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Dec. 3, 2022

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Nautilus directors considering sale of Vancouver-based company

By , Columbian staff writer
Published:

Vancouver-based fitness giant Nautilus announced Monday that the company’s board of directors was reviewing strategic alternatives, including the potential sale of the company.

The review, which has the support of company management, will also look for chances to speed up Nautilus’ “digital transformation under its previously announced North Star plan and enhance shareholder value,” read a Monday press release.

“We have made tremendous progress executing our North Star strategy and transforming Nautilus from a product-led hardware company to a consumer-led, digitally connected company,” Nautilus Board Chair Anne Saunders said in Monday’s statement. “Given the dynamic market environment and growth of the home fitness sector, as well as the potential we see to accelerate North Star, the board felt the time was right to review strategic options.”

The North Star plan set a five-pillar strategy: to adopt a consumer first mindset, to scale a differentiated digital offering, to focus investments on core businesses, to evolve the company’s supply chain to be a strategic advantage and to build organizational capabilities.

“With a portfolio of innovative products and leading brands, and a wide and growing omni-channel distribution network, Nautilus is well-positioned to deliver long-term growth and profitability,” said Jim Barr, chief executive of the Vancouver company. “Further, we continue to expand our digital fitness platform, JRNY.”

The JRNY platform, Barr added, had more than 360,000 members as of the end of June.

Barr called the company’s future bright, regardless of the outcome of the review process.

“Our recent investments have allowed us to reach more of our target customers, grow our member base, add new retailer partners and expand our supply chain capacity,” said Barr. “Given the state of the at-home fitness ecosystem, we believe the timing is right to comprehensively assess any opportunities that may accelerate our transformation and enhance value for our shareholders, while also benefiting our customers, employees, and vendors.”

The board is working with Evercore as a financial adviser for the review process. Monday’s statement said the board has no timetable for the review and made clear there was no “assurance that the review will result in any transaction or other strategic change.”

Barr told The Columbian in an email Tuesday that there are no changes to the company’s day-to-day operations at this time.

“This strategic review is ongoing,” he wrote.

Nautilus trades on the New York Stock Exchange as NLS. After the announcement was made on Monday, the company’s stock price jumped from where it closed on Monday at $1.67 to open Tuesday at $1.81. As of Tuesday’s close of market, its stock price was $1.70.

The company, which weathered layoffs, executive resignations and plummeting stock prices in 2019, saw tremendous growth during the pandemic’s initial lockdown period when people began working out at home more than in gyms. The company’s COVID-era stock price rose to around $30 in February 2021. It’s since declined steadily and hovered around $2 since May.

In its last financial report in August, the company reported a 70.3 percent decline in net sales compared with last year. It chalked that up to a return to pre-pandemic seasonal demand. Nautilus reported a net loss of $60.2 million in its first quarter of fiscal 2023 compared with a $13.9 million net income the previous year.

This story was updated to reflect the current stock value of the company as well as with a comment from CEO Jim Barr.

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