Nautilus 2003 Annual Report Download - page 18

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Table of Contents
For our direct-marketed and retail products, we mainly use Asian suppliers to manufacture the components and finished goods. Whenever
possible, we attempt to use at least two suppliers to manufacture each product component in order to improve flexibility, efficiency, and
emphasis on product quality. We do have domestic operations in Texas that manufactures our various lines of consumer treadmills and the
TreadClimber product line.
Our commercial strength fitness products are manufactured in Virginia and our commercial cardiovascular fitness products are manufactured in
Oklahoma. These operations are vertically integrated and include such functions as metal fabrication, powder coating, upholstery and vacuum-
formed plastics processes. By managing our own manufacturing operations, we can control the quality of our commercial products, and offer
customers greater color specification flexibility, build-to-order capability, and unique product configurations.
Domestically, we inspect, package, and ship our products from our facilities in Washington, Virginia, Illinois, Texas, and Oklahoma. We rely
primarily on United Parcel Service (UPS) to deliver our Bowflex, TreadClimber, and Nautilus Sleep Systems products. We distribute our retail
and commercial fitness equipment from our facilities in Illinois, Oklahoma, and Texas using various commercial truck lines. We distribute
commercial strength fitness equipment from our Virginia warehouse facilities directly to customers primarily through our truck fleet. This
method of distribution allows us to effectively control the set up and inspection of equipment at the end-user’s facilities.
For international sales, we have distributors in over 50 countries, and we ship our products from leased facilities in Switzerland, the United
Kingdom and Germany. We also lease, on a month-to-month basis, flexible warehouse space in multiple countries in Asia and Europe, the
largest of which is located in the Netherlands. This flexible warehouse space is devoted to international distribution of our products.
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