Nautilus first-quarter net sales were $156.4 million compared to $130.9 million for the corresponding period last year, up 20%. Net income for the quarter was $9.4 million, or 28 cents per diluted share, up from $6.4 million, or 19 cents per share. Included in net income for the first quarter 2005 is a one-time charge of $950,000 for a settlement with the Consumer Product Safety Commission.
The Company finished the quarter with cash and short term investments of $123.3 million, up from $104.6 million at year end. The Company has no debt.
“This quarter's results are consistent with our consumer-based business strategy to drive growth while investing in our future,” said Gregg Hammann, Chairman and Chief Executive Officer. “It also reflects our progress in becoming the global leader in fitness, as our diversified portfolio of brands and products are presented in more places where people shop and exercise.”
“Although we are early in our plan to expand our domestic and international presence, we are the only company in our category positioned across all channels and with a complete line of branded fitness products. Our fast pace of innovation is bringing new fitness tools to consumers, increasing awareness and demand for the benefits of fitness. All of our marketing now incorporates educational elements on fitness to help grow the overall fitness industry.”
For the second quarter of 2005, the Company estimates that earnings will grow by approximately 50 percent to $0.09 to $0.10 per diluted share, and net sales will grow 25 percent to approximately $125 to $130 million compared with the second quarter last year. The Company raised its full year 2005 earnings estimate to $1.17 to $1.19 on net sales growth of more than 15 percent. Because of the seasonal nature of fitness equipment sales, the Company expects more than two-thirds of its earnings to occur in the second half of the year.
NAUTILUS, INC.
Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Data)
(Unaudited)
Three months ended
March 31,
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% of % of
2005 Sales 2004 Sales
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NET SALES $156,388 $130,896
COST OF SALES 79,615 50.9% 74,040 56.6%
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Gross profit 76,773 49.1% 56,856 43.4%
OPERATING EXPENSES:
Selling and marketing 44,922 28.8% 35,742 27.3%
General and administrative 13,436 8.6% 7,215 5.5%
Research and development 2,803 1.8% 1,811 1.4%
Related-party royalties - 0.0% 1,566 1.2%
Third-party royalties 1,474 0.9% 703 0.5%
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Total operating expenses 62,635 40.1% 47,037 35.9%
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OPERATING INCOME 14,138 9.0% 9,819 7.5%
OTHER INCOME:
Interest income 517 0.4% 246 0.2%
Other - net 51 0.0% (7) 0.0%
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Total other income, net 568 0.4% 239 0.2%
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INCOME BEFORE INCOME TAXES 14,706 9.4% 10,058 7.7%
INCOME TAX EXPENSE 5,277 3.4% 3,621 2.8%
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NET INCOME $9,429 6.0% $6,437 4.9%
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BASIC EARNINGS PER SHARE $0.28 $0.20
DILUTED EARNINGS PER SHARE $0.28 $0.19
Weighted average shares outstanding:
Basic shares outstanding 33,168,120 32,611,928
Diluted shares outstanding 34,038,636 33,260,364
