Bowflex (BFXXQ) 8-K Nautilus, Inc. Announces Results for Second Quarter 2009

Exhibit 99.1

Nautilus, Inc. Announces Results for Second Quarter 2009

Direct and Retail Businesses Achieve Operating Profit

Company Announces Plans to Explore Strategic Alternatives for Its Commercial Business

VANCOUVER, Wash., August 10, 2009 — VANCOUVER, Wash. — Fitness company Nautilus, Inc. (NYSE:NLS) today announced unaudited results for the second quarter ended June 30, 2009. Continuing results include the Company’s direct, retail, and commercial businesses but exclude the Company’s former apparel business, which was sold in April 2008 and is considered a discontinued operation.

For the quarter ended June 30, 2009 the Company reported net sales of $60.8 million, compared to net sales of $95.6 million for the second quarter of 2008.

On an operating basis, the retail and direct businesses were profitable while the commercial business recorded a loss for the quarter ended June 30, 2009. The retail business generated $1.2 million of income from operations compared to a loss of $0.2 million for the previous year period and the direct business generated $0.6 million of income from operations compared to a loss of $0.6 million in the same period last year. The commercial business had a loss from continuing operations of $7.2 million in the second quarter of 2009 compared to a loss of $1.1 million for the same period last year (see Reportable Segments Financial Information table below). The Company is considering a strategic change to focus its efforts on a consumer only business model and, as a result, also is looking at strategic alternatives for the commercial business.

The Company reported a loss from continuing operations for the second quarter 2009 of $20.8 million, or ($0.68) per diluted share. Included in the loss from continuing operations were pre-tax restructuring charges of $11.8 million. The restructuring charges are principally related to a non-cash write-off of the Company’s leasehold improvements resulting from the termination of its corporate facilities lease in Vancouver, Washington. The Company has executed a new lease for smaller space in the same location and expects to save approximately $3.3 million annually from the new lease arrangement, with full savings beginning in the fourth quarter of 2009.

In the second quarter of 2008, loss from continuing operations was $9.6 million or ($0.30) per diluted share. Included in the loss from continuing operations were pre-tax charges of $2.5 million primarily related to severance, inventory reserves and anticipated settlements related to licensing agreements.

Excluding the restructuring charges mentioned above, the Company’s adjusted loss from continuing operations before income taxes was $9.7 million for the quarter ended June 30, 2009. For the corresponding period in 2008, excluding the restructuring charges mentioned above, adjusted loss from continuing operations before income taxes was $11.9 million (see Supplemental Disclosure table below).

Comparative net sales by business segment were as follows:

Three Months Ended ($ thousands)	Jun 30, 2009		Jun 30, 2008		$ Change			% Change
Direct	$	28,200	$	41,294	$	(13,094	)	-31.7	%
Retail		11,356		19,000		(7,644	)	-40.2	%
Commercial		20,720		34,366		(13,646	)	-39.7	%
Corporate		514		904		(390	)	-43.1	%
Net Sales	$	60,790	$	95,564	$	(34,774	)	-36.4	%

Net sales declined in the direct business, primarily due to the restricted availability of consumer credit programs. Offsetting a portion of the sales decline in the direct business segment was an increase in sales of TreadClimber products compared to the same period last year. The Company’s net sales in its retail business declined primarily due to inventory reductions at retailers. The commercial business net sales decrease reflects weakness in strength equipment, partially offset by higher sales in Schwinn and Stairmaster cardio products.

Consolidated gross profit margin decreased to 34.2% of net sales for the second quarter of 2009, compared to 35.5% for the same period in the previous year. For the second quarter of 2009, the gross profit margin in the direct business was essentially flat at 58.5% of net sales, compared to 58.6% for the same period in the previous year; the retail business gross margin improved to 27.3%, compared to 17.7% primarily due to decreased warranty costs, consolidation of our distribution centers, and an increase in sales prices; and the commercial business gross margin declined to 3.5%, compared to 19.9%. The gross margin in the commercial business was negatively impacted in the period by an effort to reduce commercial inventory levels by discounting products that have either been discontinued or had excess inventories. Operating expenses, excluding restructuring charges in both periods, declined by approximately $15.5 million, or 33.7%, in the second quarter of 2009, compared to the second quarter of 2008.

The Company generated $8.5 million of net cash provided from operating activities of continuing operations in the second quarter of 2009 compared to less than $0.1 million in the second quarter of 2008. The cash generated in 2009 was primarily due to working capital improvements and reduction of costs to better align with current sales levels.

As of June 30, 2009, the Company had a net cash position of $7.8 million, compared to net debt of $12.4 million at December 31, 2008.

Edward Bramson, Chairman and Chief Executive Officer of Nautilus, Inc., stated, “Even though the overall consumer environment remained challenging and the second quarter is typically our seasonally softest sales period, we were able to achieve profitable operating results in two of our three lines of business; direct and retail. We are working to improve these results in the second half of 2009 by leveraging our restructured operating model in a period when sales are seasonally stronger for our direct and retail consumer businesses.”

Mr. Bramson continued, “Offsetting the profitable operating results in the direct and retail businesses and across-the-board improvements in operating expenses was the lower than expected performance of our commercial business, primarily due to lower gross margins that resulted from discounting, in order to move out excess and discontinued inventory. In order to refocus our business model and operations, the Company is considering streamlining its activities to place greater emphasis on its direct-to-consumer and retail businesses, and thus will be evaluating the strategic long-term alternatives for the commercial business. While recent results did not meet expectations, we continue to believe that Nautilus Commercial provides an attractive and under exploited asset in the commercial fitness equipment market.”

The Company has engaged Robert W. Baird & Co., to assist in the evaluation of strategic alternatives for the commercial business and believes the review of potential alternatives likely will take a number of months to complete. In the meantime, we will continue to look for ways to reduce costs through restructuring that will allow the commercial business to improve on recent results.

Conference Call

Nautilus will host a conference call today, August 10, for 4:30 p.m. EDT (1:30 p.m. PDT). It will be broadcast live over the Internet hosted at http://www.nautilusinc.com/events and will be archived online within one hour after completion of the call. In addition, listeners may call (800) 748-8543 in North America, and international listeners may call (212) 231-2901.

A telephonic playback will be available from 3:30 p.m. PDT, August 10, 2009, through 3:30 p.m. PDT, August 24, 2009. Participants can dial (800) 633-8284 or (402) 977-9140 (international) passcode 21432421 to hear the playback.

About Nautilus, Inc.

Headquartered in Vancouver, Wash., Nautilus, Inc. (NYSE:NLS) is a global fitness products company providing innovative, quality solutions to help people achieve a healthy lifestyle. With a brand portfolio including Nautilus(R), Bowflex(R), Schwinn(R)Fitness, StairMaster(R) and Universal(R), Nautilus manufactures and markets innovative fitness products through global direct, commercial and retail channels. Formed in 1986, the Company had 2008 sales of $411 million. It has approximately 750 employees and operations in Washington, Oregon, Virginia, Canada, Switzerland, Germany, United Kingdom, Italy, China and other locations around the world. Website: www.nautilusinc.com

Safe Harbor Statement:

This press release includes forward-looking statements, including statements concerning anticipated future profitability, estimated cost reductions, estimated restructuring charges, the evaluation of strategic alternatives for the Company’s commercial business, and operational improvement. Factors that could cause Nautilus, Inc. actual results to differ materially from these forward-looking statements include availability of media time and fluctuating advertising rates, its

ability to successfully transfer products to alternative manufacturing facilities, manufacturing quality issues resulting in increased warranty costs, its ability to effectively restructure the business and reduce costs, a decline in consumer spending due to unfavorable economic conditions, a change in the availability of credit for its customers who finance their purchases, its ability to effectively develop, market, and sell future products, its ability to get foreign-sourced product through customs in a timely manner, its ability to effectively identify, negotiate and integrate any future strategic transactions, its ability to protect its intellectual property, introduction of lower-priced competing products, 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.

NAUTILUS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

	June 30,  2009		December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	7,783	$	5,547
Trade receivables, net		24,436		53,770
Inventories, net		31,492		43,802
Prepaid expenses and other current assets		9,768		11,628
Income taxes receivable		1,292		11,954
Total current assets		74,771		126,701
Property, plant and equipment, net		19,884		32,883
Goodwill and other intangible assets, net		35,688		36,801
Other assets		946		1,134
Total assets	$	131,289	$	197,519
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade payables	$	26,109	$	38,198
Accrued liabilities		27,749		30,472
Short-term borrowings		—		17,944
Deferred tax liabilities		1,343		919
Total current liabilities		55,201		87,533
Long-term liabilities		6,368		6,301
Total liabilities		61,569		93,834
Stockholders’ equity:
Common stock – no par value, 75,000 shares authorized, 30,614 shares issued and outstanding at June 30, 2009 and December 31, 2008		3,869		3,207
Retained earnings		59,843		94,433
Accumulated other comprehensive income		6,008		6,045
Total stockholders’ equity		69,720		103,685
Total liabilities and stockholders’ equity	$	131,289	$	197,519

NAUTILUS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Net sales	$	60,790		$	95,564		$	132,876		$	225,165
Cost of sales		39,986			61,630			80,755			135,306
Gross profit		20,804			33,934			52,121			89,859
Operating expenses:
Selling and marketing		21,745			30,945			49,418			72,946
General and administrative		7,064			12,985			16,650			22,356
Research and development		1,619			1,961			3,500			4,166
Restructuring		11,767			2,450			15,588			13,118
Total operating expenses		42,195			48,341			85,156			112,586
Operating loss		(21,391	)		(14,407	)		(33,035	)		(22,727	)
Other income (expense):
Interest expense		(1	)		(93	)		(148	)		(1,330	)
Other income (expense), net		(89	)		144			(372	)		266
Total other income (expense)		(90	)		51			(520	)		(1,064	)
Loss from continuing operations before income taxes		(21,481	)		(14,356	)		(33,555	)		(23,791	)
Income tax expense (benefit)		(710	)		(4,722	)		1,035			(7,276	)
Loss from continuing operations		(20,771	)		(9,634	)		(34,590	)		(16,515	)
Discontinued operations:
Income from discontinued operations		—			640			—			3,016
Income tax expense (benefit) from discontinued operations		—			(118	)		—			1,737
Income from discontinued operations, net of tax		—			758			—			1,279
Net loss	$	(20,771	)	$	(8,876	)	$	(34,590	)	$	(15,236	)
Loss per common share from continuing operations:
Basic and diluted	$	(0.68	)	$	(0.30	)	$	(1.13	)	$	(0.52	)
Income per common share from discontinued operations:
Basic and diluted	$	0.00		$	0.02		$	0.00		$	0.04
Net loss per common share:
Basic and diluted	$	(0.68	)	$	(0.28	)	$	(1.13	)	$	(0.48	)
Weighted average common shares outstanding:
Basic and diluted		30,614			31,582			30,614			31,569

NAUTILUS, INC.

REPORTABLE SEGMENTS FINANCIAL INFORMATION

(Unaudited, in thousands)

(In thousands) Three months ended June 30, 2009:	Direct			Retail			Commercial			Corporate			Total
Net sales	$	28,200		$	11,356		$	20,720		$	514		$	60,790
Gross profit		16,509			3,104			718			473			20,804
Depreciation and amortization expense		1,198			460			816			540			3,014
Operating income (loss)		577			1,191			(7,164	)		(15,995	)		(21,391	)
Interest expense		—			—			—			1			1
Income tax benefit from continuing operations		—			—			—			(710	)		(710	)
Income (loss) from continuing operations		577			1,191			(7,164	)		(15,375	)		(20,771	)
Total assets		25,921			21,946			58,904			24,518			131,289
Three months ended June 30, 2008:
Net sales	$	41,294		$	19,000		$	34,366		$	904		$	95,564
Gross profit		24,180			3,370			6,851			(467	)		33,934
Depreciation and amortization expense		1,606			471			1,195			669			3,941
Operating loss		(595	)		(180	)		(1,064	)		(12,568	)		(14,407	)
Interest expense		—			—			—			93			93
Income tax benefit from continuing operations		—			—			—			(4,722	)		(4,722	)
Loss from continuing operations		(595	)		(180	)		(1,064	)		(7,795	)		(9,634	)
Total assets		41,207			74,538			98,766			56,500			271,011

Nautilus, Inc.

Supplemental Disclosure

Reconciliation of GAAP to Adjusted Pre-tax Income (loss) from Continuing Operations Statement

(Unaudited, in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
Supplemental Non-GAAP Disclosure	2009			2008			2009			2008
Loss from continuing operations before income taxes (GAAP basis)	$	(21,481	)	$	(14,356	)	$	(33,555	)	$	(23,791	)
Abandonment of leasehold improvements - corporate headquarters		8,028			—			8,028			—
Facility lease termination costs		1,900			—			1,900			—
Abandonment of information technology software		—			—			1,799			—
Lease obligations for discontinued facilities		—			240			1,673			240
Contract termination costs		910			350			910			350
Employee termination and other employee costs		534			1,390			561			4,058
Abandoned creative media		—			470			—			470
Termination of purchase agreement with Land America Health and Fitness Co., Ltd.		—			—			—			8,000
Other		395			—			717			—
Income (loss) from continuing operations before income taxes, as adjusted	$	(9,714	)	$	(11,906	)	$	(17,967	)	$	(10,673	)

SOURCE: Nautilus, Inc.

For Nautilus, Inc.

Investor Relations

John Mills, 310-954-1100