May 5, 2014 - Nautilus, Inc. (NYSE: NLS) today reported its unaudited operating results for the first quarter ended March 31, 2014.
Net sales for the first quarter of 2014 totaled $71.9 million, a 21% increase compared to $59.2 million in the same quarter of 2013. The strong growth was driven by higher sales in both the Direct and Retail segments. Gross margins for the first quarter improved by 170 basis points, reflecting margin increases in both the Direct and Retail segments. Operating income from continuing operations for the first quarter of 2014 was $9.0 million, a 50% increase over operating income from continuing operations of $6.0 million reported in the same quarter of 2013. The increase in operating income reflects higher sales and gross margins in both the Direct and Retail segments combined with improved leverage of sales and marketing and general and administrative costs across higher sales volumes.
Pretax income from continuing operations for the first quarter of 2014 was $8.9 million, or $0.28 per diluted share compared to pretax income from continuing operations of $5.9 million, or $0.19 per diluted share for first quarter of last year. Net income from continuing operations for the first quarter of 2014 was $5.7 million, or $0.18 per diluted share, compared to $5.5 million, or $0.18 per diluted share for the same period last year. Beginning in the first quarter of 2014, the Company started to record income taxes at a normalized rate following the partial release, in 2013, of its valuation allowance recorded against its deferred tax assets. The effective income tax rate for continuing operations in the first quarter of 2014 was 35.7% compared to 6.0% in the first quarter of 2013. Cash payments related to income taxes were minimal due to the Company’s significant domestic net operating loss carry forwards.
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