<< Back
01.23.01
DIRECT FOCUS ANNOUNCES RECORD FOURTH QUARTER AND YEAR-END RESULTS
DIRECT FOCUS ANNOUNCES RECORD FOURTH QUARTER AND YEAR-END RESULTS
Vancouver, WA- January 23, 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 and year ended December 31, 2000.
For the fourth quarter of 2000, Direct Focus reported net sales of $70.6 million, an increase of 70% from $41.6 million in the fourth quarter of 1999. For 2000, the Company reported net sales of $223.9 million, up 68% from $133.1 million for 1999. These results reflect the adoption of FASB EITF 00-10 ("Accounting for Shipping and Handling Costs"). As required by the EITF, the Company now recognizes proceeds from shipping product to customers as net revenue. This accounting change has no impact on the Company's net income or earnings per share.
The Company also reported continued growth in its eCommerce revenue. eCommerce sales in the fourth quarter were $13.7 million, up 251% from $3.9 million in the same period of 1999.
Net income for the fourth quarter of 2000 was $13.5 million or $0.83 per diluted share, up 50% from $9.0 million or $0.56 per diluted share for the same period of 1999. Net income for 2000 was $41.6 million or $2.60 diluted share, up 82% from $22.9 million or $1.47 per diluted share for the previous year. The results reported for 1999 exclude an after-tax charge of $2.6 million for a legal settlement.
?We are very pleased with our record sales and profits for the quarter and the year,? said Brian Cook, President and Chief Executive Officer. ?Despite a softening economic environment, we continue to see sustained sales growth across our Bowflex and Nautilus product lines as we leverage our direct business model and powerful brand names. We are very pleased with the continued growth of our e-Commerce sales, which has proven to be a strong complement to our data-driven business model.
?Sales of our Nautilus Sleep System achieved our target for the year and demonstrated our ability to launch new products through our direct division. In addition, the success of our new products in our commercial and retail division are strengthening Nautilus brand equity. We?re very excited about our growth opportunities in 2001 and beyond.?
An Internet broadcast of Direct Focus? fourth quarter conference call (2:00 PM Pacific/5:00 PM Eastern) will be available today at www.directfocusinc.com under ?Investor Relations? or by calling 800-886-8681 (conference ID # 17574093). A 48-hour replay will be available by calling 800-633-8284 or at www.directfocusinc.com.
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, net income, earnings 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, market acceptance of its existing and future products and growth management challenges. 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, 1999.DIRECT FOCUS, INC. - CONSOLIDATED
Statement of Operations
DIRECT FOCUS, INC.-CONSOLIDATED
Balance Sheet
June 30, 2000
For the fourth quarter of 2000, Direct Focus reported net sales of $70.6 million, an increase of 70% from $41.6 million in the fourth quarter of 1999. For 2000, the Company reported net sales of $223.9 million, up 68% from $133.1 million for 1999. These results reflect the adoption of FASB EITF 00-10 ("Accounting for Shipping and Handling Costs"). As required by the EITF, the Company now recognizes proceeds from shipping product to customers as net revenue. This accounting change has no impact on the Company's net income or earnings per share.
The Company also reported continued growth in its eCommerce revenue. eCommerce sales in the fourth quarter were $13.7 million, up 251% from $3.9 million in the same period of 1999.
Net income for the fourth quarter of 2000 was $13.5 million or $0.83 per diluted share, up 50% from $9.0 million or $0.56 per diluted share for the same period of 1999. Net income for 2000 was $41.6 million or $2.60 diluted share, up 82% from $22.9 million or $1.47 per diluted share for the previous year. The results reported for 1999 exclude an after-tax charge of $2.6 million for a legal settlement.
?We are very pleased with our record sales and profits for the quarter and the year,? said Brian Cook, President and Chief Executive Officer. ?Despite a softening economic environment, we continue to see sustained sales growth across our Bowflex and Nautilus product lines as we leverage our direct business model and powerful brand names. We are very pleased with the continued growth of our e-Commerce sales, which has proven to be a strong complement to our data-driven business model.
?Sales of our Nautilus Sleep System achieved our target for the year and demonstrated our ability to launch new products through our direct division. In addition, the success of our new products in our commercial and retail division are strengthening Nautilus brand equity. We?re very excited about our growth opportunities in 2001 and beyond.?
An Internet broadcast of Direct Focus? fourth quarter conference call (2:00 PM Pacific/5:00 PM Eastern) will be available today at www.directfocusinc.com under ?Investor Relations? or by calling 800-886-8681 (conference ID # 17574093). A 48-hour replay will be available by calling 800-633-8284 or at www.directfocusinc.com.
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, net income, earnings 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, market acceptance of its existing and future products and growth management challenges. 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, 1999.
Statement of Operations
| 3 Months Ended December 31, | 12 Months Ended December 31, | |||
| 2000 | 1999 | 2000 | 1999 | |
| ------------ | ------------ | ------------ | ------------ | |
| NET SALES | 70,629,117 | 41,588,689 | 223,927,365 | 133,078,513 |
| COST OF SALES | 24,677,260 | 14,580,651 | 75,573,619 | 46,482,613 |
| ------------ | ------------ | ------------ | ------------ | |
| Gross profit | 45,951,857 | 27,008,038 | 148,353,746 | 86,595,900 |
| ------------ | ------------ | ------------ | ------------ | |
| OPERATING EXPENSES | ||||
| Selling and marketing | 22,239,255 | 11,590,956 | 73,509,675 | 44,629,825 |
| General and administrative | 2,562,823 | 684,661 | 8,804,446 | 4,236,804 |
| Royalties | 1,525,163 | 905,337 | 4,979,287 | 2,897,278 |
| Litigation settlement | - | - | - | 4,000,000 |
| ------------ | ------------ | ------------ | ------------ | |
| Total operation expenses | 26,327,241 | 13,180,954 | 61,060,338 | 30,831,993 |
| ------------ | ------------ | ------------ | ------------ | |
| INCOME FROM OPERATIONS | 19,624,616 | 13,827,084 | 61,060,338 | 30,831,993 |
| ------------ | ------------ | ------------ | ------------ | |
| OTHER INCOME(EXPENSE) | ||||
| Interest income | 1,222,409 | 422,688 | 3,631,993 | 1,003,586 |
| Other-net | 178,278 | 125,638 | 347,175 | 2,737 |
| ------------ | ------------ | ------------ | ------------ | |
| Total other income(expense)-net | 1,400,687 | 548,326 | 3,979,168 | 1,006,323 |
| ------------ | ------------ | ------------ | ------------ | |
| INCOME BEFORE INCOME TAXES | 21,025,303 | 14,375,410 | 65,039,506 | 31,838,316 |
| INCOME TAX EXPENSE | 7,568,298 | 5,406,112 | 23,413,412 | 11,495,425 |
| ------------ | ------------ | ------------ | ------------ | |
| NET INCOME | $13,457,005 | $8,969,298 | $41,626,094 | $20,342,891 |
| ------------ | ------------ | ------------ | ------------ | |
| BASIC EARNINGS PER SHARE | $0.86 | $0.57 | $2.65 | $1.33 |
| DILUTED EARNINGS PER SHARE | $0.83 | $0.56 | $2.60 | $1.30 |
| Basic shares outstanding | 15,693,732 | 15,644,619 | 15,683,379 | 15,248,426 |
| Diluted shares outstanding | 16,137,031 | 16,081,169 | 15,998,829 | 15,637,812 |
Balance Sheet
June 30, 2000
| December 31, 2000 |
December 31, 1999 |
||
| ------------ | ------------ | ||
| ASSETS | |||
| CURRENT ASSETS | |||
| Cash and cash equivalents | $77,181,064 | $35,703,457 | |
| Trade receivables | 4,941,286 | 4,744,213 | |
| Inventories | 12,653,117 | 9,167,554 | |
| Prepaid expenses and other current assets | 591,453 | 1,863,951 | |
| Deferred income taxes | 950,363 | 820,789 | |
| ------------ | ------------ | ||
| Total Current assets | 96,317,283 | 52,299,964 | |
| ------------ | ------------ | ||
| PROPERTY, PLANT AND EQUIPMENT | 16,668,884 | 10,644,838 | |
| OTHER ASSETS | 4,140,277 | 4,364,963 | |
| TOTAL ASSETS | $117,126,444 | $67,309,765 | |
| ------------ | ------------ | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| CURRENT LIABILITIES | |||
| Trade payables | $12,335,776 | $5,871,369 | |
| Accrued liabilities | 5,344,225 | 4,051,540 | |
| Income taxes payable | 2,542,967 | 2,177,236 | |
| Royalty payable to stockholders | 1,481,886 | 893,563 | |
| Customer deposits | 2,092,611 | 1,097,748 | |
| ------------ | ------------ | ||
| Total current liabilities | 23,797,465 | 14,091,456 | |
| ------------ | ------------ | ||
| LONG-TERM DEFERRED INCOME TAXES | 462,004 | 187,484 | |
| ------------ | ------------ | ||
| STOCKHOLDERS' EQUITY | |||
| Common stock | 16,812,476 | 18,602,420 | |
| Retained earnings | 76,054,499 | 34,428,405 | |
| ------------ | ------------ | ||
| Total stockholders' equity | 92,866,975 | 53,030,825 | |
| ------------ | ------------ | ||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $117,126,444 | $67,309,765 | |
| ------------ | ------------ |