Bowflex Parent, Nautilus, Inc. Announces Actions to Enhance Its Balance Sheet, Including the Sale of Non-Core Assets for $13 Million
Announces Preliminary Fourth Quarter and Full Year Fiscal 2023 Results, Exceeding Expectations
Plans to Report Fourth Quarter and Full Year Fiscal 2023 Results on
The Company has completed the sale of non-core assets for approximately
The Company has also improved the terms of its credit agreement for its existing revolving credit facility. Under the new agreement, Nautilus has reduced the revolver commitment from
“The sale of these valuable, but non-core assets, including the Nautilus brand, which has been de-emphasized in our transformative
Preliminary Unaudited Fourth Quarter and Full Year Fiscal 2023 Results
For the fiscal 2023 fourth quarter ended
-
Net sales of
$68.4 million compared to$119.7 million last year. The sales decline versus last year is driven primarily by the return to pre-pandemic demand. The Company focused on significantly reducing Nautilus branded inventory in the quarter. Excluding sales of Nautilus branded equipment, net sales for Q4-2023 are expected to be$62.0 million . -
Loss from continuing operations of
$20.9 million compared to a loss of$18.2 million last year. -
Adjusted EBITDA1 loss from continuing operations of
$12.6 million compared to$16.9 million last year.
For the twelve-months ended
-
Net sales of
$286.8 million (versus guidance of about$270 million ) compared to$589.5 million last year. The sales decline versus last year is driven primarily by the return to pre-pandemic demand. Excluding sales of Nautilus branded equipment, net sales for FY2023 are expected to be$274.8 million . -
Loss from continuing operations of
$107.5 million compared to a loss of$22.2 million last year. -
Adjusted EBITDA1 loss from continuing operations of
$46.6 million (versus guidance of Adjusted EBITDA2 loss of about$50.0 million ) compared to Adjusted EBTIDA1 loss of$3.3 million last year. -
JRNY® Members to be approximately 500,000 as of
March 31, 2023 , in line with guidance.
“I am proud to announce results that exceeded our expectations,” said
1 See “Reconciliation of Non-GAAP Financial Measures” for more information. |
2 We provide Adjusted EBITDA guidance, rather than net income guidance, due to the inherent unpredictability of forecasting certain types of expenses such as stock-based compensation and income tax expenses, which affect net income but not Adjusted EBITDA. We are unable to reasonably estimate the impact of such expenses, if any, on net income. The inability to project certain components of the calculation would significantly affect the accuracy of a reconciliation. Accordingly, we do not provide a reconciliation of projected net income to projected Adjusted EBITDA. |
About
Headquartered in
Forward-Looking Statements
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: projected, targeted or forecasted financial, operating results and capital expenditures, including but not limited to net sales growth rates, gross margins, operating expenses, operating margins, anticipated demand for the Company's new and existing products, statements regarding the Company's prospects, resources or capabilities; planned investments, strategic initiatives and the anticipated or targeted results of such initiatives; the effects of the COVID-19 pandemic on the Company’s business; and planned operational initiatives and the anticipated cost-saving results of such initiatives. All of these forward-looking statements are subject to risks and uncertainties that may change at any time. Factors that could cause Nautilus, Inc.’s actual expectations to differ materially from these forward-looking statements also include: weaker than expected demand for new or existing products; our ability to timely acquire inventory that meets our quality control standards from sole source foreign manufacturers at acceptable costs; risks associated with current and potential delays, work stoppages, or supply chain disruptions, including shipping delays due to the severe shortage of shipping containers; an inability to pass along or otherwise mitigate the impact of raw material price increases and other cost pressures, including unfavorable currency exchange rates and increased shipping costs; experiencing delays and/or greater than anticipated costs in connection with launch of new products, entry into new markets, or strategic initiatives; our ability to hire and retain key management personnel; changes in consumer fitness trends; changes in the media consumption habits of our target consumers or the effectiveness of our media advertising; a decline in consumer spending due to unfavorable economic conditions; risks related to the impact on our business of the COVID-19 pandemic or similar public health crises; softness in the retail marketplace; availability and timing of capital for financing our strategic initiatives, including being able to raise capital on favorable terms or at all; changes in the financial markets, including changes in credit markets and interest rates that affect our ability to access those markets on favorable terms and the impact of any future impairment. Additional assumptions, risks and uncertainties are described in detail in our registration statements, reports and other filings with the
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Non-GAAP Presentation
Nautilus presents non-GAAP financial measures as a complement to results provided in accordance with GAAP, and the non-GAAP financial measures should not be regarded as a substitute for GAAP.
In addition to disclosing its financial results determined in accordance with GAAP, Nautilus has presented in this release certain non-GAAP financial measures, which exclude the impact of certain items (as further described below). Management believes these measures are also useful to investors as these are the same metrics that management uses to evaluate past performance and prospects for future performance. Nautilus strongly encourages investors to review all its financial statements and publicly filed reports in their entirety and to not rely on any single financial measure to evaluate the Company’s performance.
Adjusted EBITDA from Continuing Operations
Nautilus has also presented EBITDA from continuing operations on an adjusted basis, to exclude the non-cash charge related to goodwill and intangible asset impairment(1), the legal settlement(2), acquisition and other related costs(3), and involuntary termination benefits and other exit costs(4), depreciation, amortization, and stock-based compensation and other net expenses. The Company believes that EBITDA is an important measure as it allows the Company to evaluate past performance and prospects for future performance. The Company believes the exclusion of stock-based compensation expense provides for a better comparison of operating results to prior periods and to peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions, and the variety of award types. The Company excludes other expenses, net that are the result of a variety of factors and can vary significantly from one period to the next. We believe that exclusion of such other expenses are useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis.
We do not reconcile non-GAAP financial measures on a forward-looking basis as it is impractical to do so without unreasonable effort.
The following table presents a reconciliation of loss from continuing operations, the most directly comparable GAAP measure, to Adjusted EBITDA from continuing operations for the three and twelve-month periods ended
|
Three-Months Ended |
|
Twelve-Months Ended |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Loss from continuing operations |
$ |
(20,925 |
) |
|
$ |
(18,198 |
) |
|
$ |
(107,488 |
) |
|
$ |
(22,204 |
) |
Other expense, net |
|
2,593 |
|
|
|
984 |
|
|
|
4,768 |
|
|
|
2,914 |
|
Income tax expense (benefit) from continuing operations |
|
786 |
|
|
|
(4,705 |
) |
|
|
9,359 |
|
|
|
(6,026 |
) |
Depreciation and amortization |
|
3,147 |
|
|
|
2,628 |
|
|
|
11,103 |
|
|
|
8,615 |
|
Stock-based compensation expense |
|
(964 |
) |
|
|
1,651 |
|
|
|
3,908 |
|
|
|
6,262 |
|
|
|
— |
|
|
|
— |
|
|
|
26,965 |
|
|
|
— |
|
Legal settlement(2) |
|
(276 |
) |
|
|
— |
|
|
|
(276 |
) |
|
|
4,665 |
|
Acquisition and other related costs(3) |
|
540 |
|
|
|
770 |
|
|
|
2,483 |
|
|
|
2,448 |
|
Restructuring and exit charges(4) |
|
2,549 |
|
|
|
— |
|
|
|
2,549 |
|
|
|
— |
|
Adjusted loss before interest, taxes, depreciation, and amortization (Adjusted EBITDA) from continuing operations |
$ |
(12,550 |
) |
|
$ |
(16,870 |
) |
|
$ |
(46,629 |
) |
|
$ |
(3,326 |
) |
(1)
In accordance with ASC 350 — Intangibles — |
(2) Legal Settlement Legal settlement is a loss contingency accrual related to a legal settlement for a class action lawsuit related to advertisement of our treadmills. |
(3) Acquisition and other related costs
On |
(4) Restructuring and exit charges
In |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230502005536/en/
Investor Relations:
646-277-1254
John.mills@icrinc.com
Media:
360-859-5815
jfread@nautilus.com
Action Mary
925-464-8030
robin.rootenberg@actionmary.com
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