Cybex CEO says the wolf is no longer at the door

Taking a breath after a difficult year, Cybex International has recorded an 8 percent increase in net sales for the fourth quarter (11 percent for the year) although operating income for the quarter ended Dec. 31 dropped by nearly a third and was down for the year by 42 percent.

Taking a breath after a difficult year, Cybex International has recorded an 8 percent increase in net sales for the fourth quarter (11 percent for the year) although operating income for the quarter ended Dec. 31 dropped by nearly a third and was down for the year by 42 percent.

But a few glimmers of light exist, with one being a slight drop in net interest expense for the fourth quarter after a successful refinancing the middle of last year. And although the Medway, Mass.-based, company (AMEX: CYB) still shows for the quarter a loss in net income ($796,000, or "only" about half of the $1,548,000 in the same quarter a year ago), that seems like a huge step when comparing the year's net income loss -- a seemingly paltry $1,761,000 in 2003 compared to a whopping $21,024,000 in 2002.

"Yes, it was a difficult year in that we didn't do the type of things you do in running a company," CEO John Aglialoro said in an earnings call on Feb. 12, referring to the time spent dealing with refinancing and banks. But "the wolf is no longer at the door, we're out of it."

Although profits eked up a bit for both the quarter and the year ($9,728,000 for the quarter or up nearly 5 percent, and $30,654,000 for the year or up 3.8 percent), the cost of doing business also went up: The cost of sales was up 8.5 percent, pushing the margins down 0.5 to 36.6 in the quarter and 34.0 for the year.

Looking ahead to IHRSA show

Aglialoro looked ahead to the IHRSA trade show, this year scheduled for March 22-25 in Las Vegas, Nev., and noted Cybex would be showing for the first time its "Total Body Arc Trainer." He noted that since most commercial elliptical sales are in equipment that have handles to exercise the upper body, "we're looking for enhanced growth there."

CFO Art Hicks in the call said Arc Trainer sales were up 3 percent for the quarter, while strength sales were up 19.6 percent and treadmill sales increased 12.3 percent, while other categories (such as bikes and steppers) were down overall.

Nevertheless, the company plans to introduce new stationary bikes, both upright and recumbent, at the IHRSA show to continue the revamp of its line.

To come, however, is more, including new commercial treadmills, as well as light commercial treadmills, both later this year and in the next couple of years to add another six to eight to the line.

"We want to get back to our Trotter roots on the consumer side," Aglialoro said. "Our dealers have been asking for them. We know we can make them, and we want to make them."

Road show planned, feeling more positive

In addition, the company will add a third strength line, one that will be "more basic," as Aglialoro put it, and that is geared for small clubs, colleges or the likes of senior centers and apartment complexes.

"We're poised now," he added. "We're not getting our feathers ruffled by financing people. We feel good. With all of this the company is poised to meet its financial goals and growth goals going forward."

With those rough spots smoothed out, the company is also going to hit the road with its first road show in a number of years; its first appearance is June 2 in Philadelphia.

One analyst noted during the call that he felt it was "significant" that the company was coming out to talk to people, which is leading analysts to think the company is feeling more positive.

"Bingo," Aglialoro responded. "The talk is now different. The talk has changed. In February 2001 it was, 'when is Cybex not going to make it and who's going to buy them,' and on and on. The talk is different. Now, it's, 'gee, new product lines … hmm.…' That's what's going to do it.

"The worst thing wasn't the stocks going down but the worst thing," Aglialoro said, "was the indifference.

"Everybody was scared," he added, "and that's behind us."

SNEWS View: We have to admit that we also watched a couple of years ago and wondered when the next shoe was going to fall. SNEWS® also felt it was on what journalists call a "death watch." But the patient fought back, and it seems to have come around. Granted, there are still a few financial weak spots such as income (yes, this isn't the dot-com economy; income still matters) and margins, but everything goes step-by-step. We are actually confident those will also turn around too. In late 2002, stock prices were dancing dangerously close to 1.00 for a time after having dropped below that in late 2001 as well as in May 2003. But prices have inched upward -- hitting 1.82 the morning of the year-end earnings release, but dropping to 1.61 by close on Feb. 12 on a volume of 9,700. We're eager to find out more about the company's direction at the coming IHRSA show and promise to bring you an in-depth look at what's next.


Fitness financials: Cybex says the wolf is gone, plus Reebok, Foot Locker, Hibbett, Puma, Sears

CEO Aglialoro says the word is: "Cybex is back"Cybex CEO John Aglialoro told analysts in a quarterly earnings call April 26 that the "wolf at the door" he mentioned in the last few calls had been turned into a puppy. The Medway, Mass.-based, company (AMEX: CYB) for its first more

Galyan's financial picture not pretty: CEO remains optimistic

Galyan's Sports & Outdoor (Nasdaq: GLYN), a 44-store chain in 20 states, reported during a morning conference call on March 18 that the company's profits plunged 40 percent in the fourth quarter. Net income was $9.99 million in Q4 of 2002, compared to $16.7 million in Q4 of 2003. more


Timbuk2 says goodbye to a CEO and hello to a road show concept to meet with dealers

After two and a half years with Timbuk2, Perry Klebahn has decided to step away as CEO to pursue one of his other passions -- teaching. He'll resign his post at the end of the month and CFO Tony Meneghetti will step in as interim CEO while the company's board looks for a more

Revolving door for CEOs continues to spin at Confluence

On Nov. 3, we received word that Richard Feehan, CEO of Confluence, was out of a job. Phone calls and emails to sources at Confluence, including Feehan, went unreturned. An email sent to Brian Maney, director of corporate communications for American Capital Strategies (ACS), more


Did you hear?... Cybex CEO in shareholder letter tells of ‘sense of injustice’ in $66M verdict against firm

On Dec. 13, Cybex CEO John Aglialoro sent an open letter to shareholders and also posted it on the company website explaining his company’s position on the recent $66 million jury verdict against the company. In it, Aglialoro explained what he called a “sense of injustice” the more

Fitness financials: Arc Trainer carries Cybex toward double-digit growth

Revealing Arc Trainer sales up nearly 70 percent in the quarter, Cybex (AMEX: CYB), nevertheless had a huge drop in net income -- $119,000 compared to $375,000 a year ago -- although still showed a small increase in net sales of 1 percent. "Keep in mind, we're no longer more

The CEO Revolving Door Continues To Operate At Lowe

Forget what we said in our Jan. 28 article, "Lowe Alpine's New CEO Rolling Up Sleeves." -- click here to read. Apparently the sleeves are still down, and the CEO revolving door remains fully operational at Lowe Alpine worldwide. John King is now out, and David Joyce, formerly the more

Cybex touts increased sales -- it's do or die

Hanging its hat on rows of new product in the last year -- with another rollout expected at the IHRSA club show in February -- Cybex (AMEX: CYB) has announced that net sales for the fourth quarter ended Dec. 31, 2002, are expected to reach approximately $24.6 million, or an more

Fitness financials: Nautilus shows 29 percent Q2 net sales growth, plus Cybex shows increase in net sales and says turnaround is long over

Nautilus shows 29 percent net sales growth, discusses Sears strategyNautilus Inc. (NYSE: NLS) has announced net sales for the three months ended June 30, 2005, of $129.6 million compared to $100.2 million for the corresponding period last year, or an increase of 29.3 percent. The more