Nautilus finishes ’14 in financially fit fashion

Vancouver-based maker of fitness equipment sees rise in profit, net sales

By Aaron Corvin, Columbian Port & Economy Reporter

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Nautilus, the Vancouver-based manufacturer of fitness machines, wrapped up 2014 in strong financial shape, recording net sales of $94.93 million in the fourth quarter and posting a profit of $10.37 million in the three-month period ended Dec. 31.

The company’s net sales in the October-to-December period were up 23 percent from $77.09 million in the same year-ago period. And Nautilus’ profit of $10.37 million in the fourth quarter compares with a profit of $8.54 million for the final three months of 2013.

Last year’s positive financial results have positioned the company well in 2015 “for another year of profitable growth,” Bruce Cazenave, CEO of Nautilus, said during the company’s earnings conference call Monday.

For all of 2014, the company reported net sales of $274.44 million. That’s up 25 percent from net sales of $218.80 million in 2013. Nautilus’ profit for all of last year: $18.79 million. That compares with a profit of $47.95 million in 2013.

Nautilus sells its cardio, muscle-building and other fitness machines through its direct-to-consumer channel, involving TV, social media and other advertising, and through brick-and-mortar retailers. It also derives revenue from licensing its brands and intellectual property.

The company’s direct-to-consumer route produced fourth-quarter net sales of $58 million. That’s up 35 percent from $42.98 million in the fourth quarter of 2013. For all of last year, net sales from that line of business were $175.59 million, up 28 percent from net sales of $136.66 million in 2013.

Meanwhile, net sales from brick-and-mortar outlets were $34.61 million in the October-to-December period. That’s up 7 percent from $32.09 million during the same year-ago period. For all of 2014, net sales from retail outlets were $93.22 million, up 21 percent from net sales of $76.77 million in 2013.

Bill McMahon, chief operating officer for Nautilus, said the company’s Bowflex Max Trainer — a home fitness machine that combines the attributes of an elliptical machine and a stair-stepper — largely drove the company’s solid revenue and operating income growth.

“Consumer demand has been very strong for this product,” McMahon said. Research shows customer satisfaction with the product is high, he added, “and our return rates are low.” He also noted that Nautilus recently conducted a small launch (no TV advertising and relatively conservative marketing) of its new Bowflex Body line of nutrition and energy drinks. The launch, focused on existing customers, aimed to pinpoint whether the nutrition shakes would go over well with the target group.

The initial response was positive, McMahon said, so the company expects to continue to roll out the new drinks this year.

Nautilus’ stock, which trades as NLS on the New York Stock Exchange, closed up 2 cents Monday, at $14.70 per share. The company’s shares have traded between $7.94 and $16.20 in the past 52 weeks.