Cybex Announces Third Quarter Results

  Cybex Announces Third Quarter Results

Business Wire

MEDWAY, Mass. -- October 23, 2012

Cybex International, Inc. (NASDAQ: CYBI), a leading U.S. manufacturer of
premium exercise equipment, today reported results for its third quarter ended
September 29, 2012. Net sales for the third quarter of 2012 were $34.4
million, compared to $33.5 million for the corresponding 2011 period. The
Company reported net income for the third quarter of 2012 of $1.1 million, or
$0.06 per diluted share, compared to a net loss of $0.3 million, or $0.02 per
diluted share, for the corresponding 2011 period.

For the nine months ended September 29, 2012, net sales were $102.4 million,
compared to $97.1 million for 2011. Net income for the nine months ended
September 29, 2012 was $0.3 million, or $0.02 per diluted share, compared to a
net loss of $0.5 million, or $0.03 per diluted share, for 2011.

The above results include litigation charges of $1.4 million and $3.0 million
for the quarter and nine months ended September 24, 2011, respectively, and
litigation charges (reduction) of ($0.1 million) for the quarter ended
September 29, 2012, related to the Barnhard product liability judgment. As
previously reported, this litigation was settled during the first quarter of
2012.

Cybex Chairman and CEO John Aglialoro stated, “Q3 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.”

Cybex President and COO Art Hicks stated, “We look forward to the Q4
introduction of our 525 cardio line which is targeted to better reach light
commercial market segments. These products will feature lower price points,
valuing ease of use and durability. Third quarter gross margins improved
compared to Q2; and we expect this slow improvement trend to continue as we
gain experience with our new 625 and 770 product lines. The Bravo strength
series continues to be attractive to customers with functional training areas,
which is a trend in the club market.”

As previously announced, the Company’s board of directors has approved an
Agreement and Plan of Merger pursuant to which all of the Company’s
outstanding common stock - other than shares owned by the Company’s largest
shareholder, UM Holdings, Ltd. (“UM”), and UM’s subsidiaries and shareholders,
which include John Aglialoro and Joan Carter - would be converted into $2.55
per share payable in cash, in a “going private” merger transaction. Mr.
Aglialoro is Cybex’s chairman and CEO and Ms. Carter is a director.

Consummation of the merger is subject to various conditions, including
approval of the Merger Agreement by the affirmative vote of two-thirds of all
outstanding shares and a majority of the shares held by the public
shareholders, and consummation of financing. While there can be no assurance
that the merger will be approved by the shareholders or consummated, the
Company anticipates that it will seek approval of the merger at a special
Shareholders Meeting to be held during the first quarter of 2013 and that the
transaction will close shortly thereafter.

If the merger is approved and consummated, shares of the Company’s common
stock (other than shares held by UM, Mr. Aglialoro and Ms. Carter) will be
deregistered under the Securities and Exchange Act of 1934, as amended (the
“Exchange Act”), the Company will no longer be subject to the reporting
requirements of the Exchange Act, and the shares will no longer trade on any
market.

There is no investor conference call scheduled this quarter.

About Cybex

Cybex International, Inc. is a leading manufacturer of premium exercise
equipment primarily for commercial use. The Cybex product line, including a
full range of strength and cardio training machines, is designed using
exercise science to reflect the natural movement of the human body. Led by
theCybex Research Institute, Cybex fitness equipment is engineered to produce
optimal results for users from the first-time exerciser to the professional
athlete. Cybex designs and builds its products in the USA for a wide range of
facilities, from commercial health clubs to home gyms, in more than 85
countries worldwide. For more information on Cybex and its products, visit the
Company’s website atwww.cybexintl.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, the ability of the Company to comply with the terms of
its credit facilities, competitive factors, technological and product
developments, market demand, economic conditions, and the resolution of
litigation involving the Company. 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 for the year ended December 31,
2011, its Reports on Form 10-Q, its Current Reports on Form 8-K, and its proxy
statement dated April 12, 2012.

CYBEX INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
                                                              
                    Three Months Ended              Nine Months Ended
                    September 29,   September 24,   September 29,   September
                                                                    24,
                      2012          2011          2012         2011   
                                                                    
Net sales           $  34,368       $  33,478       $  102,427      $ 97,054
Cost of sales         22,942        21,728        69,686       63,053 
Gross profit           11,426          11,750          32,741         34,001
As a percentage        33.3    %       35.1    %       32.0     %     35.0   %
of sales
Selling,
general and            10,154          10,404          31,498         30,818
administrative
expenses
Litigation
charge                (68     )      1,362         —            3,005  
(reduction)
Operating              1,340           (16     )       1,243          178
income (loss)
Interest              331           240           946          781    
expense, net
Income (loss)
before income          1,009           (256    )       297            (603   )
taxes
Income tax
expense               (74     )      22            (49      )    (149   )
(benefit)
Net income          $  1,083       $  (278    )    $  346         $ (454   )
(loss)
Basic and
diluted net         $  0.06        $  (0.02   )    $  0.02        $ (0.03  )
income (loss)
per share
Shares used in
computing basic
net income            17,141        17,120        17,130       17,120 
(loss) per
share
Shares used in
computing
diluted net           17,236        17,120        17,249       17,120 
income (loss)
per share
                                                                             

CYBEX INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
                                                        
                                           September 29,     December 31,
                                           2012              2011
ASSETS
Current assets:
Cash and cash equivalents                  $    2,181        $   11,958
Accounts receivable, net                        18,620           20,251
Inventories                                     14,258           13,584
Prepaid expenses and other                      1,596            2,070
Barnhard litigation related receivable         —               7,561
Total current assets                            36,655           55,424
Property and equipment, net                     27,131           28,194
Other assets                                   827             1,025
                                           $    64,613       $   84,643
                                                             
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt       $    2,061        $   1,520
Accounts payable                                5,302            5,364
Accrued expenses                                12,295           13,674
Barnhard litigation reserve                    —               27,004
Total current liabilities                       19,658           47,562
Long-term debt                                  18,939           12,769
Other liabilities                              5,579           4,674
Total liabilities                               44,176           65,005
Stockholders’ equity                           20,437          19,638
                                           $    64,613       $   84,643
                                                                 

Contact:

Cybex International, Inc.
Arthur W. Hicks, Jr., 508-533-4300
President and COO
 
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