Nautilus, Inc., together with its subsidiaries, operates as a consumer fitness products company. The company’s principal business activities include designing, developing, sourcing and marketing cardio and strength fitness products and related accessories for consumer use, primarily in the United States and Canada, as well as in international markets outside North America. Segments The company operates in the two segments, Direct and Retail. The Direct business offers products directly to consumers through television advertising, catalogs and the Internet. The Retail business offers its products through a network of independent retail companies with stores and Websites located in the United States and internationally. Products The company markets cardiovascular, strength and nutrition fitness products that cover a range of price points and features. Its products are designed for home use by individuals with varying exercise needs. Nautilus is its corporate umbrella brand and is also used to differentiate certain specialized cardio, treadmills, ellipticals and bike products. The company’s Bowflex brand represents a line of fitness equipment comprised of both cardio and strength products, including the TreadClimber and Max Trainer specialized cardio machines, PowerRod and Revolution home gyms and SelectTech dumbbells, and nutrition supplements including Bowflex Body. The company’s Schwinn brand is known for its popular line of exercise bikes, including the Airdyne, treadmills, and ellipticals. The company’s Universal brand offers a line of kettlebell weights and weight benches. The Bowflex TreadClimber and Max Trainer product lines are offered for sale primarily through its Direct sales channel. Sales and Marketing Direct: In its Direct business, the company markets and sells its products, principally Bowflex cardio and strength products, directly to consumers. Retail: The company’s products are marketed through a network of retail companies, consisting of sporting goods stores, Internet retailers, large-format and warehouse stores, and smaller specialty retailers and independent bike dealers. Seasonality The company’s sales are strongest in the first and fourth quarters, followed by the third quarter, and are generally weakest in the second quarter. Intellectual Property Trademarks: The company owns various trademarks, including Nautilus, Bowflex, PowerRod, Bowflex Revolution, TreadClimber, Bowflex Max Trainer, SelectTech, Trimline, Airdyne, Bowflex Boost, Bowflex Body and Universal. Nautilus is the exclusive licensee under the Schwinn mark for indoor fitness products. Patents and Designs: The company owns or licenses patents and design registrations covering various technologies, some of which are utilized in its selectorized dumbbells, treadmills, and exercise bikes. Nautilus is also the licensee of patents that cover the Bowflex Revolution home gyms. Additionally, the company maintains a portfolio of patents related to its TreadClimber specialized cardio machines, which are sold primarily in its Direct segment. The portfolio includes approximately 24 issued U.S. patents covering various product features and other technologies associated with its TreadClimber products. Customers In 2014, Amazon.com accounted for 11.3% of the company’s net sales. Strategy The company’s strategy involves the following: creatively marketing equipment, both directly to consumers and through Retail customers, while leveraging well-known brand names; enhancing product lines by designing fitness equipment that meets or exceeds the high expectations of customers; utilizing strengths in product engineering to reduce product costs; continuing investment in research and development activities aimed at acquiring or creating new technologies; increasing international Retail sales and distribution; and maximizing available royalty revenues from the licensing of brands and intellectual property. Environmental and Other Regulatory Matters The U.S. Environmental Protection Agency, Occupational Safety and Health Administration and other federal agencies have the authority to promulgate regulations that impact the company’s operations. In particular, the company is subject to legislation placing restrictions on its generation, emission, treatment, storage and disposal of materials, substances and wastes. Such legislation includes: the Toxic Substances Control Act; the Resource Conservation and Recovery Act; the Clean Air Act; the Clean Water Act; the Safe Drinking Water Act; and the Comprehensive Environmental Response and the Compensation and Liability Act (also known as Superfund). The company is also subject to the requirements of the Consumer Product Safety Commission and the Federal Trade Commission, in addition to regulations concerning employee health and safety matters. Competition The company’s principal competitors include Fitness Quest, ICON Health & Fitness, Johnson Health Tech, Beach Body and American Telecast. The company also competes with marketers of computer-based physical activity products, such as the Nintendo Wii and Microsoft Xbox Kinect; and weight management companies, such as Weight Watchers. History Nautilus, Inc. was founded in 1986. The company was incorporated in the state of Washington in 1993.
nautilus inc (NLS:New York)
17750 SE 6th Way
Vancouver, WA 98683
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