Icon sales, pre-tax income down for 3Q

For the first quarter in at least seven, Icon Health & Fitness has posted a drop in net sales for its third quarter ended Feb. 28, 2004, of 4.7 percent. In addition, the company’s net income fell 10 percent. But for the nine months ended Feb. 28, the company posted a single-digit increase in net sales.

For the third quarter, net sales were $328.0 million, compared to $344.0 million for the third quarter ended March 1, 2003, which represents a $16.0 million, or 4.7 percent, decrease over the prior-year quarter. The Logan, Utah-based, company did not attribute the drop to any one customer, distributor or specific factor, but said it was across several of its product lines.

Net income for the three-month period was $18.2 million, compared to a net income of $20.3 million for the three-month period ended March 1, 2003. Net income before taxes for the period ended was $23.4 million, compared to a net income before taxes of $31.0 million for the three-month period ended March 1, 2003, also representing a drop (24.5 percent). The provision for taxes for the three-month period ended Feb. 28, 2004, was $5.2 million compared to a provision of $10.7 million in the three-month period ended March 1, 2003.

But strength equipment sales helped keep the drop from being worse: Sales of cardiovascular and other equipment in the third quarter of fiscal 2004 decreased $24.3 million, or 8.6 percent, to $259.1 million, while sales of strength-training equipment in the third quarter of fiscal 2004 increased $8.4 million, or 13.9 percent, to $68.9 million.

For the nine-month period just ended, Icon reported net sales of $857.7 million, compared to $806.9 million for the nine months ended March 1, 2003, which represents a $50.8 million, or 6.3 percent, increase over the prior year nine-month period. Overall, strength equipment was still the category that pumped up sales with sales increasing $36.0 million, or 27.6 percent, to $166.5 million in the first nine months. That compares to only a single-digit jump in cardiovascular and other equipment sales for the same period that increased $14.8 million, or 2.2 percent, to $691.2 million.

Margins were also slightly lower for the third quarter although they were slightly higher for the nine months just ended. EBITDA for the three-month period ended Feb. 28, 2004, was $36.3 million, or 11.1 percent of net sales, compared to $42.5 million, or 12.3 percent of net sales, for the three-month period ended March 1, 2003, a $6.2 million or 14.6 percent decrease. EBITDA for the nine months ended Feb. 28, 2004, was $83.3 million, or 9.7 percent of net sales compared to $81.5 million, or 10.1 percent of net sales for the nine months ended March 1, 2003, a $1.8 million or 2.2 percent increase.

To read the entire SEC filing, click here.