NAUTILUS, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q) | MarketScreener

The following discussion and analysis is based upon our financial statements as
of the dates and for the periods presented in this section. You should read this
discussion and analysis in conjunction with the financial statements and notes
thereto found in Part I, Item 1 of this Form 10-Q and our consolidated financial
statements and notes thereto included in our Annual Report on Form 10-K for the
fiscal year ended March 31, 2022 (the "2022 Form 10-K"). All references to the
first quarters of fiscal 2023 and fiscal 2022 mean for the three-month period
ended June 30, 2022 and 2021, respectively. Unless the context otherwise
requires, "Nautilus," "we," "us" and "our" refer to Nautilus, Inc. and its
subsidiaries. Unless indicated otherwise, all information regarding our
operating results pertains to our continuing operations.

Avviso cautelativo sulle dichiarazioni previsionali


This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Words such
as "plan," "expect," "aim," "believe," "project," "intend," "estimate," "will,"
"should," "could," and other terms of similar meaning typically identify
forward-looking statements. We also may make forward-looking statements in our
other documents filed with or furnished to the U.S. Securities and Exchange
Commission (the "SEC"). In addition, our senior management may make
forward-looking statements orally to analysts, investors, representatives of the
media and others. Forward-looking statements include any statements related to
our future business, financial performance or operating results; anticipated
fluctuations in net sales due to seasonality; plans and expectations regarding
gross and operating margins; plans and expectations regarding research and
development expenses and capital expenditures and anticipated results from such
expenditures and other investments in our capabilities and resources;
anticipated losses from discontinued operations; plans for new product
introductions, strategic partnerships and anticipated demand for our new and
existing products; and statements regarding our inventory and working capital
requirements and the sufficiency of our financial resources. These
forward-looking statements, and others we make from time-to-time, are subject to
a number of risks and uncertainties. Many factors could cause actual results to
differ materially from those projected in forward-looking statements, including
our ability to timely acquire inventory that meets our quality control standards
from sole source foreign manufacturers at acceptable costs, changes in consumer
fitness trends, changes in the media consumption habits of our target consumers
or the effectiveness, availability and price of media time consistent with our
cost and audience profile parameters, greater than anticipated costs or delays
associated with launch of new products, weaker than expected demand for new or
existing products, a decline in consumer spending due to unfavorable economic
conditions, softness in the retail marketplace or the availability from
retailers of heavily discounted competitive products, an adverse change in the
availability of credit for our customers who finance their purchases, our
ability to pass along vendor raw material price increases and other cost
pressures, including increased shipping costs and unfavorable foreign currency
exchange rates, tariffs, risks associated with current and potential delays,
work stoppages, or supply chain disruptions caused by the coronavirus pandemic,
our ability to hire and retain key management personnel, our ability to
effectively develop, market and sell future products, the availability and
timing of capital for financing our strategic initiatives, including being able
to raise capital on favorable terms or at all; changes in the financial markets,
including changes in credit markets and interest rates that affect our ability
to access those markets on favorable terms, the impact of any future
impairments, our ability to protect our intellectual property, the introduction
of competing products, and our ability to get foreign-sourced product through
customs in a timely manner. Additional assumptions, risks and uncertainties are
described in Part I, Item 1A, "Risk Factors," in our 2022 Form 10-K as
supplemented or modified in our quarterly reports on Form 10-Q. We do not
undertake any duty to update forward-looking statements after the date they are
made or conform them to actual results or to changes in circumstances or
expectations.

Riepilogo

We empower healthier living through individualized connected fitness experiences
and are committed to building a healthier world, one person at a time. Our
principal business activities include designing, developing, sourcing and
marketing high-quality cardio and strength fitness products, related accessories
and digital platform for consumer use, primarily in the U.S., Canada, Europe and
Asia. Our products are sold under some of the most-recognized brand names in the
fitness industry: Bowflex®, Schwinn®, JRNY® and Nautilus®.

We market our products through two distinct distribution channels, Direct and
Retail, which we consider to be separate business segments. Our Direct business
offers products directly to consumers primarily through websites. Our Retail
business offers our products through a network of independent retail companies
to reach consumers in the home use markets in the U.S. and internationally. We
also derive a portion of our revenue from the licensing of our brands and
intellectual property.
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sommario


Our results for the three-months ended June 30, 2022, are driven by the actions
outlined in our North Star strategy. The five strategic pillars of our North
Star strategy are: (1) Adopt a consumer first mindset; (2) Scale a
differentiated digital offering; (3) Focus investments on core businesses; (4)
Evolve supply chain to be a strategic advantage; and (5) Build organizational
capabilities to win by unleashing the power of our team. We intend to leverage
our many strengths to transform into a company that empowers healthier living
through individualized connected fitness experiences. Our transformation will
properly leverage our leading brands, products, innovation, distribution and
digital assets to build a healthier world, one person at a time.

At the center of health and well-being is fitness and the market has so far
behaved largely as we expected. The market size more than doubled over the past
2 years, is regulating from its peak with more normal seasonality, and we expect
will settle at a "new normal" significantly above pre-pandemic levels based on a
profound evolution in consumers' workouts and workplace habits. As a result of
these changed habits and sentiments, we continue to believe much of the industry
growth opportunity will remain at elevated levels relative to pre-pandemic. This
results in stronger opportunity for our industry and Nautilus.

For fiscal 2023, we expect to return to a more typical pre-pandemic seasonality,
with the second half of the fiscal year contributing more of the full year's
revenue. Additionally, to gauge sales growth and progress against more
"normalized," or pre-pandemic results, we will rely more heavily on measuring
performance of fiscal 2023 sales growth versus the pre-pandemic twelve-month
period ended March 31, 2020 ("fiscal 2020") to guide business strategy, rather
than measuring performance against the atypical, outsized results that occurred
during the pandemic.

Confronto dei tre mesi trascorsi 30 giugno 2022 Per i tre mesi che finiscono 30 giugno 2021


•Net sales were $54.8 million, compared to $184.6 million, a decline of 70.3%
versus last year. Net sales are up 11%, or 3% CAGR, when compared to the same
period in fiscal 2020, excluding sales related to the Octane brand, which was
sold in October 2020. The sales decline versus last year is driven primarily by
the return to pre-pandemic seasonal demand.

•Net sales of our Direct segment decreased by $36.9 million, or 58.2%, for the
three-months ended June 30, 2022, compared to the three-months ended June 30,
2021. The net sales decrease was primarily driven by higher sales discounting
and the return to pre-pandemic seasonal demand.

•Net sales of our Retail segment decreased by $93.0 million, or 77.2%, for the
three-months ended June 30, 2022, compared to the three-months ended June 30,
2021. Excluding sales related to the Octane brand, which was sold in 2020, net
sales were down 2%, or a -1% CAGR, compared to the same period in fiscal 2020.
The decrease in sales compared to last year is primarily driven by lower cardio
sales and higher sales discounting as Retailers work through higher-than-normal
inventory levels.

• Proventi da royalties per i tre mesi chiusi 30 giugno 2022 tasso aumentato 0,2 milioni di dollari Rispetto al termine dei tre mesi 30 giugno 2021.


•Gross profit was $7.0 million, compared to $55.5 million last year. Gross
profit margins were 12.7% compared to 30.1% last year. The 17.4 ppt decrease in
gross margins was primarily due to increased discounting (-8 ppts), unfavorable
logistics overhead absorption (-8 ppts) and increased investments in JRNY® (-4
ppts), offset by improvements in other costs (3 ppts).

•Operating expenses were $58.1 million, an increase of $20.5 million, or 54.5%,
compared to last year, primarily due to a goodwill and intangible impairment
charge of $27.0 million and a $3.6 million increase in JRNY® investments,
partially offset by $5.7 million lower media spending and $2.7 million lower
other variable selling and marketing expenses due to decreased sales. Total
advertising expenses were $5.1 million versus $10.8 million last year.

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•Operating loss was $51.2 million or negative 93.4% operating margin, compared
to operating income of $17.9 million last year, primarily driven by a goodwill
and intangible impairment charge of $27.0 million and lower gross profit
associated with lower sales demand during the period.

•Loss from continuing operations was $60.2 million, or $(1.92) per diluted
share, compared to income of $14.0 million, or $0.43 per diluted share, last
year.

• perdita netta era $ 60,2 milionio $ (1,92) per azione diluita rispetto all'utile netto di $ 13,9 milioni o 0,43 USD Per azione diluita, l'anno scorso.


•The income tax expense was $8.1 million this year compared to $3.4 million last
year. The income tax expense this year was primarily a result of a U.S. deferred
tax asset valuation allowance in the amount of $14.2 million recorded this
quarter.

North Star Strategy Update

JRNY® Digital Platform

• Nautilus continua a migliorare la piattaforma JRNY® con molte caratteristiche uniche, inclusa l'espansione delle esperienze differenziate di fitness visivo dei membri JRNY®.


•As of June 30, 2022, Members of JRNY®, Nautilus' personalized connected fitness
platform, exceeded 360k representing approximately 133% growth versus the same
quarter last year. Of these members, 127k were Subscribers, representing
approximately 290% growth over the same period. We define JRNY® Members as all
individuals who have a JRNY® account and/or subscription, which includes
Subscribers, their respective associated users and users who consume free
content. We define Subscribers as a person or household who paid for a
Subscription, are in a trial, or have requested a "pause"' to their
subscriptions for up to three months.

•Additionally, the Company has made great strides over the last two years
expanding the number of products featuring JRNY® connectivity. In FY 2022,
approximately 80% of total units sold were JRNY® compatible, compared to only
22% in the pre-pandemic FY 2020. The trend of approximately 80% of total units
sold being JRNY® compatible continued in Q1 FY 2023.

•Nautilus' integration of VAY's motion-tracking capabilities into JRNY® will
further advance and accelerate personalized strength workout options, including
the addition of rep counting and form coaching for SelectTech® users, which we
believe will drive JRNY® membership growth during FY 2023.

Guida lungimirante

Le seguenti dichiarazioni previsionali riflettono le aspettative della società per l'intero anno fiscale 2023 a partire da 9 agosto 2022soggetto a rischi e incertezze.

• La società ribadisce le linee guida per il secondo semestre e l'intero anno 2023.

Secondo semestre e anno fiscale 2023

• L'azienda prevede ricavi per l'intero anno 380 milioni di dollari E il 460 milioni di dollari.


•Given the impact of elevated inventory levels at the Company's retail partners,
the Company expects the 2nd half of the year to represent between 65% and 70% of
full year sales, slightly higher than pre-pandemic 2nd half seasonality of
approximately 60%.

•Gross margins for the second half of the year are expected to be in the range
of 27% to 30%. Improvements versus last year are driven by lower in-bound
freight and demurrage fees, and the reduction in logistics facilities footprint.
The Company is closing one of its distribution centers when the associated lease
expires in the Fall of 2022 and will not be renewing the leases of some storage
locations.

• Ci aspettiamo che il numero dei membri del JRNY® superi i 500.000 31 marzo 2023.

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sommario

Fattori che influenzano le nostre prestazioni

I risultati delle nostre operazioni possono variare notevolmente da periodo a periodo.


Our revenues typically fluctuate due to the seasonality of our industry,
customer buying patterns, product innovation, the nature and level of
competition for health and fitness products, our ability to procure products to
meet customer demand, the level of spending on, and effectiveness of, our media
and advertising programs and our ability to attract new customers and maintain
existing sales relationships. In addition, our revenues are highly susceptible
to economic factors, including, among other things, the overall condition of the
economy and the availability of consumer credit in both the U.S. and Canada. The
COVID-19 pandemic created a heightened need for home-fitness products at an
unprecedented rate and as the pandemic lessened there was a return to a more
normal seasonality. We cannot predict with certainty the longer-term impacts of
the COVID-19 pandemic and the change to consumer habits and sentiments and
therefore, the impact on our results of operations is uncertain.

Our gross margins are being impacted by, among other things:
•Increased product costs, primarily driven by our increasing use of more
expensive components in our products, which now include our connected fitness
JRNY® platform.
•Fluctuations in the availability, and as a result the costs, of materials used
to manufacture our products.
•Tariffs and expedited shipping and transportation costs.
•Fluctuations in cost associated with the acquisition or license of products and
technologies, product warranty claims, fuel, foreign currency exchange rates,
and changes in costs of other distribution or manufacturing-related services.
•Costs relating to the addition of a new distribution facility in Southern
California prior to the anticipated exit from our Portland DC facility.
•The efficiency and effectiveness of our organization and operations.
•A return to product discounting practices in place prior to the pandemic, which
were temporarily suspended in part during the pandemic.

Our operating profits or losses may also be affected by the efficiency and
effectiveness of our organization. Historically, our operating expenses have
been influenced by media costs to produce and distribute advertisements of our
products on television, websites and other media, facility costs, operating
costs of our information and communications systems, product supply chain
management, customer support and new product development activities. In
addition, our operating expenses have been affected from time-to-time by asset
impairment charges, restructuring charges and other significant unusual or
infrequent expenses.

As a result of the above and other factors, our period-to-period operating
results may not be indicative of future performance. You should not place undue
reliance on our operating results and should consider our prospects in light of
the risks, expenses and difficulties typically encountered by us and other
companies, both within and outside our industry. We may not be able to
successfully address these risks and difficulties and, consequently, we cannot
assure you of any future growth or profitability. For more information, see our
discussion of risk factors located at Part I, Item 1A of our 2022 Form 10-K as
supplemented by our quarterly reports on Form 10-Q.

operazioni sospese


Results from discontinued operations relate to the disposal of our former
Commercial business, which was completed in April 2011. We reached substantial
completion of asset liquidation as of December 31, 2012. Although there was no
revenue related to the former Commercial business in the fiscal
2022 or year-to-date fiscal 2023 periods, we continue to incur product liability
and other legal expenses associated with product previously sold into the
Commercial channel.
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RESULTS OF OPERATIONS
Results of operations information was as follows (in thousands):

                                                              Three-Months Ended
                                                                   June 30,                                Change
                                                            2022               2021                 $                   %
Net sales                                               $  54,817          $ 184,593          $ (129,776)              (70.3) %
Cost of sales                                              47,860            129,088             (81,228)              (62.9) %
Gross profit                                                6,957             55,505             (48,548)              (87.5) %
Operating expenses:
Selling and marketing                                      12,891             21,300              (8,409)              (39.5) %
General and administrative                                 12,463             11,523                 940                 8.2  %
Research and development                                    5,823              4,815               1,008                20.9  %

Goodwill and intangible impairment charge                  26,965                  -              26,965               NM
Total operating expenses                                   58,142             37,638              20,504                54.5  %
Operating (loss) income                                   (51,185)            17,867             (69,052)             (386.5) %
Other expense:
Interest income                                                 1                 21                 (20)
Interest expense                                             (376)              (314)                (62)
Other, net                                                   (514)              (120)               (394)
Total other expense, net                                     (889)              (413)               (476)

(Perdita) Risultato dell'attività continuativa prima delle imposte sul reddito

                                                     (52,074)            17,454             (69,528)
Income tax expense                                          8,096              3,438               4,658
(Loss) income from continuing operations                  (60,170)            14,016             (74,186)
Loss from discontinued operations, net of taxes                (7)              (132)                125
Net (loss) income                                       $ (60,177)         $  13,884          $  (74,061)
NM = Not meaningful


























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Sommario I risultati delle informazioni operative per settore e principali linee di prodotto sono stati i seguenti (in migliaia di dollari):

                             Three-Months Ended
                                  June 30,                            Change
                           2022             2021              $                    %
Net sales:
Direct net sales:
 Cardio products(1)     $ 17,133        $  31,430        $  (14,297)             (45.5) %
 Strength products(2)      9,343           31,966           (22,623)             (70.8) %
Direct                    26,476           63,396           (36,920)             (58.2) %

 Retail net sales:
Cardio products(1)      $ 11,843        $  89,924        $  (78,081)             (86.8) %
Strength products(2)      15,601           30,560           (14,959)             (48.9) %
Retail                    27,444          120,484           (93,040)             (77.2) %

Royalty                      897              713               184               25.8  %
                        $ 54,817        $ 184,593        $ (129,776)             (70.3) %

Cost of sales:
Direct                  $ 21,914        $  38,882        $  (16,968)             (43.6) %
Retail                    25,946           90,206           (64,260)             (71.2) %

                        $ 47,860        $ 129,088        $  (81,228)             (62.9) %

Gross profit:
Direct                  $  4,562        $  24,514        $  (19,952)             (81.4) %
Retail                     1,498           30,278           (28,780)             (95.1) %
Royalty                      897              713               184               25.8  %
                        $  6,957        $  55,505        $  (48,548)             (87.5) %
Gross profit margin:
Direct                      17.2  %          38.7  %         (2,150)  basis points
Retail                       5.5  %          25.1  %         (1,960)  basis points

Contribution:
Direct                  $ (9,893)       $   6,759        $  (16,652)            (246.4) %
Retail                    (5,408)          22,090           (27,498)            (124.5) %

Contribution rate:
Direct                     (37.4) %          10.7  %         (4,810)  basis points
Retail                     (19.7) %          18.3  %         (3,800)  basis points


(1) Cardio products include: connected-fitness bikes, the Bowflex® C6, VeloCore®, Schwinn® IC4, Max Trainer®,
connected-fitness treadmills, other exercise bikes, ellipticals and subscription services.
(2) Strength products include: Bowflex® Home Gyms, Bowflex® SelectTech® dumbbells, kettlebell and barbell
weights, and accessories.





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Sales and Gross Profit

Direct Segment

Confronto dei risultati di settore per il trimestre concluso 30 giugno 2022 al termine del periodo di tre mesi 30 giugno 2021


Net sales were $26.5 million for the three-month period ended June 30, 2022,
compared to $63.4 million, a decline of 58.2%, versus the same period in 2021,
and up 27.1% compared to the same period in fiscal 2020. Net sales decrease was
primarily driven by the return to pre-pandemic seasonal demand and higher sales
discounting.

Cardio sales declined 45.5% versus the same period in 2021, and were up 6.5%
compared to the same period in fiscal 2020. Lower cardio sales this quarter were
primarily driven by lower bike demand. Strength product sales declined 70.8%
versus the same period in 2021, and increased 96.7% compared to the same period
in fiscal 2020. Lower strength sales this quarter were primarily driven by lower
demand for SelectTech® weights.

The Direct segment ended the quarter with $0.4 million of backlog as of June 30,
2022, as product demand has declined compared the same period last year. These
amounts represent unfulfilled consumer orders net of current promotional
programs and sales discounts.

Gross profit margin was 17.2% for the three-month period ended June 30, 2022
versus 38.7% for the same period in 2021. The 21.5 ppt decrease in gross margin
was primarily driven by: increased discounting (-8 ppts), unfavorable logistics
overhead absorption (-7 ppts), and increased investments in JRNY® (-7 ppts).
Gross profit was $4.6 million, down 81.4% versus the same period in 2021.

Segment contribution loss was $9.9 million for the three-month period ended June
30, 2022, compared to segment contribution income of $6.8 million for the same
period in 2021. The decline was primarily driven by lower gross profit, as
explained above, offset by decreased media spend. Advertising expenses were $5.2
million compared to $8.0 million for the same period in 2021.

Combined consumer credit approvals by our primary and secondary U.S. third-party
financing providers for the three-month period ended June 30, 2022 were 53.8%,
compared to 53.0% for the same period in 2021. The increase in approvals
reflects higher credit quality applications.

Settore vendite

Confronto dei risultati di settore per il trimestre concluso 30 giugno 2022 al termine del periodo di tre mesi 30 giugno 2021


Net sales for the three-month period ended June 30, 2022 were $27.4 million,
down 77.2%, from $120.5 million for the same period in 2021. Excluding sales
related to Octane, net sales were down 2% compared to the same period in fiscal
2020. Retail segment sales outside the United States and Canada were down 83.4%
versus last year. The decrease in sales compared to last year is primarily
driven by lower cardio sales and higher sales discounting as Retailers work
through higher than normal inventory levels.

Cardio sales for the three-month period ended June 30, 2022 decreased by 86.8%.
Excluding sales related to Octane, cardio sales were down 28.7% compared to the
same period in fiscal 2020. Strength product sales declined by 48.9% versus last
year. Strength sales were up 36.8% compared to the same period in fiscal 2020,
led by the popular SelectTech® weights. The decrease in sales compared to last
year is primarily driven by lower bike sales and higher sales discounting as
Retailers work through higher than normal inventory levels.

As of June 30,2022, the Retail segment's backlog totaled $48.0 million, as
retailers are now ordering closer to time of need compared to the same period
last year. These amounts represent customer orders for future shipments and are
net of contractual rebates and consideration payable to applicable Retail
customers.

Gross profit margins were 5.5% for the three-month period ended June 30, 2022,
down from 25.1% for the same period in 2021. The 19.6 ppt decrease in gross
margin was primarily driven by: increased discounting (-11 ppts) and unfavorable
logistics overhead absorption (-9 ppts). Gross profit was $1.5 million, a
decrease of 95.1% versus the same period in 2021.

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Segment contribution loss for the three-month period ended June 30, 2022 was
$5.4 million, or 19.7% of sales, compared to segment contribution income of
$22.1 million, or 18.3% of sales for the same period in 2021, primarily driven
by lower gross profit as explained above.

Proprietà

Il reddito da royalties è aumentato di 0,2 milioni di dollario 25,8%, a $ 0,9 milioni Per il periodo di tre mesi in scadenza 30 giugno 2022Rispetto allo stesso periodo del 2021, principalmente per conguagli patrimoniali.

Vendita e marketing


Selling and marketing expenses include payroll, employee benefits, and other
headcount-related expenses associated with sales and marketing personnel, and
the costs of media advertising, promotions, trade shows, seminars, sales
incentives related to our JRNY® platform and other programs.

Le informazioni di vendita e marketing erano le seguenti (in migliaia di dollari):

                            Three-Months Ended
                                 June 30,                        Change
                           2022            2021             $              %

Vendita e marketing 12.891 dollari $ 21.300 $ (8.409) (39,5)% come percentuale delle vendite nette

           23.5  %         11.5  %



The decrease in selling and marketing expenses for the three-month period ended
June 30, 2022 compared to the same period of 2021 was primarily related to a
decrease of $5.7 million in media spend and a decrease of $2.7 million in other
variable selling and marketing expenses due to decreased sales. We expect
variable selling and marketing expenses to continue to flex with sales.

Le spese pubblicitarie sui media sono la più grande componente di vendita e marketing ed erano le seguenti (in migliaia di dollari):

                         Three-Months Ended
                              June 30,                        Change
                         2022            2021            $              %

Total advertising    $    5,120       $ 10,824       $ (5,704)       (52.7)%


The $5.7 million decrease in media advertising expense for the three-month
period ended June 30, 2022, as compared to the same period of 2021 reflects a
return to more historical, pre-pandemic levels of advertising support to
preserve market share and control costs. Advertising as a percentage of selling
and marketing for the three-month period ended June 30, 2022 was 39.7% as
compared to 50.8% for the same quarter last year and 37.2% for the same period
in fiscal 2020.

General and Administrative
General and administrative expenses include payroll, employee benefits,
stock-based compensation expense, and other headcount-related expenses
associated with finance, legal, facilities, certain human resources and other
administrative personnel, and other administrative fees.

Il generale e l'amministrazione erano i seguenti (in migliaia di dollari):

                                  Three-Months Ended
                                       June 30,                     Change
                                 2022            2021            $           %
General and administrative    $ 12,463        $ 11,523        $  940        8.2%
As % of net sales                 22.7  %          6.2  %



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The increase in general and administrative expenses for the three-month period
ended June 30, 2022 compared to the same period of 2021 was primarily due to
increases in personnel costs.

Research and Development
Research and development expenses include payroll, employee benefits, other
headcount-related expenses and information technology associated with product
development.

La ricerca e sviluppo è stata la seguente (in migliaia di dollari):

                                          Three-Months Ended
                                               June 30,                      Change
                                          2022            2021            $            %
           Research and development   $   5,823        $ 4,815        $ 1,008        20.9%
           As % of net sales               10.6  %         2.6  %


Aumento delle spese di ricerca e sviluppo per il trimestre in scadenza 30 giugno 2022Rispetto allo stesso periodo del 2021, il principale motore di ciò è stato l'aumento degli investimenti in JRNY®, la nostra piattaforma digitale.


Goodwill and Intangible Impairment Charge
In accordance with ASC 350 - Intangibles - Goodwill and Other, we perform a
goodwill and indefinite-lived asset impairment evaluation during the fourth
quarter of each year. However, as a result of the decline in our market value
relative to the market and our industry, which was identified as a triggering
event, we performed an interim evaluation and a market capitalization
reconciliation during the first quarter of fiscal 2023, which resulted in a
non-cash goodwill and indefinite-lived intangible assets impairment charge of
$27.0 million.

ASC 350 requires us to make significant assumptions and estimates about the
extent and timing of future cash flows, discount rates, growth rates and
terminal value. The cash flows are estimated over a significant future period of
time, which makes those estimates and assumptions subject to an even higher
degree of uncertainty. We also use market valuation models and other financial
ratios, which require us to make certain assumptions and estimates regarding the
applicability of those models to our assets and businesses.

In accordance with ASC 360 - Property, Plant, and Equipment and other long-lived
assets, we perform a test for recoverability when triggering events occur. No
impairment was recognized in the quarter ended June 30, 2022.

Per ulteriori informazioni relative al nostro avviamento e al fondo svalutazione immateriale, si veda la nota 7


Operating (Loss) Income
Operating loss for the three-months ended June 30, 2022 was $51.2 million, a
decrease of $69.1 million, or 386.5%, as compared to an operating income of
$17.9 million for the same period of 2021. The decrease was primarily driven by
a goodwill and intangible impairment charge of $27.0 million and lower gross
profit associated with lower sales and lower gross margins during the period.

Other, Net
Other, net relates to the effect of exchange rate fluctuations with the U.S. and
our foreign subsidiaries.

Income Tax Expense
Income tax expense includes U.S. and international income taxes, and interest
and penalties on uncertain tax positions.

Le imposte sul reddito sono state le seguenti (in migliaia):

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                         Three-Months Ended
                              June 30,                       Change
                         2022            2021            $            %
Income tax expense   $   8,096        $ 3,438        $ 4,658        135.5%
Effective tax rate       (15.5) %        19.7  %

Imposte sul reddito per il trimestre in scadenza 30 giugno 2022 Era principalmente un risultato di noi Fondo accertamento imposte anticipate pari a $ 14,2 milioni registrato nel periodo. Imposte sul reddito per il trimestre in scadenza 30 giugno 2021 È stato principalmente guidato dai profitti realizzati noi

Aliquota fiscale effettiva delle attività continuative per il trimestre concluso 30 giugno 2022principalmente per quanto sopra noi Fondo accertamento imposte anticipate a riduzione del bene noi Attività fiscali nazionali differite al loro presumibile valore di realizzo.


The effective tax rate from continuing operations for the three-month period
ended June 30, 2021 was a result of the profit generated in the U.S offset by
the excess tax benefit related to stock-based compensation.

(Loss) Income from Continuing Operations
Loss from continuing operations was $60.2 million for the three-months ended
June 30, 2022, or $(1.92) per diluted share, compared to income from continuing
operations of $14.0 million, or $0.43 per diluted share, for the three-months
ended June 30, 2021. The decrease in income from continuing operations was
primarily due to lower gross profit and higher operating expenses as discussed
in more detail above.

Net (Loss) Income
Net loss was $60.2 million for the three-months ended June 30, 2022, compared to
net income of $13.9 million for the three-months ended June 30, 2021. Net loss
per diluted share was $(1.92) for the three-months ended June 30, 2022, compared
to net income per diluted share of $0.43 for the three-months ended June 30,
2021.

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LIQUIDITY AND CAPITAL RESOURCES

Our future capital requirements may vary materially from those currently planned
and will depend on many factors, including our levels of revenue, the timing and
extent of spending on research and development efforts and other business
initiatives, the expansion of sales and marketing activities, the timing of new
product introductions, market acceptance of our products, and overall economic
conditions. To the extent that current and anticipated future sources of
liquidity are insufficient to fund our future business activities and
requirements, we may be required to seek additional equity or debt financing.
The sale of additional equity would result in additional dilution to our
shareholders. The incurrence of debt financing would result in debt service
obligations and the instruments governing such debt could provide for operating
and financing covenants that would restrict our operations.

As of June 30, 2022, we had $8.7 million of cash, cash equivalents and
restricted cash, and $35.1 million was available for borrowing under the ABL
Revolving Facility, compared to $14.2 million of cash, cash equivalents and
restricted cash, and $65.8 million available for borrowing under the ABL
Revolving Facility as of March 31, 2022. We expect our cash, cash equivalents,
restricted cash and amounts available for borrowing under our Credit Facility as
of June 30, 2022, along with cash expected to be generated from operations, to
be sufficient to fund our operating and capital requirements for at least twelve
months from June 30, 2022.

Cash used in operating activities was $6.0 million for the three-month period
ended June 30, 2022, compared to cash used in operating activities of $28.2
million for the three-month period ended June 30, 2021. The decrease in cash
flows from operating activities for the three-month period ended June 30, 2022
as compared to the same period of 2021 was primarily due to changes in our
operating assets and liabilities discussed below, offset by the decrease in net
income.

Trade receivables decreased to $27.5 million as of June 30, 2022, compared to
$61.5 million as of March 31, 2022, primarily was due to lower sales and the
timing of customer payments.

Inventory was $103.9 million as of June 30, 2022, compared to $111.2 million as
of March 31, 2022. The decrease in inventory was driven by sell-through and
strategic demand planning as we balance on-hand inventory levels ahead of the
fitness season. About 8% of inventory as of June 30, 2022 was in-transit.

Prepaid and other current assets decreased by $2.6 million to $12.0 million,
compared to $14.5 million as of March 31, 2022, primarily due to decreases in
prepaid marketing and prepaid insurance.

I debiti commerciali sono diminuiti di $ 26,4 milioni per me $ 26,8 milioni Da 30 giugno 2022Rispetto a $ 53,2 milioni Da 31 marzo 2022principalmente per i tempi di pagamento delle scorte.


Accrued liabilities decreased by $5.0 million to $24.4 million as of June 30,
2022, compared to $29.4 million as of March 31, 2022, primarily due to decreases
in accrued off-site materials of $2.8 million and decreases in accrued personnel
expenses of $1.2 million.

Cash used in investing activities of $3.4 million for the three-month period
ended June 30, 2022 was primarily due to capital purchases related to our
digital platform. We anticipate spending between $12.0 million and $14.0 million
in fiscal 2023 for digital platform enhancements, systems integration, and
production tooling.

Cash provided by financing activities of $7.1 million for the three-month period
ended June 30, 2022 was primarily related to proceeds from long-term debt offset
by payments on long-term debt.

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Financing Arrangements

On October 29, 2021, we amended our Credit Agreement dated January 31, 2020,
with Wells Fargo Bank, National Association and lenders from time to time party
thereto ("the Lenders"). The Lenders agreed, among other things, to make
available to us an asset-based revolving loan facility, subject to a borrowing
base (the "ABL Revolving Facility"), and a term loan facility (the "Term Loan
Facility" and together with the ABL Revolving Facility, the "Credit Facility").
The aggregate principal amount available under the ABL Revolving Facility is
$100.0 million (the "Revolver"), subject to a borrowing base. The unamortized
balance on the Term Loan was $11.5 million. The Credit Facility matures on
October 29, 2026 and repayment obligations under the Credit Agreement is secured
by substantially all of our assets, with principal and interest amounts required
to be paid as scheduled.

As of June 30, 2022, outstanding borrowings totaled $37.2 million, with $9.8
million and $27.4 million under our Term Loan Facility and Revolver,
respectively. As of June 30, 2022, we were in compliance with the financial
covenants of the Credit Agreement and $35.1 million was available for borrowing
under the ABL Revolving Facility.

Interest on the Revolver will accrue at the Secured Overnight Financing Rate
("SOFR") plus a margin of 1.86% to 2.36% (based on average quarterly
availability) and interest on the Term Loan Facility will accrue at SOFR plus
4.61%. As of June 30, 2022, our interest rate was 3.65% for the Revolver and
6.40% for the Term Loan Facility.

La classificazione di bilancio dei prestiti nell'ambito della linea di credito del prestito revolving è stata stabilita in conformità con ASC 470, Debito.


Off-Balance Sheet Arrangements
We have long lead times for inventory purchases and, therefore, must secure
factory capacity from our vendors in advance. As of June 30, 2022, we had
approximately $34.5 million, compared to $39.8 million as of March 31, 2022 in
non-cancellable market-based purchase obligations, primarily to secure
additional factory capacity for inventory purchases in the next twelve months.
Purchase obligations can vary from quarter-to-quarter and versus the same period
in prior years due to a number of factors, including the amount of products that
are shipped directly to Retail customer warehouses versus through Nautilus
warehouses. The decrease in purchase obligations was primarily due to
seasonality.

In the ordinary course of business, we enter into agreements that require us to
indemnify counterparties against third-party claims. These may include:
agreements with vendors and suppliers, under which we may indemnify them against
claims arising from our use of their products or services; agreements with
customers, under which we may indemnify them against claims arising from their
use or sale of our products; real estate and equipment leases, under which we
may indemnify lessors against third-party claims relating to the use of their
property; agreements with licensees or licensors, under which we may indemnify
the licensee or licensor against claims arising from their use of our
intellectual property or our use of their intellectual property; and agreements
with parties to debt arrangements, under which we may indemnify them against
claims relating to their participation in the transactions.

The nature and terms of these indemnifications vary from contract to contract,
and generally a maximum obligation is not stated. We hold insurance policies
that mitigate potential losses arising from certain types of indemnifications.
Management does not deem these obligations to be significant to our financial
position, results of operations or cash flows, and therefore, no liabilities
were recorded at June 30, 2022.

di stagione


We expect our revenue from fitness equipment products to vary seasonally. Sales
are typically strongest in our fiscal third quarter ending December and fiscal
fourth quarter ending March and are generally weakest in our fiscal first
quarter ending June and fiscal second quarter ending September. We believe that
consumers tend to be involved in outdoor activities during the spring and summer
months, including outdoor exercise, which impacts sales of indoor fitness
equipment. This seasonality can have a significant effect on our inventory
levels, working capital needs and resource utilization.

PRINCIPALI POLITICHE CONTABILI E STIME

Le nostre politiche contabili significative non sono cambiate a parte l'avviamento discusso nel nostro modulo finanziario 10-K per il 2022.

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NEW ACCOUNTING PRONOUNCEMENTS

Si veda la Nota 1 delle Note al Bilancio consolidato abbreviato inclusa nella Parte 1, Voce 1 per una trattazione dei recenti prospetti contabili.

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sommario

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