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07.26.99
DIRECT FOCUS, INC. POSTS 107 PERCENT SALES GAIN
DIRECT FOCUS, INC. POSTS 107 PERCENT SALES GAIN
VANCOUVER, WA...July 26, 1999...Direct Focus, Inc. (Nasdaq: DFXI) today reported that net income for the second quarter ended June 30, 1999 doubled to $4.0 million from the same 1998 period on 107 percent higher sales before a one-time charge of $2.6 million, after tax, for litigation settlement. Sales for the quarter rose to $25.2 million compared to $12.2 million a year ago.
Excluding the one-time charge, net income of $4.0 million was 100 percent higher than $2.0 million in the comparable year ago period. On a per diluted share basis, earnings, before the one-time charge, were $0.38 - 90 percent higher than $0.20 recorded in the 1998 second quarter. The diluted per share effect of the settlement was $0.25, lowering diluted earnings per share to $0.13.
Working capital, after the settlement charge, was $27.0 million at June 30, 1999 compared to $15.7 million at December 31, 1998. The company's cash and cash equivalent position at the end of the quarter was $27.3 million, 44 percent higher than at fiscal year end.
"We're extremely pleased at the ongoing sales and earnings growth of the company," said Brian Cook, president and chief executive officer of Direct Focus, Inc. "The Nautilus operation continued to make progress in the second quarter, showing a 19 percent improvement over the first quarter with a net loss of $157,000 on $3.7 million in sales.
Cook said that the Internet is emerging as a significant sales avenue for the company's home fitness equipment product line. In the second quarter, 14 percent of total leads were generated via the Internet, which resulted in 21 percent of sales from leads generated in the second quarter.
"With our direct marketing skills, the integration of television commercials, infomercials and the Internet is proving to be powerful. This year, as a percentage of total sales, Internet sales have increased over 100 percent faster than any other channel," Cook said.
For the six months ended June 30, 1999, sales of $51.4 million gained 121 percent from $23.3 million in the same 1998 period. In addition to increasing sales for the company's line of Bowflex home fitness equipment, the Nautilus operation accounted for 27 percent of the increase in sales, or $7.7 million, since its acquisition by Direct Focus in January 1999.
Direct Focus currently markets three lines of products - Bowflex home fitness equipment, Nautilus fitness equipment and Nautilus sleep systems - directly to customers via advertising on television, printed media and the Internet.
This press release contains forward-looking statements relating to anticipated revenues, net income, earnings and the development of the company's products and services, including statements regarding its Nautilus business. Factors that could affect the company's actual results include its reliance on a limited product line, market acceptance of its existing and future products, growth management challenges and difficulties integrating the company's actual results include its reliance on a limited product line, market acceptance of its existing and future products, growth management challenges and difficulties integrating the company's Nautilus operations. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in the company's registration statement on Form S-1 in the section entitled "Risk Factors."
Excluding the one-time charge, net income of $4.0 million was 100 percent higher than $2.0 million in the comparable year ago period. On a per diluted share basis, earnings, before the one-time charge, were $0.38 - 90 percent higher than $0.20 recorded in the 1998 second quarter. The diluted per share effect of the settlement was $0.25, lowering diluted earnings per share to $0.13.
Working capital, after the settlement charge, was $27.0 million at June 30, 1999 compared to $15.7 million at December 31, 1998. The company's cash and cash equivalent position at the end of the quarter was $27.3 million, 44 percent higher than at fiscal year end.
"We're extremely pleased at the ongoing sales and earnings growth of the company," said Brian Cook, president and chief executive officer of Direct Focus, Inc. "The Nautilus operation continued to make progress in the second quarter, showing a 19 percent improvement over the first quarter with a net loss of $157,000 on $3.7 million in sales.
Cook said that the Internet is emerging as a significant sales avenue for the company's home fitness equipment product line. In the second quarter, 14 percent of total leads were generated via the Internet, which resulted in 21 percent of sales from leads generated in the second quarter.
"With our direct marketing skills, the integration of television commercials, infomercials and the Internet is proving to be powerful. This year, as a percentage of total sales, Internet sales have increased over 100 percent faster than any other channel," Cook said.
For the six months ended June 30, 1999, sales of $51.4 million gained 121 percent from $23.3 million in the same 1998 period. In addition to increasing sales for the company's line of Bowflex home fitness equipment, the Nautilus operation accounted for 27 percent of the increase in sales, or $7.7 million, since its acquisition by Direct Focus in January 1999.
Direct Focus currently markets three lines of products - Bowflex home fitness equipment, Nautilus fitness equipment and Nautilus sleep systems - directly to customers via advertising on television, printed media and the Internet.
This press release contains forward-looking statements relating to anticipated revenues, net income, earnings and the development of the company's products and services, including statements regarding its Nautilus business. Factors that could affect the company's actual results include its reliance on a limited product line, market acceptance of its existing and future products, growth management challenges and difficulties integrating the company's actual results include its reliance on a limited product line, market acceptance of its existing and future products, growth management challenges and difficulties integrating the company's Nautilus operations. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in the company's registration statement on Form S-1 in the section entitled "Risk Factors."