Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Nautilus, Inc. (NYSE:NLS)

Q1 2008 Earnings Call

May 5, 2008 4:30 pm ET

Executives

Edward J. Bramson - Chief Executive Officer

Bill Meadowcroft - Chief Financial Officer

Analysts

Kathryn Thompson – Avondale Partners

Paul Swinand – Stephens Inc.

Scott Krasik – CL King Associates

Reed Anderson – D.A. Davidson & Co.

Rommel Dionisio – Wedbush Morgan

Laura Richardson – BBT Capital Markets

Jim Chartier – Moness, Crespi, Hart & Co.

Operator

Welcome to the Nautilus, Inc. first quarter 2008 earnings results conference call. At this time all participants are in a listen-only mode. Following today’s presentation we will have a question-and-answer session. If anyone needs assistance during the call please press the * key followed by the 0. As a reminder, this conference is being recorded on Monday, May 5, 2008.

Before the call begins listeners should be advised of the Safe Harbor statement that applies to today’s call. Prepared remarks during this call contain forward-looking statements. Additional forward-looking statements may be made in response to questions. These statements do not guarantee future performance. Nautilus undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made or to reflect the occurrence of unanticipated events. Therefore, undue reliance should not be placed upon them.

Listeners should review the earnings release to which this call relates and the Company’s most recent period reports on form 10K and 10Q filed with the Securities and Exchange Commission for a more detailed discussion of the factors that could cause actual results to differ materially from those projected in the forward-looking statements.

Now I’d like to turn the conference over to Mr. Ed Bramson, Chairman of Nautilus, Inc. Please go ahead Sir.

Edward Bramson

Thank you. Good afternoon everybody and thank you for joining us. I don’t really have any prepared remarks this afternoon. As you know, I wasn’t actually the Chief Executive during the first quarter so Bill Meadowcroft is going to go through the first quarter in detail. We will be happy to answer your questions after the meeting. At the moment we are working on a plan to improve things in a number of areas, which as we have previously announced we are hoping to communicate to shareholders after the second quarter results some time in the third quarter, so a lot of your questions might be better answered then.

At the moment I can certainly say that our balance sheet is stronger than it was at the end of the quarter because we have now sold Pearl iZumi and paid off our debt as a result, although that is not reflected at the end of March. Also I think the earnings while not good in the first quarter might have been a little bit better than expected if you make an allowance for the two one-time items we announced, one having to do with Land America and the other one with some severance for the prior Chief Executive.

So, as I said we’d be happy to answer any questions after the meeting. We are not imposing a limit on the number of questions as we have some times in the past but obviously if you could keep it to two that would help things to move smoothly.

So with that I’d like to turn things over to Bill Meadowcroft to take you through the results of the first quarter.

Bill Meadowcroft

Thanks Ed. Net sales from continuing operations were $129.6 million compared to $137 million for the corresponding period last year. The commercial business recorded $16 million in net sales which was 10% below last year. Direct sales were about $69 million, down 6% from last year. Retail sales were $25 million about 9% down from last year.

Our international business recorded $18 million in net sales, which is about 6% growth and is currency related. We also had $1.1 million from royalty income which was up $700,000 from the same period last year.

Our gross profit margin was 43.2% compared to 45.6% in the year-ago quarter. The decrease was primarily due to some lower margin sales and increased inventory reserves as we reduce our SKU’s to simplify our product portfolio. Higher warranty costs also contributed to lower margins compared with Q1 2007.

Operating expenses were 50% of revenue which is up 450 basis points from last quarter. On a dollar basis operating expenses were $64 million or up $2.5 million compared to the $62 million last year. As Ed mentioned this was primarily due to $8 million to be paid to Land America and $2.4 million of severance costs for our change of CEO in March. These were offset by reduced selling and marketing expenses for a reduced headcount and lower advertising production and trade show costs.

Our net loss from continuing operations for the quarter was $6.9 million or $0.22 per diluted share which included $0.18 for the Land America payment and $0.06 for the severance costs. This compared to a net loss from continuing operations of about $9,000 in last year’s quarter or $0.00 per diluted share.

The results from continuing operations excludes the company’s apparel segment which is considered a discontinued operation as we sold it on April 18, 2008 for the $69.4 million consideration. Our consolidated net loss for the first quarter of 2008 was $6.4 million or $0.20 per diluted share.

Turning to our balance sheet, inventories were $66 million compared to $59 million at the end of 2007 due to building some safety stock on our main SKU’s. One of our projects is to improve inventory turn so we expect inventory reduction in future periods. DSO’s were 52 days and we’ll continue to work on reducing that figure.

After the sale of Pearl iZumi we had $7 million net cash position at the end of April and we expect to have a positive net cash position at the end of the second quarter. We entered May with over $45 million in borrowing capacity under our asset based facility.

We recently entered into an agreement to pay $8 million to a major supplier, Land America Health and Fitness, to settle all claims from the previously announced termination of the agreement to purchase their China-based manufacturing assets. This settlement was accrued in Q1 but is expected to be paid in June. We expect the $8 million payment will be largely offset by a cash flow standpoint by a tax refund of $7.1 million that we filed for the drawback of last year’s losses to prior years.

We have also renegotiated and added one year to our supply agreement with Land America which now expires on December 31, 2010 and expect a good relationship with them going forward.

Because of our improving balance sheet our Board of Directors has authorized a share repurchase program for the purchase of up to $10 million of the company’s common stock. Under the authorization we will purchase shares from time to time in the open market or privately, in privately negotiated transactions in compliance with the rules of the SEC. However, the timing and the amount of such purchases, if any, would be at the discretion of Management and it would fully depend on market conditions and other considerations.

Looking forward our current expectation is that the uncertain consumer environment will continue to affect us in the second quarter, which is seasonally our weakest, as it did in the first quarter. We expect pressure on gross margins given the expiration of the Land America rebates and increasing cost pressures from our vendors and suppliers.

We continue to work on aligning the cost structure of the business to conform to our expected revenues and these plans will be discussed during the third quarter as I had mentioned.

With that, Ed and I are ready to take questions.

Question-And-Answer Session

Operator

(Operator Instructions)

The first question comes from the line of Kathryn Thompson with Avondale Partners.

Kathryn Thompson – Avondale Partners

First of all I know you are limiting a lot of your comments to the out quarter, but could you at least give us some idea for your gross margin targets for 2008 and also any type of general time horizon for consistent profitability?

Edward Bramson

I think maybe both of us should probably take a shot at that one, but in terms of gross margin if you look at it statically as Bill said earlier we have got some pressure on gross margin from cost increases in China. On the other hand as part of the plan we are looking to come out with a fair quarter. We will have plans to offset that either through improvements in efficiency or possibly even some repositioning of prices. So, I think there are really two answers to the question.

Bill, if you’d like to expand on that?

Bill Meadowcroft

Kathryn, as you know there has been lots we are doing and will continue to do. I don’t think we want to peg a figure at this point but we certainly would be looking even with the pressures we are facing and the rebates going away we look to be in the 40’s from a margin standpoint. Again, we’ll have to give more color on that as we continue to plan and take some actions heading into the third quarter.

Kathryn Thompson – Avondale Partners

I understand with there being some management changes also there have been some forecasts you had in the past that may have changed. First of those might be capEx. What are your capEx assumptions for 2008?

Bill Meadowcroft

We will still keep them lower. We had already gotten planned this year down below $6 million and certainly in this environment we are continuing to evaluate every project and make sure that it has a suitable return for the economics of the business we expect going forward. That would certainly be an outside number and we would be looking to reduce that further.

Kathryn Thompson – Avondale Partners

In the past you have often talked about forecasting savings for op ex for fiscal 2008. Where are you on track for that? How much savings was there in Q1? What do you expect for 2008?

Bill Meadowcroft

You’re certainly hitting again on stuff I think we are going to be more prepared to talk through as we go forward. Certainly moves have been made and some progress has been made. As you have seen we were able to cut G&A, the one-time items, by a few million dollars and there has certainly been reductions in S&M of about $5 million. There have been some…we’re seeing the early returns of the moves that are being made but there is still a lot of actions being determined and that will be executed over the next several months and the rest of this year.

Kathryn Thompson – Avondale Partners

Still not willing to pin a number on that generally speaking for the remainder of the year?

Edward Bramson

I think it is probably a bit early, Kathryn. If you think about it a bit more broadly our expenses break down into two buckets. You’ve got the cost in operations and manufacturing logistics, that sort of thing, which is almost $300 million a year. Then you’ve got costs of sales and marketing and overhead which is $200 million-ish a year as well. So, there are different approaches to both of those. We’d like to set some fairly aggressive targets but since we haven’t actually got real numbers yet I don’t think it is wise to give you a projection until we have a detailed story for you.

Operator

The next question comes from the line of Paul Swinand with Stephens Inc.

Paul Swinand – Stephens Inc.

My first question is you have talked in the past about trying to improve the productivity of your advertising dollars spent and how you generate leads. How did that go in the quarter compared to the fourth quarter? Just on the traffic generation side?

Bill Meadowcroft

We are, as you know, focused on continuing to try to improve our effectiveness and looking at the creative and making sure we keep it fresh. We are seeing some improvements in lead generations but it is certainly also a softer environment out there. So, we are not being as productive as we have been historically. I think we are attributing that to the softer environment that is out there right now.

Paul Swinand – Stephens Inc.

Would it be fair to say your generation side is holding steady but your conversion is falling off?

Bill Meadowcroft

Yes. At this point that is what we are seeing. We are seeing some softness in conversion but we are continuing to be able to generate leads.

Paul Swinand – Stephens Inc.

Then just a follow-up on that. The last call you talked about a little bit more difficult environment for credit approval and some of that was due to higher price points. Has that changed at all? Is it harder to get people approved and that is one of the reasons people are falling out?

Bill Meadowcroft

Yes. We certainly believe that is a contributing factor. We are looking at price points and continue to look at price points as one of the opportunities to get back down to where the consumer is able to finance given that it is obviously an important part of our business.

Edward Bramson

I think something we want to talk about when we get into the third quarter because as you probably know because you have been following the company for awhile, what we have been doing is our price points have been drifting up because it gives you better coverage of the cost of generating a lead and we have probably moved a bit too far. So one of the areas of product innovation really is to take a tight look at that and move the price points back to where you’d like them to be. My impression is that at the standard price point we’re not seeing a tremendous amount of pressure from creditors approvals. As you go to the higher price points it becomes more of a problem. So the solution is not just for the economy to get better it is also to retarget where we put the price levels we are selling up.

Paul Swinand – Stephens Inc.

A real quick question on your comment on the warranties. I thought you were getting rid of the high-warranty cost product lines, the commercial TreadClimber and the Elliptical. Is that including some of those discontinued line costs on the warrant or is that other items?

Bill Meadowcroft

There were some incremental costs in the quarter related to the TreadClimber as we still had sold some as we made the final move to get out of the product. There were sales we had to provide for additional warranty on those sales.

Paul Swinand – Stephens Inc.

Now that it is done now you won’t see those in subsequent quarters?

Bill Meadowcroft

Yes, from the PC916 that is right. Then we’ve gotten out of the EV7 as well so there is those costs but we expect that to get better going forward.

Operator

The next question comes from the line of Scott Krasik with CL King Associates.

Scott Krasik – CL King Associates

In the fourth quarter you guys accrued or took charges for $19 million plus associated with the Land America deal and now it appears like the cost is going to be $8 million. Did you take some reversals this quarter? Or how does that square up?

Bill Meadowcroft

The $8 million is incremental to the $19 million. It is the costs to just settle everything and be able to move forward with a positive, clean relationship with Land America and be in a good position with sufficient supply going forward. So it is really the cost of fully getting out of the purchase agreement.

Scott Krasik – CL King Associates

So the $19 million was done, accounted for and then there is an incremental $8 million and that basically ensures the relationship going forward?

Edward Bramson

Correct. It also settles any possible litigation.

Bill Meadowcroft

The one way the $19 million continues to manifest is we will be able to deduct that in 2008 and so we’ll get a tax benefit next May or in that timeframe of significant tax refund. So cash flow wise it will be a positive come in.

Scott Krasik – CL King Associates

You would get that in 2009?

Bill Meadowcroft

Yes. It is a 2008 event from a tax standpoint.

Scott Krasik – CL King Associates

Retail, maybe Ed if you could talk about where we are in retail? A 9% decline is significantly better than I was modeling. Nobody is really speaking that positively about the category and I think you have got a lot of SKU’s. You had some build up there in the inventory so it is a little bit better than I thought. Maybe talk about what happened at retail in the quarter.

Edward Bramson

Maybe I’ll take a shot at that. It is a little difficult for me to do comparisons to prior periods because I don’t have that much knowledge of it. My sense of what is going on in retail at the moment is the problems that have occurred through the middle of last year have now gone away. So you have a more steady state environment. We’re adding stuff to the line as the year goes on. So retail actually for us seems to be doing reasonably well. I don’t know if that speaks to the industry as a whole or not but it is a little bit ahead of our expectations too.

Scott Krasik – CL King Associates

Is it mostly home gyms Bill? Is there a balance here?

Bill Meadowcroft

Scott it is actually not. It is more so, we did have some sales of the [Select Tech] 552’s, some of the Schwinn and [Northbrook] bikes and ellipticals. We saw some softness on the [Ratchem] side because we were not pushing them in as we had in the past.

Scott Krasik – CL King Associates

So you’re feeling maybe this is a good idea now, forget about any future expansion, but this $25 million in the first quarter is a pretty balanced number?

Edward Bramson

We think so. As Bill sort of touched on if you look at the direct business as principally a strength business and we may try to add a bit more cardio there, the retail business is principally cardio. That is what the customers want and we have been feeding more cardio to them and that is really what is driving the sales growth.

Scott Krasik – CL King Associates

Do you feel like on the commercial side some of your competitors have gotten aggressive because you are pulling stuff out and not delivering some of that original stuff you said you would with the TreadClimber and the ellipticals that they are taking share at this point?

Edward Bramson

I’m not close enough to tell you quite honestly. As me that in the third quarter and I’ll tell you.

Operator

The next question comes from the line of Reed Anderson with D.A. Davidson & Co.

Reed Anderson – D.A. Davidson & Co.

If you look at the selling and marketing piece, it was actually pretty good relative to where sales were and so forth and looking at percents. I’m just curious was that more of a savings on the direct side of your business from just kind of dialing it down or was it more retail where you were kind of exiting some of your products at retail? Give us a little color on that perhaps.

Bill Meadowcroft

It was broad based although certainly on the direct side. We had done some creative last year and so we had a reduction of about $1.6 million in charges around some creative that we hadn’t renewed at this point. But it is also getting out of trade shows or reducing our trade show exposure. Obviously with the sales decline there is some commission reductions as well. So it is not specific to one challenge. It is heavier on the direct end commercial as opposed to retail. Retail is not as intensive from a selling and marketing standpoint.

Reed Anderson – D.A. Davidson & Co.

Getting back to the question someone hit earlier about the financing piece. Can you remind us what percent of your customers that come in direct do you typically help arrange the financing? What does that look like today versus what it was before?

Bill Meadowcroft

It hasn’t really shifted a lot. It continues to be in the 60-70% in that range and that has continued.

Reed Anderson – D.A. Davidson & Co.

Who have you typically used to help them get that financing? Remind us of that please.

Bill Meadowcroft

We have HSBC as our first-tier and they also buy deeper and just the A credits and we have Health Card that takes the true second-tier.

Reed Anderson – D.A. Davidson & Co.

At this point they have made no formal changes to your arrangement with them? Or has there been anything that has changed?

Bill Meadowcroft

There has been some tightening of score cards as they have watched the environment and what has been going on and seen changes to the portfolio. Then some approval reductions at the very bottom end obviously with all the credit concerns down at the very bottom there has been some ratcheting up to make sure we are not as exposed.

Reed Anderson – D.A. Davidson & Co.

Shifting gears a little bit…the cash flow statement. What was the depreciation for the quarter?

Bill Meadowcroft

D&A was $3.8 million in the quarter.

Reed Anderson – D.A. Davidson & Co.

Tax rates…the low tax rate that is partially attributable to the benefit you were talking about in the prepared remarks. Is that correct?

Bill Meadowcroft

The tax rate is messy because we are right down around zero and every little change or every deferred item really affects the tax rate. I think what you can expect as you model for this year is for continuing operations we should be at about a 30% rate but because of the current non-deductible nature of the impairment on Pearl at this point we expect a blended rate down at around 20%. Modeling the continuing operations of the business we would expect about a 30% rate this year.

Reed Anderson – D.A. Davidson & Co.

You’ve now settled with Land America. Any meaningful either benefits if you have restructured your deal whether it is better savings, I don’t know. Anything that would be worth noting as you have now basically put in place a new one-year agreement?

Edward Bramson

I think that we did have rebates in prior years which went away at the beginning of this year so we haven’t renewed those. But the pricing we have now has fairly decent predictability. On a like-for-like basis it is up a little bit. Their supply is mostly in our direct area where the gross margins are very high anyway. So I hope to say we actually came out of the discussion pretty favorably.

Bill Meadowcroft

In addition we have accelerated our 30-day terms. We had been on 10-day so we now have 30-day terms.

Reed Anderson – D.A. Davidson & Co.

Lastly, related to that are you relatively costed out for the rest of 2008? Or is there still a fair amount of uncertainty relative to what could be out there with steel and stuff like that for you guys?

Edward Bramson

We’re covered through October and then we’ll have to look at it again.

Operator

The next question comes from the line of Rommel Dionisio with Wedbush Morgan.

Rommel Dionisio – Wedbush Morgan

In your prepared comments you talked about the lower margin rates on gross profits. Direct was down 6% which was lower than the total and that has got a much higher gross margin. Could you just clarify that comment?

Bill Meadowcroft

Rommel what was it?

Rommel Dionisio – Wedbush Morgan

I thought you said gross profits were down somewhat because of a lower margin mix.

Bill Meadowcroft

No. Lower margin sales. There were lower margin sales. As we continue to rationalize our SKU’s and deciding to get out of some products there is obviously that move to try to sell out of the older product. The sunsetted products. So there was some of that action going on in the first quarter and that helped to draw down margins somewhat. That’s what that meant. Sorry about that.

Operator

The next question comes from the line of Laura Richardson with BBT Capital Markets.

Laura Richardson – BBT Capital Markets

Ed when you talk about having the plan by the third quarter are you talking about one quarter from now we’ll have a conference call for the second quarter results but it will be in the third quarter or are you talking about one quarter beyond that?

Edward Bramson

I think the hope would be that when we talk about the second quarter earnings that we would be ready to lay out everything for you but we’re leaving ourselves a little bit of flexibility in case it needs to be a little bit after the second quarter earnings call because when we do it we want to be able to lay out not just the plan but why we have the plan so I want to be sure we do it right. But it will be in that range.

Laura Richardson – BBT Capital Markets

Bill, a couple of numbers questions for you. G&A minus those one-time items should have been about $9 million in the quarter?

Bill Meadowcroft

Yes, about $9.6 million or $9.4 million.

Laura Richardson – BBT Capital Markets

Does that also include royalty expense?

Bill Meadowcroft

No, the royalty as of the end of last year we reclassified it up to cost of sales to the extent it was on existing products and then the pre-production royalties are now in research and development. It is on a consistent basis in 2007 and 2008 but there is a re-class of royalties up to the proper line items.

Laura Richardson – BBT Capital Markets

Is $9 million a reasonable G&A to use for the next couple of quarters for our modeling purposes?

Bill Meadowcroft

We will be taking some additional charges for severance in the second quarter as you saw some announcements around the second quarter. I don’t want to commit immediately because we are continuing to make steps to pull them down but there wasn’t anything unusual in the first quarter that we wouldn’t expect coming forward other than those two line items. We’re trying to get it down as much as we can.

Laura Richardson – BBT Capital Markets

Have you estimated what the severance is going to be in Q2?

Edward Bramson

We don’t know what the number of people leaving is going to be. We know there are some already but we don’t know what it is for the quarter as a whole.

Laura Richardson – BBT Capital Markets

Can you also talk me through…I think I heard you say that after the sale of Pearl iZumi you would have $7 million cash on the balance sheet. Did I hear that right? Then how do you get there? You paid your debt down with that money?

Bill Meadowcroft

Yes, exactly. We used all the proceeds to pay down debt at this point. Obviously that balance through the period will fluctuate based on the working capital.

Edward Bramson

When Bill talks about cash he means cash net of debt.

Laura Richardson – BBT Capital Markets

Are you able to buy more Nautilus stock at this point? If not when could you and when would you want to?

Edward Bramson

I’d have to see if I have any money left. Well we have to comply with the closed periods as any employee of the company would. When is that, Bill? I guess you could buy from late this week until the end of the month?

Bill Meadowcroft

Our window internally opens on Thursday and closes on May 31.

Edward Bramson

Whether or not we being Sherborne would, I couldn’t say. The Company can start to use the repurchase during that period.

Laura Richardson – BBT Capital Markets

Was there some legal reason that Sherborne was capped at what was it like 26% of the stock where you ended up?

Edward Bramson

No. It was really more market related. That was all the shares we were able to accumulate at the time.

Laura Richardson – BBT Capital Markets

So you are not saying you will buy more but you aren’t saying you aren’t? There is no real reason you can’t?

Edward Bramson

No, we are free to. Whether we will or not is a different issue.

Operator

The next question is a follow-up question from the line of Scott Krasik with CL King Associates.

Scott Krasik – CL King Associates

Just some numbers questions, Bill. The $8 million for Land America, is any of that in cost of goods sold or is all of that all in your operating expenses?

Bill Meadowcroft

That all hit G&A.

Scott Krasik – CL King Associates

So nothing in COG. Then can you give us the actual sales numbers just for modeling purposes by division?

Bill Meadowcroft

I have got them rounded to the hundred-thousands if that helps. $69.4 for direct. $25.2 for retail. $16.3 for commercial. $17.6 for international. Royalty of $1.1.

Operator

We do have another follow-up question from the line of Paul Swinand with Stephens Inc.

Paul Swinand – Stephens Inc.

On your credit agreement with HSBC how long do those typically run for and when does this agreement expire?

Bill Meadowcroft

We have had it from three years with the old agreement and then we extended it one year. So we are certainly talking with them at this point. This one expires at the end of this year and we’re working with them on the new agreement.

Operator

We do have another follow-up question from the line of Reed Anderson with D.A. Davidson & Co.

Reed Anderson – D.A. Davidson & Co.

Bill, I’m curious because we don’t have all the numbers but if you X Pearl what were your inventory turns in 2007? Approximately?

Bill Meadowcroft

Down in the 4’s.

Reed Anderson – D.A. Davidson & Co.

The 4’s?

Bill Meadowcroft

I think so. Reed I don’t have the exact numbers in front of me but that would be my recollection.

Reed Anderson – D.A. Davidson & Co.

In terms of your line or the new line now that you have closed the sale, what amount do they allow you to use for buybacks?

Bill Meadowcroft

We have approval at this point to do the $10 million.

Reed Anderson – D.A. Davidson & Co.

So that is incorporated into that?

Bill Meadowcroft

Yes.

Edward Bramson

Just to clarify on that it is permitted under the borrowing agreement. Our intention really is not to borrow to any significant extent to fund buybacks. We want to do it out of our own cash. So, we need the permission but we’re not really planning to borrow to do it.

Operator

The next question comes from the line of Jim Chartier with Moness, Crespi, Hart & Co.

Jim Chartier – Moness, Crespi, Hart & Co.

Getting back to the gross margin. You indicated some pressures that you see in gross margin for the rest of the year. Are those pressures greater than you saw in the first quarter or will it just continue to be a continuation of the pressures you saw in the first quarter?

Bill Meadowcroft

I think the pressure continues. Certainly in China there is uncertainty over there as far as currency. So I would say there is risk that the pressure heightens but again with our Land America agreement we’ve got some set pricing for awhile. Again, it is something we will continue to monitor and work to offset in our available ways to us to do.

Jim Chartier – Moness, Crespi, Hart & Co.

On International excluding currency the growth there is basically flat versus you had some good growth last year. Was that a conscious effort to reduce sales there if they were lower profit?

Bill Meadowcroft

There was some of that, Jim. Also, the TC916 was much stronger last year’s Q1 and then we had the residual sales this year’s Q1 so X the TreadClimber we would have grown because we were down about $2.5 million for the quarter with TC916. Otherwise there was some growth in the existing product line.

Operator

Gentlemen there are no further questions at this time.

Edward Bramson

Thank you very much for joining us everybody and we look forward to talking to you in the second quarter.

Operator

Ladies and gentlemen that does conclude today’s conference call. We thank you very much for your participation and we ask that you please disconnect your lines. Have a great afternoon everyone.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Nautilus, Inc. Q1 2008 Earnings Call Transcript
This Transcript
All Transcripts