The final quarter of fiscal 2009 was a continuation of the first three for Nautilus, Inc. as the company reported more general weakness in all of its major business segments. Net sales for the Vancouver, WA-based fitness manufacturer fell 16% to $53.7 million from $63.9 million in the prior-year period.
For continuing operations, management said the companys Direct segment fell 19.9% to $28.9 million in Q4 from $36.0 million in Q4 2008, due to a decrease in the number of credit approvals through the companys finance partner, along with a reduction in media spending in the weaker economic environment.
Operating losses for the Direct segment fell to $5.8 million from a loss of $3.1 million in the prior-year period. Margins for the segment did improve 270 basis points to 60.7% of sales from a mark of 58.0% percent a year ago, due to a decrease in warranty costs, decreased outbound shipping costs, lower return rates, and other initiatives.
The Retail division saw sales fall 9.4% to $24.0 million from $26.5 million in Q4 2008, as retailers continued to be reluctant to replenish inventory levels due to economic conditions. The company noted that these factors were offset by sales increases from the introduction of new products including the Mobia half-treadmill, half-stairclimber. The Retail divisions operating income increased 45% to $6.0 million from $4.1 million in 2008. Margins for the segment also grew to 32.6% of sales, up from 26.3% in Q4 2008, an increase of 630 basis points.
Net income for the quarter was $5.7 million, or 19 cents per diluted share, compared to a net loss of $41.2 million, or a loss of $1.35 per diluted share, in the fourth quarter of 2008.
