Cybex International Inc., Medway, MA, reported third quarter 2012 net sales of $34.4 million, up slightly from the $33.5 million in the corresponding 2011 period.
Cybex also reported net income for the quarter of $1.1 million compared to a net loss of $0.3 million for third quarter 2011.
Cybex did not hold the customary financial call upon release of its financials. The company announced last week that its board had approved a plan to take the company private. As part of the plan, all of the company’s outstanding common stock—other than shares owned by the company’s largest shareholder, UM Holdings Ltd. and UM’s subsidiaries and shareholders, which include John Aglialoro, chairman and CEO of Cybex and UM, and Joan Carter, who is on the board of both companies, would be converted into $2.55 per share payable in cash. Aglialoro and Carter are married.
The plan must be approved by shareholders, which Art Hicks, president and COO, says will likely happen in January. If shareholders approve the plan, the company could go private within a matter of weeks, he says. At least four law firms have announced they are looking at the merger agreement to see if there are any grounds for lawsuits. Hicks says that the decision-making process was above board and fair.
If the plan to go private is approved, it could mean that this would be the last financial report from Cybex, depending on if the company is required to report its fourth quarter 2012 and year-end 2012 financials prior to going private.
After a few years of declining revenue, Cybex has bounced back for much of 2012, although it did have a five percent sales decrease in the second quarter. For the nine months ended Sept. 29, the company’s net sales were $102.4 million, compared to $97.1 million for 2011. Net income for the first nine months of 2012 was $0.3 million compared to a net loss of $0.5 million for 2011.
These numbers include litigation charges of $1.4 million and $3 million for the quarter and nine months ended Sept. 24, 2011, respectively, and litigation charges for the quarter ended Sept. 29, 2012, related to the $66 million Barnhard vs. Cybex International product liability judgment that was settled in February for $19.5 million.
Aglialoro stated in a release, “Third quarter showed improvement compared to the previous quarter although the current economic environment continues to be challenging. While it is difficult to predict the short-term impact of economic conditions, we remain optimistic about sales prospects over the longer-term.”
Third quarter gross margins improved compared to the second quarter, Hicks said in the release.
“We expect this slow improvement trend to continue as we gain experience with our new 625 and 770 product lines,” Hicks added. “The Bravo strength series continues to be attractive to customers with functional training areas, which is a trend in the club market.”
The company plans to introduce in the fourth quarter its 525 cardio line, which will have lower price points and be targeted to the light commercial market.