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Nautilus Inc. Message Board

  • yoibyo yoibyo Jul 6, 2003 7:47 AM Flag

    My, my! How things can change quickly.

    (The Nautilus Group, Inc. , a leading marketer, developer, and manufacturer of branded health and fitness products, today announced that it was ranked #2 on BusinessWeek's listing of "Hot Growth Companies." To win a position on BusinessWeek's list, a company must have excelled in three categories over the last three years: sales growth, earnings growth and return on invested capital. According to BusinessWeek, The Nautilus Group's three-year averages were 85.2% growth in sales, 77.5% growth in earnings and 42.4% return on invested capital. In 2000 and 2001, The Nautilus Group was ranked #1 and #2, respectively, in BusinessWeek's listing of "Hot Growth Companies." This year, The Nautilus Group was the only company to be listed among the top five growth companies for the third consecutive year. "We are very pleased to win recognition from BusinessWeek for the third year in a row," said Brian Cook, Chief Executive Officer. "Our high rankings show that we have been successfully executing our long-term growth strategy. We have expanded our suite of powerful brands, diversified our product lines and developed multiple distribution channels, which continue to make us a more complete health and fitness company, and drive our growth. We are excited about our potential in 2002 and beyond." )

    Early June 2002.

    Hmmm???

    yoibyo

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    • For anyone new to the board, aluisious' posts over the past day probably seem strange. What got him all pissed off and superior yesterday?

      Unfortunately ...
      Angry superiority is the only way aluisious appears to be able to interact.


      Try to see it his way. He's around inferior people (the rest of us on the planet) all day long. Constantly working to help us understand that whatever passes through his imagination is cold, hard Reality. And we're just too slow to get it.

      Poor guy. Anybody would be frustrated.

    • <<So you're a believer in the Efficient Market Hypothesis?>>

      Not really. But 45 to 10 generally indicates something going on. Doesn't often happen for no real reason.

      The market is LARGELY efficient, if you give it enough time. The trick is, IMO, to find where it's gone too far (mostly to the downside) and exploit that.

      I say this because you tend to find that stocks don't just gain 10 000% while earnings stay put over years, and alternately if they DO make massive gains outpacing earnings, they fall back down (internet bubble DID burst). Also, earnings seldom advance 10 000% without the share price making some sort of convincing move upwards.

    • <45 to 10...proven results. 'nuff said.>

      So you're a believer in the Efficient Market Hypothesis? Why pick stocks then?

    • You're kinda missing the point again, big a. Here it is again:

      Nobody cares what you think.

      There's no conspiracy to claim that you posted anything in particular, or that you didn't. It's just not that important.

    • lol, stock price isn't controlled by the company.

      Here are NLS's proven results:

      year....earnings
      2002....100 million
      2001.....66 million
      2000.....40 million

      150% increase in two years. And that's typical for Nautilus/Direct Focus. Go all the way back to '96 and you see nothing but 50% to 80% earnings growth in every reported year.

      That's proven performance. Post your smart-aleck response when you've done anything close to what Nautilus has done.

    • 45 to 10...proven results.

      'nuff said.

      You want to speculate that NLS will do well with new product lines...fine. All they have ever known is Bowflex, and the 'flex is in trouble.

      Time will bear out whose sentiment was more accurate.

    • <<Not very rational, but a lot more interesting than your recitals of how much money you lost buying this puppy at $40 or whatever.>>

      Gee, look, one lie to cover another.

      Get your facts straight, prick.

    • Hey Insight,

      Thanks for the kind words. And yes, you are correct, the new channel I was alluding to was retail...which is relatively net new to NLS.

      Regards,

      Haikuza

    • Haikuza, the best post I've seen in awhile. Is your insight connected in any way to the age you give (100)?

      At any rate, thanks for the sophisticated articulation on product evolution as it relates to competition, etc.

      You made a reference to a "new channel strategy." I'm in the dark on that one -- unless you're referring simply to the selling of bowflex in the retail "channel." If not, than could you expand on that...

    • Don't get your logic;

      You state that NLS is "a company with no growth prospects and a revenue stream threatened by termination of patents in one year."

      How do you account for the new Treadclimber product and the new channel strategy?

      They are both net new sources of revenue - i.e. growth prospects.

      As for the patent expiring, well, I can argue that that could be considered a good thing.

      You are predicating your argument on the notion that the fitness market is a zero sum game. Judging by the amount of fat people, fitness clubs, new TaiBo tapes, etc., coming out, it would seem that the market is not yet saturated. Certainly people are investing their money in all kinds of new fitness initiatives...Pilates trend for example.

      Now, given a still expanding fitness market the entrance of competitors to Bowflex good be a good thing. Here's my logic:

      Take what happens in the software business as an example. Companies that develop new technologies sometimes only take off once competitors enter the market:

      The reason(s)

      1) Competition validates the product space...most consumers don't want to be pioneers, they want to have others validate for them.

      Of course, there are those people that do buy when a product has little track record, normally called Early Adopters.

      And there are lots of early Adopters in the fitness space who want the latest and greatest in equipment, the same way people want to have the latest PC or Palm Pilot or new Car model...and that will provide NLS with a sure sales pop...the Treadclimber is new and it is trendy.

      But back to Bowflex and its expiring patent: if the Bowflex space is in fact mature, then the Late Majority or Laggards are the buying constituency and those purchasers go for the name brand. (see. Moore's Crossing the Chasm) They want Kleenex not tissue. So, that accrues benefit to Bowflex, not the new kid on the block.

      Further, assuming a mature market, we also assume Bowflex has other advantages:

      - they have a more mature manufacturing process, so higher reliability, less mfg defects and a more efficient process
      - this allows them to sell for less and still generate good margins - and they appear to be anticipating this patent expiry by lowering the price of the Bowflex. It's got to be harder for a new entrant to get into this business given that they have a lot less margin for failure and a lot longer to wait to see a return on their investment given the lower price of the brand leader.

      2) If there are more companies advocating a like type of product, and most buyers do in fact shop around; creating interest in a competitor to Bowflex means that Bowflex may get another look to purchase from a different route.

      A consumer starts looking at the cheap model/or the Nike Model and then decides to look at alternatives, some buy the Nike some buy the Bowflex. Either way, the competitor's advertising has created some net new customers...again, assuming this is not a zero sum game.

      You may have lots of reasons to hate this stock, but saying that it is standing still is bogus...it has new routes to market and new products...and historically, NLS has executed well...so why would that now discontinue is beyond me?

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