Nautilus Inc. faces being removed from the New York Stock Exchange unless it raises its market capitalization — the total value of all of the company’s stock — to above $50 million, the company announced Wednesday. .
In a filing with the U.S. Securities and Exchange Commission, The Vancouver-based maker of fitness equipment said it was notified by the NYSE last week that it had fallen below the exchange’s listing standards, which require a company to have either an average global market capitalization of at least $50 million over 30 days or its total stockholders’ equity of at least $50 million. Stockholders’ equity is the stake held on the books by the company’s investors.
As of Wednesday, Nautilus’ market cap was $39.66 million. Delisting would be a major setback for the company, which is fighting to return to profitability after years of struggles.
Nautilus has 45 days to submit a plan outlining how it will, within 18 months,come into compliance with listing standards.
The NYSE will have 45 calendar days to rule on Nautilus’ proposal.
If the NYSE accepts the plan, then Nautilus will remain on the exchange but undergo continued monitoring for compliance. If the NYSE does not accept the plan, then the company will “initiate an orderly transition to another exchange,” the company said. With market capitalization below $50 million, it might be forced to trade on less liquid penny stock exchanges.
In a news release, Nautilus said the plan it will submit to the NYSE will include its progress with its new consumer credit finance provider, GE Money Bank.
Because Nautilus equipment often sells for $1,000 or more, many customers depend on financing to make a purchase. Under its last credit partner, the company saw considerable declines in customer approvals.
After signing on with GE Money Bank, the company reported “incremental improvement” in credit approval rates in September and Nautilus expects this trend to continue. Said Edward Bramson, chairman and CEO of Nautilus: “The underlying demand for our products continues to be strong, and we believe that our new relationship with GE Money Bank will enable us to take advantage of consumer demand and deliver improved financial results.”
Nautilus shares fell 1.6 percent, to $1.27 per share, on Wednesday.
