Fitness financials: Cybex receives new term loan, plus Nike, Amer Group, Bally Total Fitness, Finish Line

Fitness financials: Cybex gets commitment for loan that will save $1 million per year. Nike posts Q4 earnings. Amer Group updates 2004 warrants. Bally schedules annual meeting. Finish Line reports 2005 Q1.
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Cybex gets commitment for loan that will save $1 million per year
Cybex International Inc. (AMEX: CYB) has announced it received a commitment from GMAC Commercial Finance to provide a term facility of up to $13 million, the proceeds of which will be used to repay higher cost real estate and term loans. Closing of this financing is subject to customary conditions, including the completion of appraisals and other reviews and finalization of legal documentation. The closing of the loan is expected during July 2004. Cybex announced that CIT Group/Business Credit Inc. has agreed to extend its credit facility one year from July 16, 2006 to July 16, 2007.

When completed, the GMAC commitment to finance is expected to result in annualized interest savings of approximately $1 million per year, although third quarter 2004 savings will be offset by the immediate expensing of the balance of financing costs of approximately $340,000 associated with the real estate loan to be retired with the proceeds of the financing.

"The GMAC commitment to finance is evidence of the continuing improvement in Cybex's operating performance," said Art Hicks, Cybex CFO, in a statement. "We are pleased to have earned the support of two well-regarded lenders as GMAC Commercial Finance and CIT. The resultant debt structure will aid Cybex in meeting its expansion goals."

In other Cybex news, the company was one of 12 exhibiting companies and the only one from the fitness industry to exhibit at the G-8 Summit earlier this month. The exhibitors were part of a Bush administration corporate sponsorship concept at the Group of Eight industrialized nations summit meeting. Arriving members of the international press corps who wanted to work in the summit's press center first had to walk through an exhibition hall where several corporations were displaying and selling their goods. The only exhibit that isn't geared up for commercial exploitation is a presentation by the National Oceanic and Atmospheric Administration, which displayed a large globe depicting real time global weather information. Other than Cybex, which displayed its Trazer system and the Arc Trainer, companies were mostly communications specialists such as Verizon and Cingular.

Nike posts 4Q earnings
Nike Inc. (NYSE: NKE) ended the year strong posting a 23 percent surge in quarterly income for its fiscal fourth quarter -- $305 million, or $1.13 per share, up from $246.2 million, or 92 cents a share, in the same period of 2003. Quarterly revenue increased to $3.5 billion from $3 billion for the same period ending May 31, 2003.

Analysts said the gains reflected a stronger U.S. economy, better design and marketing, steady expansion into overseas markets, improved inventory control, high visibility for endorsement athletes at top events, a favorable currency exchange rate and very little negative attention generated by labor rights issues. Nike also has settled a long dispute with its largest U.S. retailer, Foot Locker, which has helped boost sales despite some slight erosion in its market share.

For the full year, Nike had net income of $945.6 million, or $3.51 per share, compared to a $474 million, or $2.77 a share, in 2003. Sales for fiscal 2004 nearly reached $12.3 billion, up 15 percent from $10.7 billion for 2003. It also reported increases in orders for shoes and apparel, up 10 percent for the U.S. market and 9 percent in Europe. Orders for Asia grew 21 percent.

Recent figures show a resurgence in demand from teenage boys and young men, the top Nike customers in the U.S. market for product lines such as Air Force 1, Jordan retro shoes, and Shox, a shoe with cushioning technology Nike spent years developing.

Amer Group updates 2004 warrants
Of the 550,000 warrants that were subscribed, 150,000 were offered for subscription to the group's key personnel. Also, 400,000 were offered for subscription to Amera Oy, a company belonging to the group of Amer Group of companies, in order that the warrants may, at a later date, be offered to key persons nominated by Amer Group's board of directors, provided that the financial targets set by the board of directors for the company's growth and profitability are reached. All 550,000 have been subscribed. One warrant entitles the subscriber to subscribe for one Amer Group share. The share subscription price is Euro 40.60 (approximately USD $49.49 on June 28), which according to the warrant terms was the trade volume weighted average quotation of Amer Group Plc shares on the Helsinki Exchanges during the period Jan. 2 to Feb. 14, 2004, plus 10 percent. The subscription period of the shares will commence on Jan. 1, 2007, and end on Dec. 31 2009.

Bally Total Fitness schedules annual meeting for July 29
The annual meeting of stockholders of Bally Total Fitness Holding Corporation will be July 29, 8:30 a.m. (local time) at Bally's fitness center at 3554 Mayfield Road, Cleveland Heights, OH 44118. At the meeting, two Class II directors will be elected for three-year terms to expire in 2007. A vote will be taken on a stockholder proposal requesting that the necessary action be taken to declassify the board of directors. Also, a vote will be taken on three additional stockholder proposals, and any other business that is needed. One stockholder proposal asks that holders urge the board to take the necessary steps to amend the by-laws "to require that, subject to any presently existing contractual obligations of the company, an independent director shall serve as the chairman of the board of directors, and that the chairman of the board of directors shall not concurrently serve as the chief executive officer." The company's board has unanimously recommended against the proposal for several reasons, including pointing out that a virtually identical proposal was rejected by stockholders at the 2004 annual meeting by a margin of 2 to 1. According to the SEC filing (click here to see the entire filing), "the board has determined that it would not be in the best interests of the company and its stockholders to impose an absolute rule prohibiting the chief executive officer from also serving as chairman of the board."

Finish Line reports 2005 Q1 earnings
2005 first-quarter net sales for the Finish Line (Nasdaq: FINL) increased 24 percent to $258.0 million compared to $207.8 million reported for the same period last year. Comparable store net sales also increased 14 percent. Net income for Q1 was $10.6 million or $.43 per diluted share versus $6.5 million or $.28 per diluted share in Q1 LY, an increase of 54 percent in diluted earnings per share. Merchandise inventories were $221.6 million on May 29, 2004, compared to $182.2 million on May 31, 2003. On a per square foot basis, merchandise inventories increased approximately 11 percent compared to one year ago. Finish Line ended the quarter with 550 stores, a 12 percent increase from the year before. Total retail square footage increased 9 percent to 3,164,000 versus 2,890,000.

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