Johnson fitness, which sells fitness equipment and health products, reported its second-quarter loss on Wednesday as the company faced an unprecedented onslaught of lawsuits, the company said in a statement.
“The losses were due to our inability to comply with our contractual obligations and/or to address new litigation challenges, including a lawsuit brought by former employees against the company,” the statement read.
Johnson’s shares lost more than 5% of their value in the quarter, and its shares fell by more than 3% as investors worried about the future of the company.
“Our business is suffering, and we need to restructure our business and focus on the positives of the new growth,” Johnson CEO Steve Thomas told analysts at the time.
Johnsons revenue fell $9.5 million, or 14%, to $11.2 million, and the company’s net income fell to $3.3 million.
Thomas said the company plans to raise additional capital in the coming weeks to fund a reorganization and to improve its cash flow.
Johnssons sales in the third quarter fell by 9.3%, to roughly $3 million, while the company lost about $5 million in revenue and lost $2 million in net income.
The company also reported that it had reached an agreement with a third party to buy a controlling stake in Johnsson Fitness, which would be worth around $1 million to Johnson shareholders.
The deal is expected to close by the end of June, according to the company, though a spokesman for Johnsondates board said Wednesday the deal has not yet been finalized.
