FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[*] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended August 29, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Numbers: 333-18475, 33-87930-0, 33-87930
ICON Fitness Corporation
IHF Holdings, Inc.
ICON Health & Fitness, Inc.
(Exact name of registrant as specified in its charter)
Delaware 87-0566936, 87-0531209, 87-0531206
(State or other jurisdiction of (I.R.S. Employer Identification Nos.)
incorporation or organization)
1500 South 1000 West, Logan, Utah 84321
(Address and zip code of principal executive offices)
435-750-5000
(Registrant's telephone number, including area code)
Not Applicable
--------------
(Former name, former address and former fiscal year,
if change since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
ICON Health & Fitness, Inc. 1,000 shares,
IHF Holdings, Inc. 1,000 shares,
ICON Fitness Corporation 100 shares.
<PAGE>
ICON Fitness Corporation
and its wholly-owned subsidiary, IHF Holdings, Inc.
and its wholly-owned subsidiary, ICON Health & Fitness, Inc.
FORM 10-Q INDEX
Page No.
PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . 3
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . . 3-6
Consolidated Condensed Balance
Sheets as of August 29, 1998 and
May 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . 3-4
Consolidated Condensed Statements of
Operations for the three months ended
August 29, 1998 and August 30, 1997. . . . . . . . . . . . . . . 5
Consolidated Condensed Statements
of Cash Flows for the three months
ended August 29, 1998 and August 30, 1997 . . . . . . . . . . . 6
Notes to Consolidated Condensed
Financial Statements . . . . . . . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . 7-10
PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . 10
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 10
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . 10
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of Securities Holders . . . . 11
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
ICON Fitness Corporation and its wholly-owned subsidiary,
IHF Holdings, Inc. and its wholly-owned subsidiary,
ICON Health & Fitness, Inc.
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
ICON IHF ICON ICON IHF ICON
Fitness Holdings, Health & Fitness Holdings, Health &
Corporation Inc. Fitness, Inc. Corporation Inc. Fitness,Inc.
August 29, August 29, August 29, May 31, May 31, May 31,
1998 1998 1998 1998 1998 1998
------------ ---------- ------------- ------------ --------- ------------
Assets
Current assets
Cash $4,475 $4,475 $4,475 $3,892 $3,892 $3,892
Accounts receivable-net 120,614 120,614 120,614 124,301 124,301 124,301
Inventories:
Raw materials 39,072 39,072 39,072 42,609 42,609 42,609
Finished goods 104,408 104,480 104,480 78,857 78,857 78,857
Deferred income taxes 11,343 11,343 11,343 11,177 11,177 11,177
Other current assets 8,166 8,166 8,166 6,202 6,202 6,202
Income tax receivable 760 760 760 781 781 781
------- ------- ------- ------- ------- -------
Total current assets 288,910 288,910 288,910 267,819 267,819 267,819
Property and equipment
Land 1,430 1,430 1,430 1,430 1,430 1,430
Building 16,675 16,675 16,675 16,675 16,675 16,675
Machinery and equipment 73,931 73,931 73,931 71,293 71,293 71,293
------ ------ ------ ------ ------ ------
Total 92,036 92,036 92,036 89,398 89,398 89,398
Less:accum depreciation (44,193) (44,193) (44,193) (40,579) (40,579) (40,579)
-------- -------- -------- ------- ------- -------
Property & equipment-net 47,843 47,843 47,843 48,819 48,819 48,819
Receivable from parent 2,362 2,362 2,362 2,362 2,362 2,362
Trademarks,ne 16,982 16,982 16,982 17,244 17,244 17,244
Deferred income taxes 29,240 21,696 9,183 22,572 16,265 4,927
Other assets 27,490 24,214 21,004 29,057 25,585 21,958
-------- -------- -------- -------- -------- --------
Total assets $412,827 $402,007 $386,284 $387,873 $378,094 $363,129
======== ======== ======== ======== ======== ========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
ICON Fitness Corporation and its wholly-owned subsidiary,
IHF Holdings, Inc. and its wholly-owned subsidiary,
ICON Health & Fitness, Inc.
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Continued)
(In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
ICON IHF ICON ICON IHF ICON
Fitness Holdings, Health & Fitness Holdings, Health &
Corporation Inc. Fitness, Inc. Corporation Inc. Fitness,Inc.
August 29, August 29, August 29, May 31, May 31, May 31,
1998 1998 1998 1998 1998 1998
------------ ---------- ------------- ------------ --------- ------------
Liabilities and
Stockholders' Equity
(Deficit)
Current liabilities
Current portion of
long-term debt $6,375 $6,375 $6,375 $6,051 $6,051 $6,051
Accounts payable 94,860 94,860 94,860 83,965 83,965 83,965
Interest payable 3,082 3,082 3,082 6,596 6,596 6,596
Accrued expenses 18,931 18,931 18,931 18,090 18,090 18,090
Income taxes payable 344 344 344 249 249 249
------- ------- ------- ------- ------- -------
Total current liabilities 123,592 123,592 123,592 114,951 114,951 114,951
Long term-debt 490,168 386,392 290,816 460,707 360,413 268,495
Stockholders' equity (deficit)
Common stock & additional
paid-in capital 49,701 127,770 166,187 49,701 127,769 166,186
Receivable from officers
for purchase of equity (656) (656) (656) (656) (656) (656)
Cumulative translation
adjustment (401) (401) (401) (547) (547) (547)
Retained earnings(deficit) (249,577) (234,690) (193,254) (236,283) (223,836) (185,300)
-------- -------- -------- -------- -------- --------
Total Stockholders' Equity (200,933) (107,977) (28,124) (187,785) (97,270) (20,317)
-------- -------- -------- -------- -------- --------
Total liabilities and
stockholders' equity $412,827 $402,007 $386,284 $387,873 $378,094 $363,129
======== ======== ======== ======== ======== ========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
ICON Fitness Corporation and its wholly-owned subsidiary,
IHF Holdings, Inc. and its wholly-owned subsidiary,
ICON Health & Fitness, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For The Three Months Ended
<S> <C> <C> <C> <C> <C> <C>
ICON IHF ICON ICON IHF ICON
Fitness Holdings, Health & Fitness Holdings, Health &
Corporation Inc. Fitness, Inc. Corporation Inc. Fitness,Inc.
August 29, August 29, August 29, May 31, May 31, May 31,
1998 1998 1998 1998 1998 1998
------------ ---------- ------------- ------------ --------- ------------
Net sales $117,207 $117,207 $117,207 $127,482 $127,482 $127,482
Cost of goods sold 85,525 85,525 85,525 92,334 92,334 92,334
Cost of goods sold-
revaluation of,
HealthRider, Weider
Sports and CanCo
inventory -- -- -- 326 326 326
-------- ------- ------- ------- ------- ------
Total cost of goods sold 85,525 85,525 85,525 92,660 92,660 92,660
-------- ------- ------- ------- ------- -------
Gross profit 31,682 31,682 31,682 34,822 34,822 34,822
Operating expenses:
Selling expenses 20,538 20,538 20,538 26,645 26,645 26,645
Research and development 1,684 1,684 1,684 1,920 1,920 1,920
General and administrative 12,822 12,822 12,822 13,837 13,837 13,837
-------- ------- ------- ------- ------- -------
Total operating expenses 35,044 35,044 35,044 42,402 42,402 42,402
-------- ------- ------- ------- ------- -------
Operating income (loss) (3,362) (3,362) (3,362) (7,580) (7,580) (7,580)
Interest expense 14,672 11,190 7,533 14,591 11,569 8,482
Amortization of deferred
financing fees 2,038 1,842 1,425 1,758 1,588 1,236
-------- ------- ------- ------- ------- -------
Loss before income tax (20,072) (16,394) (12,320) (23,929) (20,737) (17,298)
Benefit from income taxes (6,778) (5,540) (4,366) (8,487) (7,413) (6,379)
--------- -------- -------- -------- -------- --------
Net loss $(13,294) $(10,854) $(7,954) $(15,442) $(13,324) $(10,919)
========= ======== ======== ========= ========= =========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
ICON Fitness Corporation and its wholly-owned subsidiary,
IHF Holdings, Inc. and its wholly-owned subsidiary,
ICON Health & Fitness, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For The Three Months Ended
<S> <C> <C> <C> <C> <C> <C>
ICON IHF ICON ICON IHF ICON
Fitness Holdings, Health & Fitness Holdings, Health &
Corporation Inc. Fitness, Inc. Corporation Inc. Fitness,Inc.
August 29, August 29, August 29, May 31, May 31, May 31,
1998 1998 1998 1998 1998 1998
------------ ---------- ------------- ------------ --------- ------------
OPERATING ACTIVITIES:
Net income/(loss) ($13,294) ($10,854) ($7,954) ($15,442) ($13,324) ($10,919)
Adjustments to reconcile net
income to net cash provided
by operating activity:
Provision/(benefit)for
deferred taxes (6,833) (5,596) (4,422) (8,767) (7,693) (6,659)
Amortization of debt
discount and deferred
financing fees 9,246 5,569 1,495 7,944 4,752 1,313
Depreciation & amortization 4,316 4,316 4,316 3,966 3,966 3,966
Inventory revaluation -- -- -- 326 326 326
Changes in operating assets and liabilities:
Accounts receivable 3,687 3,687 3,687 49,197 49,197 49,197
Inventory (22,086) (22,086) (22,086) (40,558) (40,558) (40,558)
Other assets (2,876) (2,876) (2,876) (2,166) (2,166) (2,166)
Account payable and
accrued expenses 8,339 8,339 8,339 3,441 3,441 3,441
------- ------- ------- -------- -------- --------
Net cash received from/(used
in) operating activities (19,501) (19,501) (19,501) (2,059) (2,059) (2,059)
INVESTING ACTIVITIES:
Purchases of property
and equipment (2,638) (2,638) (2,638) (2,325) (2,325) (2,325)
------- ------- ------- -------- -------- --------
Net cash received from /(used
in) investing activities (2,638) (2,638) (2,638) (2,325) (2,325) (2,325)
FINANCING ACTIVITIES:
Proceeds from long-term debt,
net of payments 22,576 22,576 22,576 4,378 4,378 4,378
------ ------ ------ ----- ----- -----
Net cash received from/
(used in) financing
activities 22,576 22,576 22,576 4,378 4,378 4,378
Effect of exchange rate
change on cash 146 146 146 117 117 117
------ ------ ------ ------ ------ ------
Net increase/(decrease)
in cash 583 583 583 111 111 111
Cash at beginning of period 3,892 3,892 3,892 5,560 5,560 5,560
------ ------ ------ ------ ------ ------
Cash at end of period $4,475 $4,475 $4,475 $5,671 $5,671 $5,671
====== ====== ====== ====== ====== ======
SUPPLEMENTAL DISCLOSURES:
Cash paid (received)
during the year for:
Interest $10,908 $10,908 $10,908 $11,481 $11,481 $11,481
Income taxes $3 $3 $3 $(174) $(174) $(174)
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Basis of Presentation
The consolidated condensed financial statements include the accounts of ICON
Fitness Corporation ("ICON Fitness"), its wholly-owned subsidiary, IHF Holdings,
Inc. ("IHF Holdings"), and its wholly-owned subsidiary, ICON Health & Fitness,
Inc. ("ICON Health"), and its wholly-owned subsidiaries (collectively, the
"Company"). ICON Fitness' parent company, IHF Capital, Inc. ("IHF Capital"), is
not a registrant.
The accompanying consolidated condensed financial statements and notes should be
read in conjunction with the financial statements contained in the Company's
Annual Report on Form 10-K. In management's opinion, the accompanying
consolidated condensed financial statements include all adjustments necessary
for a fair presentation of the results of the interim periods presented and all
such adjustments are of a normal recurring nature. The home fitness industry is
seasonal in nature and the results of operations for the interim periods
presented may not be indicative of the results for the full year.
The preparation of consolidated financial statements in accordance with
generally accepted accounting principles requires the Company to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingencies at the date of the consolidated financial statements
and the reported amount of revenues and expenses during the period. Actual
results could differ from those estimates.
In June 1997, the Financial Accounting Standards Board (the FASB) issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" (SFAS 130) and Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" (SFAS
131). The Company adopted SFAS 130 and 131 on June 1, 1998. SFAS 130 establishes
standards for reporting comprehensive income and its components in the
consolidated condensed financial statements. There were no material differences
between net income and comprehensive income for the three months ended August
29, 1998. SFAS 131 establishes standards for reporting information on operating
segments and will first be applicable to the May 31, 1999 year end consolidated
financial statements.
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations.
This quarterly Report on Form 10Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. For this purpose, any statements contained
herein that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words
"believes", "anticipates", "plans", "expects", "intends" and similar expressions
are intended to identify forward-looking statements. The Company's actual
results could differ materially from those set forth in the forward-looking
statements.
Year 2000 Compliance
- --------------------
The Company utilizes and is dependent upon data processing systems and software
to conduct its business. The data processing systems and software include those
developed and maintained by the Company's third-party data processing vendors
and software which is run on in-house computer networks. The Company has
reviewed and assessed all hardware and software to confirm that it will function
properly in the year 2000. With respect to internal systems, the results of the
evaluation to date have not revealed any year 2000 issues that, in the Company's
opinion, create a material risk of disruption of operations. With respect to
outside vendors and shippers, those that have been contacted have indicated that
their hardware or software is or will be Year 2000 compliant in time frames that
meet regulatory requirements. Evaluation of these issues is continuing and there
can be no assurance that additional issues, not presently known to the Company,
will not be discovered which could present a material risk of disruption to the
Company's operations.
<PAGE>
Seasonality
- -----------
The Company has historically sold the majority of its products to customers in
its second and third fiscal quarters (i.e., from September through February).
Increased sales and distribution typically have occurred in the Christmas retail
season and the beginning of a new calendar year because of increased customer
promotions and customer purchases. While this seasonality has been the trend, it
may not be indicative of the results to be expected for this fiscal year or any
future years. The following table reflects the Company's consolidated net sales
for the first quarter of fiscal 1999 and for each quarter in fiscal 1998 and
1997:
First Second Third Fourth
Quarter Quarter Quarter Quarter
----------------------------------------
Fiscal 1999 $117.2 --- -- --
Fiscal 1998 $127.5 $236.3 $252.0 $133.5
Fiscal 1997 $125.8 $249.5 $248.7 $212.2
Operating Results for the First Quarters of Fiscal 1999 and 1998
During the first quarter of fiscal 1999, net sales decreased $10.3 million, or
8.1% to $117.2 million from $127.5 million in the first quarter of fiscal 1998.
Domestic treadmill sales for the first quarter of fiscal 1999 accounted for
approximately 55% of total net sales versus 53% in the first quarter of fiscal
1998. First quarter fiscal 1998, domestic treadmill sales were $64.2 million
compared to $67.3 million, which is a $3.1 million decrease. Other decreases in
sales include airwalkers of $5.4 million, ab shapers of $1.2 million, upright
rowers of $1.2 million, gyms and benches of $1.2 million, and international
sales declined $2.6 million. The sale of softgoods increased $1.8 million,
stationary bike sales increased $1.1 million, home spas increased $1.1 million,
and elliptical sales increased approximately $0.4 million over the same period
of a year ago. Sales for the first quarter are consistent with management's
expectations and budgeted numbers for the first quarter.
Gross profit for the first quarter of fiscal 1999 was $31.7 million, or 27.0% of
net sales, compared to $34.8 million, or 27.3% of net sales, for the first
quarter of fiscal 1998. Included in the first quarter of fiscal 1998 cost of
goods sold, was a one time step-up expense for the purchase of HealthRider,
Weider Sports and CanCo inventory in the amount of $0.3 million, which had a
negative 0.3% effect on the margin. Without this charge, the decrease of 0.6% in
profit margin is attributable to the changes in product mix.
Selling expenses were $20.5 million, or 17.5% of net sales, in the first quarter
of fiscal 1999 compared to $26.6 million, or 20.9% of net sales, for the first
quarter of fiscal 1998. This decrease is attributed primarily to a reduction in
advertising expenses that have decreased by approximately $3.1 million for the
first quarter of 1999 versus the first quarter of 1998. Other selling expense
decreases included a reduction in bad debt expense of approximately $1.0 million
and approximately a $0.5 million reduction in each of customer service expense,
freight out, salaries and wages and other.
Research and development expenses were $1.7 million, or 1.4% of net sales, for
the first quarter of fiscal 1999 compared to $1.9 million or 1.5% of net sales
for the first quarter of 1998. This decrease both in dollar value and as a
percentage of sales is attributable to management's efforts to reduce costs in
the current year.
<PAGE>
General and administrative expenses totaled $12.8 million, or 10.9% of net
sales, for the first quarter of fiscal 1999 compared to $13.8 million, or 10.9%
of net sales, for the first quarter of fiscal 1998. This decrease of
approximately $1.0 million in general and administrative expenses for the first
quarter of fiscal 1999 is attributable to a decrease in legal expenses of $0.4
million, distribution expenses of $0.4 million, salaries and wages of $0.2
million and insurance claims of $0.2 million. These decreased expenses were
offset by an increase in depreciation expense of $0.2 million.
As a result of the foregoing factors, operating losses were $3.4 million in the
first quarter of fiscal 1999, compared to losses of $7.6 million in the first
quarter of fiscal 1998. The Company has focused on reducing expenses in the
current fiscal year. This effort has shown in the decreased first quarter losses
reported by the Company.
Interest expense was $7.5 million for ICON Health, $11.2 million for IHF
Holdings and $14.7 million for ICON Fitness in the first quarter of fiscal 1999
compared to $8.5 million for ICON Health, $11.6 million for IHF Holdings and
$14.6 million for ICON Fitness for the first quarter of fiscal 1998. The
decrease in interest expense for the operating company is due to a lower level
of outstanding indebtedness in fiscal 1999 as a result of decreased borrowings
under the credit agreement. However, in IHF Holdings and ICON Fitness, there is
an additional level of borrowings with respect to accretion of the principal
balances of the Company's outstanding indentures.
The income tax benefit is $4.4 million for ICON Health, $5.5 million for IHF
Holdings and $6.8 million for ICON Fitness for the first quarter of fiscal 1999,
compared with a tax benefit of $6.4 million for ICON Health, $7.4 million for
IHF Holdings and $8.5 for ICON Fitness during the first quarter of fiscal 1998.
The decreased tax benefit in the first quarter of fiscal 1999 compared to the
first quarter of fiscal 1998 is a result of the decreased losses of the Company.
As a result of the foregoing factors, net losses were $8.0 million for ICON
Health, $10.9 million for IHF Holdings and $13.3 million for ICON Fitness for
the first quarter of fiscal 1999 compared to net losses in the first quarter of
fiscal 1998 of $10.9 million for ICON Health, $13.3 million for IHF Holdings and
$15.4 million for ICON Fitness.
Liquidity and Capital Resources
- -------------------------------
In the first three months of fiscal 1999, the Company used $19.5 million of cash
in operating activities compared to $2.1 for the same period in fiscal 1998. The
majority of this use of cash relates to an increase in inventory. The Company
used $2.6 million of cash for investing activities in the first three months of
fiscal 1999, compared to $2.3 million in the first three months of fiscal 1998.
This cash was used for capital expenditures, the majority of which is related to
tooling and other manufacturing equipment. During the first quarter of fiscal
1999, the Company received cash of $22.6 million from financing activities,
compared to $4.4 million received in the same period in 1998.
The Company is in compliance with all financial covenants associated with the
amended Credit Agreement. ICON Health had $172.5 million of revolving credit
borrowings under the Credit Agreement at August 29, 1998 compared to $184.5
million at August 30, 1998. The revolving credit borrowings have increased by
$24.0 million from $148.5 million reported at the end of fiscal 1998. Line of
Credit borrowings have been used to fund inventory levels, finance normal trade
credit for customers, make interest payments on debt obligations and to fund
capital expenditures. The term loans have decreased from $19.5 million reported
at the end of fiscal 1998 to $17.8 million at August 29, 1998. This decrease is
a result of scheduled debt payments. Management believes that cash flows from
operations and the Company's ability to make revolving credit borrowings under
the amended Credit Agreement will provide adequate funds for working capital,
planned capital expenditures and debt service obligations for a period of at
least one year. Nevertheless, the Company is highly leveraged, and the ability
to fund operations, make planned capital expenditures, make scheduled debt
payments and refinance indebtedness depends on future operating performance and
cash flows, which in turn, are subject to prevailing economic conditions and to
financial, business and other factors, some of which are beyond the Company's
control.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is party to a variety of non-product liability commercial suits
involving contract claims and intellectual property claims. The Company believes
that potential adverse resolution of these suits will not have a material
adverse effect on the Company. The Company is also involved in several patent
infringement claims, arising in the ordinary course of its business. The Company
believes that the ultimate outcome of these matters will not have a material
adverse affect on the financial position or results of operations of the
Company.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
Exhibits.
(a) Exhibits
27.1 Financial Data Schedule for ICON Fitness Corporation.
27.2 Financial Data Schedule for IHF Holdings, Inc.
27.3 Financial Data Schedule for ICON Health & Fitness, Inc.
(b) Reports on Form 8-K
A Form 8-K was filed on August 19, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
ICON Fitness Corporation
IHF Holdings,Inc.
ICON Health & Fitness, Inc.
Date: October 13, 1998 By /s/ Gary Stevenson
---------------- -------------------------
Gary Stevenson
President
Date: October 13, 1998 By /s/ S. Fred Beck
---------------- --------------------
S. Fred Beck
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
SCHEDULE 27.1
This schedule contains summary financial information extracted from the August
29, 1998 Financial Statements included in the Company's Form 10-Q and is
qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<CIK> 0001029294
<NAME> ICON Fitness Corporation
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-01-1998
<PERIOD-END> AUG-29-1998
<CASH> 4475
<SECURITIES> 0
<RECEIVABLES> 120614
<ALLOWANCES> 0
<INVENTORY> 143552
<CURRENT-ASSETS> 288910
<PP&E> 92036
<DEPRECIATION> 44193
<TOTAL-ASSETS> 412827
<CURRENT-LIABILITIES> 123592
<BONDS> 490167
0
0
<COMMON> 49701
<OTHER-SE> (250634)
<TOTAL-LIABILITY-AND-EQUITY> 412827
<SALES> 117207
<TOTAL-REVENUES> 117207
<CGS> 85525
<TOTAL-COSTS> 35044
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14672
<INCOME-PRETAX> (20072)
<INCOME-TAX> (6778)
<INCOME-CONTINUING> (13294)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13294)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
SCHEDULE 27.2
This schedule contains summary financial information extracted from the August
29, 1998 Financial Statements included in the Company's Form 10-Q and is
qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<CIK> 0000934799
<NAME> IHF Holdings Inc
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-01-1998
<PERIOD-END> AUG-29-1998
<CASH> 4475
<SECURITIES> 0
<RECEIVABLES> 120614
<ALLOWANCES> 0
<INVENTORY> 143552
<CURRENT-ASSETS> 288910
<PP&E> 92036
<DEPRECIATION> 44193
<TOTAL-ASSETS> 402007
<CURRENT-LIABILITIES> 123592
<BONDS> 386392
0
0
<COMMON> 127770
<OTHER-SE> (235747)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 117207
<TOTAL-REVENUES> 117207
<CGS> 85525
<TOTAL-COSTS> 35044
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11190
<INCOME-PRETAX> (16394)
<INCOME-TAX> (5540)
<INCOME-CONTINUING> (10854)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10854)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
SCHEDULE 27.3
This schedule contains summary financial information extracted from the August
29, 1998 Financial Statements included in the Company's Form 10-Q and is
qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<CIK> 0000934798
<NAME> ICON Health & Fitness Inc
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1998
<PERIOD-END> AUG-29-1998
<CASH> 4475
<SECURITIES> 0
<RECEIVABLES> 120614
<ALLOWANCES> 0
<INVENTORY> 143552
<CURRENT-ASSETS> 288910
<PP&E> 92036
<DEPRECIATION> 44193
<TOTAL-ASSETS> 386284
<CURRENT-LIABILITIES> 123592
<BONDS> 290816
0
0
<COMMON> 166187
<OTHER-SE> (194311)
<TOTAL-LIABILITY-AND-EQUITY> 386284
<SALES> 117207
<TOTAL-REVENUES> 117207
<CGS> 85525
<TOTAL-COSTS> 35044
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7533
<INCOME-PRETAX> (12320)
<INCOME-TAX> (4366)
<INCOME-CONTINUING> (7954)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7954)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
