March 4, 2013 - Nautilus, Inc. (NYSE: NLS) today reported its unaudited operating results for the fourth quarter and full year ended December 31, 2012.
Net sales for the fourth quarter of 2012 totaled $65.0 million, an 8.4% increase compared to $60.0 million in the same quarter of 2011. Gross margin for the fourth quarter of 2012 improved 490 basis points to 48.3%, compared to 43.4% for the same quarter in 2011. The increase in gross margin was primarily due to sales of higher margin products in the Direct channel. Operating margin for the fourth quarter of 2012 improved 310 basis points to 11.8% compared to 8.7% in the same period last year.
Income from continuing operations for the fourth quarter of 2012 was $7.3 million, compared to $3.3 million for the same period last year. Income per diluted share from continuing operations for the fourth quarter of 2012 increased to $0.23, compared to $0.11 for the same quarter a year ago. The strong improvement in results from continuing operations primarily reflects improved gross margins and higher operating income from the Company’s Direct business.
For the full year ended December 31, 2012, net sales were $193.9 million, a 7.5% increase compared to $180.4 million in 2011. Income from continuing operations in 2012 was $10.6 million, compared to $2.5 million last year. Income per diluted share from continuing operations in 2012 was $0.34, compared to $0.08 last year.
Bruce M. Cazenave, Chief Executive Officer, stated, “We are pleased to report strong fourth quarter and full year 2012 financial results. Solid improvements in revenue, gross margins, and net income reflect our successful execution on many of the key initiatives we established for 2012. In the fourth quarter, our Direct business continued to perform very well, underscoring the steadily growing demand for our products as well as our ability to leverage certain fixed costs and improve our gross margins. Our Retail business in the fourth quarter was impacted by an overall weaker retail environment for fitness equipment and the timing of new product placements with certain key retailers. The challenging retail market environment reinforces the direction we took during 2012 to focus our product development efforts on an entirely new lineup of cardio products which are scheduled for introduction this coming fall season. Early indications are positive in terms of the potential Retailer receptivity to this new line of products. We also ended the year with a strong balance sheet which reflects the improved cash flow and provides us the financial flexibility to make strategic and selective investments in our business going forward.”