May 7, 2012 - Nautilus, Inc. (NYSE: NLS) reported today its unaudited operating results for the first quarter ended March 31, 2012. Continuing the momentum established in 2011, net sales for the first quarter ended March 31, 2012 totaled $51.3 million, an increase of 6.1% compared to net sales of $48.3 million for the same quarter in 2011. Gross margin for the first quarter of 2012 improved 90 basis points to 46.6% compared to 45.7% for the same quarter in 2011. The increase in gross margin was primarily due to a greater proportion of sales being derived from the higher margin Direct segment. Operating margin for the first quarter of 2012 improved 180 basis points to 5.5%, compared to 3.7% for the same period last year.
Income from continuing operations for the first quarter ended March 31, 2012 was $2.6 million, compared to $1.1 million for the same period last year. Diluted income per share from continuing operations for the first quarter of 2012 was $0.09, compared to $0.04 for the same quarter a year ago. The significant improvement in results from continuing operations reflects stronger sales, improved gross margins, and lower operating expenses as a percentage of sales, mainly due to lower general and administrative expense.
Bruce M. Cazenave, Chief Executive Officer, stated, "We are pleased with our start to fiscal 2012. The increased revenues and improved bottom line profitability are consistent with our stated priority of delivering sustainable and profitable growth. Our first quarter results benefited from revenue growth in the Direct channel driven by the continued success of a number of products, higher gross margins and diligent management of operating expenses for all areas of our business. Importantly, we also pre-paid all amounts outstanding under our senior notes issued in 2010 and ended the quarter with a strong balance sheet, including cash of over $20 million. This gives us the financial flexibility to make strategic investments in our business as we see appropriate.”
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