Boston, MA 05/07/2014 (wallstreetpr) – Buoyed by a strong 1Q2014 performance, the fitness equipment manufacturer Nautilus, Inc. (NYSE:NLS) now believes that its time for growth has come after years of lackluster performance.
As such, the company said it wants to build a new distribution center, consolidate its research and development facilities and expand the presence in the cardio fitness market with the launch of a new product. And all these developments are expected in the fall.
Adding a new distribution center is expected to improve customer reach and also support revenue growth. According to chief operating offering Bill McMahon, the company will establish its second distribution in Midwest with hopes that it will expand the company’s presence in Portland. The new facility is expected to support enhanced customer service with the target of the East Coast. Moreover, the company looks to a new facility as an opportunity to ease its freight costs, therefore, supporting bottom-line improvement.
In addition to the new distribution facility, the company also announced plans to bring its product research and development activities to a single building in east Vancouver near its headquarters. The consolidation of the research and development activities is also expected to have a positive impact on the bottom-line.
Departure from earlier stance
Nautilus, Inc. (NYSE:NLS) announced plans to enter the treadmill market, a move that is expected to expand its footprint in the cardio fitness equipment market. The company expects to price its treadmills between $799 and $999.
The decision to enter the treadmill signals a change of heart given that the company initially said it had no plans of competing in the treadmill market. Therefore, following the latest development, the COO stated the company feels it has developed the right product capable of competing in the global cardio fitness space.
1Q in summary
Nautilus, Inc. (NYSE:NLS) had a strong quarter, marking a significant departure from the years of tepid quarterly performance. As such, the CEO Bruce Cazenave said the strong results are testimony to improvements that the company has been undertaking over the past three years. He expects the company to maintain profitability.
The company reported 1Q profit of $5.4 million. Net sales in the quarter were $71.9 million, up 21 percent over the same quarter a year earlier.