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Nautilus, Inc. (NLS) SEC Filing 10-K Annual report for the fiscal year ending Thursday, December 31, 2015

Nautilus, Inc.

CIK: 1078207 Ticker: NLS
Exhibit 99.1

NAUTILUS, INC. REPORTS STRONG RESULTS FOR THE FOURTH QUARTER AND FULL YEAR 2015
    
Fourth Quarter Revenue Increased 15.0% Over Prior Year and Full Year Revenue Grew 22.3%

Fourth Quarter Adjusted EPS from Continuing Operations was $0.39 versus $0.33 in Prior Year

Full year Adjusted EPS from Continuing Operations up 45.3% to $0.93


VANCOUVER, WASHINGTON, February 22, 2016 - Nautilus, Inc. (NYSE: NLS) today reported its unaudited operating results for the fourth quarter and full year ended
December 31, 2015.

Net sales for the fourth quarter of 2015 totaled $109.1 million, a 15.0% increase compared to $94.9 million in the same quarter of 2014. The strong growth was driven by higher sales in both the Direct and Retail segments. For the full year 2015, net sales were $335.8 million, an increase of 22.3% over last year. Gross margins for the fourth quarter declined by 300 basis points to 48.1%, reflecting several unusual items detailed below. Adjusted gross margins increased 120 basis points to 52.3%. Operating income for the fourth quarter of 2015 was $12.3 million, compared to $14.5 million in the same period last year. Adjusted operating income increased 32.2% to $19.2 million. The increase in adjusted operating income reflects higher sales in both the Direct and Retail segments, as well as improved leverage of general and administrative costs across the higher sales volumes. For the full year 2015, operating income was $40.3 million, compared to $30.2 million last year, an increase of 33.6%. Adjusted operating income was $47.1 million for the full year 2015 reflecting an increase of 56.2% compared to 2014.

Income from continuing operations for the fourth quarter of 2015 was $9.9 million, or $0.32 per diluted share, compared to income from continuing operations of $10.5 million, or $0.33 per diluted share, for the fourth quarter of 2014. Earnings per diluted share from continuing operations for the fourth quarter of 2015 includes approximately $(0.07) of unusual items. Excluding these unusual items, the adjusted earnings per diluted share from continuing operations was $0.39 per diluted share. For the full year 2015, income from continuing operations was $26.8 million, or $0.85 per diluted share, compared to $20.4 million, or $0.64 per diluted share, in the prior year. Adjusted earnings per share from continuing operations for the full year 2015 were $0.93 per diluted share.

Adjusted earnings per diluted share for the fourth quarter and full year 2015 excludes transaction costs expensed to general and administrative expense that were related to the acquisition of Octane Fitness (approximately $0.02 per share) and the other following unusual items: (1) settlement of a previously disclosed arbitration proceeding related to a 1999 agreement under which Nautilus licensed certain rights relating to TreadClimber® products (approximately $0.05 per share) impacting gross margins; (2) write-off of inventory related to the nutrition business which the Company is transitioning out of to focus on opportunities presented by the recent Octane Fitness acquisition (approximately $0.03 per share) impacting gross margins; (3) the Company did not record any royalty due from a licensee during the fourth quarter, and reversed out estimated royalties for the third quarter as a result of a dispute that arose with the licensee during the fourth quarter (approximately $0.03 per share) impacting gross margins. The Company has filed a breach of contract lawsuit against the licensee and intends to vigorously pursue all remedies for payment; (4) setup of a reserve related to a potentially uncollectible accounts receivable balance with a large sporting goods retailer (approximately $0.02 per share) impacting sales and marketing expense; and (5) the release of a valuation allowance related to foreign tax credits that favorably impacted GAAP EPS by approximately $0.06 for the fourth quarter and full year periods. See attached reconciliation of non-GAAP financial measures below.

The effective income tax rate for continuing operations in the fourth quarter of 2015 was 20.3% and 33.0% for the full year, reflecting the release of a valuation allowance mentioned above.



The following information was filed by Nautilus, Inc. (NLS) on Monday, February 22, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information Document
Consolidated Balance Sheets
Consolidated Balance Sheets (parentheticals)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Comprehensive Income (loss)
Consolidated Statements Of Comprehensive Income (parenthetical)
Consolidated Statements Of Operations
Consolidated Statements Of Stockholders' Equity
401(k) Savings Plan (details)
401(k) Savings Plan (tables)
401(k) Savings Plan 401(k) Savings Plan
Accrued Liabilities
Accrued Liabilities (details)
Accrued Liabilities (tables)
Accumulated Other Comprehensive Income (loss) (details)
Accumulated Other Comprehensive Income (loss) (tables)
Accumulated Other Comprehensive Income (loss) Accumulated Other Comprehensive Income (loss)
Borrowings
Borrowings (loan Agreement) (details)
Borrowings (tables)
Business Acquisition
Business Acquisition (details)
Business Acquisition (tables)
Business Acquisition - Assets Acquired And Liabilities Assumed (details)
Business Acquisition - Intangible Assets (details)
Business Acquisition - Pro Forma (details)
Commitments And Contingencies
Commitments And Contingencies (details)
Commitments And Contingencies (tables)
Commitments And Contingencies - Operating Lease (details)
Discontinued Operation
Discontinued Operation (details)
Discontinued Operation (tables)
Fair Value Measurements (details)
Fair Value Measurements (notes)
Fair Value Measurements (tables)
Goodwill
Goodwill (details)
Goodwill (tables)
Income Per Share
Income Per Share (details)
Income Per Share (tables)
Income Taxes
Income Taxes (tables)
Income Taxes - Carryforwards (details)
Income Taxes - Deferred Tax Assets And Liabilities (details)
Income Taxes - Deferred Tax Liability (details)
Income Taxes - Expense (details)
Income Taxes - Income (loss) Before Tax (details)
Income Taxes - Reconciliation (details)
Income Taxes - Unrecognized Tax Benefits (details)
Inventories
Inventories (details)
Inventories (tables)
Other Intangible Assets
Other Intangible Assets (details)
Other Intangible Assets (tables)
Product Warranties
Product Warranties (details)
Product Warranties (tables)
Property, Plant And Equipment
Property, Plant And Equipment (details)
Property, Plant, And Equipment (tables)
Segment Information
Segment Information (details)
Segment Information (tables)
Significant Accounting Policies
Significant Accounting Policies (details)
Significant Accounting Policies (policies)
Significant Accounting Policies (tables)
Stock Repurchase Program (details)
Stock Repurchase Program Stock Repurchase Program
Stock Repurchase Program Stock Repurchase Program (tables)
Stock-based Compensation
Stock-based Compensation (detail)
Stock-based Compensation (tables)
Stock-based Compensation - Employee Stock Purchase Plan (details)
Stock-based Compensation - Performance Stock Units (details)
Stock-based Compensation - Stock Options (details)
Stock-based Compensation - Stock-based Compensation (details)
Stock-based Compensation Fair Value Assumptions (details)
Stock-based Compensation Stock Compensation, Other (details)
Stock-based Compensation- Restricted Stock Units (details)
Supplementary Information - Quarterly Results Of Operations (details)
Supplementary Information - Quarterly Results Of Operations (tables)
Supplementary Information - Quarterly Results Of Operations (unaudited)
Trade Receivables
Trade Receivables (details)
Trade Receivables (tables)
Ticker: NLS
CIK: 1078207
Form Type: 10-K Annual Report
Accession Number: 0001078207-16-000064
Submitted to the SEC: Thu Feb 25 2016 4:47:14 PM EST
Accepted by the SEC: Thu Feb 25 2016
Period: Thursday, December 31, 2015
Industry: Sporting And Athletic Goods

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