Vancouver, WA — Nautilus, which has had disappointing financials for the past several years, wasn't helped last year by the economy.

Net sales in fourth quarter 2008 were $92.3 million compared to $146.7 million in 2007, a 37 percent decrease. For the year, net sales were $411 million, down 18 percent from $501 million in 2007.

“The decline is due to the overall consumer environment and credit market disruptions as well as an internal decision to reduce the level of discounting versus the prior year,” Kenneth Fish, Nautilus CFO, said in a call with analysts last month.

The company's fourth quarter 2008 loss of $41.2 million is less than the $45.7 million loss it had in fourth quarter 2007. For the year, the company had a net loss of $90.6 million, which is more than the $55.6 million loss the company had in 2007.

Commercial business sales were down 37 percent to $26.4 million.

“This decline is primarily due to the late investment by health clubs to modernize existing equipment, reduced Treadclimber sales, tighter inventory controls by dealers that sell mainly into light commercial applications and delays in opening up new gyms,” Fish said. “Excluding Treadclimber sales commercial business revenue was down 29 percent in fourth quarter of 2008 versus fourth quarter of 2007.”

The company has been cutting its expenses by various means, including layoffs and closing a manufacturing facility in Tulsa, OK. In late February, Nautilus laid off 50 employees at its Vancouver, WA, headquarters, leaving head count there at 350 people. In October 2007, the company laid off 140 people, 80 of those at its headquarters.

“While we expect our revenue will continue to be impacted by the challenging economic environment throughout 2009, we believe these additional cost improvements in 2009 will enable us to be cash flow positive in 2009 as we continue to right size the company and lower our breakeven point,” Fish said.

The company plans to reintroduce the Treadclimber this year, but Ed Bramson, CEO of Nautilus, declined to offer a release date. Nautilus has suspended the manufacturing of the Treadclimber twice, most recently in early 2008, due to durability issues.