Nautilus, Inc. Delivers Record Third Quarter Results
Third Quarter 2020 Net Sales Increased 152% to
Operating Income of
Adjusted EBITDA Was
Third Quarter 2020 Highlights Compared to Third Quarter 2019
-
Net sales were
$155.4 million , up 151.8% compared to$61.7 million for the same period last year, driven primarily by strong demand for the Schwinn® IC4 and Bowflex® C6 connected-fitness bikes, Bowflex® Home Gyms, and SelectTech® weights. Strong execution across the organization coupled with supply chain improvements that began earlier in the year drove record results. However, despite increased factory capacity, the company entered the fourth quarter with$72.8 million in backorders including certain held-for-sale orders of$5.2 million . -
Gross profit was
$67.9 million , up 256.3% compared to$19.1 million for the same period last year. Gross margin rates expanded to 43.7% this year compared to 30.9% last year, driven by increased full-priced selling in Direct, improved wholesale margins in Retail, and fixed costs leverage, partially offset by increased transportation costs driven by global logistics disruptions. -
On
October 14, 2020 , the company entered into an agreement to sellOctane Fitness, Inc. toTrue Fitness Technology, Inc. for a base purchase price of$25.0 million subject to adjustments for cash and cash equivalents, indebtedness, transaction expenses and working capital. The company recognized a gain on disposal group of$8.3 million related to this transaction. As a result, operating expenses decreased by 12.4% to$23.9 million , compared to$27.3 million last year. -
Operating income was
$44.0 million , a$52.3 million improvement versus a loss of$8.3 million for the same period last year. This is the highest quarterly operating income in the company’s history. -
Net income was
$33.8 million , or$1.04 per diluted share, compared to last year’s loss of$8.8 million , or -$0.30 per diluted share. -
The following statements exclude the impact of the gain on disposal group this quarter1.
-
Adjusted operating expenses increased by 18.2% to
$32.3 million compared to$27.3 million last year, primarily due to increased advertising and general and administrative expenses. -
Adjusted operating income improved to
$35.7 million compared to an operating loss of$8.3 million last year, driven by sales growth and expanded gross margin rates, partially offset by higher operating expenses. -
Adjusted income from continuing operations improved to
$28.0 million , or$0.87 per diluted share, compared to a loss from continuing operations of$8.7 million , or -$0.29 per diluted share. -
Adjusted EBITDA from continuing operations improved to
$37.1 million compared to an adjusted EBITDA loss of$5.5 million , an improvement of$42.6 million .
-
Adjusted operating expenses increased by 18.2% to
1 See "Reconciliation of Non-GAAP Financial Measures" and "Gain (loss) on
Management Comments
“I’m really proud of how well our team executed this quarter. We delivered record results while continuing to position our company for long-term sustainable growth. We increased sales by 152%, expanded gross margins by 1280 basis points, delivered operating income of
Third Quarter 2020 Segment Results Compared to Third Quarter 2019
Direct Segment
-
Net sales were
$61.2 million , up 277.8%, from$16.2 million in the same period last year, driven primarily by cardio products, which grew 256.2%, led by the Schwinn® IC4 and Bowflex® C6 connected-fitness bikes. Strength products grew 349.2% led by the popular SelectTech® weights and Bowflex® Home Gyms. The company launched the Bowflex® VeloCore™ in September and early results have exceeded expectations. -
As of
September 30, 2020 , Direct’s backlog totaled$23.0 million compared to$20.6 million as ofJune 30, 2020 . These amounts represent unfulfilled consumer orders net of current promotional programs and sales discounts. - Gross margin rate was 57.2%, increased from 38.3% for the same period last year, primarily driven by increased full-priced sales and favorable fixed costs leverage, partially offset by higher transportation costs.
-
Segment contribution income was
$17.6 million , compared to a loss of$8.7 million last year. The$26.3 million improvement was primarily driven by higher gross profit, partially offset by increased media spend. Advertising expenses were$8.0 million for the third quarter of 2020 compared to$5.8 million for the same period in 2019. The$2.3 million increase was driven by the company’s investment in launch marketing of the new Bowflex® VeloCore™ bikes.
Retail Segment
-
Net sales were
$93.2 million , up 107.8%, from$44.8 million . Cardio sales increased by 102.6% driven by bikes, particularly the Schwinn® IC4 connected-fitness bikes, and ellipticals. Strength product sales grew by 127.9% led by the popular SelectTech® weights and benches. Excluding sales related to the Octane brand, third quarter of 2020 net sales for the Retail segment grew 131.6% versus the third quarter of 2019. -
As of
September 30, 2020 , Retail’s backlog totaled$49.8 million including certain held-for-sale orders of$5.2 million , compared to$13.6 million as ofJune 30, 2020 . These amounts represent customer orders for future shipments and are net of contractual rebates and consideration payable to applicable Retail customers. - Gross margin rate was 34.3%, increased from 27.1% for the same period last year, primarily driven by favorable customer mix and fixed costs leverage, partially offset by higher transportation costs.
-
Segment contribution income was
$23.4 million compared to$4.8 million for the same period last year. The$18.6 million improvement was primarily driven by higher gross profit and leveraging of fixed costs.
Balance Sheet and Other Key Highlights
As of
-
The company’s liquidity position continues to improve
-
Cash, cash equivalents and restricted cash were
$72.3 million , an increase of$61.2 million , compared to cash and cash equivalents of$11.1 million as ofDecember 31, 2019 . -
Debt was
$14.3 million , compared to debt of$14.1 million as ofDecember 31, 2019 . -
$48.6 million was available for borrowing under the Wells Fargo Asset Based Lending Revolving Facility - This is the fourth consecutive quarter of positive cash flow
-
Cash, cash equivalents and restricted cash were
-
Account receivables were
$68.6 million , compared to$54.6 million as ofDecember 31, 2019 . The increase in accounts receivable was primarily due to the timing of customer payments partially offset by certain accounts receivable included in assets held-for-sale. -
Inventory was
$33.7 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 assets held-for-sale. -
To secure factory capacity, the company routinely issues non-cancelable purchase obligations for expected product deliveries in the next twelve months. As of
September 30, 2020 , there were approximately$240.3 million of non-cancelable purchase obligations including certain held-for-sale purchase orders of$13.8 million , compared to$47.0 million at the same date last year and$28.4 million as ofDecember 31, 2019 . -
Trade payables were
$83.4 million , compared to$74.3 million as ofDecember 31, 2019 . The increase in trade payables was primarily due to timing of payments for inventory, advertising related payments partially offset by certain payables included in liabilities held-for-sale. -
Capital expenditures totaled
$8.0 million as ofSeptember 30, 2020 .
Forward Looking Guidance
- The company does not plan to provide specific guidance on an ongoing basis. However, as this year’s quarterly results have not followed the typical seasonality, the company is providing the following commentary.
-
The company expects full year 2020 net sales to be between
$540 million and$565 million and full year 2020 Adjusted EBITDA to be between$90 million and$100 million . -
The company is raising the full year 2020 capital expenditures guidance range to
$10 million to$13 million .
Announcing Filing of S-3 Shelf Registration Statement
-
Today, the company will file a shelf registration statement on Form S-3 with the
Securities and Exchange Commission (the “SEC”). When declared effective by theSEC , the company may, from time to time, issue various types of securities, including common stock, debt securities, warrants or units, up to an aggregate amount of$100 million . - The company has no immediate plans to raise and use additional capital at this time.
-
Any offer, solicitation, or sale of any of the securities registered under the registration statement will be made only by means of the prospectus and the accompanying prospectus supplement once the registration statement is declared effective by the
SEC . -
This announcement does not constitute an offer to sell or a solicitation of an offer to buy securities, nor may there be any sale of Nautilus’s common stock or other securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the effectiveness of the registration statement with the
SEC and registration or qualification under the securities law of any state or jurisdiction.
Conference Call
Nautilus will discuss third 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. Our financial results could also be impacted by our sale of
RESULTS OF OPERATIONS INFORMATION
The following summary contains information from our consolidated statements of operations for the three and nine months ended
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Net sales |
$ |
155,391 |
|
|
$ |
61,708 |
|
|
$ |
363,301 |
|
|
$ |
205,112 |
|
|
Cost of sales |
87,453 |
|
|
42,641 |
|
|
212,370 |
|
|
132,686 |
|
|||||
Gross profit |
67,938 |
|
|
19,067 |
|
|
150,931 |
|
|
72,426 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
|
|
|
|
|
|
|
|||||||||
Selling and marketing |
19,207 |
|
|
17,472 |
|
|
56,339 |
|
|
69,146 |
|
|||||
General and administrative |
8,841 |
|
|
6,726 |
|
|
25,812 |
|
|
23,824 |
|
|||||
Research and development |
4,240 |
|
|
3,122 |
|
|
11,783 |
|
|
11,282 |
|
|||||
(Gain) loss on disposal group, goodwill and other intangible impairment charge |
(8,345 |
) |
|
— |
|
|
20,668 |
|
|
72,008 |
|
|||||
Total operating expenses |
23,943 |
|
|
27,320 |
|
|
114,602 |
|
|
176,260 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) |
43,995 |
|
|
(8,253 |
) |
|
36,329 |
|
|
(103,834 |
) |
|||||
Other expense, net |
(628 |
) |
|
(422 |
) |
|
(1,434 |
) |
|
(910 |
) |
|||||
Income (loss) from continuing operations before income taxes |
43,367 |
|
|
(8,675 |
) |
|
34,895 |
|
|
(104,744 |
) |
|||||
Income tax expense (benefit)(1) |
9,398 |
|
|
55 |
|
|
3,610 |
|
|
(8,786 |
) |
|||||
Income (loss) from continuing operations |
33,969 |
|
|
(8,730 |
) |
|
31,285 |
|
|
(95,958 |
) |
|||||
Loss from discontinued operations, net of income taxes |
(131 |
) |
|
(114 |
) |
|
(373 |
) |
|
(329 |
) |
|||||
Net income (loss) |
$ |
33,838 |
|
|
$ |
(8,844 |
) |
|
$ |
30,912 |
|
|
$ |
(96,287 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Basic income (loss) per share from continuing operations |
$ |
1.13 |
|
|
$ |
(0.29 |
) |
|
$ |
1.05 |
|
|
$ |
(3.24 |
) |
|
Basic loss per share from discontinued operations |
— |
|
|
(0.01 |
) |
|
(0.02 |
) |
|
(0.01 |
) |
|||||
Basic net income (loss) per share |
$ |
1.13 |
|
|
$ |
(0.30 |
) |
|
$ |
1.03 |
|
|
$ |
(3.25 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Diluted income (loss) per share from continuing operations |
$ |
1.05 |
|
|
$ |
(0.29 |
) |
|
$ |
0.98 |
|
|
$ |
(3.24 |
) |
|
Diluted loss per share from discontinued operations |
(0.01 |
) |
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.01 |
) |
|||||
Diluted net income (loss) per share |
$ |
1.04 |
|
|
$ |
(0.30 |
) |
|
$ |
0.97 |
|
|
$ |
(3.25 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Shares used in per share calculations: |
|
|
|
|
|
|
|
|||||||||
Basic |
30,038 |
|
|
29,728 |
|
|
29,914 |
|
|
29,660 |
|
|||||
Diluted |
32,401 |
|
|
29,728 |
|
|
31,792 |
|
|
29,660 |
|
|||||
(1) Income tax expense (benefit) for the three and nine months ended |
SEGMENT INFORMATION
The following tables present certain comparative information by segment for the three and nine months ended
|
Three Months Ended
|
|
Change |
||||||||||||
|
2020 |
|
2019 |
|
$ |
|
% |
||||||||
Net sales: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
61,194 |
|
|
$ |
16,197 |
|
|
$ |
44,997 |
|
|
277.8 |
% |
|
Retail |
93,155 |
|
|
44,823 |
|
|
48,332 |
|
|
107.8 |
% |
||||
Royalty |
1,042 |
|
|
688 |
|
|
354 |
|
|
51.5 |
% |
||||
Consolidated net sales |
$ |
155,391 |
|
|
$ |
61,708 |
|
|
$ |
93,683 |
|
|
151.8 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Gross profit: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
34,990 |
|
|
$ |
6,210 |
|
|
$ |
28,780 |
|
|
463.4 |
% |
|
Retail |
31,906 |
|
|
12,169 |
|
|
19,737 |
|
|
162.2 |
% |
||||
Royalty |
1,042 |
|
|
688 |
|
|
354 |
|
|
51.5 |
% |
||||
Consolidated gross profit |
$ |
67,938 |
|
|
$ |
19,067 |
|
|
$ |
48,871 |
|
|
256.3 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Contribution: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
17,588 |
|
|
$ |
(8,693 |
) |
|
$ |
26,281 |
|
|
* |
||
Retail |
23,442 |
|
|
4,772 |
|
|
18,670 |
|
|
391.2 |
% |
||||
Royalty |
1,042 |
|
|
688 |
|
|
354 |
|
|
51.5 |
% |
||||
Consolidated contribution |
$ |
42,072 |
|
|
$ |
(3,233 |
) |
|
$ |
45,305 |
|
|
* |
||
|
|
|
|
|
|
|
|
||||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: |
|
|
|
|
|||||||||||
Consolidated contribution |
$ |
42,072 |
|
|
$ |
(3,233 |
) |
|
$ |
45,305 |
|
|
* |
||
Amounts not directly related to segments: |
|
|
|
|
|
|
|
||||||||
Operating expenses |
1,923 |
|
|
(5,020 |
) |
|
6,943 |
|
|
138.3 |
% |
||||
Other expense, net |
(628 |
) |
|
(422 |
) |
|
(206 |
) |
|
(48.8 |
)% |
||||
Income tax expense |
(9,398 |
) |
|
(55 |
) |
|
(9,343 |
) |
|
(16,987.3 |
)% |
||||
Income (loss) from continuing operations |
$ |
33,969 |
|
|
$ |
(8,730 |
) |
|
$ |
42,699 |
|
|
489.1 |
% |
*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) |
$ |
44,278 |
|
$ |
12,431 |
|
$ |
31,847 |
|
256.2% |
||
Strength products(2) |
16,916 |
|
3,766 |
|
13,150 |
|
349.2% |
|||||
|
61,194 |
|
16,197 |
|
44,997 |
|
277.8% |
|||||
Retail net sales: |
|
|
|
|
|
|
|
|||||
Cardio products(1) |
71,924 |
|
35,509 |
|
36,415 |
|
102.6% |
|||||
Strength products(2) |
21,231 |
|
9,314 |
|
11,917 |
|
127.9% |
|||||
|
93,155 |
|
44,823 |
|
48,332 |
|
107.8% |
|||||
|
|
|
|
|
|
|
|
|||||
Royalty |
1,042 |
|
688 |
|
354 |
|
51.5% |
|||||
|
$ |
155,391 |
|
$ |
61,708 |
|
$ |
93,683 |
|
151.8% |
||
|
|
|
|
|
|
|
|
(1) |
Cardio products include: connected-fitness bikes, the Bowflex® C6, Bowflex® VeloCoreTM, Schwinn® IC4, Max Trainer®, treadmills, other exercise bikes, ellipticals and subscription services. |
|
(2) |
Strength products include: Bowflex® Home Gyms, Bowflex® SelectTech® dumbbells, kettlebell and barbell weights, and accessories. |
|
Nine Months Ended
|
|
Change |
||||||||||||
|
2020 |
|
2019 |
|
$ |
|
% |
||||||||
Net sales: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
158,768 |
|
|
$ |
83,745 |
|
|
$ |
75,023 |
|
|
89.6 |
% |
|
Retail |
201,716 |
|
|
119,097 |
|
|
82,619 |
|
|
69.4 |
% |
||||
Royalty |
2,817 |
|
|
2,270 |
|
|
547 |
|
|
24.1 |
% |
||||
Consolidated net sales |
$ |
363,301 |
|
|
$ |
205,112 |
|
|
$ |
158,189 |
|
|
77.1 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Gross profit: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
86,812 |
|
|
$ |
41,633 |
|
|
$ |
45,179 |
|
|
108.5 |
% |
|
Retail |
61,302 |
|
|
28,523 |
|
|
32,779 |
|
|
114.9 |
% |
||||
Royalty |
2,817 |
|
|
2,270 |
|
|
547 |
|
|
24.1 |
% |
||||
Consolidated gross profit |
$ |
150,931 |
|
|
$ |
72,426 |
|
|
$ |
78,505 |
|
|
108.4 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Contribution: |
|
|
|
|
|
|
|
||||||||
Direct |
$ |
36,392 |
|
|
$ |
(19,569 |
) |
|
$ |
55,961 |
|
|
* |
||
Retail |
37,444 |
|
|
3,803 |
|
|
33,641 |
|
|
884.6 |
% |
||||
Royalty |
2,817 |
|
|
2,270 |
|
|
547 |
|
|
24.1 |
% |
||||
Consolidated contribution |
$ |
76,653 |
|
|
$ |
(13,496 |
) |
|
$ |
90,149 |
|
|
668.0 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: |
|
|
|
|
|||||||||||
Consolidated contribution |
$ |
76,653 |
|
|
$ |
(13,496 |
) |
|
$ |
90,149 |
|
|
* |
||
Amounts not directly related to segments: |
|
|
|
|
|
|
|
||||||||
Operating expenses |
$ |
(40,324 |
) |
|
$ |
(90,338 |
) |
|
50,014 |
|
|
55.4 |
% |
||
Other expense, net |
(1,434 |
) |
|
(910 |
) |
|
(524 |
) |
|
(57.6 |
)% |
||||
Income tax (expense) benefit |
(3,610 |
) |
|
8,786 |
|
|
(12,396 |
) |
|
(141.1 |
)% |
||||
Income (loss) from continuing operations |
$ |
31,285 |
|
|
$ |
(95,958 |
) |
|
$ |
127,243 |
|
|
132.6 |
% |
*Not meaningful |
The following table compares the net sales of our major product lines within each business segment (dollars in thousands):
|
Nine Months Ended
|
|
Change |
|||||||||||
|
2020 |
|
2019 |
|
$ |
|
% |
|||||||
Direct net sales: |
|
|
|
|
|
|
|
|||||||
Cardio products(1) |
$ |
125,739 |
|
|
$ |
68,121 |
|
|
$ |
57,618 |
|
|
84.6 |
% |
Strength products(2) |
33,029 |
|
|
15,624 |
|
|
17,405 |
|
|
111.4 |
% |
|||
|
158,768 |
|
|
83,745 |
|
|
75,023 |
|
|
89.6 |
% |
|||
Retail net sales: |
|
|
|
|
|
|
|
|||||||
Cardio products(1) |
157,078 |
|
|
92,250 |
|
|
64,828 |
|
|
70.3 |
% |
|||
Strength products(2) |
44,638 |
|
|
26,847 |
|
|
17,791 |
|
|
66.3 |
% |
|||
|
201,716 |
|
|
119,097 |
|
|
82,619 |
|
|
69.4 |
% |
|||
|
|
|
|
|
|
|
|
|||||||
Royalty |
2,817 |
|
|
2,270 |
|
|
547 |
|
|
24.1 |
% |
|||
|
$ |
363,301 |
|
|
$ |
205,112 |
|
|
$ |
158,189 |
|
|
77.1 |
% |
|
|
|
|
|
|
|
|
(1) |
Cardio products include: connected-fitness bikes, the Bowflex® C6, Bowflex® VeloCoreTM, Schwinn® IC4, |
|
(2) |
Strength products include: Bowflex® Home Gyms, Bowflex® SelectTech® dumbbells, kettlebell and barbell weights, and accessories. |
HELD-FOR-SALE DISPOSAL GROUP
The assets and liabilities of
|
As of |
|||
|
|
|||
Assets: |
|
|||
Cash and cash equivalents |
$ |
108 |
|
|
Trade receivables |
3,937 |
|
||
Inventories |
10,703 |
|
||
Prepaids and other current assets |
586 |
|
||
Property, plant and equipment, net |
1,571 |
|
||
Other intangible assets |
32,045 |
|
||
Loss on disposal group |
(20,272 |
) |
||
Other assets |
23 |
|
||
Total current assets held-for-sale |
$ |
28,701 |
|
|
Liabilities: |
|
|||
Trade payables |
$ |
4,659 |
|
|
Accrued liabilities |
759 |
|
||
Warranty obligations |
2,779 |
|
||
Deferred income tax liabilities |
1,513 |
|
||
Total current liabilities held-for-sale |
$ |
9,710 |
|
BALANCE SHEET INFORMATION
The following summary contains information from our consolidated balance sheets as of
|
As of |
|||||||
|
|
|
|
|||||
Assets |
|
|
|
|||||
|
|
|
|
|||||
Cash and cash equivalents |
$ |
70,072 |
|
|
$ |
11,070 |
|
|
Restricted cash |
2,197 |
|
|
— |
|
|||
Trade receivables, net of allowances of |
68,619 |
|
|
54,600 |
|
|||
Inventories |
33,715 |
|
|
54,768 |
|
|||
Prepaids and other current assets |
9,735 |
|
|
8,283 |
|
|||
Income taxes receivable |
6,600 |
|
|
472 |
|
|||
Current assets held-for-sale |
28,701 |
|
|
— |
|
|||
Total current assets |
219,639 |
|
|
129,193 |
|
|||
Property, plant and equipment, net |
23,168 |
|
|
22,755 |
|
|||
Operating lease right-of-use assets |
20,637 |
|
|
20,778 |
|
|||
Other intangible assets, net |
9,553 |
|
|
43,243 |
|
|||
Other assets |
6,015 |
|
|
4,510 |
|
|||
Total assets |
$ |
279,012 |
|
|
$ |
220,479 |
|
|
|
|
|
|
|||||
Liabilities and Shareholders' Equity |
|
|
|
|||||
|
|
|
|
|||||
Trade payables |
$ |
83,403 |
|
|
$ |
74,255 |
|
|
Accrued liabilities |
15,943 |
|
|
7,633 |
|
|||
Operating lease liabilities, current portion |
3,126 |
|
|
3,720 |
|
|||
Warranty obligations, current portion |
3,219 |
|
|
3,100 |
|
|||
Debt payable, current portion, net of unamortized debt issuance costs of |
2,417 |
|
|
— |
|
|||
Current liabilities held-for-sale |
9,710 |
|
|
— |
|
|||
Total current liabilities |
117,818 |
|
|
88,708 |
|
|||
Operating lease liabilities, non-current |
19,592 |
|
|
18,982 |
|
|||
Warranty obligations, non-current |
306 |
|
|
2,617 |
|
|||
Income taxes payable, non-current |
3,989 |
|
|
3,676 |
|
|||
Deferred income tax liabilities, non-current |
1,550 |
|
|
1,783 |
|
|||
Other non-current liabilities |
801 |
|
|
46 |
|
|||
Debt payable, non-current, net of unamortized debt issuance costs of |
11,510 |
|
|
14,071 |
|
|||
Shareholders' equity |
123,446 |
|
|
90,596 |
|
|||
Total liabilities and shareholders' equity |
$ |
279,012 |
|
|
$ |
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 for the three and nine months ended
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||
Operating expenses |
$ |
23,943 |
|
$ |
27,320 |
|
$ |
114,602 |
|
|
$ |
176,260 |
|
|
Gain (loss) on disposal group(1) |
8,345 |
|
— |
|
(20,668 |
) |
|
— |
|
|||||
|
— |
|
— |
|
— |
|
|
(72,008 |
) |
|||||
Adjusted operating expenses |
$ |
32,288 |
|
$ |
27,320 |
|
$ |
93,934 |
|
|
$ |
104,252 |
|
The following table presents a reconciliation of operating income (loss), the most directly comparable GAAP measure, to Adjusted operating income (loss) for the three and nine months ended
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Operating income (loss) |
$ |
43,995 |
|
|
$ |
(8,253 |
) |
|
$ |
36,329 |
|
$ |
(103,834 |
) |
|
(Gain) loss on disposal group(1) |
(8,345 |
) |
|
— |
|
|
20,668 |
|
— |
|
|||||
|
— |
|
|
— |
|
|
— |
|
72,008 |
|
|||||
Adjusted operating income (loss) |
$ |
35,650 |
|
|
$ |
(8,253 |
) |
|
$ |
56,997 |
|
$ |
(31,826 |
) |
The following table presents a reconciliation of income (loss) from continuing operations, the most directly comparable GAAP measure, to Adjusted income (loss) from continuing operations for the three and nine months ended
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from continuing operations |
$ |
33,969 |
|
|
$ |
(8,730 |
) |
|
$ |
31,285 |
|
|
$ |
(95,958 |
) |
|
(Gain) loss on disposal group(1) |
(8,345 |
) |
|
— |
|
|
20,668 |
|
|
— |
|
|||||
|
— |
|
|
— |
|
|
— |
|
|
72,008 |
|
|||||
Income tax expense (benefit) for (gain) loss on disposal group and goodwill and other intangible impairment |
2,420 |
|
|
— |
|
|
(4,796 |
) |
|
(3,095 |
) |
|||||
Adjusted income (loss) from continuing operations |
$ |
28,044 |
|
|
$ |
(8,730 |
) |
|
$ |
47,157 |
|
|
$ |
(27,045 |
) |
The following table presents a reconciliation of income (loss) from continuing operations, the most directly comparable GAAP measure, to EBITDA for the three and nine months ended
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||
|
|
|
|
|
|
|
|
|||||||
Income (loss) from continuing operations |
$ |
33,969 |
|
$ |
(8,730 |
) |
|
$ |
31,285 |
|
$ |
(95,958 |
) |
|
Interest expense, net |
252 |
|
293 |
|
|
1,214 |
|
559 |
|
|||||
Income tax expense (benefit) from continuing operations |
9,398 |
|
55 |
|
|
3,610 |
|
(8,786 |
) |
|||||
Depreciation and amortization |
1,849 |
|
2,853 |
|
|
7,303 |
|
8,045 |
|
|||||
Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) from continuing operations |
$ |
45,468 |
|
$ |
(5,529 |
) |
|
$ |
43,412 |
|
$ |
(96,140 |
) |
The following table presents a reconciliation of income (loss) from continuing operations, the most directly comparable GAAP measure, to Adjusted EBITDA for the three and nine months ended
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) from continuing operations |
$ |
33,969 |
|
|
$ |
(8,730) |
|
|
$ |
31,285 |
|
|
$ |
(95,958) |
|
|
Interest expense, net |
252 |
|
|
293 |
|
|
1,214 |
|
|
559 |
|
|||||
Income tax expense (benefit) from continuing operations |
9,398 |
|
|
55 |
|
|
3,610 |
|
|
(8,786) |
|
|||||
Depreciation and amortization |
1,849 |
|
|
2,853 |
|
|
7,303 |
|
|
8,045 |
|
|||||
(Gain) loss on disposal group(1) |
(8,345) |
|
|
— |
|
|
20,668 |
|
|
— |
|
|||||
|
— |
|
|
— |
|
|
— |
|
|
72,008 |
|
|||||
Adjusted earnings (loss) before interest, taxes, depreciation and amortization (Adjusted EBITDA) from continuing operations |
$ |
37,123 |
|
|
$ |
(5,529) |
|
|
$ |
64,080 |
|
|
$ |
(24,132) |
|
The following table presents a reconciliation of diluted income (loss) per share from continuing operations, the most directly comparable GAAP measure, to Adjusted diluted income (loss) per share from continuing operations for the three and nine months ended
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Diluted income (loss) per share from continuing operations |
$ |
1.05 |
|
|
$ |
(0.29 |
) |
|
$ |
0.98 |
|
$ |
(3.24 |
) |
|
(Gain) loss on disposal group, net of tax(1) |
(0.18 |
) |
|
— |
|
|
0.50 |
|
— |
|
|||||
|
— |
|
|
— |
|
|
— |
|
2.32 |
|
|||||
Adjusted diluted income (loss) per share from continuing operations |
$ |
0.87 |
|
|
$ |
(0.29 |
) |
|
$ |
1.48 |
|
$ |
(0.92 |
) |
(1) Gain (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 assets and liabilities of a disposal group classified as held-for-sale should be presented separately in the asset and liability sections, respectively, of the balance sheet. The disposal group is expected to be structured as a sale of the subsidiary shares and we elected to classify the deferred taxes associated with the individual assets and liabilities as part of the disposal group held-for-sale.
(2)
In accordance with ASC 350, Intangibles -
View source version on businesswire.com: https://www.businesswire.com/news/home/20201109006079/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: