EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

 

CONTACTS:   Nautilus, Inc.   Nautilus, Inc.
  Ron Arp   John Mills
  (360)859-2514   (310)954-1105

NAUTILUS, INC. ANNOUNCES FIRST QUARTER 2007 RESULTS

VANCOUVER, Wash. – (April 25, 2007) – Pure fitness company Nautilus, Inc. (NYSE: NLS) today announced results for the three months ended March 31, 2007.

Net sales for the three months ended March 31, 2007, were $158.8 million, compared to $185.0 million for the corresponding period last year, down 14 percent. Net income for the quarter was $2.5 million, or $0.08 per share, compared to $5.2 million or $0.16 per share for the first quarter of 2006. Gross margins reached 46.1 percent, the highest level in seven quarters.

“As we reported earlier, our international, apparel and commercial businesses performed well,” said Gregg Hammann, Chairman and CEO of Nautilus, Inc. “However, we experienced sluggish trends in the North American market for home fitness equipment in the first quarter, causing cancellation of expected retail replenishment orders and softness in direct.”

“We expect to achieve stronger net sales through new innovation and new promotions planned as the next fitness cycle begins the second half of the year. Meanwhile, our gross margin-improving activities that began in the back half of 2005 were evident again this quarter. Our efforts to bring efficiencies to manufacturing, distribution, packaging, shipping and transportation are putting us in an excellent position to improve bottom line results as sales pick up.”

For the second quarter of 2007, the company expects net sales of $135-140 million and expected earnings of $0.03-$0.06 per share. For the full year, the company expects net sales growth of 5-10 percent and earnings growth of 20-30 percent.

The first quarter 2007 investor conference call is scheduled for 5 p.m. EDT (2 p.m. PDT) Wednesday, April 25, 2007. It will be broadcast live over the Internet hosted at www.nautilusinc.com/events and will be archived online within one hour after completion of the call. In addition, listeners may call 800-576-7258 in North America and 212-748-2760 from outside North America. Participants will include: Gregg Hammann, Chairman and Chief Executive Officer; and Bill Meadowcroft, Chief Financial Officer.

A telephonic playback will be available from 4:00 p.m. PDT April 25 through 4:00 p.m. PDT, May 9, 2007. North American callers can dial 800-633-8284, and international callers can dial 402-977-9140 to hear the playback. The passcode is 21333672.

 

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About Nautilus, Inc.

Headquartered in Vancouver, Wash., Nautilus, Inc. (NYSE:NLS) is a pure fitness company that provides tools and education necessary to help people achieve a fit and healthy lifestyle. With a brand portfolio that includes Nautilus(R), Bowflex(R), Schwinn(R) Fitness, StairMaster(R), and Pearl iZUMi(R), Nautilus manufactures and markets a complete line of innovative health and fitness products through direct, commercial, retail, and international channels. The Company was formed in 1986 and had sales of $680 million in 2006. It has 1,500 employees and operations in Washington, Oregon, Colorado, Oklahoma, Illinois, Virginia, Canada, Switzerland, Germany, United Kingdom, Italy, China, and other locations around the world. More information is at www.nautilusinc.com

Safe Harbor Statement:

This press release includes forward-looking statements, including statements concerning estimated future sales and earnings, new product introduction, and operational improvement. Factors that could cause Nautilus, Inc. actual results to differ materially from these forward-looking statements include availability of media time and fluctuating advertising rates, a decline in consumer spending due to unfavorable economic conditions, its ability to effectively develop, market, and sell future products, its ability to get foreign-sourced product through customs in a timely manner, its ability to effectively identify, negotiate and integrate any future strategic acquisitions, its ability to protect its intellectual property, introduction of lower-priced competing products, unpredictable events and circumstances relating to international operations including its use of foreign manufacturers, government regulatory action, and general economic conditions. Please refer to our reports and filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, for a further discussion of these risks and uncertainties. We also caution you not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made or to reflect the occurrence of unanticipated events.

 

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NAUTILUS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

    

March 31,

2007

  

December 31,

2006

ASSETS

     

CURRENT ASSETS:

     

Cash and cash equivalents

   $ 4,745    $ 4,262

Trade receivables (net of allowance for doubtful accounts of $3,499 and $3,893 at March 31, 2007 and December 31, 2006, respectively)

     98,025      137,714

Inventories

     89,856      75,832

Prepaid expenses and other current assets

     24,393      23,093

Short-term notes receivable

     2,600      2,461

Assets held for sale

     1,677      1,677

Deferred tax assets

     5,557      5,722
             

Total current assets

     226,853      250,761

PROPERTY, PLANT AND EQUIPMENT (at cost, net of accumulated depreciation of $54,658 and $51,262 at March 31, 2007 and December 31, 2006, respectively)

     51,423      52,658

GOODWILL

     65,095      65,037

INTANGIBLE AND OTHER ASSETS, net

     56,473      56,486
             

TOTAL ASSETS

   $ 399,844    $ 424,942
             

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

CURRENT LIABILITIES:

     

Trade payables

   $ 52,382    $ 61,375

Accrued liabilities

     27,692      31,444

Short-term borrowings

     37,200      47,500

Income tax payable

     1,336      4,551

Customer deposits

     1,894      2,229

Current portion of long-term debt

     205      259
             

Total current liabilities

     120,709      147,358

LONG-TERM DEBT

     4,070      4,158

NON-CURRENT INCOME TAX LIABILITIES

     3,191      —  

NON-CURRENT DEFERRED TAX LIABILITIES

     15,401      16,792

COMMITMENTS AND CONTINGENCIES

     

STOCKHOLDERS’ EQUITY:

     

Common stock – no par value, 75,000 shares authorized; 31,545 and 31,482 shares issued and outstanding at March 31, 2007 and December 31, 2006, respectively

     2,581      1,026

Retained earnings

     249,403      251,418

Accumulated other comprehensive income

     4,489      4,190
             

Total stockholders’ equity

     256,473      256,634
             

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 399,844    $ 424,942
             

 

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NAUTILUS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, in thousands, except per share amounts)

 

    

Three Months

Ended March 31,

 
     2007     2006  

NET SALES

   $ 158,839     $ 184,990  

COST OF SALES

     85,571       105,678  
                

Gross profit

     73,268       79,312  
                

OPERATING EXPENSES:

    

Selling and marketing

     50,776       52,154  

General and administrative

     13,323       13,650  

Research and development

     3,215       3,268  

Royalties

     1,319       1,579  
                

Total operating expenses

     68,633       70,651  
                

OPERATING INCOME

     4,635       8,661  

OTHER INCOME (EXPENSE):

    

Interest income

     75       138  

Interest expense

     (941 )     (589 )

Other income, net

     252       15  
                

Total other expense

     (614 )     (436 )
                

INCOME BEFORE INCOME TAXES

     4,021       8,225  

INCOME TAX EXPENSE

     1,557       3,024  
                

NET INCOME

   $ 2,464     $ 5,201  
                

EARNINGS PER SHARE:

    

BASIC

   $ 0.08     $ 0.16  

DILUTED

   $ 0.08     $ 0.16  

WEIGHTED AVERAGE SHARES OUTSTANDING:

    

BASIC

     31,508       32,796  

DILUTED

     31,729       33,025  

 

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