Third Quarter 2020 Net Sales Increased 152% to $155 million Compared to Same Period Last Year
Operating Income of $44 million is the highest in company history
Adjusted EBITDA Was $37 million, representing an Adjusted EBITDA improvement of $43 million
VANCOUVER, Wash.--(BUSINESS WIRE)--Nov. 9, 2020-- Nautilus, Inc. (NYSE: NLS) today reported its unaudited operating results for the third quarter of 2020.
Third Quarter 2020 Highlights Compared to Third Quarter 2019
- Net sales were $155.4 million, up 151.8% compared to $61.7 million for the same period last year, driven primarily by strong demand for the Schwinn® IC4 and Bowflex® C6 connected-fitness bikes, Bowflex® Home Gyms, and SelectTech® weights. Strong execution across the organization coupled with supply chain improvements that began earlier in the year drove record results. However, despite increased factory capacity, the company entered the fourth quarter with $72.8 million in backorders including certain held-for-sale orders of $5.2 million.
- Gross profit was $67.9 million, up 256.3% compared to $19.1 million for the same period last year. Gross margin rates expanded to 43.7% this year compared to 30.9% last year, driven by increased full-priced selling in Direct, improved wholesale margins in Retail, and fixed costs leverage, partially offset by increased transportation costs driven by global logistics disruptions.
- On October 14, 2020, the company entered into an agreement to sell Octane Fitness, Inc. to True Fitness Technology, Inc. for a base purchase price of $25.0 million subject to adjustments for cash and cash equivalents, indebtedness, transaction expenses and working capital. The company recognized a gain on disposal group of $8.3 million related to this transaction. As a result, operating expenses decreased by 12.4% to $23.9 million, compared to $27.3 million last year.
- Operating income was $44.0 million, a $52.3 million improvement versus a loss of $8.3 million for the same period last year. This is the highest quarterly operating income in the company’s history.
- Net income was $33.8 million, or $1.04 per diluted share, compared to last year’s loss of $8.8 million, or -$0.30 per diluted share.
- The following statements exclude the impact of the gain on disposal group this quarter1.
- Adjusted operating expenses increased by 18.2% to $32.3 million compared to $27.3 million last year, primarily due to increased advertising and general and administrative expenses.
- Adjusted operating income improved to $35.7 million compared to an operating loss of $8.3 million last year, driven by sales growth and expanded gross margin rates, partially offset by higher operating expenses.
- Adjusted income from continuing operations improved to $28.0 million, or $0.87 per diluted share, compared to a loss from continuing operations of $8.7 million, or -$0.29 per diluted share.
- Adjusted EBITDA from continuing operations improved to $37.1 million compared to an adjusted EBITDA loss of $5.5 million, an improvement of $42.6 million.
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