Nautilus Inc (NLS) 2016 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Nautilus Inc. fourth quarter and full-year 2016 earnings results conference call. (Operator Instructions). As a reminder, this conference is being recorded. And now, I'd like to turn the conference over to Mr. John Mills, of ICR. Please, go ahead, sir.

女士們，先生們，感謝各位的收看。歡迎參加Nautilus Inc. 2016年第四季及全年業績電話會議。 （操作員指示）。提醒一下，本次會議正在錄音。現在，我想將電話會議交給ICR的John Mills先生。先生，請開始。

Thank you. Good afternoon, everyone. Welcome to Nautilus' fourth quarter and full-year 2016 conference call. Participants on the call from Nautilus are Bruce Cazenave, Chief Executive Officer, Sid Nayar, Chief Financial Officer, and Bill McMahon, Chief Operating Officer. Our earnings release was issued earlier today and may be downloaded from our web site at nautilusinc.com, on the Investor Relations page.

謝謝。大家下午好。歡迎參加Nautilus 2016年第四季及全年電話會議。 Nautilus的與會者包括執行長Bruce Cazenave、財務長Sid Nayar和營運長Bill McMahon。我們的財報已於今天稍早發布，可從我們的網站nautilusinc.com的「投資者關係」頁面下載。

The earnings release includes a reconciliation of the non-GAAP financial measures mentioned in today's call, and with the most directly comparable GAAP measures. Remarks on today's conference call will include forward-looking statements, within the meanings of the Securities laws. These include statements if concerning financial projections, operating trends, anticipated growth and profitability, anticipated new product introductions, anticipated capital expenditures, planned and anticipated results of new product and business development initiatives, and anticipated benefits of the acquisition of Octane Fitness.

收益報告包含今日電話會議中提及的非公認會計準則 (non-GAAP) 財務指標與最直接可比較的公認會計準則 (GAAP) 指標的對帳。今日電話會議中的發言將包含證券法所定義的前瞻性陳述。這些陳述包括：財務預測、營運趨勢、預期成長和獲利能力、預期新產品推出、預期資本支出、新產品和業務發展計畫的計畫和預期結果，以及收購 Octane Fitness 的預期收益。

Forward-looking statements are subject to a number of risks and uncertainties, and actual results may differ materially from these statements. For more information about these risks, please refer to our most recent annual report on form 10K. Nautilus undertakes no obligation to update or otherwise publicly release any revision to forward-looking statements to reflect new information, events or circumstances after they were made, or to reflect the occurrence of unanticipated events. All information and comments regarding our operating results, pertaining to our continuing operations.

前瞻性陳述受許多風險和不確定性因素影響，實際結果可能與這些陳述有重大差異。有關這些風險的更多信息，請參閱我們最新的10K表格年度報告。 Nautilus不承擔更新或以其他方式公開發布對前瞻性陳述的任何修訂以反映其作出後的新資訊、事件或情況，或反映意外事件的發生的義務。所有關於我們經營業績的資訊和評論均與我們的持續經營業務有關。

And with that it is my pleasure to turn the call over to our CEO, Mr. Bruce Cazenave. Go ahead, Bruce.

好了，現在我很樂意將電話轉給我們的執行長布魯斯·卡澤納夫先生。請講，布魯斯。

Thanks, John. Good afternoon, everyone. And thank you for joining our call today. I'd like to start by providing a general overview of our fourth quarter and full-year results, and then we'll turn it over to Sid Nayar to review our financial results in more detail. Bill McMahon will follow providing details on each business segment, as well as updates on product activity. Finally, I will end today's call with some closing remarks before we open up the call for more questions.

謝謝，約翰。大家下午好。感謝大家今天參加我們的電話會議。首先，我想概述我們第四季和全年的業績，然後我們將請Sid Nayar更詳細地回顧我們的財務表現。接下來，Bill McMahon將詳細介紹各個業務部門以及產品活動的最新情況。最後，在開始提問之前，我將以一些結束語結束今天的電話會議。

In the fourth quarter, we generated strong increases in all key financial metrics of our business. Total revenue increased 15%, operating income increased 56%, and EBITDA increased by approximately 62% over the same period prior-year. The operating performance improvement was driven by several factors, including higher sales in our retail business, from the addition of Octane Fitness, gross margin improvement in all businesses, and achieving greater leverage of operating expenses.

第四季度，我們各項關鍵財務指標均實現強勁成長。總營收年增15%，營業利潤年增56%，息稅折舊攤提前利潤（EBITDA）較去年同期成長約62%。營運績效的提升得益於多項因素，包括Octane Fitness的加入帶來的零售業務銷售額成長、所有業務毛利率的提升以及營運費用槓桿的提升。

Operating income in our direct business increased by 21% over the same quarter prior-year, even though top-line revenue in this business continued to be impacted by weak consumer response to our media investments during the pre-election period. The strategic decision to defer advertising media spending during the pre-election period, even though it adversely affected sales, was the right one. Bill will provide additional color on this channel as well as others in a few moments.

儘管選舉前消費者對我們媒體投資的反應疲軟，直接業務的營業收入仍較去年同期成長了21%。儘管選舉前推遲廣告媒體支出的策略決策對銷售額產生了不利影響，但這項決策是正確的。比爾稍後將詳細介紹該頻道以及其他頻道。

The fourth quarter rounded out another year of solid revenue growth with increased profitability and achieving greater operating leverage. Operating margins for the full year improved by 110 basis points to 13.1%, and was a direct result of our team's disciplined cost management practices and ability to adapt quickly to changing conditions in both the retail and direct-to-consumer markets.

第四季度，公司營收再創佳績，獲利能力增強，營運槓桿率也進一步提升，為全年業績的穩健成長畫上了圓滿的句號。全年營運利潤率提升110個基點，達到13.1%，這直接得益於我們團隊嚴謹的成本管理實踐，以及快速適應零售和直銷市場不斷變化的環境的能力。

In addition during 2016, we made major strides in advancing our primary strategic initiatives in the area of building the innovation pipeline and capabilities, diversifying product lines and channels of distribution, and expanding access points in international markets.

此外，2016年，我們在建立創新管道和能力、多樣化產品線和分銷管道以及擴大國際市場接入點方面的主要策略舉措取得了重大進展。

The first full year of having added Octane Fitness to our portfolio was an important contributor to all of these initiatives. Looking into 2017, we do expect to achieve another year of revenue and profit growth, compared to 2016, with increases coming from all three channels of our business; Direct, Retail, and Commercial and Specialty. I will provide more specifics in terms of our plans for 2017 at the conclusion of our prepared remarks.

Octane Fitness 加入我們投資組合後的第一個完整財年，對所有這些舉措都做出了重要貢獻。展望 2017 年，我們預計營收和利潤將比 2016 年再次成長，成長將來自我們所有三個業務管道：直銷、零售以及商業和專業。我將在準備演講結束時詳細介紹 2017 年的計畫。

Additionally, in response to a number of investors and analysts, who in the past have requested that we provide more definition concerning the near-term outlook, we will be providing some guidance towards the end of the call.

此外，為了回應一些投資者和分析師過去提出的要求，即我們對近期前景提供更多定義，我們將在電話會議結束時提供一些指導。

Now, I'd like to turn the call over to Sid to review our financials in more detail. Sid?

現在，我想將電話轉給 Sid，讓他更詳細地審查我們的財務狀況。 Sid？

Thank you, Bruce. Net sales from the fourth quarter of 2016 totalled $125.8 million, an increase of 15.2%, as compared to the same period in the prior year. Net sales for the year ended December 31, 2016, totaled $406 million versus $335.8 million for the same prior period, an increase of 20.9%.

謝謝，布魯斯。 2016年第四季淨銷售額總計1.258億美元，較去年同期成長15.2%。截至2016年12月31日的年度淨銷售額總計4.06億美元，去年同期為3.358億美元，成長20.9%。

Fourth quarter gross margins increased to 66.8% in the Direct segment, up approximately 630 basis points, an increase to 33.34% in the Retail segment, up approximately 570 basis points when compared to the same quarter last year. On an overall basis, total Company gross margins for the fourth quarter 2016 increased 290 basis points to 51%, versus the same period prior year.

第四季度，直銷業務毛利率增至66.8%，較去年同期上升約630個基點；零售業務毛利率增至33.34%，較去年同期上升約570個基點。整體而言，2016年第四季公司總毛利率較去年同期上升290個基點，達到51%。

On an annual basis gross margins for the year ended December 31, 2016 improved 50 basis points to 52.1%. Total operating expenses for the fourth quarter of 2016 as a percentage of net sales decreased to 35.6% from 36.8% in the same period last year. As a percentage of net sales, lower selling and marketing costs were partially offset by higher planned, research and development expenses, and incremental expenses from the addition of Octane. Operating expenses for the year ended December 31, 2016, as a percentage of sales, improved to 38.9%, as compared to 39.6% for the same prior period.

2016年12月31日止年度，毛利率年增50個基點至52.1%。 2016年第四季總營運費用佔淨銷售額的百分比從去年同期的36.8%降至35.6%。銷售和行銷成本的下降部分被計劃支出、研發支出以及Octane產品上市帶來的增量支出的增加所抵消。 2016年12月31日止年度，營運費用佔銷售額的百分比提升至38.9%，去年同期為39.6%。

Sales and marketing expense for the fourth quarter of 2016 totaled $34.2 million, versus $31.4 million in the same period last year. Reflecting higher media spending, partially offset by lower variable selling expenses, and lower bad debt expense, as the prior-year quarter included the write-off of the TSA receivable.

2016年第四季銷售及行銷費用總計3,420萬美元，去年同期為3,140萬美元。這反映了媒體支出的增加，但部分被變動銷售費用的降低所抵消，以及壞帳支出的降低（因為去年同期計入了TSA應收帳款的沖銷）。

As a percent of net sales, sales and marketing expense decreased to 27.2% of net sales, as compared to 28.8% of net sales in the same period last year. The percentage decrease was primarily due to the acquisition of Octane, which is reported within the Retail segment and has a lower selling and marketing percentage than the Company average.

銷售及行銷費用佔淨銷售額的百分比降至27.2%，去年同期為28.8%。百分比下降主要由於收購了Octane，Octane隸屬於零售業務部門，其銷售及行銷費用佔比低於公司平均值。

For the year ended December 31, 2016, sales and marketing expenses were 28.4% of net sales, compared to 30.3% of net sales for the same period in the prior year. The decrease as a percent of net sales was due to including the Octane acquisition, as well as faster growth in the organic retail business, which also has a lower marketing expense percentage than the Company average.

截至2016年12月31日止年度，銷售及行銷費用佔淨銷售額的28.4%，去年同期為30.3%。佔淨銷售額百分比的下降是由於納入了Octane的收購，以及有機零售業務的快速增長，而該業務的營銷費用佔比也低於公司平均水平。

General and Administrative expenses were $7.2 million, or 5.7% of net sales for the fourth quarter of 2016, which compares to $6.1 million, or 5.6% of net sales in the same period last year. The increased dollar spending in G&A was primarily due to higher amortization expense and the inclusion of Octane expenses, partially offset by lower incentive expense and legal fees.

2016年第四季，總務及行政費用為720萬美元，佔淨銷售額的5.7%，去年同期為610萬美元，佔淨銷售額的5.6%。總務及行政費用的增加主要由於攤銷費用的增加以及Octane費用的納入，但激勵費用和法律費用的減少部分抵消了這一增加。

General and administrative expenses for the year 2016 as a percentage of net sales, total 7.1% as compared to 6.4% for the same prior period, primarily driven by the same factors. Research and Development costs in the fourth quarter of 2016 were $3.5 million or 2.8% of net sales, compared to $2.6 million or 2.4% of net sales in the same period last year. The dollar increase was driven by additional resources added to supplement our new product development capability, along with inclusion of the Octane acquisition.

2016年，一般及行政費用佔淨銷售額的百分比為7.1%，而上年同期為6.4%，主要受相同因素影響。 2016年第四季研發成本為350萬美元，佔淨銷售額的2.8%，去年同期為260萬美元，佔淨銷售額的2.4%。研發成本的成長源自於我們為增強新產品開發能力所投入的額外資源，以及對Octane的收購。

Research and development costs for the full year 2016 as a percentage of sales totaled 3.4%, as compared to 2.9% for the prior year. Operating income for the fourth quarter of 2016 increased 56.4% to $19.3 million, as compared to operating income of $12.3 million in the same quarter of last year. The increase reflects higher gross margins in both segments, combined with improved operating leverage of sales and marketing expenses.

2016年全年研發成本佔銷售額的3.4%，去年同期為2.9%。 2016年第四季營業利潤成長56.4%，達1,930萬美元，上年同期營業利潤為1,230萬美元。這一增長反映了兩個部門毛利率的提高，以及銷售和行銷費用營運槓桿的提升。

Operating margin for the fourth quarter of 2016 increased to 15.4%, compared to 11.3% for the same period last year. For the full year 2016, operating income totaled $53.4 million, or 13.1% of net sales, up 32.6% compared to the same period last year. Income from continuing operations for the fourth quarter of 2016 was $12 million or $0.38 per diluted share, as compared to $9.9 million or $0.32 per diluted share for the same period last year.

2016年第四季營業利益率增至15.4%，去年同期為11.3%。 2016年全年營業利潤總額為5,340萬美元，佔淨銷售額的13.1%，較去年同期成長32.6%。 2016年第四季持續經營利潤為1,200萬美元，即每股攤薄收益0.38美元，去年同期為990萬美元，即每股攤薄收益0.32美元。

The effective tax rate for the fourth quarter of 2016 was 36.4%, compared to 20.3% in the same period last year. The prior-year quarter included a tax benefit of $2 million, related to the release of foreign tax credit valuation allowances. Income from continuing operations for the year 2016 totaled $35.1 million or $1.12 per diluted share as compared to $26.8 million or $0.85 per diluted share for the full year 2015.

2016年第四季有效稅率為36.4%，去年同期為20.3%。去年同期包含200萬美元的稅收優惠，與釋放外國稅收抵免估值準備金有關。 2016年持續經營利潤總計3,510萬美元，即每股攤薄收益1.12美元，而2015年全年持續經營利潤為2,680萬美元，即每股攤薄收益0.85美元。

Prior-year financial metrics including gross margins, operating income and earnings per share were negatively impacted by unusual one-time items booked here in Q4 2016 and will be highlighted in the segment results that follow.

2016 年第四季登記的異常一次性項目對毛利率、營業收入和每股盈餘等去年同期財務指標產生了負面影響，並將在接下來的分部業績中重點介紹。

Turning now to our segment results, net sales in the direct business totaled $65.2 million for the fourth quarter of 2016, a 2.7% decrease over the same quarter last year.

現在來看看我們的分部業績，2016 年第四季直銷業務淨銷售額總計 6,520 萬美元，比去年同期下降 2.7%。

The decrease in net sales in the direct business was due to declines in the Tread Climber product line which outweighed continued growth of the Bowflex Max Trainer product line. Gross margin for the direct business improved by 630 basis points to 66.8%, for the fourth quarter of 2016 compared to 60.5% in the same quarter of last year.

直銷業務淨銷售額下降是由於Tread Climber產品線的銷售下滑，抵銷了Bowflex Max Trainer產品線的持續成長。 2016年第四季直銷業務毛利率提升630個基點至66.8%，去年同期為60.5%。

Prior-year gross margins and operating income results were negatively impacted by a $2.5 million arbitration settlement expense, and a $1.4 million inventory reserve of our discontinued nutrition products. Operating income for the fourth quarter of 2016 in our direct business was $12 million, compared to $9.9 million in the same quarter prior-year.

去年同期的毛利率和營業利潤受到250萬美元仲裁和解費用以及140萬美元已停產營養產品庫存儲備的負面影響。 2016年第四季度，我們直接業務的營業利潤為1,200萬美元，而去年同期為990萬美元。

Turning to our Retail segment, net sales for the fourth quarter of 2016 increased 43.6% to $60 million, compared to $41.8 million in the fourth quarter of last year.

談到我們的零售部門，2016 年第四季的淨銷售額成長 43.6%，達到 6,000 萬美元，而去年第四季為 4,180 萬美元。

The improvement reflects the inclusion of Octane Fitness in this year's numbers, partially offset by a decline in our organic retail business. Gross margins for the retail business improved by 570 basis points to 33.3% in the fourth quarter of 2016, as compared to 27.6% for the prior period driven by favorable channel and product mix and improved supply chain costs.

這一成長反映了Octane Fitness被納入今年業績數據的影響，但部分抵消了我們有機零售業務的下滑。 2016年第四季，零售業務毛利率提升570個基點至33.3%，而上一季為27.6%，這得益於有利的通路和產品組合以及供應鏈成本的改善。

In the fourth quarter of 2016, operating income for the Retail business totaled $12.2 million, as compared to $7 million in the same period of last year, due to the higher revenue and improved gross margins.

2016年第四季，零售業務的營業收入總計1,220萬美元，而去年同期為700萬美元，這得益於收入增加和毛利率提高。

Now, turning to the consolidated balance sheet. Cash totaled $79.6 million as of December 31, 2016, with $64 million of debt. This compares to $60.8 million in cash and $80 million of debt at December 31, 2015. Working capital totaled $85 million, as of year-end 2016, compared to $69.4 million at the end of 2015. The increase in working capital was primarily due to an $18.8 million increase in cash and marketable securities.

現在，我們來看看合併資產負債表。截至2016年12月31日，現金總額為7,960萬美元，負債為6,400萬美元。相較之下，2015年12月31日，現金總額為6,080萬美元，債務總額為8,000萬美元。截至2016年底，營運資本總額為8,500萬美元，而2015年底為6,940萬美元。營運資本的增加主要歸因於現金和有價證券增加了1880萬美元。

Inventories were $47 million as of December 31, 2016, compared to $42.7 million at December 31, 2015. The increase in inventory versus year-end 2015 is primarily due to increased stock (inaudible) specific product lines to support the higher velocity SKUs. Trade payables was $66 million as of December 31, 2016, compared to $61.7 million at the end of 2015.

截至2016年12月31日，庫存為4,700萬美元，而2015年12月31日為4,270萬美元。庫存較2015年末有所增加，主要原因是特定產品線庫存增加（聽不清楚），以支持更高週轉率的SKU。截至2016年12月31日，貿易應付款項為6,600萬美元，而2015年末為6,170萬美元。

Capital expenditures totaled $4.7 million for the year ended December 31, 2016, with spending primarily on product tooling, IT assets and facility infrastructure. We anticipate full-year CapEx for 2017 to be in the range of $7 million dollars to $8 million, primarily focused on product tooling and IT integration costs.

截至2016年12月31日的年度，資本支出總計470萬美元，主要用於產品工裝、IT資產和設施基礎設施。我們預計2017年全年資本支出將在700萬美元至800萬美元之間，主要用於產品工裝和IT整合成本。

The Company also repurchased $5.4 million of stock during Q4 2016, as part of the previously disclosed buy back program.

作為先前披露的回購計劃的一部分，該公司還在 2016 年第四季回購了價值 540 萬美元的股票。

At this time I'd like to turn it over to Bill McMahon, our Chief Operating Officer, who will provide additional insights into our business and key products. Bill?

現在，我想把時間交給我們的營運長比爾麥克馬洪 (Bill McMahon)，他將對我們的業務和主要產品提供更多見解。比爾？

Thank you, Sid. Good afternoon, everyone. I'd like to provide additional background on our recent results and the overall position of our business, and discuss some of our new product activity.

謝謝Sid。大家下午好。我想進一步介紹我們最近的業績和業務的整體狀況，並討論一些新產品的活動。

Starting with the direct segment, our slight decrease in sales during the fourth quarter, reflected the continuation of soft consumer response conditions, that impacted our Q3 performance, for about one half of the quarter. Encouragingly, following the election and more specifically from Black Friday onward, we saw a return to positive year-over-year growth in our Max Trainer category. However, that growth was offset somewhat as Tread Climber sales continued lower, reflecting its aging life cycle.

從直銷業務開始，我們第四季銷售額略有下降，這反映出消費者反應持續疲軟，影響了我們第三季約一半的業績。令人鼓舞的是，在大選之後，更具體地說是從黑色星期五開始，我們的Max Trainer類別恢復了同比增長。然而，由於Tread Climber的銷量持續下滑，這一增長在一定程度上被抵消，反映出其生命週期的老化。

Overall for the quarter, we saw a return to more favorable media conditions in the post-election environment. Given those conditions, we increased our media investment by 14%, and closed the revenue gap versus prior year, especially as compared to the large gap created in Q3.

總體而言，本季度，我們看到選舉後媒體環境回升。有鑑於此，我們將媒體投資增加了14%，並縮小了與去年同期的營收差距，尤其是與第三季的巨大差距相比。

While we're pleased to return to a growth trajectory in Max Trainer following market disruption last year, we have two near-term challenges. First, the media ROI for Max Trainer in Q1 2016 was historically high, as the product was still in its early growth trajectory mode.

雖然我們很高興看到 Max Trainer 在去年市場動盪後重回成長軌道，但我們近期面臨兩大挑戰。首先，由於 Max Trainer 仍處於早期成長階段，因此 2016 年第一季的媒體投資報酬率創歷史新高。

One year later, Max continues to grow for us, but at a more modest level due to the much higher baseline revenue number. As such, the media ROI while still good, is not as high it was as in prior year. This will put some pressure on direct channel profit as we normalize to the new level of performance, and invest in further growth.

一年過去了，Max 為我們帶來的收入仍在成長，但由於基準收入數字大幅提升，成長幅度有所放緩。因此，媒體投資報酬率雖然仍然不錯，但不如去年那麼高。隨著我們逐步適應新的績效水準並投資於進一步的成長，這將對直接通路利潤造成一定壓力。

Secondly, our Tread Climber product line is now entering its 12th year of television advertising, and we continue to see ongoing television performance decline in this category, due primarily to the natural product life cycle. Tread Climber will level out at a new lower revenue point, but we've not yet reached that level and, thus, Tread Climber declines will be a near-term challenge to the overall direct channel growth path. Though, the introduction of our newest direct product the Bowflex hybrid velocity trainer, is intended to offset this decline.

其次，我們的Tread Climber產品線已進入電視廣告投放的第12個年頭，我們持續看到該類別的電視廣告表現持續下滑，這主要是由於產品生命週期的自然變化。 Tread Climber的營收將在新的較低點趨於平穩，但我們尚未達到該水平，因此，Tread Climber的下滑將對整體直銷管道的成長路徑構成短期挑戰。不過，我們最新直銷產品Bowflex混合速度訓練器的推出旨在抵銷這一下滑趨勢。

As a result, in the first half of 2017, especially Q1, we likely will not see the same expansion we posted in Q1 of 2016. However, we will continue to invest in growth for Max Trainer and we anticipate growth in our direct business for the full-year 2017.

因此，在 2017 年上半年，尤其是第一季度，我們可能不會看到與 2016 年第一季相同的擴張。但是，我們將繼續投資於 Max Trainer 的成長，我們預計 2017 年全年我們的直接業務將實現成長。

As mentioned before, Direct's newest product, the Hybrid Velocity Trainer, or HVT, is on track in terms of quality, cost, and time to market.

如前所述，Direct 的最新產品 Hybrid Velocity Trainer（HVT）在品質、成本和上市時間方面均已達標。

Bowflex HVT combines strength and cardio training into one product, bringing the benefits of both to the consumer, along with workout programming and mobile app support. We demonstrated a prototype of Bowflex HVT in our New York product showcase last fall and we're excited to bring it to market. We plan to launch before mid-year, and we'll have more information on that launch in our next earnings call.

Bowflex HVT 將肌力訓練和有氧訓練融為一體，為消費者帶來兩者的益處，並提供運動計畫和行動應用程式支援。去年秋天，我們在紐約產品展示會上展示了 Bowflex HVT 的原型，我們非常高興能夠將其推向市場。我們計劃在年中之前推出該產品，並在下次財報電話會議上公佈更多相關資訊。

Turning now to our Retail segment. Our Q4 revenue results did not meet our expectations. While our sales grew more than 43% year-over-year, that growth was primarily due to the acquisition of Octane Fitness. Our organic retail sales declined 7% in the quarter, though we were encouraged by the 570 basis point improvement in gross profit, which consisted of further gains in our organic retail margins, as well as the contribution of commercial and specialty sales via Octane Fitness.

現在談談我們的零售業務。第四季的營收表現未達預期。雖然銷售額年增超過43%，但這主要歸功於對Octane Fitness的收購。本季有機零售銷售額下降了7%，但毛利成長了570個基點，這令我們感到鼓舞，這得益於有機零售利潤率的進一步提升，以及Octane Fitness帶來的商業和專賣店銷售額的貢獻。

It's important to note that internally we evaluate mass retail over the last six months of the year, versus Q3 and Q4 as stand-alone quarters. Our reasoning is that the selling process is heaviest in late September and early October, and variance in shipment timing during that period can swing results in either quarter.

值得注意的是，我們內部評估的是去年最後六個月的大眾零售業績，而不是將第三季和第四季作為獨立季度。我們的理由是，9月底和10月初的銷售最為活躍，這段時間的出貨時間差異可能會影響兩季的業績。

Using that as an evaluation method, our mass retail sales did increase in the second half of the year. Nonetheless, there were near-term challenges in Q4. First, we noted a pattern of very deep promotions and daily deal buying by our competitors in the eCommerce space during December and early January.

以此作為評估方法，我們的大眾零售銷售額在下半年確實有所成長。儘管如此，第四季也面臨一些短期挑戰。首先，我們注意到，12月至1月初，競爭對手在電商領域推出了非常大規模的促銷活動和每日團購。

We chose not to erode our margins by matching those deals, which we felt were not sustainable and potentially involved aged inventory. Second, and also related to the question of inventory, during our last earnings call, we highlighted some concern with certain retailers being cautious in their inventory positions, and that fact could influence their re-buying patterns in Q4.

我們選擇不透過匹配這些交易來侵蝕利潤率，因為我們認為這些交易不可持續，而且可能涉及陳舊庫存。其次，同樣與庫存問題有關，在上次財報電話會議上，我們強調了對某些零售商謹慎管理庫存的擔憂，這可能會影響他們在第四季度的重新採購模式。

That concern manifested itself during the quarter, as certain of our largest accounts reduced their inventory positions in terms of weeks of inventory on hand, as compared to projected sales by significant amounts for our products. These reductions occurred despite sell-through of Nautilus product continuing to be favorable.

這種擔憂在本季度有所體現，我們一些最大的客戶減少了庫存週數（以庫存週數計算），而我們產品的預期銷售額則大幅低於預期。儘管Nautilus產品的銷售情況持續良好，但庫存仍然出現了減少。

We suspect this is a new focus by certain retailers on optimizing their return on working capital and profitability. We anticipate that this behavior will level out in the long run at a new level of on-hand products, and if our sell-through continues to be strong then our comparable sales will return to normal. But this is a near-term challenge to our online retail segment, which will put pressure on our ability to match comparable sales from Q1 2016.

我們懷疑這是某些零售商為了優化營運資本回報率和獲利能力而採取的新措施。我們預計，這種行為將在長期內隨著現有產品數量的增加而趨於平穩，如果我們的銷售量持續強勁，那麼我們的可比銷售額將恢復正常。但這對我們的線上零售部門來說是一個短期挑戰，將從2016年第一季開始對我們實現可比較銷售額目標的能力構成壓力。

We are pleased with several elements of our retail business. For example, in 2016 our sales in the international market, which we define as outside the US and Canada, grew 56%, excluding the addition of Octane sales. That growth occurred in both established and emerging markets.

我們對零售業務的幾個方面感到滿意。例如，2016年，我們在國際市場（我們將其定義為美國和加拿大以外的地區）的銷售額成長了56%，這不包括Octane的銷售額。這一成長同時發生在成熟市場和新興市場。

Further, in our commercial segment, we continue to grow sales of the Zero Runner ZR8000, which is now being introduced in the international market. And lastly, our Schwinn Airdyne AD 8 and AD Pro products also gained market share on a global basis and as such we have decided to further expand this line of products.

此外，在商用領域，Zero Runner ZR8000 的銷售持續成長，目前該產品已在國際市場推出。此外，我們的 Schwinn Airdyne AD 8 和 AD Pro 產品在全球的市佔率也不斷提升，因此我們決定進一步擴展該產品線。

International now represents 6% of our revenue, which has improved, but this remains an area ripe for future growth.

國際業務目前占我們總收入的 6%，這一比例有所提高，但仍是未來成長的潛力領域。

During our Q3 earnings call, we announced our plans to partner with Dick's Sporting Goods to place the Max Trainer M3 within Dick's stores nationwide for in store purchase. Additionally, we also conducted a smaller test involving a Bowflex branded store within a store concept, also with Dick's.

在第三季財報電話會議上，我們宣布了與迪克體育用品公司 (Dick's Sporting Goods) 合作的計劃，將在全美各地的迪克體育用品商店中銷售 Max Trainer M3 健身器材。此外，我們也與迪克體育用品公司合作，在一家 Bowflex 品牌店中店進行了小規模的測試。

These efforts are ongoing and we'll compare results with the Dick's Sporting Goods team at the end of this fitness season. I can say now we're very impressed with the partnership and teamwork shown by Dick's Sporting Good during this initiative. If successful, we feel that this approach could further optimize the reach of our direct media advertising to include those who prefer to buy in store through a trusted major retailer.

這些努力仍在持續進行中，我們將在本健身季結束後與迪克體育用品團隊進行比較結果。現在我可以說，我們對迪克體育用品在這次活動中展現的合作和團隊精神印象深刻。如果成功，我們認為這種方法可以進一步優化我們直銷媒體廣告的覆蓋範圍，涵蓋那些喜歡透過值得信賴的大型零售商到店購物的顧客。

One last note in retail. Sales of Octane-branded products were down versus prior year in the quarter by $1.6 million. This decline was anticipated, however, and is attributable to the inclusion in the prior-year Q4 of the launch and pipeline fill of both a new Zero Runner product and the Octane XT One Elliptical.

最後，零售方面值得關注的是，本季 Octane 品牌產品的銷售額較去年同期下降了 160 萬美元。不過，這一下降在意料之中，原因是去年第四季推出了一款新的 Zero Runner 產品，並已開始在產品線中投入使用。 Octane XT One 橢圓機也已在去年同期上市並投入使用。

Commercial and specialty sales improved overall during the second half of 2016 by 4%, and we anticipate growth in this segment for the full year 2017. We have several new product launches planned for our retail channel in 2017, expanding consumer and commercial markets across a variety of modalities. We'll provide more detail on those launches in our next earnings call.

2016年下半年，商業和專業產品銷售額整體成長了4%，我們預計該領域2017年全年也將成長。我們計劃在2017年在零售通路推出多款新產品，以拓展多種模式的消費和商業市場。我們將在下次財報電話會議上詳細介紹這些新品的發布。

In terms of inventory, we're well balanced and positioned to meet our needs in 2017. And additionally our transition process with Octane to achieve full integration is well on track and it's already delivering benefits.

在庫存方面，我們已經做好了充分的平衡，可以滿足 2017 年的需求。此外，我們與 Octane 實現全面整合的過渡過程進展順利，並且已經產生了效益。

So in summary, despite the recent challenges, based on our current knowledge of consumer response rates, very strong credit availability and approval rates, retailer plans and our product launch road map, we do anticipate all of our business segments to grow in both revenue and profit in 2017. And Bruce will provide more color on this outlook in his comments.

總而言之，儘管最近面臨挑戰，但基於我們目前對消費者回應率、非常強勁的信貸可用性和批准率、零售商計劃以及我們的產品發布路線圖的了解，我們預計所有業務部門在2017年的收入和利潤都將實現成長。布魯斯將在他的評論中對這一前景進行更詳細的闡述。

And with that I'd like to turn it back over to him. Bruce?

現在我想把發言權交還給他。布魯斯？

Thank you, Bill. I'd like to make a few final comments before we open up the call for questions. Even in the face of softer customer response and fewer retail doors due to sporting goods retailer closing, both Bill and Sid's comments illustrate how we are able to increase profitability even in a more challenging market.

謝謝比爾。在開始提問之前，我想最後說幾句。即使面對顧客反應疲軟、體育用品零售商關門導致零售門市減少的情況，比爾和西德的評論也表明，即使在更具挑戰性的市場環境下，我們也能提高獲利能力。

As we enter 2017, I'd like to reiterate the key initiatives we intend to focus on over the next few years to drive long-term growth and continue to build shareholder value. First, innovation continues to be our lead driver. And recently introduced products reaffirm our commitment to further broaden our portfolio and build a business for long-term profitable growth via industry-leading design and innovation.

在2017年之際，我想重申我們未來幾年將重點關注的關鍵舉措，以推動長期成長並持續創造股東價值。首先，創新仍然是我們的主要驅動力。近期推出的產品再次印證了我們進一步拓寬產品組合，並透過業界領先的設計和創新打造長期獲利成長業務的承諾。

Our product development road map over the next few years is rich for all parts of our business. And we expect to ratchet up R&D spend and capital to support this enhanced launch cadence.

我們未來幾年的產品開發路線圖涵蓋了我們業務的各個方面。我們預計將加大研發投入和資本投入，以支持這更快的上市節奏。

Second, in addition to newly internally generated products, we are pleased with the acquisition of Octane Fitness and the long-term opportunities this brings to our Company. Whereas 2016 was focused mostly on the immediate integration activities such as merging strategic plans, coordinating sales efforts and back-office activities, our plan for moving forward in 2017 and 2018 shifts into capturing costs and growth integration synergy's in the more strategic areas.

其次，除了內部開發的新產品外，我們對收購 Octane Fitness 及其為公司帶來的長期機會感到欣喜。 2016 年主要專注於短期整合活動，例如合併策略規劃、協調銷售工作和後台活動，而 2017 年和 2018 年的計畫將轉向在更具策略性的領域實現成本控制和成長整合協同效應。

These include securing longer range operational and added innovation capabilities. Recapturing market share in the specialty retail channel and growing our presence in the commercial arena through incremental investments in salespeople and marketing programs, is an investment we intend to make in 2017, to support our long-term strategy.

這些措施包括確保更遠距離的營運和增強創新能力。我們計劃在2017年進行一項投資，以支持我們的長期策略，即重新奪回專業零售通路的市場份額，並透過加大對銷售人員和行銷項目的投入來提升我們在商業領域的影響力。

Third, we remain committed to driving increased sales within international markets, while we were pleased with the 56% organic growth in international sales, this part of our business, even including Octane, still represents only 6% of our total sales. Over the past few years, we have learned a lot as to how to position ourselves to achieve more significant growth in these markets during 2017 and beyond.

第三，我們將繼續致力於推動國際市場的銷售成長。雖然我們對國際市場56%的有機成長感到欣慰，但這部分業務（即使包括Octane在內）仍僅占我們總銷售額的6%。過去幾年，我們學到了很多，了解如何在2017年及以後在這些市場實現更顯著的成長。

To achieve our near-term goal of doubling this business in the next few years, we believe we need to invest incrementally in the sales force, develop a more robust logistics platform, including potential warehousing capability and multiple markets, and to become a more market-centric in terms of product offering.

為了實現我們在未來幾年內將業務翻倍的近期目標，我們認為我們需要逐步投資於銷售隊伍，開發更強大的物流平台，包括潛在的倉儲能力和多個市場，並在產品供應方面更加以市場為中心。

Finally, as we have said for many years, our focus on gross margins and improving operating margins is engrained in all areas of our business. Our team has institutionalized the process of challenging how we do things and trying new things that will improve our business processes, services, and costs. I'm really proud of our team for taking the initiative to make this happen and the positive results this work has generated.

最後，正如我們多年來一直強調的那樣，我們對毛利率和提高營業利潤率的關注已根植於我們業務的各個領域。我們的團隊已將挑戰現有工作方式、嘗試新事物以改善業務流程、服務和成本的流程製度化。我為我們的團隊主動實現這一目標以及這項工作所取得的積極成果感到非常自豪。

Bottom line is we're excited about 2017. While we expect our growth trajectory will again be above industry average, it will be more moderate when compared to the recent high double digit pace we've delivered in recent years.

歸根結底，我們對 2017 年充滿期待。雖然我們預計我們的成長軌跡將再次高於行業平均水平，但與近年來我們實現的兩位數高成長速度相比，這一成長速度將更加溫和。

There are four primary reasons for this near-term change in trajectory. One, we have identified and expanded breadth of promising new platforms to expand beyond the current portfolio of leading cardio and strength products and we will need to invest incrementally in research and development and marketing to drive the innovation needed.

近期軌跡變化主要有四個原因。首先，我們已經發現並拓展了有前景的新平台，以超越目前領先的有氧和力量產品組合，我們需要在研發和行銷方面加大投入，以推動所需的創新。

Two, we intend to step up our efforts in marketing and sales within the retail business to support new product launches and further explore additional avenues to drive future growth. Despite good momentum in many areas, within both the organic retail and commercially and specialty channels, we realized that we are not getting access to all the consumers we should be.

第二，我們打算增加零售業務的行銷和銷售力度，以支援新產品的發布，並進一步探索推動未來成長的其他途徑。儘管在有機零售、商業和專業通路等許多領域都呈現良好勢頭，但我們意識到，我們未能觸及所有應觸及的消費者。

Furthermore, there is still challenging times ahead for some of the bricks and mortar retailers, who will likely retract, be acquired or maybe even cease doing business in 2017. Given our Company's strength and core competencies, we feel we're in a good position to navigate through and continue to grow this channel if we can execute near-term plans well.

此外，一些實體零售商仍將面臨挑戰，他們可能會在 2017 年撤資、被收購甚至停止營業。鑑於我們公司的實力和核心競爭力，我們認為，如果我們能夠很好地執行短期計劃，我們將處於有利地位，能夠駕馭並繼續發展這一管道。

Three, we intend to invest more heavily in our Direct business to support continued growth of the Max Trainer product line, as well as launch the Hybrid Velocity Trainer product in the second quarter.

第三，我們打算增加對直銷業務的投資，以支持 Max Trainer 產品線的持續成長，並在第二季推出 Hybrid Velocity Trainer 產品。

Our research indicates that the more innovative nature of HVT will require added initial support in the early stages to build awareness. This support will include both television and expanded digital marketing efforts. The long-range potential of this product will make the added initial investment worthwhile.

我們的研究表明，HVT 更具創新性，需要在早期階段提供額外的初始支援來提升知名度。這種支援將包括電視和更廣泛的數位行銷活動。該產品的長期潛力將使額外的初始投資物有所值。

And finally, four. As outlined, further expansion into international markets will require additional operational and sales resources. We intend to be strategic and careful about expanding overhead structure overseas. But are confident we now know where the prudent investments in capabilities need to be, in order to break through to a higher scale of business.

最後，第四點。如上所述，進一步拓展國際市場需要額外的營運和銷售資源。我們打算在擴大海外管理結構方面採取策略性和謹慎的態度。但我們有信心，現在我們知道需要在哪裡進行審慎的能力投資，才能突破更高的業務規模。

While all of these initiatives are critical to help us drive towards long-term growth targets, that we have previously outlined and which remain intact, including delivering double digit annual revenue and operating income growth, the investments required short-term will likely mute profit growth during the first half of 2017.

雖然所有這些舉措對於幫助我們實現我們先前概述的長期成長目標（包括實現兩位數的年收入和營業收入成長）都至關重要，但短期所需的投資可能會抑制 2017 年上半年的利潤成長。

As I mentioned at the outset of the call, we are initiating guidance for the full year of 2017 in terms of revenue and operating income growth. I want to make it clear that although we are providing some color, as to the range of expectations for the first quarter as well today, we do not intend to provide guidance to quarterly operating results for subsequent quarters during 2017.

正如我在電話會議開始時所提到的，我們正在初步提供2017年全年營收和營業利潤成長的指引。我想明確指出的是，儘管我們今天也對第一季的預期範圍提供了一些細節，但我們不打算為2017年後續季度的季度營運業績提供指引。

We will, however, provide updates to our full-range guidance as appropriate during the future quarterly earnings calls. On a full-year basis for 2017, we are projecting revenue and operating income growth to be in the range of 5% to 7% over 2016. This reflects starting out the first half of the year slower when compared to the same period while layering in the incremental investments I just mentioned, which we have already begun to execute on.

不過，我們將在未來的季度財報電話會議上適時更新我們的全面業績指引。就2017年全年而言，我們預計營收和營業利潤將比2016年成長5%至7%。這反映了上半年的開局較同期放緩，同時考慮到我剛才提到的增量投資，這些投資我們已經開始實施。

Importantly, the annual guidance anticipates a return to double-digit growth run rate by the back half of the year, in line with previously communicated long-term revenue and profit growth targets, fueled mostly by new product launches. The first quarter of 2017 is anticipated to be our most challenging quarter of the year, given an extremely difficult comps from the first quarter of last year.

重要的是，年度指引預計下半年業績將恢復兩位數成長，與先前公佈的長期收入和利潤成長目標一致，主要得益於新產品的發布。鑑於去年第一季業績極為低迷，預計2017年第一季將成為我們今年最具挑戰性的一個季度。

We anticipate sales in the first quarter to be in the range of $110 million to $112 million.

我們預計第一季的銷售額將在 1.1 億美元至 1.12 億美元之間。

Similarly, operating income from continuing operations in Q1 of 2017 is expected to be in the range of $12.5 million to $14 million. And reflecting the added investments in increased expenses related to securing and protecting our intellectual property globally.

同樣，2017年第一季持續經營業務的營業利潤預計在1,250萬美元至1,400萬美元之間。這反映了我們在全球範圍內保護智慧財產權相關支出的增加。

As mentioned, the back half of the year is expected to be strong, which will offset this slower start and generate expected full-year positive growth of 5% to 7% in terms of revenues and operating income.

如上所述，預計下半年業績將表現強勁，這將抵消開局放緩的影響，並預計全年收入和營業收入將實現 5% 至 7% 的正增長。

Finally, I'd like to take this opportunity to thank our dedicated team of employees around the world for all their hard work in helping to deliver the desired results and create the positive momentum we have in every corner of our Company.

最後，我想藉此機會感謝我們遍布全球的敬業員工團隊，感謝他們的辛勤工作，幫助我們實現了預期成果，並在公司的各個角落創造了積極的勢頭。

That concludes our prepared remarks. Now, I'd like to open up the call for questions. Operator?

我們的準備好的演講到此結束。現在，我想開始提問環節。接線生？

Thank you, sir. (Operator Instructions). We'll take our first question from Mike Schwartz, with SunTrust.

謝謝您，先生。 （操作員指示）。我們的第一個問題來自 SunTrust 的 Mike Schwartz。

Hey, good afternoon, guys.

嘿，大家下午好。

Hey, Mike.

嘿，麥克。

Bruce, just maybe a little more color, you can expand on the investment programs that you just have gone through? Is this something that we think of as maybe 2017 a step back one year and we can see the double-digit growth in the second half of the year, and going into 2018 we'd get a full-year double digit growth? Or will there be incremental investments required as we go down the path that may mute that double digit reasonable rate longer term?

布魯斯，您能否再詳細解釋一下您剛才提到的投資項目？我們是否認為，2017年可能只是倒退一年，下半年我們可以看到兩位數的成長，而2018年全年我們也能實現兩位數的成長？或者，隨著我們繼續推進這條成長路徑，是否需要進行增量投資，從而可能在長期內抑制兩位數的合理成長率？

Thanks, Mike. I would say that, you know, the things that we have outlined in terms of added investment, some will be more I'd say ongoing in the years to come. I don't anticipate that the additional R&D spend that we are layering in to take advantage of some of the breadth of platforms, that we now have opportunities with, so that will continue. I would say some of the shorter-term investments might be things that involve getting international going. And those things might be more between now and into 2018, before they might slow down.

謝謝，麥克。我想說的是，我們之前提到的新增投資，有些會在未來幾年持續進行。我預計，我們為了利用目前擁有的眾多平台而投入的額外研發支出不會持續下去，所以這種情況會持續下去。我想說，一些短期投資可能與國際化發展有關。這些投資可能會在現在到2018年之間持續，之後可能會放緩。

Okay. And, of course, then benefiting from the increases that we expect in those markets. So those are things. So innovation I think is one that we continue to step up. We realize the marketplace and the feature set that people are looking for and the technologies that are becoming available to us, would suggest that we need to continue to feed the R&D area. Does that help you?

好的。當然，我們也會受益於這些市場預期的成長。這些都是值得關注的事。所以，我認為創新是我們持續加強的領域之一。我們意識到市場、人們所尋求的功能以及我們即將獲得的技術，都顯示我們需要繼續投入研發資金。這對您有幫助嗎？

Yes. No, that was helpful. Is there any way to just look at what that kind of incremental step-up in spend is in 2017 versus maybe what we would expect and kind of a day growth scenario? In other words, what's this incremental spend that you're looking at this year that may not replicate itself in 2018 and beyond?

是的。不，這很有幫助。有什麼方法可以看看2017年支出的增量，以及我們預期的成長？換句話說，您今年看到的增量支出是多少，在2018年及以後可能不會再次出現？

I think you're going some of it in 2018 as well, Mike. I think that's sort of the way we look at it. The other point I'd probably make is some of the incremental spend is also really around our media and our marketing. So I think that's -- Bill referenced the fact that as we move forward, even with Max Trainer, you're going to see increased media spending, both TV advertising as well as digital marketing to support Max as we go forward.

麥克，我想你也會在2018年投入一些資金。我想我們大概是這麼看的。我想說的另一點是，一些增量支出實際上也用於我們的媒體和行銷。所以我認為——比爾提到，隨著我們前進，即使有了Max Trainer，你也會看到媒體支出的增加，包括電視廣告和數位行銷，以支持Max的發展。

The HVT launch will require some investment.

HVT 的推出需要一些投資。

Yes.

是的。

Okay. And then just one final question. It sounds like some of the trends that you saw coming out of the election improved, particularly with Max Trainer, maybe talk about what you've seen in the last month or so, or maybe even year-to-date that gives a little more comfort in the Max Trainer, I guess growing for the year is what you said?

好的。最後再問一個問題。聽起來，您看到的選舉結果顯示一些趨勢有所改善，尤其是 Max Trainer 的表現。您能否談談過去一個月左右，或者今年迄今為止，Max Trainer 的表現如何，這讓 Max Trainer 的表現更加令人放心？您說的是今年的成長？

Yeah, we're pretty comfortable, Mike, with what's going on with Max ever since really the election cleared out the media conditions we feel like have returned to a more normal environment. So Max is very healthy, albeit it's calm being against incredible media efficiency from the prior year. I would say at this point it's just quite good media efficiency on Max. But that does influence the profitability. The hard part in direct near-term is Tread Climber is showing its signs of age. And a lot of that spend is going to be replaced by the HVT launch coming up very shortly.

是的，麥克，自從大選徹底解決了媒體環境問題，我們感覺已經恢復到更正常的狀態以來，我們對Max的營運狀況感到相當放心。所以Max的營運非常健康，儘管與去年令人難以置信的媒體效率相比，Max的媒體效率顯得有些低迷。我想說，目前Max的媒體效率還不錯。但這確實會影響獲利能力。短期內，直接獲利的困難在於Tread Climber平台正顯露出老化的跡象。而其中很大一部分支出將被即將推出的HVT平台所取代。

Okay. Thank you.

好的。謝謝。

Thanks, Mike.

謝謝，麥克。

We'll take our next question from Frank Camma, with Sidoti.

我們將與 Sidoti 一起回答 Frank Camma 提出的下一個問題。

Hey, guys. How are you doing?

嘿，大家好嗎？

Good, Frank.

很好，弗蘭克。

My question is specifically on the Direct side, because I've been, you know, noticing this. Do you think part of this weakness, granted I mean understand the media spend issue, but it seems like your competitor, one of your main competitors has been really ramping up their messaging. So I was just wondering do you feel like at all that maybe the messaging might have, even relative to the spend level, may be off or maybe they're just being more aggressive? Wonder if you can give any color there?

我的問題主要集中在直銷方面，因為我一直注意到這一點。您認為這種弱點的部分原因是什麼？當然，我理解媒體支出的問題，但您的競爭對手，您的主要競爭對手之一，似乎一直在加強宣傳。所以，您是否覺得，即使相對於支出水平而言，他們的宣傳力度可能存在偏差，或者他們只是在更積極地宣傳？能否具體說明一下？

Overall we don't feel like there's any competitor to Max Trainer on the market today. And we don't see any competitive influence. There's certainly other products as related to Tread Climber, where a competitor has in many ways co-opted our message that was successful with Tread Climber. On the other hand, we're not convinced that there's a great deal of success with that product as well.

整體而言，我們覺得目前市場上沒有 Max Trainer 的競爭對手。我們也看不到任何競爭影響。當然，市場上還有其他與 Tread Climber 相關的產品，競爭對手在許多方面都藉鑒了我們 Tread Climber 的成功理念。另一方面，我們也不認為這款產品能獲得很大的成功。

Though obviously we don't know. I would say Tread Climber itself we feel like there's a lot of things we can do with that product, including it's already partly cascaded into retail as we speak. We think it's an incredible platform. It will probably have more targeted marketing going forward, versus general advertising that it's seen for about a decade now.

雖然我們顯然不知道。我想說，就Tread Climber本身而言，我們覺得我們可以用它做很多事情，包括它目前已經部分進入零售領域。我們認為這是一個非常棒的平台。未來它可能會進行更有針對性的行銷，而不是像近十年來那樣只進行普通的廣告宣傳。

Okay. And my question is on the HVT. It sounds like the launch schedule slipped a little bit on that. Is that a fair statement? I thought it was going to launch sort of April-ish, now you're saying kind of mid-year, or am I wrong about the original?

好的。我的問題是關於 HVT 的。聽起來發佈時間表好像有點延後了。這樣說對嗎？我以為它會在四月左右發布，現在你說的是年中，還是我之前說的錯了？

We're sorry, Frank. We will launch it before mid-year and we don't believe that HVT has slipped. We'll launch it as planned by mid-year is what we've said.

抱歉，弗蘭克。我們會在年中之前推出，我們認為HVT（Hypervisor）的表現並沒有下滑。我們已經說過，我們會按計劃在年中推出。

Okay. Great. And just on the retail environment itself, I mean, are you seeing -- is there any difference at all, because you didn't really call out the category difference, sort of aerobic versus strength, just wondering if you're seeing any difference over there as you've seen over the last couple of years. It seemed like strength for a while was making a bit of a comeback.

好的。太好了。就零售環境本身而言，我的意思是，您看到——有什麼區別嗎？因為您並沒有具體指出類別的區別，例如有氧運動和肌力運動的區別。我只是想知道，您是否看到了一些變化，就像過去幾年看到的那樣。力量運動似乎有一段時間有所回升。

Yes, we still see some positive trends in strength. Cardio is still the larger category by quite a bit. But strength is making a comeback, Frank, as you say, and specifically we enjoy the benefits of that and our (inaudible) category. So, we like seeing that happen. We feel like that's still creates a great landscape leading up to the launch of HVT.

是的，我們仍然看到力量訓練的一些正面趨勢。有氧運動仍然是一個相當大的類別。但正如你所說，肌力訓練正在捲土重來，弗蘭克，我們尤其享受它以及我們（聽不清楚）類別帶來的好處。所以，我們很高興看到這種情況發生。我們覺得這仍然為HVT的推出創造了良好的前景。

Sure. Okay. Thanks, guys.

當然。好的。謝謝大家。

Thank, Frank.

謝謝，弗蘭克。

We'll take our next question from Rommel Dionisio, with Wunderlich.

我們將與 Wunderlich 一起回答 Rommel Dionisio 的下一個問題。

Thanks, good afternoon. Bruce, I think in your comments you talked about investments in overseas markets. I wonder if you could just provide a little more granularity in terms of which particular regions? Obviously you're already in the UK, New Zealand, Australia, I believe. And maybe you could also just comment on the strength that you're seeing there? Sort of sequentially as the year progressed, given that you entered some of those markets earlier in the year, in 2016? Thanks.

謝謝，下午好。布魯斯，我記得您在評論中提到了海外市場的投資。您能否更詳細地介紹一下具體是哪些地區？顯然您已經在英國、紐西蘭和澳洲開展業務了。您能否談談您在這些地區看到的強勁表現？考慮到您早在2016年就進入了其中一些市場，所以您能否按時間順序逐年分析這些市場的表現？謝謝。

Yes. Thanks, Rommel. There's definitely different things going on in different parts of the international markets. I think what we're seeing is that if we were to prioritize where we will be investing, I would say that it would be in the European markets, western European markets. Would be our primary area that we see the greatest near-term opportunity.

是的。謝謝，隆美爾。國際市場不同區域的情況肯定有所不同。我認為，如果要我們優先考慮投資領域，我認為歐洲市場，西歐市場，將是我們認為近期最具機會的主要領域。

Certainly we know and we're having great successes in parts of Asia as well. Both for organic retail, as well as Octane. So those I would say, if I had to prioritize, those would be the highest ones. We do intend to make an added investment in Latin America, which is under way, because we're very much under penetrated in that market. But I would say that's not nearly on the same scale of opportunity as we have in Europe or Asia. Does that help you?

當然，我們知道這一點，而且我們在亞洲部分地區也取得了巨大的成功。有機零售和Octane都是如此。所以，如果要我優先考慮的話，我會說這些地區才是最重要的。我們確實打算在拉丁美洲加大投資，目前這項計劃正在進行中，因為我們在該市場的滲透率非常低。但我想說，那裡的機會規模遠不及我們在歐洲或亞洲的規模。這對您有幫助嗎？

Yes, thanks very much, Bruce.

是的，非常感謝，布魯斯。

We'll take our next question from Andrew Burns, with D.A. Davidson.

我們將回答來自 D.A. Davidson 的 Andrew Burns 提出的下一個問題。

Good afternoon. Thanks for taking my question.

午安.感謝您回答我的問題。

Hi, Andrew.

你好，安德魯。

Hey, Andrew.

嘿，安德魯。

Hi. Bruce, in your areas of investment you mentioned the step-up in marketing and sales in the retail business. I was hoping you could elaborate a little bit more on that comment as it relates to not getting access to all the consumers that you want to get to now. What does that mean and where do you need to get your retail distribution to get access to all of those consumers? Thanks.

你好。 Bruce，您在投資領域提到了零售業務的行銷和銷售升級。我希望您能更詳細地解釋這一點，因為它與目前無法接觸到所有想要接觸的消費者有關。這意味著什麼？您需要在哪裡進行零售分銷才能接觸到所有這些消費者？謝謝。

Let me start with some comments and maybe Bill might want to add to them. I think that you have to keep in mind that we know -- We dissect the market in retail by price point, by product category and certainly by retailers within the channel. And we're still at a very low market share, almost any way you measure it on any one of those dimensions. So with the exception of maybe of eCommerce, I would say -- everybody knows we've been strong in that area and continue to grow there.

我先說幾點，比爾或許想補充。我想大家應該知道，我們依照價格點、產品類別，當然還有通路內的零售商來細分零售市場。我們的市佔率仍然很低，幾乎無論你用哪個維度來衡量。所以，除了電商領域，我想說的是，大家都知道我們在這個領域一直很強大，而且還在持續成長中。

So what we're looking at is it's a combination of making our product more accessible and to be honest with you, we still have product that we need to develop, some of which is coming this year. You're familiar that we're launching Bowflex Cardio this year and that will be at higher price points than we've participated in, in retail, both for ellipticals and treadmills.

所以，我們的目標是，一方面讓我們的產品更容易被消費者接受，另一方面，坦白說，我們還有一些產品需要開發，其中一些產品將在今年上市。大家應該知道，我們今年將推出 Bowflex Cardio，它的售價將高於我們參與的零售產品，包括橢圓機和跑步機。

And so it's a combination of providing more products that we can sell and get more access to consumers, as well as getting more space at retail or through the digital world, with our retail partners. And then you layer in on top of that modern movement, which we also showed in New York and things like that, which opens up another whole new capability and interest level with new target consumers.

所以，這既包括提供更多可供銷售的產品，擴大與消費者的接觸面，也包括與零售合作夥伴在零售或數位世界獲得更多空間。然後，我們再結合現代潮流，例如我們在紐約展示的潮流等等，這將開啟全新的能力，吸引新的目標消費者，並提升他們的興趣。

So that's kind of -- it's a multi-pronged approach what we need to do to really take advantage of all of the great product that we have coming or already have and just making it more accessible.

所以這是一種多管齊下的方法，我們需要真正利用我們即將推出或已經擁有的所有優秀產品，並使其更容易獲得。

Bill, do you want to add anything?

比爾，你還有什麼要補充嗎？

Yes. I'd only add, Andrew, it's a great question. As you know, since you've followed us for quite a while, we like to talk about a term we called "SKU doors". And we still do measure our advancements in retail against the concept of gaining more SKUs, or more doors. As eCommerce grows to a greater extent in our business and as the bricks and mortar environment is somewhat challenged, as Bruce called out in his comments, we're looking to expand that definition to really consumer categories, consumer needs, what aren't we hitting. It turns out there's several.

是的。我只想補充一點，安德魯，這個問題問得很好。如你所知，既然你已經關注我們很久了，我們喜歡談論一個叫做「SKU門」的術語。我們仍然以獲得更多SKU或更多門市的概念來衡量我們在零售領域的進步。正如布魯斯在評論中提到的，隨著電子商務在我們業務中越來越重要，以及實體店環境面臨一些挑戰，我們希望將這個定義擴展到真正的消費者類別、消費者需求，以及哪些方面我們沒有觸及。事實證明，有很多方面。

As Bruce called out some good examples. Incremental price points, incremental modalities and even incremental categories such as modern movement, shelf fitness. We think those are tremendous growth areas for us and we have the capability of creating a much wider product portfolio for our sales teams to go out and sell. And we're doing that at a time when we're enhancing sales teams on a global basis to take advantage of those products.

正如布魯斯所列舉的一些很好的例子。增量價格點、增量模式，甚至是增量品類，例如現代運動、貨架健身。我們認為這些對我們來說都是巨大的成長領域，我們有能力為我們的銷售團隊打造更廣泛的產品組合，以便他們能夠更好地銷售。我們正在加強全球銷售團隊，以充分利用這些產品的優勢。

Great. Thanks for the color, there. And Bill, during your prepared remarks, you mentioned (inaudible) promotions and daily deal buying from competitors in the eCommerce space and that December/January time frame. Do you think this is the new norm or were there unusual events that maybe led to that? Just trying to gauge your outlook for the upcoming key sales seasons ahead.

太好了。謝謝你的精彩介紹。比爾，在你的準備好的發言中，你提到了（聽不清楚）電商領域競爭對手的促銷和每日團購，以及12月/1月這個時間段。你認為這是新的常態嗎？還是有什麼不尋常的事件導致了這種情況？只是想評估一下你對即將到來的關鍵銷售季的展望。

My guess is more one-time events, given that so many people were depressed in that period up to the election. It felt like there were two types of folks. Either those who were sitting on their powder like we did in terms of media, up to that point, and others who were trying to find a way to move that inventory one way or the other. And, you know, we just saw a lot of deeper than normal promotional activity in buying of those placements in dot com world.

我猜想這更像是一次性事件，因為在選舉前的那段時間裡，很多人都情緒低落。感覺當時有兩種人。一種是像我們一樣，在媒體方面一直坐擁資源的人，另一種是那些試圖以某種方式轉移庫存的人。而且，你知道，我們看到在網路世界中，購買這些廣告位的促銷活動比平常更深入。

Ultimately, reviews still went out in the dot com world, so we chose to stay the course and not match, we felt like it wasn't really a sustainable business model to keep that up. So, my anticipation would be, there will always be pressure for people who want to try these targeted promotions. And in fact, we do some of that, too, where it makes sense. But I don't believe it will continue on at the pace we saw in that period between Black Friday and early January.

最終，評論還是在網路世界中流傳，所以我們選擇堅持下去，不再進行匹配，我們覺得這種模式不太可持續。所以，我預計，對於那些想要嘗試這些定向促銷的人來說，壓力總是存在的。事實上，我們也在合理的情況下採取了一些類似的措施。但我認為，這種情況不會像黑色星期五到一月初那段時間那樣持續下去。

Thanks. Best of luck.

謝謝。祝你好運。

Thank you.

謝謝。

Thanks, Andrew.

謝謝，安德魯。

Thank you. (Operator Instructions). And we'll go next to George Kelly, with Imperial Capital.

謝謝。 （操作員指示）。接下來，我們請帝國資本公司的喬治凱利發言。

Hi, guys. A couple questions for you. First, what were credit approvals in the quarter?

大家好。我有幾個問題想問大家。首先，本季的信貸審核情況如何？

Yes. Hi, George. Credit approvals in the quarter were quite good at 55.9% versus 49.3% last year.

是的。你好，喬治。本季的信貸核准率相當不錯，為55.9%，去年同期為49.3%。

Wow! Is that a trend that you expect to continue into 2017? Should that change for any reason?

哇！您預計這種趨勢會持續到2017年嗎？這種情況會因為什麼原因而改變嗎？

We can't think of why it would change. That improvement, continued improvement, is really still reflective of our media and creative strategy that is driving incrementally strong credit-worthy people through the door. On the other hand, our credit partners have also stepped up. We have what we would call vintage with our account, with our tier one provider, who can now look at us as a whole and say, well our account performs at X level compared to the norm. And since that achievement has been there, we've definitely performed well. So, hence, they've been willing to buy deeper on the tier one side. So we get incrementally more credit and we get it at a better cost structure.

我們想不出為什麼它會改變。這種持續的改進，實際上仍然反映了我們媒體和創意策略的成效，該策略正在逐步吸引信譽良好、實力雄厚的客戶。另一方面，我們的信貸合作夥伴也取得了進展。我們與一級供應商的合作已經達到了所謂的“成熟期”，他們現在可以從整體上看待我們，並說，我們的帳戶表現比一般客戶高出X倍。自從取得這項成就以來，我們的表現確實非常出色。因此，他們願意在一級供應商方面進行更深入的收購。因此，我們獲得了越來越多的信貸，成本結構也得到了改善。

Okay. And then secondly on the guidance you provided for the full year 2017, can you give any kind of granularity about what your assumptions are for HVT? It's just really hard to think through, you know, brand new product like that. How should we think about contribution and incremental investment, too, will it be profitable in the first? Any of that kind of stuff that you can give more detail would be helpful.

好的。其次，關於您提供的2017年全年業績指引，您能否詳細說明您對HVT的假設？對於這種全新的產品來說，仔細思考確實很難。我們應該如何考慮貢獻和增量投資？它一開始會獲利嗎？如果您能提供更詳細的信息，那將非常有幫助。

Go ahead.

前進。

George, unfortunately we can't give any details specifically around the product sales. I would say that, you know, we intend it to be profitable, although again from a media ROI perspective and some of the creative and other investments we need to make in the product at launch time, you know, clearly it's not coming out of the gate, won't be as profitable as a Max Trainer. But just in terms of if you were to sort of look at it broadly in terms of certainly from a gross profit perspective, we would anticipate it to be sort of similar to the averages that we see in the direct channel today. Where you'll see the incremental spend is really on the sales and marketing side.

喬治，很遺憾，我們無法透露任何關於產品銷售的具體細節。我想說的是，我們的目標是讓它盈利，儘管從媒體投資回報率的角度，以及我們在產品發佈時需要進行的一些創意和其他投資來看，它顯然不會像Max Trainer那樣一炮打響就盈利。但如果從毛利的角度來看，我們預計它的獲利水準將與目前直銷管道的平均水準大致相同。你會看到，增量支出其實集中在銷售和行銷方面。

And the initial creative.

以及最初的創意。

And the initial creative. (inaudible)

以及最初的創意。 （聽不清楚）

So, traditional direct product launch, George, we would spend cautiously. Direct product launch would be sort of the opposite of say a major consumer product launch, where there would be a large add campaign. In our case we would start smaller and test into incremental spending and we like to see each product earn its next level of incremental spend.

所以，喬治，對於傳統的直接產品發布，我們會謹慎支出。直接產品發布與大型消費產品發布截然相反，後者通常會進行大規模的推廣活動。而我們的做法是先從小規模開始，然後測試增量支出，我們希望看到每款產品都能獲得更高水準的增量支出。

So the creative costs out of the gate are there and they will not be profitable on day one. However, the media spend we will target toward trying to get to a return on investment as soon as we can. And if it isn't, generally we don't find that the answer is to keep pouring money on it, to see if that finally breaks through. We think the opposite, which is well let's tweak our message or find out what networks are working and let's focus more on that. So it is a lot of -- Part of the reason why we like launching direct products in the Q2 time frame, is you have a free period there, where you can test around and learn what works and what doesn't work.

所以，創意成本是存在的，第一天不會獲利。但是，我們會把媒體支出的目標設定為盡快實現投資回報。如果無法實現，我們通常不會繼續投入資金，看看最終能否取得突破。我們的想法恰恰相反，我們會調整我們的訊息，或找出哪些網路有效，然後更專注於此。所以，我們喜歡在第二季推出直接產品，部分原因是因為那段時間比較空閒，你可以進行測試，了解哪些有效，哪些無效。

And primarily we looked to have a lot of things tweaked and understood by the time we get to Q4.

我們主要希望在第四季之前對很多事情進行調整和理解。

Okay. Okay. That's helpful. And then last question for me is on your expectations around Octane in 2017. I believe that sales declined there in 2016 and do you think that will reverse?

好的。好的。這很有幫助。最後一個問題是您對2017年Octane的預期。我認為2016年Octane的銷量有所下滑，您認為這種情況會逆轉嗎？

Yes. We anticipate growth in profit and sales in Octane for 2017.

是的。我們預計2017年Octane的利潤和銷售額都會成長。

Okay. Thanks.

好的。謝謝。

Thanks, George.

謝謝，喬治。

We'll take our next question from Bill Dezellem, with Titan Capital Management.

我們將回答 Titan Capital Management 的 Bill Dezellem 提出的下一個問題。

Great, thank you. The Max Trainer, would you please break out what the rate of growth was in the fourth quarter and what the rate of growth was in the third quarter?

太好了，謝謝。 Max Trainer，您能詳細解釋一下第四季和第三季的成長率嗎？

Bill, sorry, we do not disclose individual product performance metrics. I can telling you Max Trainer did not grow in Q3, primarily due to our decision to cut media in light of the media environment that existed pre-election. Max Trainer did grow in Q4, despite challenging conditions early in Q4 for the first half of Q4. But Max Trainer finished quite strong in Black Friday onward and grew for the quarter.

比爾，抱歉，我們不透露單一產品的績效指標。我可以告訴你，Max Trainer 在第三季沒有成長，主要是因為我們根據大選前的媒體環境決定削減媒體投放。儘管第四季初期市場環境充滿挑戰，但 Max Trainer 在第四季度確實實現了成長。不過，Max Trainer 在黑色星期五之後表現相當強勁，並在整個季度實現了成長。

That actually is helpful and essentially gets at what I was trying to get at. Thank you. And can you then take that a step further and talk about the rate of growth, or not, that you have seen here in the first quarter in light of how strong the year-ago was?

這確實很有幫助，基本上表達了我想要表達的意思。謝謝。那麼，您能否進一步談談，考慮到去年同期的強勁成長，您認為第一季的成長率如何？

No. We did give some commentary in the script on this. And Max Trainer is growing, but the prior year was incredible growth at a very high media ROI. But it was against a much smaller revenue base to start with for that growth. So we're happy, actually, with the performance of Max Trainer right now as we speak. We're just calling out that that media performance will not be the same on a higher baseline number. If that makes sense?

不。我們在劇本裡確實對此做了一些評論。 Max Trainer 正在成長，但前一年實現了驚人的成長，媒體投資回報率也很高。但實現這一成長的基礎收入要小得多。所以，實際上，我們對 Max Trainer 目前的表現感到滿意。我們只是想指出，在更高的基準數字下，媒體表現不會與現在一樣。你覺得這樣說合理嗎？

I think so. I'm going to try to paraphrase what I think you just said, the media ROI will not be as high, but because of the success that you are having, you would expect there to be absolute growth in the Max Trainer to continue?

我認為是的。我試著解釋一下你剛才說的，媒體投資報酬率不會那麼高，但鑑於你們目前取得的成功，你預期Max Trainer的絕對成長還會持續下去嗎？

Right. It will just take some additional media to get it there, as compared to the same period prior-year.

是的。與去年同期相比，我們只需要增加一些媒體宣傳就可以實現這一目標。

That's helpful. Thank you.

這很有幫助。謝謝。

Thanks, Bill.

謝謝，比爾。

Ladies and gentlemen, that's the final question we have in the queue at this time. I'd like to turn the call over to Mr. Cazenave for any closing remarks.

女士們，先生們，這是我們這次提問的最後一個問題。我想請卡澤納夫先生做最後總結發言。

Thank you. Thank you all for joining our call today and your interest in Nautilus. We look forward to updating you on our first quarter results in our next call and hope everyone has a great afternoon. Thank you.

謝謝大家！感謝大家今天參加我們的電話會議，也感謝大家對Nautilus的關注。我們期待在下次電話會議中向大家報告第一季的業績，祝大家下午愉快。謝謝！

And, ladies and gentlemen, this does conclude today's conference. We appreciate your participation.

女士們、先生們，今天的會議到此結束。感謝各位的參與。