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Nautilus, Inc. (NLS) SEC Filing 10-Q Quarterly report for the period ending Sunday, June 30, 2019

Nautilus, Inc.

CIK: 1078207 Ticker: NLS


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EXHIBIT 99.1

NAUTILUS, INC. REPORTS RESULTS FOR THE SECOND QUARTER 2019

Comprehensive Plan to Improve Direct Business Ready for Q3 2019 Launch

Company Implements Initiatives with Anticipated Annualized Cost Savings of $5 to $6 million

VANCOUVER, WASHINGTON, July 31, 2019 - Nautilus, Inc. (NYSE: NLS) today reported its unaudited operating results for the second quarter and six months ended June 30, 2019.

Net sales for the second quarter of 2019 totaled $59.0 million, a decrease of 21.8% compared to $75.5 million in the same quarter of 2018. The decrease in net sales was largely driven by shortfalls in the Direct segment, down 40.2% from the prior year quarter, primarily reflecting a decline in sales of the Bowflex Max Trainer® product. Retail sales were down 4.4% from the same quarter prior year, primarily due to lower order rates reflecting, we believe, the anticipated transition to new products being introduced and shipped during the third and fourth quarters of 2019. Royalty revenue in the second quarter of 2019 was $0.7 million, a decrease of 51.8% compared to the same quarter of last year which included payments of royalties related to a new agreement. For the first six months of 2019, net sales were $143.4 million, down 24.6% compared to the same period in the prior year. Gross margins for the second quarter of 2019 were 29.7% versus 44.6% for the same period of last year, reflecting unfavorable product mix and unfavorable overhead absorption related to the decline in sales.

Operating loss for the second quarter of 2019 was $85.4 million, compared to operating income of $1.2 million in the same period of last year, due to non-cash impairments along with lower sales and gross margins which resulted in a decline in gross profit dollars. Included in the second quarter 2019 operating loss were $72.0 million in non-cash goodwill and intangible impairments. Excluding these impairments, adjusted operating loss in the second quarter of 2019 was $13.4 million, compared to operating income of $1.2 million in the same period of last year. In addition to these impairments, operating expenses for the second quarter of 2019 included charges of $2.0 million related to a litigation settlement and $0.3 million of severance related to workforce reductions occurring early in the third quarter of 2019. Total operating expenses for the second quarter of 2019 increased by $70.5 million to $102.9 million compared to $32.4 million in the same period of last year as a result of the impairments and charges listed above, partially offset by lower marketing costs.

Loss from continuing operations for the second quarter of 2019 was $78.7 million, or $2.65 per diluted share, compared to income of $1.0 million, or $0.03 per diluted share, for the same period of last year. Adjusted to exclude the goodwill and intangible impairments, loss from continuing operations for the second quarter of 2019 was $9.8 million, or $0.33 per diluted share.

EBITDA loss from continuing operations for the second quarter of 2019 totaled $82.5 million compared to income of $3.3 million in the same quarter of the prior year. Adjusted EBITDA loss, excluding the goodwill and intangible impairments, was $10.5 million for the second quarter of 2019.

Carl Johnson, Chairman of the Board and former Interim Chief Executive Officer, stated, “As anticipated, our second quarter results were impacted by continued softness in the Direct segment; however, we believe the appropriate improvements are being implemented into our overall business to address this trend. The primary actions taken include extensive, in-depth consumer insights research leading to a major repositioning of the Bowflex brand and a new advertising and communication campaign, which we expect will begin airing in the third quarter of 2019 across television, social media, other digital platforms. Additionally, we expect to launch many targeted new products across all our channels in the second half of 2019. In parallel, we plan to continue our digital transformation with updated digital experience platforms on key new products, moving toward our goal of having all our products with subscription-based digital experience offerings. Our second quarter Retail segment sales were below prior year sales, tracing to declines in the Max



The following information was filed by Nautilus, Inc. (NLS) on Wednesday, July 31, 2019 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Nautilus, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Cover Page
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals)
Condensed Consolidated Statements Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Comprehensive (Loss) Income (Unaudited)
Condensed Consolidated Statements Of Comprehensive (Loss) Income (Unaudited) (Parentheticals)
Condensed Consolidated Statements Of Operations (Unaudited)
Condensed Consolidated Statements Of Stockholders' Equity (Unaudited)
Condensed Consolidated Statements Of Stockholders' Equity - Parenthetical (Unaudited)
Accrued Liabilities
Accrued Liabilities (Details)
Accrued Liabilities (Tables)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) (Details)
Accumulated Other Comprehensive Income (Loss) (Tables)
Borrowings
Borrowings (Loan Agreement) (Details)
Commitments And Contingencies
Commitments And Contingencies (Details)
Derivatives
Derivatives (Details)
Derivatives (Tables)
Derivatives - Effect On Condensed Consolidated Statements Of Operations (Details)
Derivatives - Fair Value Of Derivative Instruments (Details)
Fair Value Measurements
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General Information
General Information (Details)
General Information (Policies)
Goodwill And Other Intangible Assets
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Goodwill And Other Intangible Assets (Tables)
Goodwill And Other Intangible Assets Future Intangible Amortization (Details)
Goodwill And Other Intangible Assets Goodwill Roll Forward (Details)
Goodwill And Other Intangible Assets Patent Amortization (Details)
Income (Loss) Per Share
Income Per Share (Details)
Income Per Share (Tables)
Inventories
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Inventories (Tables)
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Investments (Tables)
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Leases - Additional Information (Details)
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Product Warranties
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Product Warranties (Tables)
Property, Plant And Equipment
Property, Plant And Equipment (Details)
Property, Plant And Equipment - Depreciation Expense (Details)
Property, Plant, And Equipment (Tables)
Revenues
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Revenues (Tables)
Segment And Enterprise-Wide Information
Segment And Enterprise-Wide Information (Details)
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Segment And Enterprise-Wide Information - Concentration (Details)
Stock Repurchase Program
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Nautilus, Inc. provided additional information to their SEC Filing as exhibits

Ticker: NLS
CIK: 1078207
Form Type: 10-Q Quarterly Report
Accession Number: 0001078207-19-000040
Submitted to the SEC: Thu Aug 08 2019 12:31:51 PM EST
Accepted by the SEC: Thu Aug 08 2019
Period: Sunday, June 30, 2019
Industry: Sporting And Athletic Goods

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