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Nautilus, Inc. Reports Strong Results For The First Quarter 2012

Stocks in this article: NLS

About Nautilus, Inc.

Headquartered in Vancouver, Washington, Nautilus, Inc. (NYSE: NLS) is a global fitness products company providing innovative, quality solutions to help people achieve a healthy lifestyle. With a brand portfolio including Nautilus ®, Bowflex ®, TreadClimber ® , Schwinn ®, Schwinn Fitness TM, Universal ® and CoreBody Reformerâ„¢, Nautilus markets innovative fitness products through Direct and Retail channels. Websites: www.nautilusinc.com, www.bowflex.com, www.treadclimber.com and www.corebody.com.

This press release includes forward-looking statements (statements which are not historical facts) within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning: the Company's prospects, resources or capabilities; current or future financial trends; future operating results; anticipated demand for the Company's products; the adequacy of inventory levels and future plans for introduction of new products. Factors that could cause Nautilus, Inc.'s actual results to differ materially from these forward-looking statements include our ability to acquire inventory from sole source foreign manufacturers at acceptable costs, within timely delivery schedules and that meet our quality control standards, availability and price of media time consistent with our cost and audience profile parameters, a decline in consumer spending due to unfavorable economic conditions, an adverse change in the availability of credit for our customers who finance their purchases, our ability to pass along vendor raw material price increases and increased shipping costs, our ability to effectively develop, market and sell future products, our ability to protect our intellectual property, the introduction of competing products, and our ability to get foreign-sourced product through customs in a timely manner. Additional assumptions, risks and uncertainties are described in detail in our registration statements, reports and other filings with the Securities and Exchange Commission, including the "Risk Factors" set forth in our Annual Report on Form 10-K, as supplemented by our quarterly reports on Form 10-Q. Such filings are available on our website or at www.sec.gov. You are cautioned that such statements are not guarantees of future performance and that actual results or developments may differ materially from those set forth in the forward-looking statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances.

RESULTS OF OPERATIONS INFORMATION

The following summary contains information from our consolidated statements of operations for the three months ended March 31, 2012 and 2011:

 
Results of Operations Information Three months ended March 31,
(Unaudited and in thousands, except per share amounts)   2012     2011
Net sales $ 51,262 $ 48,301
Cost of sales 27,357   26,214  
Gross profit 23,905   22,087  
Operating expenses:
Selling and marketing 16,066 14,865
General and administrative 4,010 4,692
Research and development 1,000   753  
Total operating expenses 21,076   20,310  
Operating income 2,829 1,777
Other income (expense), net 82   (89 )
Income from continuing operations before taxes 2,911 1,688
Income tax expense 264   567  
Income from continuing operations 2,647 1,121
(Loss) income from discontinued operation, net of tax (125 ) 485  
Net income $ 2,522   $ 1,606  
 
Income per share from continuing operations:
Basic $ 0.09 $ 0.04
Diluted 0.09 0.04
(Loss) income per share from discontinued operation:
Basic (0.01 ) 0.01
Diluted (0.01 ) 0.01
Net income per share:
Basic 0.08 0.05
Diluted 0.08 0.05
Weighted average shares outstanding:
Basic 30,748 30,744
Diluted 30,839 30,760
 

SEGMENT INFORMATION

The following table presents comparative net sales by segment for the three months ended March 31, 2012 and 2011:

   
Net Sales by Segment Three months ended March 31, Change
(Unaudited and in thousands) 2011   2010 $   %
Direct $ 33,734 $ 30,254 $ 3,480 11.5 %
Retail 16,639 16,963 (324 ) (1.9 )%
Royalty income 889   1,084   (195 ) (18.0 )%
Total net sales $ 51,262   $ 48,301   $ 2,961   6.1 %
 

The following table presents comparative operating results by segment for the three months ended March 31, 2012 and 2011:

   
Operating Income (Loss)

by Segment

Three months ended March 31,
(Unaudited and in thousands) 2011   2010 Change
Direct $ 3,028 $ 2,200 $ 828
Retail 2,267 2,229 38
Unallocated corporate (2,466 ) (2,652 ) 186
Total operating income $ 2,829   $ 1,777   $ 1,052
 

BALANCE SHEET INFORMATION

The following summary contains information from our consolidated balance sheets as of March 31, 2012 (unaudited) and December 31, 2011:

 
Balance Sheet Information As of
 
(In thousands) March 31, 2012   December 31, 2011
Assets
Cash and cash equivalents $ 20,397 $ 17,427
Trade receivables, net 11,901 23,780
Inventories 13,450 11,601
Prepaids and other current assets 4,537   5,279
Total current assets 50,285 58,087
Property, plant and equipment, net 4,724 4,405
Goodwill 2,939 2,873
Other intangible assets, net 16,204 16,716
Other assets 606   732
Total assets $ 74,758   $ 82,813
Liabilities and Stockholders' Equity
Trade payables $ 23,461 $ 28,563
Accrued liabilities 6,744 7,218
Warranty obligations, current portion 1,658 1,803
Deferred income tax liabilities 1,191   1,064
Total current liabilities 33,054 38,648
Long-term notes payable — 5,598
Warranty obligations, non-current 214 214
Income taxes payable, non-current 3,711 3,658
Deferred income tax liabilities, non-current 1,669 1,434
Other long-term liabilities 1,310 1,308
Stockholders' equity 34,800   31,953
Total liabilities and stockholders' equity $ 74,758   $ 82,813




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