Nautilus posts 16-percent drop in Q4 net sales
Nautilus (NYSE: NLS) posted a 16-percent drop in sales for the fourth quarter hampered by reduced consumer spending and “reluctance” of retailers to replenish inventory levels in the current economic climate.
For the quarter ended Dec. 31, 2009, net sales were $53.7 million compared to net sales of $63.9 million for the same period last year. In the report issued March 1, Nautilus reported only continuing operations, therefore excluding the commercial segments that were sold and are considered discontinued operations.
“2009 was mostly about restructuring, and we made significant progress,” CEO Edward Bramson said during the call. “It’s the consumer areas where we think we can do better.”
Direct sales were down 19.9 percent to $28.8 million versus $36.0 million, while retail sales dropped 9.4 percent to $24.0 million compared to $26.5 million last year. In a chart in the financials released prior to the call, CFO Kenneth Fish noted how the rate of decline year-over-year was diminishing. Year-over-year comparisons showed quarterly sales at retail going from a drop 2009 over 2008 in the first quarter of 50.3 percent, to 40.2 percent drop in the second, 34 percent decline in the third, and a drop of 9.4 percent in the fourth. Direct sales declines went from 41.5 percent in the first quarter, to 31.7 percent in the second quarter, to 34.8 percent in the third, to 19.9 percent in the fourth.
“We believe we are in a good position as we emphasize positive growth for 2010,” Fish told analysts and media on the call. The call lasted a short 20 minutes and no questions were posed by listeners.
Net income was $5.7 million, or $0.19 per diluted share, compared with a net loss of $41.2 million, or $1.35 loss per diluted share, in the fourth quarter 2008.
“In 2010, we’ll be able to present a clearer picture,” Bramson added. “Our financial position is much stronger than it was a year ago.”
For FY ‘09, Nautilus reported net sales of $189.3 million compared to $283.7 million for 2008. The company blamed the decline on the challenging economic environment and reduced credit approvals in the direct business.
Loss from continuing operations was $18.6 million, or $0.61 loss per diluted share, in 2009, compared to a loss of $52.6 million, or $1.69 loss per diluted share, in 2008, after income tax benefits of $10.9 million and $5.9 million, respectively.
Sales for Accell’s fitness division down
Accell Group reported rises in both sales and profit for 2009 -- boosted by demand in its bike division. Its fitness division -- consisting of Bremshey and Tunturi and making up about 5 percent of its overall business -- posted lackluster results for the year.
Companywide, sales for the year increased by 6 percent to EUR 572.6 million (USD $780.2 million) versus EUR 538.0 million (USD $733.1 million) in 2008, with 5 percent of this organic growth.
Net profit was up by 15 percent to EUR 32.7 million (USD $44.5 million) compared to EUR 28.6 million (USD $38.9 million) last year. The company said this resulted in a 12 percent rise in net earnings per share to EUR 3.30 (USD $4.49) versus EUR 2.95 (USD $4.01) last year.
The company said in a statement, “The demand for bicycles and bicycle parts and accessories was generally positive in 2009, although the market was more dynamic and subject to more shifts. On the other hand, the demand of fitness equipment was weak, due to the economic downturn, particularly in the first half of the year.”
Salesin the fitness segment fell to EUR 29.7 million (USD $40.4 million) in the past year, from EUR 39.9 million (USD $54.3 million) in 2008.
Accell said fitness equipment sales dropped in virtually all markets in 2009, especially in the home use market. The sales drop in the fitness segment was partly due to the postponement or cancelling of deliveries to some international distributors, due to more limited financing options – most notable in the first half of 2009.
The company said it is adapting to the economic shift by introducing fitness equipment for the professional market to broaden its reach. Distributors in a number of new countries are also planned.
(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Feb. 26.)
--Compiled by Wendy Geister
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