VANCOUVER, WA -- Nautilus Inc. is shopping around its commercial business after deciding to focus on its consumer businesses instead, the company announced this week.
Nautilus is actively seeking buyers for substantially all of the assets, liabilities and ongoing operations of its commercial business. This is a further step in the company’s restructuring plan to improve its cost structure and focus on the consumer market through the direct and retail businesses.
Ed Bramson, Nautilus chairman and CEO, announced in August that the company was investigating a possible closure or sale of the commercial business. After discussions with potential acquirers for the entire commercial business, the company’s executives decided that shareholders will benefit from selling the entire commercial business as one entity or selling individual assets. The company expects to present the commercial business as a discontinued operation in its financial statements beginning with the third quarter and record a loss on the estimated fair value of assets compared to the carrying value.
Assets of the company’s commercial business include a manufacturing facility and three warehouses in Virginia, the StairMaster cardio brand and related stepper and StepMill lines, the commercial indoor cycling line (including the newly launched Authentic Cycling bikes with true power measurements), and commercial strength and cardio equipment (including the Nautilus One strength line).
“We believe this divestiture is in the best interest of our shareholders and will enable us to improve margins, utilize capital more efficiently and focus our organization on the branded consumer fitness business where we see superior growth opportunities,” Bramson said in a prepared release from Nautilus. “Our business model and operations are now positioned to place greater emphasis on the brands in our direct-to-consumer and retail businesses and will enable us to better leverage our restructured consumer operating model.”
Bramson also said that even though recent results in the company’s commercial business did not meet expectations, Nautilus Commercial has many attractive and under exploited assets in the commercial fitness equipment market.
“Many of our leading fitness brands, including Nautilus and Schwinn, have strong recognition and customer loyalty in both the commercial and consumer markets,” Bramson said. “In addition to the pure consumer brand, Bowflex, we will be retaining the Nautilus, Schwinn, and Universal brands as part of our ongoing consumer efforts through our direct and retail businesses. This will enable consumers to bring brands they associate with leading strength and cardio fitness equipment into their homes.”
As previously announced, the company has engaged Robert W. Baird & Co., which will now actively assist in the sale of the commercial business.