Longtime CEO steps down from iFIT amid layoffs and leadership shake-up

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Logan-based iFIT Well being & Health has adopted deep workers cuts introduced Friday with a shake-up of its management, together with the departure of longtime CEO Scott Watterson.

Watterson, an iFIT co-founder who has labored 45 years with the train gear maker, will stay in his position as chairman of the board of administrators, the agency mentioned Monday, however is stepping away from day-to-day administration.

The corporate’s chief monetary officer, Steve Barr, and Mark Watterson, chief expertise officer, will function co-presidents. The information comes after iFIT laid off an undisclosed variety of staff final week at its Cache County headquarters and operations worldwide in what one supply mentioned was a cost-cutting transfer important to “safeguard the enterprise long run.”

“I’m happy with what we now have constructed at iFIT over 4 many years and our capability to efficiently adapt in a quickly evolving well being and health panorama,” Scott Watterson mentioned Monday in a press release.

The announcement can also be timed with the disclosing of a $355 million infusion of personal funding into iFIT, led by Connecticut-based L Catterton, a distinguished fairness agency centered on client manufacturers.

That new money indicators the settlement, firm officers mentioned, of a $300 million lawsuit in opposition to iFIT by one in all its shareholders, hedge fund Pamplona Capital Administration.

The agency, which is dealing with escalating prices, mentioned in its assertion it had “amicably resolved” the excellent litigation.

The corporate affords widespread manufacturers reminiscent of NordicTrack and ProForm, powered by an interconnected well being and health platform with experiential content material and interactive {hardware}. It mentioned Monday it has over 7.3 million subscribers throughout greater than 120 nations and was seeing rising member participation in exercises and occasions.

Archrival Peloton and different makers of train gear, together with personalised interactive content material, noticed a dramatic spike in demand for his or her merchandise in the course of the coronavirus pandemic as thousands and thousands shifted to house exercises.

The 66-year-old Watterson, who reportedly will work on growth of next-generation merchandise for the corporate, mentioned Monday he could be investing in iFIT alongside Catterton, which is anticipated to play a significant position in main the corporate ahead.

“Immediately’s vital updates,” Watterson mentioned, “strongly focus the enterprise for continued progress in what has made us profitable within the first place: know-how, innovation and the member expertise.”

Monday’s strikes are the newest fallout from iFIT’s indefinite delay of an preliminary public providing in October that the corporate abruptly withdrew, citing “antagonistic market situations.” That inventory sale was set to convey enormous windfalls to a number of firm executives — together with a prime chief of The Church of Jesus Christ of Latter-day Saints and one other high-ranking authority who had not too long ago stepped down from his church place.

Apostle Gary E. Stevenson, as co-founder of one of many iFIT’s early predecessors, stood to realize as a lot as $911.9 million for practically 43.4 million iFIT shares he accrued via the years. Robert C. Homosexual, now an emeritus basic authority Seventy within the church, was to see his practically 18 million shares in iFIT lifted to roughly $385.9 million in worth.

Shares owned by former CEO Watterson, who launched the agency with longtime buddy Stevenson in 1977, stood to be price a complete of $4.6 billion post-IPO. The enterprise journal Forbes estimated Watterson’s wealth in February at $2.1 billion.

In his assertion, Watterson mentioned he was “excited to transition my govt tasks to Mark and Steve,” whom he mentioned had been “well-suited to proceed iFIT’s lengthy historical past of success.”

Sources near the corporate mentioned final week iFIT wanted the newest capital infusion because it labored via persistent provide issues involving many key parts, together with metal, resins and microchips important to its line of immersive exercise machines.

In a joint assertion Monday, co-presidents Barr and Mark Watterson mentioned, with the newest restructuring, iFIT “is on sturdy monetary footing and stands able to seize the large alternative forward of us.”

They mentioned their future focus for iFIT was centered on “steamlining” the enterprise in addition to “investing in and enhancing the member expertise and persevering with to innovate throughout interactive software program, content material and {hardware}.”

Marc Magliacano, a managing accomplice with L Catterton, mentioned the corporate would play “a significant position” in advancing iFIT’s future and that with the brand new capital raised, “we consider the perfect of iFIT is but to return.”

L Catterton led a $200 million funding in iFIT in October 2020, becoming a member of Pamplona Capital Administration after it lent the agency $200 million in 2019.

In an inner e-mail to be despatched Monday to all international staff, Barr and Watterson mentioned L Catterton’s half within the firm could be “shut and impactful.”

The main target, they mentioned, could be “product innovation, experiential content material, and areas of the enterprise which might be delivering probably the most worth for our greater than 7.3 million members.”

Utah’s iFIT sweats through more layoffs as it settles a large lawsuit and seeks more capital

Its preliminary public providing, which at one time stood to make a Latter-day Saint apostle a near-billionaire, is now on indefinite maintain.

(Enterprise Wire | Tribune file photograph) Sources near Logan-based iFIT Well being & Health, maker of NordicTrack, say the corporate has launched a brand new spherical of layoffs because it seeks to regulate prices and safe a brand new infusion of capital financing.

Dealing with escalating prices, Logan-based iFIT Well being & Health has launched one other spherical of layoffs worldwide as the corporate nears the settlement of a $300 million lawsuit over its money owed and secures a brand new infusion of capital to assist its backside line.

Workers reductions for the maker of NordicTrack and different fashionable train tools had been introduced internally Friday, in response to sources near the corporate who declined to be named as associated negotiations had but to be unveiled publicly.

Taken collectively, the monetary strikes put the corporate “on a sound monetary footing with a clearer focus and path ahead for worthwhile progress,” a supply accustomed to the small print mentioned. “It’ll make iFIT stronger,” the supply added, and permit the non-public firm to take a position “considerably” in its manufacturers and construct its buyer base.

The individual didn’t specify the magnitude of the layoffs, which observe a spherical of employees reductions in December, however did say the cuts went past staff on the agency’s Cache County headquarters.

A number of staff have since confirmed that they’d been let go, in some cases, with little discover and no severance.

The corporate’s strikes additionally sign an indefinite delay, sources mentioned, for an preliminary public providing iFIT floated after which withdrew in October. That aborted inventory sale stood to convey large windfalls to a number of of its executives — together with a prime chief of The Church of Jesus Christ of Latter-day Saints and one other high-ranking authority who had lately stepped down from his church place.

As co-founder of one of many iFIT’s early predecessors, apostle Gary E. Stevenson, 66, had been nominated to turn into a board director and stood on the time to achieve as a lot as $911.9 million for almost 43.4 million iFIT shares he collected by means of the years.

Robert C. Homosexual, now an emeritus common authority Seventy within the church, was nominated to that potential board. With almost 18 million shares, in response to public paperwork, the IPO’s initially proposed share worth of $21 would have lifted the 70-year-old’s holdings in iFIT to roughly $385.9 million.

Provide chain woes

(The Church of Jesus Christ of Latter-day Saints)
Apostle Gary E. Stevenson speaks at Basic Convention on Saturday, Oct. 2, 2021. The church leaders stands to make tens of millions when iFIT holds its preliminary public providing, however the firm is enduring some hardships proper now.

Archrival Peloton, iFIT and different related makers of train tools, together with strong interactive content material, noticed a dramatic spike in demand for his or her merchandise through the worst of the coronavirus pandemic as tens of millions averted public settings and shifted to dwelling exercises.

Although not formally withdrawn, iFIT’s IPO plans stay on indefinite maintain for now, sources near the corporate mentioned.

On the time, iFIT officers cited “opposed market situations” as they canceled the inventory providing. These situations at the moment are perceived contained in the agency as much more unstable, sources mentioned, with Russia’s current invasion of Ukraine and different market challenges.

The corporate as an alternative has negotiated the brand new infusion of personal capital, the sources mentioned, in a mixture of debt and personal fairness of undisclosed greenback worth, supposed partly to bolster operations as it really works by means of persistent provide issues involving lots of its key parts.

Transport containers, metal, resins and microchips important to iFIT’s line of immersive exercise machines have all skyrocketed in worth amid quick provides, the sources mentioned, and the agency has resisted passing on the brunt of these added prices to customers, stressing it financially within the close to time period.

The corporate laid off a whole lot of staff round Christmas throughout a number of departments after telling staff in earlier months that it was doing “higher than ever.”

Lawsuit ends ‘amicably’

Sources mentioned iFIT’s newest capital injection, which might be publicly unveiled as quickly as subsequent week, may also be accompanied by the formal decision of a high-profile $300 million lawsuit filed towards it in January by international hedge fund Pamplona Capital Administration, which lent iFIT $200 million in 2019.

Pamplona’s lawsuit sought to claw again the unique mortgage, plus $100 million in curiosity, in response to court docket paperwork. It reportedly stemmed from a dispute with the highest shareholder over iFIT’s choice to amass an unnamed Chinese language manufacturing firm.

That litigation, filed in a New York court docket, had been resolved “amicably,” sources near the corporate mentioned.

Information studies on the time solid the go well with as an existential menace to iFIT because it noticed sagging demand for its at-home exercise merchandise with easing pandemic situations and customers returning to the fitness center. The New York Submit mentioned iFIT had even employed high-powered chapter attorneys at one level.

Sources near the corporate instructed The Salt Lake Tribune on Friday the agency’s financials had been being squeezed by provide points and seasonal market shifts, however that iFIT can also be seeing sturdy indicators that underlying demand for its merchandise wasn’t being dampened.

The agency reported its revenues topped $1.7 billion within the 12 months ending Could 31, up from $851 million the earlier 12 months. Sources mentioned iFIT was additionally seeing file participation of late in its exercises and occasions and now has 7.3 million subscribers in 120 international locations.

They known as the layoffs and different monetary strikes “some tough however vital choices concerning price efficiencies” however added that they had been wanted “to be able to safeguard the enterprise long run.”