Nautilus 2002 Annual Report Download - page 12

firmness settings on each side of the bed. We believe that variable firmness and other comfort-oriented features of our Nautilus Sleep Systems
favorably differentiate them from conventional innerspring mattresses.
Our Nautilus Sleep Systems are currently available in four models:
o The Ultimate Series is our top-of-the-line model. It features dual patent-pending, interlocking variable support air chambers that permit users
to maintain separate firmness settings on each side of the sleep system. The interlocking chambers regulate airflow and pressure to more
effectively maintain support when a user changes position. The Ultimate Series comes with removable wool blend and silk blend pillow top
sleeping surfaces, which permits users to easily convert to a "tight top" surface when they desire extra firmness. The Ultimate Series also has an
upgraded comfort layer of visco-elastic foam that conforms to a user's body.
o The Premier Series features dual patent-pending, interlocking variable support air chambers that permit users to maintain separate firmness
settings on each side of the sleep system. The interlocking chambers regulate airflow and pressure to more effectively maintain support when a
user changes position. The Premier Series comes with a removable wool blend pillow top sleeping surface, which permits users to easily
convert to a "tight top" surface when they desire extra firmness.
o The Signature Series is designed to appeal to consumers who desire the flexibility of dual variable firmness support air chambers, but at a
more affordable price. Our customers can choose between a tight top or pillow-top sleeping surface over a one and one-half inch convoluted
foam comfort layer.
o The Basic Series is our entry-level model, which features a single, head-to-toe variable firmness support air chamber and a traditional
tight-top sleeping surface over a one and one-half inch thick convoluted foam comfort layer.
We offer foundations that are specifically designed to support and enhance the performance of our Nautilus Sleep Systems. We advise
consumers to use our foundations because conventional box springs tend to sag and wear over time, causing a sleep system to eventually mirror
the worn box spring. The majority of our Nautilus Sleep Systems customers order a complete sleep system, which includes both a mattress and
a foundation.
TREADCLIMBER
In March 2003, we introduced a new line of cardiovascular fitness equipment, which we have named the "TreadClimber." The TreadClimber
incorporates three popular cardiovascular fitness features in one machine and is marketed through our direct sales channel to home consumers.
TreadClimber provides a unique combination of movements that allows users to walk forward (like a treadmill) and step up (like a
stair-stepper) while taking advantage of the low impact movement of an elliptical machine. We believe that the unique combination of
movements of our TreadClimber favorably differentiates it from other cardiovascular fitness equipment for the home.
CHAMPION NUTRITION
As part of our mission to provide quality healthy lifestyle products, we obtained an option to purchase Champion Nutrition ("Champion") by
entering into a Loan and Security Agreement ("Loan Agreement") with Champion and its primary shareholders in May 2001. Champion is a
privately held manufacturer of nutritional supplements. We began selling Champion's product line through our direct sales channel in June
2001. We package these products as kits and sell them to our Bowflex customers as add-on items. Under the terms of the Loan Agreement, the
Company's option to buy the stock of Champion expired in February
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