8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report: November 30, 2022

(Date of earliest event reported)

_________________________________________

NAUTILUS, INC.

(Exact name of registrant as specified in its charter)

__________________________________________

Washington	001-31321	94-3002667
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

17750 S.E. 6th Way

Vancouver, Washington 98683

(Address of principal executive offices, including zip code)

(360) 859-2900

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	NLS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐

NAUTILUS, INC.

FORM 8-K

Item 1.01 Entry into Material Definitive Agreement.

Entry into New Term Loan Facility

On November 30, 2022, Nautilus, Inc., a Washington corporation (the “Company”), entered into a Term Loan Credit Agreement (the “SLR Credit Agreement”) by and among the Company and certain of its subsidiaries from time to time party thereto, as borrowers (collectively, the “Borrowers”), Crystal Financial LLC D/B/A SLR Credit Solutions, a Delaware limited liability company, as administrative agent (“SLR”) and lenders from time to time party thereto (collectively the “Lenders”). Capitalized terms used but not defined in this report have the meanings ascribed to such terms in the SLR Credit Agreement.

Pursuant to the SLR Credit Agreement, the Lenders have agreed, among other things, to make available to the Borrowers a term loan facility in the aggregate principal amount of up to $30,000,000, subject to a borrowing base (the “Term Loan Facility”), as such amounts may increase or decrease in accordance with the terms of the SLR Credit Agreement. The principal amount of the loan will initially bear interest based on the Adjusted Term SOFR rate plus a margin of 8.25%. From and after the 2024 Financial Statement Delivery Date (as defined in the SLR Credit Agreement), the margin may vary between 7.75% or 8.25% based on whether the Borrowers’ fixed charge coverage ratio is greater than 1.00 to 1.00 or less than or equal to 1.00 to 1.00, respectively.

Borrowings under the SLR Credit Agreement will mature, and all outstanding amounts thereunder will be payable on October 29, 2026, unless the maturity is accelerated subject to the terms set forth in the Credit Agreement or if there is an earlier maturity of the Wells Fargo Credit Agreement (as defined below). Each Borrower’s obligations under the SLR Credit Agreement are guaranteed by the Company and each of the Company’s subsidiaries that are party to the SLR Credit Agreement from time to time. Repayment of obligations under the SLR Credit Agreement is secured by a pledge over substantially all assets and proceeds thereof now owned or hereafter acquired by the Company and certain of its subsidiaries.

The Company will use proceeds from the Term Loan Facility to refinance the existing term loan facility with Wells Fargo Bank, National Association. (“Wells Fargo”), pay transaction expenses, and for general corporate purposes.

The SLR Credit Agreement contains customary affirmative and negative covenants for financings of this type, including, among other terms and conditions, delivery of financial statements, reports and maintenance of existence, availability subject to a calculated borrowing base, as well as limitations and conditions on the Company’s and each of its participating subsidiaries’ ability to: create, incur, assume or be liable for indebtedness; dispose of assets outside the ordinary course; acquire, merge or consolidate with or into another person or entity; create, incur or allow any lien on any of its property; make investments; or pay dividends or make distributions, in each case subject to certain exceptions. The financial covenants set forth in the SLR Credit Agreement initially require the Borrowers to (a) maintain minimum excess availability of at least the greater of (i) $10 million (subject to increase set forth in the SLR Credit Agreement related to utilization of any incremental term loan facilities thereunder) or (ii) 12.5% of the sum of (x) the line cap under the Wells Fargo Credit Agreement (calculated without giving effect to any term pushdown reserve) plus (y) the lesser of (A) the outstanding principal balance of the loans under the SLR Credit Agreement and (B) the borrowing base under the SLR Credit Agreement (the “Combined Line Cap”). From and after the date on which both the fixed charge coverage ratio for the previous 12-month period is at least 1.00 to 1.00 and availability under the Wells Fargo Credit Agreement is equal to or greater than $20,000,000, the Borrower shall no longer be subject to a minimum excess availability covenant but rather would be required to maintain a fixed charge coverage ratio of at least 1.00:1.00 tested when availability under the Wells Fargo Credit Agreement is less than the greater of (i) 12.5% of the Combined Line Cap (excluding the effect, if any, of any term pushdown reserve), and (ii) $11,000,000, calculated as of the last day of each fiscal quarter (the “Financial Covenants”). In addition, the SLR Credit Agreement includes customary events of default, including but not limited to, the nonpayment of principal and interest when due thereunder, breaches of representations and warranties, noncompliance with covenants, acts of insolvency and default on indebtedness held by third parties (subject to certain limitations and cure periods).

This description of the SLR Credit Agreement is a summary only and qualified in its entirety by reference to the text of the SLR Credit Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ending December 31, 2022.

Amendment to Existing ABL Revolving Facility

On November 30, 2022, the Company also entered into an Amendment (the “Amendment”) by and among the Company, as borrower, Wells Fargo, as Agent, and the lenders from time to time party thereto, which amended the Company’s existing asset-based revolving loan facility and term loan facility, dated as of January 31, 2020, among the Company, the lenders from time to time party thereto and Wells Fargo, as Agent (the “Existing Credit Agreement” and, as amended by the Amendment, the “Wells Fargo Credit Agreement”). Capitalized terms used but not defined in this report have the meanings ascribed to such terms in the Wells Fargo Credit Agreement.

The Amendment will terminate the term loans thereunder in connection with the refinancing described above and permit the entry into and the lien and guarantees related to the SLR Credit Agreement. The guarantees and liens existing in connection with the Wells Fargo Credit Agreement will remain in place upon the closing of the transaction contemplated by the Credit Agreement with respect to the revolving asset-based loans thereunder but will be terminated with respect to the term loans. The Wells Fargo Credit Agreement was also amended to add the Financial Covenants consistent with the SLR Credit Agreement. The principal amount of the loans continue to bear interest based on the base rate or the SOFR rate, plus an applicable margin The Amendment increased the margin applicable to SOFR loans and letters of credit to a range of 5.00% to 5.50% from a range of 1.75% to 2.25% in the Existing Credit Agreement (based on the maximum revolver amount) and the margin applicable to base rate loans to a range of 4.00% to 4.50% from a range of 0.75% to 1.25% in the Existing Credit Agreement (based on the maximum revolver amount). Borrowings under the Credit Agreement are scheduled to mature, and all outstanding amounts thereunder will be payable on October 29, 2026, unless the maturity is accelerated subject to the terms set forth in the Credit Agreement or there is an earlier maturity of the SLR Credit Agreement.

Other than as specifically provided in the Amendment, the Amendment had no effect on any schedules, exhibits or attachments to the Wells Fargo Credit Agreement. Other than as specifically provided in the Amendment, the Guaranty and Security Agreement related to the Wells Fargo Credit Agreement remains in effect.

This description of the Amendment is a summary only and qualified in its entirety by reference to the text of the Credit Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ending December 31, 2022.

Item 1.02 Termination of a Material Definitive Agreement.

The information in Item 1.01 is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information in Item 1.01 is incorporated herein by reference.

Item 8.01 Other Events.

On November 30, 2022, Nautilus, Inc. issued a press release announcing the refinancing of its existing Term Loan. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 8.01 and in the exhibit attached hereto is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as otherwise expressly stated by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibit is furnished herewith and this list is intended to constitute the exhibit index:

99.1 Nautilus, Inc. press release dated November 30, 2022.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NAUTILUS, INC.
	(Registrant)
November 30, 2022	By:	/s/ Aina E. Konold
Date		Aina E. Konold
		Chief Financial Officer
		(Principal Financial Officer)

EX-99.1

Nautilus, Inc. Completes Refinancing of Existing Term Loan, Enhancing its Liquidity Position and Increasing the Total Credit Facility to $130 Million November 30, 2022 VANCOUVER, Wash.--(BUSINESS WIRE)--Nov. 30, 2022-- Nautilus, Inc. (NYSE: NLS) (the “Company”) today announced the amendment of its existing credit facility by refinancing the previous term loan with a new $30 million term loan (“New Term Loan”), thereby increasing the Company’s total credit facility to $130 million. The credit facility previously consisted of a $100 million asset-based revolver and a $15 million term loan provided by Wells Fargo Bank, NA. The New Term Loan will be provided by SLR Credit Solutions (f/k/a Crystal Financial), a portfolio company of SLR Capital Partners. Wells Fargo Bank, NA will continue to provide the $100 million revolver and both facilities will mature on October 29, 2026. The incremental availability provided by the New Term Loan facility, along with the Company’s cash balance, is expected to provide sufficient working capital to fund business improvements and growth initiatives and for general corporate purposes, as needed. "Our increased credit facility, along with our cash balance, will allow us to finance key strategic and operating initiatives and drive to sustained profitable growth,” said Aina Konold, Chief Financial Officer, Nautilus, Inc. “With no debt maturities until calendar 2026, we are well positioned to navigate short-term macroeconomic challenges while continuing to make progress on our North Star strategy. We are very pleased to continue our partnership with Wells Fargo as our revolver lender and welcome SLR Credit Solutions as our New Term Loan lender.” The entire $130 million credit facility does not contain any financial performance covenants and is governed by a single Minimum Excess ABL Availability Covenant, which is the greater of (i) $10 million and (ii) 12.5% of the Combined Line Cap as defined in the credit agreement. For additional information on these facilities, please reference the Company's current report on Form 8-K filed with the SEC on November 30, 2022. OceanArc Capital Partners LLC acted as the Company’s exclusive financial advisor for the transaction. About Nautilus, Inc. Nautilus, Inc. (NYSE:NLS) is a global leader in digitally connected home fitness solutions. The Company’s brand family includes Bowflex®, Nautilus®, Schwinn®, and JRNY®, its digital fitness platform. With a broad selection of exercise bikes, cardio equipment, and strength training products, Nautilus, Inc. empowers healthier living through individualized connected fitness experiences and in doing so, envisions building a healthier world, one person at a time. Headquartered in Vancouver, Washington, the Company’s products are sold direct to consumer on brand websites and through retail partners and are available throughout the U.S. and internationally. Nautilus, Inc. uses the investor relations page of its website (www.nautilusinc.com/investors) to make information available to its investors and the market. Forward-Looking Statements This press release includes forward-looking statements (statements which are not historical facts) within the meaning of the Private Securities Litigation Reform Act of 1995, which may include: the use of funds from the New Term Loan, projected, targeted or forecasted financial, operating results and capital expenditures, anticipated demand for the Company's new and existing products, statements regarding the Company's prospects, resources or capabilities; planned investments, strategic initiatives and the anticipated or targeted results of such initiatives; the effects of the COVID-19 pandemic on the Company’s business; and planned operational initiatives and the anticipated cost-saving results of such initiatives.. All of these forward-looking statements are subject to risks and uncertainties that may change at any time. Factors that could cause Nautilus, Inc.’s actual results to differ materially from these forward-looking statements include: our ability to meet borrowing conditions and remain in compliance with the terms of the New Term Loan and the credit facility; weaker than expected demand for new or existing products; our ability to timely acquire inventory that meets our quality control standards from sole source foreign manufacturers at acceptable costs; risks associated with current and potential delays, work stoppages, or supply chain disruptions, including shipping delays due to the shortage of shipping containers; an inability to pass along or otherwise mitigate the impact of raw material price increases and other cost pressures, including unfavorable currency exchange rates and increased shipping costs; experiencing delays and/or greater than anticipated costs in connection with launch of new products, entry into new markets, or strategic initiatives; our ability to hire and retain key management personnel; changes in consumer fitness trends; changes in the media consumption habits of our target consumers or the effectiveness of our media advertising; a decline in consumer spending due to unfavorable economic conditions; risks related to the impact on our business of the COVID-19 pandemic or similar public health crises; softness in the retail marketplace; availability and timing of capital for financing our strategic initiatives, including being able to raise capital on favorable terms or at all; changes in the financial markets, including changes in credit markets and interest rates that affect our ability to access those markets on favorable terms and the impact of any future impairment. Additional assumptions, risks and uncertainties are described in detail in our registration statements, reports and other filings with the Securities and Exchange Commission, including the “Risk Factors” set forth in our Annual Report on Form 10-K, as supplemented by our quarterly reports on Form 10-Q. Such filings are available on our website or at www.sec.gov. You are cautioned that such statements are not guarantees of future performance and that our actual results may differ materially from those set forth in the forward-looking statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent developments, events or circumstances. View source version on businesswire.com: https://www.businesswire.com/news/home/20221130006013/en/ Investor Relations: John Mills ICR, LLC

646-277-1254 John.Mills@icrinc.com Media: John Fread Nautilus, Inc. 360-859-5815 jfread@nautilus.com Robin Rootenberg Action Mary 925-464-8030 robin.rootenberg@actionmary.com Source: Nautilus, Inc.

XML

Cover Page	Nov. 30, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 30, 2022
Entity Registrant Name	NAUTILUS, INC.
Entity Incorporation, State or Country Code	WA
Entity File Number	001-31321
Entity Tax Identification Number	94-3002667
Entity Address, Address Line One	17750 S.E. 6th Way
Entity Address, City or Town	Vancouver
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98683
City Area Code	(360)
Local Phone Number	859-2900
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	NLS
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001078207
Amendment Flag	false