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Nautilus reports shrinking quarterly loss

By Aaron Corvin, Columbian Port & Economy Reporter
Published: August 16, 2010, 12:00am

Nautilus, Inc. on Monday reported a narrower loss in the second quarter compared with the same period a year ago. The company said it hoped to return to growth, in part, on its improving retail business and new consumer credit programs.

The Vancouver-based exercise equipment maker said its net loss for the period ended June 30 was $10.7 million, or 35 cents per share. That compares with a net loss of $20.8 million, or 68 cents per share, in the second quarter of 2009. The company said the second-quarter loss was partly due to a traditionally soft sales period. Also driving the loss was its decision to reduce spending on advertising until it implemented new consumer credit offerings.

The company reported overall net sales of $30.6 million in the second quarter, a 24 percent decline compared with $40.1 million in the second quarter of 2009. The company’s net sales in its direct business declined in the second quarter because of a 40 percent year-over-year decrease in the rate of credit approvals by the company’s former third-party, consumer-credit financing provider. Conversely, the company’s net sales in its retail business increased 4 percent in the second quarter primarily because of customer demand for its newly redesigned fitness bikes and elliptical products, increased sales of free-weight products and sales to new customers.

To help spur growth, the company said that on June 15 it entered into an agreement with General Electric Money Bank to become its new provider of consumer credit programs.

“Customer interest in our products remains strong for both retail and direct, and we expect to convert the demand into higher sales as we integrate our new financing programs into our direct business,” said Edward Bramson, chairman and CEO of Nautilus.

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Columbian Port & Economy Reporter