Company Achieves Full Year Revenue Guidance by Growing Revenue 79% to $553 million
Full Year Operating Income was $78 million and Full Year EBITDA was $84 million
Full Year Adjusted EBITDA of $107 million exceeds company EBITDA guidance
Fourth Quarter Operating Income of $41 million is the second highest since our founding in 1986
Fourth Quarter EBITDA improved by 578% to $40 million compared to same period last year
Company Expects Revenue to Increase 55% to 75% for the period ending March 31, 2021 compared to the same period last year
VANCOUVER, Wash.--(BUSINESS WIRE)-- Nautilus, Inc. (NYSE: NLS) today reported its unaudited operating results for the fourth quarter and full year ended December 31, 2020.
Fourth Quarter 2020 Highlights Compared to Fourth Quarter 2019
1 See "Reconciliation of Non-GAAP Financial Measures" for more information
Management Comments
“Our team’s passion to deliver a best-in-class consumer experience resulted in our strongest quarterly performance of all time. We delivered robust growth across our brands, channels, and products. Net sales grew 82% or 108% excluding the impact of the Octane brand, which we sold in October 2020. We expanded gross margins by 450 basis points, delivered operating income of $41 million, and generated $40 million of EBITDA,” said Jim Barr, Nautilus Inc. Chief Executive Officer. “The demand for in-home fitness has not abated in early 2021, even in the face of a vaccine roll-out. We ended the year with $91 million in backlog as, similar to many industries, we continue to face disruptions in global logistics. We are managing through these temporary constraints which we expect will remain through the first half of calendar 2021. Strong consumer response to our expanding cardio and strength offerings, particularly our IC bikes, SelectTech® weights, and Home Gyms drove our performance in the quarter.”
Mr. Barr continued, “During the holiday fitness season, we added to our product portfolio by launching the new Bowflex® C7 bike, two Bowflex® Treadmills, and an updated Max Trainer® all integrated with the JRNY® digital fitness platform through HD touchscreens. Additionally, our new VeloCore® bike, the industry’s first (un)stationary, dual-mode bike that combines leaning technology with digital connectivity, won a prestigious Consumer Electronics Show 2021 Innovation Award. These new products and JRNY 2.0 have received incredible coverage and glowing customer reviews, positioning us well for 2021. Lastly, we completed North Star, our long-term strategy that builds on the company's well-known brands, reputation for quality and innovation, broad product portfolio, and consumer-focused company culture. We ended the year with over $90 million of cash and short-term investments, providing additional resources needed to accelerate our North Star strategy and ultimately deliver sustainable long-term growth.”
Fourth Quarter 2020 Segment Results Compared to Fourth Quarter 2019
Direct Segment
Retail Segment
Full Year 2020 Highlights Compared to Full Year 2019
1 See "Reconciliation of Non-GAAP Financial Measures" for more information
Full Year 2020 Segment Results Compared to Full Year 2019
Direct Segment
Retail Segment
Balance Sheet and Other Key Highlights as of December 31, 2020:
Change in Year-End
Investor Day Announcement
Forward Looking Guidance
Conference Call
Nautilus will discuss fourth quarter 2020 operating results during a live conference call and webcast on Monday, February 22, 2021 at 1:30 p.m. Pacific Time. the conference call can be accessed by calling (877) 425-9470 in North America. International callers may dial (201) 389-0878. Please note there will be presentation slides accompanying the earnings call. The slides will be displayed live on the webcast and will be available to download via the webcast player or at http://www.nautilusinc.com/events. The webcast will be archived online within two hours after completion of the call and will be available for six months. Participants from the Company will include Jim Barr, Chief Executive Officer and Aina Konold, Chief Financial Officer.
A telephonic playback will be available from 4:30 p.m. PT, February 22, 2021 through 11:59 p.m. ET, March 8, 2021. Participants can dial (844) 512-2921 in North America and international participants can dial (412) 317-6671 to hear the playback. The passcode for the playback is 13715623.
About Nautilus, Inc.
Headquartered in Vancouver, Washington, Nautilus, Inc. (NYSE: NLS) is a global technology driven fitness solutions company that believes everyone deserves a fit and healthy life. With a brand portfolio including Bowflex®, Nautilus®, Schwinn® and JRNY®. Nautilus, Inc. develops innovative products to support healthy living through direct and retail channels. Nautilus, Inc. uses the investor relations page of its website (www.nautilusinc.com/investors) to make information available to its investors and the market.
Forward-Looking Statements
This press release includes forward-looking statements (statements which are not historical facts) within the meaning of the Private Securities Litigation Reform Act of 1995, including: projected or forecasted financial, operating results and capital expenditures, anticipated demand for the Company's new and existing products, statements regarding the Company's prospects, resources or capabilities; planned investments, strategic initiatives and the anticipated or targeted results of such initiatives; the effects of the COVID-19 pandemic on the Company’s business; and planned operational initiatives and the anticipated cost-saving results of such initiatives. All of these forward-looking statements are subject to risks and uncertainties that may change at any time. Factors that could cause Nautilus, Inc.’s actual expectations to differ materially from these forward-looking statements also include: weaker than expected demand for new or existing products; our ability to timely acquire inventory that meets our quality control standards from sole source foreign manufacturers at acceptable costs; risks associated with current and potential delays, work stoppages, or supply chain disruptions, including shipping delays due to the severe shortage of shipping containers; an inability to pass along or otherwise mitigate the impact of raw material price increases and other cost pressures, including unfavorable currency exchange rates and increased shipping costs; experiencing delays and/or greater than anticipated costs in connection with launch of new products, entry into new markets, or strategic initiatives; our ability to hire and retain key management personnel; changes in consumer fitness trends; changes in the media consumption habits of our target consumers or the effectiveness of our media advertising; a decline in consumer spending due to unfavorable economic conditions; risks related to the impact on our business of the COVID-19 pandemic or similar public health crises; softness in the retail marketplace; changes in the financial markets, including changes in credit markets and interest rates and the impact of any future impairment. Additional assumptions, risks and uncertainties are described in detail in our registration statements, reports and other filings with the Securities and Exchange Commission, including the “Risk Factors” set forth in our Annual Report on Form 10-K, as supplemented by our quarterly reports on Form 10-Q. Such filings are available on our website or at www.sec.gov. You are cautioned that such statements are not guarantees of future performance and that our actual results may differ materially from those set forth in the forward-looking statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent developments, events or circumstances.
RESULTS OF OPERATIONS INFORMATION
The following summary contains information from our consolidated statements of operations for the three and twelve months ended December 31, 2020 and 2019 (unaudited and in thousands, except per share amounts):
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||||
| 2020 |
| 2019 |
| 2020 |
| 2019 | ||||||||
|
|
|
|
|
|
|
| ||||||||
Net sales | $ | 189,259 |
|
| $ | 104,173 |
|
| $ | 552,560 |
|
| $ | 309,285 |
|
Cost of sales | 111,388 |
|
| 66,016 |
|
| 323,758 |
|
| 198,702 |
| ||||
Gross profit | 77,871 |
|
| 38,157 |
|
| 228,802 |
|
| 110,583 |
| ||||
|
|
|
|
|
|
|
| ||||||||
Operating expenses: |
|
|
|
|
|
|
| ||||||||
Selling and marketing | 21,998 |
|
| 25,449 |
|
| 78,337 |
|
| 94,595 |
| ||||
General and administrative | 10,364 |
|
| 6,418 |
|
| 36,176 |
|
| 30,242 |
| ||||
Research and development | 4,029 |
|
| 3,000 |
|
| 15,812 |
|
| 14,282 |
| ||||
Loss on disposal group, goodwill and other intangible impairment charge | — |
|
| — |
|
| 20,668 |
|
| 72,008 |
| ||||
Total operating expenses | 36,391 |
|
| 34,867 |
|
| 150,993 |
|
| 211,127 |
| ||||
|
|
|
|
|
|
|
| ||||||||
Operating income (loss) | 41,480 |
|
| 3,290 |
|
| 77,809 |
|
| (100,544 | ) | ||||
Other expense, net | (3,640 | ) |
| (378 | ) |
| (5,074 | ) |
| (1,288 | ) | ||||
Income (loss) from continuing operations before income taxes | 37,840 |
|
| 2,912 |
|
| 72,735 |
|
| (101,832 | ) | ||||
Income tax expense (benefit) | 8,588 |
|
| (751 | ) |
| 12,198 |
|
| (9,537 | ) | ||||
Income (loss) from continuing operations | 29,252 |
|
| 3,663 |
|
| 60,537 |
|
| (92,295 | ) | ||||
Loss from discontinued operations, net of income taxes | (316 | ) |
| (176 | ) |
| (689 | ) |
| (505 | ) | ||||
Net income (loss) | $ | 28,936 |
|
| $ | 3,487 |
|
| $ | 59,848 |
|
| $ | (92,800 | ) |
|
|
|
|
|
|
|
| ||||||||
Basic income (loss) per share from continuing operations | $ | 0.97 |
|
| $ | 0.12 |
|
| $ | 2.02 |
|
| $ | (3.11 | ) |
Basic loss per share from discontinued operations | (0.01 | ) |
| (0.01 | ) |
| (0.03 | ) |
| (0.02 | ) | ||||
Basic net income (loss) per share(1) | $ | 0.96 |
|
| $ | 0.12 |
|
| $ | 1.99 |
|
| $ | (3.13 | ) |
|
|
|
|
|
|
|
| ||||||||
Diluted income (loss) per share from continuing operations | $ | 0.90 |
|
| $ | 0.12 |
|
| $ | 1.88 |
|
| $ | (3.11 | ) |
Diluted loss per share from discontinued operations | (0.01 | ) |
| (0.01 | ) |
| (0.02 | ) |
| (0.02 | ) | ||||
Diluted net income (loss) per share(1) | $ | 0.89 |
|
| $ | 0.12 |
|
| $ | 1.86 |
|
| $ | (3.13 | ) |
|
|
|
|
|
|
|
| ||||||||
Shares used in per share calculations: |
|
|
|
|
|
|
| ||||||||
Basic | 30,284 |
|
| 29,756 |
|
| 30,007 |
|
| 29,684 |
| ||||
Diluted | 32,633 |
|
| 29,756 |
|
| 32,123 |
|
| 29,684 |
| ||||
(1) May not add due to rounding. |
SEGMENT INFORMATION
The following tables present certain comparative information by segment and major product lines within each business segment for the three and twelve months ended December 31, 2020 and 2019 (unaudited and in thousands):
| Three Months Ended December 31, |
| Change | |||||||||||
| 2020 |
| 2019 |
| $ |
| % | |||||||
Net sales: |
|
|
|
|
|
|
| |||||||
Direct: |
|
|
|
|
|
|
| |||||||
Cardio products(1) | $ | 52,876 |
|
| $ | 29,703 |
|
| $ | 23,173 |
|
| 78.0 | % |
Strength products(2) | 29,282 |
|
| 6,203 |
|
| 23,079 |
|
| 372.1 | % | |||
Direct sales | $ | 82,158 |
|
| $ | 35,906 |
|
| $ | 46,252 |
|
| 128.8 | % |
|
|
|
|
|
|
|
| |||||||
Retail: |
|
|
|
|
|
|
| |||||||
Cardio products(1) | 78,255 |
|
| 49,081 |
|
| 29,174 |
|
| 59.4 | % | |||
Strength products(2) | 28,065 |
|
| 18,406 |
|
| 9,659 |
|
| 52.5 | % | |||
Retail sales | 106,320 |
|
| 67,487 |
|
| 38,833 |
|
| 57.5 | % | |||
|
|
|
|
|
|
|
| |||||||
Royalty | 781 |
|
| 780 |
|
| 1 |
|
| 0.1 | % | |||
Consolidated net sales | $ | 189,259 |
|
| $ | 104,173 |
|
| $ | 85,086 |
|
| 81.7 | % |
|
|
|
|
|
|
|
| |||||||
Gross profit: |
|
|
|
|
|
|
| |||||||
Direct | $ | 44,003 |
|
| $ | 17,917 |
|
| $ | 26,086 |
|
| 145.6 | % |
Retail | 33,087 |
|
| 19,460 |
|
| 13,627 |
|
| 70.0 | % | |||
Royalty | 781 |
|
| 780 |
|
| 1 |
|
| 0.1 | % | |||
Consolidated gross profit | $ | 77,871 |
|
| $ | 38,157 |
|
| $ | 39,714 |
|
| 104.1 | % |
|
|
|
|
|
|
|
| |||||||
Contribution: |
|
|
|
|
|
|
| |||||||
Direct | $ | 23,584 |
|
| $ | (5,000 | ) |
| $ | 28,584 |
|
| 571.7 | % |
Retail | 25,338 |
|
| 12,240 |
|
| 13,098 |
|
| 107.0 | % | |||
Royalty | 781 |
|
| 780 |
|
| 1 |
|
| 0.1 | % | |||
Consolidated contribution | $ | 49,703 |
|
| $ | 8,020 |
|
| $ | 41,683 |
|
| 519.7 | % |
|
|
|
|
|
|
|
| |||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | ||||||||||||||
Consolidated contribution | $ | 49,703 |
|
| $ | 8,020 |
|
| $ | 41,683 |
|
| 519.7 | % |
Amounts not directly related to segments: |
|
|
|
|
|
|
| |||||||
Operating expenses | (8,223 | ) |
| (4,730 | ) |
| (3,493 | ) |
| (73.8 | )% | |||
Other expense, net | (3,640 | ) |
| (378 | ) |
| (3,262 | ) |
| (863.0 | )% | |||
Income tax (expense) benefit | (8,588 | ) |
| 751 |
|
| (9,339 | ) |
| (1,243.5 | )% | |||
Income from continuing operations | $ | 29,252 |
|
| $ | 3,663 |
|
| $ | 25,589 |
|
| 698.6 | % |
|
|
|
|
|
|
|
| |||||||
(1) Cardio products include: connected-fitness bikes, the Bowflex® C6, Bowflex® VeloCore®, Schwinn® IC4, Max Trainer®, treadmills, other exercise bikes, ellipticals and subscription services. | ||||||||||||||
(2) Strength products include: Bowflex® Home Gyms, Bowflex® SelectTech® dumbbells, kettlebell and barbell weights, and accessories. |
| Twelve Months Ended December 31, |
| Change | |||||||||||
| 2020 |
| 2019 |
| $ |
| % | |||||||
Net sales: |
|
|
|
|
|
|
| |||||||
Direct: |
|
|
|
|
|
|
| |||||||
Cardio products(1) | $ | 178,615 |
|
| $ | 97,824 |
|
| $ | 80,791 |
|
| 82.6 | % |
Strength products(2) | 62,311 |
|
| 21,827 |
|
| 40,484 |
|
| 185.5 | % | |||
Direct sales | $ | 240,926 |
|
| $ | 119,651 |
|
| $ | 121,275 |
|
| 101.4 | % |
|
|
|
|
|
|
|
| |||||||
Retail: |
|
|
|
|
|
|
| |||||||
Cardio products(1) | 235,333 |
|
| 141,331 |
|
| 94,002 |
|
| 66.5 | % | |||
Strength products(2) | 72,703 |
|
| 45,253 |
|
| 27,450 |
|
| 60.7 | % | |||
Retail sales | 308,036 |
|
| 186,584 |
|
| 121,452 |
|
| 65.1 | % | |||
|
|
|
|
|
|
|
| |||||||
Royalty | 3,598 |
|
| 3,050 |
|
| 548 |
|
| 18.0 | % | |||
Consolidated net sales | $ | 552,560 |
|
| $ | 309,285 |
|
| $ | 243,275 |
|
| 78.7 | % |
|
|
|
|
|
|
|
| |||||||
Gross profit: |
|
|
|
|
|
|
| |||||||
Direct | $ | 130,815 |
|
| $ | 59,550 |
|
| $ | 71,265 |
|
| 119.7 | % |
Retail | 94,389 |
|
| 47,983 |
|
| 46,406 |
|
| 96.7 | % | |||
Royalty | 3,598 |
|
| 3,050 |
|
| 548 |
|
| 18.0 | % | |||
Consolidated gross profit | $ | 228,802 |
|
| $ | 110,583 |
|
| $ | 118,219 |
|
| 106.9 | % |
|
|
|
|
|
|
|
| |||||||
Contribution: |
|
|
|
|
|
|
| |||||||
Direct | $ | 59,976 |
|
| $ | (24,569 | ) |
| $ | 84,545 |
|
| 344.1 | % |
Retail | 62,782 |
|
| 16,043 |
|
| 46,739 |
|
| 291.3 | % | |||
Royalty | 3,598 |
|
| 3,050 |
|
| 548 |
|
| 18.0 | % | |||
Consolidated contribution | $ | 126,356 |
|
| $ | (5,476 | ) |
| $ | 131,832 |
|
| 2,407.5 | % |
|
|
|
|
|
|
|
| |||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | ||||||||||||||
Consolidated contribution | $ | 126,356 |
|
| $ | (5,476 | ) |
| $ | 131,832 |
|
| 2,407.5 | % |
Amounts not directly related to segments: |
|
|
|
|
|
|
| |||||||
Operating expenses | (48,547 | ) |
| (95,068 | ) |
| 46,521 |
|
| 48.9 | % | |||
Other expense, net | (5,074 | ) |
| (1,288 | ) |
| (3,786 | ) |
| (293.9 | )% | |||
Income tax (expense) benefit | (12,198 | ) |
| 9,537 |
|
| (21,735 | ) |
| (227.9 | )% | |||
Income (loss) from continuing operations | $ | 60,537 |
|
| $ | (92,295 | ) |
| $ | 152,832 |
|
| 165.6 | % |
|
|
|
|
|
|
|
| |||||||
(1) Cardio products include: connected-fitness bikes, the Bowflex® C6, Bowflex® VeloCore®, Schwinn® IC4, Max Trainer®, treadmills, other exercise bikes, ellipticals and subscription services. | ||||||||||||||
(2) Strength products include: Bowflex® Home Gyms, Bowflex® SelectTech® dumbbells, kettlebell and barbell weights, and accessories. |
BALANCE SHEET INFORMATION
The following summary contains information from our consolidated balance sheets as of December 31, 2020 and 2019 (unaudited and in thousands):
| As of December 31, | ||||||
| 2020 |
| 2019 | ||||
Assets |
|
|
| ||||
|
|
|
| ||||
Cash and cash equivalents | $ | 56,581 |
|
| $ | 11,070 |
|
Restricted cash | 1,339 |
|
| — |
| ||
Available-for-sale securities | 36,199 |
|
| — |
| ||
Trade receivables, net of allowances of $337 and $45 | 91,224 |
|
| 54,600 |
| ||
Inventories | 51,140 |
|
| 54,768 |
| ||
Prepaids and other current assets | 19,188 |
|
| 8,283 |
| ||
Income taxes receivable | 4,021 |
|
| 472 |
| ||
Total current assets | 259,692 |
|
| 129,193 |
| ||
Property, plant and equipment, net | 23,926 |
|
| 22,755 |
| ||
Operating lease right-of-use assets | 19,876 |
|
| 20,778 |
| ||
Other intangible assets, net | 9,380 |
|
| 43,243 |
| ||
Deferred income tax assets, non-current | 2,426 |
|
| — |
| ||
Other assets | 2,817 |
|
| 4,510 |
| ||
Total assets | $ | 318,117 |
|
| $ | 220,479 |
|
|
|
|
| ||||
Liabilities and Shareholders' Equity |
|
|
| ||||
|
|
|
| ||||
Trade payables | $ | 96,399 |
|
| $ | 74,255 |
|
Accrued liabilities | 22,841 |
|
| 7,633 |
| ||
Operating lease liabilities, current portion | 3,331 |
|
| 3,720 |
| ||
Warranty obligations, current portion | 4,198 |
|
| 3,100 |
| ||
Debt payable, current portion, net of unamortized debt issuance costs of $83 and $0 | 2,792 |
|
| — |
| ||
Total current liabilities | 129,561 |
|
| 88,708 |
| ||
Operating lease liabilities, non-current | 18,736 |
|
| 18,982 |
| ||
Warranty obligations, non-current | 1,000 |
|
| 2,617 |
| ||
Income taxes payable, non-current | 4,309 |
|
| 3,676 |
| ||
Deferred income tax liabilities, non-current | — |
|
| 1,783 |
| ||
Other long-term liabilities | 606 |
|
| 46 |
| ||
Debt payable, non-current, net of unamortized debt issuance costs of $256 and $230 | 10,710 |
|
| 14,071 |
| ||
Shareholders' equity | 153,195 |
|
| 90,596 |
| ||
Total liabilities and shareholders' equity | $ | 318,117 |
|
| $ | 220,479 |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Non-GAAP Presentation
In addition to disclosing its financial results determined in accordance with GAAP, Nautilus has presented in this release certain non-GAAP financial measures, which exclude the impact of certain items (as further described below) and provide supplemental information regarding operating performance. Nautilus presents non-GAAP financial measures as a complement to results provided in accordance with GAAP, and the non-GAAP financial measures should not be regarded as a substitute for GAAP. By disclosing these non-GAAP financial measures, management intends to provide investors with a supplemental comparison of operating results and trends for the periods presented. Management believes these measures are also useful to investors as such measures allow investors to evaluate performance using the same metrics that management uses to evaluate past performance and prospects for future performance. Nautilus strongly encourages you to review all its financial statements and publicly filed reports in their entirety and to not rely on any single financial measure.
EBITDA from Continuing Operations
Nautilus defines EBITDA from continuing operations as its income from continuing operations, adjusted to exclude interest expense (income), income tax expense (benefit) of continuing operations, and depreciation and amortization expense. Nautilus uses EBITDA from continuing operations in evaluating its operating results and for financial and operational decision-making purposes such as budgeting and establishing operational goals. Nautilus believes that EBITDA from continuing operations helps identify underlying trends in its business that could otherwise be masked by the effect of the items that are excluded from EBITDA from continuing operations and enhances the overall understanding of the Company’s past performance and future prospects. Management believes that EBITDA from continuing operations is frequently used by investors, securities analysts and other interested parties in their evaluation of companies, many of which present EBITDA when reporting their results. Other companies may calculate EBITDA differently, and it may not be comparable.
Adjusted Results
In addition to disclosing the comparable GAAP results, Nautilus has presented its operating expenses, operating income and income from continuing operations on an adjusted basis. Adjusted operating expenses and income excludes non-cash charges related to the loss on the disposal group held-for-sale, goodwill and the Octane Fitness® trade name intangible asset impairment, and an equity investment impairment. Adjusted income from continuing operations excludes the loss and impairment charges as well as the associated tax benefit. We believe that the adjustment of this charge and associated tax benefit, which are inconsistent in amount and frequency, supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance. In addition to presenting its EBITDA from continuing operations, Nautilus has also presented EBITDA from continuing operations on an adjusted basis, excluding the aforementioned impairment charge for similar reasons.
Adjusted EBITDA from Continuing Operations
In addition to disclosing the comparable GAAP results, Nautilus has presented its operating expenses, operating income and income from continuing operations on an adjusted basis. Adjusted operating income excludes non-cash charges related to the disposal group held-for-sale and goodwill and the Octane Fitness® trade name intangible asset impairment, and an equity investment impairment. Adjusted income from continuing operations excludes the loss and impairment charges as well as the associated tax benefit. We believe that the adjustment of this charge and associated tax benefit, which are inconsistent in amount and frequency, supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance. In addition to presenting its EBITDA from continuing operations as described above, Nautilus has also presented EBITDA from continuing operations on an adjusted basis, excluding the aforementioned impairment charge for similar reasons.
The following table presents a reconciliation of operating expenses, the most directly comparable GAAP measure, to Adjusted operating expenses for the three and twelve months ended December 31, 2020 and 2019 (unaudited and in thousands):
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||||
| 2020 |
| 2019 |
| 2020 |
| 2019 | ||||||||
Operating expenses | $ | 36,391 |
|
| $ | 34,867 |
|
| $ | 150,993 |
|
| $ | 211,127 |
|
Loss on disposal group(1) | — |
|
| — |
|
| (20,668 | ) |
| — |
| ||||
Goodwill and other intangible impairment charge(2) | — |
|
| — |
|
| — |
|
| (72,008 | ) | ||||
Adjusted operating expenses | $ | 36,391 |
|
| $ | 34,867 |
|
| $ | 130,325 |
|
| $ | 139,119 |
|
The following table presents a reconciliation of operating income (loss), the most directly comparable GAAP measure, to Adjusted operating income (loss) for the three and twelve months ended December 31, 2020 and 2019 (unaudited and in thousands):
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||||
| 2020 |
| 2019 |
| 2020 |
| 2019 | ||||||||
Operating income (loss) | $ | 41,480 |
|
| $ | 3,290 |
|
| $ | 77,809 |
|
| $ | (100,544 | ) |
Loss on disposal group(1) | — |
|
| — |
|
| 20,668 |
|
| — |
| ||||
Goodwill and other intangible impairment charge(2) | — |
|
| — |
|
| — |
|
| 72,008 |
| ||||
Adjusted operating income (loss) | $ | 41,480 |
|
| $ | 3,290 |
|
| $ | 98,477 |
|
| $ | (28,536 | ) |
The following table presents a reconciliation of income (loss) from continuing operations, the most directly comparable GAAP measure, to Adjusted income (loss) from continuing operations or the three and twelve months ended December 31, 2020 and 2019 (unaudited and in thousands):
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||||
| 2020 |
| 2019 |
| 2020 |
| 2019 | ||||||||
|
|
|
|
|
|
|
| ||||||||
Income (loss) from continuing operations | $ | 29,252 |
|
| $ | 3,663 |
|
| $ | 60,537 |
|
| $ | (92,295 | ) |
Loss on disposal group(1) | — |
|
| — |
|
| 20,668 |
|
| — |
| ||||
Goodwill and other intangible impairment charge(2) | — |
|
| — |
|
| — |
|
| 72,008 |
| ||||
Income tax benefit for loss on disposal group and goodwill and other intangible impairment | — |
|
| — |
|
| (4,796 | ) |
| (3,095 | ) | ||||
Other expenses | 2,500 |
|
| — |
|
| 2,500 |
|
| — |
| ||||
Adjusted income (loss) from continuing operations | $ | 31,752 |
|
| $ | 3,663 |
|
| $ | 78,909 |
|
| $ | (23,382 | ) |
The following table presents a reconciliation of income (loss) from continuing operations, the most directly comparable GAAP measure, to EBITDA from Continuing Operations for the three and twelve months ended December 31, 2020 and 2019 (unaudited and in thousands):
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||||
| 2020 |
| 2019 |
| 2020 |
| 2019 | ||||||||
|
|
|
|
|
|
|
| ||||||||
Income (loss) from continuing operations | $ | 29,252 |
|
| $ | 3,663 |
|
| $ | 60,537 |
|
| $ | (92,295 | ) |
Interest expense, net | 273 |
|
| 259 |
|
| 1,487 |
|
| 818 |
| ||||
Income tax expense (benefit) of continuing operations | 8,588 |
|
| (751 | ) |
| 12,198 |
|
| (9,537 | ) | ||||
Depreciation and amortization | 2,145 |
|
| 2,766 |
|
| 9,448 |
|
| 10,811 |
| ||||
Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) from continuing operations | $ | 40,258 |
|
| $ | 5,937 |
|
| $ | 83,670 |
|
| $ | (90,203 | ) |
The following table presents a reconciliation of income (loss) from continuing operations, the most directly comparable GAAP measure, to Adjusted EBITDA from Continuing Operations for the three and twelve months ended December 31, 2020 and 2019 (unaudited and in thousands):
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||||
| 2020 |
| 2019 |
| 2020 |
| 2019 | ||||||||
|
|
|
|
|
|
|
| ||||||||
Income (loss) from continuing operations | $ | 29,252 |
|
| $ | 3,663 |
|
| $ | 60,537 |
|
| $ | (92,295 | ) |
Interest expense, net | 273 |
|
| 259 |
|
| 1,487 |
|
| 818 |
| ||||
Income tax expense (benefit) from continuing operations | 8,588 |
|
| (751 | ) |
| 12,198 |
|
| (9,537 | ) | ||||
Depreciation and amortization | 2,145 |
|
| 2,766 |
|
| 9,448 |
|
| 10,811 |
| ||||
Loss on disposal group(1) | — |
|
| — |
|
| 20,668 |
|
| — |
| ||||
Other expenses | 2,500 |
|
| — |
|
| 2,500 |
|
| — |
| ||||
Goodwill and other intangible impairment charge(2) | — |
|
| — |
|
| — |
|
| 72,008 |
| ||||
Adjusted earnings (loss) before interest, taxes, depreciation and amortization (Adjusted EBITDA) from continuing operations | $ | 42,758 |
|
| $ | 5,937 |
|
| $ | 106,838 |
|
| $ | (18,195 | ) |
The following table presents a reconciliation of diluted income (loss) per share from continuing operations, the most directly comparable GAAP measure, to Adjusted diluted income (loss) per share from continuing operations for the three and twelve months ended December 31, 2020 and 2019 (unaudited and in thousands):
| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||||||||||
| 2020 |
| 2019 |
| 2020 |
| 2019 | ||||||||
|
|
|
|
|
|
|
| ||||||||
Diluted income (loss) per share from continuing operations | $ | 0.90 |
|
| $ | 0.12 |
|
| $ | 1.88 |
|
| $ | (3.11 | ) |
Loss on disposal group, net of tax (1) | — |
|
| — |
|
| 0.49 |
|
| — |
| ||||
Goodwill and other intangible impairment charge, net of tax(2) | — |
|
| — |
|
| — |
|
| 2.32 |
| ||||
Other expense | 0.07 |
|
| — |
|
| 0.09 |
|
| — |
| ||||
Adjusted diluted income (loss) per share from continuing operations | $ | 0.97 |
|
| $ | 0.12 |
|
| $ | 2.46 |
|
| $ | (0.79 | ) |
(1) Loss on disposal group
In accordance with Accounting Standards Codification ("ASC") 360, Property, Plant and Equipment, for a long-lived assets or disposal group classified as held-for-sale, a loss was recognized for the carrying amount that exceeded the fair market value of the long-lived assets less the cost to sell.
(2) Goodwill and Other Intangible Impairment
In accordance with ASC 350, Intangibles - Goodwill and Other, Nautilus is required to test its goodwill and other indefinite-lived intangible assets for impairment annually or when a triggering event has occurred that would indicate that it is more likely than not that the fair value of the reporting units are less than the book value, including goodwill and intangibles. In our assessment, a triggering event occurred during the second quarter of 2019 as a result of the decline in our stock price and overall market capitalization. Based on the assessment conducted, we estimated a $72.0 million impairment.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210222005823/en/
Investor Relations: John MillsICR, LLC 646-277-1254 john.mills@ICRinc.com Media: John FreadNautilus, Inc. 360-859-5815 jfread@nautilus.com Carey Kerns The Hoffman Agency 503-754-7975 ckerns@hoffman.com
Source: Nautilus, Inc.