Medway, Ma — Third quarter 2007 net sales for Cybex International increased by 9 percent to $32.6 million, the company announced last month. The figures compare to $29.9 million for the corresponding 2006 period. The company attributes the growth to strong sales of the company's cardio products and continued growth in the commercial equipment market.

Cybex reported net income for the third quarter of $4.6 million compared to net income of more than $500,000 in the third quarter of last year.

“The third quarter was somewhat transitional for us as we absorbed start-up expenses in our new manufacturing facility in Owatonna, MN, as well as some of the new growth initiatives, which I've outlined in the past,” John Aglialoro, chairman and CEO of the company, said in a conference call with analysts last month. He said that sales of strength equipment were affected by the move to the new facility, which disrupted production during July. An initial hiccup in the painting process at the new facility also affected sales, but those problems have been corrected, he says.

“We know the business is healthy despite these temporary nonrecurring items because backlog is probably close to double what we're normally seeing,” Aglialoro says. “We continue to see the double digit growth rates that we've talked about in the past in the commercial market and we are taking market share.”

The company's gross margin in the third quarter dropped to 32.2 percent from 35.4 percent last year. Aglialoro attributed this to $600,000 in moving costs and some unabsorbed manufacturing overhead in the new facility.

The company has begun some new initiatives including a partnership with eNova Group as part of its hospitality business. The partner will create a line of strength products that Aglialoro says “will be good growth vehicles for us in 2008.”

The hospitality division is part of the company's growing focus on the light vertical segment of the commercial market. That segment includes hotels, spas, universities, large high schools and medical rehabilitation facilities.

“The profitability may be higher in the vertical market, which is more of a customized special marketplace than either home or commercial,” he says.

However, he also says that the traditional commercial side is still core to the company and continues to grow.

In the home side of the market, the company announced a voluntary recall of several home treadmills (Cybex 400T, Cybex 410T, Trotter 510, Trotter 525, Trotter 535 and CXT+). These treadmills were involved in a recall in 2003, but the wire nuts installed at that time were done so improperly, causing the treadmills to overheat and pose a fire hazard.

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