August 5, 2013 - Nautilus, Inc. (NYSE: NLS) today reported its unaudited operating results for the second quarter ended June 30, 2013.
Net sales for the second quarter of 2013 totaled $36.2 million, an 8.4% decrease compared to $39.6 million in the same quarter of 2012, as higher sales in the Company’s Direct segment were offset by a previously forecasted decline in sales in the Retail segment. Year to date through two quarters, net sales are $95.5 million, an increase of 5.1% over the same period last year. Gross margin for the second quarter of 2013 improved 440 basis points to 47.8%, compared to 43.4% for the same quarter in 2012. The increase in gross margin was primarily due to higher gross margins in both the Retail and Direct businesses, a greater percentage of sales coming from the Company’s higher margin Direct segment, and lower overhead costs. Operating loss for the second quarter of 2013 was $1.7 million, compared to $0.6 million in the same quarter of 2012. The increase in operating loss reflects lower net sales in the Retail segment as well as the Company’s strategic decision to increase media spend to drive awareness of its new Direct products and build its sales lead foundation for the back half of the year. Year to date operating income totals $4.3 million, an increase of 92% over the same period last year.
Income from continuing operations for the second quarter of 2013 was $32.7 million, which includes a $34.3 million net income tax benefit due primarily to partial reversal of a valuation allowance recorded against the Company’s deferred tax assets. Excluding the net income tax benefit, the Company’s loss from continuing operations before income taxes was $1.6 million. This compares to loss from continuing operations before income taxes of $0.7 million for the same period last year. Income per diluted share from continuing operations for the second quarter of 2013 was $1.04, which includes $1.09 related to the income tax benefit. Excluding the income tax benefit, loss per diluted share was $0.05 in the second quarter of 2013. This compares to loss per diluted share from continuing operations of $0.02 in the same quarter a year ago. On a year to date basis through two quarters, income per diluted share from continuing operations excluding the net income tax benefit increased to $0.13 as compared to $0.07 for the same period last year.
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