       2,354       1,157  
    


 


 


 


Basic net income per share

   $ 0.11     $ 0.07     $ 0.15     $ 0.08  
    


 


 


 


Diluted net income per share

   $ 0.10     $ 0.07     $ 0.14     $ 0.07  
    


 


 


 


Shares used in computing basic net income per share

     16,041       15,121       15,599       15,113  
    


 


 


 


Shares used in computing diluted net income per share

     16,727       15,690       16,287       15,708  
    


 


 


 


 

-more-


CYBEX INTERNATIONAL, INC.

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

 

     Three Months Ended July 1, 2006

   Six Months Ended July 1, 2006

  

Actual

Results


    Adjustments

   

ProForma

Results


  

Actual

Results


    Adjustments

   

ProForma

Results


Net Sales

   $ 29,951     $ —       $ 29,951    $ 58,863     $ —       $ 58,861

Cost of sales

     19,089       —         19,089      37,450       —         37,450
    


 


 

  


 


 

Gross Profit

     10,862       —         10,862      21,413       —         21,413

Selling, general and administrative expenses (SG&A)

     8,659       —         8,659      17,921       —         17,921
    


 


 

  


 


 

Operating income

     2,203       —         2,203      3,492       —         3,492

Interest expense, net

     454       —         454      1,013       —         1,013
    


 


 

  


 


 

Income before Income taxes      1,749       —         1,749      2,479       —         2,479
Income tax provision (benefit)      (14,359 )     14,421       62      (14,296 )     14,421       125
    


 


 

  


 


 

Net income

   $ 16,108     $ (14,421 )   $ 1,687    $ 16,775     $ (14,421 )   $ 2,354
    


 


 

  


 


 

Basic net income per share

   $ 1.00     $ (.89 )   $ 0.11    $ 1.08     $ (.93 )   $ 0.15
    


 


 

  


 


 

Diluted net income per Share

   $ .96     $ (.86 )   $ 0.10    $ 1.03     $ (.89 )   $ 0.14
    


 


 

  


 


 

Shares used in computing basic net income per share

     16,041               16,041      15,599               15,599
    


 


 

  


 


 

Shares used in computing diluted net income (loss) per share

     16,727               16,727      16,287               16,287
    


 


 

  


 


 

 

-more-


CYBEX INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

 

    

July 1,

2006


   December 31,
2005


ASSETS

             

Current assets:

             

Cash

   $ 526    $ 807

Accounts receivable, net

     14,860      18,320

Inventories

     8,802      9,258

Prepaid expenses and other

     3,610      2,707

Deferred tax asset

     2,092      —  
    

  

Total current assets

     29,890      31,092

Property and equipment, net

     11,673      12,124

Goodwill

     11,247      11,247

Deferred tax asset

     12,329      —  

Other assets

     852      1,209
    

  

     $ 65,991    $ 55,672
    

  

LIABILITIES AND STOCKHOLDERS’ EQUITY

             

Current liabilities:

             

Current maturities of long-term debt

   $ —      $ 3,929

Current portion of capital leases

     374      481

Accounts payable

     4,885      5,918

Accrued expenses

     16,023      16,286
    

  

Total current liabilities

     21,282      26,614

Long-term debt

     —        9,730

Capital leases, excluding current portion

     187      332

Other liabilities

     2,099      2,808
    

  

Total liabilities

     23,568      39,484

Stockholders’ equity

     42,423      16,188
    

  

     $ 65,991    $ 55,672
    

  

 

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