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04.17.01
DIRECT FOCUS ANNOUNCES RECORD FIRST QUARTER RESULTS
DIRECT FOCUS ANNOUNCES RECORD FIRST QUARTER RESULTS
Vancouver, WA?April 17, 2001--Direct Focus, Inc. (Nasdaq: DFXI), a marketing company for fitness and healthy lifestyle products with a direct business model, today announced its results for the quarter ended March 31, 2001.
For the first quarter of 2001, Direct Focus reported net sales of $74.9 million, an increase of 58% from $47.3 million for the first quarter of 2000. Net income for the first quarter of 2001 was $14.7 million or $0.61 per diluted share, up 65% from $8.9 million or $0.37 per diluted share for the same period of 2000.
The Company also reported continued growth in its eCommerce revenue. eCommerce sales for the first quarter were $14.9 million, up 198% from $5.0 million for the same period of 2000. As of March 31, 2001, the Company had cash and short-term investments of $91.8 million, up $14.7 million from December 31, 2000.
"We are very pleased with our record sales and profits for the quarter and our strong positive cash flows," said Brian Cook, President and Chief Executive Officer. "We continue to see sustained sales growth with our Bowflex and Nautilus product lines as we leverage our direct business model and powerful brand names. We believe that our products are addressing the fitness and healthy lifestyles needs of our customers, and we are very excited about our growth opportunities this year and beyond."
?In our direct business segment, sales of our Bowflex products and our Nautilus Sleep System continue to meet our growth targets. We are also very pleased with the continued expansion of our eCommerce channel, which has proven to be a strong complement to our data-driven business model. In our commercial and retail segment, we have continued to introduce new products to strengthen Nautilus brand equity, and we are well positioned for strong growth in the second half of the year, which is historically the best season for these products.?
A listen-only broadcast of Direct Focus? first quarter conference call (2:00 PM Pacific/5:00 PM Eastern) will be available today on the Internet at www.directfocusinc.com under ?Investor Relations? or by calling 800-530-8983 (Reservation No. 18469587). A 48-hour phone replay will be available by calling 800-633-8284 or +1 858-812-6440 (Reservation No. 18469587). A replay will also be available through April 30, 2001 on the Internet at www.directfocusinc.com under ?Investor Relations.?
About Direct Focus, Inc.
Direct Focus, Inc. is a marketing company for fitness and healthy lifestyle products with a direct business model. The Company currently markets its Bowflex line of home fitness equipment and Nautilus Sleep Systems directly to consumers, using an effective combination of television advertising, 800-call centers and Web sites. The Company also sells its Nautilus commercial fitness equipment directly to health clubs and other institutions, and its Nautilus consumer fitness products through retail athletic stores. The Company is headquartered in Vancouver, Washington. Direct Focus is located on the Web at www.directfocusinc.com.
This press release contains forward-looking statements relating to anticipated sales and the development of Direct Focus' products and services, including statements regarding its Nautilus business. Factors that could affect Direct Focus' actual results include its reliance on a limited product line, fluctuations in advertising rates, market acceptance of its existing and future products, growth management challenges, and general economic conditions. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in Direct Focus' annual report on Form 10-K for the fiscal year ended December 31, 2000.DIRECT FOCUS, INC. - CONSOLIDATED
Statement of Operations
DIRECT FOCUS, INC.-CONSOLIDATED
Balance Sheet
For the first quarter of 2001, Direct Focus reported net sales of $74.9 million, an increase of 58% from $47.3 million for the first quarter of 2000. Net income for the first quarter of 2001 was $14.7 million or $0.61 per diluted share, up 65% from $8.9 million or $0.37 per diluted share for the same period of 2000.
The Company also reported continued growth in its eCommerce revenue. eCommerce sales for the first quarter were $14.9 million, up 198% from $5.0 million for the same period of 2000. As of March 31, 2001, the Company had cash and short-term investments of $91.8 million, up $14.7 million from December 31, 2000.
"We are very pleased with our record sales and profits for the quarter and our strong positive cash flows," said Brian Cook, President and Chief Executive Officer. "We continue to see sustained sales growth with our Bowflex and Nautilus product lines as we leverage our direct business model and powerful brand names. We believe that our products are addressing the fitness and healthy lifestyles needs of our customers, and we are very excited about our growth opportunities this year and beyond."
?In our direct business segment, sales of our Bowflex products and our Nautilus Sleep System continue to meet our growth targets. We are also very pleased with the continued expansion of our eCommerce channel, which has proven to be a strong complement to our data-driven business model. In our commercial and retail segment, we have continued to introduce new products to strengthen Nautilus brand equity, and we are well positioned for strong growth in the second half of the year, which is historically the best season for these products.?
A listen-only broadcast of Direct Focus? first quarter conference call (2:00 PM Pacific/5:00 PM Eastern) will be available today on the Internet at www.directfocusinc.com under ?Investor Relations? or by calling 800-530-8983 (Reservation No. 18469587). A 48-hour phone replay will be available by calling 800-633-8284 or +1 858-812-6440 (Reservation No. 18469587). A replay will also be available through April 30, 2001 on the Internet at www.directfocusinc.com under ?Investor Relations.?
About Direct Focus, Inc.
Direct Focus, Inc. is a marketing company for fitness and healthy lifestyle products with a direct business model. The Company currently markets its Bowflex line of home fitness equipment and Nautilus Sleep Systems directly to consumers, using an effective combination of television advertising, 800-call centers and Web sites. The Company also sells its Nautilus commercial fitness equipment directly to health clubs and other institutions, and its Nautilus consumer fitness products through retail athletic stores. The Company is headquartered in Vancouver, Washington. Direct Focus is located on the Web at www.directfocusinc.com.
This press release contains forward-looking statements relating to anticipated sales and the development of Direct Focus' products and services, including statements regarding its Nautilus business. Factors that could affect Direct Focus' actual results include its reliance on a limited product line, fluctuations in advertising rates, market acceptance of its existing and future products, growth management challenges, and general economic conditions. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in Direct Focus' annual report on Form 10-K for the fiscal year ended December 31, 2000.
Statement of Operations
| 3 Mos. Ended March 31, | ||
| 2001 | 2000 | |
| ------------ | ------------ | |
| NET SALES | $74,854,724 | $47,332,880 |
| COST OF SALES | 25,303,989 | 15,184,311 |
| ------------ | ------------ | |
| Gross profit | 49,550,735 | 32,148,569 |
| ------------ | ------------ | |
| EXPENSES | ||
| Selling and marketing | 23,151,635 | 15,816,575 |
| General and administrative | 3,202,643 | 1,959,368 |
| Royalties | 1,662,904 | 1,013,987 |
| ------------ | ------------ | |
| Total operation expenses | 28,017,182 | 18,789,930 |
| ------------ | ------------ | |
| INCOME FROM OPERATIONS | 21,533,553 | 13,358,639 |
| ------------ | ------------ | |
| OTHER INCOME(EXPENSE) | ||
| Interest income | 1,394,745 | 615,517 |
| other -net | 101,400 | (39,147) |
| ------------ | ------------ | |
| Total other income(expense)-net | 1,496,145 | 576,370 |
| ------------ | ------------ | |
| INCOME BEFORE INCOME TAXES | 23,029,698 | 13,935,009 |
| INCOME TAX EXPENSE | 8,290,541 | 5,016,567 |
| ------------ | ------------ | |
| NET INCOME | $14,739,157 | $8,918,442 |
| ------------ | ------------ | |
| BASIC EARNINGS PER SHARE | $0.62 | $0.38 |
| DILUTED EARNINGS PER SHARE | $0.61 | $0.37 |
| Basic shares outstanding | 23,661,615 | 23,604,752 |
| Diluted shares outstanding | 24,154,764 | 24,160,730 |
Balance Sheet
| March 31, 2001 |
December 31, 2000 |
||
| ------------ | ------------ | ||
| ASSETS | |||
| CURRENT ASSETS | |||
| Cash | $91,835,558 | $77,181,064 | |
| Trade receivables | 4,638,974 | 4,941,286 | |
| Inventories | 17,558,829 | 12,653,117 | |
| Prepaid expenses and other current assets | 357,776 | 591,453 | |
| Current deferred tax asset | 1,055,425 | 950,363 | |
| ------------ | ------------ | ||
| Total Current assets | 115,446,562 | 96,317,283 | |
| ------------ | ------------ | ||
| PROPERTY, PLANT AND EQUIPMENT | 17,006,514 | 16,668,884 | |
| OTHER ASSETS | 4,094,410 | 4,140,277 | |
| TOTAL ASSETS | $136,547,486 | $117,126,444 | |
| ------------ | ------------ | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| CURRENT LIABILITIES | |||
| Trade payables | $17,854,712 | $12,335,776 | |
| Accrued liabilities | 5,872,230 | 5,344,225 | |
| Income taxes payable | 8,723,189 | 2,542,967 | |
| Royalty payable to stockholders | 1,586,168 | 1,481,886 | |
| Customer deposits | 2,251,994 | 2,092,611 | |
| ------------ | ------------ | ||
| Total current liabilities | 36,288,293 | 23,797,465 | |
| ------------ | ------------ | ||
| LONG-TERM DEFERRED TAX LIAILITY | 489,776 | 462,004 | |
| ------------ | ------------ | ||
| STOCKHOLDERS' EQUITY | |||
| Common stock | 8,975,761 | 16,812,476 | |
| Retained earnings | 90,793,656 | 76,054,499 | |
| ------------ | ------------ | ||
| Total stockholders' equity | 99,769,417 | 92,866,975 | |
| ------------ | ------------ | ||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $136,547,486 | $117,126,444 | |
| ------------ | ------------ |