NLS’ first quarter bottom line was $8,575,000 in the red against a profit of $8,059,000 last year on revenues that dropped 26% to $84,400,000 from $114,813,000 on weakness in both the direct and retail segments, as Bowflex Max Trainer sales continue to disappoint. Max Intelligence digital subscriptions are also ramping more slowly than expected, and new customers now get a two-month free trial to try it out. Gross margin plummeted 880 basis points to 42.5% overall due to lower overhead absorption and a less favorable product mix. Operating expenses were down $2.2 million, but deleveraged to 54.5% of sales.

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