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

Nautilus, Inc.

CIK: 1078207 Ticker: NLS


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EXHIBIT 99.1

NAUTILUS, INC. REPORTS RESULTS FOR THE THIRD QUARTER 2019

Company Expects to Achieve Positive Cash Flow from Operations and EBITDA in Fourth Quarter 2019

Personalized Connected Fitness Offerings Enhanced with Additions to Max Trainer, Treadmill,
and Bike Categories and Relaunch of Digital Platform

VANCOUVER, WASHINGTON, November 7, 2019 - Nautilus, Inc. (NYSE: NLS) today reported its unaudited operating results for the third quarter and nine months ended September 30, 2019.

Net sales for the third quarter of 2019 totaled $61.7 million, a decrease of 32.2% compared to $91.1 million in the same quarter of 2018. Direct segment sales were down by 44.1% from the prior year quarter, primarily driven by lower Max Trainer® product sales and related to a 37.0% reduction in advertising expense compared to the prior year quarter as the Company prepared to increase spend on a new advertising campaign in the fourth quarter of 2019. Retail sales were down by 27.1% from the same quarter of the prior year, primarily reflecting partial shipment delays to October 2019 related to recently imposed tariffs further discussed below, as well as a decline in Bowflex Max Trainer® product sales. Royalty revenue in the third quarter of 2019 was $0.7 million, an increase of 12.4% compared to the same quarter of last year primarily due to a new agreement. For the first nine months of 2019, net sales were $205.1 million, a decrease of 27.1% compared to $281.4 million in the same period in the prior year. Gross margins for the third quarter of 2019 were 30.9% versus 42.3% for the same period of last year, primarily due to unfavorable product mix and unfavorable overhead absorption related to the decline in sales.

Total operating expenses for the third quarter of 2019 decreased by $5.0 million to $27.3 million compared to $32.3 million in the same period of last year, primarily due to lower advertising spend and product development costs, partially offset by increased advertising production costs. Operating loss for the third quarter of 2019 was $8.3 million, compared to operating income of $6.2 million in the same period of last year, primarily due to lower sales and unfavorable gross margins, partially offset by lower operating expenses.

Loss from continuing operations for the third quarter of 2019 was $10.6 million, or $0.36 per diluted share, compared to income of $4.5 million, or $0.15 per diluted share, for the same period of last year. Tax expense in the third quarter of 2019 included a $3.9 million, or $0.13 per diluted share, valuation allowance against the Company's deferred tax assets.

EBITDA loss from continuing operations for the third quarter of 2019 totaled $5.5 million compared to income of $8.5 million in the same quarter of the prior year.

Jim Barr, Chief Executive Officer, stated, “Third quarter results were impacted by declines in both of our segments. The Direct segment results were related to a significant reduction in advertising spend while we continued to fine-tune our refreshed brand and advertising messaging and finalize our fourth quarter advertising plan. The Retail segment experienced a partial shipping delay to October 2019 related to recently imposed tariffs implemented with a shortened notice period, as well as lower sales of our existing Max Trainer products. In late August, we began the Direct segment rollout of the new Max TotalTM product. This trainer features our first integrated digital screen that directly connects the user to the features of our upgraded AI-powered digital platform. Our new advertising and brand campaign launched with limited media weight to test messaging effectiveness and efficiency across television, social media, PR, and other digital platforms. The marketing spend during the third quarter included content development costs that we do not expect to incur on a similar scale in the fourth quarter. We anticipate ramping up a more robust marketing campaign during the fourth quarter of 2019 and the first quarter of 2020, incorporating learnings from the initial campaign test launch.”




The following information was filed by Nautilus, Inc. (NLS) on Thursday, November 7, 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 Cash Flows (Unaudited) (Parenthetical)
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 Loss
Accumulated Other Comprehensive Loss (Details)
Accumulated Other Comprehensive 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
Fair Value Measurements (Details)
Fair Value Measurements (Tables)
General Information
General Information (Details)
General Information (Policies)
Goodwill And Other Intangible Assets
Goodwill And Other Intangible Assets (Details)
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)
Income Taxes
Income Taxes (Details)
Inventories
Inventories (Details)
Inventories (Tables)
Investments
Investments (Details)
Investments (Tables)
Leases
Leases (Tables)
Leases - Additional Information (Details)
Leases - Lease Cost (Details)
Leases - Maturity (Details)
Leases - Maturity Prior To Adoption (Details)
Leases - Supplemental Cash Flow (Details)
Product Warranties
Product Warranties (Details)
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
Revenues (Details)
Revenues (Tables)
Segment And Enterprise-Wide Information
Segment And Enterprise-Wide Information (Details)
Segment And Enterprise-Wide Information (Tables)
Segment And Enterprise-Wide Information - Concentration (Details)
Stock Repurchase Program
Stock Repurchase Program (Details)
Stock Repurchase Program Stock Repurchase Program (Tables)
Stock Repurchase Program, Repurchased Shares (Details)

Material Contracts, Statements, Certifications & more

Nautilus, Inc. provided additional information to their SEC Filing as exhibits

Ticker: NLS
CIK: 1078207
Form Type: 10-Q Quarterly Report
Accession Number: 0001078207-19-000046
Submitted to the SEC: Fri Nov 08 2019 11:32:54 AM EST
Accepted by the SEC: Fri Nov 08 2019
Period: Monday, September 30, 2019
Industry: Sporting And Athletic Goods

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