Nautilus Inc., Vancouver, Washington, has accepted the resignation of CEO Bruce Cazenave, after the release of the company’s “disappointing” full-year 2018 and fourth quarter financial results.
The company has appointed M. Carl Johnson III, chairman of Nautilus’ board of directors, as interim CEO, according to a Feb. 26 filing with the Securities and Exchange Commission (SEC). The board has enlisted the aid of an executive search firm to find a permanent CEO.
Cazenave, who joined Nautilus in May 2011, submitted his resignation to the board on Feb. 26, and it was made effective March 1, according to the SEC filing. During his tenure, Cazenave oversaw periods of revenue growth as well as Nautilus’ acquisition of Octane Fitness in late 2015.
In January 2019, Cazenave warned investors that Nautilus’ forthcoming financial results were expected to disappoint. This warning prompted a 38.3 percent drop in Nautilus’ share price (NYSE: NLS), according to NASDAQ.
In February, the company reported decreases in its full-year 2018 revenue (2.3 percent) and its fourth quarter revenue (9.7 percent). (Nautilus also reported virtually flat revenue in 2017.) The results were attributed to a 30 percent decline in direct segment sales, which is related to lower-than-expected sales for Nautilus' refreshed Max Trainer product line, featuring its new Max Intelligence digital offering.
During a Feb. 25 call with shareholders, Cazenave forecasted that 2019 would be a challenging year for Nautilus. This prompted a 23.75 percent drop in the company’s share price.
“2018 was a challenging year, and we expect 2019 to be equally challenging with stepped-up competition, marketing retooling in the works and high retail channel inventories that need to be drawn down, although we remain confident in the fundamentals of the business and that our strategic priorities are the right ones,” Cazenave said in the call.
Johnson, 70, joined Nautilus’ board in July 2010. He was previously an executive vice president of Big Heart Pet Brand, now a division of J.M. Smucker Company.
Nautilus’ board has since accepted Johnson’s resignation from its compensation committee, according to the SEC filing.