Cybex has 180 days to improve its stock price or risk being delisted on the NASDAQ Stock Market, according to a letter from NASDAQ received by Cybex on Jan. 21.
Since a $66 million product liability suit verdict went against Cybex International on Dec. 7, 2010, the company’s stock price has fallen below $1 per share.
NASDAQ automatically notifies companies whose stock has fallen below $1 for 30 days that they are in danger of being delisted.
To regain compliance, the closing bid price of Cybex’s common stock must meet or exceed $1 per share for at least 10 consecutive business days. If Cybex does not meet these requirements by July 20, 2011, NASDAQ will provide written notification to Cybex that its securities are subject to delisting. At that time, Cybex can apply for an extension of the compliance period or make an appeal to NASDAQ to not delist it.
The delisting possibility occurs as most analysts predict that Cybex will be profitable in 2011 after experiencing losses in 2010. Last year, Cybex had a $0.8 million loss in the first quarter, a $0.4 million loss in the second quarter and a $15,000 loss in the third quarter. Fourth quarter financials have not yet been released. After losing $0.14 per share last year, analysts expect the company to earn $0.02 per share in 2011.
Cybex’s 52-week high of $1.80 per share occurred on Aug. 23, 2010. Its 52-week low was $0.57 on Dec. 20, 2010.
The drop in stock occurred after a New York jury found Cybex 75 percent liable in a product liability case related to a piece of Cybex strength equipment that was more than 25 years old. The equipment fell on Natalie Barnhard, an employee at Amherst Orthopedic Physical Therapy in 2004, resulting in her becoming a quadriplegic. A jury awarded her $66 million.
Cybex plans to file an appeal of the verdict.