Confirming its plans to go public, iFIT Health & Fitness reported a 104.9 percent increase in revenues to $1,745.1 million for the 12 months ended last May 31, compared with $700.0 million in 2018/19 and $851.7 million in 2019/20. It got orders worth $382.3 million last year, representing an increase of 108.1 percent from the prior year.
On the other hand, after generating net income of $56.6 million in 2018/19, thanks to the sale of a subsidiary, the company incurred net losses of $98.5 million in 2019/20 and $516.7 million in the last financial year. It made growing operating losses in each of the three years, moving from a loss of $21.1 million to a loss of $49.7 million and a loss of $127.6 million in the last year.
The company said it was planning to raise up to $100 million on Nasdaq for general corporate purposes and to grant a $35.0 million bonus payment to Scott R. Watterson, iFIT’s CEO, who co-founded the company along with Gary E. Stevenson in 1977. It didn’t provide yet any indications about the valuation it is seeking through the public offering. According to Bloomberg, the company was valued at more than $7 billion in a preliminary $200 million round of financing last October.
Only 16 percent of iFIT’s revenues came from international markets last year. The Utah-based company, previously called Icon Health & Fitness, describes itself as the N° 1 provider of large fitness equipment in the U.S. It has been selling it and other products for many years under brands such as Freemotion, NordicTrack, ProForm, Sweat, Weider and Weslo. More recently, it has been developing and promoting strongly its proprietary iFIT connected fitness software, making it also available to other companies, and the related internet platform.
NordicTrack represented 53 percent of the company’s revenues in the past year, followed by ProForm with a share of 27 percent and iFIT subscriptions at 13 percent. The company’s own direct-to-consumer channels generated 44 percent of its interactive hardware revenues, while 54 percent went through more than 50 retailers around the world including Amazon, Best Buy, Dick’s Sporting Goods, Costco, Canadian Tire, Rebel Sports and Decathlon. The balance of 2 percent came through strategic partnerships in the commercial channel.
Outside the U.S., the company’s own DTC business experienced high double-digit growth last year in the U.K., France and Australia.
The company said it sold about 10.1 million “interactive fitness products” with a gross merchandise value of $2.8 billion in the last fiscal year, including weights, apparel, nutrition products and other accessories. They generated net revenues of $1,515.3 million.
The company boasts a highly flexible supply chain, getting its products manufactured in seven countries, a global community of over 6.1 million members with an iFit account or a Sweat subscription in 120 countries, and a library of more than 17,000 workouts.
The total number of interactive fitness subscribers has been growing at a compound average annual rate (CAGR) of 81.3 percent since 2016/17, reaching a level of 1.1 million. In the last financial year, members participated in 112 million workouts, an increase of 229 percent from the previous year.
“We believe the breadth of our equipment range across modalities, brands, price points and distribution channels gives us the largest SAM (Serviceable Addressable Market) among our primary competitors in the fitness industry,” said iFIT in its filing. “We believe we are the only provider delivering a seamless solution of software, content and hardware with offerings across treadmills, bikes, ellipticals, rowers, climbers, strength equipment, fitness mirrors, yoga equipment and accessories in the global market.”
In its filing, iFIT said that it plans to only offer Class A shares on the stock exchange. Class B shares will carry the same value, but ten times more voting rights.
Morgan Stanley, BofA Securities, Barclays, Citi, Credit Suisse, Jefferies and Baird have been named as joint bookrunners in the transaction.
