Nautilus (NLS) Tops Q4 EPS by 26c, Revenues Beat

Nautilus (NYSE: NLS) reported Q4 EPS of $0.12, $0.26 better than the analyst estimate of ($0.14). Revenue for the quarter came in at $104.2 million versus the consensus estimate of $99.78 million.

Fourth Quarter 2019 Highlights Compared to Fourth Quarter 2018

• Net Sales were $104.2 million, down 9.7% compared to $115.4 million. The 4.8% increase in the Retail Segment was offset by a 28.1% decline in the Direct Segment.
• Operating Expenses decreased by 27.4% to $34.9 million compared to $48.0 million, primarily due to reductions in sales and marketing expenses, general and administrative costs, and research and development costs.
• Operating Income increased by 21.4% to $3.3 million compared to $2.7 million.
• Income from Continuing Operations increased to $3.7 million, or $0.12 per diluted share, compared to income from continuing operations of $1.5 million, or $0.05 per diluted share.
• The tax rate for the fourth quarter was minus 25.8% primarily due to a true-up of an income tax benefit in the prior quarter.
• EBITDA from continuing operations increased to $5.9 million compared to $5.0 million.

“We are seeing signs that the improvements made during the latter half of 2019 are beginning to benefit our business. New technology enhancements to our product offerings combined with more efficient advertising and reduced overall operating expenses resulted in overall improved results for the fourth quarter,” said Jim Barr, Chief Executive Officer. “We enter 2020 in a stronger financial position, having recently secured a new $70 million Senior Secured Credit Facility. We are very encouraged by customer reception of our new digital platform and new product offerings as well as the improvements in our cost structure, but we are very early in our transformation process. Throughout 2020, we will continue to focus on unlocking the potential of our brands and returning the company to sustainable profitable growth, but we do not expect the changes we are making to our company will result in immediate linear quarterly improvements.”

Guidance

The Company does not plan to provide specific guidance on an ongoing basis but due to the timing of the fourth quarter 2019 release and the early stages of its business transformation, it is providing the following commentary: The Company expects EBITDA from continuing operations to be a loss in the range of $4.0 million to $1.0 million. Capital expenditures for 2020 are anticipated to be in the range of $8.0 million to $10.0 million.

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

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