CC Highlights...
THIS IS THE MOST OPTIMISTIC AND FORTHCOMING I HAVE
EVER HEARD THE GUYS AT DFXI DURING A QUARTERLY CALL.
NOW LETS ROCK!!!
my quick notes follow --sorry for not being able to type
fast enough during the recap of financial numbers. THe
Q&A was extremely positive.
Great Quarter, Great Year.
Announced stock repurchase effective next 3 months.
Sales up 70% for quarter.
Sales up 68% for 2000.
ecommerce sales up 19% sequentially and 251% yr/yr.
ecommerce sales up 366% yr/yr.
61.8 million sales from direct division. Beds reached
5% of direct sales. Rest from nautilus.
GM remained steady at 70% in 2000 in direct channel.
GM for Nautilus line was 38% in 4th q, up 3%. Combined GM
65%.
Better than expected television response rates this
quarter! --however, caused expenses to be up a little
more.
77.2 million cash, up from 57.3 million at the end of 3rd
Q!!
Accounts receivable and DSO constant over last year and
expect them to remain this level.
Sales growth rate to be in the range of 25% to 30% compared
to 2000.
Continue to see sustained growth across BFX and nautilus.
BFX grew beyond expactation. Will release new BFX
model next year. Total home market opportunity is 5 billion.
So we believe continued sales growth potential. 2nd main
achievement was roll-out of nautilus bed. Expect to use
our PATIENT and direct formula to offer new products in
the direct channel. Increase commercial and retail sales
to 25 million and profits to 1 million dollars. Believe
set the stage for continued growth. Continue to invest in
the future: investments in our information systems.
Purchase a new building to consolidate operations. Confident
in growth 2001 and beyond.
Q&A now.
...: Fantastic Quarter Gentlemen! Breakout on the
direct side of business and nautilus. Top line for
direct side was 51.8 mil and nautilus seg 8.8 million.
With all the cash you have, any acquisitions? stupid
analyst... got no response of course! strenght in
direct business. trouble staffing direct marketing?
We have adequate resources...
Piper Jaffrays: Congrats. On the beds, avg selling price?
right around 1600$, fitness around 1200$. Sold around 6000
beds up to now. Life to date on BFX was 340K. Ten thousand
unit acceleration over 3rd quarter. Mentioned the
tough retail environment, you saw a good environment?
WE DIDN"T FIND IT A VERY TOUGH ENVIRONMENT!!! with
linear sales troughout the quarter. From outperformance,
we'll be able to bump up expectations? Grow business around
25% based on 3rd quarter.
....: Share buybacks over course of 2000? Bought back
around 3M$ in 1st half of 2000.
Wells Fargo: Congrats to ALL and DFXI! wants to know more
about GM... Guidance for 2001: Stated here grow the company
in the 25% to 20% range. Tough retail environment, what
kind of business in January? In direct business, 1st Q and
3rdQ are two of our strongest quarters, 1st Q is STILL A
STRONG QUARTER!!!! YEAH!
....: Congrats! Terrific results compared to previous
guidance. Exceeded guidance by 12 millions. Why revs
so much higher than guidance. talked about this before,
thought 4th Q would be a challenging Q, election affect
advertising. But this year it was a non-event. The
nautilus business, made 8.8 million. What contribution
came from new products. Roll-out in 4th QW. Nitroline
picking up steam. Nitro line is a new revitalize
line of fitness for the commercial market. Initial
response has been very good. On the air-sleep system, was
it break even? Accomplished our sales and marketing
objectives, won't break out other numbers. Do you expect
it to be a profitable business? expect all business to
be profitable! Guidance for percentage of sales from
beds... trend somewhat like BFX. Expect to double sales
so expect 15-20 million dollars... Correct assumption.
piper jaffrays: strong enough on sleep system that you
feel comfortable to forecast now? Product has it's own
cycle. Longer life expected from sleep than BFX.
Modeled 700K in earning for 2000. Expect to grow that
faster than total business. Selling to more new customers
today than at any time we've owned the company.
....: on nautilus retail... we have about 23 strenght
products and 40 fitness accessories. Plan to add? yes.
How many products we can add? significant number of main
products including home gyms. Could it double? Equipement
line about 1/2 dozen, the accessory line can double.
Anything unusual with return rate. No... DARN< CAN"T FIND
ANY WEAKNESS>
....: capex right around 6-7million in computer equip.
How many people working in call. About 125 in call center
and 15 people are dedicated to sleep system.
....: new BFX model. Characterize? Why new model?
New look, functionality wise, its similar and think will
attract more high end customers. Revolutionary
design? or new gimmick? GIMMICK?!?! Not a revolutionary new
design --cosmetic upgrade. Higher price model: believe so. |
