Dec 9 2009
Fitness company Nautilus, Inc. (NYSE:NLS), (the “Company”) announces
today that it has entered into definitive agreements for the sale of
certain assets of its commercial business to Fit Dragon International
Ltd. The agreements provide for the sale of certain assets of
StairMaster® and Schwinn® Fitness, including the licensing of indoor
cycling products of the Schwinn® Fitness brand for use in the commercial
channel. The company retains certain rights to the Schwinn® brand and
will continue to market Schwinn® fitness products in the consumer
channel, including both retail and direct to consumer. The transactions
are subject to customary conditions to closing and are scheduled to
close on or before December 30, 2009.
The Company had previously announced its intention to divest itself of
its commercial business in order to enable its team to invest all
resources on its branded consumer retail and direct businesses. The
agreements do not involve Schwinn® products which are sold in the retail
and direct sales channels, which Nautilus will continue to sell.
“We believe this is an important step towards our goal of focusing
exclusively on our direct and retail channels,” said Edward Bramson, CEO
of Nautilus. “The Schwinn® and StairMaster® brands and products have
been an important part of the commercial market place and we are pleased
that these products will continue to be available for health clubs and
fitness centers for the future. We are confident that Fit Dragon will be
an excellent supplier to the commercial markets, and we will work
aggressively with them to support an effective transition of our
StairMaster® and Schwinn® indoor cycling commercial products and service.
“We are retaining certain rights of the Schwinn® trademarks and remain
committed to the Schwinn® brand and fitness products in the Consumer
channel and will continue our marketing, product development, and sales
efforts in these channels,” added Mr. Bramson.
Under the terms of the agreements, the assets are being sold for $12.3
million. The Company will receive a net cash payment of $10.9 million
and approximately $1.4 million in liabilities are being assumed by the
buyer. Nautilus will receive approximately $7.9 million cash at closing,
$2.0 million within 60 days, and the remaining $1.0 million over the
next three years. In addition, Nautilus will be entitled to receive
certain royalties based on the buyer’s post-closing sales of Schwinn®
commercial indoor cycling and StairMaster® products. Nautilus will
retain the right to continue to market and sell Schwinn® indoor cycling
products in the retail and direct to consumer sales channels. Nautilus
will also retain certain rights to sell StairMaster® products in the
retail and direct to consumer markets.
Nautilus continues to work with Robert W. Baird & Co. to divest its
remaining commercial assets, including the strength and cardio lines and
the manufacturing plant in Virginia.
With the disposition of these commercial businesses, Nautilus plans to
focus exclusively on the consumer marketplace. As part of that effort,
Bill McMahon has been promoted to Senior Vice President and General
Manager for the entire Consumer business reporting directly to Edward
Bramson, CEO of Nautilus. In addition, the Company announced that
Sebastien Goulet, General Manager Commercial Business and Senior Vice
President Manufacturing, has elected to leave the company to pursue
other opportunities.
http://www.nautilusinc.com/