The statement, signed by CEO Bruce Cazenave, also said “significantly stronger sales” were expected in the quarter from its direct-to-consumer segment, driven by the introduction of a new product, the digital platform Max Intelligence.
“We expect that as consumers are further exposed to (Max Intelligence),,” the statement says, “this unique product will help to accelerate sales across a number of our products and brands in the future starting in 2019.”
Attempts for comment from a Nautilus official about Thursday’s announcement were not successful.
The company said sales of $114 million to $116 million are expected for the fourth quarter last year. In 2017, the company reported fourth quarter sales of $127.8 million, which was 1.6 percent higher than in 2016.
Direct sales appeared to have dropped xx percent in the fourth quarter of last year compared to the same period in 2017. Direct sales for the fourth quarter of 2018 were about $50 million, the company said in Thursday’s statement. In fourth quarter 2017, direct sales were $71.6 million, nearly 10 percent higher than the previous year.
On a brighter note, the company said it expected its fourth quarter retail sales of $64 million to have bested the $55 million posted in fourth quarter 2017, by 16 percent.
“While the overall results for the quarter are disappointing,” Thursday’s statement says, “they are not illustrative of the underlying strengths of the business.”
In executive moves, the company announced that Bill McMahon, perhaps the most visible Nautilus employee through good times and bad the past decade, will step down effective Friday as chief operating officer and become a special assistant to the CEO.
McMahon “has been diagnosed with a health issue that requires a recovery period that will result in him scaling back his responsibilities as COO near term,” the statement says.
Nautilus also said Carlos Navarro had joined the company as general manager and vice president of director business. McMahon will assist Navarro’s transition to the role, the statement says.
The statement concludes with a cautionary outlook for 2019. While saying new products would be launched this year and “strategic investments with key partners” are expected, it also strikes a note of austerity.
“We are embarking on an aggressive cost-containment program,” it says, “that will simplify and make processes more efficient, rescale the operations to be more profitable on a lower sales base, and increase our efforts in value engineering our products.”
Final fourth quarter and for 2018 results are scheduled for Feb. 25, after market’s close.
