Bally withdraws stockholder rights program
Bally Total Fitness (NYSE:BFT) announced on July 12 that it would withdraw its stockholder rights program immediately in order to avoid a proxy fight. The withdrawal is part of an agreement between Bally and two of its largest investors, Liberation Investments and Amalgamated Bank LongView Fund. Liberation, which owns 5.8 percent of Bally agreed to drop proposals, including mandatory retirement age for directors and separation of the chairman and chief executive jobs, in exchange for the retraction of the stockholder rights plan. Amalgamated agreed to drop its board declassification proposal. A classified board provides a level of continuity because members serve longer terms and elections are staggered. The board also adopted a new policy that could create a clear pathway for an unsolicited take-over. The new policy requires stockholder approval of any plan intended to avert an unwanted acquisition. "Today's actions reinforce our strong commitment to enhancing stockholder value and promoting good corporate governance," Bally Chairman and CEO Paul Toback said in a statement. He also underscored some of Bally's initiatives, including the company's implementation of aggressive cost-cutting programs and new marketing campaigns to increase membership. Bally's next shareholder meeting will be held July 29. That's three days after lead plaintiff applications are due by law in the pending class-action lawsuit against Bally based on charges of damages incurred because stockholders charge they paid artificially inflated price for stock because value was based on the company's financial performance numbers, which were altered by the company in the spring. After the July 26 deadline, each law firm representing stockholders files its individual lead plaintiff motions with the court, which then listens to briefings before determining lead plaintiffs, at which time all law firms consolidate information.
Cybex reports Q2 earnings
Cybex International, Inc. (AMEX: CYB) has reported that its sales were up 14 percent for the second quarter ended June 26. Net sales for the quarter were $24 million compared to $21.1 million for the comparable 2003 period for the increase. Net income for the quarter was $833,000, or $0.08 per share on a fully diluted basis, compared to net income of $183,000, or $0.02 per share on a fully diluted basis. Net sales for the six months ended June 26, 2004, were $48,311,000 compared to $41,722,000 for 2003, also showing an increase (16 percent). The net income for the six months ended June 26, 2004, was $1,208,000, or $0.10 per fully diluted share, compared to a net loss of $1,604,000, or $.18 per fully diluted share, for the prior year period. In addition, margins were up for the quarter to 37.8 percent from the year-ago quarter's 34.2 percent. "The company's results for the second quarter and first six months of 2004 illustrate the momentum that we have achieved," said John Aglialoro, chairman and CEO. "Our results show rising revenues and improved margins, which produced the increased operating income and bottom line performance." SNEWSÂ® will report details as they surface during an upcoming call with analysts.
Dick's buyout of Galyan's moving along
The mandatory waiting period for the exchange of cash tender for outstanding shares between Dick's Sporting Goods (NYSE: DKS) and Galyan's (Nasdaq: GLYN) has expired. Dick's and Galyan's recently came to a definitive agreement under which Dick's will acquire all of Galyan's outstanding stock as a part of the acquisition announced last month. The Hart-Scott-Rodino Antitrust Improvements Act of 1976 made the waiting period mandatory. Dick's launched the tender offer of $16.75 per share on June 29, 2004. Dick's offer is subject to several conditions, including the requirement that a majority of issued and outstanding stock be tendered and not withdrawn. Unless extended, the offer and withdrawal rights will expire at midnight Eastern Standard Time on July 28, 2004. Holders of Galyan's common stock, who collectively own 55 percent of the outstanding shares, have agreed to proffer their shares to Dick's.
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