Nautilus Inc. continued its long climb back toward profitability Monday, significantly narrowing its losses in the third quarter despite a nearly 3 percent drop in net sales for the three-month period ended Sept. 30.
The Vancouver-based maker of fitness equipment posted a loss of $92,000, breaking even on earnings per share. That compares with a loss of $4.3 million, or 14 cents per share, for the third quarter of 2010.
“Our third quarter this year represents a milestone quarter in the course of successfully building up the profitability of our business,” Bruce Cazenave, who took the Nautilus helm as CEO in late May, said during an earnings conference call Monday. The company’s third-quarter financial results mark “another step in quarter-over-quarter improvements,” Cazenave said.
The company, which employs 320 people — most of whom work in Vancouver and Portland — reported third-quarter net sales of $37.4 million, down 2.8 percent from net sales of $38.5 million during the same period a year ago.
However, Nautilus improved its earnings by reducing its operating expenses by roughly 17 percent, primarily “through more efficient advertising expenditures,” according to a company news release.
Although the company’s overall third-quarter sales were down, its direct-to-consumer business — which reaches consumers through TV and other advertising — reported a 5.3 percent gain in revenue.
That increase was largely driven by strong demand for the company’s TreadClimber products, the company said. And solid demand for those cardio-based exercise machines was the result of increased advertising effectiveness and of higher consumer credit approval rates.
Nautilus had reported annual losses every year since 2006 until the first quarter of this year, when it posted a profit of $1.6 million. For its second quarter, which ended June 30, the company reported a loss of $3.3 million. That compared with a $10.7 million loss in the second quarter of 2010.
Founded in 1986, Nautilus develops and sells fitness equipment and accessories. Its brand names include Nautilus, Bowflex and Schwinn Fitness.
Nautilus stock, which trades as NLS, closed down 1.45 percent, at $2.04 per share.