Nautilus, Inc. (NLS) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, December 31, 2013

Exhibit 99.1

NAUTILUS, INC. REPORTS RESULTS FOR THE FOURTH QUARTER AND FULL YEAR 2013

Fourth Quarter Revenue Increased 19% Driven By a 47% Increase in Retail and Continued Growth in Direct Segment

Fourth Quarter Operating Income from Continuing Operations Increased 32% to $10.1 Million

Full Year Revenue Increased 13% and Operating Income Increased 49%

VANCOUVER, WASHINGTON, February 24, 2014 - Nautilus, Inc. (NYSE: NLS) today reported its unaudited operating results for the fourth quarter and full year ended December 31, 2013.

Net sales for the fourth quarter of 2013 totaled $77.1 million, a 19% increase compared to $65.0 million in the same quarter of 2012. The result was driven by strong growth in the Company’s Retail segment, combined with continued gains in the Direct segment. For the full year 2013, net sales were $218.8 million, an increase of 13% over last year. Gross margins for the fourth quarter improved in both the Direct and Retail segments, by 130 and 330 basis points respectively, compared to the same period last year; however fourth quarter consolidated gross margin declined 70 basis points to 47.6% due to a greater percentage of sales coming from the Company’s lower gross margin Retail segment. For the full year, consolidated gross margin increased 180 basis points from the prior year to 48.7%. Operating income for the fourth quarter of 2013 was $10.1 million, a 32% increase over operating income of $7.7 million reported in the same quarter of 2012. The increase in operating income reflects higher sales and gross margins in both the Direct and Retail Segments combined with improved operating leverage of sales and marketing and general and administrative expenses. Full year 2013 operating income was $15.7 million, an increase of 49% over last year.

Net income from continuing operations for the fourth quarter of 2013 was $8.4 million, or $0.27 per diluted share, compared to $7.3 million, or $0.23 per diluted share for the same period last year. Adjusted net income from continuing operations for the fourth quarter of 2013 was $9.6 million, or $0.30 per diluted share, compared to $7.3 million, or $0.23 in the same period last year. Adjusted net income figures exclude nonrecurring income tax benefits and expenses. In the second quarter of 2013 the Company recognized an income tax benefit of $1.09 per share as a result of the partial reversal of the valuation allowance recorded against the Company’s deferred tax assets. During the fourth quarter of 2013 it was determined that this reversal underestimated the Company’s full year profitability and the Company reestablished a portion of the reversal, resulting in recognition of income tax expense of approximately $1.1 million, or $0.04 per share, in the fourth quarter of 2013.

For the full year 2013, net income from continuing operations was $48.1 million, or $1.53 per diluted share, compared to $10.6 million, or $0.34 per diluted share, last year. Full year 2013 net income includes income tax benefit of $33.0 million, or $1.05 per share, due primarily to the aforementioned partial reversal of a valuation allowance. Excluding the tax benefit, 2013 net income from continuing operations was $15.1 million, or $0.48 per diluted share, compared to $10.6 million, or $0.34 per diluted share, last year.

For the fourth quarter of 2013, the Company reported net income (including discontinued operations) of $8.5 million, or $0.27 per diluted share. In the fourth quarter of 2012, the Company reported net income (including discontinued operations) of $13.6 million, or $0.44 per diluted share. Net income for the fourth quarter of 2013 included income from discontinued operations of $0.1 million. Net income for the fourth quarter of 2012 included income from discontinued operations of $6.3 million, or $0.20 per diluted share, which primarily represents a currency translation adjustment gain related to the liquidation of European subsidiaries.

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