Nautilus, Inc. Announces Preliminary First Quarter 2020 Sales Results
First Quarter 2020 Sales Increase by Approximately 11%, Driven by Strength of Bowflex and Schwinn Brands
Retail Segment Delivers Strong Sales Growth and Direct Segment Breaks Negative Streak
Company Raises First Quarter 2020 Guidance
First Quarter 2020 Preliminary Net Sales Results
Preliminary net sales for the first quarter of 2020 were approximately
Segment Sales
Direct Segment
-
Preliminary Q1, 2020 net sales were approximately
$47 million , up 1% compared to Q1 2019. This is the first quarter of year-over-year sales growth for the Direct segment since Q4, 2017. Top-selling direct-to-consumer items like the Bowflex® SelectTech® dumbbells and kettlebells and the Bowflex® C6 and Schwinn® IC4 bikes more than offset lower Max Trainer® sales. Both the Bowflex C6 and Schwinn IC4 connected-fitness bikes have been popular with consumers since they were first introduced inOctober 2019 .
Retail Segment
-
Preliminary Q1, 2020 net sales were approximately
$46 million , up 24% compared to Q1 2019. Strong sales of Bowflex and Schwinn home fitness products more than offset weaker performance in theOctane Fitness commercial line. Like the Direct segment, the Retail segment was boosted by strong demand for Bowflex SelectTech 552 adjustable weights and Schwinn IC4 connected-fitness bikes. Although numerous retailers have temporarily closed store locations due to COVID-19, Bowflex and Schwinn experienced strong year-over-year sales increases through retail partners’ ecommerce and curbside pick-up platforms.
In addition to meeting strong customer demand, Nautilus is focused on the health and welfare of its employees. Before government orders were in place in the jurisdictions where Nautilus conducts business, the Company implemented its work from home policies for most employees world-wide, while continuing to provide leading customer care for Direct and Retail customers. The Company’s distribution centers remain open for both receiving and shipping with strict guidelines on social distancing and worker health and safety protocols.
Manufacturing and Supply Chain
A significant volume of Nautilus products is manufactured in
Management Comments
While these short-term results have exceeded expectations, it is prudent to realize the coming quarters may present added challenges for all businesses as we better understand the longer-term impacts of COVID-19. Short-term, it may remain a significant challenge to fully match the unplanned surge in demand with supply. Looking to the long term, like many companies, we will be evaluating the potential impact and duration of the pandemic on the overall macro-economic environment.”
Raising First Quarter 2020 Guidance
The Company now expects EBITDA from continuing operations to be in the range of
The Company does not plan to release preliminary financial information on an ongoing basis.
Liquidity
As of
The amounts and financial results described in this press release reflect the Company’s estimates based solely upon information available to it as of the date of this press release, which are not a comprehensive statement of its financial results or position as of
First Quarter Earnings Results Conference Call
Nautilus will host a conference call at
A telephonic playback will be available from
Non-GAAP Presentation
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) and provide supplemental information regarding operating performance. 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. By disclosing these non-GAAP financial measures, management intends to provide investors with a supplemental comparison of operating results and trends for the periods presented. Management believes these measures are also useful to investors as such measures allow investors to evaluate performance using the same metrics that management uses to evaluate past performance and prospects for future performance. Nautilus strongly encourages you to review all its financial statements and publicly filed reports in their entirety and to not rely on any single financial measure.
We have not reconciled guidance for non-GAAP financial measures to our most directly comparable GAAP measures because certain items that impact these measures are uncertain, out of our control and/or cannot be reasonably predicted or estimated at this time, such as net/income tax or benefit from continuing operations. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measures is not available without unreasonable effort.
EBITDA from Continuing Operations
Nautilus defines EBITDA from continuing operations as its income from continuing operations, adjusted to exclude interest expense (income), income tax expense (benefit) of continuing operations, and depreciation and amortization expense. Nautilus uses EBITDA from continuing operations in evaluating its operating results and for financial and operational decision-making purposes such as budgeting and establishing operational goals. Nautilus believes that EBITDA from continuing operations helps identify underlying trends in its business that could otherwise be masked by the effect of the items that are excluded from EBITDA from continuing operations and enhances the overall understanding of the Company’s past performance and future prospects. Management believes that EBITDA is frequently used by investors, securities analysts and other interested parties in their evaluation of companies, many of which present EBITDA when reporting their results. Other companies may calculate EBITDA differently, and it may not be comparable.
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: estimated, projected or forecasted financial and operating results for the first quarter of 2020, the expected impact of the COVID-19 pandemic on our operations and results; anticipated demand for the Company's new and existing products; and statements regarding the Company's prospects, resources or capabilities; planned investments, strategic initiatives and the anticipated or targeted results of such initiatives. Factors that could cause Nautilus, Inc.’s actual results to differ materially from these forward-looking statements 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; an inability to pass along or otherwise mitigate the impact of raw material price increases and other cost pressures, including unfavorable currency exchange rates; 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; and softness in the retail marketplace. Additional assumptions, risks and uncertainties are described in detail in our registration statements, reports and other filings with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20200408005709/en/
Investor Relations:
646-277-1254
john.mills@ICRinc.com
Media:
360-859-5815
jfread@nautilus.com
The
503-754-7975
ckerns@hoffman.com
Source: