BodyBilt Press Release:
FOR IMMEDIATE RELEASE
Court Upholds BodyBilt's Right to Manufacture Chairs;
BodyBilt Reports Strong 1997 Earnings
Navasota, TX, August 31, 1998. BodyBilt, Inc. announced that a favorable decision was released by Judge J.D. Langley of the 85th Judicial District court in Brazos County, Texas, vindicating BodyBilt's long held position that Neutral Posture Ergonomics (Nasdaq: NTRL) does not hold the patent on the seat design used in certain of BodyBilt's chairs. In a nine page written memorandum on July 23, 1998, the court granted BodyBilt's partial summary judgment on the issue of the assignability of the chair patent and held that Jerome Congleton, the inventor of the patent, did not have the right to assign the patent to Neutral Posture Ergonomics .
The court upheld the terms of a 1991 settlement agreement which expressly provided that Chairworks (now BodyBilt) could produce commercial, industrial and laboratory chairs without infringing the patent rights of Jerome Congleton. Gerald McMillan, Chairman of BodyBilt commented "We are pleased that the court, after reviewing all the facts and legal documents, found for BodyBilt by summary judgement. We also feel that this victory sends a clear signal to all parties involved."
Separately, BodyBilt clarified a recent ruling issued by Chief Judge Jerry Buchmeyer of the United States District Court for the Northern District of Texas, Dallas Division. The court recently dismissed, without prejudice, ErgoBilt's claims that Neutral Posture Ergonomics made false and misleading statements in the marketplace and investment community. Instead, the court suggested the better party to allege a false advertising claim would be BodyBilt, ErgoBilt's wholly owned subsidiary, who is a direct competitor of Neutral Posture Ergonomics. The court specifically granted ErgoBilt the opportunity to re-file a good faith amended complaint.
In a second ruling, Judge Buchmeyer granted BodyBilt's motion to compel arbitration of patent infringement claims, relying on a 1996 settlement agreement which required arbitration of all disputes between the parties. BodyBilt believes that given the recent ruling by Judge Langley in Brazos County State Court (which was not available for Judge Buchmeyer to review at the time he made his rulings), Neutral Posture Ergonomics no longer has standing to assert any patent claim against BodyBilt or ErgoBilt.
BodyBilt's 1997 Financial Performance
BodyBilt's performance for the fiscal year ended February 28, 1998 was excellent. BodyBilt reported net sales of $ 24.5 Million, up 39.8% over the fiscal year ended December 31, 1996. BodyBilt reported a gross margin of 42.4%, down 4.5% from the prior year due to modest sales discounts and changes in mix of products sold. BodyBilt reported operating income (income before taxes) of $ 3.1 million after interest expense, up 33.8% over the fiscal year ended December 31, 1996. The increase was despite certain write-offs, higher than normal expenditures and charges to BodyBilt in the fiscal year ended February 28, 1998.
BodyBilt's purpose of releasing this financial information is primarily to reassure customers, suppliers and employees of its continued viability. This financial information on BodyBilt has not been subject to a final audit, but has been subjected a series of reviews and analyses. BodyBilt emphasizes that the above results do not reflect the consolidated results of operations for its parent company, ErgoBilt, Inc. ErgoBilt, Inc. expects to report, on a consolidated basis, a significant loss for its fiscal year ended February 28, 1998.
For further information, please call the company at (972) 705 7298.
Except for historical information contained herein, the matters set forth in this release may be forward-looking statements. These statements are dependent on certain risks and uncertainties including, but not limited to, such factors as the number of new orders received and shipped, continued consumer acceptance of the company's products, the availability of product components, stable labor relations, the timely roll-out of new products, the company's ability to identify and acquire commercially viable ergonomic products, litigation risks and the continued availability of credit to the company on reasonable terms. Investors should also consider other risks and uncertainties set forth in documents filed by the company with the Securities and Exchange Commission.
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