Nautilus Inc., a Vancouver manufacturer and marketer of fitness equipment, on Monday said its earning streak continued in the first quarter this year, thanks to direct sales and easier credit to consumers.
The company's net sales were $59.2 million for the quarter ending March 31, a 15.5 percent increase compared to $51.3 million during the same period last year. Nautilus' reported net income of $5.2 million, or 17 cents per diluted share in the first quarter, more than doubling its income of $2.5 million, or 8 cents per share, during the same period one year ago, the company reported.
"Overall, we are very pleased with the direction and momentum of our business," said Bruce Cazenave, chief executive officer, during an earnings conference call Monday. This month marks Cazenave's second anniversary at the Nautilus helm.
The company has reported a profit for six consecutive quarters.
The company's income from direct sales increased to $6.7 million in the first quarter, compared to $3 million in the same period last year. Direct selling includes sales to commercial and home customers through advertising and call centers.
"We attribute the steady growth to familiar products," Cazenave said, including its longtime standards, the Bowflex strength-training machine and the Treadclimber cardio machine, which retails for between $1,000 and $3,300.
Rising U.S. credit limits have helped those sales along, said Linda Pearce, Nautilus' chief financial officer, during the conference call.
"U.S. credit approval rates rose to 35 percent in the first quarter of 2013, up from 30 percent for the same period last year," she said.
Cazenave acknowledged some weakness in Nautilus' retail segment, where sales faltered on the selling floors of sporting goods retailers as the stores suffered from weak sales in 2011 and 2012.
Cazenave expects Nautilus' retail sales will improve as a new lineup of cardio equipment hits stores this fall. In the meantime, retail sales were down by $1.5 million, dropping to $15.1 million in the first quarter from $16.6 million during the same period last year. Cazenave indicated retail sales could continue to drop over the next four months, only to improve when the company unveils its new product line.
Revenue streams also were helped along by growing fitness trends throughout the U.S. and Canada.
Nautilus responded with its CoreBody Reformer, which retails for about $250 and is meant to strengthen and firm the abdominal muscles, and its Bowflex UpperCut Performance package, a sort of mini weight-lifting bench that includes push-up handles and a speed jump rope and retails for about $130.
The company's stock, which trades as NLS, closed up 33 cents Monday, at $6.76 per share. The company's shares have traded between $2.20 and $7.66 in the past 52 weeks.