Vancouver fitness equipment company BowFlex has notified investors and regulators that it has substantial doubt it can remain in business through the next year.
In its third quarter earnings report released Wednesday, the company, formerly known as Nautilus, pointed to a challenging retail environment, deteriorating macroeconomic conditions and a drop in customer demand that led to a significant decline in revenue compared with last year.
“Additionally, we now believe that conditions will not improve in the next several quarters,” the report stated, adding the situation is impacting its projected liquidity.
BowFlex executives have been looking to sell the company or its assets or find another alternative way to access funds, according to the report. The company said that it may voluntarily file for bankruptcy.
The report said if the company cannot promptly make a deal or access funds, it won’t be able to comply with debt agreements and may not be able to continue operating.
“Management has determined that under these circumstances, there is substantial doubt about our ability to continue as a going concern for 12 months from the issuance date of this report,” the report read. Going concern is an accounting term indicating a company will remain in business indefinitely.
The company reported a net loss of $34.3 million, or 94 cents per diluted share, in its third quarter of 2023, which ended Dec. 31, 2023. It saw a loss of $11.1 million, or 35 cents per diluted share, in the third quarter of 2022.
For the three quarters so far this year, BowFlex reported a loss of $51.8 million, compared with a $84.4 million loss in the first three quarters of 2022.
The company reported $67.6 million in sales for the third quarter of 2023, down from $98.1 million during the third quarter of 2022.
During the home work-out revolution that swept the world during the global pandemic, BowFlex saw demand for its products boom, driving its stock price up to $29.53 per share in Feb. 2021. But as the world returned to normal, demand slumped.
The company has struggled in the years since, withstanding layoffs, selling off its prior namesake brand Nautilus and enduring the threat of delisting by the New York Stock Exchange.
After selling off its Nautilus brand, the company changed its name to BowFlex Nov. 1.
The company’s stock trades on the New York Stock Exchange as BFX. It closed Wednesday at 20 cents per share, plummeting from 52 cents per share where it closed Feb. 14, when the company issued a delayed filing notification raising concern about the company’s solvency.
