Bowflex (BFXXQ) 10 Nov 212022 Q2 Earnings call transcript

Greetings ladies and gentlemen, and welcome to the Nautilus Incorporated Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] It is now my pleasure to introduce your host, Mr. John Mills. you. Thank

begin. may You

Aina Good be conference Welcome call call. Jim next being Officer; Nautilus Jen. note days. Officer. quarter call XX for this today Nautilus' replay fiscal are is and Executive Chief XXXX Participants and Barr, Chief afternoon, you, Financial to Please will everyone. webcast second from Konold, available Thank on the the for

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Thank you. of from question. Our Dyer [Operator question Instructions] comes first Craig-Hallum. the proceed with with your Please line Steve

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Swartz gentlemen Michael and from our your of Ladies Securities. with proceed you. comes question. with question next Truist the line Please Thank

in environment expect and over guys. next where how out I we just guess think I of Hey, to you couple do question, customer and that about benefits evening start really current Maybe the good level guess first years? see the to acquisition costs some do

in customers well customers customer SelectTech free that to all will previous And attach doing cost of and and And you we the cameo we're customer tough. are of addresses. acquire having we -- leveraging think know by -- JRNY. and brutal. customers equipment Yes, highly at of from in customer, a it in to The at to the -- them can were our customers were on script we would that acquire businesses we members be so talk, Right? because obviously way. doing digital advertising I get and would being in and journey it it our are of much time of Then that the That's acquisition. of easier. course and cost this advertising the my business selling is purely without way we free acquire Day, costar, my business acquisition to little our customers equipment bit very over acquisition little Investor for we're will a it see being described appearance way we to leveraging go as equipment still star to an we're that look be out for margins over a acquiring that jury back selling with then equipment cost trials we a JRNY those the The and really -- actually you I this direct at to we customer roll you'll previous the was profitable have of challenged mean very, their business we're piece trying a if you about then are these bit trials email but go trying time.

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color. second margins. ahead you're like maybe longer it target sounds you're question great, and when just right, of term margin for thanks when targets generate some would you the on, you one previously you've them, I a All And think moving thought provided

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when of the lot to that beginning now have. at we we ink these of at we had year, No, were the it contracts working a

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question end of quarter, that's can any the provide you've you final are many me, subscribers? from the XXX,XXX think Okay, helpful. subscribers color those or how context on maybe the of said paying at And I one

you, than different said correct we to no members Just definition which Yes, a is problem. subscribes.

our subscription metrics report said, we business. quality, We information that actually we get we're coming quarter as is selective add be on you chart planned providing our we as more more year as as our we've down. amount. will a and that you that's lot of Until down demystify we're to what up, not we we We're I'm a jrny.com happy than we then subscription new this look robust we time really fourth and we our analytics have as providing business of and commitment can this better, when build that focused is, member that saying over fourth set at really quarter content, enough look this will do we'll by features, as about at work it's the this our for coming for but to the health that on stood get of business

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you, All right, Jim. got thanks

Sure, thanks Mike.

you. Thank

comes question line Please of next Our the William with question. Blair. your Zackfia with proceed from Sharon

question. actually. Michael for Thanks on Sharon for it's taking the Hi,

launch? more XX, roughly product is fiscal I wondering expected you you Max recently this the many those have Total on mean added introductions how and First year when the question I'm pipeline. for product are just to scheduled

provide we They I Yes, complete roadmap reasons. to for don’t mean, popup. competitive a just seem

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big thing. VAY a acquisition features said, like into then workouts. will those you that's more So we're And I continue building the that that, help with

this and said of is our part of call we on coming the the year. that early that in quarter that's part kind of fourth Strength So the -- what

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to at very them talk liberty not we're in in pipeline, have about the detail right So products but several excited I am now. about we

I weighted case out? that's would more wondering pre-holidays, be expect going but the margin to second Okay, flush it's you to? have see what evenly the pressure more year, just half if expected out it would to are I'm be us expecting the of -- And on could in you that to then understood. you quarter more the or to be pressure if see mean just I help spread

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holidays. Okay, very luck good during thanks the understood, much and

Thank you.

you. Thank

the next ROTH of with comes Capital with your Please question Partners. Our line questions. George from Kelly proceed

Hey my for Thanks everybody. questions. taking

comments to half XX% you to EBITDA get bridge, if that I the start to maybe XXXX, profitable help [indiscernible]. margin. it's most could second the is on EBITDA with if bridge Can think of year I was gap this next your curious of to still So negative XX% margin you

but also what And to that? any sales question, So next point sales growth? kind at then expect implied about positive similar in what else growth Do hit you of year? is

Great questions.

expansion margins. gross the driver path of logistics. big back with is really start margins I'll headwind easing to of the to the in So our the specific The or profitability

clear path very some will these most brought half. moderate. down we back early, inventory important costs be our on are in We as have a already, would we work and this we're and sell the storage transportation extra we how a much things The as need the that that of inventory incurring we won't as

year, will fixed began And lastly, is for for our spot be it small gross actually we negotiations to a help that larger a but we're containers then market. being us. piece, line pleased really begin under the contract JRNY on to next portion the that us being helping Secondarily, the already rather so of on margin excited than our

to back EBITDA drivers getting So those fiscal profitability 'XX. adjusted are really us the in of big

on you next growth about I you comment, if revenue want but know your for year? then And talk don’t to expectation can

I continuing at there if there think not settling likely down we settling talked would not settling right? during this to Day and was be it to pace. We about it to where moderate back this high down is and but that it of planned XXXX, Again, a is fanatic some grow also Investor sort in down. similar everybody and pandemic would

similar is other a on that is like more few are to that to out to go We going figure people for trying now, quarters.

on get deliver pretty I'm to adjusted sales So the profitability. growth increase, and out either buoyed model slight a profitability, but the that be to our assumptions are we to decline slight EBITDA not counting where

during we it see then said to in other habits fitness, is why the that's whole in attitudes, we connected talk market, in with what seeing pandemic, I changes the start the that's the we're I and not deliver we what reiterate are but today that market, people workout secular just I'll not really us we It and And as see just about early the found against we this to believe really all it see but we're and that near wanted great where monitoring, that home connected be very just in so reason as going innings. to towards and early and where doesn’t Aina relative it's peak actual down as going fitness. to comes consumers. in down to believe only to all is what anywhere for just, we delivering that everybody can in think its well And it's fitness not but many it it's said. was it what We to, tell strong

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a sure. about to strong feeling know Obviously crystal ball we're very it for that. So takes

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about bit talking So next especially year we're that a already. when back holds little

providing closer thing themselves as half and work were know XXXX you next the question get before year went honestly the we out. take we to then we'll that, core fitness the So And about fiscal predict just your first of year and trying the season let another that. think is so guess we like changed reason as things results we stock I'll say I in what is our was the exactly could the that year. how at we

of how start seasonal weeks just fitness we knowing so away how Black we're going from season retail we're the knowing your. then actually pickup to and hopefully kind begin before going to about, that's to that both away business, direct it's we're play Friday in out, and So when makes just from so seeing sense is

Yes, from in what last that's me helpful. was spending question the media is, And direct then quarter?

have don’t I that, send total I for advertising have quarter, the just I'll the but direct.

but million, it was For primarily $XX the direct. QX quarter of it's

of most so $XX million. Okay,

most of Yes, $XX million.

one. Have everybody. a Thanks good

you. Thank

from you. Instructions] with Mark proceed Capital the comes Thank Our [Operator next questions. line Smith with Street Please your Markets. question of Lake

are we Hi important little and guys, can move pricing whilst you're for environment you about seeing January guys season, people in of using a especially acquisition? into equipment holiday bit talk early member what the competition kind the as

Yes, now seen board kind bike using everybody having and footdrop of all do year their We've inventory we're primary that's think great last the it mostly a of across and where down bikes. promoting also acquire particular equipment the there, in it promoted combination We've range. same. seen things seen nobody equipment. know question the $XXXX a but I've high bikes, you I about most I is it doing to it's lot promotion, seen we're members of and think this much the Pelican [ph] seeing a ourselves right? competition probably some as year the the equipment of I've in to

with hurt as our of at be So say combination that, doesn't to point JRNY it helps have do we the that. we give bundle P&L and I'd can afford us this to which think trials, much. away to We and competitive

our prices. had promotions as pricing pricing not of probably I we're were raised that, our running part in -- also our point when out that's stuff will power, the approach though well. more promotional, So on earlier we we power to but then early fact we

it us a the longer, days of a but price little look helped and change of is in part mean kind look about bit this have margin we every it now at at whether I almost promotion should year, fight day there. where So off do high-volume that to we we market especially these the pressure the of

to we're I to think the a because said continue inventory as promotion you're see I deducing see that from just a going early what got holiday lot do do I'm this of well. being then said, that, bring so lot and and have in what's reported think that we we we've not So of but to think people only inventory. we'll I ones

Yes, in your confident within on pricing environment? you inventory as at look we of into enough and are important that this retail, this that how have season, especially inventory you and kind out moving in there

and say that actually products, stocked we in up just in results enough. going selling We're we this. back best we mean, I than we're the focusing products, predict knew showed Sure. definitely to stocked because have we we on up our what the sells Yes, be we would of able what I invested kind best inventory gives have high, of our and of a that to much confidence. lot as the and weren't quarter, SKUs We've before on of we part us were of ton selling got new curve the in a fewer and SKUs. perfectly

sure That's try you in stuff. to to we always the So I make have. enough the and right believe thing we think second it's have

all it, the it's the old got we've dusty, nothing kind So at nothing curve. fairly and of new, tail of

confident like out. So turns made going we've we think could to we'll season we see Any and this it holiday into choices the feel how and as right usually add? feel

I advertising. to about don’t add I in correct I have anything do but to want said inventory, what

is total lot because million advertising of attributed we $X Olympics. and in and direct $X a was million, $XX like things marketing So and the QX to invested brand, brand we million

So million $X for branded. in total, $XX for $X direct, million million

that Thank no you. Yes, helps.

Sure.

closing I'd to there back at questions. and Ladies you. management no further Thank comments. gentlemen, like to floor for are turn the this time

to a rest today you Nautilus. 'XX forward of your quarter We earnings Have continuous fiscal of in and year everyone call call to look to our upwards. for you the talking Thank great on support onwards again day third February. our on

Thank you. this today's Ladies and concludes gentlemen, teleconference.

may You time. at participation. Thank for disconnect your your this you lines