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Table of Contents
Item 1. Business
OVERVIEW
The Nautilus Group, Inc. (the “Company”)
is a leading marketer, developer and manufacturer of branded health and fitness products sold under
such well-known names as Nautilus, Bowflex, Schwinn, StairMaster, TreadClimber and Trimline. Our products are distributed through
diversified direct, retail and commercial sales channels. We market and sell our Bowflex, TreadClimber, and Nautilus Sleep Systems products
through our direct-marketing channel utilizing an effective combination of television commercials, infomercials, response mailings, the
Internet, and inbound/outbound call centers. We market and sell our Nautilus, Schwinn, and StairMaster commercial fitness equipment through
our sales force and selected dealers to health clubs, government agencies, hotels, corporate fitness centers, colleges, universities and assisted
living facilities worldwide. We also market a comprehensive line of consumer fitness equipment sold under the Nautilus, Schwinn,
StairMaster, Bowflex, and Trimline brands, through a network of specialty and sporting goods dealers, distributors and retailers worldwide.
Founded in 1986, the Company has grown to approximately $500 million in annual sales through a combination of internal growth of our
Bowflex product line and a series of strategic acquisitions, including Nautilus International, Inc. (“Nautilus”) in January 1999, the fitness
division of Schwinn/GT Corp. and its affiliates (“Schwinn Fitness”) in September 2001 and StairMaster Sports/Medical, Inc. (“StairMaster”)
in
February 2002. As a result of these acquisitions, we considerably expanded our portfolio of leading brands, product lines, channels of
distribution, product development capabilities and the size of our customer base. We now offer a comprehensive line of cardiovascular and
weight resistance products in the direct, retail and commercial fitness channels. Our product lines include home gyms, free weight equipment,
treadmills, indoor cycling equipment, steppers, ellipticals, and fitness accessories, as well as premium air support sleep systems. We have over
1,200 dealers in the U.S., a worldwide network of distributors, operations in Switzerland, and offices in Italy, Germany, and the United
Kingdom.
The Company was incorporated in California in 1986 and became a Washington corporation in 1993. On May 21, 2002, the Company changed
its corporate name to The Nautilus Group, Inc. from Direct Focus, Inc. Concurrent with the name change, trading of the Company’s shares was
moved from the NASDAQ National Market to the New York Stock Exchange with a new ticker symbol (NLS).
Our principal executive offices are located at 1400 NE 136
th
Avenue, Vancouver, Washington 98684, and our telephone number is (360) 694-
7722. We maintain our corporate website at www.nautilusgroup.com. None of the information on this website or our other websites is part of
this Form 10-K. On our website, we make available, free of charge, printable copies of our annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange
Commission (“SEC”). In addition, our code of business conduct and ethics, corporate governance guidelines, and the charters of our Audit
Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on our corporate website. These
corporate governance documents are available in print to any stockholder who requests them.
As used in this Form 10-K, the terms “we,” “our,” “us,” “Nautilus Group” and “Company” refer to The Nautilus Group, Inc. and its
subsidiaries. The names Nautilus
®
, Bowflex
®
, Power Rod
®
, TreadClimber
®
, Schwinn
®
(fitness products), StairMaster
®
and Trimline
®
are
trademarks of the Company.
The consolidated financial statements of the Company include The Nautilus Group, Inc. and its wholly owned subsidiaries (collectively, the
“Company”). All intercompany transactions have been eliminated in the preparation of the consolidated financial statements.
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