Nautilus, Inc. Announces Preliminary First Quarter 2020 Sales Results - Seite 2

Manufacturing and Supply Chain

A significant volume of Nautilus products is manufactured in China and most workers in the factories the Company utilizes have returned to work. Further, ground transportation to the ports, and shipping capabilities from China are improving daily. Management is working closely with partners across its entire supply chain to improve production and delivery timelines and has expedited deliveries to the U.S. and Europe to meet increased customer demand.

Management Comments

Jim Barr, Chief Executive Officer of Nautilus Inc., noted, “The power of our trusted brands, quality products, and strong execution in sales, marketing, and supply chain fueled significant growth and strong results in Q1. COVID-19 has created a heightened need for home-fitness products and our company was able to meet customer demand well, through both the Direct and Retail segments. We reversed five quarters of year-over-year sales declines and delivered sales growth of 11% in Q1, 2020 as customers gravitated to key products like the Bowflex SelectTech dumbbells, Bowflex C6 bike, and the Schwinn IC4 bike. Demand for many of our home-fitness products continues to outpace supply and we are pulling all levers to accelerate the manufacturing and delivery of key products. Our better than expected EBITDA is the result, in part, of the strategic and operational improvements we’ve made recently, combined with a dedicated and engaged employee base focused on consistent execution.

While these short-term results have exceeded expectations, it is prudent to realize the coming quarters may present added challenges for all businesses as we better understand the longer-term impacts of COVID-19. Short-term, it may remain a significant challenge to fully match the unplanned surge in demand with supply. Looking to the long term, like many companies, we will be evaluating the potential impact and duration of the pandemic on the overall macro-economic environment.”

Mr. Barr continued, “Our management team is very proud of our employees and how they faced this current adversity. We rapidly and profoundly changed our historical working model, well ahead of government mandates, and have created new solutions to ensure we are meeting our customers’ enhanced needs. Our supply chain and front-line customer care teams have been handling holiday-level volumes with very little time to prepare. I want to thank our employees and partners for their amazing efforts and for coming together as a team for our customers. We believe this challenge has brought out the best in our company, further demonstrating our resolve, resilience, and agility, qualities that make us stronger, and will serve us well in our efforts to return to long-term profitable growth.”