VANCOUVER, WA -- Net sales for Nautilus Inc. for the first quarter 2009 were down by $57.5 million from first quarter 2008 net sales, a decrease of 44.4 percent, according to a financials release from the company today.
Nautilus reported net sales of $72.1 million, compared to net sales of $129.6 million for the first quarter of 2008.
“The first quarter was a tough one for us,” Ed Bramson, Nautilus chairman and CEO, said in a call with analysts this afternoon.
Nautilus reported a loss from continuing operations for the first quarter of $13.8 million. Most of the loss was from the commercial business and from pre-tax restructuring charges of $3.8 million, he said. The commercial side of Nautilus’ business had first quarter 2009 sales of $18 million, down 46.5 percent from the $33.7 million in the same period last year.
The commercial business sales were reduced mostly due to the economy and availability of credit to commercial businesses, plus more stringent sales terms by Nautilus, according to Bramson.
Included in the loss from continuing operations were pre-tax restructuring charges of $3.8 million. The restructuring charges are principally related to the company's previously announced closure of the manufacturing facility in Tulsa, OK, and a write-off related to abandoned information technology software.
In the first quarter of 2008, Nautilus reported a loss from continuing operations of $6.9 million or $0.22 per diluted share. Included in the loss from continuing operations were pre-tax charges of $10.7 million, primarily related to the cancellation in the first quarter of 2008 of the company's agreement to purchase Land America Health & Fitness Co. Ltd.
“While we are not satisfied with the consolidated net loss, we are encouraged by the operating improvements,” Bramson said in a release from the company. “During the first quarter, we achieved the highest gross margins in over a year and reduced operating expenses by 33 percent compared to the same period last year. Even though the overall consumer environment remains very challenging, our recently implemented marketing and operating adjustments are providing positive contributions in the direct and retail businesses.”
Bramson added: “We continued to right-size our cost structure in the first quarter by implementing an additional $17 million in anticipated annualized cost reductions. These actions will begin to benefit our operating results in the second quarter, and we expect to realize substantially all of the benefit from these improvements in the fourth quarter of 2009.”