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Cybex International Inc. (CYBI) filed Quarterly Report for the period ended 2011-03-26.
Cybex International Inc. has a market cap of $16.8 million; its shares were traded at around $0.98 with a P/E ratio of 8.9 and P/S ratio of 0.1.
This is the annual revenues and earnings per share of CYBI over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CYBI.
Highlight of Business Operations:
On December 7, 2010, the jury in the Barnhard product liability suit returned a $66 million verdict, apportioned 75% to Cybex, 20% to a non-affiliated co-defendant, and 5% to the plaintiff. In April 2011 a judgment was entered for $63,075,000 (including interest through March 26, 2011) against us on this verdict. Under New York law, we are responsible for payment of the judgment but may obtain reimbursement from the co-defendant of approximately 21% of our payments on the judgment. Our available insurance coverage for this matter as of March 26, 2011 was approximately $2,650,000. See Note 12 of the Notes to the Consolidated Financial Statements included herein for a more detailed
Our net sales increased $4,895,000, or 19%, to $31,011,000 for the first quarter of 2011 from $26,116,000 for the first quarter of 2010. The 2011 first quarter increase was attributable to an increase of sales of cardiovascular products of $2,332,000, or 16%, to $16,632,000, and increased sales of strength training products of $2,062,000, or 23%, to $11,025,000, along with increased freight, parts and other sales of $501,000, or 18%, to $3,354,000. We believe that the overall increase in sales is reflective of improving economic conditions as well as our marketing and new product initiatives.
A valuation allowance for deferred tax assets is recorded to the extent it cannot be determined that the realization of these assets is more likely than not. Due to the uncertainty created by an unfavorable product liability jury verdict (see Note 12 of the Notes to the Consolidated Financial Statements included herein), we determined that a valuation allowance against the entire amount of our deferred tax assets as of December 31, 2010 was necessary. Our deferred tax assets are fully reserved as of March 26, 2011. We recorded an income tax benefit of ($225,000) and ($361,000), for the three months ended March 26, 2011 and March 27, 2010, respectively. The effective tax benefit rate was (146.1%) and (32.4%) for the three months March 26, 2011 and March 27, 2010, respectively. During the three months ended March 26, 2011, we received a refund of federal alternative minimum taxes paid in prior years of $257,000, which was recorded as a benefit in the current period since it was fully reserved as of December 31, 2010. This was offset by state and federal alternative minimum taxes payable of $32,000 during the period. The lower tax benefit rate for the three months ended March 27, 2010 was primarily due to non-deductible foreign losses. Actual cash outlays for taxes continue to be reduced by the available operating loss carryforwards and credits.
Cash used in investing activities of $343,000 during the three months ended March 26, 2011 consisted of purchases of computer hardware and infrastructure of $254,000 and purchases of manufacturing tooling and equipment of $89,000, primarily for the manufacture of new products. Cash used in investing activities of $399,000 during the three months ended March 27, 2010 consisted of purchases of computer hardware and infrastructure of $302,000 and purchase of manufacturing tooling and equipment of $97,000, primarily for the manufacture of new products. While capital expenditures for the balance of 2011 are expected to be approximately $3,200,000, the timing and amount of these expenditures will depend on economic conditions and results of our operations and our other cash needs.
Cash used in financing activities was $382,000 for the three months ended March 26, 2011, consisting primarily of $380,000 of principal payments on the Citizens real estate loan. Cash used in financing activities was $604,000 for the three months ended March 27, 2010, consisting primarily of term loan repayments.
At March 26, 2011, there were no outstanding revolving credit loans, a $11,093,000 real estate loan and $4,336,000 outstanding under the Citizens equipment facility. Availability under the revolving loan fluctuates daily. At March 26, 2011, there was $2,000,000 in unused availability under the revolving loan facility.
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