June 15, 2004

By: Sean Thissen
Website: http://www.1st-in-fitness.com

The Nautilus Group Announces First Quarter 2004 Results; Sales Exceed, Earnings Per Share Meets Company Guidance

The Nautilus Group, Inc., a leading marketer, developer, and manufacturer of branded health and fitness products, today announced results for the first quarter.

First quarter net sales were $130.9 million compared to $129.4 million for the corresponding period last year. Net income during the period was $6.4 million, or $0.19 per diluted share, compared to $13.7 million, or $0.42 per diluted share, for the first quarter of 2003.

Commenting on the quarter, Gregg Hammann, Chairman and Chief Executive Officer of Nautilus, said, We are encouraged by our results in the first quarter and our ability to outperform top-line expectations and grow year over year revenue for the first time in over a year.

By maintaining our focus on the customer and addressing demand for Nautilus' strength and cardiovascular equipment in the appropriate distribution channels, we delivered $130.9 million in net sales, above the $125-$130 million range we previously anticipated. We are still not satisfied with our gross margins.

As part of our turnaround plan, we are working to differentiate our products and position our brands properly in the marketplace to address this issue.

A number of our brands performed particularly well, including the Bowflex product line, our Nautilus commercial strength line, and our TreadClimber products, Mr. Hammann continued. The newly designed Nautilus commercial strength line exceeded our expectations.

It combines all the benefits of legendary Nautilus engineering and functionality in a sleek new look. Our most innovative product, the TreadClimber experienced a sales increase of 39% in the first quarter compared to the fourth quarter of 2003.

Our focus on research and development should help our brands perform even better in the future. Our team has just launched two new Bowflex products, the Extreme 2 for our direct channel, which does not require cable changes between exercises and the Sport, which is targeted for our retail customers.

We also recently showed the StairMaster(R) variable stride elliptical trainer at the IHRSA tradeshow, and we expect to begin shipping this product at the end of 2004. In addition, we showed the new commercial TreadClimber at the IHRSA tradeshow, where it received a strong reception from club owners. This product is expected to ship by the end of the first quarter in 2005.

Rod Rice, Chief Financial Officer, stated, We generated $22.9 million in cash from operations and ended the quarter with $92.1 million in cash and cash equivalents, a 27% increase from the end of 2003.

The Company announced today that its Board of Directors has declared a regular quarterly dividend of $0.10 per common share, payable June 10, 2004, to shareholders of record as of May 20, 2004.

Mr. Hammann concluded, We are encouraged by the progress we have made in our turnaround plan and believe that Nautilus' strong portfolio of health and fitness brands, fiscal discipline and commitment to increasing shareholder value will enable the Company to be the innovator and brand leader in the health and fitness industries.

With respect to our outlook for the second quarter, taking into account the seasonality and diversification of our business along with the progress to date of our turnaround, we expect revenue to be in the range of $90 to $100 million and earnings per share in the range of $0.04 to $0.06. We expect to provide additional guidance in our second quarter conference call.

Author Notes:

Sean Thissen contributes and publishes news editorial to http://www.1st-in-fitness.com.  A source of information and helpful tips on various types of fitness equipment.