Nautilus 2004 Annual Report Download - page 5

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Table of Contents
Item 1. Business
OVERVIEW
Nautilus, Inc. (the “Company”) is a leading marketer, developer and manufacturer of branded health and fitness products sold under such
well-known brand names as Nautilus, Bowflex, Schwinn, StairMaster and Trimline. Our products are distributed through diversified direct,
retail and commercial sales channels, both domestically and internationally. We market and sell a variety of branded products that are targeted
at specific segments where people shop or exercise. Nautilus and StairMaster brands are most commonly marketed through the commercial and
high-end specialty retail markets, while the Bowflex and Schwinn branded products are marketed primarily through retail and direct channels.
Our product marketing includes direct response marketing utilizing a combination of television commercials, infomercials, response mailings,
the Internet, catalog, and inbound/outbound call centers. It also includes a sales force and dealer network marketing to retail organizations,
health clubs, government agencies, hotels, corporate fitness centers, colleges, universities and assisted living facilities worldwide.
Founded in 1986, the Company has grown to over $520 million in annual sales through a combination of internal growth of our Bowflex
brand and a series of strategic acquisitions of strong brands, 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
strength or weight resistance products in the direct, retail and commercial fitness channels both domestically and internationally.
Our product lines reflect a complete assortment of high-quality fitness equipment. Our Nautilus brand includes three lines of selectorized
strength equipment, plus free weights, benches, and both upright and recumbent exercise cycles. During 2004, the company developed a line of
Nautilus cardiovascular equipment, including new ellipticals and treadmills, and began development of a commercial version of our popular
TreadClimber cardio machine. Our StairMaster brand is best known for steppers and stepmills designed for excellent lower-body and
cardiovascular workouts, but also includes treadmills and ellipticals. Our Bowflex brand has been expanded to represent a complete line of
fitness equipment, both strength and cardio, including multiple models of home gyms, plus strength cages, free weights, benches,
TreadClimber and treadmills. Our Schwinn Fitness brand includes a popular line for indoor cycling, along with upright and recumbent exercise
bikes, and treadmills and ellipticals.
Our products are in approximately 25% of U.S. retail doors, and approximately 40% of specialty fitness doors. In addition, we have more
than 1,200 dealers in the U.S., a worldwide network of distributors in over 50 countries, and sales offices in Switzerland, Italy, Germany, the
United Kingdom and China.
The Company was incorporated in California in 1986 and became a Washington corporation in 1993. On March 14, 2005, the Company
changed its corporate name from The Nautilus Group, Inc. to Nautilus, Inc. to reflect the Company functioning as a united team with the
“power of one” rather than as a holding company or group. Our common stock is listed on the New York Stock Exchange and trades under the
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. Beginning July 1, 2005, our principal executive offices will be located at 16400 SE Nautilus Drive, Vancouver, Washington 98683.
As used in this Form 10-K, the terms “we,” “our,” “us,” “Nautilus” and “Company”
refer to Nautilus, Inc. and its subsidiaries. The names
Nautilus
®
, Bowflex
®
, Power Rod
®
, TreadClimber
®
, Schwinn
®
(fitness products), StairMaster
®
and Trimline
®
are trademarks of the
Company.
4