Nautilus 2002 Annual Report Download - page 13

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2003. Although the option has expired, the Company continues to hold a right of first refusal on the stock of Champion. If another party offers
to buy the stock of Champion, this right grants the Company the option to buy the stock of Champion, before any other party, so long as the
Company exercises the right before August 24, 2003.
COMMERCIAL/RETAIL BUSINESS SEGMENT
COMMERCIAL/RETAIL SALES AND MARKETING
We market and sell our Nautilus, Schwinn, and StairMaster commercial fitness equipment through our direct sales force and selected dealers to
health clubs, government agencies, hotels, corporate fitness centers, colleges, universities and assisted living facilities. Our commercial direct
sales force is focused on strengthening the market position of our existing Nautilus, Schwinn, and StairMaster commercial product lines, which
we sell principally to health clubs, large hotels, assisted living facilities and the government. Additionally, as we continue to broaden our
product line with products like Nautilus Nitro and commercial strength equipment, our direct sales force will target new market segments and, if
successful, broaden our customer base. Internationally, we market and sell our Nautilus, Schwinn, and StairMaster commercial fitness products
through our foreign subsidiaries and a worldwide network of independent distributors.
We also market a complete line of consumer fitness equipment, under the Nautilus, Schwinn, StairMaster, and Trimline brands, through an
independent network of more than 1,200 dealers, sporting goods retailers and specialty stores worldwide. As part of our September 2001
acquisition of Schwinn Fitness, we added an experienced management team to oversee the sales and marketing operations of our retail products
business.
In general, sales of our retail fitness equipment is highly seasonal. We believe that sales within our commercial/retail segment are considerably
lower in the second quarter of the year compared to the other quarters. Our strongest quarter for the commercial/retail segment is generally the
fourth quarter, followed by the first and third quarters. We believe the principal reason for this trend is the commercial/retail fitness industry's
preparation for the impact of New Year's fitness resolutions and seasonal weather patterns related to colder winter months.
COMMERCIAL APPROACH
We position ourselves as "The Health & Fitness Consultants" to encourage our commercial market customers and potential customers to think
of us first when considering their fitness equipment and programming needs. Our strategy is to address the needs of the three key constituencies
of today's health clubs:
o Club owners (customer satisfaction and profit)
o Club staff (continuing education and career development)
o Club users (improved health and fitness)
FITNESS ACADEMY: The Schwinn Fitness Academy was established in 1997 to provide programming and educational information for both
consumers and fitness professionals. To date, the Schwinn Fitness Academy has provided training and certification for hundreds of fitness
professionals in the Schwinn Cycling Program and has recently added a range of strength training programs based on Nautilus training
principles to its repertoire. Many of these programs are targeted to special populations such as seniors, women and youth that are particularly
important to the fitness industry today.
Schwinn Fitness Academy programs are designed to aid clubs to increase profits by encouraging cost-efficient group exercise classes; benefit
staff members by helping them increase their range of fitness education skills; and motivate members to stick with their exercise programs to
truly experience fitness results.
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2003. EDGAR Online, Inc.