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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Nautilus Inc | NYSE:NLS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.8204 | 0 | 01:00:00 |
|
|
|
FORM
|
10-Q
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
NAUTILUS, INC.
|
||
(Exact name of Registrant as specified in its charter)
|
||
|
|
|
Washington
|
|
94-3002667
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, no par value
|
NLS
|
New York Stock Exchange
|
|
|
|
|
|
Item 1.
|
|
||
Item 2.
|
|
||
Item 3.
|
|
||
Item 4.
|
|
||
|
|
|
|
|
|
|
|
Item 1.
|
|
||
Item 1A.
|
|
||
Item 6.
|
|
||
|
|
As of
|
||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
5,756
|
|
|
$
|
38,125
|
|
Available-for-sale securities
|
—
|
|
|
25,392
|
|
||
Trade receivables, net of allowances of $45 and $99
|
30,860
|
|
|
45,847
|
|
||
Inventories
|
50,066
|
|
|
68,465
|
|
||
Prepaids and other current assets
|
6,152
|
|
|
7,980
|
|
||
Income taxes receivable
|
2,747
|
|
|
5,653
|
|
||
Total current assets
|
95,581
|
|
|
191,462
|
|
||
Property, plant and equipment, net
|
22,366
|
|
|
22,216
|
|
||
Operating lease right-of-use assets
|
21,640
|
|
|
—
|
|
||
Goodwill
|
—
|
|
|
63,452
|
|
||
Other intangible assets, net
|
44,054
|
|
|
55,240
|
|
||
Other assets
|
4,498
|
|
|
574
|
|
||
Total assets
|
$
|
188,139
|
|
|
$
|
332,944
|
|
Liabilities and Shareholders' Equity
|
|
|
|
||||
Trade payables
|
$
|
38,497
|
|
|
$
|
87,265
|
|
Accrued liabilities
|
7,460
|
|
|
8,370
|
|
||
Operating lease liabilities, current portion
|
3,695
|
|
|
—
|
|
||
Warranty obligations, current portion
|
2,982
|
|
|
3,213
|
|
||
Note payable, current portion, net of unamortized debt issuance costs of $0 and $7
|
—
|
|
|
15,993
|
|
||
Total current liabilities
|
52,634
|
|
|
114,841
|
|
||
Operating lease liabilities, non-current
|
19,926
|
|
|
—
|
|
||
Warranty obligations, non-current
|
2,391
|
|
|
2,362
|
|
||
Income taxes payable, non-current
|
3,695
|
|
|
3,427
|
|
||
Deferred income tax liabilities, non-current
|
4,661
|
|
|
11,888
|
|
||
Other non-current liabilities
|
74
|
|
|
1,837
|
|
||
Debt payable, non-current, net of unamortized debt issuance costs of $256 and $7
|
20,296
|
|
|
15,993
|
|
||
Total liabilities
|
103,677
|
|
|
150,348
|
|
||
Commitments and contingencies (Note 18)
|
|
|
|
|
|
||
Shareholders' equity:
|
|
|
|
||||
Common stock - no par value, 75,000 shares authorized, 29,728 and
29,545 shares issued and outstanding
|
625
|
|
|
215
|
|
||
Retained earnings
|
84,940
|
|
|
183,290
|
|
||
Accumulated other comprehensive loss
|
(1,103
|
)
|
|
(909
|
)
|
||
Total shareholders' equity
|
84,462
|
|
|
182,596
|
|
||
Total liabilities and shareholders' equity
|
$
|
188,139
|
|
|
$
|
332,944
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
$
|
61,708
|
|
|
$
|
91,057
|
|
|
$
|
205,112
|
|
|
$
|
281,368
|
|
Cost of sales
|
42,641
|
|
|
52,551
|
|
|
132,686
|
|
|
150,343
|
|
||||
Gross profit
|
19,067
|
|
|
38,506
|
|
|
72,426
|
|
|
131,025
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling and marketing
|
17,472
|
|
|
20,635
|
|
|
69,146
|
|
|
79,482
|
|
||||
General and administrative
|
6,726
|
|
|
7,503
|
|
|
23,824
|
|
|
20,740
|
|
||||
Research and development
|
3,122
|
|
|
4,208
|
|
|
11,282
|
|
|
12,744
|
|
||||
Goodwill and intangible impairment charge
|
—
|
|
|
—
|
|
|
72,008
|
|
|
—
|
|
||||
Total operating expenses
|
27,320
|
|
|
32,346
|
|
|
176,260
|
|
|
112,966
|
|
||||
Operating (loss) income
|
(8,253
|
)
|
|
6,160
|
|
|
(103,834
|
)
|
|
18,059
|
|
||||
Other (expense) income:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
—
|
|
|
269
|
|
|
162
|
|
|
835
|
|
||||
Interest expense
|
(293
|
)
|
|
(244
|
)
|
|
(721
|
)
|
|
(805
|
)
|
||||
Other, net
|
(129
|
)
|
|
188
|
|
|
(351
|
)
|
|
206
|
|
||||
Total other (expense) income, net
|
(422
|
)
|
|
213
|
|
|
(910
|
)
|
|
236
|
|
||||
(Loss) income from continuing operations before income taxes
|
(8,675
|
)
|
|
6,373
|
|
|
(104,744
|
)
|
|
18,295
|
|
||||
Income tax expense (benefit)
|
1,900
|
|
|
1,870
|
|
|
(6,941
|
)
|
|
4,645
|
|
||||
(Loss) income from continuing operations
|
(10,575
|
)
|
|
4,503
|
|
|
(97,803
|
)
|
|
13,650
|
|
||||
Discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations before income taxes
|
(39
|
)
|
|
(159
|
)
|
|
(104
|
)
|
|
(187
|
)
|
||||
Income tax expense of discontinued operations
|
75
|
|
|
35
|
|
|
225
|
|
|
167
|
|
||||
Loss from discontinued operations
|
(114
|
)
|
|
(194
|
)
|
|
(329
|
)
|
|
(354
|
)
|
||||
Net (loss) income
|
$
|
(10,689
|
)
|
|
$
|
4,309
|
|
|
$
|
(98,132
|
)
|
|
$
|
13,296
|
|
|
|
|
|
|
|
|
|
||||||||
Basic (loss) income per share from continuing operations
|
$
|
(0.36
|
)
|
|
$
|
0.15
|
|
|
$
|
(3.30
|
)
|
|
$
|
0.45
|
|
Basic loss per share from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||||
Basic net (loss) income per share
|
$
|
(0.36
|
)
|
|
$
|
0.14
|
|
|
$
|
(3.31
|
)
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted (loss) income per share from continuing operations
|
$
|
(0.36
|
)
|
|
$
|
0.15
|
|
|
$
|
(3.30
|
)
|
|
$
|
0.45
|
|
Diluted loss per share from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||||
Diluted net (loss) income per share
|
$
|
(0.36
|
)
|
|
$
|
0.14
|
|
|
$
|
(3.31
|
)
|
|
$
|
0.44
|
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
29,728
|
|
|
30,185
|
|
|
29,660
|
|
|
30,230
|
|
||||
Diluted
|
29,728
|
|
|
30,433
|
|
|
29,660
|
|
|
30,500
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net (loss) income
|
$
|
(10,689
|
)
|
|
$
|
4,309
|
|
|
$
|
(98,132
|
)
|
|
$
|
13,296
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on available-for-sale securities, net of income tax expense of $0, $13, $6 and $6
|
—
|
|
|
40
|
|
|
6
|
|
|
37
|
|
||||
(Loss) gain on derivative securities, effective portion, net of income tax expense (benefit) of $0, $(6), $(139) and $26
|
—
|
|
|
(18
|
)
|
|
(223
|
)
|
|
138
|
|
||||
Foreign currency translation, net of income tax (benefit) expense of $(37), $7, $(101) and $7
|
(177
|
)
|
|
82
|
|
|
23
|
|
|
(373
|
)
|
||||
Other comprehensive (loss) income
|
(177
|
)
|
|
104
|
|
|
(194
|
)
|
|
(198
|
)
|
||||
Comprehensive (loss) income
|
$
|
(10,866
|
)
|
|
$
|
4,413
|
|
|
$
|
(98,326
|
)
|
|
$
|
13,098
|
|
|
Common Stock
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total Shareholders' Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balances at December 31, 2018
|
29,545
|
|
|
$
|
215
|
|
|
$
|
183,290
|
|
|
$
|
(909
|
)
|
|
$
|
182,596
|
|
Net loss
|
—
|
|
|
—
|
|
|
(8,575
|
)
|
|
—
|
|
|
(8,575
|
)
|
||||
Unrealized gain on marketable securities, net of income tax expense of $5
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
||||
Loss on derivative securities, effective portion, net of income tax benefit of $33
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
(100
|
)
|
||||
Foreign currency translation adjustment,
net of income tax benefit of $55 |
—
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|
128
|
|
||||
Stock-based compensation expense
|
—
|
|
|
(147
|
)
|
|
(218
|
)
|
|
—
|
|
|
(365
|
)
|
||||
Common stock issued under equity
compensation plan, net of shares withheld for tax payments |
48
|
|
|
(68
|
)
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
||||
Balances at March 31, 2019
|
29,593
|
|
|
—
|
|
|
174,497
|
|
|
(866
|
)
|
|
173,631
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
(78,868
|
)
|
|
—
|
|
|
(78,868
|
)
|
||||
Unrealized loss on marketable securities, net of income tax expense of $1
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||
Loss on derivative securities, effective portion, net of income tax benefit of $106
|
—
|
|
|
—
|
|
|
—
|
|
|
(123
|
)
|
|
(123
|
)
|
||||
Foreign currency translation adjustment,
net of income tax benefit of $9 |
—
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
72
|
|
||||
Stock-based compensation expense
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Common stock issued under equity
compensation plan, net of shares withheld for tax payments |
87
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
||||
Common stock issued under employee stock purchase plan
|
48
|
|
|
168
|
|
|
—
|
|
|
—
|
|
|
168
|
|
||||
Balances at June 30, 2019
|
29,728
|
|
|
213
|
|
|
95,629
|
|
|
(926
|
)
|
|
94,916
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
(10,689
|
)
|
|
—
|
|
|
(10,689
|
)
|
||||
Foreign currency translation adjustment,
net of income tax benefit of $37 |
—
|
|
|
—
|
|
|
—
|
|
|
(177
|
)
|
|
(177
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
412
|
|
|
—
|
|
|
—
|
|
|
412
|
|
||||
Balances at September 30, 2019
|
29,728
|
|
|
$
|
625
|
|
|
$
|
84,940
|
|
|
$
|
(1,103
|
)
|
|
$
|
84,462
|
|
|
Common Stock
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total Shareholders' Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balances at December 31, 2017
|
30,305
|
|
|
$
|
—
|
|
|
$
|
179,448
|
|
|
$
|
(259
|
)
|
|
$
|
179,189
|
|
Net income
|
—
|
|
|
—
|
|
|
8,059
|
|
|
—
|
|
|
8,059
|
|
||||
Unrealized loss on marketable securities, net of income tax benefit of $18
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
(37
|
)
|
||||
Gain on derivative securities, effective portion, net of income tax expense of $28
|
—
|
|
|
—
|
|
|
—
|
|
|
144
|
|
|
144
|
|
||||
Foreign currency translation adjustment,
net of income tax benefit of $3 |
—
|
|
|
—
|
|
|
—
|
|
|
(117
|
)
|
|
(117
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
479
|
|
|
—
|
|
|
—
|
|
|
479
|
|
||||
Common stock issued under equity
compensation plan, net of shares withheld for tax payments |
67
|
|
|
(99
|
)
|
|
—
|
|
|
—
|
|
|
(99
|
)
|
||||
Repurchased shares
|
(211
|
)
|
|
(150
|
)
|
|
(2,568
|
)
|
|
—
|
|
|
(2,718
|
)
|
||||
Balances at March 31, 2018
|
30,161
|
|
|
230
|
|
|
184,939
|
|
|
(269
|
)
|
|
184,900
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
928
|
|
|
—
|
|
|
928
|
|
||||
Unrealized gain on marketable securities, net of income tax expense of $11
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
34
|
|
||||
Gain on derivative securities, effective portion, net of income tax expense of $4
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
||||
Foreign currency translation adjustment,
net of income tax expense of $3 |
—
|
|
|
—
|
|
|
—
|
|
|
(338
|
)
|
|
(338
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
268
|
|
|
—
|
|
|
—
|
|
|
268
|
|
||||
Common stock issued under equity
compensation plan, net of shares withheld for tax payments |
87
|
|
|
(198
|
)
|
|
—
|
|
|
—
|
|
|
(198
|
)
|
||||
Common stock issued under employee stock purchase plan
|
20
|
|
|
232
|
|
|
—
|
|
|
—
|
|
|
232
|
|
||||
Repurchased shares
|
(31
|
)
|
|
(70
|
)
|
|
(178
|
)
|
|
—
|
|
|
(248
|
)
|
||||
Balances at June 30, 2018
|
30,237
|
|
|
462
|
|
|
185,689
|
|
|
(561
|
)
|
|
185,590
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
4,309
|
|
|
—
|
|
|
4,309
|
|
||||
Unrealized gain on marketable securities, net of income tax expense of $13
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
40
|
|
||||
Loss on derivative securities, effective portion, net of income tax benefit of $6
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
||||
Foreign currency translation adjustment,
net of income tax expense of $7 |
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
82
|
|
||||
Stock-based compensation expense
|
—
|
|
|
647
|
|
|
|
|
—
|
|
|
647
|
|
|||||
Common stock issued under equity
compensation plan, net of shares withheld for tax payments |
28
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
||||
Repurchased shares
|
(134
|
)
|
|
(971
|
)
|
|
(891
|
)
|
|
—
|
|
|
(1,862
|
)
|
||||
Balances at September 30, 2018
|
30,131
|
|
|
$
|
216
|
|
|
$
|
189,107
|
|
|
$
|
(457
|
)
|
|
$
|
188,866
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
(Loss) income from continuing operations
|
$
|
(97,803
|
)
|
|
$
|
13,650
|
|
Loss from discontinued operations
|
(329
|
)
|
|
(354
|
)
|
||
Net (loss) income
|
(98,132
|
)
|
|
13,296
|
|
||
Adjustments to reconcile net (loss) income to cash (used in) provided by
|
|
|
|
||||
operating activities:
|
|
|
|
||||
Depreciation and amortization
|
8,045
|
|
|
6,646
|
|
||
Provision (benefit) for allowance for doubtful accounts
|
52
|
|
|
(42
|
)
|
||
Inventory lower-of-cost-or-market/NRV adjustments
|
692
|
|
|
255
|
|
||
Stock-based compensation expense
|
56
|
|
|
1,394
|
|
||
Loss on asset dispositions
|
1,127
|
|
|
32
|
|
||
Goodwill and intangible impairment charge
|
72,008
|
|
|
—
|
|
||
Deferred income taxes, net of valuation allowance of $5,083 and $1,045
|
(7,456
|
)
|
|
1,476
|
|
||
Other
|
(115
|
)
|
|
40
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Trade receivables
|
15,079
|
|
|
(3,352
|
)
|
||
Inventories
|
18,284
|
|
|
(2,503
|
)
|
||
Prepaids and other assets
|
4,168
|
|
|
1,075
|
|
||
Income taxes receivable
|
2,906
|
|
|
(4,712
|
)
|
||
Trade payables
|
(48,973
|
)
|
|
(525
|
)
|
||
Accrued liabilities and other liabilities, including warranty obligations
|
(3,325
|
)
|
|
(3,254
|
)
|
||
Net cash (used in) provided by operating activities
|
(35,584
|
)
|
|
9,826
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of available-for-sale securities
|
—
|
|
|
(29,522
|
)
|
||
Proceeds from sales and maturities of available-for-sale securities
|
25,271
|
|
|
46,475
|
|
||
Purchases of property, plant and equipment
|
(6,630
|
)
|
|
(6,557
|
)
|
||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
4
|
|
||
Purchases of other investments in non-controlled affiliates
|
(3,500
|
)
|
|
—
|
|
||
Net cash provided by investing activities
|
15,141
|
|
|
10,400
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from long-term debt
|
20,218
|
|
|
—
|
|
||
Payments on long-term debt
|
(31,667
|
)
|
|
(12,000
|
)
|
||
Payments for stock repurchases
|
—
|
|
|
(4,989
|
)
|
||
Proceeds from employee stock purchases
|
168
|
|
|
232
|
|
||
Proceeds from exercise of stock options
|
75
|
|
|
338
|
|
||
Tax payments related to stock award issuances
|
(107
|
)
|
|
(396
|
)
|
||
Net cash used in financing activities
|
(11,313
|
)
|
|
(16,815
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(613
|
)
|
|
(551
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
(32,369
|
)
|
|
2,860
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
38,125
|
|
|
27,893
|
|
||
End of period
|
$
|
5,756
|
|
|
$
|
30,753
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
963
|
|
|
$
|
799
|
|
Cash (received) paid for income taxes, net
|
(2,203
|
)
|
|
8,622
|
|
||
Supplemental disclosure of non-cash investing activities:
|
|
|
|
||||
Capital expenditures incurred but not yet paid
|
$
|
415
|
|
|
$
|
1,352
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Product sales
|
|
$
|
59,323
|
|
|
$
|
88,068
|
|
|
$
|
195,781
|
|
|
$
|
269,288
|
|
Extended warranties and services
|
|
993
|
|
|
1,611
|
|
|
4,630
|
|
|
6,830
|
|
||||
Other(1)
|
|
1,392
|
|
|
1,378
|
|
|
4,701
|
|
|
5,250
|
|
||||
Net sales
|
|
$
|
61,708
|
|
|
$
|
91,057
|
|
|
$
|
205,112
|
|
|
$
|
281,368
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
United States
|
|
$
|
50,447
|
|
|
$
|
81,423
|
|
|
$
|
169,532
|
|
|
$
|
250,502
|
|
Canada
|
|
5,649
|
|
|
4,306
|
|
|
17,135
|
|
|
13,372
|
|
||||
All other
|
|
5,612
|
|
|
5,328
|
|
|
18,445
|
|
|
17,494
|
|
||||
Net sales
|
|
$
|
61,708
|
|
|
$
|
91,057
|
|
|
$
|
205,112
|
|
|
$
|
281,368
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Balance, beginning of period
|
$
|
562
|
|
|
$
|
748
|
|
|
$
|
816
|
|
|
$
|
1,084
|
|
Cash additions
|
611
|
|
|
354
|
|
|
1,123
|
|
|
1,347
|
|
||||
Revenue recognition
|
(279
|
)
|
|
(227
|
)
|
|
(1,045
|
)
|
|
(1,556
|
)
|
||||
Balance, end of period
|
$
|
894
|
|
|
$
|
875
|
|
|
$
|
894
|
|
|
$
|
875
|
|
|
Measurement Alternative - No Readily Determinable Fair Value
|
||
Other assets
|
$
|
3,500
|
|
|
|
|
|
•
|
Level 1 - observable inputs such as quoted prices (unadjusted) in active liquid markets for identical securities as of the reporting date;
|
•
|
Level 2 - other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; or observable market prices in markets with insufficient volume and/or infrequent transactions; and
|
•
|
Level 3 - significant inputs that are generally unobservable inputs for which there is little or no market data available, including our own assumptions in determining fair value.
|
|
|
September 30, 2019
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
218
|
|
|
$
|
—
|
|
|
$
|
218
|
|
Total liabilities measured at fair value
|
|
$
|
—
|
|
|
$
|
218
|
|
|
$
|
—
|
|
|
$
|
218
|
|
|
|
December 31, 2018
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash Equivalents
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
7,646
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,646
|
|
Total cash equivalents
|
|
7,646
|
|
|
—
|
|
|
—
|
|
|
7,646
|
|
||||
Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit(1)
|
|
—
|
|
|
10,379
|
|
|
—
|
|
|
10,379
|
|
||||
Corporate bonds
|
|
—
|
|
|
7,522
|
|
|
—
|
|
|
7,522
|
|
||||
U.S. government bonds
|
|
—
|
|
|
7,491
|
|
|
—
|
|
|
7,491
|
|
||||
Total available-for-sale securities
|
|
—
|
|
|
25,392
|
|
|
—
|
|
|
25,392
|
|
||||
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap contract
|
|
—
|
|
|
363
|
|
|
—
|
|
|
363
|
|
||||
Foreign currency forward contracts
|
|
—
|
|
|
240
|
|
|
—
|
|
|
240
|
|
||||
Total derivatives
|
|
—
|
|
|
603
|
|
|
—
|
|
|
603
|
|
||||
Total assets measured at fair value
|
|
$
|
7,646
|
|
|
$
|
25,995
|
|
|
$
|
—
|
|
|
$
|
33,641
|
|
|
|
Balance Sheet Classification
|
|
As of
|
||||||
|
|
|
September 30, 2019
|
|
December 31, 2018
|
|||||
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
|
|
||||
Interest rate swap contract
|
|
Prepaids and other current assets
|
|
$
|
—
|
|
|
$
|
291
|
|
|
|
Other assets
|
|
—
|
|
|
72
|
|
||
|
|
|
|
$
|
—
|
|
|
$
|
363
|
|
|
|
|
|
|
|
|
||||
Derivative instruments not designated as cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Prepaids and other current assets
|
|
$
|
—
|
|
|
$
|
240
|
|
|
|
Accrued liabilities
|
|
218
|
|
|
—
|
|
||
|
|
|
|
$
|
218
|
|
|
$
|
240
|
|
|
|
Statement of Operations Classification
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) recognized in other comprehensive (loss) income before reclassifications
|
|
---
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
(128
|
)
|
|
$
|
242
|
|
Income reclassified from accumulated other comprehensive (loss) income to earnings for the effective portion
|
|
Interest expense
|
|
—
|
|
|
65
|
|
|
125
|
|
|
140
|
|
||||
Income tax benefit
|
|
Income tax expense (benefit)
|
|
—
|
|
|
(19
|
)
|
|
(30
|
)
|
|
(36
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments not designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loss recognized in earnings
|
|
Other, net
|
|
$
|
(388
|
)
|
|
$
|
(601
|
)
|
|
$
|
(101
|
)
|
|
$
|
(2,525
|
)
|
Income tax expense
|
|
Income tax expense (benefit)
|
|
91
|
|
|
176
|
|
|
22
|
|
|
624
|
|
|
As of
|
||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||
Finished goods
|
$
|
44,542
|
|
|
$
|
63,257
|
|
Parts and components
|
5,524
|
|
|
5,208
|
|
||
Total inventories
|
$
|
50,066
|
|
|
$
|
68,465
|
|
|
Estimated
Useful Life
(in years)
|
|
As of
|
||||||||
|
|
September 30, 2019
|
|
December 31, 2018
|
|||||||
Automobiles
|
5
|
|
$
|
23
|
|
|
$
|
23
|
|
||
Leasehold improvements
|
4
|
to
|
20
|
|
3,829
|
|
|
3,782
|
|
||
Computer software and equipment
|
2
|
to
|
7
|
|
24,903
|
|
|
23,776
|
|
||
Machinery and equipment
|
3
|
to
|
5
|
|
18,049
|
|
|
16,756
|
|
||
Furniture and fixtures
|
5
|
to
|
20
|
|
2,839
|
|
|
2,827
|
|
||
Work in progress(1)
|
N/A
|
|
3,019
|
|
|
1,590
|
|
||||
Total cost
|
|
|
|
|
52,662
|
|
|
48,754
|
|
||
Accumulated depreciation
|
|
|
|
|
(30,296
|
)
|
|
(26,538
|
)
|
||
Total property, plant and equipment, net
|
|
|
|
|
$
|
22,366
|
|
|
$
|
22,216
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Depreciation expense
|
$
|
2,046
|
|
|
$
|
1,393
|
|
|
$
|
5,353
|
|
|
$
|
4,266
|
|
|
Direct
|
|
Retail
|
|
Total
|
||||||
Balance, January 1, 2018
|
$
|
2,335
|
|
|
$
|
59,695
|
|
|
$
|
62,030
|
|
Currency exchange rate adjustment
|
(185
|
)
|
|
5
|
|
|
(180
|
)
|
|||
Business acquisition
|
1,602
|
|
|
—
|
|
|
1,602
|
|
|||
Balance, December 31, 2018
|
3,752
|
|
|
59,700
|
|
|
63,452
|
|
|||
Currency exchange rate adjustment
|
55
|
|
|
—
|
|
|
55
|
|
|||
Goodwill impairment charge
|
(3,807
|
)
|
|
(59,700
|
)
|
|
(63,507
|
)
|
|||
Balance, September 30, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Estimated
Useful Life
(in years)
|
|
As of
|
||||||||
|
|
September 30, 2019
|
|
December 31, 2018
|
|||||||
Indefinite-lived trademarks(1)
|
N/A
|
|
$
|
14,753
|
|
|
$
|
23,252
|
|
||
Definite-lived trademarks
|
5
|
to
|
15
|
|
2,850
|
|
|
2,850
|
|
||
Patents
|
7
|
to
|
24
|
|
14,243
|
|
|
14,243
|
|
||
Customer relationships
|
10
|
to
|
15
|
|
24,700
|
|
|
24,700
|
|
||
|
|
|
|
|
56,546
|
|
|
65,045
|
|
||
Accumulated amortization - definite-lived intangible assets
|
|
|
|
|
(12,492
|
)
|
|
(9,805
|
)
|
||
Other intangible assets, net
|
|
|
|
|
$
|
44,054
|
|
|
$
|
55,240
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Amortization expense
|
$
|
808
|
|
|
$
|
785
|
|
|
$
|
2,692
|
|
|
$
|
2,380
|
|
Remainder of 2019
|
$
|
803
|
|
2020
|
3,198
|
|
|
2021
|
3,168
|
|
|
2022
|
3,168
|
|
|
2023
|
3,168
|
|
|
Thereafter
|
15,796
|
|
|
|
$
|
29,301
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 30, 2019
|
|
September 30, 2019
|
||||
Operating lease expense
|
$
|
1,138
|
|
|
$
|
3,393
|
|
|
As of
|
||
|
September 30, 2019
|
||
2019 - remaining
|
$
|
1,164
|
|
2020
|
4,682
|
|
|
2021
|
4,712
|
|
|
2022
|
4,566
|
|
|
2023
|
3,812
|
|
|
Thereafter
|
8,082
|
|
|
Total undiscounted lease payments
|
27,018
|
|
|
Less imputed interest
|
(3,397
|
)
|
|
Total lease liabilities
|
$
|
23,621
|
|
|
As of
|
||
|
December 31, 2018
|
||
Year ending:
|
|
||
2019
|
$
|
5,366
|
|
2020
|
5,279
|
|
|
2021
|
4,147
|
|
|
2022
|
2,729
|
|
|
2023
|
1,698
|
|
|
Thereafter
|
2,647
|
|
|
Total minimum lease payments
|
$
|
21,866
|
|
|
As of
|
||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||
Payroll and related liabilities
|
$
|
3,031
|
|
|
$
|
3,620
|
|
Other
|
4,429
|
|
|
4,750
|
|
||
Total accrued liabilities
|
$
|
7,460
|
|
|
$
|
8,370
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Balance, beginning of period
|
|
$
|
5,575
|
|
|
$
|
6,117
|
|
Accruals
|
|
3,721
|
|
|
2,772
|
|
||
Payments
|
|
(3,923
|
)
|
|
(3,183
|
)
|
||
Balance, end of period
|
|
$
|
5,373
|
|
|
$
|
5,706
|
|
|
Unrealized Gain (Loss) on Available-for-Sale Securities
|
|
Gain (Loss) on Derivative Securities
|
|
Foreign Currency Translation Adjustments
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance, June 30, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(926
|
)
|
|
$
|
(926
|
)
|
Current period other comprehensive loss before reclassifications
|
|
|
|
|
(177
|
)
|
|
(177
|
)
|
||||||
Net other comprehensive loss income during period
|
—
|
|
|
—
|
|
|
(177
|
)
|
|
(177
|
)
|
||||
Balance, September 30, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,103
|
)
|
|
$
|
(1,103
|
)
|
|
Unrealized Gain (Loss) on Available-for-Sale Securities
|
|
Gain (Loss) on Derivative Securities
|
|
Foreign Currency Translation Adjustments
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance, January 1, 2019
|
$
|
(6
|
)
|
|
$
|
223
|
|
|
$
|
(1,126
|
)
|
|
$
|
(909
|
)
|
Current period other comprehensive income (loss) before reclassifications
|
19
|
|
|
(128
|
)
|
|
23
|
|
|
(86
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
(13
|
)
|
|
(95
|
)
|
|
—
|
|
|
(108
|
)
|
||||
Net other comprehensive income (loss) during period
|
6
|
|
|
(223
|
)
|
|
23
|
|
|
(194
|
)
|
||||
Balance, September 30, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,103
|
)
|
|
$
|
(1,103
|
)
|
|
|
|
|
|
|
|
|
|
Unrealized Gain (Loss) on Available-for-Sale Securities
|
|
Gain (Loss) on Derivative Securities
|
|
Foreign Currency Translation Adjustments
|
|
Accumulated Other Comprehensive (Loss) Income
|
||||||||
Balance, June 30, 2018
|
$
|
(67
|
)
|
|
$
|
372
|
|
|
$
|
(866
|
)
|
|
$
|
(561
|
)
|
Current period other comprehensive income before reclassifications
|
40
|
|
|
28
|
|
|
82
|
|
|
150
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
||||
Net other comprehensive income (loss) during period
|
40
|
|
|
(18
|
)
|
|
82
|
|
|
104
|
|
||||
Balance, September 30, 2018
|
$
|
(27
|
)
|
|
$
|
354
|
|
|
$
|
(784
|
)
|
|
$
|
(457
|
)
|
|
Unrealized Loss on Available-for-Sale Securities
|
|
Gain (Loss) on Derivative Securities
|
|
Foreign Currency Translation Adjustments
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance, January 1, 2018
|
$
|
(64
|
)
|
|
$
|
216
|
|
|
$
|
(411
|
)
|
|
$
|
(259
|
)
|
Current period other comprehensive income (loss) before reclassifications
|
37
|
|
|
242
|
|
|
(373
|
)
|
|
(94
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(104
|
)
|
|
—
|
|
|
(104
|
)
|
||||
Net other comprehensive income (loss) during period
|
37
|
|
|
138
|
|
|
(373
|
)
|
|
(198
|
)
|
||||
Balance, September 30, 2018
|
$
|
(27
|
)
|
|
$
|
354
|
|
|
$
|
(784
|
)
|
|
$
|
(457
|
)
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Number of Shares
|
|
Repurchased Amount
|
|
Average Price Per Share
|
|||||
December 31, 2018
|
|
75,813
|
|
|
$
|
1,008,652
|
|
|
$
|
13.30
|
|
March 31, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
||
June 30, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
||
September 30, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Totals to date
|
|
75,813
|
|
|
$
|
1,008,652
|
|
|
$
|
13.30
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Shares used to calculate basic income (loss) per share
|
29,728
|
|
|
30,185
|
|
|
29,660
|
|
|
30,230
|
|
Dilutive effect of outstanding stock options, performance stock units and restricted stock units
|
—
|
|
|
248
|
|
|
—
|
|
|
270
|
|
Shares used to calculate diluted income (loss) per share
|
29,728
|
|
|
30,433
|
|
|
29,660
|
|
|
30,500
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Stock options
|
—
|
|
|
—
|
|
|
76
|
|
|
—
|
|
Restricted stock units
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Stock options
|
534
|
|
|
9
|
|
|
85
|
|
|
10
|
|
Restricted stock units
|
765
|
|
|
1
|
|
|
227
|
|
|
—
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Direct
|
$
|
16,197
|
|
|
$
|
28,955
|
|
|
$
|
83,745
|
|
|
$
|
134,980
|
|
Retail
|
44,823
|
|
|
61,490
|
|
|
119,097
|
|
|
143,668
|
|
||||
Royalty
|
688
|
|
|
612
|
|
|
2,270
|
|
|
2,720
|
|
||||
Consolidated net sales
|
$
|
61,708
|
|
|
$
|
91,057
|
|
|
$
|
205,112
|
|
|
$
|
281,368
|
|
Contribution:
|
|
|
|
|
|
|
|
||||||||
Direct
|
$
|
(8,693
|
)
|
|
$
|
(1,363
|
)
|
|
$
|
(19,569
|
)
|
|
$
|
10,667
|
|
Retail
|
4,772
|
|
|
12,707
|
|
|
3,803
|
|
|
20,196
|
|
||||
Royalty
|
688
|
|
|
612
|
|
|
2,270
|
|
|
2,717
|
|
||||
Consolidated contribution
|
$
|
(3,233
|
)
|
|
$
|
11,956
|
|
|
$
|
(13,496
|
)
|
|
$
|
33,580
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of consolidated contribution to (loss) income from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Consolidated contribution
|
$
|
(3,233
|
)
|
|
$
|
11,956
|
|
|
$
|
(13,496
|
)
|
|
$
|
33,580
|
|
Amounts not directly related to segments:
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
(5,020
|
)
|
|
(5,796
|
)
|
|
(90,338
|
)
|
|
(15,521
|
)
|
||||
Other (expense) income, net
|
(422
|
)
|
|
213
|
|
|
(910
|
)
|
|
236
|
|
||||
Income tax (expense) benefit
|
(1,900
|
)
|
|
(1,870
|
)
|
|
6,941
|
|
|
(4,645
|
)
|
||||
(Loss) income from continuing operations
|
$
|
(10,575
|
)
|
|
$
|
4,503
|
|
|
$
|
(97,803
|
)
|
|
$
|
13,650
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Amazon.com
|
18.7
|
%
|
|
18.8
|
%
|
|
14.1
|
%
|
|
11.8
|
%
|
Dick's Sporting Goods
|
19.3
|
%
|
|
19.6
|
%
|
|
10.2
|
%
|
|
13.5
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net sales
|
$
|
61,708
|
|
|
$
|
91,057
|
|
|
$
|
(29,349
|
)
|
|
(32.2
|
)%
|
Cost of sales
|
42,641
|
|
|
52,551
|
|
|
(9,910
|
)
|
|
(18.9
|
)%
|
|||
Gross profit
|
19,067
|
|
|
38,506
|
|
|
(19,439
|
)
|
|
(50.5
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling and marketing
|
17,472
|
|
|
20,635
|
|
|
(3,163
|
)
|
|
(15.3
|
)%
|
|||
General and administrative
|
6,726
|
|
|
7,503
|
|
|
(777
|
)
|
|
(10.4
|
)%
|
|||
Research and development
|
3,122
|
|
|
4,208
|
|
|
(1,086
|
)
|
|
(25.8
|
)%
|
|||
Total operating expenses
|
27,320
|
|
|
32,346
|
|
|
(5,026
|
)
|
|
(15.5
|
)%
|
|||
Operating (loss) income
|
(8,253
|
)
|
|
6,160
|
|
|
(14,413
|
)
|
|
(234.0
|
)%
|
|||
Other (expense) income:
|
|
|
|
|
|
|
|
|||||||
Interest income
|
—
|
|
|
269
|
|
|
(269
|
)
|
|
|
||||
Interest expense
|
(293
|
)
|
|
(244
|
)
|
|
(49
|
)
|
|
|
||||
Other, net
|
(129
|
)
|
|
188
|
|
|
(317
|
)
|
|
|
||||
Total other (expense) income, net
|
(422
|
)
|
|
213
|
|
|
(635
|
)
|
|
|
||||
(Loss) income from continuing operations before income taxes
|
(8,675
|
)
|
|
6,373
|
|
|
(15,048
|
)
|
|
|
||||
Income tax expense
|
1,900
|
|
|
1,870
|
|
|
30
|
|
|
|
||||
(Loss) income from continuing operations
|
(10,575
|
)
|
|
4,503
|
|
|
(15,078
|
)
|
|
|
||||
Loss from discontinued operations, net of taxes
|
(114
|
)
|
|
(194
|
)
|
|
80
|
|
|
|
||||
Net (loss) income
|
$
|
(10,689
|
)
|
|
$
|
4,309
|
|
|
$
|
(14,998
|
)
|
|
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net sales
|
$
|
205,112
|
|
|
$
|
281,368
|
|
|
$
|
(76,256
|
)
|
|
(27.1
|
)%
|
Cost of sales
|
132,686
|
|
|
150,343
|
|
|
(17,657
|
)
|
|
(11.7
|
)%
|
|||
Gross profit
|
72,426
|
|
|
131,025
|
|
|
(58,599
|
)
|
|
(44.7
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling and marketing
|
69,146
|
|
|
79,482
|
|
|
(10,336
|
)
|
|
(13.0
|
)%
|
|||
General and administrative
|
23,824
|
|
|
20,740
|
|
|
3,084
|
|
|
14.9
|
%
|
|||
Research and development
|
11,282
|
|
|
12,744
|
|
|
(1,462
|
)
|
|
(11.5
|
)%
|
|||
Goodwill and intangible impairment charge
|
72,008
|
|
|
—
|
|
|
72,008
|
|
|
—
|
%
|
|||
Total operating expenses
|
176,260
|
|
|
112,966
|
|
|
63,294
|
|
|
56.0
|
%
|
|||
Operating (loss) income
|
(103,834
|
)
|
|
18,059
|
|
|
(121,893
|
)
|
|
(675.0
|
)%
|
|||
Other (expense) income:
|
|
|
|
|
|
|
|
|||||||
Interest income
|
162
|
|
|
835
|
|
|
(673
|
)
|
|
|
||||
Interest expense
|
(721
|
)
|
|
(805
|
)
|
|
84
|
|
|
|
||||
Other, net
|
(351
|
)
|
|
206
|
|
|
(557
|
)
|
|
|
||||
Total other (expense) income, net
|
(910
|
)
|
|
236
|
|
|
(1,146
|
)
|
|
|
||||
(Loss) income from continuing operations before income taxes
|
(104,744
|
)
|
|
18,295
|
|
|
(123,039
|
)
|
|
|
||||
Income tax (benefit) expense
|
(6,941
|
)
|
|
4,645
|
|
|
(11,586
|
)
|
|
|
||||
(Loss) income from continuing operations
|
(97,803
|
)
|
|
13,650
|
|
|
(111,453
|
)
|
|
|
||||
Loss from discontinued operations, net of taxes
|
(329
|
)
|
|
(354
|
)
|
|
25
|
|
|
|
||||
Net (loss) income
|
$
|
(98,132
|
)
|
|
$
|
13,296
|
|
|
$
|
(111,428
|
)
|
|
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net sales:
|
|
|
|
|
|
|
|
|||||||
Direct
|
$
|
16,197
|
|
|
$
|
28,955
|
|
|
$
|
(12,758
|
)
|
|
(44.1
|
)%
|
Retail
|
44,823
|
|
|
61,490
|
|
|
(16,667
|
)
|
|
(27.1
|
)%
|
|||
Royalty
|
688
|
|
|
612
|
|
|
76
|
|
|
12.4
|
%
|
|||
|
$
|
61,708
|
|
|
$
|
91,057
|
|
|
$
|
(29,349
|
)
|
|
(32.2
|
)%
|
Cost of sales:
|
|
|
|
|
|
|
|
|||||||
Direct
|
$
|
9,987
|
|
|
$
|
12,376
|
|
|
$
|
(2,389
|
)
|
|
(19.3
|
)%
|
Retail
|
32,654
|
|
|
40,175
|
|
|
(7,521
|
)
|
|
(18.7
|
)%
|
|||
|
$
|
42,641
|
|
|
$
|
52,551
|
|
|
$
|
(9,910
|
)
|
|
(18.9
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Direct
|
$
|
6,210
|
|
|
$
|
16,579
|
|
|
$
|
(10,369
|
)
|
|
(62.5
|
)%
|
Retail
|
12,169
|
|
|
21,315
|
|
|
(9,146
|
)
|
|
(42.9
|
)%
|
|||
Royalty
|
688
|
|
|
612
|
|
|
76
|
|
|
12.4
|
%
|
|||
|
$
|
19,067
|
|
|
$
|
38,506
|
|
|
$
|
(19,439
|
)
|
|
(50.5
|
)%
|
Gross margin:
|
|
|
|
|
|
|
|
|||||||
Direct
|
38.3
|
%
|
|
57.3
|
%
|
|
(1,900
|
)
|
basis points
|
|||||
Retail
|
27.1
|
%
|
|
34.7
|
%
|
|
(760
|
)
|
basis points
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net sales:
|
|
|
|
|
|
|
|
|||||||
Direct
|
$
|
83,745
|
|
|
$
|
134,980
|
|
|
$
|
(51,235
|
)
|
|
(38.0
|
)%
|
Retail
|
119,097
|
|
|
143,668
|
|
|
(24,571
|
)
|
|
(17.1
|
)%
|
|||
Royalty
|
2,270
|
|
|
2,720
|
|
|
(450
|
)
|
|
(16.5
|
)%
|
|||
|
$
|
205,112
|
|
|
$
|
281,368
|
|
|
$
|
(76,256
|
)
|
|
(27.1
|
)%
|
Cost of sales:
|
|
|
|
|
|
|
|
|||||||
Direct
|
$
|
42,112
|
|
|
$
|
52,805
|
|
|
$
|
(10,693
|
)
|
|
(20.2
|
)%
|
Retail
|
90,574
|
|
|
97,535
|
|
|
(6,961
|
)
|
|
(7.1
|
)%
|
|||
Royalty
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(100.0
|
)%
|
|||
|
$
|
132,686
|
|
|
$
|
150,343
|
|
|
$
|
(17,657
|
)
|
|
(11.7
|
)%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Direct
|
$
|
41,633
|
|
|
$
|
82,175
|
|
|
$
|
(40,542
|
)
|
|
(49.3
|
)%
|
Retail
|
28,523
|
|
|
46,133
|
|
|
(17,610
|
)
|
|
(38.2
|
)%
|
|||
Royalty
|
2,270
|
|
|
2,717
|
|
|
(447
|
)
|
|
(16.5
|
)%
|
|||
|
$
|
72,426
|
|
|
$
|
131,025
|
|
|
$
|
(58,599
|
)
|
|
(44.7
|
)%
|
Gross margin:
|
|
|
|
|
|
|
|
|||||||
Direct
|
49.7
|
%
|
|
60.9
|
%
|
|
(1,120
|
)
|
basis points
|
|||||
Retail
|
23.9
|
%
|
|
32.1
|
%
|
|
(820
|
)
|
basis points
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Direct net sales:
|
|
|
|
|
|
|
|
|||||||
Cardio products(1)
|
$
|
12,431
|
|
|
$
|
24,353
|
|
|
$
|
(11,922
|
)
|
|
(49.0
|
)%
|
Strength products(2)
|
3,766
|
|
|
4,602
|
|
|
(836
|
)
|
|
(18.2
|
)%
|
|||
|
16,197
|
|
|
28,955
|
|
|
(12,758
|
)
|
|
(44.1
|
)%
|
|||
Retail net sales:
|
|
|
|
|
|
|
|
|||||||
Cardio products(1)
|
35,509
|
|
|
48,294
|
|
|
(12,785
|
)
|
|
(26.5
|
)%
|
|||
Strength products(2)
|
9,314
|
|
|
13,196
|
|
|
(3,882
|
)
|
|
(29.4
|
)%
|
|||
|
44,823
|
|
|
61,490
|
|
|
(16,667
|
)
|
|
(27.1
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Royalty
|
688
|
|
|
612
|
|
|
76
|
|
|
12.4
|
%
|
|||
|
$
|
61,708
|
|
|
$
|
91,057
|
|
|
$
|
(29,349
|
)
|
|
(32.2
|
)%
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Direct net sales:
|
|
|
|
|
|
|
|
|||||||
Cardio products(1)
|
$
|
68,121
|
|
|
$
|
118,026
|
|
|
$
|
(49,905
|
)
|
|
(42.3
|
)%
|
Strength products(2)
|
15,624
|
|
|
16,954
|
|
|
(1,330
|
)
|
|
(7.8
|
)%
|
|||
|
83,745
|
|
|
134,980
|
|
|
(51,235
|
)
|
|
(38.0
|
)%
|
|||
Retail net sales:
|
|
|
|
|
|
|
|
|||||||
Cardio products(1)
|
92,250
|
|
|
114,916
|
|
|
(22,666
|
)
|
|
(19.7
|
)%
|
|||
Strength products(2)
|
26,847
|
|
|
28,752
|
|
|
(1,905
|
)
|
|
(6.6
|
)%
|
|||
|
119,097
|
|
|
143,668
|
|
|
(24,571
|
)
|
|
(17.1
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Royalty
|
2,270
|
|
|
2,720
|
|
|
(450
|
)
|
|
(16.5
|
)%
|
|||
|
$
|
205,112
|
|
|
$
|
281,368
|
|
|
$
|
(76,256
|
)
|
|
(27.1
|
)%
|
|
|
|
|
|
|
|
|
|||||||
(1) Cardio products include: Max Trainer®, TreadClimber®, HVT™, LateralX®, Zero Runner®, treadmills, exercise bikes and ellipticals.
|
||||||||||||||
(2) Strength products include: home gyms, selectorized dumbbells, kettlebell weights and accessories.
|
Dollars in thousands
|
Three Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
Selling and marketing
|
$17,472
|
|
$20,635
|
|
$(3,163)
|
|
(15.3)%
|
As % of net sales
|
28.3%
|
|
22.7%
|
|
|
|
|
Dollars in thousands
|
Nine Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
Selling and marketing
|
$69,146
|
|
$79,482
|
|
$(10,336)
|
|
(13.0)%
|
As % of net sales
|
33.7%
|
|
28.2%
|
|
|
|
|
Dollars in thousands
|
Three Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
Media advertising
|
$5,757
|
|
$9,142
|
|
$(3,385)
|
|
(37.0)%
|
Dollars in thousands
|
Nine Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
Media advertising
|
$32,012
|
|
$42,510
|
|
$(10,498)
|
|
(24.7)%
|
Dollars in thousands
|
Three Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
General and administrative
|
$6,726
|
|
$7,503
|
|
$(777)
|
|
(10.4)%
|
As % of net sales
|
10.9%
|
|
8.2%
|
|
|
|
|
Dollars in thousands
|
Nine Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
General and administrative
|
$23,824
|
|
$20,740
|
|
$3,084
|
|
14.9%
|
As % of net sales
|
11.6%
|
|
7.4%
|
|
|
|
|
Dollars in thousands
|
Three Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
Research and development
|
$3,122
|
|
$4,208
|
|
$(1,086)
|
|
(25.8)%
|
As % of net sales
|
5.1%
|
|
4.6%
|
|
|
|
|
Dollars in thousands
|
Nine Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
Research and development
|
$11,282
|
|
$12,744
|
|
$(1,462)
|
|
(11.5)%
|
As % of net sales
|
5.5%
|
|
4.5%
|
|
|
|
|
Dollars in thousands
|
Three Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
Income tax expense
|
$1,900
|
|
$1,870
|
|
$30
|
|
1.6%
|
Effective tax rate
|
(21.9)%
|
|
29.3%
|
|
|
|
|
Dollars in thousands
|
Nine Months Ended September 30,
|
|
Change
|
||||
|
2019
|
|
2018
|
|
$
|
|
%
|
Income tax (benefit) expense
|
$(6,941)
|
|
$4,645
|
|
$(11,586)
|
|
*
|
Effective tax rate
|
6.6%
|
|
25.4%
|
|
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 1.
|
Legal Proceedings
|
Exhibit No.
|
|
Description
|
|
|
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
Certification of Corporate Controller pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
Certification of Chief Executive Officer and Corporate Controller pursuant to Rule 13a-14(b) of the Securities and Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
NAUTILUS, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
November 8, 2019
|
|
By:
|
/S/ James Barr IV
|
Date
|
|
|
James Barr IV
|
|
|
|
Chief Executive Officer
|
|
|
NAUTILUS, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
November 8, 2019
|
|
By:
|
/S/ Sarah A. Jones
|
Date
|
|
|
Sarah A. Jones
|
|
|
|
Principal Financial and Accounting Officer
|
1 Year Nautilus Chart |
1 Month Nautilus Chart |
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