Bowflex (BFXXQ) 8-K/A Completion of Acquisition or Disposition of Assets

Exhibit 99.4

PRO FORMA FINANCIAL INFORMATION

On July 7, 2005, Nautilus, Inc. (“Nautilus”) completed the acquisition of DashAmerica, Inc. d/b/a Pearl Izumi USA (“Pearl Izumi USA”), pursuant to the agreement and plan of merger dated as of June 17, 2005 (the “Merger Agreement”) by and among Nautilus, Pearl Izumi USA, PI Acquisition Company, Inc. (the “Acquisition Company”), and DAI Escrow Holdings, LLC.

Under the terms of the Merger Agreement, the Acquisition Company merged with and into Pearl Izumi USA, with Nautilus acquiring 100% of the issued and outstanding capital stock of Pearl Izumi USA. The merger consideration consisted of approximately $69.7 million in cash and approximately $4.6 million in assumed debt.

The assets acquired and liabilities assumed in connection with the acquisition of Pearl Izumi USA were recorded at estimated fair values as determined by management based on information currently available and on current assumptions as to future operations. Nautilus has allocated the purchase price based on preliminary estimates of the fair values of the assets and liabilities acquired. Accordingly, the allocation of the purchase price and the assigned estimated useful lives of assets are subject to revision, based on the final determination of appraised and other fair values, and related tax effects.

The unaudited pro forma statements of income have been presented as if the acquisition of Pearl Izumi USA had occurred on January 1, 2004. The unaudited pro forma balance sheet has been presented as if the acquisition of Pearl Izumi USA had occurred on June 30, 2005. The assumptions and adjustments are described in the accompanying notes to the unaudited pro forma financial data. The unaudited pro forma financial data gives effect only to adjustments set forth in the accompanying notes and does not reflect any anticipated future cost savings or other benefits as a result of the acquisition.

The following unaudited pro forma financial data is presented for illustrative purposes only and does not purport to be indicative of actual financial position or results of operations as of or for the dates thereof, or as of or for any other future date, and is not necessarily indicative of what Nautilus’s actual financial position or results of operations would have been had the acquisition been completed on the above-referenced dates.

The unaudited pro forma financial data should be read in conjunction with the Company’s historical consolidated financial statements included in the Nautilus’s Annual Report on Form 10-K for the year ended December 31, 2004 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2005 and June 30, 2005, and the historical consolidated financial statements of Pearl Izumi USA, included elsewhere in this Current Report on Form 8-K.

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Unaudited Pro Forma Condensed Combined Balance Sheet

June 30, 2005

(In Thousands, Except Per Share Data)

	Nautilus, Inc.			Pearl Izumi			Pro Forma Adjustments			Pro Forma Combined
ASSETS
CURRENT ASSETS:
Cash, cash equivalents and short-term investments	$	100,349		$	1,096		$	(69,732	)(A)	$	31,713
Trade receivables		58,841			8,813			—			67,654
Inventories		69,924			12,436			—			82,360
Prepaid expenses and other current assets		14,916			143			—			15,059
Deferred tax assets		4,671			518			—			5,189
Total current assets		248,701			23,006			(69,732	)		201,975
PROPERTY, PLANT AND EQUIPMENT, net		53,051			1,846			—			54,897
GOODWILL		32,161			—			21,094	(A)		53,255
DEFERRED TAX ASSETS		—			174			—			174
OTHER ASSETS, net		19,297			6,617			26,500	(A), (C)		52,414
TOTAL ASSETS	$	353,210		$	31,643		$	(22,138	)	$	362,715
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables	$	49,726		$	1,506		$	—		$	51,232
Accrued liabilities		23,069			2,092			—			25,161
Income taxes payable		5,670			—			—			5,670
Current portion of long-term debt and capital lease obligation		—			900			—			900
Customer deposits		2,811			—			—			2,811
Total current liabilities		81,276			4,498			—			85,774
DEFERRED TAX LIABILITIES		6,880			—			—			6,880
LONG-TERM DEBT		—			3,708			—			3,708
OTHER NONCURRENT LIABILITIES		1,746			—			—			1,746
STOCKHOLDERS’ EQUITY:
Common stock		16,943			116			(116	)(D)		16,943
Additional paid in capital		—			28,006			(28,006	)(D)		—
Unearned stock compensation		(1,034	)		—			—			(1,034	)
Retained earnings		244,582			(4,358	)		5,657	(B), (C), (D)		245,881
Accumulated other comprehensive income		2,817			(327	)		327	(D)		2,817
Total stockholders’ equity		263,308			23,437			(22,138	)		264,607
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	353,210		$	31,643		$	(22,138	)	$	362,715

See notes to unaudited pro forma condensed combined balance sheet.

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NAUTILUS, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

(In Thousands)

The unaudited pro forma condensed combined balance sheet gives effect to the following unaudited pro forma adjustments.

A. The purchase price was allocated to the assets acquired and liabilities assumed based on management’s estimate of fair values as follows:

Purchase price:
Cash consideration			$	69,732
Debt assumed				4,608
Direct acquisition costs				1,499
				75,839
Allocated to:
Cash	1,096
Accounts receivable	8,813
Inventory	12,436
Prepaid expenses	143
Property, plant and equipment	1,846
Other assets	6,617
Deferred tax assets	692
Accounts payable	(1,506	)
Accrued liabilities	(2,092	)
Estimated fair value of tangible net assets acquired				28,045
Identifiable intangible assets:
Trade Name (indefinite life)	20,700
Customer base (eight year life)	3,400
Developed technology (four year life)	2,400
In process research and development (expensed)	200
Goodwill	21,094
				47,794
Total			$	75,839

B. To accrue direct acquisition costs incurred of $1,499.

C. As of the date of the acquisition, the development of the in-process research and development projects had not yet reached technological feasibility and the research and development in progress had no alternative future uses. Accordingly, $200 was allocated to these projects which was capitalized and immediately expensed at acquisition.

D. To eliminate Pearl Izumi historical equity accounts.

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Unaudited Pro Forma Condensed Combined Statement of Income

For the six months ended June 30, 2005

(In Thousands, Except Share and Per Share Data)

	Nautilus, Inc.		Pearl Izumi			Pro Forma Adjustments			Pro Forma Combined
NET SALES	$	285,969	$	30,632		$	—		$	316,601
COST OF SALES		151,142		16,539			—			167,681
Gross profit		134,827		14,093						148,920
OPERATING EXPENSES:
Selling and marketing		84,899		5,492			—			90,391
General and administrative		23,421		3,448			513	(A)		27,382
Research and development		5,912		894			—			6,806
Royalties		2,655		—			—			2,655
Total operating expenses		116,887		9,834			513			127,234
OPERATING INCOME		17,940		4,259			(513	)		21,686
OTHER INCOME (EXPENSE):		1,826		(1,133	)		(1,488	)(B)		(795	)
INCOME BEFORE INCOME TAXES		19,766		3,126			(2,001	)		20,891
INCOME TAX EXPENSE		7,007		1,137			(720	)(C)		7,424
NET INCOME	$	12,759	$	1,989		$	(1,281	)	$	13,467
BASIC EARNINGS PER SHARE	$	0.38							$	0.40
DILUTED EARNINGS PER SHARE	$	0.38							$	0.40
Weighted average shares outstanding:
Basic shares outstanding		33,274,244								33,274,244
Diluted shares outstanding		33,917,339								33,917,339

See notes to unaudited pro forma condensed combined statements of income

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Unaudited Pro Forma Condensed Combined Statement of Income

For the year ended December 31, 2004

(In Thousands, Except Share and Per Share Data)

	Nautilus, Inc.		Pearl Izumi			Pro Forma Adjustments			Pro Forma Combined
NET SALES	$	523,837	$	49,372		$	—		$	573,209
COST OF SALES		279,043		25,482			—			304,525
Gross profit		244,794		23,890			—			268,684
OPERATING EXPENSES:
Selling and marketing		156,577		12,289			—			168,866
General and administrative		31,033		4,535			1,025	(A)		36,593
Research and development		6,754		1,790			—			8,544
Royalties		5,968		—			—			5,968
Total operating expenses		200,332		18,614			1,025			219,971
OPERATING INCOME		44,462		5,276			(1,025	)		48,713
OTHER INCOME (EXPENSE):		1,185		(13	)		(1,269	)(B)		(97	)
INCOME BEFORE INCOME TAXES		45,647		5,263			(2,294	)		48,616
										—
INCOME TAX EXPENSE		15,662		1,729			(826	)(C)		16,565
NET INCOME	$	29,985	$	3,534		$	(1,468	)	$	32,051
BASIC EARNINGS PER SHARE	$	0.92							$	0.98
DILUTED EARNINGS PER SHARE	$	0.90							$	0.96
Weighted average shares outstanding:
Basic shares outstanding		32,756,766								32,756,766
Diluted shares outstanding		33,394,160								33,394,160

See notes to unaudited pro forma condensed combined statements of income

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NAUTILUS, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

(In Thousands)

The unaudited pro forma condensed combined statements of income give effect to the following unaudited pro forma adjustments:

A. Identifiable intangible assets acquired are being amortized using the straight-line basis. The adjustment to reflect amortization expense is as follows:

	Year ended December 31, 2004		Six months ended June 30, 2005
Customer base (eight year life)	$	425	$	213
Developed technology (four year life)		600		300
Total	$	1,025	$	513

B. To eliminate investment income earned on the cash consideration paid by Nautilus, Inc.

C. Tax effect of adjustments A and B at the federal and state statutory rates.

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