Cybex International Inc. (CYBI, Financial) filed Quarterly Report for the period ended 2010-03-27.
Cybex International Inc. has a market cap of $26.19 million; its shares were traded at around $1.53 with and P/S ratio of 0.22. CYBI is in the portfolios of Jim Simons of Renaissance Technologies LLC.
As of December 31, 2009 U.S. federal operating loss carryforwards of approximately $17,488,000 were available to us to offset future taxable income and, as of such date, we also had foreign net operating loss carryforwards of $5,111,000, federal alternative minimum tax credit carryforwards of $666,000 and federal research and development tax credit carryforwards of $277,000. The net deferred tax asset balance of $14,153,000 at March 27, 2010 represents the amount of our deferred tax assets that we believe is more-likely-than-not to be realized, and the valuation allowance against our deferred tax assets at March 27, 2010 is $1,486,000. If the estimates and related assumptions relating to the likely utilization of the deferred tax asset change in the future, the valuation allowance may change accordingly. The ability to consider future income before income taxes as a source of recoverability of deferred income taxes is dependent upon the Company generating cumulative profits before income taxes during recent periods. To the extent that the Company does not generate profits before income taxes during 2010, an increase in the valuation allowance may be required. Approximately $36,000,000 of income before taxes is needed to fully realize the Companys recorded net deferred tax asset.
As of March 27, 2010, we had working capital of $20,282,000 compared to $21,107,000 at December 31, 2009. The net decrease in working capital is primarily due to the paydown of term loans of $604,000 and $399,000 of capital expenditures.
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 purchases of manufacturing tooling and equipment of $97,000, primarily for the manufacture of new products. Cash used in investing activities of $98,000 during the three months ended March 28, 2009 consisted of purchases of computer hardware and infrastructure of $67,000 and purchase of manufacturing tooling and equipment of $31,000, primarily for the manufacture of new products. While capital expenditures for the balance of 2010 are expected to be approximately $3,100,000, the timing and amount of these expenditures will depend on economic conditions and results of our operations.
Cash used in financing activities was $604,000 for the three months ended March 27, 2010, consisting entirely of term loan repayments. Cash provided by financing activities was $1,785,000 for the three months ended March 28, 2009, consisting primarily of $1,675,000 of borrowings under the Citizens revolving credit loan and the $1,000,000 Wells Fargo third term loan, offset by $446,000 of term loan repayments and $428,000 for purchases of treasury stock through a repurchase program.
Valuation of deferred tax assets. The net deferred tax asset balance of $14,153,000 at March 27, 2010 represents the amount of the Companys deferred tax assets that management believes is more-likely-than-not to be realized and the valuation allowance against the deferred tax assets at March 27, 2010 is $1,486,000. Management will continue to assess the need for this valuation allowance on a quarterly basis. Approximately $36,000,000 of income before income taxes is needed to fully realize the Companys recorded net deferred tax asset and $40,000,000 of future taxable income is needed to fully realize the Companys deferred tax assets. The difference between total deferred tax assets and the net operating loss carryforwards and credits is primarily book versus tax differences of various expenses. If the estimates and related assumptions relating to the likely utilization of the deferred tax asset change in the future, the valuation allowance may change accordingly.
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Cybex International Inc. has a market cap of $26.19 million; its shares were traded at around $1.53 with and P/S ratio of 0.22. CYBI is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Our net sales decreased $2,806,000, or 10%, to $26,116,000 for the first quarter of 2010 from $28,922,000 for the first quarter of 2009. The 2010 first quarter decrease was attributable to a decrease of sales of cardiovascular products of $930,000, or 6%, to $14,300,000, and decreased sales of strength training products of $1,298,000, or 13%, to $8,963,000, along with decreased freight, parts and other sales of $578,000, or 17%, to $2,853,000. The sales decline was generally throughout our product offerings and we believe was reflective of economic conditions, both generally and in the fitness industry.As of December 31, 2009 U.S. federal operating loss carryforwards of approximately $17,488,000 were available to us to offset future taxable income and, as of such date, we also had foreign net operating loss carryforwards of $5,111,000, federal alternative minimum tax credit carryforwards of $666,000 and federal research and development tax credit carryforwards of $277,000. The net deferred tax asset balance of $14,153,000 at March 27, 2010 represents the amount of our deferred tax assets that we believe is more-likely-than-not to be realized, and the valuation allowance against our deferred tax assets at March 27, 2010 is $1,486,000. If the estimates and related assumptions relating to the likely utilization of the deferred tax asset change in the future, the valuation allowance may change accordingly. The ability to consider future income before income taxes as a source of recoverability of deferred income taxes is dependent upon the Company generating cumulative profits before income taxes during recent periods. To the extent that the Company does not generate profits before income taxes during 2010, an increase in the valuation allowance may be required. Approximately $36,000,000 of income before taxes is needed to fully realize the Companys recorded net deferred tax asset.
As of March 27, 2010, we had working capital of $20,282,000 compared to $21,107,000 at December 31, 2009. The net decrease in working capital is primarily due to the paydown of term loans of $604,000 and $399,000 of capital expenditures.
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 purchases of manufacturing tooling and equipment of $97,000, primarily for the manufacture of new products. Cash used in investing activities of $98,000 during the three months ended March 28, 2009 consisted of purchases of computer hardware and infrastructure of $67,000 and purchase of manufacturing tooling and equipment of $31,000, primarily for the manufacture of new products. While capital expenditures for the balance of 2010 are expected to be approximately $3,100,000, the timing and amount of these expenditures will depend on economic conditions and results of our operations.
Cash used in financing activities was $604,000 for the three months ended March 27, 2010, consisting entirely of term loan repayments. Cash provided by financing activities was $1,785,000 for the three months ended March 28, 2009, consisting primarily of $1,675,000 of borrowings under the Citizens revolving credit loan and the $1,000,000 Wells Fargo third term loan, offset by $446,000 of term loan repayments and $428,000 for purchases of treasury stock through a repurchase program.
Valuation of deferred tax assets. The net deferred tax asset balance of $14,153,000 at March 27, 2010 represents the amount of the Companys deferred tax assets that management believes is more-likely-than-not to be realized and the valuation allowance against the deferred tax assets at March 27, 2010 is $1,486,000. Management will continue to assess the need for this valuation allowance on a quarterly basis. Approximately $36,000,000 of income before income taxes is needed to fully realize the Companys recorded net deferred tax asset and $40,000,000 of future taxable income is needed to fully realize the Companys deferred tax assets. The difference between total deferred tax assets and the net operating loss carryforwards and credits is primarily book versus tax differences of various expenses. If the estimates and related assumptions relating to the likely utilization of the deferred tax asset change in the future, the valuation allowance may change accordingly.
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