Nautilus Reports 22 Percent Decrease in 2019 Revenue

Nautilus Q4 2019 results
Over the last year, Nautilus strategically reduced its advertising spending while refreshing its brand, resulting in lower direct segment sales. In July 2019, Jim Barr replaced Bruce Cazenave as CEO. In February 2020, the company refinanced with a $70 million credit facility.(Photo courtesy Nautilus.)

Nautilus Inc., Vancouver, Washington, reported $104.2 million in fourth quarter 2019 revenue and $309.3 million in full-year 2019 revenue, representing year-over-year decreases of 9.7 percent and 22 percent, respectively, according to financials released by the company on Feb. 24.

Brands under Nautilus include Bowflex, Nautilus, Octane Fitness, Schwinn and Universal.

The company reported operating losses of $5 million for the quarter and $100.5 million for the year, the latter of which is a decrease of 584 percent from 2018's $20.8 million in operating income. The change was attributed to lower media spending, lower gross margins and lower sales.

The company's direct segment sales decreased 28.1 percent (to $35.9 million) for the quarter and 35.3 percent (to $119.6 million) for the year. Additionally, retail segment sales increased 4.8 percent (to $67.5 million) during the quarter and decreased 10.3 percent ($186.5 million) for the year.

Nautilus' executives have been transparent about its challenges over the last year. The company, at times, strategically reduced its advertising spending while refreshing its brand, resulting in lower direct segment sales. Then, in July 2019, Jim Barr replaced Bruce Cazenave as CEO. In February 2020, the company refinanced with a $70 million credit facility.

“We are seeing signs that the improvements made during the latter half of 2019 are beginning to benefit our business," Barr said in the earnings report. "We enter 2020 in a stronger financial position. ... We are very encouraged by customer reception of our new digital platform and new product offerings as well as the improvements in our cost structure, but we are very early in our transformation process. Throughout 2020, we will continue to focus on unlocking the potential of our brands and returning the company to sustainable profitable growth, but we do not expect the changes we are making to our company will result in immediate linear quarterly improvements.”

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