Nautilus Inc. (NLS, Financial) filed Quarterly Report for the period ended 2011-03-31.
Nautilus Inc. has a market cap of $86 million; its shares were traded at around $2.8 with and P/S ratio of 0.5.
Net sales of our retail business were $17.0 million in the first quarter of 2011, an increase of $1.0 million, or 6.5%, compared to retail net sales of $15.9 million in the first quarter of 2010. The increase in retail net sales was attributable primarily to higher demand for both cardio and strength products from Internet-based retail customers, which was partially offset by a decrease in sales to brick-and-mortar retail customers. Retail channel sales of strength products in the first quarter of 2011 increased by $1.1 million, or 20.0%, compared to the first quarter of 2010, primarily due to higher sales of SelectTech dumbbells.
Selling and marketing expenses were $14.9 million in the first quarter of 2011, a decrease of $4.1 million, or 21.5%, compared to the first quarter of 2010. Advertising expense of our direct business, a component of selling and marketing expenses, was $7.8 million in the first quarter of 2011, a decrease of $5.2 million, or 39.9%, compared to the first quarter of 2010. The comparative decrease in direct advertising expense was primarily attributable to management's decision to shift advertising away from home gyms due to declining sales and toward our Bowflex TreadClimber product line. Due to the continued strong performance of our new TreadClimber television advertisements, the number of new unique consumer leads increased on less marketing spending in the first quarter of 2011, compared to the first quarter of 2010. Reduced advertising expense was partially offset by a $1.1 million increase in consumer credit financing costs in the first quarter of 2011, compared to the first quarter of 2010, due to an increase in sales financed by our third-party financing providers.
Income from our commercial business discontinued operation, net of income taxes, was $0.5 million in the first quarter of 2011, compared to a loss of $5.4 million in the first quarter of 2010, as we substantially completed the disposal of our former commercial business in 2010. Loss from discontinued operation in the first quarter of 2010 was net of a $1.2 million reduction in the amount of pre-tax disposal loss previously estimated in connection with the divestiture. While we disposed of the last remaining asset held-for-sale of our commercial business in the second quarter of 2011, some expenses may be incurred during the remainder of 2011 in connection with the settlement of contingencies arising from and directly related to our commercial business prior to its disposal.
As of March 31, 2011, we had $16.6 million of cash and cash equivalents, compared to $14.3 million as of December 31, 2010. The principal source of this increase in cash and cash equivalents was $2.7 million of cash provided by operating activities in the three months ended March 31, 2011. Cash provided by operating activities was $0.9 million in the three months ended March 31, 2010. The increase in operating cash flows in the first quarter of 2011, compared to the first quarter of last year, primarily was due to the elimination of losses from both our discontinued commercial business and our continuing operations. The impact of such losses in the first quarter of last year was offset by a $12.7 million income tax refund, which contributed to positive operating cash flows for the period. While we expect to continue to incur certain costs in connection with our exit from the commercial business in future periods, we do not expect such costs to be material. Management believes that sufficient funds will be available to meet our expected cash needs for at least the next twelve months, based on cash currently on hand and anticipated cash flows from operations.
Cash provided by investing activities of $0.1 million in the three months ended March 31, 2011 consisted of $0.5 million in proceeds from the sale of portions of our discontinued commercial business, partially offset by $0.4 million used for purchases of equipment, primarily tooling for new cardio products. Cash provided by investing activities of $3.2 million in the three months ended March 31, 2010 included $2.7 million in proceeds from the sale of portions of our discontinued commercial business and a $0.6 million net decrease in the amount of restricted cash collateralizing our outstanding letters of credit. We do not expect cash provided by the sale of our commercial business to be material in future periods.
Read the The complete Report
Nautilus Inc. has a market cap of $86 million; its shares were traded at around $2.8 with and P/S ratio of 0.5.
Highlight of Business Operations:
Net sales of our direct business were $30.3 million in the first quarter of 2011, an increase of $1.8 million, or 6.1%, compared to direct net sales of $28.5 million in the first quarter of 2010. The comparative increase in net sales in our direct business in the first quarter of 2011 reflected a 24.0%, or $4.0 million, increase in sales of cardio products, particularly the Bowflex TreadClimber, due in part to new creative advertising and greater customer awareness of our TreadClimber product line. The Bowflex TreadClimber is sold almost exclusively through our direct channel. The increase in sales of cardio products was partially offset by a 19.3%, or $2.3 million, comparative decline in sales of strength products, primarily rod-based home gyms. Based on recent sales trends, we expect that increased sales of TreadClimber products will continue to more than offset anticipated declines in home gym sales in our direct channel for the full year 2011.Net sales of our retail business were $17.0 million in the first quarter of 2011, an increase of $1.0 million, or 6.5%, compared to retail net sales of $15.9 million in the first quarter of 2010. The increase in retail net sales was attributable primarily to higher demand for both cardio and strength products from Internet-based retail customers, which was partially offset by a decrease in sales to brick-and-mortar retail customers. Retail channel sales of strength products in the first quarter of 2011 increased by $1.1 million, or 20.0%, compared to the first quarter of 2010, primarily due to higher sales of SelectTech dumbbells.
Selling and marketing expenses were $14.9 million in the first quarter of 2011, a decrease of $4.1 million, or 21.5%, compared to the first quarter of 2010. Advertising expense of our direct business, a component of selling and marketing expenses, was $7.8 million in the first quarter of 2011, a decrease of $5.2 million, or 39.9%, compared to the first quarter of 2010. The comparative decrease in direct advertising expense was primarily attributable to management's decision to shift advertising away from home gyms due to declining sales and toward our Bowflex TreadClimber product line. Due to the continued strong performance of our new TreadClimber television advertisements, the number of new unique consumer leads increased on less marketing spending in the first quarter of 2011, compared to the first quarter of 2010. Reduced advertising expense was partially offset by a $1.1 million increase in consumer credit financing costs in the first quarter of 2011, compared to the first quarter of 2010, due to an increase in sales financed by our third-party financing providers.
Income from our commercial business discontinued operation, net of income taxes, was $0.5 million in the first quarter of 2011, compared to a loss of $5.4 million in the first quarter of 2010, as we substantially completed the disposal of our former commercial business in 2010. Loss from discontinued operation in the first quarter of 2010 was net of a $1.2 million reduction in the amount of pre-tax disposal loss previously estimated in connection with the divestiture. While we disposed of the last remaining asset held-for-sale of our commercial business in the second quarter of 2011, some expenses may be incurred during the remainder of 2011 in connection with the settlement of contingencies arising from and directly related to our commercial business prior to its disposal.
As of March 31, 2011, we had $16.6 million of cash and cash equivalents, compared to $14.3 million as of December 31, 2010. The principal source of this increase in cash and cash equivalents was $2.7 million of cash provided by operating activities in the three months ended March 31, 2011. Cash provided by operating activities was $0.9 million in the three months ended March 31, 2010. The increase in operating cash flows in the first quarter of 2011, compared to the first quarter of last year, primarily was due to the elimination of losses from both our discontinued commercial business and our continuing operations. The impact of such losses in the first quarter of last year was offset by a $12.7 million income tax refund, which contributed to positive operating cash flows for the period. While we expect to continue to incur certain costs in connection with our exit from the commercial business in future periods, we do not expect such costs to be material. Management believes that sufficient funds will be available to meet our expected cash needs for at least the next twelve months, based on cash currently on hand and anticipated cash flows from operations.
Cash provided by investing activities of $0.1 million in the three months ended March 31, 2011 consisted of $0.5 million in proceeds from the sale of portions of our discontinued commercial business, partially offset by $0.4 million used for purchases of equipment, primarily tooling for new cardio products. Cash provided by investing activities of $3.2 million in the three months ended March 31, 2010 included $2.7 million in proceeds from the sale of portions of our discontinued commercial business and a $0.6 million net decrease in the amount of restricted cash collateralizing our outstanding letters of credit. We do not expect cash provided by the sale of our commercial business to be material in future periods.
Read the The complete Report
