Washington | 001-31321 | 94-3002667 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
17750 SE 6th Way Vancouver, Washington 98683 |
(Address of principal executive offices and zip code) |
(360) 859-2900 |
(Registrant's telephone number, including area code) |
N/A |
(Former name or former address, if changed since last report) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
Emerging growth company | o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | o |
Item 2.02 | Results of Operations |
Item 9.01 | Financial Statements and Exhibits |
Nautilus, Inc. press release dated May 7, 2018. |
NAUTILUS, INC. | |||
(Registrant) | |||
May 7, 2018 | By: | /s/ Sidharth Nayar | |
Date | Sidharth Nayar | ||
Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
![]() | EXHIBIT 99.1 |
• | Revenues: |
◦ | Total revenue increased 1.4% to $114.8 million compared to prior year of $113.3 million and guidance range of $110.0 to $113.0 million. |
◦ | Direct segment sales decreased 4.7% to $71.2 million primarily from the expected decline in TreadClimber® sales, partially offset by growth of new products, including the Bowflex HVT® product. |
◦ | Retail segment sales increased 13.7% to $43.0 million, reflecting strong growth across a variety of product lines, as well as growth in specialty and commercial customers. |
• | Gross Margins: |
◦ | Total company gross margins decreased by 320 basis points to 51.3% primarily due to a reduction in Direct gross margins, coupled with a shift in segment revenue mix from Direct to Retail. |
◦ | Direct margins decreased by 250 basis points due to a shift in product mix to lower margin HVT® products and treadmills. |
◦ | Retail margins decreased by 80 basis points due to increased product costs. |
• | Operating income decreased 15.7% to $10.7 million compared to prior year of $12.7 million due to the decline in gross margin and added investments in key strategic initiatives. |
• | Income from continuing operations for the first quarter of 2018 was $8.1 million, or $0.27 per diluted share, compared to income from continuing operations of $8.2 million, or $0.26 per diluted share in the prior year quarter. |
• | EBITDA from continuing operations decreased 11.8% to $13.1 million compared to $14.9 million in the prior year period. |
• | At March 31, 2018, cash and marketable securities increased to $92.7 million and debt decreased to $44.0 million, compared to $85.2 million and $48.0 million, respectively, at December 31, 2017. |
• | Repurchased $2.7 million of stock in the open market as part of previously announced stock repurchase program. |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net sales | $ | 114,813 | $ | 113,252 | |||
Cost of sales | 55,942 | 51,507 | |||||
Gross profit | 58,871 | 61,745 | |||||
Operating expenses: | |||||||
Selling and marketing | 36,763 | 37,665 | |||||
General and administrative | 6,910 | 7,486 | |||||
Research and development | 4,501 | 3,911 | |||||
Total operating expenses | 48,174 | 49,062 | |||||
Operating income | 10,697 | 12,683 | |||||
Other expense, net | (34 | ) | (360 | ) | |||
Income from continuing operations before income taxes | 10,663 | 12,323 | |||||
Income tax expense | 2,523 | 4,138 | |||||
Income from continuing operations | 8,140 | 8,185 | |||||
Loss from discontinued operations(1) | (81 | ) | (1,092 | ) | |||
Net income | $ | 8,059 | $ | 7,093 | |||
Basic income per share from continuing operations | $ | 0.27 | $ | 0.27 | |||
Basic loss per share from discontinued operations | — | (0.04 | ) | ||||
Basic net income per share | $ | 0.27 | $ | 0.23 | |||
Diluted income per share from continuing operations | $ | 0.27 | $ | 0.26 | |||
Diluted loss per share from discontinued operations | — | (0.04 | ) | ||||
Diluted net income per share(2) | $ | 0.26 | $ | 0.23 | |||
Shares used in per share calculations: | |||||||
Basic | 30,314 | 30,713 | |||||
Diluted | 30,591 | 31,127 | |||||
Select Metrics: | |||||||
Gross margin | 51.3 | % | 54.5 | % | |||
Selling and marketing % of net sales | 32.0 | % | 33.3 | % | |||
General and administrative % of net sales | 6.0 | % | 6.6 | % | |||
Research and development % of net sales | 3.9 | % | 3.5 | % | |||
Operating income % of net sales | 9.3 | % | 11.2 | % | |||
(1) The three months ended March 31, 2017 include a $1.2 million expense related to a lawsuit settlement with Biosig Instruments, Inc. | |||||||
(2) May not add due to rounding. |
Three Months Ended March 31, | Change | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
Net sales: | ||||||||||||||
Direct | $ | 71,201 | $ | 74,703 | $ | (3,502 | ) | (4.7 | )% | |||||
Retail | 42,993 | 37,805 | 5,188 | 13.7 | % | |||||||||
Royalty | 619 | 744 | (125 | ) | (16.8 | )% | ||||||||
$ | 114,813 | $ | 113,252 | $ | 1,561 | 1.4 | % | |||||||
Operating income (loss): | ||||||||||||||
Direct | $ | 11,291 | $ | 15,333 | $ | (4,042 | ) | (26.4 | )% | |||||
Retail | 3,921 | 2,212 | 1,709 | 77.3 | % | |||||||||
Unallocated corporate | (4,515 | ) | (4,862 | ) | 347 | 7.1 | % | |||||||
$ | 10,697 | $ | 12,683 | $ | (1,986 | ) | (15.7 | )% | ||||||
As of | |||||||
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 23,747 | $ | 27,893 | |||
Available-for-sale securities | 68,905 | 57,303 | |||||
Trade receivables, net of allowances of $133 and $119 | 29,796 | 42,685 | |||||
Inventories | 37,699 | 53,354 | |||||
Prepaids and other current assets | 7,132 | 7,240 | |||||
Income taxes receivable | 30 | 17 | |||||
Total current assets | 167,309 | 188,492 | |||||
Property, plant and equipment, net | 16,591 | 15,827 | |||||
Goodwill | 61,963 | 62,030 | |||||
Other intangible assets, net | 56,933 | 57,743 | |||||
Deferred income tax assets, non-current | 287 | — | |||||
Other assets | 704 | 684 | |||||
Total assets | $ | 303,787 | $ | 324,776 | |||
Liabilities and Shareholders' Equity | |||||||
Trade payables | $ | 41,724 | $ | 66,899 | |||
Accrued liabilities | 12,126 | 10,764 | |||||
Warranty obligations, current portion | 3,900 | 3,718 | |||||
Note payable, current portion | 15,993 | 15,993 | |||||
Total current liabilities | 73,743 | 97,374 | |||||
Warranty obligations, non-current | 2,158 | 2,399 | |||||
Income taxes payable, non-current | 3,103 | 2,955 | |||||
Deferred income tax liabilities, non-current | 9,687 | 8,558 | |||||
Other non-current liabilities | 2,208 | 2,315 | |||||
Note payable, non-current | 27,988 | 31,986 | |||||
Shareholders' equity | 184,900 | 179,189 | |||||
Total liabilities and shareholders' equity | $ | 303,787 | $ | 324,776 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Income from continuing operations | $ | 8,140 | $ | 8,185 | |||
Interest expense, net | 21 | 313 | |||||
Income tax expense of continuing operations | 2,523 | 4,138 | |||||
Depreciation and amortization | 2,439 | 2,244 | |||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations | $ | 13,123 | $ | 14,880 |
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