Nautilus (NLS) Tops Q1 EPS by 6c, Beats on Revenues

Nautilus (NYSE: NLS) reported Q1 EPS of $0.26, $0.06 better than the analyst estimate of $0.20. Revenue for the quarter came in at $114.8 million versus the consensus estimate of $111.77 million.

Q1 2018 Highlights

All comparisons relate to the first quarter of 2017 unless otherwise indicated:

• 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.

Company Reiterates Full Year 2018 Revenue and Operating Income Guidance

For earnings history and earnings-related data on Nautilus (NLS) click here.

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