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Nautilus, Inc. Reports Results For The Fourth Quarter And Full Year 2012

For further information, see "Balance Sheet Information" attached hereto.

Conference Call

Nautilus will host a conference call to discuss the Company's operating results for the fourth quarter and year ended December 31, 2012 at 4:30 p.m. ET (1:30 p.m. PT) on Monday, March 4, 2013. The call will be broadcast live over the Internet hosted at http://www.nautilusinc.com/events and will be archived online within one hour after completion of the call. In addition, listeners may call (800) 738-1032 in North America and international listeners may call (212) 231-2930. Participants from the Company will include Bruce M. Cazenave, Chief Executive Officer, Linda M. Pearce, Chief Financial Officer, and William B. McMahon, Chief Operating Officer.

A telephonic playback will be available from 6:30 p.m. ET, March 4, 2013, through 6:30 p.m. ET, March 18, 2013. Participants can dial (800) 633-8284 in North America and international participants can dial (402) 977-9140 to hear the playback. The passcode for the playback is 21647755.

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 and Universal ®. 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; future plans for introduction of new products; expected declines in inventory levels and the timing thereof, future demand for the Company's products, growth in revenues, leverage of operating expenses, and continued improvement in operating margins. Factors that could cause Nautilus, Inc.'s actual results to differ materially from these forward-looking statements include our ability to timely acquire inventory that meets our quality control standards from sole source foreign manufacturers at acceptable costs, availability and price of media time consistent with our cost and audience profile parameters, greater than anticipated costs associated with launch of new products, a decline in consumer spending due to unfavorable economic conditions, softness in the retail marketplace, 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 our actual results 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 developments, events or circumstances.

RESULTS OF OPERATIONS INFORMATION

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

   
Results of Operations Information Three months ended

December 31,

Twelve months ended

December 31,

(Unaudited and in thousands, except per share amounts) 2012   2011 2012   2011
Net sales $ 65,029 $ 59,985 $ 193,926 $ 180,412
Cost of sales 33,606   33,953   102,889   101,953  
Gross profit 31,423   26,032   91,037   78,459  
Operating expenses:
Selling and marketing 17,560 15,893 58,617 54,494
General and administrative 4,997 4,040 17,669 17,143
Research and development 1,206   887   4,163   3,223  
Total operating expenses 23,763   20,820   80,449   74,860  
Operating income 7,660 5,212 10,588 3,599
Other expense, net (67 ) (95 ) (172 ) (412 )
Income from continuing operations before

income taxes

7,593 5,117 10,416 3,187
Income tax expense (benefit) 328   1,822   (226 ) 686  
Income from continuing operations 7,265 3,295 10,642 2,501
Income (loss) from discontinued operation, net of income taxes 6,309   (121 ) 6,241   (1,081 )
Net income $ 13,574   $ 3,174   $ 16,883   $ 1,420  
Income (loss) per diluted share:
Continuing operations $ 0.23 $ 0.11 $ 0.34 $ 0.08
Discontinued operation 0.21 (0.01 ) 0.21 (0.03 )
Net income 0.44 0.10 0.55 0.05
Weighted average shares outstanding:
Basic 30,916 30,747 30,851 30,746
Diluted 30,996 30,759 30,974 30,776
 

SEGMENT INFORMATION

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

   
Net Sales by Segment Three months ended

December 31,

  Change  
(Unaudited and in thousands) 2012   2011   $     %
Direct $ 41,434 $ 31,707 $ 9,727 30.7 %
Retail 21,834 26,501 (4,667 ) (17.6 )%
Royalty income 1,761   1,777     (16 ) (0.9 )%
Total net sales $ 65,029   $ 59,985   $ 5,044   8.4 %
 

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

   
Operating Income (Loss) by Segment Three months ended

December 31,

(Unaudited and in thousands) 2012   2011   Change
Direct $ 6,511 $ 1,615 $ 4,896
Retail 3,673 5,069 (1,396 )
Unallocated corporate (2,524 ) (1,472 )   (1,052 )
Total operating income (loss) $ 7,660   $ 5,212   $ 2,448  
 

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

   
Net Sales by Segment Twelve months ended

December 31,

  Change  
(Unaudited and in thousands) 2012   2011   $   %
Direct $ 124,978 $ 107,061 $ 17,917 16.7 %
Retail 63,891 68,591 (4,700) (6.9 )%
Royalty income 5,057   4,760     297 6.2 %
Total net sales $ 193,926   $ 180,412   $ 13,514 7.5 %
 

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

   
Operating Income (Loss) by Segment Twelve months ended

December 31,

(Unaudited and in thousands) 2012   2011   Change
Direct $ 12,479 $ 2,954 $ 9,525
Retail 7,855 9,489 (1,634 )
Unallocated corporate (9,746 ) (8,844 )   (902 )
Total operating income (loss) $ 10,588   $ 3,599   $ 6,989  
 

BALANCE SHEET INFORMATION

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

 
Balance Sheet Information As of December 31,
(In thousands) 2012   2011
Assets
Cash and cash equivalents $ 23,207 $ 17,427
Trade receivables, net 21,767 23,780
Inventories 18,787 11,601
Prepaids and other current assets 6,126   5,279
Total current assets 69,887 58,087
Property, plant and equipment, net 6,138 4,405
Goodwill 2,940 2,873
Other intangible assets, net 14,666 16,716
Other assets 680   732
Total assets $ 94,311   $ 82,813
Liabilities and Stockholders' Equity
Trade payables $ 32,753 $ 28,563
Accrued liabilities 8,171 7,218
Warranty obligations, current portion 2,278 1,803
Deferred income tax liabilities 1,275   1,064
Total current liabilities 44,477 38,648
Long-term notes payable 5,598
Income taxes payable, non-current 2,812 3,658
Deferred income tax liabilities, non-current 1,484 1,434
Warranty obligations, non-current 214 214
Other long-term liabilities 1,998 1,308
Stockholders' equity 43,326   31,953
Total liabilities and stockholders' equity $ 94,311   $ 82,813
 




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