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Fitness financials: Analyst opinion differs on Cybex, plus Town Sports, Sears, Amer Sports

Fitness financials: Analyst opinion differs on Cybex. Town Sports enters into new $260 million senior secured credit facility. Sears' Q4 profit up 27 percent. Amer Sports 2006 annual report published.

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Analyst opinion differs on Cybex
Shares of Cybex International (Nasdaq: CYBI) dropped Feb. 26, after an analyst from Oppenheimer & Co. said the company’s new products have failed to lift its revenue. Cybex shares lost 57 cents to close at $5.38 on the Nasdaq Stock Market.

Oppenheimer & Co. analyst Barry Sine downgraded the stock to “neutral” from “buy,” and cut his earnings projections for the company. He said in a client note that he now expects 33 cents per share in 2007, down from 45 cents. He added that sales of the company’s most important product, the Arc Trainer machine, are slowing down.

“The reason for our downgrade is that revenue steadily decelerated during 2006, particularly in the core professional cardiovascular equipment segment,” he wrote. Sales in that segment increased 0.7 percent in the fourth quarter.

If exercise clubs decide to buy cardiovascular machines from Cybex’s competitors, Sine said, they will also look to those companies when buying other equipment.

Days earlier, though, research firm Stephens Inc. maintained its “overweight” rating and $8 target price, saying Cybex’s strategies to leverage the brand into the high-end consumer market make sense. “We like the use of existing distribution channels, manufacturing facilities and product platforms,” analyst Rick Nelson said in a research brief.

Town Sports enters into new $260 million senior secured credit facility
Town Sports International (Nasdaq: CLUB) said it has entered into a $260 million senior secured credit facility with various lenders and Deutsche Bank Trust Company Americas, as Administrative Agent.

The new senior credit facility consists of a Libor + 1.75 percent $185 million term loan facility and a $75 million revolving credit facility initially set at Libor + 2.25 percent. This new credit facility replaces the company’s existing $75 million senior secured credit facility, which had an initial term through April 15, 2008.

All of the proceeds of the new term loan facility will be used to purchase or redeem all of the outstanding 9 5/8 percent senior notes due 2011.

Sears’ Q4 profit up 27 percent
Sears Holdings (Nasdaq: SHLD) posted a 27 percent jump in fourth-quarter earnings as it continued to squeeze higher profit margins out of declining same-store sales.

The company, which owns the Sears and Kmart retail chains, posted earnings of $820 million, or $5.33 a share, up from the $648 million, or $4.03 a share, it recorded for the same period a year ago. Excluding various one-time items, the retailer reported earnings of $5.36 a share on revenue of $16.29 billion, up 1 percent from last year’s $16.09 billion.

Same-store sales, or sales in stores open at least one year, fell 3.1 percent. Sears domestic same-store sales fell 4.9 percent, while Kmart’s same-store sales edged down 0.9 percent.

For the year, net income grew 74 percent to $1.49 billion, or $9.57 per share, from $858 million, or $5.59 per share, last year. Net income in 2006 included a $0.58 charge for an accounting change.

Revenue rose 8 percent to $53 billion, from $49.1 billion last year, even as same-store sales fell 3.7 percent, including a 6.1 percent drop at Sears domestic and a 0.6 percent decline at Kmart.

Amer Sports 2006 annual report published
Amer Sports’ 2006 annual report has been published in English and Finnish. A printed version of the annual report can be ordered by e-mail from or by telephone +358 9 7257 8308. It can also be downloaded as a PDF file from the company’s website, In addition, the company’s 2006 stock exchange releases and other announcements can be accessed at the website under “Investors,” although Amer warns that some may be out-of-date.

Amer Sports is the parent company of Precor, Wilson, Salomon, Atomic and Suunto.

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