Hey Clement and Trilobyte,,still around? What are your thoughts on latest release? Hope you bought back in on the dip.
Monday October 25, 8:04 am Eastern Time
Company Press Release
Direct Focus, Inc. Sales Climb 109 Percent
Net Income Up 90 Percent to $5.5 Million
VANCOUVER, Wash.--(BUSINESS WIRE)--Oct. 25, 1999--Direct Focus, Inc. (Nasdaq:DFXI - news) reported record sales and earnings during the third quarter ended September 30, 1999. Sales for the quarter increased 109 percent to $31.8 million from $15.2 million in the same 1998 period.
Net income for the quarter rose to $5.5 million, up 90 percent from $2.9 million a year ago. The strong quarterly results were aided by a return to profitability for the company's Nautilus operation. On a per diluted share basis, earnings for Direct Focus were $0.51 compared to $0.30 in last year's third quarter. The 70 percent improvement came on 11 percent more diluted shares outstanding than in the prior year.
''A highlight of the quarter was the continuing improved performance at our Nautilus business,'' said Brian Cook, president and chief executive officer of Direct Focus. ''Sales for our Nautilus operation were $5.4 million, a 46 percent gain over sales of $3.7 million in the second quarter.''
''We are even more pleased that Nautilus attained profitability in the third quarter, contributing $216,000 to net income, or $0.02 per diluted share,'' Cook said. ''The solid turnaround at Nautilus since Direct Focus acquired its operations in January 1999 confirms our belief in the strength of this brand name.''
For the nine months ended September 30, 1999, sales of $83.1 million increased 116 percent from $38.5 million in the same 1998 period, exceeding 1998 full year sales of $57.3 million. Excluding a one-time litigation charge of $2.6 million, or $0.25 per share, net income for the year-to-date period was $14.0 million, or $1.35 per diluted share, compared to $7.5 million, or $0.77 per share, a year ago.
The company continued to strengthen its financial position during the quarter. Working capital was $28.8 million at September 30, 1999 compared to $15.7 million at December 31, 1998. The cash and cash equivalent position at the end of the quarter rose to $30.0 million, 59 percent higher than at fiscal year end.
Direct Focus, Inc., a marketing company with a direct business model, currently markets three lines of products -- Nautilus fitness equipment, Bowflex home fitness equipment and Nautilus sleep systems.
This press release contains forward-looking statements relating to anticipated revenues, net income, earnings and the development of the company's products and services, including statements regarding its Nautilus business. Factors that could affect the company's actual results include its reliance on a limited product line, market acceptance of its existing and future products, growth management challenges and difficulties integrating the company's Nautilus operations. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in the company's registration statement on Form S-1 in the section entitled ''Risk Factors.''
DIRECT FOCUS, INC.
CONSOLIDATED BALANCE SHEETS
Sept. 30, Dec. 31,
1999 1998
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $30,021,538 $8,910,675
Trade receivables (less allowance
for doubtful accounts of: 1999,
$268,098 and 1998, $40,000) 3,951,316 218,207
Inventories 8,825,559 2,614,673
Prepaid expenses and other assets 39,841 378,409
Current deferred income tax asset 1,104,711 215,737
Total current assets 44,342,965 22,337,701
PROPERTY, PLANT AND EQUIPMENT (less
accumulated depreciation of: 1999,
$1,127,528 and 1998, $438,790) 10,431,126 1,842,712
OTHER ASSETS (less accumulated
amortization of: 1999, $220,838 and
1998, $49,967) 4,410,070 192,859
TOTAL ASSETS $59,184,161 $24,373,272
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $6,812,385 $3,602,074
Income taxes payable 810,662 504,775
Accrued liabilities 6,608,878 1,851,253
Royalty payable to stockholders 717,986 548,211
Customer deposits 596,046 148,937
Total current liabilities 15,545,917 6,655,250
LONG-TERM DEFERRED TAX LIABILITY 118,788 66,880
STOCKHOLDERS' EQUITY:
Common stock - authorized,
50,000,000 shares of no par
value; Outstanding, 1999:
10,423,748 shares, 1998:
9,448,523 shares 18,060,349 3,565,628
Retained earnings 25,459,107 14,085,514
Total stockholders' equity 43,519,456 17,651,142
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $59,184,161 $24,373,272
DIRECT FOCUS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended Nine months ended
Sept. 30, Sept. 30,
1999 1998 1999 1998
NET SALES $31,772,893 $15,200,261 $83,129,639 $38,488,009
COST OF SALES 8,790,565 3,434,418 23,541,777 8,640,711
Gross profit 22,982,328 11,765,843 59,587,862 29,847,298
EXPENSES:
Selling and
marketing 13,029,343 6,456,905 33,038,869 15,799,731
General and
administrative 1,124,363 520,675 3,552,143 1,745,399
Royalties 730,012 418,268 1,991,941 1,066,832
Litigation settlement -- -- 4,000,000 --
Total operating
expenses 14,883,718 7,395,848 42,582,953 18,611,962
INCOME FROM
OPERATIONS 8,098,610 4,369,995 17,004,909 11,235,336
OTHER INCOME (EXPENSE):
Interest income 343,730 136,358 580,898 303,708
State business tax and
other - net (24,379) (30,448) (122,901) (118,201)
Total other
income - net 319,351 105,910 457,997 185,507
INCOME BEFORE
INCOME TAXES 8,417,961 4,475,905 17,462,906 11,420,843
INCOME TAX EXPENSE 2,922,640 1,565,990 6,089,813 3,958,388
NET INCOME $5,495,321 $2,909,915 $11,373,593 $7,462,455
BASIC EARNINGS
PER SHARE $0.52 $0.31 $1.13 $0.80
DILUTED EARNINGS
PER SHARE $0.51 $0.30 $1.10 $0.77
Basic shares
outstanding 10,544,572 9,295,192 10,077,190 9,295,192
Diluted shares
outstanding 10,814,821 9,717,031 10,345,758 9,717,031
--------------------------------------------------------------------------------
Contact:
Direct Focus, Inc.
Rod W. Rice, 800/371-3363
www.directfocusinc.com |
