BowFlex Inc (BFX) 2024 Q1 法說會逐字稿

Good day, and welcome to the Nautilus Fiscal First Quarter 2024 Earnings Results Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to John Mills with ICR. Please go ahead, sir.

美好的一天，歡迎參加 Nautilus 2024 年第一季財報電話會議。 （操作員說明）請注意此事件正在被記錄。我現在想將會議轉交給 ICR 的約翰·米爾斯 (John Mills)。請繼續，先生。

Thank you. Good afternoon, everyone. Welcome to Nautilus' fiscal 2024 first quarter ended June 30 conference call. Participants on the call today from Nautilus are Jim Barr, Chief Executive Officer; and Aina Konold, Chief Financial Officer. Please note this call is being webcast and will be available for replay for the next 14 days. (Operator Instructions) We will be happy to take your questions at the conclusion of our prepared remarks.

謝謝。大家下午好。歡迎參加 Nautilus 截至 6 月 30 日的 2024 財年第一季電話會議。今天參加 Nautilus 電話會議的包括執行長 Jim Barr；和財務長艾娜·科諾德。請注意，本次電話會議正在網路直播，並將在未來 14 天內重播。 （操作員說明）我們很樂意在準備好的發言結束時回答您的問題。

Our earnings press release was issued today at 1:05 p.m. Pacific Time and may be downloaded from our website at nautilusinc.com on the Investors page. The earnings release includes a reconciliation of the non-GAAP financial measures mentioned in today's call to the most directly comparable GAAP measures.

我們的收益新聞稿於今天下午 1:05 發布。太平洋時間，可從我們的網站 nautilusinc.com 的投資者頁面下載。收益發布包括今天電話會議中提到的非公認會計原則財務指標與最直接可比較的公認會計原則指標的調節。

For today's call, we have a presentation that management will refer to during their prepared remarks, and on Slide 2 is our full safe harbor statement, which we ask everyone to read. You can access the presentation by going to the Investors page on our website and clicking on Events and Webcast.

對於今天的電話會議，我們有一個演示文稿，管理層將在準備好的發言中參考，幻燈片 2 上是我們完整的安全港聲明，我們要求每個人都閱讀。您可以透過造訪我們網站上的投資者頁面並​​點擊活動和網路廣播來存取簡報。

I'd like to remind everyone that during this conference call, Nautilus management will make certain forward-looking statements. These forward-looking statements are based on the beliefs of management and information currently available to us as of today. Such forward-looking statements are not guarantees of future performance, and therefore, one should not place undue reliance on them.

我想提醒大家，在這次電話會議中，鸚鵡螺管理階層將做出某些前瞻性陳述。這些前瞻性陳述是基於管理階層的信念和我們目前所掌握的資訊。此類前瞻性陳述並不能保證未來業績，因此，不應過度依賴它們。

Our actual results may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control and ability to predict. For additional information concerning these factors, please refer to the safe harbor statement and to our SEC filings, which can be found in the Investor Relations section of our website.

我們的實際結果可能會受到已知和未知的風險、趨勢、不確定性以及超出我們控制和預測能力的因素的影響。有關這些因素的更多信息，請參閱安全港聲明和我們的 SEC 文件，這些文件可以在我們網站的投資者關係部分找到。

And with that, it is my pleasure to turn the call over to Nautilus' CEO, Mr. Jim Barr.

至此，我很高興將電話轉給 Nautilus 執行長 Jim Barr 先生。

Thank you, John, and thank you all for joining us. To start, I'd like to emphasize 4 key topics that will be the focal points of today's call. First, our Q1 results show substantial progress on our path back to profitability driven by strong gross margin improvement and operating expense reduction, resulting in a significant improvement in year-over-year adjusted EBITDA. Second, consumer sentiment around home exercise is encouraging, with solid demand in Direct despite our seasonally low Q1 and some visible sell-through in Retail.

謝謝你，約翰，也謝謝大家加入我們。首先，我想強調 4 個關鍵主題，這將是今天電話會議的焦點。首先，我們第一季的業績顯示，在毛利率強勁改善和營運費用減少的推動下，我們在恢復盈利的道路上取得了重大進展，導致調整後的 EBITDA 同比顯著改善。其次，消費者對居家運動的信心令人鼓舞，儘管第一季季節性較低且零售業出現一些明顯的銷售，但直接需求依然強勁。

Third, through a series of proactive efforts, we've strengthened our balance sheet, improved liquidity and created greater financial flexibility to better navigate an uncertain retail and macroeconomic landscape. Finally, with consumer demand in Direct, a stronger financial position and our confidence in the long-term industry opportunity, we are proud to begin introducing a new generation of Bowflex products carrying our refreshed visual branding.

第三，透過一系列積極努力，我們加強了資產負債表，改善了流動性，並創造了更大的財務靈活性，以更好地應對不確定的零售和宏觀經濟狀況。最後，隨著消費者的直接需求、更強大的財務狀況以及我們對長期行業機會的信心，我們很自豪地開始推出新一代 Bowflex 產品，並帶有我們煥然一新的視覺品牌。

Turning to the first quarter. We are pleased with the results we achieved, which demonstrate our ability to navigate the challenges posed by the macroenvironment. For Q1, net sales were $42 million, including Direct sales of $22 million. Notably, Direct achieved a flat comp to last year in strength products. This bright spot can be attributed to enhancements we've made in our strength portfolio, a topic we'll cover later when we discuss our exciting new product launches.

轉向第一季。我們對所取得的成果感到高興，這顯示我們有能力應對宏觀環境帶來的挑戰。第一季淨銷售額為 4,200 萬美元，其中直接銷售額為 2,200 萬美元。值得注意的是，Direct 在強度產品方面與去年持平。這一亮點可以歸因於我們在優勢產品組合中所做的增強，稍後我們在討論令人興奮的新產品發佈時將討論這個主題。

Results in our Retail segment were in line with our expectations as retailers maintained a conservative approach to inventory. As I mentioned earlier, we are encouraged by the movement of some inventory in Retail, and we believe we are well positioned in this segment as we approach our peak Retail sales quarters of Q3 and Q4. While the path back to profitability is our #1 priority, scaling JRNY also remains a focus, and our efforts have been fruitful with over 535,000 JRNY members at the end of Q1, representing 48% year-over-year growth. Among these members, 150,000 are subscribers, showcasing 17% year-over-year growth.

由於零售商對庫存保持保守態度，零售部門的表現符合我們的預期。正如我之前提到的，我們對零售業的一些庫存變動感到鼓舞，我們相信，隨著第三季和第四季零售銷售高峰季的臨近，我們在這一領域處於有利地位。雖然恢復盈利是我們的第一要務，但擴大 JRNY 規模也仍然是一個重點，我們的努力取得了豐碩成果，截至第一季末，JRNY 會員數量超過 535,000 名，同比增長 48%。其中，訂戶人數為 15 萬人，較去年同期成長 17%。

Our operational excellence efforts continue to gain traction. We delivered our seventh consecutive quarter of sequential improvements in our inventory position. We have now rightsized our inventory and reduced our lead times, enabling us to further optimize our working capital investments. Going forward, we will focus on aligning inventory with sales trends. We have also continued to deliver improvement on gross margin. reflecting an expansion of 800 basis points year-over-year in Q1 '24, a testament to the progress achieved through our supply chain initiatives.

我們卓越營運的努力持續獲得關注。我們的庫存狀況連續第七個季度持續改善。我們現在已經調整了庫存並縮短了交貨時間，使我們能夠進一步優化我們的營運資本投資。展望未來，我們將專注於使庫存與銷售趨勢保持一致。我們也持續改善毛利率。反映出 24 年第一季年增 800 個基點，證明了我們透過供應鏈計畫所取得的進展。

As a direct result of the deliberate cost-cutting actions announced in February, adjusted operating expenses were reduced by approximately $12 million or 40% year-over-year. The notable gross margin expansion and lower adjusted operating expenses translated into a $14 million improvement in adjusted EBITDA as we make headway on our efforts to return to profitability. We have also taken decisive steps to further fortify our financial position, enhance liquidity and strengthen our balance sheet.

作為 2 月宣布的刻意削減成本行動的直接結果，調整後的營運費用減少了約 1,200 萬美元，比去年同期減少了 40%。隨著我們在恢復盈利能力方面取得進展，毛利率的顯著增長和調整後營運費用的降低使調整後 EBITDA 提高了 1,400 萬美元。我們也採取了果斷措施，進一步鞏固我們的財務狀況，增強流動性並強化我們的資產負債表。

Throughout the quarter, we diligently pursued this core focus. Notably, we completed the sale of certain noncore assets, made amendments to our credit agreements, paid down debt and significantly improved our inventory position. Additionally, in June, we made a public offering of common stock to raise additional cash for the balance sheet as well as provide additional flexibility to opportunistically invest in marketing and drive sales growth. This places us in a better position as we prepare for our product launches in the upcoming fitness season.

整個季度，我們都在努力追求這核心焦點。值得注意的是，我們完成了某些非核心資產的出售，修改了我們的信貸協議，償還了債務並顯著改善了我們的庫存狀況。此外，6 月，我們公開發行普通股，為資產負債表籌集額外現金，並提供額外的靈活性，以機會投資於行銷並推動銷售成長。這使我們在為即將到來的健身季節推出產品做準備時處於更有利的位置。

At quarter end, net cash position was a positive $2 million, a significant sequential improvement to our net cash position of negative $10 million in Q4 of fiscal '23. These proactive actions add fuel to maintain and grow our strong leadership in connected home fitness while effectively managing the complexities of the challenging and dynamic operating environment. At the same time, our comprehensive review of strategic alternatives is ongoing. Our Board remains focused on identifying opportunities that will accelerate our company's transformation and deliver enhanced value to our shareholders.

截至季末，淨現金部位為正 200 萬美元，比 23 財年第四季淨現金部位為負 1,000 萬美元有了顯著改善。這些積極主動的行動為維持和發展我們在互聯家庭健身領域的強大領導地位提供了動力，同時有效管理充滿挑戰和動態營運環境的複雜性。同時，我們正在對戰略替代方案進行全面審查。我們的董事會仍然致力於尋找能夠加速公司轉型並為股東創造更高價值的機會。

Our expertise in crafting top-of-the-line equipment is evident through our powerful brands such as Bowflex and Schwinn. Guided by our consumer-first mindset under our North Star strategy, we are constantly evaluating opportunities to innovate and align our products with consumers' continually evolving preferences. First, we've refreshed our #1 brand. The fitness industry is a sea of sameness, and the new Bowflex brand is designed to stand apart.

我們在製造頂級設備方面的專業知識透過我們強大的品牌（例如 Bowflex 和 Schwinn）得到了體現。在北極星策略下消費者至上的理念指導下，我們不斷評估創新機會，並使我們的產品適應消費者不斷變化的偏好。首先，我們更新了我們的第一品牌。健身產業千篇一律，新的 Bowflex 品牌旨在脫穎而出。

Our new brand identity is inclusive, empowering and inspiring, reflected outwardly in our visual system like our imagery, emotive color selections and yes, a new logo. The brand is also a mindset embodied with the following statement: at Bowflex, our job is to help you find, strengthen and follow the one inside you. That's why everything we make, every treadmill or a set of weights, is a way for you to move and move closer to the you, you already are. Our new branding and identity empower consumers to move towards what matters most to them.

我們的新品牌形象具有包容性、賦權性和啟發性，這些都體現在我們的視覺系統中，例如我們的圖像、情感色彩選擇，當然還有新標誌。該品牌也是一種心態，體現在以下聲明中：在 Bowflex，我們的工作是幫助您找到、加強和追隨您內心的想法。這就是為什麼我們製造的一切，無論是跑步機還是啞鈴，都是一種讓您移動並更接近真實的自己的方式。我們的新品牌和標誌使消費者能夠朝著對他們最重要的方向前進。

Next, our recent launch of our lower-priced digital-only JRNY SKU featuring rep counting and form coaching and strength training has been extremely well received, and it is just the beginning of JRNY in strength. This fall, we are also thrilled to be announcing a robust first wave of updated connected fitness equipment featuring our brand new Bowflex visual branding.

接下來，我們最近推出的價格較低的純數字 JRNY SKU 具有次數計數、形態指導和力量訓練功能，受到了極大的好評，而這只是 JRNY 力量的開始。今年秋天，我們也很高興地宣布推出第一波更新的連網健身設備，採用我們全新的 Bowflex 視覺品牌。

Ahead of the holiday fitness season, we are enhancing our cardio offerings with 2 new products under the new Bowflex branding: the Bowflex C6 SE an update of our wildly popular C6 bike; and the new Max SE, a quieter version of our top-selling Max Trainer high-intensity interval training machine, which takes up about half the space of a treadmill at an excellent value.

在假日健身季到來之前，我們將推出新 Bowflex 品牌下的 2 款新產品來增強我們的有氧運動產品：Bowflex C6 SE，是我們廣受歡迎的 C6 自行車的更新版；全新 Max SE 是我們最暢銷的 Max Trainer 高強度間歇訓練機的安靜版本，它佔用跑步機約一半的空間，而且物超所值。

We are also launching a new elliptical under the Schwinn brand. The Schwinn Elliptical 490 delivers a very strong value, features a compact footprint, terrain control and thousands of structured workouts in hundreds of virtual routes via JRNY and third-party apps. We plan to follow up this wave of exciting new Bowflex products and JRNY features in calendar 2024 in both strength and cardio portfolios. Stay tuned.

我們也推出了 Schwinn 品牌的新型橢圓機。 Schwinn Elliptical 490 提供了非常強大的價值，具有緊湊的佔地面積、地形控制以及透過 JRNY 和第三方應用程式在數百條虛擬路線中進行數千次結構化鍛鍊。我們計劃在 2024 年在力量和有氧運動產品組合中跟進這波令人興奮的新 Bowflex 產品和 JRNY 功能。敬請關注。

To complement these launches, we have enhanced the shopping experience by introducing a new navigation, website design and product imagery, all under the new brand-new identity system. The goal is to elevate an engaging experience for our customers as they explore our offerings. In addition to these exciting developments, the recent sale of the Nautilus brand has further strengthened our strategic direction.

為了補充這些發布，我們透過引入新的導航、網站設計和產品圖像來增強購物體驗，所有這些都在新的全新標誌系統下進行。我們的目標是在客戶探索我們的產品時提升他們的參與度。除了這些令人興奮的發展之外，最近出售 Nautilus 品牌也進一步強化了我們的策略方向。

As a result, we are currently in the process of executing a total company rebrand by the end of the calendar year. This corporate rebranding initiative will reinforce our identity as a leader in the connected home fitness industry. Our dedication to quality and innovation remains at the core of our identity, and we are enthusiastic about the future.

因此，我們目前正在於年底前進行公司整體品牌重塑。這項企業品牌重塑計畫將鞏固我們作為互聯家庭健身產業領導者的地位。我們對品質和創新的奉獻仍然是我們身份的核心，我們對未來充滿熱情。

I would also like to touch on our fiscal '24 outlook where we have reiterated our full year guidance for revenue, adjusted EBITDA and JRNY member cap. Our diligence in testing and learning with JRNY is driving steady member growth. Conversion rate from trial to paid subscriptions is always -- has also improved over 30% in July as we enhanced -- and our welcome communications and move towards a greater mix of 2-month trials.

我還想談談我們的 24 財年展望，我們重申了全年收入指引、調整後的 EBITDA 和 JRNY 會員上限。我們與 JRNY 一起進行測試和學習的努力正在推動會員的穩定成長。從試用到付費訂閱的轉換率始終如一，隨著我們的增強，7 月也提高了 30% 以上，我們歡迎溝通並朝著更廣泛的 2 個月試用組合邁進。

In tandem, our unwavering focus on driving operational excellence stands as a crucial pillar in our path back to profitability. With efficient and streamlined operations, we are paving a clear and viable framework to regain profitability. As a result, we anticipate a significant year-over-year improvement in adjusted EBITDA for the full year 2024. Our dedication to innovation, operational efficiency and consumer-centric equipment and services positions us to deliver long-term value for our shareholders.

同時，我們堅定不移地致力於推動卓越運營，這是我們恢復獲利的關鍵支柱。透過高效、精簡的運營，我們正在製定一個清晰可行的框架來恢復獲利能力。因此，我們預計 2024 年全年調整後 EBITDA 將年比大幅改善。

I will now turn it over to Aina, who will give us more detail on the first quarter results and our fiscal 2024 guidance. Aina?

我現在將其交給 Aina，她將為我們提供有關第一季業績和 2024 財年指導的更多詳細資訊。艾娜？

Thank you, Jim, and good afternoon, everyone. Today, I'll be speaking to results of the first quarter of fiscal '24 and will provide guidance for the full year. Please go through our website to view our press release and the slides accompanying this call for more information.

謝謝吉姆，大家下午好。今天，我將談論 24 財年第一季的業績，並將提供全年指導。請造訪我們的網站，查看我們的新聞稿和本次電話會議隨附的幻燈片，以了解更多資訊。

Turning to Slide 9, total company P&L results with comparisons to last year. Net sales for the first quarter were $42 million, down 24% versus last year. Direct segment declined by about 17%, driven by cardio. We're pleased with the continued momentum in strength, where sales were flat to LY. Retail segment declined by 29% as retailers continue to take a conservative approach to inventory purchases. Gross profit was $9 million, up 24% to last year and gross margins were 21%, up 800 basis points from last year.

轉向投影片 9，公司總損益結果與去年的比較。第一季淨銷售額為 4,200 萬美元，比去年同期下降 24%。在有氧運動的推動下，直接細分市場下降了約 17%。我們對持續的強勁勢頭感到高興，銷售額與 LY 持平。由於零售商繼續採取保守的庫存採購方式，零售部門下降了 29%。毛利為 900 萬美元，比去年增長 24%，毛利率為 21%，比去年增長 800 個基點。

I'll now go through the drivers of the significant gross margin expansion from last year. About 1,100 basis points of improvement were due to lower landed product costs. In the U.S., we've now cleared through older inventory that was burdened by pandemic-related detention and demurrage and higher inbound freight. New imports are benefiting from our efforts to optimize our distribution network, resulting in lower inbound freights. Additionally, we've negotiated lower factory costs for our top SKUs.

現在我將回顧去年毛利率大幅成長的驅動因素。由於到岸產品成本降低，改善了約 1,100 個基點。在美國，我們現在已經清理了因疫情相關的滯留費、滯期費以及入境運費上漲而造成負擔的舊庫存。新進口受益於我們優化分銷網絡的努力，從而降低了入境運費。此外，我們也透過協商降低了頂級 SKU 的工廠成本。

200 basis points of the improvement are due to decreased discounting, primarily in Retail, demonstrating our disciplined approach to promotions. 100 basis points of the improvement is due to favorable logistics overhead driven by the cost-cutting actions we took in February '23. Partially offsetting these margin gains are 100 basis points of decline related to outbound freight, driven primarily by mix as this year, the Direct segment is a higher portion of sales versus last year. 500 basis points of deleverage related to JRNY COGS. JRNY COGS are increasing year-over-year primarily due to depreciation. If we exclude depreciation, JRNY COGS deleverage is about 300 basis points.

提高 200 個基點是由於折扣減少（主要是零售業），這反映了我們嚴格的促銷方法。改善了 100 個基點，這是由於我們在 2023 年 2 月採取的成本削減措施帶來了有利的物流管理費用。與出境貨運相關的 100 個基點的下降部分抵消了這些利潤率的成長，這主要是由於今年的混合驅動，直接業務在銷售額中所佔的比例高於去年。與 JRNY COGS 相關的去槓桿化幅度為 500 個基點。 JRNY 銷貨成本年增主要是由於折舊。如果我們排除折舊，JRNY COGS 去槓桿化約為 300 個基點。

Turning now to adjusted operating expenses on Slide 10. The next few lines of the P&L have been adjusted to exclude the impact of noncash impairment charges and restructuring costs. Please see our press release for a reconciliation to GAAP. Adjusted operating expenses were $19 million, down $12 million or 40% versus last year.

現在轉向投影片 10 上調整後的營運費用。請參閱我們的新聞稿，以了解與公認會計原則（GAAP）的調節。調整後營運費用為 1,900 萬美元，比去年減少 1,200 萬美元，即 40%。

The key drivers of the decrease were $4 million less in advertising as we reallocated marketing dollars to later quarters to support our seasonally stronger back half; $4 million decrease in personnel expenses; and $2 million decrease in contracted services, reflecting actions we took in February '23; $1 million decrease in variable selling and marketing expenses; and the rest of the decrease coming from all other expenses.

下降的主要驅動因素是廣告費用減少了 400 萬美元，因為我們將行銷資金重新分配到後面幾個季度，以支持季節性更強的後半部分；人事費用減少 400 萬美元；合約服務減少了 200 萬美元，反映了我們在 2023 年 2 月採取的行動；變動銷售和行銷費用減少 100 萬美元；其餘的減少來自所有其他費用。

Excluded from adjusted operating expenses are restructuring and exit charges of about $400,000. Adjusted operating loss was $10 million, an improvement of $14 million versus last year, and adjusted EBITDA loss was $6 million, an improvement of $14 million versus last year's $20 million loss.

調整後的營運費用不包括約 40 萬美元的重組和退出費用。調整後的營業虧損為 1,000 萬美元，比去年減少了 1,400 萬美元；調整後的 EBITDA 虧損為 600 萬美元，比去年的 2,000 萬美元虧損減少了 1,400 萬美元。

Turning now to the balance sheet as of June 30. Cash was $18 million, in line with our cash position at fiscal year-end '23. Debt was $16 million, and our liquidity at the end of June was $28 million. We used the proceeds from our noncore asset sales to pay down a portion of our term loan. As of June 30, we had a minimal balance on our ABL, and our net cash position was positive $2 million, an improvement to our net cash position of negative $10 million last quarter, negative $43 million at the end of third quarter fiscal '23 and negative $28 million at the end of the same quarter last year. For Q1 fiscal '24, we improved our free cash flow by $6 million. Free cash flow was negative $4 million this year versus negative $10 million for the same quarter of last year.

現在來看截至 6 月 30 日的資產負債表。債務為 1,600 萬美元，截至 6 月底我們的營運資金為 2,800 萬美元。我們使用非核心資產出售所得收益來償還部分定期貸款。截至6 月30 日，我們的ABL 餘額極小，我們的淨現金部位為正200 萬美元，較上季淨現金部位為負1,000 萬美元、23 年第三季末為負4,300 萬美元有所改善。 24 財年第一季度，我們的自由現金流增加了 600 萬美元。今年自由現金流為負 400 萬美元，去年同期為負 1,000 萬美元。

Other key call outs in the balance sheet. Per our plan, we rightsized our inventory in the quarter, ending Q1 with inventory of $40 million, down 15% versus year-end fiscal '23 and down 62% versus the same quarter last year. Looking ahead, we will continue to be disciplined with inventory purchases and will work to align inventory with sales. AR was $13 million and trade payables were $21 million, both down from year-end.

資產負債表中的其他關鍵點。根據我們的計劃，我們在本季調整了庫存規模，第一季末庫存為 4,000 萬美元，比 23 財年末下降 15%，比去年同期下降 62%。展望未來，我們將繼續嚴格庫存採購，並努力使庫存與銷售保持一致。應收帳款為 1,300 萬美元，應付帳款為 2,100 萬美元，均較年底下降。

Turning now to guidance. We are reaffirming guidance for full year revenue, full year adjusted EBITDA and year-end fiscal '24 JRNY members. We're guiding to full year net revenue of between $270 million and $300 million. We expect retailers to continue being conservative with reorders, and based on the seasonality of our business, expect the second half to represent between 60% and 65% of revenue.

現在轉向指導。我們重申對全年收入、全年調整後 EBITDA 和 24 年 JRNY 會員財年末的指引。我們預計全年淨收入在 2.7 億至 3 億美元之間。我們預計零售商在重新訂購方面將繼續保持保守態度，並根據我們業務的季節性，預計下半年將佔收入的 60% 至 65%。

Given the sale of the Nautilus brand, we expect full year royalty revenue to be about $1.8 million. We're focused on returning to profitability and are targeting breakeven adjusted EBITDA for fiscal '24. However, given the uncertain macro in our net revenue guidance range, we are guiding to a range of adjusted EBITDA loss of negative $15 million to breakeven.

鑑於 Nautilus 品牌的出售，我們預計全年特許權使用費收入約為 180 萬美元。我們專注於恢復獲利能力，並以 24 財年實現損益平衡調整後 EBITDA 為目標。然而，鑑於我們的淨收入指導範圍內的宏觀不確定性，我們指導調整後的 EBITDA 損失為負 1500 萬美元，以實現盈虧平衡。

To achieve breakeven adjusted EBITDA, we need to deliver $47 million of year-over-year improvement. About $30 million of the improvement will come from lower costs, resulting primarily from the restructuring that we implemented in February '23. As we demonstrated in Q1, these cost reductions will result in lower operating expenses and gross margin expansion as some of these costs are part of COGS. The rest of the EBITDA improvement will come from lower landed product costs, which will drive further gross margin expansion as we demonstrated in Q1.

為了實現損益平衡調整後 EBITDA，我們需要達到 4,700 萬美元的年比改善。大約 3000 萬美元的改進將來自成本降低，這主要是我們在 2023 年 2 月實施的重組所帶來的。正如我們在第一季所證明的那樣，這些成本降低將導致營運費用降低和毛利率上升，因為其中一些成本是銷貨成本的一部分。 EBITDA 的其餘改善將來自到岸產品成本的降低，這將推動毛利率進一步擴張，正如我們在第一季所展示的那樣。

Partially offsetting these gross margin gains will be some deleverage in JRNY COGS as fiscal '24 spend is planned to be higher year-over-year, primarily due to this depreciation. While we saw reduced discounting in our Retail segment in Q1, we continue to expect no improvement in the discounting environment for the full year. which is reflected in our guidance.

JRNY COGS 的去槓桿化將部分抵消這些毛利率的成長，因為 24 財年的支出計畫比去年同期增加，這主要是由於這種貶值。雖然我們看到第一季零售部門的折扣減少，但我們仍然預計全年折扣環境不會改善。這反映在我們的指導上。

While we have rightsized our inventory and exit Q1 in a position of strength, our competitors and the retailers continue to be pressured on the inventory front, so we have planned discounts to be flattish year-over-year. And lastly, we expect JRNY members to be about 625,000 at year-end, approximately 23% growth versus last year.

雖然我們調整了庫存規模並以強勢地位退出第一季度，但我們的競爭對手和零售商繼續在庫存方面面臨壓力，因此我們計劃折扣與去年同期持平。最後，我們預計 JRNY 會員到年底將達到約 625,000 名，比去年增長約 23%。

Like many other companies, we are preparing for a continuation of a difficult operating environment. We have secured the financial flexibility necessary to navigate the current landscape, and will remain focused on operational excellence while continuing to execute on our North Star strategy. I'll now turn it back over to Jim.

與許多其他公司一樣，我們正在為持續困難的營運環境做好準備。我們已經確保了應對當前情況所需的財務靈活性，並將繼續專注於卓越運營，同時繼續執行我們的北極星策略。我現在將把它轉回給吉姆。

Thank you, Aina. We're excited by the momentum of our operational excellence efforts and for the launch of our portfolio of new connected fitness features and equipment ahead of the holiday season. which reinforces our strong belief in the enduring long-term shift towards home fitness. We are committed to staying agile and adaptable in the face of any challenge or opportunities that may arise. Our focus remains on driving strong cash flow and supporting our path back to profitability.

謝謝你，艾娜。我們對卓越營運努力的勢頭以及在假期前推出新的互聯健身功能和設備組合感到興奮。這增強了我們對家庭健身的持久長期轉變的堅定信念。我們致力於在面對可能出現的任何挑戰或機會時保持敏捷性和適應性。我們的重點仍然是推動強勁的現金流並支持我們恢復利潤。

We are pleased with our performance to start the year, but recognize that there's still a long way to go in fiscal '24. We are committed to delivering exceptional equipment and experiences to consumers and charting a course that leads to a sustained long-term growth. Finally, I would like to thank our employees and partners for their passion to deliver winning products and experiences for our customers. And with that, I'd like to turn it over for questions. Operator?

我們對年初的表現感到滿意，但認識到 24 財年還有很長的路要走。我們致力於為消費者提供卓越的設備和體驗，並制定可持續長期成長的路線。最後，我要感謝我們的員工和合作夥伴為我們的客戶提供成功的產品和體驗的熱情。說到這裡，我想把它轉過來供大家提問。操作員？

(Operator Instructions) The first question comes from Michael Swartz with Truist Securities.

（操作員說明）第一個問題來自 Truist Securities 的 Michael Swartz。

Maybe just first question. I think you made some comments about Retail. The retail environment is still -- you're still kind of cautious around it, and retailers have worked down inventory. But maybe give us a little bit of your visibility into the back half of the year around maybe their ordering plans or merchandising plans for the fitness category.

也許只是第一個問題。我認為您對零售業發表了一些評論。零售環境依然——你仍然保持謹慎態度，零售商已經減少了庫存。但也許可以讓我們了解他們下半年健身類別的訂購計劃或銷售計劃。

Yes, I'll start, and I'll see if Aina wants to add anything to this. So Retail, of course, is always going to be an important part of our omnichannel approach to the market, right? And so we believe in Retail. The retail environment remains uncertain. We're definitely encouraged by a few things we're seeing. We're seeing sell-through, not only in Direct, which is indicative of consumer demand, but also as retailers work down that inventory as we cited on the call.

是的，我會開始，我會看看艾娜是否想對此添加任何內容。當然，零售永遠是我們全通路市場策略的重要組成部分，對嗎？因此，我們相信零售業。零售環境仍然不確定。我們所看到的一些事情確實讓我們感到鼓舞。我們不僅看到直接銷售的情況，這表明了消費者的需求，而且正如我們在電話會議中提到的那樣，零售商減少了庫存。

So that is a good leading indicator. The rebuy is only the rebuy when they make it, but we look for these types of leading indicators there. So we know our products are moving in Direct. That gives us greater confidence in Retail as well. Same products, in many cases. And we haven't seen any structural changes in Retail. Like we've been watching whether certain retailers would get out of the fitness category or deemphasize the fitness category in any way.

所以這是一個很好的領先指標。重新購買只是他們進行重新購買時的重新購買，但我們在那裡尋找這些類型的領先指標。所以我們知道我們的產品正在直接運輸。這也讓我們對零售業更有信心。在很多情況下，都是相同的產品。我們還沒有看到零售業發生任何結構性變化。就像我們一直在觀察某些零售商是否會退出健身類別或以任何方式淡化健身類別一樣。

I'd say a positive event was Amazon's Prime Day. It was very encouraging, though it's off-season. It -- the sell-through there far exceeded our expectations, especially in the strength category. And it's another leading indicator for us that our brands and portfolio are strong as we get into the replenishment season.

我想說亞馬遜的 Prime Day 是一個積極的事件。儘管現在是淡季，但這還是非常令人鼓舞的。那裡的銷售量遠遠超出了我們的預期，尤其是在強度類別中。這是我們的另一個領先指標，顯示我們的品牌和產品組合在進入補貨季節時表現強勁。

That said, the holiday ordering typically happens in late second quarter, early third quarter as you're well aware. So with reduced lead times, we're hopeful that we start to see those orders. We're getting some of them, but we'd expect to see them in that time frame. So anything you would add on, Aina?

也就是說，如您所知，假期訂購通常發生在第二季末、第三季初。因此，隨著交貨時間的縮短，我們希望能夠開始看到這些訂單。我們已經收到了其中一些，但我們預計會在那個時間範圍內看到它們。艾娜，你還有什麼要補充的嗎？

No, I think you covered it, Jim.

不，我想你已經報道過了，吉姆。

Okay. That's great. And then maybe just with the rebranding, and I think you talked about 2 rebrandings, one of the Bowflex brand and then also the corporate rebranding. Maybe just walk us through, high level, your thoughts around doing that. And then 2, were there -- I would assume there's costs related to that. And were those costs already embedded in your prior guidance?

好的。那太棒了。然後也許只是品牌重塑，我想您談到了兩次品牌重塑，其中之一是 Bowflex 品牌，然後是企業品牌重塑。也許只是向我們介紹一下您對此的想法。然後2，在那裡——我假設有與此相關的成本。這些成本是否已包含在您先前的指導中？

Yes. The answer to that is the costs are already in there. As I mentioned, we wanted -- the reason -- one of the reasons we wanted to get enhanced balance sheet is to be able to flex up and down on the opportunity in marketing in particular, so we'll definitely do that. But look, Bowflex is a great brand. It has tremendous equity, stands for quality, particularly the strength category. We've made it an excellent cardio brand on top of that.

是的。答案是成本已經在那裡了。正如我所提到的，我們想要——原因——我們想要增強資產負債表的原因之一是能夠靈活地利用行銷機會，特別是在行銷方面，所以我們肯定會這樣做。但你看，Bowflex 是一個偉大的品牌。它具有巨大的公平性，代表著質量，尤其是實力類別。除此之外，我們也使其成為一個優秀的有氧運動品牌。

But it needs refreshing, right? Because I think still people think about the old rod gyms and maybe a Chuck Norris commercial, and the guy never actually worked for us. So that's kind of some of the vision in the cloud that we hear. And so it's time to modernize it. And we modernized it around some of the statements I made in the slide. You see the imagery, but it's really about getting out of the sea of sameness. Everything is black and red in this whole industry, and we're changing it up a bit.

但它需要刷新，對吧？因為我認為人們仍然會想到舊的棒健身房，也許還有查克諾里斯的廣告，而這個人從未真正為我們工作過。這就是我們聽到的一些雲願景。所以是時候對其進行現代化改造了。我們圍繞著我在幻燈片中所做的一些陳述對其進行了現代化改造。你看到了這些影像，但這實際上是為了擺脫千篇一律的海洋。整個行業的一切都是黑與紅，我們正在對其進行一些改變。

We know that equipment now sits in the living room, and it's got to look great and sleek. And so you see that in our branding, on our products, but it's just time to really take advantage of the emotional aspects of exercise and why people do it. And we feel very strongly about bringing this to market. And then, of course, the first manifestation of the products that I mentioned as well. Aina, anything you would add?

我們知道設備現在位於客廳，必須看起來美觀且時尚。所以你可以在我們的品牌和產品中看到這一點，但現在正是真正利用運動的情感面以及人們這樣做的原因的時候了。我們非常想將其推向市場。當然，還有我提到的產品的第一個表現。艾娜，你還有什麼要補充的嗎？

No. I just would want to echo what Jim said about how important it is for us to elevate this really remarkable asset. Bowflex is one of the leading brands in the fitness category, and it really harkens back to like our North Star strategy. We've always said we're going to focus on short-term responsibility to never lose sight of the long term, and this is the result of several -- many quarters of effort to bring the Bowflex -- the new rebranded Bowflex to market.

不，我只是想呼應吉姆所說的，即提升這真正非凡資產對我們來說有多重要。 Bowflex 是健身類別的領導品牌之一，它確實讓人回想起我們的北極星策略。我們總是說，我們將專注於短期責任，永遠不會忽視長期目標，這是幾個季度（多個季度）努力將 Bowflex（新更名的 Bowflex）推向市場的結果。

And then you're absolutely right, and that was a great way to parse it. There will also be a company rebranding. We haven't announced the new name yet. We kind of want you to be on the edge of your seats. We'll announce that a bit later and plan to complete it by the end of the calendar year.

那麼你是絕對正確的，這是解析它的好方法。公司也將進行品牌重塑。我們還沒有宣布新名稱。我們希望您能坐立不安。我們將稍後宣布，並計劃在年底前完成。

(Operator Instructions) The next question comes from George Kelly with ROTH MKM.

（操作員說明）下一個問題來自 ROTH MKM 的 George Kelly。

I have 3 for you, the first one on your media spending. I was curious if you could disclose the advertising spend in the quarter. And I see just even before getting that number, it was -- looks like it was down quite a bit year-over-year. And so just curious, like what's the strategy there? When do you plan to turn it back on more aggressive? Maybe it's around these new products, but any kind of information on that would be helpful.

我有 3 個給你，第一個是關於你的媒體支出的。我很好奇您能否透露本季的廣告支出。我發現，就在得到這個數字之前，看起來它比去年同期下降了很多。所以只是好奇，例如那裡的策略是什麼？你打算什麼時候把它重新打開，變得更激進？也許是圍繞這些新產品，但任何有關這方面的資訊都會有幫助。

Sure. Why don't we start with the facts . Aina?

當然。我們為什麼不從事實開始呢？艾娜？

So advertising was about $1 million this year, so down versus last year about -- so it was about $5 million last year. And our intent really was to focus the spend on our highest revenue quarters. So you'll see it increase in Q2. And then our highest spend is in Q3, quarter ending December and the next highest spend will be in Q4, because January is a big month for us.

今年的廣告費用約為 100 萬美元，與去年相比下降了約 500 萬美元。我們的真正目的是將支出集中在收入最高的季度。所以你會看到它在第二季度有所增加。然後我們的最高支出出現在第三季度（截至 12 月的季度），下一個最高支出將出現在第四季度，因為一月對我們來說是一個重要的月份。

And I'll just add that given that spend, which is extraordinarily low, I was very pleased with our Direct performance, right? That's where most of that spend goes. And despite that low spend, we were able to drive revenue. And I think it goes back to what Aina was saying before.

我想補充一點，考慮到支出非常低，我對我們的 Direct 表現非常滿意，對嗎？這就是大部分支出的去向。儘管支出較低，我們仍然能夠增加收入。我認為這又回到了艾娜之前所說的。

You've got a known brand, you've got a choiceful portfolio of both strength and cardio at different price points, and even when people don't hear from you front and center in a low seasonal quarter, they're still buying from you and we still see demand there. So we were pleased on that. In terms of the trajectory, I mean, obviously, as Aina said, it's Q2 a little bit, but mostly Q3, where we plan to up our spend. But it's in both our guidance and our profitability numbers that we have been spending more in advertising.

你擁有一個知名品牌，你擁有不同價位的力量和有氧運動的精選產品組合，即使人們在淡季季度沒有收到你的來信，他們仍然會從你那裡購買您和我們仍然看到那裡的需求。所以我們對此感到高興。就軌跡而言，我的意思是，顯然，正如艾娜所說，第二季度有一點，但主要是第三季度，我們計劃增加支出。但從我們的指導和獲利數據來看，我們在廣告上的支出一直在增加。

Okay. Great. And then second question for me on your inventory. I was curious. Aina, you said in your prepared remarks a couple of times that you might tweak around your inventory just to make it commensurate with sales. Or I forget the exact language, but just curious. I mean, should we expect you to start building inventory again? Or like what's the near-term outlook for your inventory?

好的。偉大的。然後是關於你的庫存的第二個問題。我很好奇。艾娜，您在準備好的演講中多次說過，您可能會調整庫存，以使其與銷售額相稱。或者我忘了確切的語言，但只是好奇。我的意思是，我們應該期望你們再次開始建立庫存嗎？或者您的庫存的近期前景如何？

Yes. You should expect us to start building inventory again. Especially for Direct, we want to make sure that the inventory is in our DCs ready to meet consumer demand by November. So we've started buying it. You'll start seeing it increasing, will reflect higher balances in September.

是的。您應該期待我們再次開始建立庫存。特別是對於 Direct，我們希望確保我們的 DC 中的庫存已準備好在 11 月之前滿足消費者的需求。所以我們就開始買了。您將開始看到它增加，這將反映 9 月的更高餘額。

I think it's extraordinary, and I applaud our people for managing the inventory balance the way that they have. I mean I recall having about $160 million of inventory in October '21 as we all went into what we thought was going to be the second COVID holiday season. And from that point on, I would put our team up against anyone in the way that they've really worked down those inventory balances.

我認為這是非同尋常的，我對我們的員工以他們現有的方式管理庫存平衡表示讚賞。我的意思是，我記得 21 年 10 月我們的庫存約為 1.6 億美元，當時我們都認為這將是第二個新冠假期季節。從那時起，我會讓我們的團隊以真正降低庫存餘額的方式與任何人競爭。

And as Aina says, when you have opportunity, and you're talking about getting year-over-year growth in the back half of the year as we expect, you want to make sure that you've got the fuel for that in the inventory, so we will be building those positions commensurate with our sales expectations.

正如艾娜所說，當你有機會，並且你正在談論在今年下半年實現我們預期的同比增長時，你要確保你在今年下半年擁有實現這一目標的動力庫存，因此我們將建立與我們的銷售預期相稱的職位。

Got you. Got you. Okay. And then last question for me. I guess 2 quick ones on your full year guidance, on your revenue guidance. The 2 are -- the first one is, can you help just with a high-level split between Direct and Retail? I mean, I'm using a 50% rough split between the 2. Does that seem reasonable?

明白你了。明白你了。好的。然後是我的最後一個問題。我想有兩個關於您的全年指導和收入指導的快速內容。這兩個是——第一個是，你能幫助直接和零售之間的高層劃分嗎？我的意思是，我在兩者之間粗略分配了 50%。

And then the second question is, what hints are you looking at right now? I'm sure your Retail order book is one, but what else do you look just to get comfort around the holiday season? And how do you try to gauge that this early?

然後第二個問題是，你現在看到什麼提示？我確信您的零售訂單就是其中之一，但是為了在假期期間獲得安慰，您還會尋找什麼？您如何儘早評估這一點？

Sure. I'll start maybe with your second question, while Aina looks up what we can tell you to try to be helpful on that side. So I did mention before what we had seen in Retail. The inventory balances are coming down. The sell-through is good. The good Amazon Prime Day, which actually leaks over into our own Direct business in July a bit as well. So we're seeing demand for our products. We're not seeing structural changes in who carries the business.

當然。我可能會從你的第二個問題開始，而艾娜會找到我們可以告訴你的訊息，以便在這方面提供幫助。所以我之前確實有提到我們在零售業看到的情況。庫存餘額正在下降。銷量不錯。亞馬遜 Prime Day 的好消息實際上也滲透到了我們 7 月的直銷業務中。所以我們看到了對我們產品的需求。我們沒有看到業務負責人發生結構性變化。

We are still seeing the CFOs of many retailers being very cautious in their inventory positions overall. I said we've worked ours down very well, but not all of them. They have many more categories than we do. So they haven't worked that down. And so they're still cautious. We have a retailer CFO on our Board, and she reiterates that from the fact that we're hearing that kind of conservative nature that's going on in Retail right now. So the demand seems good for the products. The products seem to be moving.

我們仍然看到許多零售商的財務長對其整體庫存狀況非常謹慎。我說過我們已經很好地解決了我們的問題，但不是全部。他們的類別比我們多得多。所以他們還沒有解決這個問題。所以他們仍然保持謹慎。我們的董事會中有一位零售商首席財務官，她重申了這一點，因為我們聽到了零售業目前存在的這種保守性質。因此，產品的需求似乎不錯。產品似乎正在移動。

When we look over to Direct. It's acting seasonally as expected, especially, like I mentioned, with the low ad spend. So to get that out of the low ad spend, that tells us something. We feel more in control in the Direct business, of course. We have that marketing lever. We have a new refreshed brand that people love. We have new products coming as well.

當我們轉向 Direct 時。正如我所提到的，它的季節性表現正如預期的那樣，尤其是在廣告支出較低的情況下。因此，為了從低廣告支出中獲得這一點，這告訴了我們一些事情。當然，我們在直銷業務中感覺更有控制力。我們有行銷槓桿。我們有一個深受人們喜愛的煥然一新的品牌。我們也有新產品推出。

So all those things give us a fair amount of optimism going into the holidays. And yes, we're excited about it. We feel like the whole thing is, look, we've shown meaningful progress on our path to profitability, and that gives us kind of the wherewithal and the confidence to do these rebranding with these new products, additional marketing, those types of things.

因此，所有這些事情讓我們對假期充滿了樂觀。是的，我們對此感到興奮。我們覺得整件事情是，看，我們在獲利之路上取得了有意義的進展，這給了我們一定的資金和信心，可以透過這些新產品、額外的行銷等進行品牌重塑。

And then I'll try to be helpful. I think for -- like if I look at it for the full year, I would say assuming they're about 50-50 is fair because it's been that way in normal times if you kind of remove some of the COVID movement. And then I'll just remind you of the typical seasonality for each segment. They're a little bit different. Direct's highest volumes would be the quarter ending December, and then next highest is quarter ending March, because January is such a big month for Direct.

然後我會盡力提供協助。我認為，如果我看全年情況，我會說假設它們大約是 50-50 是公平的，因為如果你消除一些新冠疫情運動，正常時期就是這樣。然後我會提醒您每個細分市場的典型季節性。他們有點不同。 Direct 的最高銷售量將是截至 12 月的季度，然後下一個最高銷售量是截至 3 月的季度，因為一月對 Direct 來說是一個重要的月份。

For Retail, their highest, it starts actually building up a little bit in the quarter ending September because that's when some of the early orders come in, and then their highest is December. And their quarter ending March is not as high, because if they're going to sell it to customers in January, they needed to have bought it from us and receded it in the quarter ending December. So hopefully, that helps you with the quarterly seasonality.

對於零售業來說，其最高點實際上在截至 9 月的季度開始有所增加，因為那時一些早期訂單進來，然後最高點是 12 月。他們截至 3 月的季度並沒有那麼高，因為如果他們要在一月份將其出售給客戶，他們需要從我們這裡購買並在截至 12 月的季度收回它。希望這對您了解季度季節性有所幫助。

This concludes our question-and-answer session. I would like to turn the conference back over to Jim Barr for any closing remarks.

我們的問答環節到此結束。我想將會議轉回吉姆·巴爾（Jim Barr）發表閉幕詞。

Thank you to everyone on the call today for your continued support of Nautilus. We eagerly anticipate providing our next update on our second quarter fiscal year '24 earnings call in November. Have a great rest of the day.

感謝今天參加電話會議的所有人對 Nautilus 的持續支持。我們熱切期待在 11 月的 24 財年第二季財報電話會議上提供下一次更新。好好休息一下吧。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。