Nautilus Inc., Vancouver, Washington, reported $115.4 million in fourth quarter 2018 revenue and $396.8 million in 2018 full-year revenue, representing year-over-year decreases of 9.7 percent and 2.3 percent, respectively, according to financials released by the company on Feb. 25.
Brands under Nautilus include Bowflex, Nautilus, Octane Fitness, Schwinn and Universal.
The final sales figures were in line with previously issued revenue estimates that Nautilus CEO Bruce Cazenave categorized as disappointing. He attributed the fourth quarter's revenue decline to a 30 percent drop in direct segment sales and low-consumer awareness surrounding Max Intelligence, its new cloud-based digital offering.
“While there were pockets of growth and profit improvement, the overall results for the quarter were clearly below our expectations," Cazenave said. "Our direct segment's disappointing results more than offset the strong retail growth primarily due to much slower than expected sales of our refreshed Max Trainer product line launched in November which now incorporates an innovative digital personalized coaching platform called Max Intelligence. We partially attribute the reduced sales of the Max Trainer product to low consumer awareness and understanding of this added digital capability which delivers a greatly enhanced consumer experience.
"The negative impact of slow initial traction of the Max Intelligence platform was magnified because the launch coincided with the critical holiday and fitness season, but there were many valuable lessons during these first two months of introduction," Cazenave said, noting that he is still confident in Max Intelligence's potential.
Nautilus' 2018 operating income was $20.8 million compared to $36.3 million in 2017. Its full-year EBITDA from continuing operations totaled $30 million versus $45.2 million during the previous year.
The company's financial report also highlighted two recent business ventures. In December 2018, Nautilus acquired mixed-reality platform RunSocial, allowing users to walk, run or bike through scenic 360-degree locations around the world. During the first quarter of 2019, Nautilus also invested in music provider Feed.fm and agreed to a partnership with artificial intelligence brand Vi Technologies Inc.