Nautilus 2014 Annual Report Download - page 27

Download and view the complete annual report

Please find page 27 of the 2014 Nautilus annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 77

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77

The following tables compare the Net Sales of our major product lines within each business segment (in thousands):
Net Sales and Cost of Sales
Direct
The 28.5% increase in Direct Net Sales in 2014 compared to 2013 was primarily related to a 39.5%
increase in Direct sales of our cardio
products that was due primarily to growth of the Bowflex Max Trainer
®
,
which started shipping in January 2014, partially offset by a decline in
the Bowflex TreadClimber
®
. The business also benefited from higher U.S. consumer credit approval rates.
The 9.3% increase in Direct Net Sales in 2013 compared to 2012 was primarily related to a 14.1%
increase in sales of our cardio products,
reflecting strong consumer demand, especially for our Bowflex TreadClimber
®
,
which we believe was driven by increased advertising
effectiveness, improved call center effectiveness and higher U.S. consumer credit approval rates.
The increases in Direct Net Sales of cardio products in 2014 compared to 2013 , and in 2013 compared to 2012 , were partially offset by a
29.7%
and a 10.2% decline, respectively, in Direct Net Sales of strength products, primarily rod-based home gyms. The declines in sales of rod-
based
home gyms were attributable, in part, to the reduction of advertising for these products over
21
Year Ended December 31,
2014 2013 Change % Change
Direct net sales:
Cardio products
(1)
$
160,249
$
114,846
$
45,403
39.5
%
Strength products
(2)
15,344
21,817
(6,473
)
(29.7
)%
175,593
136,663
38,930
28.5
%
Retail net sales:
Cardio products
(1)
56,262
36,692
19,570
53.3
%
Strength products
(2)
36,961
40,083
(3,122
)
(7.8
)%
93,223
76,775
16,448
21.4
%
Royalty income
5,631
5,365
266
5.0
%
$
274,447
$
218,803
$
55,644
25.4
%
(1)
Cardio products include: TreadClimber
®
, Max Trainer
®
, treadmills, exercise bikes, ellipticals, Bowflex Boost
®
,
Bowflex Body
TM
and DVDs.
(2)
Strength products include: home gyms, selectorized dumbbells, kettlebell weights, UpperCut™ and accessories.
Year Ended December 31,
2013 2012 Change % Change
Direct net sales:
Cardio products
(1)
$
114,846
$
100,677
$
14,169
14.1
%
Strength products
(2)
21,817
24,301
(2,484
)
(10.2
)%
136,663
124,978
11,685
9.3
%
Retail net sales:
Cardio products
(1)
36,692
36,209
483
1.3
%
Strength products
(2)
40,083
27,682
12,401
44.8
%
76,775
63,891
12,884
20.2
%
Royalty income
5,365
5,057
308
6.1
%
$
218,803
$
193,926
$
24,877
12.8
%
(1)
Cardio products include: TreadClimber
®
, Max Trainer
®
, treadmills, exercise bikes, ellipticals, Bowflex Boost
®
, Bowflex Body
TM
and DVDs.
(2)
Strength products include: home gyms, selectorized dumbbells, kettlebell weights, UpperCut™ and accessories.