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09.24.01
Direct Focus completes acquisition of fitness division of Schwinn
Direct Focus completes acquisition of fitness division of Schwinn
Direct Focus completes acquisition of fitness division of Schwinn
VANCOUVER, WA – September 24, 2001 – Direct Focus, Inc. (Nasdaq: DFXI), a leading marketing company for fitness and healthy lifestyle products, announced today that it has received final court approval to acquire substantially all of the assets of Schwinn/GT’s fitness equipment division (“Schwinn Fitness”) through a bankruptcy auction in the U.S. Bankruptcy Court for the District of Colorado. In addition, the Company announced that it has closed the transaction.
Under the terms of the bid, Direct Focus is paying approximately $65 million in cash for Schwinn Fitness. The Direct Focus bid was linked to a successful bid submitted by Pacific Cycle LLC for the purchase of substantially all of the assets of Schwinn/GT’s bicycle division. Direct Focus expects Schwinn Fitness to contribute over $120 million to sales in 2002 and to be accretive to earnings.
“We are very pleased with the success of our bid,” said Brian Cook, CEO of Direct Focus. “The acquisition is a very important part of our strategy to become the leader in the $6.2 billion domestic fitness market and expand our international sales. We have enhanced our retail distribution capabilities on a global basis and gained additional R&D capabilities. We now have another great brand name in the fitness area and offer our customers a powerful combination of Bowflex, Nautilus, and Schwinn product lines.”
“Our management team is very familiar with Schwinn Fitness. Kevin Lamar, who joined us as our President in June, was instrumental in growing the Schwinn Fitness business from $20 million in annual sales to over $100 million in annual sales from 1989 to 2000. At the end of the second quarter, we reported $94.7 million in cash and short term investments. We believe this acquisition is an excellent use of our financial and management resources, and offers significant growth opportunities.”
“We believe Schwinn Fitness’ strong brand and quality fitness products will be an excellent fit with our growing portfolio of fitness and healthy lifestyle products,” said Kevin Lamar, President of Direct Focus. “Schwinn Fitness offers a popular line of cardiovascular equipment, which includes treadmills, stationary bikes, steppers and ellipticals sold under the Schwinn and Trimline brands. These products will complement our Nautilus line of strength-building products, and we expect to gain powerful distribution synergies through our combined product lines and sales efforts.”
About Direct Focus, Inc.
Direct Focus is a marketing company for fitness and healthy lifestyle products with direct, retail, and commercial sales channels worldwide. The Company currently markets its Bowflex line of home fitness equipment and Nautilus Sleep Systems directly to consumers, using an effective combination of television advertising, 800-call centers and Web sites. The Company sells its Schwinn Fitness products, under the Schwinn and Trimline brand names, and its Nautilus consumer fitness products through retail athletic stores. In addition, Direct Focus sells its Nautilus commercial fitness equipment directly to health clubs and other institutions. The Company is headquartered in Vancouver, Washington. Direct Focus is located on the Web at www.directfocusinc.com.
This press release contains forward-looking statements relating to anticipated sales and the development of Direct Focus' products and services, including statements regarding its Nautilus and Schwinn businesses. Factors that could affect Direct Focus' actual results include its reliance on a limited product line, fluctuations in advertising rates, market acceptance of its existing and future products, growth management challenges, and general economic conditions. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in Direct Focus' annual report on Form 10-K for the fiscal year ended December 31, 2000.
Under the terms of the bid, Direct Focus is paying approximately $65 million in cash for Schwinn Fitness. The Direct Focus bid was linked to a successful bid submitted by Pacific Cycle LLC for the purchase of substantially all of the assets of Schwinn/GT’s bicycle division. Direct Focus expects Schwinn Fitness to contribute over $120 million to sales in 2002 and to be accretive to earnings.
“We are very pleased with the success of our bid,” said Brian Cook, CEO of Direct Focus. “The acquisition is a very important part of our strategy to become the leader in the $6.2 billion domestic fitness market and expand our international sales. We have enhanced our retail distribution capabilities on a global basis and gained additional R&D capabilities. We now have another great brand name in the fitness area and offer our customers a powerful combination of Bowflex, Nautilus, and Schwinn product lines.”
“Our management team is very familiar with Schwinn Fitness. Kevin Lamar, who joined us as our President in June, was instrumental in growing the Schwinn Fitness business from $20 million in annual sales to over $100 million in annual sales from 1989 to 2000. At the end of the second quarter, we reported $94.7 million in cash and short term investments. We believe this acquisition is an excellent use of our financial and management resources, and offers significant growth opportunities.”
“We believe Schwinn Fitness’ strong brand and quality fitness products will be an excellent fit with our growing portfolio of fitness and healthy lifestyle products,” said Kevin Lamar, President of Direct Focus. “Schwinn Fitness offers a popular line of cardiovascular equipment, which includes treadmills, stationary bikes, steppers and ellipticals sold under the Schwinn and Trimline brands. These products will complement our Nautilus line of strength-building products, and we expect to gain powerful distribution synergies through our combined product lines and sales efforts.”
About Direct Focus, Inc.
Direct Focus is a marketing company for fitness and healthy lifestyle products with direct, retail, and commercial sales channels worldwide. The Company currently markets its Bowflex line of home fitness equipment and Nautilus Sleep Systems directly to consumers, using an effective combination of television advertising, 800-call centers and Web sites. The Company sells its Schwinn Fitness products, under the Schwinn and Trimline brand names, and its Nautilus consumer fitness products through retail athletic stores. In addition, Direct Focus sells its Nautilus commercial fitness equipment directly to health clubs and other institutions. The Company is headquartered in Vancouver, Washington. Direct Focus is located on the Web at www.directfocusinc.com.
This press release contains forward-looking statements relating to anticipated sales and the development of Direct Focus' products and services, including statements regarding its Nautilus and Schwinn businesses. Factors that could affect Direct Focus' actual results include its reliance on a limited product line, fluctuations in advertising rates, market acceptance of its existing and future products, growth management challenges, and general economic conditions. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in Direct Focus' annual report on Form 10-K for the fiscal year ended December 31, 2000.