Nautilus shows strength in third quarter

Nautilus Inc., the Vancouver-based manufacturer of fitness machines, flexed financial muscle in the third quarter, recording net sales of $59.06 million and posting a profit of $2.48 million.

The company’s net revenue in the July-to-September period was up 28 percent from $46.25 million in the year-ago period, company officials said during an earnings conference call Monday. And Nautilus’ third-quarter profit was up 80 percent from $1.38 million in the same three-month period in 2013.

The numbers mark a robust showing for the company as it approaches the peak season for sales of fitness equipment. Nautilus continues “to make progress across all areas of our business,” CEO Bruce Cazenave said, with the company reporting “another strong quarter of financial growth and improved profitability.”

The positive results stem from several factors, company officials said, including Nautilus’ ongoing focus on product innovation, an increase in consumer credit approval rates in the U.S. and the company’s successful launches of new fitness equipment.

Meanwhile, the company said Monday its board of directors has OK’d the repurchase of up to $15 million of Nautilus’ outstanding common stock. The company’s strong balance sheet provides the flexibility to return capital to shareholders, Cazenave said. Nautilus is expected to repurchase shares over the next 24 months, he said, through a program funded by existing cash balances.

Nautilus sells its cardio, muscle-building and other fitness machines through its direct-to-consumer channel, involving TV, social media and other advertising, and through brick-and-mortar retailers. It also derives revenue from licensing its brands and intellectual property.

The company’s direct-to-consumer route produced net sales of $34.49 million, up 34 percent from $25.72 million in the third quarter of 2013. Net sales from brick-and-mortar outlets were $23.46 million in the July-to-September period. That’s up 21 percent from $19.36 million during the same year-ago period.

The direct-to-consumer segment’s sales benefited from the performance of Nautilus’ Bowflex Max Trainer, a home fitness machine combining the attributes of an elliptical machine and a stair-stepper. Bill McMahon, the company’s chief operating officer, said consumer demand for the Max Trainer remains strong, critics are handing it favorable reviews and it’s been well-received in Canada, too. Given the positive experience in Canada, McMahon said, additional investment in the Max Trainer “is prudent.”

Nautilus’ stock, which trades as NLS on the New York Stock Exchange, closed up 17 cents Monday, at $13.55 per share. The company’s shares have traded between $6.76 and $13.79 in the past 52 weeks.