-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VRp73JnGJNYWbftEPg8UMgnTAzfHJcB8tAoD8vfNQj+8yMt4yEbqaVHsL1SHaZuR ODn+LCmNO6Z09oXgnX/hTQ== 0000914233-97-000005.txt : 19970115 0000914233-97-000005.hdr.sgml : 19970115 ACCESSION NUMBER: 0000914233-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961130 FILED AS OF DATE: 19970114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICON HEALTH & FITNESS INC CENTRAL INDEX KEY: 0000934798 STANDARD INDUSTRIAL CLASSIFICATION: [3949] IRS NUMBER: 870531206 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-87930 FILM NUMBER: 97505910 BUSINESS ADDRESS: STREET 1: 1500 SOUTH 1000 WEST CITY: LOGAN STATE: UT ZIP: 84321 BUSINESS PHONE: 8017505000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IHF HOLDINGS INC CENTRAL INDEX KEY: 0000934799 STANDARD INDUSTRIAL CLASSIFICATION: [3949] IRS NUMBER: 870531209 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-87930-01 FILM NUMBER: 97505911 BUSINESS ADDRESS: STREET 1: 1500 SOUTH 1000 WEST CITY: LOGAN STATE: UT ZIP: 84321 BUSINESS PHONE: 8017505000 MAIL ADDRESS: STREET 1: 1500 SOUTH 1000 WEST CITY: LOGAN STATE: UT ZIP: 84321 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICON FITNESS CORP CENTRAL INDEX KEY: 0001029294 STANDARD INDUSTRIAL CLASSIFICATION: [3949] IRS NUMBER: 870566936 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-18475 FILM NUMBER: 97505912 BUSINESS ADDRESS: STREET 1: 1500 SOUTH 1000 WEST CITY: LOGAN STATE: UT ZIP: 84321 BUSINESS PHONE: 8017505000 MAIL ADDRESS: STREET 1: ROPES & GRAY STREET 2: ONE INTERNATIONAL PLACE CITY: BOSTON STATE: MA ZIP: 02110-2624 10-Q 1 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 November 30, 1996 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 number - 33-87930; 33-87930-01; 333-18475 ICON Health & Fitness, Inc. IHF Holdings, Inc. ICON Fitness Corporation (Exact name of registrant as specified in its charter) 87-0531206 87-0531209 Delaware 87-0566936 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1500 South 1000 West Logan, Utah 84321 (Address and zip code of principal executive offices) (801) 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 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 1,000 shares . ICON Fitness Corporation and its wholly-owned subsidiary, IHF Holdings, Inc. and its wholly-owned subsidiary, ICON Health & Fitness, Inc. INDEX Page No. PART I - FINANCIAL INFORMATION 3 Item 1. Financial Statements 3-7 Consolidated Condensed Balance Sheets as of November 30, 1996 and May 31, 1996 3-4 Consolidated Condensed Statements of Operations for the three months and six months ended November 30, 1996 and December 2, 1995 5-6 Consolidated Condensed Statements of Cash Flows for the six months ended November 30, 1996 and December 2, 1995 7 Notes to Consolidated Condensed Financial Statements 8-12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13-17 PART II - OTHER INFORMATION 17 Item 1. Legal Proceedings 17 Item 2. Changes in Securities 18 Item 3. Defaults Upon Senior Securities 18 Item 4. Submission of Matters to a Vote of Securities Holders 18 Item 5. Other Information 18 Item 6. Exhibits and Reports on Form 8-K 19 Signatures 19 . 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 (In Thousands)
ICON Health IHF Holdings, ICON Fitness ICON Health ICON Fitness & Fitness, Inc. Inc. Corporation, &Fitness,Inc Inc. Corporation November 30, November 30, November 30, May 31, 1996 IHFMHoldings, May 31, 1996 1996 1996 1996 Audited 1996 Audited Unaudited Unaudited Unaudited Audited Assets Current assets Cash $11,565 $11,565 $11,565 $19,313 $19,313 $19,313 Accounts receivable-net 226,614 226,614 226,614 126,869 126,869 126,869 Inventories Raw materials 50,978 50,978 50,978 26,264 26,264 26,264 Finished goods 110,173 110,173 110,173 69,658 69,658 69,658 Deferred income taxes 5,240 5,240 5,240 5,240 5,240 5,240 Other assets 8,137 8,137 8,137 4,770 4,770 4,770 Prepaid income taxes 12,076 12,202 12,202 589 882 882 Total current assets 424,783 424,909 424,909 252,703 252,996 252,996 Property and equipment Land 1,230 1,230 1,230 1,230 1,230 1,230 Building 30,233 30,233 30,233 13,632 13,632 13,632 Machinery and equipment 67,286 67,286 67,286 37,191 37,191 37,191 Total 98,749 98,749 98,749 52,053 52,053 52,053 Less accumulated depreciation (20,163) (20,163) (20,163) (19,741) (19,741) (19,741) Property and equipment - net 78,586 78,586 78,586 32,312 32,312 32,312 Deferred income taxes 1,871 7,085 7,085 1,770 5,489 5,489 Other assets 31,161 36,793 40,981 19,703 25,930 25,930 $536,401 $547,373 $551,561 $306,488 $316,727 $316,727 Liabilities and Stockholders' Equity Current liabilities Current portion of long-term debt $4,885 $4,885 $4,885 $3,065 $3,065 $3,065 Accounts payable 122,689 122,689 122,689 73,652 73,652 73,652 Accrued expenses 40,909 40,909 40,909 17,239 17,239 17,239 Total current liabilities 168,483 168,483 168,483 93,956 93,956 93,956 Long term-debt 375,534 449,892 532,423 210,546 279,693 279,693 Cumulative Preferred Stock including dividends payable --- --- --- --- 47,904 47,904 Stockholders' Equity Common Stock, additional paid-in capital 166,176 127,759 49,690 166,176 77,730 77,730 Less: Receivable from officers (758) (758) (758) (758) (758) (758) Cumulative translation adjustment (106) (106) (106) 386 386 386 Retained earnings (deficit) (172,928) (197,897) (198,171) (163,818) (182,184) (182,184) Total Stockholders' Equity (7,616) (71,002) (149,345) 1,986 (104,826) (104,826) $536,401 $547,373 $551,561 $306,488 $316,727 $316,727
See accompanying notes to consolidated condensed financial statements. 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 (In Thousands)
For The Three Months Ended. ICON Health ICON Fitness ICON Health ICON & Fitness, IHF Corporation & Fitness, IHF Holdings, Fitness Inc. Holdings, November 30, Inc. Inc. Corporation November 30, Inc. 1996 December 2, December 2, December 2, 1996 November 30, Unaudited 1995 1995 1995 Unaudited 1996 Unaudited Unaudited Unaudited Unaudited Net sales $249,495 $249,495 $249,495 $228,524 $228,524 $228,524 Cost of goods sold 170,029 170,029 170,029 168,718 168,718 168,718 Cost of goods sold- revaluation of HealthRider, Weider Sports and CanCo inventory 6,300 6,300 6,300 --- --- --- Total cost of goods sold 176,329 176,329 176,329 168,718 168,718 168,718 Gross profit 73,166 73,166 73,166 59,806 59,806 59,806 Operating expenses: Selling-including one time HealthRider selling expenses of $3.2 million 37,557 37,557 37,557 24,650 24,650 24,650 Research and development 1,835 1,835 1,835 1,434 1,434 1,434 General and administrative 16,115 16,115 16,115 13,768 13,768 13,768 Weider Settlement (see Note 4) 16,465 16,465 16,465 --- --- --- Total operating expenses 71,972 71,972 71,972 39,852 39,852 39,852 Operating income 1,194 1,194 1,194 19,954 19,954 19,954 Interest expense 8,988 11,594 11,856 7,497 9,619 9,619 Dividend on cumulative redeemable Preferred stock 850 1,275 Amortization of deferred financing fees 800 1,098 1,110 646 888 888 Income (loss) before income tax (8,594) (11,498) (12,622) 11,811 9,447 8,172 Provision (benefit) for income taxes (3,105) (3,731) (3,731) 4,518 3,990 3,990 Net income (loss) ($5,489) ($7,767) ($8,891) $7,293 $5,457 $4,182
See accompanying notes to consolidated condensed financial statements. 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 (In Thousands) For The Six Months Ended.
ICON ICON ICON Health & Fitness ICON Health & IHF Holdings, Fitness, Fitness, Inc. IHF Holdings, Corporation, Fitness, Inc. Inc. Corporation November 30, Inc. November November 30, December 2, December 2, December 2, 1996 30, 1996 1996 1995 1995 1995 Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Net sales $375,305 $375,305 $375,305 $353,363 $353,363 $353,363 Cost of goods sold 260,610 260,610 260,610 259,650 259,650 259,650 Cost of goods sold-revaluation of HealthRider, Weider Sports and CanCo inventories 8,165 8,165 8,165 --- --- --- Total cost of goods sold 268,775 268,775 268,775 259,650 259,650 259,650 Gross profit 106,530 106,530 106,530 93,713 93,713 93,713 Operating expenses: Selling-including one time HealthRider selling expenses of $3.2 million 56,370 56,370 56,370 40,479 40,479 40,479 Research and development 3,474 3,474 3,474 2,980 2,980 2,980 General and administrative 27,002 27,002 27,002 23,859 23,859 23,859 Weider Settlement (see Note 4) 16,465 16,465 16,465 --- --- --- Total operating expenses 103,311 103,311 103,311 67,318 67,318 67,318 Operating income 3,219 3,219 3,219 26,395 26,395 26,395 Interest expense 15,155 20,367 20,629 13,813 18,001 18,001 Dividend on cumulative redeemable preferred stock 2,125 2,550 Amortization of deferred financing fees 1,452 2,047 2,059 1,271 1,749 1,749 Income (loss) before (13,388) (19,195) (21,594) 11,311 6,645 4,095 Provision (Benefit) for income taxes (4,278) (5,606) (5,606) 4,738 3,303 3,303 Net income (Loss) ($9,110) ($13,589) ($15,988) $6,573 $3,342 $792
See accompanying notes to consolidated condensed financial statements. . 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 (In Thousands) For The Six Months Ended.
ICON Health IHF ICON Fitness ICON Health & IHF Holdings, ICON Fitness, & Fitness Holdings, Corporation, Fitness, Inc. Inc. Corporation Inc. Inc. November 30, December 2, December 2, December November 30, November 30, 1996 1995 1995 2, 1995 1996 1996 Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited OPERATING ACTIVITIES: Net income/(loss) ($9,110) ($13,589) ($15,988) $6,573 $3,342 $792 Adjustments to reconcile net income to net cash provided by operating activity: Provision for bad debt and advertising allowance 5,284 5,284 5,284 10,793 10,793 10,793 Provision/(benefit) for deferred taxes (101) (1,596) (1,596) 3,740 3,149 3,149 Depreciation & amortization 6,072 11,879 12,153 4,985 9,651 9,651 Interest expense attributable to dividends on preferred stock --- --- 2,125 --- --- 2,550 Changes in operating assets and liabilities: Accounts receivable (86,137) (86,137) (86,137) (119,691) (119,691) (119,691) Inventory (28,756) (28,756) (28,756) (13,840) (13,840) (13,840) Other assets (9,785) (9,618) (10,756) 2,661 2,661 2,661 Account payable and accrued expenses 31,098 31,098 31,098 36,041 35,197 35,197 Net cash received from/ (used in) operating activities (91,435) (91,435) (92,573) (68,738) (68,738) (68,738) INVESTING ACTIVITIES: Payments for acquisitions (38,962) (38,962) (38,962) --- --- --- Purchases of property and equipment (13,622) (13,622) (13,622) (7,913) (7,913) (7,913) Net cash received from/ (used in) investing activities (52,584) (52,584) (52,584) (7,913) (7,913) (7,913) FINANCING ACTIVITIES Proceeds from long-term debt, net of payments 136,763 136,763 219,030 76,709 76,709 76,709 Return of capital to parent --- --- (42,319) --- --- --- Retirement of Preferred stocks --- (35,748) (35,748) --- --- --- Capital contribution by parent --- 35,748 --- --- --- --- Payment of debt financing fees --- --- (3,062) --- --- --- Net cash received from/ (used in) financing activities 136,763 136,763 137,901 76,709 76,709 76,709 Effect of exchange rate change on cash (492) (492) (492) 13 13 13 Net increase/(decrease)in cash (7,748) (7,748) (7,748) 71 71 71 Cash at beginning of period 19,313 19,313 19,313 4,099 4,099 4,099 Cash at end of period $11,565 $11,565 $11,565 $4,170 $4,170 $4,170 SUPPLEMENTAL DISCLOSURES: Cash paid during the year for: Interest $7,650 $7,650 $7,650 $12,777 $12,777 $12,777 Income taxes $1,159 $1,159 $1,159 $185 $185 $185
See notes to consolidated condensed financial statements. ICON Fitness Corporation and its wholly-owned subsidiary, IHF Holdings, Inc. and its wholly owned subsidiary, ICON Health & Fitness, Inc. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Note 1. Basis of Presentation The accompanying consolidated condensed financial statements for ICON Fitness Corporation ("ICON Fitness") and its wholly-owned subsidiary IHF Holdings, Inc. ("IHF Holdings") and its wholly owned subsidiary ICON Health & Fitness, Inc. ("ICON") and its wholly-owned subsidiaries, including HealthRider Corporation which was acquired on August 16, 1996 (See HealthRider Acquisition - Note 2) and ICON of Canada which was acquired in September of 1996 (See Weider Sports Acquisition and CanCo acquisition-Note 5) (collectively, the "Company"), have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information required by generally accepted accounting principles for complete financial statements. IHF Holdings' parent company, ICON Fitness and its parent company IHF Capital, Inc., ("IHF Capital") are not currently registrants. In management's opinion, the accompanying consolidated condensed financial statements, for ICON, IHF Holdings and ICON Fitness, contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial condition of ICON, IHF Holdings and ICON Fitness, as of November 30, 1996 and May 31, 1996, their results of operations for the three and six months ended November 30, 1996 and December 2, 1995, and their cash flows for the six months ended November 30, 1996 and December 2, 1995. There are two less days in the six month period ended November 30, 1996 than the comparable period ended December 2, 1995. Prior to the incorporation of ICON Fitness on November 12, 1996 and the concurrent contribution of IHF Capital, Inc.'s ("IHF Capital") investment in IHF Holdings to ICON Fitness in exchange for all of the outstanding common stock of ICON Fitness, IHF Holdings was a wholly-owned subsidiary of IHF Capital. ICON Fitness' financial statements carry over the historical financial position and results of operations of IHF Capital, adjusted to reflect the fact that ICON Fitness is a wholly-owned subsidiary of IHF Capital. All significant intercompany transactions and balances have been eliminated. The financial statements included herein should be read in conjunction with the financial statements and footnotes thereto and information included in the Form 10-K filed by ICON Fitness with the Securities and Exchange Commission on August 29, 1996 and with the Form S-4 filed with the Securities and Exchange Commission on December 20, 1996 (which has not yet been declared effective). The results of operations for the six months ended November 30, 1996 are not necessarily indicative of the results to be expected for the full year ended May 31, 1997. Note 2. HealthRider Acquisition On August 16, 1996, the Company: (i) purchased substantially all the assets of HealthRider for approximately $16.8 million and assumed (or refinanced) substantially all of the liabilities of HealthRider: (ii) purchased certain related manufacturing assets of Parkway Manufacturing, Inc., ("Parkway"), including Parkway's contract to manufacture and supply upright rowers to HealthRider, for approximately $10.1 million (includes the repayment of $1.0 million of trade payables owed to Parkway by HealthRider); and (iii) purchased the minority interest of HealthRider's European subsidiary for approximately $1.4 million; (of which $.7 million was paid by HealthRider, $.6 million was paid by the Company in cash and $.1 million was paid by the Company in inventory)(together, the "HealthRider Acquisition"). The HealthRider Acquisition was funded through additional borrowings under the Credit Agreement with General Electric Capital Corporation. (the "Credit Agreement"). The HealthRider Acquisition has been accounted for under the purchase method of accounting. Accordingly, the purchase price plus direct costs of the acquisition have been allocated to the assets acquired and liabilities assumed based on their relative fair values as of the closing date. The allocation to each of the assets acquired and liabilities assumed is preliminary as the Company is in the process of determining the fair value of significant assets acquired in the HealthRider Acquisition. Accordingly, the final allocations may be different from those initially recorded. The following unaudited pro forma summary presents the consolidated results of operations assuming that the HealthRider Acquisition had occurred on May 31, 1995. Results for the historical ICON, IHF Holdings and ICON Fitness represent the results for the second quarter of fiscal 1997 and the first half fiscal 1997 combined with the HealthRider results for the periods then ended with comparative results from the same periods in fiscal 1996. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the transaction been effected on the date indicated above or of results which may occur in the future. The Company expects that HealthRider revenues in the periods subsequent to the HealthRider Acquisition will decline substantially. In addition, the pro forma summary exclude certain non-recurring charges related to the HealthRider Acquisition including a significant non-recurring, non-cash charge resulting from the fact that the Company's purchase accounting will include writing-up the book value of the HealthRider inventory to fair market value less estimated sales costs.
(In million) Three Months ended November 30, 1996 Six Months ended November 30, 1996 (unaudited) (Unaudited) ICON HealthRider ICON HealthRider Total Revenues $249.5 --- $375.3 $16.4 $391.7 Net Income (Loss) ($.2) --- ($2.7) ($6.2) ($8.9) IHF Holdings HealthRider IHF Holdings HealthRider Total Revenues $249.5 --- $375.3 $16.4 $391.7 Net Income (Loss) ($2.5) --- ($7.2) ($6.2) ($12.6) ICON Fitness HealthRider ICON Fitness HealthRider Total Revenues $249.5 --- $375.3 $16.4 $391.7 Net Income (Loss) ($3.6) --- ($9.6) ($6.2) ($15.8)
Three Months ended December 2, 1995 Six Months ended December 2, 1995 (unaudited) (Unaudited) ICON HealthRider Total ICON HealthRider Total Revenues $228.5 $54.4 $282.9 $353.3 $113.5 $466.8 Net Income (Loss) $7.3 ($.3) $7.0 $6.6 $8.5 $15.1 IHF Holdings HealthRider Total IHF Holdings HealthRider Total Revenues $228.5 $54.4 $282.9 $353.3 $113.5 $466.8 Net Income (Loss) $5.5 ($.3) $5.2 $.8 $8.5 $11.8 ICON Fitness HealthRider Total ICON Fitness HealthRider Total Revenues $228.5 $54.4 $282.9 $353.3 $113.5 $466.8 Net Income (Loss) $4.2 ($.3) $3.9 $.8 $8.5 $9.3
Note 3. 1996 Stock Option Plan IHF Capital, Inc. adopted the 1996 Stock Option Plan (the "1996 Stock Option Plan") which will provide for the grant to directors and certain eligible employees of the Company either incentive stock options, non-qualified options or both. The 1996 Stock Option Plan satisfies the requirements of Rule 16b-3 under the 1934 Act. Subject to adjustment for stock splits and similar events, a total of 2,070,000 shares of Class A Common Stock of IHF Capital has been authorized for issuance under the 1996 Stock Option Plan, which is administered by the Board of Directors. Note 4. Settlement of WHF Litigation On September 6, 1996, the Company and Weider Health and Fitness ("WHF") and its affiliates settled the litigation between WHF and certain of its affiliates and the Company and certain of its officers and directors through a number of agreements (the "WHF Settlement"). The WHF Settlement includes releases of certain claims previously asserted by WHF and its affiliates, amendments to certain of the agreements currently existing between the Company and WHF and its affiliates and certain new agreement among the Company and WHF and its affiliates. Other than the releases, the significant terms of the WHF Settlement are outlined below. Option to Repurchase Common Stock. The Company obtained the right to purchase all of the Common Stock of IHF Capital and certain warrants to purchase Common Stock of IHF Capital held by the WHF Stockholders (the "IHF Position"). This right was exercised on November 20, 1996 at an aggregate price of approximately $42.3 million. This transaction has been treated as a return of IHF Capital's capital in ICON Fitness in which ICON Fitness recorded the amounts paid to the WHF stockholders as a reduction in the additional paid-in capital of ICON Fitness. Option to Repurchase Preferred Stock. The Company obtained the right to purchase the IHF Holdings Preferred Stock held by WHF and certain other stockholders. On November 20, 1996 the Company exercised this right for $32.1 million, which reflects a discount of $3.9 million and the forgiveness of accrued dividends. In connection with the repurchase of IHF Holdings Preferred Stock, the Company purchased the options to purchase IHF Holdings Preferred Stock held by Messrs. Watterson and Stevenson for $3.7 million, which reflects a discount of $.3 million and the forgiveness of accrued dividends. Upon the purchase of the IHF Holdings Preferred Stock, WHF's representation on the Company's board of directors ceased. In connection with the above transaction, the Company recorded an increase to the additional paid-in capital of IHF Holdings of $50.1 million, which consists of (i) $35.8 million which ICON Fitness contributed to IHF Holdings from its proceeds from the issuance of 14% Series A Senior Discount Notes (see Note 7) for the repurchase of IHF Holdings Preferred Stock and options to purchase IHF Holdings Preferred Stock; and (ii) $14.3 million related to the discounts given on the repurchase of IHF Holdings Preferred Stock and options to purchase IHF Holdings Preferred Stock and the forgiveness of accrued dividends. Additionally, the Company recorded an increase to the additional paid-in capital of ICON Fitness of $14.3 million to reflect the gain recognized on the early extinguishment of and the forgiven dividends related to the IHF Holdings Preferred Stock and options to purchase IHF Holdings Preferred Stock. Settlement Expenses and Intercompany Payables. The Company: (i) paid $12.1 million to terminate the lawsuits; (ii) paid $3.9 to WHF and its affiliates as payment in full under its brand license agreements with them; and (iii) received $1.2 million in full payment and settlement of the Company's intercompany payable to WHF and its affiliates ($1.8 million) and amounts due the Company under the amended WSG Management Agreement ($3.0). The Company also received $.5 million in full payment and settlement of CanCo's Management fee obligations to the Company under the CanCo Management and Advisory Agreement. As a result of the above, the Company recorded Weider Settlement expenses of $16.5 million, which includes the expenses noted in (i) and (ii) and other individually insignificant settlement expenses totaling $1.0 million, offset by the $.5 million of CanCo Management fees. The Company also recorded the intercompany balance reductions noted in (iii) in its consolidated condensed balance sheet. Ben Weider Payments. The WHF Settlement also provides that Ben Weider will serve as a consultant to, and ambassador for, the Company for five years, with an annual compensation of approximately $475,000, and that the Company will provide office space and three assistants for Mr. Weider. Payments to Messrs. Watterson and Stevenson. In connection with the WHF Settlement, WHF and its affiliates: (i) paid Messrs. Watterson and Stevenson an aggregate amount of approximately $4.2 million in exchange for the surrender of their options to purchase stock of WHF and its affiliates; and (ii) paid Messrs. Watterson and Stevenson an aggregate amount of $.5 million. Messrs. Watterson and Stevenson also each received $.3 million in full payment and settlement of CanCo's Management fee obligations to Messrs. Watterson and Stevenson under the CanCo Management and Advisory Agreements. The WHF Settlement also contains various miscellaneous provisions that the Company does not believe are material. Note 5. Weider Sports Acquisition and CanCo Acquisition. In conjunction with the settlement of litigation described above, the Company acquired certain assets, excluding cash and fixed assets, for $8.7 million and assumed certain liabilities of the sports equipment business lines of Weider Sports. In addition, the Company acquired certain assets, excluding cash, cash equivalents and accounts receivable, for $1.7 million and assumed certain liabilities of CanCo. As a result of the Weider Sports Acquisition, the Company acquired distribution rights originally granted to Weider Sports in connection with the Recapitalization on November 14, 1994, subject to certain rights granted by Weider Sports to third parties. The Company also acquired two CanCo plants which were leased by other WHF affiliates in exchange for the assumption of the existing $1.5 million Canadian. mortgage on the properties and the payment of $.5 million. The Weider Sports and CanCo Acquisitions are being accounted for under the purchase method of accounting. Accordingly, the purchase price plus direct costs of the acquisitions have been allocated to the assets acquired and liabilities assumed based on their relative fair values as of the closing date. The final allocation to each of the Company's assets acquired and liabilities assumed is preliminary as the Company is in the process of determining the fair value of significant assets acquired in the Weider Sports and CanCo Acquisitions. Accordingly, the final allocations may be different from those initially recorded. However, such allocations are not expected to differ materially from those initially recorded. The Weider Sports and CanCo Acquisitions do not represent acquisitions of significant businesses by the Company. Note 6. Amendment of Credit Agreement The Credit Agreement was amended as of August 23, 1996 to permit total borrowing of up to $310 million under the Company's revolving credit facility, in order to fund the HealthRider Acquisition the WHF settlement, the Weider Sports Acquisition and CanCo Acquisitions and to meet the Company's other long term needs. Note 7. Issuance of 14% Series A Senior discount Notes On November 20, 1996, ICON Fitness Corporation issued $162,000,000 face amount of 14% Series A Senior Discount Notes pursuant to Rule 144A and certain other exemptions under the Securities Act of 1933, as amended, for resale to certain Qualified Institutional Buyers and Institutional Accredited Investors. The Senior Discount Notes generated gross proceeds of approximately $82.5 million. The net proceeds from the Offering were used to finance the purchase of some of the outstanding shares of common stock of ICON Fitness Corporation's parent, IHF Capital, Inc., and warrants to purchase shares of such stock held by certain stockholders and the purchase of all of the outstanding shares of preferred stock of its subsidiary, IHF Holdings, Inc., and options to purchase shares of such stock held by certain stockholders. ICON Fitness Corporation filed a Form S-4 registration statement under the Securities Act of 1933 on December 20, 1996 and has agreed to use its best efforts to cause this registration to become effective within 150 days of the Offering. . Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations. Operating Results for the Second Quarters of 1997 and 1996 Net sales were $249.5 million in the second quarter of fiscal 1997, compared to $228.5 million in the second quarter of fiscal 1996. Sales of company's line of abdominal machines, first introduced in April of 1996, totaled $22.5 million, net sales of HealthRider branded products total $19.2 million with no comparable sales for these products during the second quarter of fiscal 1996. Sales of the company's home weight systems increased $5.1 million, while treadmill sales increased $13.0 million in the second quarter of fiscal 1997 compared to second quarter of fiscal 1996. Treadmill sales accounted for approximately 45% and 44 % of total net sales during the second quarter of fiscal 1997 and 1996, respectively. Sales of trampolines increased $2.1 million in the second quarter of 1997 to $16.7 million from $14.6 million in the second quarter of fiscal 1996. Sales by the European subsidiaries increased by $3.9 million. Sales of the Company's line of upright rowers decreased $49.0 million to $29.1 million from $78.1 million in the second quarter of 1996 due to decreased market demand. Gross profit for the second quarter of fiscal 1997 was $73.2 million, or 29.3% of net sales, compared to $59.8 million, or 26.2% of net sales, for the second quarter of fiscal 1996. The step-up of HealthRider and ICON of Canada inventory increased cost of sales by $6.3 million. Without this charge, the gross profit would have increased to 31.9% due to gross margin improvements in the Company's line of treadmill products and higher gross margin on HealthRider branded products. Selling expenses were $37.6 million, or 15.1% of net sales, in the second quarter of fiscal 1997 compared to $24.7 million, or 10.8% of net sales, for the second quarter of fiscal 1996. This increase is primarily attributed to $12.1 million in expenditures at HealthRider during the second quarter of fiscal 1997. One time selling expenses of HealthRider totaled $3.2 million during the second quarter. These one time selling expenses will continue until discontinued products purchased in the HealthRider acquisition are liquidated. The company has no comparable expense during the comparable period of fiscal 1996. Research and development expenses were $1.8 million or .7% of net sales, for the second quarter of 1997 compared to $1.4 million, or .6% of net sales, for the second quarter 1996. General and administrative expenses totaled $ 16.1 million, or 6.5 % of net sales, for the second quarter of 1997 compared to $13.8 million, or 6.0% of net sales, for the second quarter of 1996. HealthRider general and administrative expenses total $2.0 million for the current period without comparable expenses in the prior year. Weider settlement expenses totaled $16.5 million during the quarter. See Note 4 to the consolidated condensed financial statements and Part II Item 1 Legal proceedings. As a result of the foregoing factors, operating income was $1.2 million, or .5% of net sales in the second quarter of fiscal 1997, compared to $20.0 million, or 8.8% of net sales, in the second quarter of fiscal 1996. Operating income before one time expenses associated with the HealthRider and CanCo Acquisitions and the expense of the Weider settlement would have been $27.2 million or 10.9% of net sales for the second quarter. Interest expense was $9.0 million for ICON, $11.6 million for IHF Holdings and $11.9 million for ICON Fitness in the second quarter of fiscal 1997 compared to $7.5 million for ICON, $9.6 million for IHF Holdings and $9.6 million for ICON Fitness for the second quarter of fiscal 1996. Interest expense increased with the increased operating debt associated with the HealthRider Acquisition, the WHF settlement and the CanCo Acquisition, offset by the retirement of debt in the second quarter of fiscal 1997. Dividends on cumulative redeemable Preferred stock totaled $.9 million and $1.3 million for ICON Fitness during the second quarter of 1997 and 1996, respectively. The income tax benefit was $3.1 million for ICON and a tax benefit of $3.7 million for Holdings and ICON Fitness for the second quarter of 1997 compared with a tax provision of $4.5 million for ICON and a tax provision of $4.0 million for IHF Holdings and ICON Fitness during the second quarter of fiscal 1996. This is a result of the increase in the loss before income tax during the second quarter of 1997 compared to the same period in the preceding year. As a result of the foregoing factors, the net loss was $5.5 million for ICON, $7.8 million for IHF Holdings and $8.9 million for ICON Fitness for the second quarter of 1997 compared to net income of $7.3 million for ICON, $5.5 million for IHF Holdings and $4.2 million for ICON Fitness during the same period of fiscal 1996. Operating Results for the First Halves of 1997 and 1996 Net sales were $375.3 million in the first half of fiscal 1997, compared to $353.4 million in the first half of fiscal 1996. Sales of company's line of abdominal machines, first introduced in April of 1996, totaled $36.9 million, net sales of HealthRider branded products totaled $22.0 million with no comparable sales of these products during the first half of fiscal 1996. Sales of the company's home weight systems increased $10.2 million, while treadmill sales increased $16.0 million in the first half of fiscal 1997 compared to first half of fiscal 1996. Treadmill sales accounted for approximately 42% and 40% of total net sales during the first half of fiscal 1997 and 1996, respectively. Sales of trampolines increased $4.3 million in the first half of 1997 to $34.1 million from $29.8 million in the first half of fiscal 1996. Sales of the Company's line of upright rowers decreased $78.6 million to $47.3 million from $125.9 million in the first half of 1996 due to decreased market demand. Sales in Europe increased $5.6 million over the same period for fiscal 1996. Gross profit for the first half of fiscal 1997 was $106.5 million, or 28.3% of net sales, compared to $93.7 million, or 26.5% of net sales, for the first half of fiscal 1996. The step-up of HealthRider inventory and ICON of Canada increased cost of sales by $8.2 million for the first half of fiscal 1997. Without this charge, the gross profit would have increased to 30.6% due to gross margin improvements in the Company's line of treadmill products and higher gross margin on HealthRider branded products. Selling expenses were $56.4 million, or 15.0% of net sales, in the first half of fiscal 1997 compared to $40.5 million, or 11.5% of net sales for the first half of fiscal 1996. This increase is primarily attributed to $14.0 million in expenditures at HealthRider during the second quarter of fiscal 1997. One time selling expenses of HealthRider totaled $3.2 million during the first half of fiscal 1997. These one time selling expenses will continue until discontinued products purchased in the HealthRider acquisition are liquidated. The company has no comparable expenses during the comparable period of fiscal 1996. Research and development expenses were $3.5 million or .9% of net sales, for the first half of 1997 compared to $3.0 million, or .9% of net sales, for the first half of 1996. General and administrative expenses totaled $27.0 million, or 7.2% of net sales, for the first half of 1997 compared to $23.9 million, or 6.8% of net sales, for the first half of 1996. HealthRider general and administrative expenses totaled $2.3 million with no comparable expenses in the prior year. Weider settlement expenses totaled $16.5 million. See Note 4 to the consolidated condensed financial statements and Part II Item 1, Legal proceedings. As a result of the foregoing factors, operating income was $3.2 million, or .9% of net sales in the first half of fiscal 1997, compared to a $26.4 million, or 7.5% of net sales, in the first half of fiscal 1996. Operating income before one time HealthRider selling expenses and the expense of the Weider settlement would have been $22.9 million or 6.1% of net sales for the first half of fiscal 1997. Interest expense was $15.2 million for ICON, $20.4 million for IHF Holdings and $20.6 million for ICON Fitness in the first half of fiscal 1997 compared to $13.8 million for ICON, $18.0 million for IHF Holdings and $18.0 million for ICON Fitness for the first half of fiscal 1996. Interest expense increased with increased operating debt associated with the HealthRider Acquisition, the WHF settlement and the CanCo Acquisition offset by the retirement of debt during the first half of fiscal 1997. Dividends on cumulative redeemable Preferred stock totaled $2.1 million and $2.6 million for ICON Fitness for the first half of fiscal 1997 and 1996, respectively. The income tax benefit was $4.3 million for ICON and a tax benefit of $5.6 million for IHF Holdings and ICON Fitness for the first half of 1997 compared with a tax provision of $4.7 million for ICON and a tax provision of $3.3 million for IHF Holdings and ICON Fitness during the first half of fiscal 1996. This is a result of the loss before income tax during the first half of 1997 compared to the income before income tax for same period in the preceding year. As a result of the foregoing factors, the net loss was $9.1 million for ICON, $13.6 million for IHF Holdings and $16.0 million for ICON Fitness for the first half of 1997 compared to net income of $6.6 million for ICON, $3.3 million for IHF Holdings and $.8 million for ICON Fitness during the same period for fiscal 1996. Advertising allowances with retail customers have increased by $6.7 million to $11.1 million at November 30, 1996. Advertising allowances are generally a fixed percentage of sales to customers. Fluctuations in the balance of this allowance are attributable to changes in customer sales mix and the timing of when allowances are taken. Bad debt allowances totaled $2.0 million at November 30, 1996 compared to $1.4 million at May 31, 1996. Terms with retail customers remained unchanged from previous periods. Prepaid income taxes are $12.1 million for ICON and $12.2 million for IHF Holdings and ICON Fitness. $5.2 million of these balances are attributable to the HealthRider Acquisition, with the remaining $6.9 million and $7.0 million for ICON and IHF Holdings, respectively, being the result of losses from current operations. Seasonality The Companies have historically sold the majority of their products to customers in their 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 which includes the results of the HealthRider Acquisition from August 16, 1996 for the first half of fiscal 1997 and for each quarter in fiscal 1996, and 1995. First Second Third Fourth Quarter Quarter Quarter Quarter Fiscal 1997 $125.8 $249.5 --- --- Fiscal 1996 $124.8 $228.5 $240.9 $153.4 Fiscal 1995 $ 70.6 $163.0 $182.8 $114.4 Liquidity and Capital Resources As a result of the Company's Recapitalization on November 14, 1994, the Company's cash needs have changed significantly in the second half of fiscal 1995, 1996 and for the first half of fiscal 1997 and for future periods. Management believes that cash flows from operations and ICON'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 the foreseeable future. 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. In the first six months of fiscal 1997, ICON and IHF Holdings used $91.4 million and ICON Fitness used $92 million of cash in operating activities primarily as a result of increased accounts receivable and inventory. During the first six months of fiscal 1997, the Company had a net decrease in cash of $7.7 million. The Company also used $13.6 million of cash in the first six months of fiscal 1997 for capital expenditures primarily related to tooling, manufacturing equipment and building expansion, $28.2 million to fund the HealthRider Acquisition, and $ 10.8 million to fund the Weider Sports and CanCo Acquisitions. At November 30, 1996, ICON had $228.5 million of revolving credit borrowings under the Credit Agreement. At the close of the quarter additional availability under this Credit Agreement was $29.3 million. Management believes that availability under this amended Credit Agreement is adequate to meet the Company's obligations. The revolving credit borrowings have increased by $148.5 million from $80.0 million reported at the end of fiscal 1996. The Company funded the HealthRider and Weider Sports and CanCo Acquisitions and the Weider Settlement with borrowings under the Credit Agreement. Line of Credit borrowings have historically been used to fund increased inventory levels, finance normal trade credit for customers, make interest payments on debt issued in connection with the Company's Recapitalization and to fund capital expenditures. On November 20, 1996, ICON Fitness issued 14% Series A Senior Discount Notes with a face value of $162,000,000. These Senior Discount Notes generated gross proceeds of $82.5 million. The Company used the net proceeds from the Senior Discount Notes to finance the purchase of some of the outstanding shares of common stock of IHF Capital, Inc. and warrants to purchase shares of such stock held by certain stockholders and the purchase of all of the outstanding shares of preferred stock of IHF Holdings, and options to purchase shares of such stock held by certain stockholders. Interest on the Notes will begin accruing on November 15, 2001 and will be payable semi-annually on each May 15 and November 15, commencing May 15, 2002. The principle and accrued interest on the Senior Discount Notes will be due on November 15, 2007. PART II - OTHER INFORMATION Item 1. Legal Proceedings. Settlement of WHF Litigation On September 6, 1996, the Company and WHF and its affiliates settled the litigation between WHF and certain of its affiliates and the Company and certain of its officers and directors through a number of agreements (the "WHF Settlement"). The WHF Settlement includes releases of certain claims previously asserted by WHF and its affiliates, amendments to certain of the agreements currently existing between the Company and WHF and its affiliates and certain new agreements among the Company and WHF and its affiliates. Other than the releases, the significant terms of the WHF Settlement are outlined below. Repurchase of Common Stock. On November 20, 1996, the Company exercised its option to purchase all of the Common Stock and certain warrants to purchase Common Stock of IHF Capital held by the WHF Stockholders (the "IHF Position") at a price of approximately $42.3 million. Repurchase the Preferred Stock. On November 20, 1996 the Company exercised its option to purchase the IHF Holdings Preferred Stock held by WHF at a price of $32.1 million. In connection with the repurchase of IHF Holdings Preferred Stock, if any, the Company purchased the options to purchase IHF Holdings Preferred Stock held by Messrs. Watterson and Stevenson at a price of $3.7 million. Settlement Expenses and Intercompany Payables. The Company; (i) paid $12.1 million to terminate the lawsuits; (ii) paid $3.9 to WHF and its affiliates as prepayment in full under its brand license agreements with them; and (iii) received $1.2 million in full payment and settlement of the Company's intercompany payable to WHF and its affiliates ($1.8 million) and amounts due the Company under the amended WSG Management Agreement ($3.0). The Company also received $.5 million in full payment and settlement of CanCo's Management fee obligations to the Company under the CanCo Management and Advisory Agreement. Ben Weider Payments. The WHF Settlement also provides that Ben Weider will serve as a consultant to, and ambassador for, the Company for five years, with an annual compensation of approximately $475,000, and that the Company will provide office space and three assistants for Mr. Weider. Payments to Messrs. Watterson and Stevenson. In connection with the WHF Settlement, WHF and its affiliates: (i) paid Messrs. Watterson and Stevenson an aggregate amount of approximately $4.2 million in exchange for the surrender of their options to purchase stock of WHF and its affiliates; and (ii) paid Messrs. Watterson and Stevenson an aggregate amount of $.5 million. Messrs. Watterson and Stevenson also each received $.3 million in full payment and settlement of CanCo's Management fee obligations to Messrs. Watterson and Stevenson under the CanCo Management and Advisory Agreements. Weider Sports Acquisition and CanCo Acquisition. The Company acquired certain assets, excluding cash and fixed assets, for $8.7 million and assumed certain liabilities of the sports equipment business lines of Weider Sports. In addition, the Company reacquired certain assets, excluding cash, cash equivalents and accounts receivable, for $1.7 million and assumed certain liabilities of CanCo. As a result of the Weider Sports Acquisition, the Company acquired distribution rights originally granted to Weider Sports in connection with the Recapitalization subject to certain rights granted by Weider Sports to third parties. The Company also acquired two CanCo plants which were leased by other WHF affiliates in exchange for the assumption of the existing $1.5 million (Canadian) mortgage on the properties and the payment of $.5 million. The WHF Settlement also contains various miscellaneous provisions that the Company does not believe are material. Item 2. Changes in Securities. See Note 4 to the consolidated condensed financial statements. 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. Unless otherwise noted, the following exhibits were previously filed with the Securities and Exchange Commission under the Securities Act and are referred to and incorporated herein by reference to such filings. 1.1(1) Purchase Agreement dated November 15, 1996 regarding the issuance and sale of the Senior Discount Notes between ICON and Donaldson, Lufkin & Jennrette Securities Corporation. 3.1(1) Certificate of Incorporation of ICON Fitness Corporation. 3.1A(1)Amendment to Certificate of Incorporation of ICON Fitness Corporation. 3.2(1) By-laws of ICON Fitness Corporation. 4.2(1) Indenture dated as of November 20, 1996 between ICON Fitness Corporation as Issuer, and Fleet National Bank as Trustee, with respect to the $162,000,000 in aggregate principle amount at maturity of Senior Discount Notes Due 2006, including the form of the Senior Discount Note. 4.3(1) Registration Rights Agreement dated as of November 20, 1996 by and between ICON Fitness Corporation and Donaldson Lufkin & Jeanette Securities Corporation. 10.1(1)Amended and Restate Credit Agreement dated as of November 14, 1994 amount ICON Health & Fitness, Inc., the lenders named therein, and General Electric Capital Corporation. 27.1* Financial Data Schedule for ICON Health & Fitness, Inc. 27.2* Financial Data Schedule for IHF Holdings, Inc. 27.3* Financial Data Schedule for ICON Fitness Corporation. *Filed herewith. (1) Filed as Exhibits to the Registration Statement on Form S-4 of ICON Fitness Corporation (Registration No 333-18475) and is incorporated herein by reference. Reports on Form 8-K None. 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 Health & Fitness, Inc. IHF Holdings, Inc. ICON Fitness Corporation (Registrants) Date: 1/14/97 By /S/Gary Stevenson, President By /S/S. Fred Beck, Chief Accounting Officer EX-27 2 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF ICON HEALTH & FITNESS, INC., FOR THE PERIOD ENDED NOVEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. [/LEGEND] 0000934798 ICON HEALTH & FITNESS, INC. 6-MOS MAY-31-1997 NOV-30-1996 11,565 0 226,614 0 161,151 424,783 98,749 20,163 536,401 168,483 375,534 0 0 0 (7,616) 536,401 375,305 375,305 268,775 268,775 0 0 15,155 (13,388) (4,278) (9,110) 0 0 0 (9,110) 0
EX-27 3 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF IHF HOLDINGS, INC., FOR THE PERIOD ENDED NOVEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. [/LEGEND] 0000934799 IHF HOLDINGS, INC. 6-MOS MAY-31-1997 NOV-30-1996 11,565 0 226,614 0 161,151 424,909 98,749 20,163 547,373 168,483 449,892 0 0 0 (71,002) 547,373 249,495 249,495 176,329 176,329 0 0 11,594 (11,498) (3,731) (7,767) 0 0 0 (7,767) 0
EX-27 4 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF ICON FITNESS CORPORATION FOR THE PERIOD ENDED NOVEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. [/LEGEND] 0001029294 ICON FITNESS CORPORATION 6-MOS MAY-31-1997 NOV-30-1996 11,565 0 226,614 0 161,510 424,909 98,749 20,163 551,561 168,483 532,423 0 0 0 (107,026) 551,561 249,495 249,495 176,329 176,329 0 0 12,706 (12,622) (3,731) (8,891) 0 0 0 (8,891) 0
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