Here’s some bad news for Nautilus Inc., the fitness equipment marketer: First quarter direct sales fell 41.5% from first-quarter 2008’s level. And here’s some worse news: The sales dropoff was the smallest of its three operations.
Nautilus racked up $72.1 million in sales during first-quarter 2009, a 44.4% drop from $129.6 million a year earlier. Don’t blame the company’s direct sales, though: Those were only off by 41.5%, slipping from $69.6 million to $40.7 million.
Retail took the biggest hit, with first-quarter sales of $12.5 million less than half the $25.2 million seen a year earlier. Commercial sales, such as to gyms and hotel fitness centers, dropped 46.5%, from $33.7 million to just over $18 million.
The company’s first quarter net loss was $13.8 million, much deeper than the $6.9 million loss recorded a year ago. The most recent loss includes restructuring charges of $3.8 million, while the first-quarter 2008 loss included $10.7 million in charges stemming from its decision not to purchase Land America Health & Fitness Co., Ltd.
"While we are not satisfied with the consolidated net loss, we are encouraged by the operating improvements,” said Edward Bramson, Nautilus’s CEO, in a statement.
Bramson continued, “During the first quarter, we achieved the highest gross margins in over a year and reduced operating expenses by 33% compared to the same period last year. Even though the overall consumer environment remains very challenging, our recently implemented marketing and operating adjustments are providing positive contributions in the Direct and Retail businesses. We continued to right-size our cost structure in the first quarter by implementing an additional $17 million in anticipated annualized cost reductions. These actions will begin to benefit our operating results in the second quarter, and we expect to realize substantially all of the benefit from these improvements in the fourth quarter of 2009.”
