Nautilus: Fitness Favorite

03/10/2016 7:00 am EST


James Oberweis

President, Oberweis Asset Management, Inc.

Our latest small cap feature is a leading supplier of fitness equipment for home use, with leading brands including Bowflex, Nautilus, Schwinn and Universal, explains Jim Oberweis, Jr., editor of The Oberweis Report.

Nautilus (NLS) markets their products through two primary distribution channels: direct to consumers (2/3 of their business) through TV ads, catalogs, and the Internet; and the retail channel (1/3 of their business) through retail company stores and websites.

Several new product introductions have augmented recent growth and should continue to drive sales.

This includes momentum in the Bowflex MAX Trainer cardio machines with a recent launch in select international markets and a well-received fall introduction of the Schwinn Airdyne AD Pro Total Fitness Bike.

Other new products should benefit from the new trend in fitness whereby consumers track, store, and analyze their workouts.

For example, the Treadclimber TC100 and TC200 cardio machines, and the Bowflex SelectTech 560 dumbbells, offer “smart” technology and Bluetooth compatibility.

The company closed the acquisition of Octane Fitness at year-end which adds specialty retail, commercial and heavier international exposure to the Nautilus footprint.

The acquisition also provides a significant cross-sell opportunity and is expected to be additive to earnings per share in 2016.

In the company’s latest reported fourth quarter, sales increased approximately 15% to $109.1 million from $94.9 million in the fourth quarter of last year.

Nautilus reported earnings per share of $0.39 in the latest reported fourth quarter versus $0.33 in the same quarter of last year.

Clients of Oberweis Asset Management own approximately 167,000 shares. These shares may be appropriate for risk-oriented investors.

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