Nautilus Inc. (NYSE: NLS) reported flat revenue for the fourth quarter 2010, the first time its sales weren’t down in 11 previous quarters, company officials noted on a call March 8 with analysts and media.
The Vancouver, Wash.-based fitness products company reported quarterly revenue of $53.69 million for the period ending Dec. 31, 2010, compared to $53.67 million during the same period a year ago.
Nautilus reported a fourth-quarter 2010 net loss of $39,000, or no change per share, compared to its fourth-quarter 2009 net gain of $5.7 million, or $0.19 per share in 2009.
Breaking down the quarterly revenue figures, the company’s retail sales of $23.9 million “have been roughly where they have been trending lately, which is to say flat,” Nautilus CEO Edward Bramson said during the conference call. That was partly due to the company’s inability to meet demands due to lack of inventory; it is now increasing inventory to meet those demands, he said.
Retail cardio product sales rose 9.6 percent, primarily due to increased sales of Schwinn exercise bikes and ellipticals. While retail sales of strength-oriented products fell 13.6 percent in the fourth quarter, from a year ago.
The company’ s fourth-quarter 2010 direct sales fell 2.3 percent to $28.2 million in the fourth quarter, which included a 32.3-percent drop in its strength products, but a 17-percent increase in its cardio products.
For a company that used to rely solely on its Bowflex home gyms at direct, it has now turned a corner in diversifying that segment, Bramson said.
Officials said they will continue to focus more of their advertising efforts on the cardio line of products, such as the Bowflex TreadClimber, in 2011 “to gain greater consumer awareness of the product with the goal of increasing market share in the cardio-oriented fitness market which is significantly larger than the strength market.” Also in 2011, the company expects to rely on a lower cost Internet-based advertising strategy for its home gyms.
Improved sales figures in fourth quarter were also due to a new third-party financing source, which better fit clients’ needs and produced more credit approvals, officials said.
For the full year 2010, Nautilus’ net revenue came in at $168.5 million – down 11 percent from 2009. The company’s full-year 2010 net loss improved to $22.8 million, compared to a net loss of $53.3 million in 2009.
The company finished divesting all of its commercial assets early in 2010. Bramson said he expected a “cleaner” balance sheet in 2011.
As previously reported by SNEWS, Med-Fit Systems acquired Nautilus-brand commercial in Februay 2010 and Michael Bruno's Core Fitness acquired assets of StairMaster and of Schwinn commercial in January 2010.
-- Compiled by David Clucas and Therese Iknoian