Company Achieves Upper End Q1 Fiscal 2023
Revenue Guidance and Beats Adjusted EBITDA Guidance
Direct Net Sales of $26.5M up 27% vs
pre-pandemic Q1 Fiscal 2020
JRNY® Total Members Reaches 360k with
133% Growth vs Q1 Fiscal 2022
Company Reiterates Full Year
Guidance
Nautilus, Inc. (NYSE: NLS) today reported its unaudited
operating results for the fiscal 2023 first quarter ended June 30,
2022.
Management Comments
“We are pleased to deliver solid first quarter results that
reflect the execution of our multi-year transformation plan. Our
omnichannel approach was critical to our success in the quarter,
with Direct channel sales up 27% compared to the same pre-pandemic
period in fiscal 2020. Further, we continue to expand our digital
fitness platform, JRNY®, which exceeded 360,000 members at June 30,
2022, representing approximately 133% growth versus the same
quarter last year,” said Jim Barr, Nautilus, Inc. Chief Executive
Officer.
Mr. Barr continued, “As we look ahead, we believe we are
well-positioned to navigate the current macroeconomic environment.
Our ability to offer customers a diversified product assortment of
strength and cardio offerings that includes our JRNY® platform at a
compelling total cost of ownership enables us to drive demand and
expand our market position. Based on our performance to-date and
visibility into the remainder of our fiscal year, I am pleased to
reiterate our full year financial and JRNY® member growth guidance.
We have made tremendous progress on our North Star strategy,
including becoming a nimbler organization that is equipped to adapt
to market conditions and continue to deliver against expectations,
including our guidance of positive Adjusted EBITDA for the
second-half of fiscal 2023.”
Total Company Results
For fiscal 2023, Nautilus expects to return to a more typical
pre-pandemic seasonality, with the 2nd Half of the year
contributing more of the full year's revenue. Additionally, to
gauge sales growth and progress against more "normalized" or
pre-pandemic results, the Company will rely more heavily on
measuring performance of fiscal 2023 sales growth versus the
pre-pandemic twelve-month period that ended March 31, 2020 ("fiscal
2020") to guide business strategy, rather than measuring
performance against the atypical, outsized results that occurred
during the pandemic.
Fiscal 2023 First Quarter Ended June 30, 2022 Compared to
June 30, 2021
- Net sales were $54.8 million, compared to $184.6 million, a
decline of 70.3% versus last year. Net sales are up 11%, or 3%
CAGR, when compared to the same period in fiscal 2020, excluding
sales related to the Octane brand, which was sold in October 2020.
The sales decline versus last year is driven primarily by the
return to pre-pandemic seasonal demand.
- Gross profit was $7.0 million, compared to $55.5 million last
year. Gross profit margins were 12.7% compared to 30.1% last year.
The 17.4 ppt decrease in gross margins was primarily due to
increased discounting (-8 ppts), unfavorable logistics overhead
absorption (-8 ppts), and increased investments in JRNY® (-4 ppts),
offset by improvement in other costs (3 ppts).
- Operating expenses were $58.1 million, an increase of $20.5
million, or 54.5%, compared to last year, primarily due to a
goodwill and intangible impairment charge of $27.0 million and a
$3.6 million increase in JRNY® investments, partially offset by
$5.7 million lower media spending and $2.7 million lower other
variable selling and marketing expenses due to decreased sales.
Total advertising expenses were $5.1 million versus $10.8 million
last year.
- Operating loss was $51.2 million or negative 93.4% operating
margin, compared to operating income of $17.9 million last year,
primarily driven by a goodwill and intangible impairment charge of
$27.0 million and lower gross profit associated with lower sales
demand during the period.
- Loss from continuing operations was $60.2 million, or $(1.92)
per diluted share, compared to income of $14.0 million, or $0.43
per diluted share, last year.
- Net loss was $60.2 million, or $(1.92) per diluted share,
compared to net income of $13.9 million, or $0.43 per diluted
share, last year.
- The income tax expense was $8.1 million this year compared to
$3.4 million last year. The income tax expense this year was
primarily a result of a U.S. deferred tax asset valuation allowance
in the amount of $14.2 million recorded this quarter.
- The following statements exclude the impact of non-cash
impairment charges1 related to the carrying value of our goodwill
and intangible assets for the three-months ended June 30, 2022.
- Adjusted operating expenses were $31.2 million, or 56.9% of
sales, compared to $37.6 million, or 20.4% of sales, last year. The
decrease was driven by lower advertising and partially offset by
JRNY® investments.
- Adjusted operating loss was $24.2 million compared to last
year’s income of $17.9 million, driven by lower gross profit.
- Adjusted EBITDA loss from continuing operations was $19.9
million compared to income of $21.1 million last year.
1 See “Reconciliation of Non-GAAP
Financial Measures” for more information
JRNY® Update
- Nautilus is continuing to enhance the JRNY® platform through
many unique features including the expansion of differentiated,
visual connected fitness experiences for JRNY® Members.
- As of June 30, 2022, Members of JRNY®, Nautilus’ personalized
connected fitness platform, exceeded 360k representing
approximately 133% growth versus the same quarter last year. Of
these members, 127k were Subscribers, representing approximately
290% growth over the same period. We define JRNY® Members as all
individuals who have a JRNY® account and/or subscription, which
includes Subscribers, their respective associated users and users
who consume free content. We define Subscribers as a person or
household who paid for a Subscription, are in a trial, or have
requested a "pause"' to their subscriptions for up to three
months.
- Additionally, the Company has made great strides over the last
two years expanding the number of products featuring JRNY®
connectivity. In FY 2022, approximately 80% of total units sold
were JRNY® compatible, compared to only 22% in the pre-pandemic FY
2020. The trend of approximately 80% of total units sold being
JRNY® compatible continued in Q1 FY 2023.
- Nautilus' integration of VAY's motion-tracking capabilities
into JRNY® will further advance and accelerate personalized
strength workout options, including the addition of rep counting
and form coaching for SelectTech® users, which we believe will
drive JRNY® membership growth during FY 2023.
Segment Results
Fiscal 2023 First Quarter Ended June 30, 2022 Compared to
June 30, 2021
Direct Segment
- Direct segment sales were $26.5 million, compared to $63.4
million, a decline of 58.2% versus last year, and up 27%, or 8%
CAGR, compared to the same period in fiscal 2020. Net sales
decrease was primarily driven by the return to pre-pandemic
seasonal demand and higher sales discounting.
- Cardio sales declined 45.5% versus last year and were up 6.5%,
or 2% CAGR, compared to the same period in fiscal 2020. Lower sales
were primarily driven by lower bike demand. Strength product sales
declined 70.8% versus last year and increased 96.7%, or 25% CAGR,
compared to the same period in fiscal 2020. Lower sales this
quarter were primarily driven by lower demand for SelectTech®
weights.
- The Direct segment ended the quarter with $0.4 million of
backlog as of June 30, 2022. These amounts represent unfulfilled
consumer orders net of current promotional programs and sales
discounts.
- Gross profit margin was 17.2% versus 38.7% last year. The 21.5
ppt decrease in gross margin was primarily driven by: increased
discounting (-8 ppts), unfavorable logistics overhead absorption
(-7 ppts) and increased investments in JRNY® (-7 ppts). Gross
profit was $4.6 million, down 81.4% versus last year.
- Segment contribution loss was $9.9 million, or 37.4% of sales,
compared to segment contribution income of $6.8 million, or 10.7%
of sales last year. The decline was primarily driven by lower gross
profit, as explained above, offset by decreased media spend.
Advertising expenses were $5.2 million compared to $8.0 million
last year.
Retail Segment
- Retail segment sales were $27.4 million, down by 77.2% versus
last year. Excluding sales related to Octane, net sales were down
2%, or -1% CAGR, compared to the same period in fiscal 2020. Retail
segment sales outside the United States and Canada were down 83%
versus last year. The decrease in sales compared to last year is
primarily driven by lower cardio sales and higher sales discounting
as Retailers work through higher-than-normal inventory levels.
- Cardio sales declined by 86.8% versus last year. Excluding
sales of the Octane brand, cardio sales were down 28.7%, or 11%
CAGR, compared to the same period in fiscal 2020. Lower sales this
quarter were primarily driven by lower bike sales. Strength product
sales declined by 48.9% versus last year. Strength sales were up
36.8% or 11% CAGR, compared to the same period in fiscal 2020, led
by the popular SelectTech® weights.
- As of June 30, 2022, the Retail segment's backlog totaled $48.0
million. These amounts represent customer orders for future
shipments and are net of contractual rebates and consideration
payable to applicable Retail customers.
- Gross profit margins were 5.5% compared to 25.1% last year. The
19.6 ppt decrease in gross margin was primarily driven by:
increased discounting (-11 ppts) and unfavorable logistics overhead
absorption (-9 ppts). Gross profit was $1.5 million, a decrease of
95% versus last year.
- Segment contribution loss was $5.4 million, or 19.7% of sales,
compared to segment contribution income of $22.1 million, or 18.3%
of sales, last year. The decline was primarily driven by lower
gross profit as explained above.
Balance Sheet and Other Key Highlights as of June 30,
2022:
- Cash and Liquidity:
- Cash, cash equivalents, and restricted cash were $8.7 million,
compared to cash, cash equivalents, and restricted cash of $14.2
million as of March 31, 2022. The decrease was primarily due to the
net loss, offset by increased debt and changes in working
capital.
- Debt and other borrowings were $37.0 million compared to $29.4
million as of March 31, 2022.
- $35.1 million was available for borrowing under the Wells Fargo
Asset Based Lending Revolving Facility (“Facility”) compared to
$65.8 million as of March 31, 2022.
- Inventory was $103.9 million, down compared to $111.2 million
as of March 31, 2022. The decrease in inventory versus year-end was
driven by sell-through as we right-size inventory levels ahead of
the fitness season. About 8% of inventory as of June 30, 2022 was
in transit.
- Trade receivables were $27.5 million, compared to $61.5 million
as of March 31, 2022. The decrease in trade receivables was due to
lower sales and the timing of customer payments.
- Trade payables were $26.8 million, compared to $53.2 million as
of March 31, 2022. The decrease in trade payables was primarily due
to the timing of payments for inventory.
- Capital expenditures totaled $3.4 million for the three-months
ended June 30, 2022.
Forward Looking Guidance
The following forward-looking statements reflect the Company's
full fiscal year 2023 expectations as of August 9, 2022 and are
subject to risks and uncertainties.
- The Company is reiterating Second Half and Full Year 2023
Guidance.
Second Half and Full Year 2023
- The Company expects full year revenue of between $380 million
and $460 million.
- Given the impact of elevated inventory levels at the Company’s
retail partners, the Company expects the 2nd half of the year to
represent between 65% and 70% of full year sales, slightly higher
than pre-pandemic 2nd half seasonality of approximately 60%.
- Gross margins for the second half of the year are expected to
be in the range of 27% to 30%. Improvements versus last year are
driven by lower in-bound freight and demurrage fees, and the
reduction in logistics facilities footprint. The Company is closing
one of its distribution centers when the associated lease expires
in the Fall of 2022 and will not be renewing the leases of some
storage locations.
- Given higher anticipated sales levels in the 2nd half of FY
2023, improved gross margins, and plans to flex sales and marketing
expenses in-line with sales, the Company expects to deliver
positive Adjusted EBITDA(1) for the 2nd half of FY 2023.
- As a result, the Company expects full year Adjusted EBITDA(1)
loss of between $25 million and $35 million.
- The Company expects JRNY® Members to exceed 500,000 at March
31, 2023.
(1) We provide Adjusted EBITDA guidance,
rather than net income guidance, due to the inherent
unpredictability of forecasting certain types of expenses such as
stock-based compensation and income tax expenses, which affect net
income but not Adjusted EBITDA. We are unable to reasonably
estimate the impact of such expenses, if any, on net income. The
inability to project certain components of the calculation would
significantly affect the accuracy of a reconciliation. Accordingly,
we do not provide a reconciliation of projected net income to
projected Adjusted EBITDA.
Conference Call
Nautilus will discuss our fiscal 2023 first quarter ended June
30, 2022 operating results during a live conference call and
webcast on Tuesday, August 9, 2022 at 1:30 p.m. Pacific Time. The
conference call can be accessed by calling (844) 825-9789 in North
America. International callers may dial (412) 317-5180. Please note
that there will be presentation slides accompanying the earnings
call. The slides will be displayed live on the webcast and will be
available to download via the webcast player or at
http://www.nautilusinc.com/events. The webcast will be archived
online within two hours after completion of the call and will be
available for six months. Participants from the Company will
include Jim Barr, Chief Executive Officer and Aina Konold, Chief
Financial Officer.
A telephonic playback will be available from 4:30 p.m. PT,
August 9, 2022 through 8:59 p.m. PT, August 23, 2022. Participants
can dial (844) 512-2921 in North America and international
participants can dial (412) 317-6671 to hear the playback. The
passcode for the playback is 10169445.
About Nautilus, Inc.
Nautilus, Inc. (NYSE:NLS) is a global leader in digitally
connected home fitness solutions. The Company’s brand family
includes Bowflex®, Nautilus®, Schwinn®, and JRNY®, its digital
fitness platform. With a broad selection of exercise bikes, cardio
equipment, and strength training products, Nautilus, Inc. empowers
healthier living through individualized connected fitness
experiences and in doing so, envisions building a healthier world,
one person at a time.
Headquartered in Vancouver, Washington, the Company’s products
are sold direct to consumer on brand websites and through retail
partners and are available throughout the U.S. and internationally.
Nautilus, Inc. uses the investor relations page of its website
(www.nautilusinc.com/investors) to make information available to
its investors and the market.
Forward-Looking Statements
This press release includes forward-looking statements
(statements which are not historical facts) within the meaning of
the Private Securities Litigation Reform Act of 1995, including:
projected, targeted or forecasted financial, operating results and
capital expenditures, including but not limited to net sales growth
rates, gross margins, operating expenses, operating margins,
anticipated demand for the Company's new and existing products,
statements regarding the Company's prospects, resources or
capabilities; planned investments, strategic initiatives and the
anticipated or targeted results of such initiatives; the effects of
the COVID-19 pandemic on the Company’s business; and planned
operational initiatives and the anticipated cost-saving results of
such initiatives. All of these forward-looking statements are
subject to risks and uncertainties that may change at any time.
Factors that could cause Nautilus, Inc.’s actual expectations to
differ materially from these forward-looking statements also
include: weaker than expected demand for new or existing products;
our ability to timely acquire inventory that meets our quality
control standards from sole source foreign manufacturers at
acceptable costs; risks associated with current and potential
delays, work stoppages, or supply chain disruptions, including
shipping delays due to the severe shortage of shipping containers;
an inability to pass along or otherwise mitigate the impact of raw
material price increases and other cost pressures, including
unfavorable currency exchange rates and increased shipping costs;
experiencing delays and/or greater than anticipated costs in
connection with launch of new products, entry into new markets, or
strategic initiatives; our ability to hire and retain key
management personnel; changes in consumer fitness trends; changes
in the media consumption habits of our target consumers or the
effectiveness of our media advertising; a decline in consumer
spending due to unfavorable economic conditions; risks related to
the impact on our business of the COVID-19 pandemic or similar
public health crises; softness in the retail marketplace;
availability and timing of capital for financing our strategic
initiatives, including being able to raise capital on favorable
terms or at all; changes in the financial markets, including
changes in credit markets and interest rates that affect our
ability to access those markets on favorable terms and the impact
of any future impairment. Additional assumptions, risks and
uncertainties are described in detail in our registration
statements, reports and other filings with the Securities and
Exchange Commission, including the “Risk Factors” set forth in our
Annual Report on Form 10-K, as supplemented by our quarterly
reports on Form 10-Q. Such filings are available on our website or
at www.sec.gov. You are cautioned that such statements are not
guarantees of future performance and that our actual results may
differ materially from those set forth in the forward-looking
statements. We undertake no obligation to publicly update or revise
forward-looking statements to reflect subsequent developments,
events, or circumstances.
RESULTS OF OPERATIONS INFORMATION
The following summary contains information from our consolidated
statements of operations for the three-month period ended June 30,
2022 and 2021 (unaudited and in thousands, except per share
amounts):
Three-Months Ended June
30,
2022
2021
Net sales
$
54,817
$
184,593
Cost of sales
47,860
129,088
Gross profit
6,957
55,505
Operating expenses:
Selling and marketing
12,891
21,300
General and administrative
12,463
11,523
Research and development
5,823
4,815
Goodwill and intangible impairment
charge
26,965
—
Total operating expenses
58,142
37,638
Operating (loss) income
(51,185
)
17,867
Other expense, net
(889
)
(413
)
(Loss) income from continuing operations
before income taxes
(52,074
)
17,454
Income tax expense
8,096
3,438
(Loss) income from continuing
operations
(60,170
)
14,016
Loss from discontinued operations, net of
income taxes
(7
)
(132
)
Net (loss) income
$
(60,177
)
$
13,884
Basic (loss) income per share from
continuing operations
$
(1.92
)
$
0.46
Basic loss per share from discontinued
operations
—
(0.01
)
Basic net (loss) income per share
$
(1.92
)
$
0.45
Diluted (loss) income per share from
continuing operations
$
(1.92
)
$
0.43
Diluted loss per share from discontinued
operations
—
—
Diluted net (loss) income per share
$
(1.92
)
$
0.43
Shares used in per share calculations:
Basic
31,405
30,697
Diluted
31,405
32,508
Select Metrics:
Gross margin
12.7
%
30.1
%
Selling and marketing % of net sales
23.5
%
11.5
%
General and administrative % of net
sales
22.7
%
6.2
%
Research and development % of net
sales
10.6
%
2.6
%
Operating (loss) income % of net sales
(93.4
) %
9.7
%
SEGMENT INFORMATION
The following table presents certain comparative information by
segment and major product lines within each business segment for
the three-months ended June 30, 2022 and 2021 (unaudited and in
thousands):
Three-Months Ended June
30,
Change
2022
2021
$
%
Net sales:
Direct net sales:
Cardio products(1)
$
17,133
$
31,430
$
(14,297
)
(45.5
) %
Strength products(2)
9,343
31,966
(22,623
)
(70.8
) %
Direct
26,476
63,396
(36,920
)
(58.2
) %
Retail net sales:
Cardio products(1)
11,843
89,924
(78,081
)
(86.8
) %
Strength products(2)
15,601
30,560
(14,959
)
(48.9
) %
Retail
27,444
120,484
(93,040
)
(77.2
) %
Royalty
897
713
184
25.8
%
Consolidated net sales
$
54,817
$
184,593
$
(129,776
)
(70.3
) %
Gross profit:
Direct
$
4,562
$
24,514
$
(19,952
)
(81.4
) %
Retail
1,498
30,278
(28,780
)
(95.1
) %
Royalty
897
713
184
25.8
%
Consolidated gross profit
$
6,957
$
55,505
$
(48,548
)
(87.5
) %
Gross margin:
Direct
17.2
%
38.7
%
(2,150
)
basis points
Retail
5.5
%
25.1
%
(1,960
)
basis points
Contribution:
Direct
$
(9,893
)
$
6,759
$
(16,652
)
(246.4
) %
Retail
(5,408
)
22,090
(27,498
)
(124.5
) %
Royalty
897
713
184
25.8
%
Consolidated contribution
$
(14,404
)
$
29,562
$
(43,966
)
(148.7
) %
Reconciliation of consolidated
contribution to (loss) income from continuing operations:
Consolidated contribution
$
(14,404
)
$
29,562
$
(43,966
)
(148.7
) %
Amounts not directly related to
segments:
Operating expenses
(36,781
)
(11,695
)
(25,086
)
(214.5
) %
Other expense, net
(889
)
(413
)
(476
)
(115.3
) %
Income tax benefit (expense)
(8,096
)
(3,438
)
(4,658
)
(135.5
) %
(Loss) income from continuing
operations
$
(60,170
)
$
14,016
$
(74,186
)
(529.3
) %
(1) Cardio products include:
connected-fitness bikes, the Bowflex® C6, Bowflex® VeloCore®,
Schwinn® IC4, Max Trainer®, connected-fitness treadmills, other
exercise bikes, ellipticals and subscription services.
(2) Strength products include: Bowflex®
Home Gyms, Bowflex® SelectTech® dumbbells, kettlebell and barbell
weights, and accessories.
BALANCE SHEET INFORMATION
The following summary contains information from our consolidated
balance sheets as of June 30, 2022 and March 31, 2022 (unaudited
and in thousands):
As of
June 30, 2022
March 31, 2022
Assets
Cash and cash equivalents
$
7,311
$
12,872
Restricted cash
1,339
1,339
Available-for-sale securities
—
—
Trade receivables, net of allowances
27,450
61,454
Inventories
103,932
111,190
Prepaids and other current assets
11,979
14,546
Other current assets - restricted,
current
3,887
3,887
Income taxes receivable
1,721
1,998
Total current assets
157,619
207,286
Property, plant and equipment, net
33,185
32,129
Operating lease right-of-use assets
22,353
23,620
Goodwill
—
24,510
Other intangible assets, net
6,833
9,304
Deferred income tax assets,
non-current
809
8,760
Income taxes receivable, non-current
5,673
5,673
Other assets
2,666
2,763
Total assets
$
229,138
$
314,045
Liabilities and Shareholders'
Equity
Trade payables
$
26,764
$
53,165
Accrued liabilities
24,420
29,386
Operating lease liabilities, current
portion
4,316
4,494
Finance lease liabilities, current
portion
120
119
Warranty obligations, current portion
3,955
4,968
Income taxes payable, current portion
720
839
Debt payable, current portion, net of
unamortized debt issuance costs
2,243
2,243
Total current liabilities
62,538
95,214
Operating lease liabilities,
non-current
19,778
20,926
Finance lease liabilities, non-current
367
395
Warranty obligations, non-current
1,041
1,248
Income taxes payable, non-current
4,054
4,029
Deferred income tax liabilities,
non-current
500
—
Other non-current liabilities
1,270
1,071
Debt payable, non-current, net of
unamortized debt issuance costs
34,743
27,113
Shareholders' equity
104,847
164,049
Total liabilities and shareholders'
equity
$
229,138
$
314,045
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Non-GAAP Presentation
In addition to disclosing its financial results determined in
accordance with GAAP, Nautilus has presented in this release
certain non-GAAP financial measures, which exclude the impact of
certain items (as further described below) and provide supplemental
information regarding operating performance. Nautilus presents
non-GAAP financial measures as a complement to results provided in
accordance with GAAP, and the non-GAAP financial measures should
not be regarded as a substitute for GAAP. By disclosing these
non-GAAP financial measures, management intends to provide
investors with a supplemental comparison of operating results and
trends for the periods presented. Management believes these
measures are also useful to investors as such measures allow
investors to evaluate performance using the same metrics that
management uses to evaluate past performance and prospects for
future performance. Nautilus strongly encourages you to review all
its financial statements and publicly filed reports in their
entirety and to not rely on any single financial measure.
Adjusted Results
In addition to disclosing the comparable GAAP results, Nautilus
has presented its operating expenses and operating (loss) income on
an adjusted basis. Adjusted operating expenses and Adjusted
operating (loss) income excludes the non-cash charges related to
the non-cash charge related to goodwill and intangible asset
impairment. We believe that the adjustment of these charges and any
associated tax benefit, which are inconsistent in amount and
frequency, supplements the GAAP information with a measure that can
be used to assess the sustainability of our operating performance.
Nautilus has also presented EBITDA from continuing operations on an
adjusted basis, excluding the aforementioned items for similar
reasons.
Adjusted EBITDA from Continuing Operations
Nautilus has also presented EBITDA from continuing operations on
an adjusted basis, to exclude the non-cash charge related to
goodwill and intangible asset impairment, stock-based compensation
expense, and other expenses, net. We believe that the exclusion of
stock-based compensation expense provides for a better comparison
of our operating results to prior periods and to our peer companies
as the calculations of stock-based compensation vary from period to
period and company to company due to different valuation
methodologies, subjective assumptions, and the variety of award
types. We exclude other expenses, net that are the result of
factors and can vary significantly from one period to the next, we
believe that exclusion of such other expenses are useful to
management and investors in evaluating the performance of our
ongoing operations on a period-to-period basis. We believe that the
adjustment of this charge, which is inconsistent in amount and
frequency, supplements the EBITDA information with a measure that
can be used to assess the sustainability of our operating
performance.
The following table presents a reconciliation of operating
expenses, the most directly comparable GAAP measure, to Adjusted
operating expenses for the three-month period ended June 30, 2022
and 2021 (unaudited and in thousands):
Three-Months Ended June
30,
2022
2021
Operating expenses
$
58,142
$
37,638
Goodwill and intangible impairment
charge(1)
(26,965
)
—
Adjusted operating expenses
$
31,177
$
37,638
The following table presents a reconciliation of operating
(loss) income, the most directly comparable GAAP measure, to
Adjusted operating (loss) income for the three-month period ended
June 30, 2022 and 2021 (unaudited and in thousands):
Three-Months Ended June
30,
2022
2021
Operating (loss) income
$
(51,185
)
$
17,867
Goodwill and intangible impairment
charge(1)
26,965
—
Adjusted operating (loss) income
$
(24,220
)
$
17,867
The following table presents a reconciliation of (loss) income
from continuing operations, the most directly comparable GAAP
measure, to Adjusted EBITDA from continuing operations for the
three-month period ended June 30, 2022 and 2021 (unaudited and in
thousands):
Three-Months Ended June
30,
2022
2021
(Loss) income from continuing
operations
$
(60,170
)
$
14,016
Other expense, net
889
413
Income tax expense from continuing
operations
8,096
3,438
Depreciation and amortization
2,306
2,054
Stock-based compensation expense
1,979
1,225
Goodwill and intangible impairment
charge(1)
26,965
—
Adjusted (loss) earnings before interest,
taxes, depreciation, and amortization (Adjusted EBITDA) from
continuing operations
$
(19,935
)
$
21,146
(1) Goodwill and intangible impairment charge
In accordance with ASC 350 — Intangibles — Goodwill and Other,
an entity is required to perform goodwill and indefinite-lived
trade names impairment valuations annually, or sooner if triggering
events are identified. While our stock price and related market
capitalization remained above our reporting unit carrying values as
of March 31, 2022, we observed continued market volatility
including significant declines in our market capitalization during
the three-month period ended June 30, 2022, identified as a
triggering event. We performed an interim evaluation and a market
capitalization reconciliation during the first quarter of fiscal
2023, which resulted in non-cash goodwill and indefinite-lived
intangible assets impairment charges.
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version on businesswire.com: https://www.businesswire.com/news/home/20220809005969/en/
Investor Relations: John Mills ICR, LLC 646-277-1254
John.mills@icrinc.com Media: John Fread Nautilus, Inc
360-859-5815 jfread@nautilus.com Carey Kerns The Hoffman Agency
503-754-7975 ckerns@hoffman.com
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