Sales continued to fall steeply at Nautilus, Inc. in the third quarter ended Sept. 30 due to weakness in both the direct and commercial businesses, where sales dropped 34% and 4.5%, respectively.
Management said revenues for the direct business, which plummeted to $38.6 million from $58.8 million in the year ago period, were primarily due to the weak consumer and tight credit environments. The companys decision earlier in the year to suspend sales of the TreadClimber cardio machine had a significant impact on the commercial segment, where revenues were $28.4 million, down from $29.7 million. Retail revenues were flat for the quarter.
Overall sales for the equipment supplier were $93.7 million, plunging nearly 19% from $155.3 million reported in the year ago period. The company reported a loss from continuing operations of $1.15 per diluted share compared to a loss of 46 cents for the year ago period.
Gross margins were 31.7% of net sales compared to 37.6% of net sales in the year ago quarter. Operating expenses were down 35% to $43.1 million versus $66.6 million in the year ago period. Improved operating expenses couldnt offset gross margins, as Nautilus posted a net loss of $34.1 million for the quarter, a 39% drop from a loss of $13.4 million in the year ago period.
Edward Bramson, CEO of Nautilus, said during a conference call that Bill Meadowcroft, current CFO of the company, would be replaced at the end of the year.