Nautilus Inc. (NLS, Financial) filed Quarterly Report for the period ended 2010-03-31.
Nautilus Inc. has a market cap of $91.9 million; its shares were traded at around $2.99 with and P/S ratio of 0.5.
Selling and marketing expenses were $18.9 million in the first quarter of 2010, a decrease of $3.7 million, or 16.4%, compared to the first quarter of 2009. Advertising expense of our direct business in the first quarter of 2010 was approximately $12.9 million, a decrease of approximately $1.8 million, or 12.3%, compared to the first quarter of 2009. The comparative reduction in advertising expenses was attributable primarily to managements decision to scale back television media spend in order to balance the ability to convert customer leads into sales in the current environment, where advertising fees have increased over the same period last year while consumer financing approval rates have declined substantially. In addition, bad debt expense decreased by $0.7 million and third-party customer financing commission fees decreased by approximately $0.5 million, primarily due to lower credit approval rates and reduced use of our financing promotions. Other selling and marketing expenses declined by approximately $0.7 million, primarily due to cost-saving initiatives and lower sales volumes.
General and administrative expenses were $5.2 million in the first quarter of 2010, a decrease of $2.7 million, or 34.6%, compared to the first quarter of 2009, primarily due to cost-saving initiatives. General and administrative expenses in the first quarter of 2009 were reduced by the resolution of a legal matter, which was settled for $0.8 million less than the amount previously estimated.
Cash provided by operating activities of $0.9 million in the first quarter of 2010 included $12.7 million from income tax refunds and $8.5 million from the reduction of trade receivables, partially offset by reductions in trade payables and accrued liabilities of $12.4 million and $3.6 million, respectively. Significant reductions in trade receivables, trade payables and accrued liabilities in the first quarter of 2010 largely resulted from winding down our commercial business discontinued operation.
Cash provided by operations of $12.8 million in the first quarter of 2009 included significant reductions in trade receivables and inventories of $21.5 million and $3.2 million, respectively, as we reduced working capital invested in our commercial business in anticipation of divesting that segment.
Cash provided by investing activities of $3.2 million in the first quarter of 2010 included $2.7 million in proceeds from the sale of portions of our discontinued commercial business and $0.6 million from a decrease in restricted cash collateralizing our outstanding letters of credit. Cash used in investing activities of $0.7 million in the first quarter of 2009 included $0.8 million for purchases of equipment, partially offset by $0.1 million in proceeds from sales of equipment.
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Nautilus Inc. has a market cap of $91.9 million; its shares were traded at around $2.99 with and P/S ratio of 0.5.
Highlight of Business Operations:
Net sales of our direct business were $28.5 million in the first quarter of 2010, a decrease of $12.2 million, or 30.0%, compared to $40.7 million in the first quarter of 2009. The decrease in direct net sales was due primarily to a 37% year-over-year decrease in the rate of credit approvals by our consumer credit financing partner.Selling and marketing expenses were $18.9 million in the first quarter of 2010, a decrease of $3.7 million, or 16.4%, compared to the first quarter of 2009. Advertising expense of our direct business in the first quarter of 2010 was approximately $12.9 million, a decrease of approximately $1.8 million, or 12.3%, compared to the first quarter of 2009. The comparative reduction in advertising expenses was attributable primarily to managements decision to scale back television media spend in order to balance the ability to convert customer leads into sales in the current environment, where advertising fees have increased over the same period last year while consumer financing approval rates have declined substantially. In addition, bad debt expense decreased by $0.7 million and third-party customer financing commission fees decreased by approximately $0.5 million, primarily due to lower credit approval rates and reduced use of our financing promotions. Other selling and marketing expenses declined by approximately $0.7 million, primarily due to cost-saving initiatives and lower sales volumes.
General and administrative expenses were $5.2 million in the first quarter of 2010, a decrease of $2.7 million, or 34.6%, compared to the first quarter of 2009, primarily due to cost-saving initiatives. General and administrative expenses in the first quarter of 2009 were reduced by the resolution of a legal matter, which was settled for $0.8 million less than the amount previously estimated.
Cash provided by operating activities of $0.9 million in the first quarter of 2010 included $12.7 million from income tax refunds and $8.5 million from the reduction of trade receivables, partially offset by reductions in trade payables and accrued liabilities of $12.4 million and $3.6 million, respectively. Significant reductions in trade receivables, trade payables and accrued liabilities in the first quarter of 2010 largely resulted from winding down our commercial business discontinued operation.
Cash provided by operations of $12.8 million in the first quarter of 2009 included significant reductions in trade receivables and inventories of $21.5 million and $3.2 million, respectively, as we reduced working capital invested in our commercial business in anticipation of divesting that segment.
Cash provided by investing activities of $3.2 million in the first quarter of 2010 included $2.7 million in proceeds from the sale of portions of our discontinued commercial business and $0.6 million from a decrease in restricted cash collateralizing our outstanding letters of credit. Cash used in investing activities of $0.7 million in the first quarter of 2009 included $0.8 million for purchases of equipment, partially offset by $0.1 million in proceeds from sales of equipment.
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