The stock price for local fitness equipment manufacturer Nautilus Inc. rallied Thursday after the company announced it will be selling more than 4 million shares of stock in an effort to raise roughly $5 million.
In a statement Thursday, a Nautilus spokesperson called the move a proactive step “to improve the company’s liquidity position and long-term outlook.”
The statement mentioned other steps taken recently by the Vancouver-based company, including proactive inventory management, end-of-fiscal-year cost-cutting measures, the sale of noncore assets and the amendment of credit agreements.
“Nautilus is well-positioned to deliver meaningful year-over-year improvements in adjusted (earnings before interest, taxes, depreciation and amortization), and remains focused on the long-term,” the statement reads.
The net proceeds for the registered direct offering will go toward “general corporate purposes,” according to the company’s initial announcement.
Nautilus announced in May that it’d be selling off its namesake brand, Nautilus. At the time, Nautilus CEO Jim Barr said the company had planned to de-emphasize its Nautilus brand since launching its North Star Strategy in 2021. It had since stopped manufacturing its Nautilus-branded products.
The company also owns Bowflex, Schwinn and JRNY and stated it intended to put its efforts into those three brands.
With so many working out at home during the pandemic, Nautilus saw tremendous growth during that time. But since then, it reported net losses in both its 2022 and 2023 fiscal years.
The company also laid off 15 percent of its staff in February.
At its last earnings call in May, Barr said he remained “confident in the long-term industry opportunity.”
The company’s research, he added, showed a “steady shift” to at-home exercise.
The offering announced Thursday will consist of 4,098,362 shares of the company’s common stock at a purchase price of $1.22 per share. It’s expected to close Tuesday.
The company also announced it will concurrently issue warrants to purchase up to 4,098,362 shares of stock. The warrants will cost $1.35 per share and can be exercised six months after issued.
Roth Capital Partners, a privately held California investment bank, will be the placement agent for the offering.
Nautilus trades on the New York Stock Exchange under the ticker NLS. Its stock closed Thursday at $1.34 per share, up from where it closed Wednesday at $1.27 per share.
