Nautilus Inc. second quarter net sales fell 36.4% to $60.8 million, compared to net sales of $95.6 million for the second quarter of 2008. On an operating basis, the retail and direct businesses were profitable while the commercial business recorded a loss. The Company is considering a strategic change to focus its efforts on a consumer only business model and, as a result, also is looking at strategic alternatives for the commercial business.

The retail business generated $1.2 million of income from operations compared to a loss of $0.2 million for the previous year period and the direct business generated $0.6 million of income from operations compared to a loss of $0.6 million in the same period last year. The commercial business had a loss from continuing operations of $7.2 million in the second quarter of 2009 compared to a loss of $1.1 million for the same period last year.


The company reported a loss from continuing operations for the second quarter 2009 of $20.8 million, or ($0.68) per diluted share. Included in the loss from continuing operations were pre-tax restructuring charges of $11.8 million. The restructuring charges are principally related to a non-cash write-off of the company’s leasehold improvements resulting from the termination of its corporate facilities lease in Vancouver, Washington. The company has executed a new lease for smaller space in the same location and expects to save approximately $3.3 million annually from the new lease arrangement, with full savings beginning in the fourth quarter of 2009.
 
In the second quarter of 2008, loss from continuing operations was $9.6 million or ($0.30) per diluted share. Included in the loss from continuing operations were pre-tax charges of $2.5 million primarily related to severance, inventory reserves and anticipated settlements related to licensing agreements.

Excluding the restructuring charges mentioned above, the company's adjusted loss from continuing operations before income taxes was $9.7 million for the quarter ended June 30, 2009. For the corresponding period in 2008, excluding the restructuring charges mentioned above, adjusted loss from continuing operations before income taxes was $11.9 million.

Comparative net sales by business segment were as follows:































































































































































Three Months Ended

 

 

 

 

 

 

 

 


($ thousands)

 

 

Jun 30, 2009

 

 

 

Jun 30, 2008

 

 

 

$ Change

 

 

 

% Change


Direct

 

 

$

28,200

 

 

 

$

41,294

 

 

 

$

(13,094

)

 

 

 

-31.7

%


Retail

 

 

 

11,356

 

 

 

 

19,000

 

 

 

 

(7,644

)

 

 

 

-40.2

%


Commercial

 

 

 

20,720

 

 

 

 

34,366

 

 

 

 

(13,646

)

 

 

 

-39.7

%


Corporate

 

 

 

514

 

 

 

 

904

 

 

 

 

(390

)

 

 

 

-43.1

%


Net Sales

 

 

$

60,790

 

 

 

$

95,564

 

 

 

$

(34,774

)

 

 

 

-36.4

%


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

&nb

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