<< Back
10.17.00
DIRECT FOCUS, INC. ANNOUNCES RECORD THIRD QUARTER RESULTS
DIRECT FOCUS, INC. ANNOUNCES RECORD THIRD QUARTER RESULTS
Vancouver, WA - October 17, 2000 - Direct Focus, Inc. (Nasdaq: DFXI), a leading marketing company for fitness and healthy lifestyle products with a highly-effective direct business model, today announced its results for the quarter ended September 30, 2000.
For the third quarter of 2000, Direct Focus reported net sales of $52.7 million, an increase of 66% from $31.8 million in the third quarter of 1999. Net income for the third quarter of 2000 was $11.1 million or $0.69 per diluted share, up 102% from $5.5 million or $0.34 per diluted share for the same period of 1999.
eCommerce sales were $11.5 million for the third quarter of 2000, up 74% sequentially from $6.6 million in the previous quarter.
For the first nine months of 2000, Direct Focus reported net sales of $139.2 million, up 68% from $83.1 million for the same period of 1999. Net income for the first nine months of 2000 was $28.2 million, or $1.76 per diluted share, up 102% from $14.0 million or $0.90 per diluted share for the same period of 1999. The results reported for 1999 exclude an after-tax charge of $2.6 million for a legal settlement.
?We are very pleased with our strong sales and profits for the quarter,? said Brian Cook, President and Chief Executive Officer. ?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. In the Nautilus division, we introduced new products in both our commercial and retail channels to increase sales opportunities and strengthen our brand equity.?
?We are also pleased by the continued growth of our e-Commerce sales, which has proven to be a strong complement to our data-driven business model. We continue to strengthen our information systems infrastructure and management team in anticipation of continued growth. We plan to move into our new building in the fourth quarter in order to consolidate our operations and provide additional capacity for future growth.?
An Internet broadcast of Direct Focus Inc.?s third 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 888-368-4280 (conference ID # 534583). A 48-hour replay will be available by calling 800-642-1687 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
September 30, 2000
For the third quarter of 2000, Direct Focus reported net sales of $52.7 million, an increase of 66% from $31.8 million in the third quarter of 1999. Net income for the third quarter of 2000 was $11.1 million or $0.69 per diluted share, up 102% from $5.5 million or $0.34 per diluted share for the same period of 1999.
eCommerce sales were $11.5 million for the third quarter of 2000, up 74% sequentially from $6.6 million in the previous quarter.
For the first nine months of 2000, Direct Focus reported net sales of $139.2 million, up 68% from $83.1 million for the same period of 1999. Net income for the first nine months of 2000 was $28.2 million, or $1.76 per diluted share, up 102% from $14.0 million or $0.90 per diluted share for the same period of 1999. The results reported for 1999 exclude an after-tax charge of $2.6 million for a legal settlement.
?We are very pleased with our strong sales and profits for the quarter,? said Brian Cook, President and Chief Executive Officer. ?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. In the Nautilus division, we introduced new products in both our commercial and retail channels to increase sales opportunities and strengthen our brand equity.?
?We are also pleased by the continued growth of our e-Commerce sales, which has proven to be a strong complement to our data-driven business model. We continue to strengthen our information systems infrastructure and management team in anticipation of continued growth. We plan to move into our new building in the fourth quarter in order to consolidate our operations and provide additional capacity for future growth.?
An Internet broadcast of Direct Focus Inc.?s third 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 888-368-4280 (conference ID # 534583). A 48-hour replay will be available by calling 800-642-1687 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 Mos. Ended September 30, | 9 Mos. Ended September 30, | |||
| 2000 | 1999 | 2000 | 1999 | |
| ------------ | ------------ | ------------ | ------------ | |
| NET SALES | $52,661,035 | $31,772,893 | $139,249,552 | $83,129,639 |
| COST OF SALES | 13,597,600 | 8,790,565 | 36,847,663 | 23,541,777 |
| ------------ | ------------ | ------------ | ------------ | |
| Gross profit | 39,063,435 | 22,982,328 | 102,401,889 | 59,587,862 |
| ------------ | ------------ | ------------ | ------------ | |
| OPERATING EXPENSES | ||||
| Selling and marketing | 19,054,085 | 13,029,343 | 51,270,420 | 33,038,869 |
| General and administrative | 2,459,320 | 1,124,363 | 6,241,623 | 3,552,143 |
| Royalties | 1,288,811 | 730,012 | 3,454,124 | 1,991,941 |
| Litigation settlement | - | - | - | 4,000,000 |
| ------------ | ------------ | ------------ | ------------ | |
| Total operation expenses | 22,802,216 | 14,883,718 | 60,966,167 | 42,582,953 |
| ------------ | ------------ | ------------ | ------------ | |
| INCOME FROM OPERATIONS | 16,261,219 | 8,098,610 | 41,435,722 | 17,004,909 |
| ------------ | ------------ | ------------ | ------------ | |
| OTHER INCOME(EXPENSE) | ||||
| Interest income | 969,872 | 343,730 | 2,409,584 | 580,898 |
| State business tax and other -net | 83,866 | (24,379) | 168,897 | (122,901) |
| ------------ | ------------ | ------------ | ------------ | |
| Total other income(expense)-net | 1,053,738 | 319,351 | 2,578,481 | 457,997 |
| ------------ | ------------ | ------------ | ------------ | |
| INCOME BEFORE INCOME TAXES | 17,314,957 | 8,417,961 | 44,014,203 | 17,462,906 |
| INCOME TAX EXPENSE | 6,233,387 | 2,922,640 | 15,845,114 | 6,089,313 |
| ------------ | ------------ | ------------ | ------------ | |
| NET INCOME | $11,081,570 | $5,495,321 | $28,169,089 | $11,373,596 |
| ------------ | ------------ | ------------ | ------------ | |
| BASIC EARNINGS PER SHARE | $0.71 | $0.35 | $1.80 | $0.75 |
| DILUTED EARNINGS PER SHARE | $0.69 | $0.34 | $1.76 | $0.73 |
| Basic shares outstanding | 15,681,453 | 15,816,858 | 15,680,125 | 15,115,785 |
| Diluted shares outstanding | 16,082,743 | 16,222,231 | 16,013,776 | 15,518,637 |
Balance Sheet
September 30, 2000
| September 30, 2000 |
December 31, 1999 |
||
| ------------ | ------------ | ||
| ASSETS | |||
| CURRENT ASSETS | |||
| Cash and cash equivalents | $57,589,567 | $35,703,457 | |
| Trade receivables | 5,026,423 | 4,744,213 | |
| Inventories | 14,310,893 | 9,167,554 | |
| Prepaid expenses and other current assets | 2,007,303 | 1,863,951 | |
| Current deferred tax asset | 2,654,254 | 820,789 | |
| ------------ | ------------ | ||
| Total Current assets | 81,588,440 | 52,299,964 | |
| ------------ | ------------ | ||
| PROPERTY, PLANT AND EQUIPMENT | 15,997,528 | 10,644,838 | |
| LONG-TERM DEFERRED TAX ASSET | 116,431 | 0 | |
| OTHER ASSETS -NET | 4,195,535 | 4,364,963 | |
| TOTAL ASSETS | $101,897,934 | $67,309,765 | |
| ------------ | ------------ | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| CURRENT LIABILITIES | |||
| Trade payables | $10,325,074 | $5,871,369 | |
| Accrued liabilities | 5,444,631 | 4,051,540 | |
| Income taxes payable | 4,212,557 | 2,177,236 | |
| Royalty payable to stockholders | 1,211,974 | 893,563 | |
| Customer deposits | 1,458,907 | 1,097,748 | |
| ------------ | ------------ | ||
| Total current liabilities | 22,653,143 | 14,091,456 | |
| ------------ | ------------ | ||
| LONG-TERM DEFERRED TAX LIAILITY | 0 | 187,484 | |
| ------------ | ------------ | ||
| STOCKHOLDERS' EQUITY | |||
| Common stock-authorized 50,000,000 shares of no par value | 16,647,297 | 18,602,420 | |
| Retained earnings | 62,597,494 | 34,428,405 | |
| ------------ | ------------ | ||
| Total stockholders' equity | 79,244,791 | 53,030,825 | |
| ------------ | ------------ | ||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $101,897,934 | $67,309,765 | |
| ------------ | ------------ |