chugging along........
Tuesday October 17, 4:01 pm Eastern Time
Press Release
Direct Focus, Inc. Announces Record Third Quarter Results
Year-over-year Sales Increase 66% and Earnings Increase 102%
VANCOUVER, Wash.--(BUSINESS WIRE)--Oct. 17, 2000--Direct Focus, Inc. (Nasdaq:DFXI - news), a leading marketing company for fitness and healthy lifestyle products with a highly-effective direct business model, today announced its results for the quarter ended September 30, 2000.
For the third quarter of 2000, Direct Focus reported net sales of $52.7 million, an increase of 66% from $31.8 million in the third quarter of 1999. Net income for the third quarter of 2000 was $11.1 million or $0.69 per diluted share, up 102% from $5.5 million or $0.34 per diluted share for the same period of 1999.
eCommerce sales were $11.5 million for the third quarter of 2000, up 74% sequentially from $6.6 million in the previous quarter.
For the first nine months of 2000, Direct Focus reported net sales of $139.2 million, up 68% from $83.1 million for the same period of 1999. Net income for the first nine months of 2000 was $28.2 million, or $1.76 per diluted share, up 102% from $14.0 million or $0.90 per diluted share for the same period of 1999. The results reported for 1999 exclude an after-tax charge of $2.6 million for a legal settlement.
``We are very pleased with our strong sales and profits for the quarter,'' said Brian Cook, President and Chief Executive Officer. ``We continue to see sustained sales growth across our Bowflex and Nautilus product lines as we leverage our direct business model and powerful brand names. In the Nautilus division, we introduced new products in both our commercial and retail channels to increase sales opportunities and strengthen our brand equity.''
``We are also pleased by the continued growth of our e-Commerce sales, which has proven to be a strong complement to our data-driven business model. We continue to strengthen our information systems infrastructure and management team in anticipation of continued growth. We plan to move into our new building in the fourth quarter in order to consolidate our operations and provide additional capacity for future growth.''
An Internet broadcast of Direct Focus Inc.'s third quarter conference call (2:00 PM Pacific/5:00 PM Eastern) will be available today at www.directfocusinc.com under ``Investor Relations'' or by calling 888/368-4280 (conference ID # 534583). A 48-hour replay will be available by calling 800/642-1687 or at www.directfocusinc.com.
About Direct Focus, Inc.
Direct Focus, Inc. is a marketing company for fitness and healthy lifestyle products with a direct business model. The Company currently markets its Bowflex line of home fitness equipment and Nautilus Sleep Systems directly to consumers, using an effective combination of television advertising, 800-call centers and Web sites. The Company also sells its Nautilus commercial fitness equipment directly to health clubs and other institutions, and its Nautilus consumer fitness products through retail athletic stores. The Company is headquartered in Vancouver, Washington. Direct Focus is located on the Web at www.directfocusinc.com.
This press release contains forward-looking statements relating to anticipated sales, net income, earnings and the development of Direct Focus' products and services, including statements regarding its Nautilus business. Factors that could affect Direct Focus' actual results include its reliance on a limited product line, market acceptance of its existing and future products and growth management challenges. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in Direct Focus' annual report on Form 10-K for the fiscal year ended December 31, 1999.
DIRECT FOCUS, INC. CONSOLIDATED
Statements of Operations
3 Mos. Ended September 30,
--------------------------------
2000 1999
-------------- ---------------
NET SALES $52,661,035 $31,772,893
COST OF SALES 13,597,600 8,790,565
-------------- ---------------
-------------- ---------------
Gross profit 39,063,435 22,982,328
-------------- ---------------
-------------- ---------------
OPERATING EXPENSES
Selling and marketing 19,054,085 13,029,343
General and administrative 2,459,320 1,124,363
Royalties 1,288,811 730,012
Litigation settlement - -
-------------- ---------------
-------------- ---------------
Total operating expenses 22,802,216 14,883,718
-------------- ---------------
-------------- ---------------
INCOME FROM OPERATIONS 16,261,219 8,098,610
-------------- ---------------
-------------- ---------------
OTHER INCOME (EXPENSE)
Interest income 969,872 343,730
State business tax and other - net 83,866 (24,379)
-------------- ---------------
-------------- ---------------
Total other income (expense) - net 1,053,738 319,351
-------------- ---------------
-------------- ---------------
INCOME BEFORE INCOME TAXES 17,314,957 8,417,961
INCOME TAX EXPENSE 6,233,387 2,922,640
-------------- ---------------
-------------- ---------------
NET INCOME $11,081,570 $5,495,321
============== ===============
============== ===============
BASIC EARNINGS PER SHARE $0.71 $0.35
DILUTED EARNINGS PER SHARE $0.69 $0.34
Basic shares outstanding 15,681,453 15,816,858
Diluted shares outstanding 16,082,743 16,222,231
9 Mos. Ended September 30,
--------------------------------
2000 1999
--------------- --------------
NET SALES $139,249,552 $83,129,639
COST OF SALES 36,847,663 23,541,777
--------------- --------------
--------------- --------------
Gross profit 102,401,889 59,587,862
--------------- --------------
--------------- --------------
OPERATING EXPENSES
Selling and marketing 51,270,420 33,038,869
General and administrative 6,241,623 3,552,143
Royalties 3,454,124 1,991,941
Litigation settlement - 4,000,000
--------------- --------------
--------------- --------------
Total operating expenses 60,966,167 42,582,953
--------------- --------------
--------------- --------------
INCOME FROM OPERATIONS 41,435,722 17,004,909
--------------- --------------
--------------- --------------
OTHER INCOME (EXPENSE)
Interest income 2,409,584 580,898
State business tax and other - net 168,897 (122,901)
--------------- --------------
--------------- --------------
Total other income (expense) - net 2,578,481 457,997
--------------- --------------
--------------- --------------
INCOME BEFORE INCOME TAXES 44,014,203 17,462,906
INCOME TAX EXPENSE 15,845,114 6,089,313
--------------- --------------
--------------- --------------
NET INCOME $28,169,089 $11,373,593
=============== ==============
=============== ==============
BASIC EARNINGS PER SHARE $1.80 $0.75
DILUTED EARNINGS PER SHARE $1.76 $0.73
Basic shares outstanding 15,680,125 15,115,785
Diluted shares outstanding 16,013,776 15,518,637
DIRECT FOCUS, INC. - CONSOLIDATED
Balance Sheet
September 30, 2000
September 30, December 31,
2000 1999
----------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 57,589,567 $ 35,703,457
Trade receivables 5,026,423 4,744,213
Inventories 14,310,893 9,167,554
Prepaid expenses and
other current assets 2,007,303 1,863,951
Current deferred tax asset 2,654,254 820,789
------------ ------------
------------ ------------
Total current assets 81,588,440 52,299,964
------------ ------------
------------ ------------
PROPERTY, PLANT
AND EQUIPMENT - NET 15,997,528 10,644,838
------------ ------------
------------ ------------
LONG-TERM DEFERRED TAX ASSET 116,431 0
OTHER ASSETS - NET 4,195,535 4,364,963
------------ ------------
------------ ------------
TOTAL ASSETS $101,897,934 $ 67,309,765
============ ============
============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables $ 10,325,074 $ 5,871,369
Accrued liabilities 5,444,631 4,051,540
Income taxes payable 4,212,557 2,177,236
Royalty payable to stockholders 1,211,974 893,563
Customer deposits 1,458,907 1,097,748
------------ ------------
------------ ------------
Total current liabilities 22,653,143 14,091,456
------------ ------------
------------ ------------
LONG-TERM DEFERRED TAX LIABILITY 0 187,484
STOCKHOLDERS' EQUITY
Common stock 16,647,297 18,602,420
Retained earnings 62,597,494 34,428,405
------------ ------------
------------ ------------
Total stockholders' equity 79,244,791 53,030,825
------------ ------------
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $101,897,934 $ 67,309,765
============ ============
============ ============
--------------------------------------------------------------------------------
Contact:
Direct Focus, Inc.
Chief Financial Officer
Rod Rice, 800/371-3363
or
StreetConnect
Investor Relations
Michael Newman, 206/320-1231 |
