Nautilus 2008 Annual Report Download - page 6

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Table of Contents
direct business, as the high margin and low working capital requirements of that business model make it favorable in both difficult economic
times and when growth accelerates. We will continue to assess the health of the global and U.S. economies and, if appropriate, will re-evaluate
our business strategies and prioritize our use of resources accordingly.
Our long-term strategy involves: continued investment in research and development activities aimed at creating or acquiring new technologies;
enhancing our product lines by designing fitness equipment that meets or exceeds the high expectations of our customers; utilizing our strengths
in product engineering to reduce manufacturing costs; and creatively marketing our equipment through our popular brand names.
RECENT DEVELOPMENTS
In light of recent economic conditions, the Company is initiating a cost saving plan aimed at further reducing our operating costs to improve the
overall alignment of spending and anticipated revenue. This plan impacts all functions through reductions in personnel and a variety of other
initiatives. Our plan includes measures to reduce the Company’s working capital requirements. We expect to accomplish this objective by
discontinuing product lines that continue to experience low volumes or are subject to competitive pressures which preclude us from achieving
reasonable margins. In addition, we will be evaluating our dealer relationships to ensure our dealer network is financially stable and capable of
effectively supporting our sales objectives in territories or markets where we do not have sales employees. We anticipate incurring additional
restructuring costs of approximately $12.5 million through the second quarter of 2009 related primarily to severance costs, real estate lease
terminations and the write-off of leasehold improvements. We can provide no assurance the cost savings plan we are implementing will be
adequate to offset any future declines in revenues.
PRODUCTS
We market high-
quality strength and cardiovascular products that cover a broad range of price points and features. Our products are designed for
individuals with varying fitness needs. From the person who works out occasionally, to the professional athlete, we have the products that will
help them achieve their fitness objectives.
•
Our Nautilus brand includes: four distinct lines of strength equipment including our new Nautilus ONE™, Xpload™, Nitro
®
and
Nitro Plus
®
product lines; free weights and benches; and a complete line of cardio equipment, such as treadmills, ellipticals, bikes
and the Nautilus TreadClimber
®
. In 2009, we plan to introduce new lower priced treadmills specifically designed for the retail
business.
•
Our
StairMaster
brand is best known for its steppers and stepmills, both of which are designed for excellent lower
-
body and
cardiovascular workouts.
2
•
Our Bowflex brand represents a line of fitness equipment comprised of both strength and cardio products. Our Bowflex product line
includes multiple models of rod-based home gyms, the Revolution
®
home gym, SelectTech
®
dumbbells, weight benches, treadmills,
and TreadClimber cardio machines specifically designed for home use.
•
Our
Schwinn Fitness
brand is known for its popular line of indoor cycling equipment, upright and recumbent exercise bikes and
ellipticals. During 2009, we plan to introduce treadmills specifically designed for the retail business and certain other product
updates.
•
Our
Universal
brand was acquired in 2006. During 2009, we plan to introduce a line of Universal strength equipment that will be
marketed through our retail business.