Nautilus Group Announces Voluntary Recall to Repair Certain Bowflex Home Gym Models
VANCOUVER, Wash. - (November 16, 2004) - The Nautilus Group (NYSE: NLS) and the Consumer Product Safety Commission (CPSC) announced a voluntary recall to repair certain Bowflex home gym models by providing customers free replacement parts through the company's warranty reserve.
The recall includes shipping a seat pin repair kit to people who have certain Bowflex Power Pro and Bowflex Ultimate models. It also includes offering a new incline support bracket to owners of Bowflex Power Pro without Lat Tower built prior to September 1, 2002.
Seat pin repair kits are being mailed free of charge to all known customers of the affected product models, and incline support bracket repair kits will be shipped to customers when they respond to a post-card mailing that is being mailed this week. Customers also can check the website www.bowflex.com to confirm whether their units are affected by this recall.
"We established in our company a new higher standard that we call the 'Nautilus standard' for quality and safety," said Holly Valkama, senior vice president of manufacturing and operations.
"We require rigorous tests for all of our products as part of our new standard. In addition to applying this standard to all current and prospective products, we also went back and reviewed the field experience of older products, including the original Bowflex Power Pro model and others which have been discontinued. As we looked back, we noticed a pattern in our incident records on certain models, so we voluntarily proposed a repair solution to CPSC. They agreed with our plans, which is how we arrived at today's announcement."
"This voluntary replacement part recall serves as another reminder that Nautilus is a responsible fitness equipment manufacturer that is committed to standing behind the quality and safety of its products. The repair kits should take just a few minutes to install and will help people use their Bowflex home gym confidently for many years to come."
Rod Rice, chief financial officer, said the company has a warranty reserve of more than $2 million as of September 30, 2004, which the company believes will cover costs of the repair kit recall. "We believe our reserves are adequate to cover these expenses and believe based on previous experience this will not have a material impact our business performance. All current product models already include improvements to seat pins and incline support brackets."
Identified owners of certain Bowflex home gyms will automatically receive the seat pin repair kit in the mail in the next several weeks. Another group of owners of Bowflex home gyms will receive a postcard notifying them of an offer to receive a repair kit for the incline support bracket free of charge. No home gyms need to be returned, and customers are asked not to use their benches in the incline position until their repair kits are installed.
Bowflex owners can verify whether their model is subject to either of the repair kits through the website www.bowflex.com.
About The Nautilus Group
Headquartered in Vancouver, Wash., The Nautilus Group, Inc. (NYSE: NLS) helps people achieve a fit and healthy lifestyle through proper exercise, rest and nutrition. With a brand portfolio that includes Nautilus®, Bowflex®, Schwinn®Fitness, StairMaster® and Trimline®, The Nautilus Group manufactures and markets a complete line of innovative health and fitness products through direct, commercial and retail channels. The company was formed in 1986 and had 2003 revenues of about $500 million. It has nearly 1,100 employees and operations in Washington, Colorado, Oklahoma, Texas, Illinois, Virginia, Switzerland, Germany, United Kingdom, Italy, and other locations around the world. More information is at www.nautilus.com.
This press release includes forward-looking statements. Factors that could cause The Nautilus Group's actual results to differ materially from these forward-looking statements include availability of media time and fluctuating advertising rates, a decline in consumer spending due to unfavorable economic conditions, expiration of important patents, its ability to effectively develop, market, and sell future products, its ability to effectively identify and negotiate any future strategic acquisitions, its ability to protect its intellectual property, unpredictable events and circumstances relating to international operations including its use of foreign manufacturers, government regulatory action, and general economic conditions. Please refer to our reports and filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, for a further discussion of these risks and uncertainties. We also caution you not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made or to reflect the occurrence of unanticipated events.
Contacts:
The Nautilus Group Inc
Ron Arp
(360) 418-6169
Integrated Corporate Relations Inc.
John Mills
(310) 395-2215 or (203) 222-9013