Nautilus, Inc. Delivers Record Second Quarter Results
Second Quarter 2020 Net Sales Increased 94% to
Second Quarter 2020 Direct Segment Sales Increased 142% and Retail Segment Sales Increased 68% Compared to Same Period Last Year
Operating Loss Was
Adjusted EBITDA Was
Second Quarter 2020 Highlights Compared to Second Quarter 2019
-
Net sales were
$114.2 million , up 93.5% compared to$59.0 million , driven primarily by strong demand for cardio and strength products, particularly our connected-fitness bikes,Max Trainer ® and treadmills. Our ability to restart and then accelerate our supply chain allowed us to better respond to the heightened demand that began in March when COVID-19 shelter-in-place orders were first put in place. However, despite increased supply capacity, we entered Q3 with$34.2 million in backorders. -
Gross profit was
$47.4 million , up 170.6% compared to$17.5 million last year. Gross margin rates expanded to 41.5% this year compared to 29.7% last year, driven by favorable product and customer mix and fixed costs leverage, partially offset by higher product landed costs. As a reminder, our products are now subject to 7.5% tariffs versus no tariff last year, and shipping costs fromAsia are higher due to constrained supply in logistics. -
In second quarter 2020, the company recognized a non-cash loss on disposal group of
$29.0 million related to the planned sale ofOctane Fitness ®. In the second quarter of 2019, the company recognized an impairment of$72.0 million for goodwill and other intangible assets. As a result, operating expenses decreased by 47.0% to$54.5 million , compared to$102.9 million last year. -
Operating loss was
$7.1 million , compared to a loss of$85.4 million last year. The$78 million improvement was driven by lower operating expenses, sales growth, and expanded gross margin rates. Net loss was$5.1 million , or -$0.17 cents per diluted share, compared to last year's loss of$78.9 million , or -$2.66 per diluted share. -
The following statements exclude the impact of the loss on disposal group this year and the impairment last year1.
-
Adjusted operating expenses decreased by 17.6% to
$25.5 million compared to$30.9 million last year, primarily due to continued expense discipline and lower advertising expenses. Customer acquisition costs were meaningfully lower this year as the company pulled back on paid advertising, given strong organic demand and inventory scarcity. -
Adjusted operating income improved to a record
$21.9 million compared to an operating loss of$13.4 million last year, driven by sales growth, expanded gross margin rates, and lower operating expenses. -
Adjusted income from continuing operations improved to
$16.8 million , or$0.56 per diluted share, compared to a loss from continuing operations of$9.8 million , or -$0.33 per diluted share. -
Adjusted EBITDA from continuing operations improved to
$24.7 million compared to an adjusted EBITDA loss of$10.5 million , an improvement of$35 million .
-
Adjusted operating expenses decreased by 17.6% to
1 See "Reconciliation of Non-GAAP Financial Measures" and "Loss on
Management Comments
“The second quarter of 2020 was one of the strongest quarters ever for our Company; highlighted by record sales, almost 1,200 basis point increase in gross margins, and a
Second Quarter 2020 Segment Results Compared to Second Quarter 2019
Direct Segment
-
Net sales were
$50.4 million , up 142.1%, from$20.8 million last year, driven primarily by the company's cardio products which grew 183.4%, led by connected-fitness bikes, Bowflex® C6 and Schwinn® IC4, and the Max Trainer®. This was the first quarter over quarter ofMax Trainer ® positive sales growth for this segment since the fourth quarter of 2017. Strength product sales growth was limited by inventory scarcity, particularly of the popular SelectTech® weights. -
As of
June 30, 2020 , backlog totaled$20.6 million compared to$8.0 million as ofMarch 31, 2020 , which represents unfulfilled consumer orders and is net of current promotional programs and sales discounts. - Gross margin rate was 54.6%, up from 43.3%, primarily driven by favorable product mix and fixed costs leverage, partially offset by higher product landed costs.
-
Segment contribution income was
$17.0 million , compared to loss of$6.3 million , last year. The$23.3 million improvement was primarily driven by higher net sales, expanded gross margin rates, and$4.2 million reduction in media spend. Advertising expenses were$2.4 million for the second quarter of 2020 compared to$6.6 million for the same period in 2019. -
Combined consumer credit approvals by our primary and secondary
U.S. third-party financing providers for the second quarter of 2020 were 48.4%, compared to 53.2% in the same period of 2019. The decrease in approvals reflects lower credit quality applications.
Retail Segment
-
Net sales were
$62.9 million , up 68.1%, from$37.5 million . Cardio sales increased by 88.2% driven by the Schwinn® IC4 connected-fitness bikes andMax Trainer ®. This was the first quarter over quarter ofMax Trainer ® positive sales growth for this segment since the fourth quarter of 2018. Strength product sales growth of 22.2% was limited by inventory scarcity of the popular SelectTech® weights and benches. Excluding sales related to our Octane brand, second quarter of 2020 net sales for the Retail segment grew 95% versus the second quarter of 2019. -
As of
June 30, 2020 , backlog totaled$13.6 million compared to$5.8 million as ofMarch 31, 2020 , primarily related to customer orders including firm orders for future shipments. The estimated future revenues are net of contractual rebates and consideration payable for applicable Retail customers. - Retail customer, Amazon.com, had sales greater than 10% of total company net sales. Amazon.com accounted for 18.0% of total company net sales this year versus 20.9% last year.
-
Gross margin rate was 30.3%, up from 20.8% last year, primarily driven by favorable sales mix and fixed costs leverage, partially offset by higher product landed costs due to increased tariffs and shipping costs from our suppliers in
Asia . -
Segment contribution income was
$11.6 million compared to loss of$0.2 million . The$11.8 million improvement was primarily driven by higher sales and leveraging of fixed costs.
Balance Sheet and Other Key Highlights
As of
-
Cash, cash equivalents and restricted cash were
$47.9 million , and debt was$14.8 million , compared to cash and cash equivalents of$11.1 million and debt of$14.1 million as ofDecember 31, 2019 . -
$28.6 million was available for borrowing under the Wells Fargo Asset Based Lending Revolving Facility. -
Accounts receivable was
$33.7 million , compared to$54.6 million as ofDecember 31, 2019 . The decrease in accounts receivable was primarily due to the timing of customer payments and certain accounts receivable included in held-for-sale. -
Inventory was
$21.3 million , compared to$54.8 million as ofDecember 31, 2019 . The decrease in inventory was primarily due to the surge in demand for home-fitness products and certain inventory included in held-for-sale. Strong customer preference for our Bowflex® and Schwinn® products drove record-setting traffic depleting our entire stock of consumer products. Our inventory turns this quarter were at historic highs and a growing portion of sales in our retail segment are being fulfilled directly from the supplier. -
To secure factory capacity, we routinely issue non-cancelable purchase obligations for expected product deliveries in the next twelve months. As of
June 30, 2020 , there were approximately$127.7 million of non-cancelable purchase obligations, compared to$20.4 million last year. As ofMarch 31, 2020 andDecember 31, 2019 , the amounts were$34.6 million and$28.4 million , respectively. -
Trade payables were
$45.2 million , 39.1% lower than compared to$74.3 million as ofDecember 31, 2019 . The decrease in trade payables was primarily due to timing of payments for inventory, reduced advertising related payments and certain payables included in held-for-sale. -
Capital expenditures totaled
$4.7 million as ofJune 30, 2020 .
Forward Looking Guidance
- Our second quarter results did not follow the typical seasonality in our business, and given the highly volatile environment, we believe historical relationships may not hold over the next few quarters.
- Our perspective on continued consumer demand depends in part on the duration of the constraints placed on gyms by local governmental authorities and prevailing consumer comfort regarding returning to gyms. Given this uncertainty, we are not providing specific guidance for the remainder of the fiscal year 2020, but we are providing the following insight into factors that may affect our performance.
- We believe that, in the near-term, demand for our products will continue to be elevated relative to pre-COVID levels, and that consumers will react favorably to the new products that we are launching later this year. However, structural production constraints in our asset-light model will likely limit our ability to fulfill all the demand. In addition, any unforeseen disruptions to our supply chain could further impede our ability to meet this demand and could also impact our sales in any particular quarter. Gross margins will be further pressured by increased logistics costs as demand for logistics services is currently outstripping supply. Lastly, we expect sales and marketing expenses for the remainder of the year to be higher than they were in the first half of the year, driven by launch marketing for our new JRNY®-connected products.
-
We are reiterating our full year capital guidance range of
$8 million to$10 million for 2020.
Conference Call
Nautilus will discuss second quarter 2020 operating results during a live conference call and webcast on
A telephonic playback will be available from
About
Headquartered in
Forward-Looking Statements
This press release includes forward-looking statements (statements which are not historical facts) within the meaning of the Private Securities Litigation Reform Act of 1995, including: projected or forecasted financial and operating results, anticipated demand for the Company's new and existing products, statements regarding the Company's prospects, resources or capabilities; planned investments, strategic initiatives and the anticipated or targeted results of such initiatives; the effects of the COVID-19 pandemic on the Company’s business; and planned operational initiatives and the anticipated cost-saving results of such initiatives. All of these forward-looking statements are subject to risks and uncertainties that may change at any time, including with respect to our exploration of the sale of
RESULTS OF OPERATIONS INFORMATION
The following summary contains information from our consolidated statements of operations for the three and six months ended
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Net sales |
$ |
114,188 |
|
|
$ |
59,004 |
|
|
$ |
207,910 |
|
|
$ |
143,404 |
|
|
Cost of sales |
66,792 |
|
|
41,487 |
|
|
124,917 |
|
|
90,045 |
|
|||||
Gross profit |
47,396 |
|
|
17,517 |
|
|
82,993 |
|
|
53,359 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
|
|
|
|
|
|
|
|||||||||
Selling and marketing |
12,446 |
|
|
17,631 |
|
|
37,132 |
|
|
51,674 |
|
|||||
General and administrative |
9,315 |
|
|
9,443 |
|
|
16,971 |
|
|
17,098 |
|
|||||
Research and development |
3,728 |
|
|
3,849 |
|
|
7,543 |
|
|
8,160 |
|
|||||
Loss on disposal group and goodwill and other intangible impairment charge |
29,013 |
|
|
72,008 |
|
|
29,013 |
|
|
72,008 |
|
|||||
Total operating expenses |
54,502 |
|
|
102,931 |
|
|
90,659 |
|
|
148,940 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss |
(7,106 |
) |
|
(85,414 |
) |
|
(7,666 |
) |
|
(95,581 |
) |
|||||
Other expense, net |
(222 |
) |
|
(55 |
) |
|
(806 |
) |
|
(488 |
) |
|||||
Loss from continuing operations before income taxes |
(7,328 |
) |
|
(85,469 |
) |
|
(8,472 |
) |
|
(96,069 |
) |
|||||
Income tax benefit |
(2,342 |
) |
|
(6,725 |
) |
|
(5,788 |
) |
|
(8,841 |
) |
|||||
Loss from continuing operations |
(4,986 |
) |
|
(78,744 |
) |
|
(2,684 |
) |
|
(87,228 |
) |
|||||
Loss from discontinued operations, net of income taxes |
(124 |
) |
|
(124 |
) |
|
(242 |
) |
|
(215 |
) |
|||||
Net loss |
$ |
(5,110 |
) |
|
$ |
(78,868 |
) |
|
$ |
(2,926 |
) |
|
$ |
(87,443 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Basic loss per share from continuing operations |
$ |
(0.17 |
) |
|
$ |
(2.65 |
) |
|
$ |
(0.09 |
) |
|
$ |
(2.94 |
) |
|
Basic loss per share from discontinued operations |
— |
|
|
— |
|
|
(0.01 |
) |
|
(0.01 |
) |
|||||
Basic net loss per share(1) |
$ |
(0.17 |
) |
|
$ |
(2.66 |
) |
|
$ |
(0.10 |
) |
|
$ |
(2.95 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Diluted loss per share from continuing operations |
$ |
(0.17 |
) |
|
$ |
(2.65 |
) |
|
$ |
(0.09 |
) |
|
$ |
(2.94 |
) |
|
Diluted loss per share from discontinued operations |
— |
|
|
— |
|
|
(0.01 |
) |
|
(0.01 |
) |
|||||
Diluted net loss per share(1) |
$ |
(0.17 |
) |
|
$ |
(2.66 |
) |
|
$ |
(0.10 |
) |
|
$ |
(2.95 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Shares used in per share calculations: |
|
|
|
|
|
|
|
|||||||||
Basic |
29,909 |
|
|
29,678 |
|
|
29,852 |
|
|
29,626 |
|
|||||
Diluted |
29,909 |
|
|
29,678 |
|
|
29,852 |
|
|
29,626 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
(1) May not add due to rounding. |
|
|
|
|
|
|
|
SEGMENT INFORMATION
The following tables present certain comparative information by segment for the three and six months ended
|
Three Months Ended
|
|
Change |
||||||||||||
|
2020 |
|
2019 |
|
$ |
|
% |
||||||||
Net sales: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
50,433 |
|
|
$ |
20,834 |
|
|
$ |
29,599 |
|
|
142.1 |
% |
|
Retail |
62,948 |
|
|
37,453 |
|
|
25,495 |
|
|
68.1 |
% |
||||
Royalty |
807 |
|
|
717 |
|
|
90 |
|
|
12.6 |
% |
||||
Consolidated net sales |
$ |
114,188 |
|
|
$ |
59,004 |
|
|
$ |
55,184 |
|
|
93.5 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Gross profit: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
27,523 |
|
|
$ |
9,027 |
|
|
$ |
18,496 |
|
|
204.9 |
% |
|
Retail |
19,066 |
|
|
7,773 |
|
|
11,293 |
|
|
145.3 |
% |
||||
Royalty |
807 |
|
|
717 |
|
|
90 |
|
|
12.6 |
% |
||||
Consolidated gross profit |
$ |
47,396 |
|
|
$ |
17,517 |
|
|
$ |
29,879 |
|
|
170.6 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Contribution: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
16,995 |
|
|
$ |
(6,334 |
) |
|
$ |
23,329 |
|
|
* |
||
Retail |
11,613 |
|
|
(247 |
) |
|
11,860 |
|
|
* |
|||||
Royalty |
807 |
|
|
717 |
|
|
90 |
|
|
12.6 |
% |
||||
Consolidated contribution |
$ |
29,415 |
|
|
$ |
(5,864 |
) |
|
$ |
35,279 |
|
|
* |
||
|
|
|
|
|
|
|
|
||||||||
Reconciliation of consolidated contribution to loss from continuing operations: |
|||||||||||||||
Consolidated contribution |
$ |
29,415 |
|
|
$ |
(5,864 |
) |
|
$ |
35,279 |
|
|
* |
||
Amounts not directly related to segments: |
|
|
|
|
|
|
|
||||||||
Operating expenses |
(36,521 |
) |
|
(79,550 |
) |
|
43,029 |
|
|
54.1 |
% |
||||
Other expense, net |
(222 |
) |
|
(55 |
) |
|
(167 |
) |
|
(303.6 |
)% |
||||
Income tax benefit |
2,342 |
|
|
6,725 |
|
|
(4,383 |
) |
|
(65.2 |
)% |
||||
Loss from continuing operations |
$ |
(4,986 |
) |
|
$ |
(78,744 |
) |
|
$ |
73,758 |
|
|
93.7 |
% |
|
*Not meaningful |
The following table compares the net sales of our major product lines within each business segment (dollars in thousands):
|
Three Months Ended |
|
Change |
||||||||||||
|
2020 |
|
2019 |
|
$ |
|
% |
||||||||
Direct net sales: |
|
|
|
|
|
|
|
||||||||
Cardio products(1) |
$ |
45,585 |
|
|
$ |
16,083 |
|
|
$ |
29,502 |
|
|
183.4 |
% |
|
Strength products(2) |
4,848 |
|
|
4,751 |
|
|
97 |
|
|
2.0 |
% |
||||
|
50,433 |
|
|
20,834 |
|
|
29,599 |
|
|
142.1 |
% |
||||
Retail net sales: |
|
|
|
|
|
|
|
||||||||
Cardio products(1) |
49,011 |
|
|
26,045 |
|
|
22,966 |
|
|
88.2 |
% |
||||
Strength products(2) |
13,937 |
|
|
11,408 |
|
|
2,529 |
|
|
22.2 |
% |
||||
|
62,948 |
|
|
37,453 |
|
|
25,495 |
|
|
68.1 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Royalty |
807 |
|
|
717 |
|
|
90 |
|
|
12.6 |
% |
||||
|
$ |
114,188 |
|
|
$ |
59,004 |
|
|
$ |
55,184 |
|
|
93.5 |
% |
(1) |
Cardio products include: connected-fitness bikes like the Bowflex® C6 and Schwinn® IC4, |
|
(2) |
Strength products include: home gyms and Bowflex® SelectTech® dumbbells, kettlebell weights, and accessories. |
|
Six Months Ended |
|
Change |
||||||||||||
|
2020 |
|
2019 |
|
$ |
|
% |
||||||||
Net sales: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
97,574 |
|
|
$ |
67,548 |
|
|
$ |
30,026 |
|
|
44.5 |
% |
|
Retail |
108,561 |
|
|
74,274 |
|
|
34,287 |
|
|
46.2 |
% |
||||
Royalty |
1,775 |
|
|
1,582 |
|
|
193 |
|
|
12.2 |
% |
||||
Consolidated net sales |
$ |
207,910 |
|
|
$ |
143,404 |
|
|
$ |
64,506 |
|
|
45.0 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Gross profit: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
51,822 |
|
|
$ |
35,423 |
|
|
$ |
16,399 |
|
|
46.3 |
% |
|
Retail |
29,396 |
|
|
16,354 |
|
|
13,042 |
|
|
79.7 |
% |
||||
Royalty |
1,775 |
|
|
1,582 |
|
|
193 |
|
|
12.2 |
% |
||||
Consolidated gross profit |
$ |
82,993 |
|
|
$ |
53,359 |
|
|
$ |
29,634 |
|
|
55.5 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Contribution: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
18,804 |
|
|
$ |
(10,876 |
) |
|
$ |
29,680 |
|
|
* |
||
Retail |
14,002 |
|
|
(969 |
) |
|
14,971 |
|
|
* |
|||||
Royalty |
1,775 |
|
|
1,582 |
|
|
193 |
|
|
12.2 |
% |
||||
Consolidated contribution |
$ |
34,581 |
|
|
$ |
(10,263 |
) |
|
$ |
44,844 |
|
|
436.9 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of consolidated contribution to loss from continuing operations: |
|||||||||||||||
Consolidated contribution |
$ |
34,581 |
|
|
$ |
(10,263 |
) |
|
$ |
44,844 |
|
|
* |
||
Amounts not directly related to segments: |
|
|
|
|
|
|
|
||||||||
Operating expenses |
$ |
(42,247 |
) |
|
$ |
(85,318 |
) |
|
43,071 |
|
|
50.5 |
% |
||
Other expense, net |
(806 |
) |
|
(488 |
) |
|
(318 |
) |
|
(65.2 |
)% |
||||
Income tax benefit |
5,788 |
|
|
8,841 |
|
|
(3,053 |
) |
|
(34.5 |
)% |
||||
Loss from continuing operations |
$ |
(2,684 |
) |
|
$ |
(87,228 |
) |
|
$ |
84,544 |
|
|
96.9 |
% |
|
*Not meaningful |
The following table compares the net sales of our major product lines within each business segment (dollars in thousands):
|
Six Months Ended |
|
Change |
|||||||||
|
2020 |
|
2019 |
|
$ |
|
% |
|||||
Direct net sales: |
|
|
|
|
|
|
|
|||||
Cardio products(1) |
$ |
81,461 |
|
$ |
55,690 |
|
$ |
25,771 |
|
46.3 |
% |
|
Strength products(2) |
16,113 |
|
11,858 |
|
4,255 |
|
35.9 |
% |
||||
|
97,574 |
|
67,548 |
|
30,026 |
|
44.5 |
% |
||||
Retail net sales: |
|
|
|
|
|
|
|
|||||
Cardio products(1) |
85,154 |
|
56,741 |
|
28,413 |
|
50.1 |
% |
||||
Strength products(2) |
23,407 |
|
17,533 |
|
5,874 |
|
33.5 |
% |
||||
|
108,561 |
|
74,274 |
|
34,287 |
|
46.2 |
% |
||||
|
|
|
|
|
|
|
|
|||||
Royalty |
1,775 |
|
1,582 |
|
193 |
|
12.2 |
% |
||||
|
$ |
207,910 |
|
$ |
143,404 |
|
$ |
64,506 |
|
45.0 |
% |
(1) |
Cardio products include: connected-fitness bikes like the Bowflex® C6 and Schwinn® IC4, |
|
(2) |
Strength products include: home gyms and Bowflex® SelectTech® dumbbells, kettlebell weights, and accessories. |
HELD-FOR-SALE DISPOSAL GROUP
The assets and liabilities of
|
As of |
|||
|
|
|||
Assets: |
|
|||
Cash and cash equivalents |
$ |
3,986 |
|
|
Trade receivables |
7,765 |
|
||
Inventories |
11,538 |
|
||
Prepaids and other current assets |
1,054 |
|
||
Property, plant and equipment, net |
1,655 |
|
||
Other intangible assets |
32,045 |
|
||
Loss on disposal group |
(29,013 |
) |
||
Other assets |
24 |
|
||
Total current assets held-for-sale |
$ |
29,054 |
|
|
Liabilities: |
|
|||
Trade payables |
$ |
8,997 |
|
|
Accrued liabilities |
2,121 |
|
||
Warranty obligations |
3,097 |
|
||
Income taxes payable |
99 |
|
||
Other |
(100 |
) |
||
Total current liabilities held-for-sale |
$ |
14,214 |
|
BALANCE SHEET INFORMATION
The following summary contains information from our consolidated balance sheets as of
|
As of |
|||||
|
|
|
|
|||
Assets |
|
|
|
|||
|
|
|
|
|||
Cash and cash equivalents |
$ |
45,656 |
|
$ |
11,070 |
|
Restricted cash |
2,196 |
|
— |
|||
Trade receivables, net of allowances of |
33,741 |
|
54,600 |
|||
Inventories |
21,310 |
|
54,768 |
|||
Prepaids and other current assets |
8,304 |
|
8,283 |
|||
Income taxes receivable |
5,326 |
|
472 |
|||
Current assets held-for-sale |
29,054 |
|
— |
|||
Total current assets |
145,587 |
|
129,193 |
|||
Property, plant and equipment, net |
22,246 |
|
22,755 |
|||
Operating lease right-of-use assets |
21,513 |
|
20,778 |
|||
Other intangible assets, net |
9,601 |
|
43,243 |
|||
Other assets |
6,024 |
|
4,510 |
|||
Total assets |
$ |
204,971 |
|
$ |
220,479 |
|
|
|
|
|
|||
Liabilities and Shareholders' Equity |
|
|
|
|||
|
|
|
|
|||
Trade payables |
$ |
45,207 |
|
$ |
74,255 |
|
Accrued liabilities |
11,632 |
|
7,633 |
|||
Operating lease liabilities, current portion |
3,216 |
|
3,720 |
|||
Warranty obligations, current portion |
1,966 |
|
3,100 |
|||
Debt payable, current portion, net of unamortized debt issuance costs of |
1,917 |
|
— |
|||
Current liabilities held-for-sale |
14,214 |
|
— |
|||
Total current liabilities |
78,152 |
|
88,708 |
|||
Operating lease liabilities, non-current |
20,429 |
|
18,982 |
|||
Warranty obligations, non-current |
585 |
|
2,617 |
|||
Income taxes payable, non-current |
3,949 |
|
3,676 |
|||
Deferred income tax liabilities, non-current |
222 |
|
1,783 |
|||
Other non-current liabilities |
— |
|
46 |
|||
Debt payable, non-current, net of unamortized debt issuance costs of |
12,518 |
|
14,071 |
|||
Shareholders' equity |
89,116 |
|
90,596 |
|||
Total liabilities and shareholders' equity |
$ |
204,971 |
|
$ |
220,479 |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Non-GAAP Presentation
In addition to disclosing its financial results determined in accordance with GAAP, Nautilus has presented in this release certain non-GAAP financial measures, which exclude the impact of certain items (as further described below) and provide supplemental information regarding operating performance. Nautilus presents non-GAAP financial measures as a complement to results provided in accordance with GAAP, and the non-GAAP financial measures should not be regarded as a substitute for GAAP. By disclosing these non-GAAP financial measures, management intends to provide investors with a supplemental comparison of operating results and trends for the periods presented. Management believes these measures are also useful to investors as such measures allow investors to evaluate performance using the same metrics that management uses to evaluate past performance and prospects for future performance. Nautilus strongly encourages you to review all its financial statements and publicly filed reports in their entirety and to not rely on any single financial measure.
EBITDA from Continuing Operations
Nautilus defines EBITDA from continuing operations as its income from continuing operations, adjusted to exclude interest expense (income), income tax expense (benefit) of continuing operations, and depreciation and amortization expense. Nautilus uses EBITDA from continuing operations in evaluating its operating results and for financial and operational decision-making purposes such as budgeting and establishing operational goals. Nautilus believes that EBITDA from continuing operations helps identify underlying trends in its business that could otherwise be masked by the effect of the items that are excluded from EBITDA from continuing operations and enhances the overall understanding of the Company’s past performance and future prospects. Management believes that EBITDA is frequently used by investors, securities analysts and other interested parties in their evaluation of companies, many of which present EBITDA when reporting their results. Other companies may calculate EBITDA differently, and it may not be comparable.
Adjusted Results
In addition to disclosing the comparable GAAP results, Nautilus has presented its operating income and income from continuing operations on an adjusted basis. Adjusted operating income excludes non-cash charges related to the disposal group held-for-sale and goodwill and the
The following table presents a reconciliation of operating expenses, the most directly comparable GAAP measure, to Adjusted operating expenses is set forth below for the three and six months ended
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
Operating expenses |
$ |
54,502 |
|
|
$ |
102,931 |
|
|
$ |
90,659 |
|
|
$ |
148,940 |
|
|
Loss on disposal group(1) |
(29,013 |
) |
|
— |
|
|
(29,013 |
) |
|
— |
|
|||||
|
— |
|
|
(72,008 |
) |
|
— |
|
|
(72,008 |
) |
|||||
Adjusted operating expenses |
$ |
25,489 |
|
|
$ |
30,923 |
|
|
$ |
61,646 |
|
|
$ |
76,932 |
|
The following table presents a reconciliation of operating loss, the most directly comparable GAAP measure, to Adjusted operating income (loss)is set forth below for the three and six months ended
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
Operating loss |
$ |
(7,106 |
) |
|
$ |
(85,414 |
) |
|
$ |
(7,666 |
) |
|
$ |
(95,581 |
) |
|
Loss on disposal group(1) |
29,013 |
|
|
— |
|
|
29,013 |
|
|
— |
|
|||||
|
— |
|
|
72,008 |
|
|
— |
|
|
72,008 |
|
|||||
Adjusted operating income (loss) |
$ |
21,907 |
|
|
$ |
(13,406 |
) |
|
$ |
21,347 |
|
|
$ |
(23,573 |
) |
The following table presents a reconciliation of loss from continuing operations, the most directly comparable GAAP measure, to Adjusted income (loss) from continuing operations is set forth below for the three and six months ended
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from continuing operations |
$ |
(4,986 |
) |
|
$ |
(78,744 |
) |
|
$ |
(2,684 |
) |
|
$ |
(87,228 |
) |
|
Loss on disposal group(1) |
29,013 |
|
|
— |
|
|
29,013 |
|
|
— |
|
|||||
|
— |
|
|
72,008 |
|
|
— |
|
|
72,008 |
|
|||||
Income tax benefit for loss on disposal group and goodwill and intangible impairment |
(7,216 |
) |
|
(3,095 |
) |
|
(7,216 |
) |
|
(3,095 |
) |
|||||
Adjusted income (loss) from continuing operations |
$ |
16,811 |
|
|
$ |
(9,831 |
) |
|
$ |
19,113 |
|
|
$ |
(18,315 |
) |
The following table presents a reconciliation of loss from continuing operations, the most directly comparable GAAP measure, to EBITDA loss is set forth below for the three and six months ended
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from continuing operations |
$ |
(4,986 |
) |
|
$ |
(78,744 |
) |
|
$ |
(2,684 |
) |
|
$ |
(87,228 |
) |
|
Interest expense, net |
337 |
|
|
226 |
|
|
962 |
|
|
266 |
|
|||||
Income tax benefit from continuing operations |
(2,342 |
) |
|
(6,725 |
) |
|
(5,788 |
) |
|
(8,841 |
) |
|||||
Depreciation and amortization |
2,644 |
|
|
2,706 |
|
|
5,454 |
|
|
5,192 |
|
|||||
Loss before interest, taxes, depreciation and amortization (EBITDA) from continuing operations |
$ |
(4,347 |
) |
|
$ |
(82,537 |
) |
|
$ |
(2,056 |
) |
|
$ |
(90,611 |
) |
The following table presents a reconciliation of loss from continuing operations, the most directly comparable GAAP measure, to Adjusted EBITDA is set forth below for the three and six months ended
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from continuing operations |
$ |
(4,986 |
) |
|
$ |
(78,744 |
) |
|
$ |
(2,684 |
) |
|
$ |
(87,228 |
) |
|
Interest expense, net |
337 |
|
|
226 |
|
|
962 |
|
|
266 |
|
|||||
Income tax benefit from continuing operations |
(2,342 |
) |
|
(6,725 |
) |
|
(5,788 |
) |
|
(8,841 |
) |
|||||
Depreciation and amortization |
2,644 |
|
|
2,706 |
|
|
5,454 |
|
|
5,192 |
|
|||||
Loss on disposal group(1) |
29,013 |
|
|
— |
|
|
29,013 |
|
|
— |
|
|||||
|
— |
|
|
72,008 |
|
|
— |
|
|
72,008 |
|
|||||
Adjusted earnings (loss) before interest, taxes, depreciation and amortization (Adjusted EBITDA) from continuing operations |
$ |
24,666 |
|
|
$ |
(10,529 |
) |
|
$ |
26,957 |
|
|
$ |
(18,603 |
) |
The following table presents a reconciliation of diluted loss per share from continuing operations, the most directly comparable GAAP measure, to Adjusted diluted income (loss) per share from continuing operations is set forth below for the three and six months ended
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted loss per share from continuing operations |
$ |
(0.17 |
) |
|
$ |
(2.65 |
) |
|
$ |
(0.09 |
) |
|
$ |
(2.94 |
) |
|
Loss on disposal group, net of tax(1) |
0.73 |
|
|
— |
|
|
0.73 |
|
|
— |
|
|||||
|
— |
|
|
2.32 |
|
|
— |
|
|
2.32 |
|
|||||
Adjusted diluted income (loss) per share from continuing operations |
$ |
0.56 |
|
|
$ |
(0.33 |
) |
|
$ |
0.64 |
|
|
$ |
(0.62 |
) |
(1) Loss on disposal group
In accordance with Accounting Standards Codification ("ASC") 360, Property, Plant and Equipment, for a long-lived assets or disposal group classified as held-for-sale, a loss is recognized for the carrying amount that exceeds the fair market value of the long-lived assets less the cost to sell. The loss on disposal group was determined to be
(2)
In accordance with ASC 350, Intangibles -
View source version on businesswire.com: https://www.businesswire.com/news/home/20200810005680/en/
Investor Relations:
646-277-1254
john.mills@ICRinc.com
Media:
360-859-5815
jfread@nautilus.com
The
503-754-7975
ckerns@hoffman.com
Source: