Nautilus finished off its “turnaround” year with a 51.1% jump in Q4 earnings, from $9.4 million, or 28 cents per share in 2003 to $14.2 million, or 42 cents per diluted share in the most recent quarter. These earnings were driven by an 11.0% increase in fourth quarter sales to $169.6 million and a 160 basis point increase in gross margin to 47.2% of sales.
The overall margin was driven up by increased sales through the consumer direct channels, which boast a 69.4% gross margin, up 70 basis points over last year. Nautilus commercial retail segment experienced an expected decline in both sales and margins due to manufacturing constraints and the startup costs of adding a second shift to address these constraints.
Nautilus finished the year with a cash balance of $100.6 million. In a conference call with analysts, Nautilus Chief Customer Officer and Chief Marketing Officer, Tim Hawkins, alluded to potential acquisitions speaking of “ natural synergies with the sports nutrition market, such as protein supplements, nutrition bars, and beverages.”
For Q1, the company estimates that net sales will be in the range of $145 to $150 million, and earnings per share will grow by more than 25% to approximately 24 to 26 cents. For the full year of 2005, the company believes net sales will grow around 15% compared to the prior year, and earnings will grow about 25 to 30%.
The company also stated that its long term goal was to have a 40% market share in all of its categories. Currently that market share is roughly 8%.
