Nautilus Inc. posted a first-quarter profit of $1.6 million on Thursday, returning the Vancouver-based maker of fitness equipment to profitability after reporting annual losses every year since 2006.
That compares with a loss of $7.8 million for the same period a year ago.
Several key initiatives are moving Nautilus into positive territory, company officials said, including its focus on cardio products and its adoption of new consumer credit programs to increase sales.
Edward Bramson, chairman and CEO of the company, said Nautilus has “been working hard” to put greater emphasis on its cardio offerings, including its Bowflex TreadClimber product. “We are very pleased about where the trends are going.”
The company, which employs about 330 people, reported first-quarter revenue of $48.3 million, up 5.8 percent year over year. Nautilus sells its fitness products through two primary channels — its direct business, which reaches consumers through TV and other advertising; and retail, which offers the company’s products through outlets such as Dick’s Sporting Goods.
Sales of the company’s cardio products accounted for about 69 percent of the company’s total direct-to-consumer sales in the first quarter of this year. By contrast, cardio products represented about 59 percent of the company’s total direct-to-consumer sales during the first quarter of 2010.
To promote consumer awareness and gain greater market share, Nautilus plans to spend more of its advertising dollars on the TreadClimber product line, company officials said Thursday. Nautilus reported that it believes the cardio fitness market is several times larger than the market for strength-oriented equipment.
The company said improved sales of cardio products offset the decline in sales of its strength-oriented products, including Bowflex home gyms. The company saw a 19 percent drop in first-quarter sales of its home gyms.
Nautilus teamed up with GE Money Bank in September 2010 to implement a new consumer financing program, which helps customers arrange payment plans to purchase equipment. That relationship is boosting sales, company officials said. Kenneth Fish, the company’s chief financial officer, said Nautilus also is seeing “improved credit lines” enabling customers to borrow money to purchase the company’s higher-priced, premium products.
Founded in 1986, Nautilus develops and sells fitness equipment and accessories, primarily in the U.S. and Canada. Its brand names include Nautilus, Bowflex and Schwinn Fitness.
Nautilus stock, which trades as NLS, closed up 3.56 percent, at $3.20 per share.
