Directly on the heels of sharing disappointing 2003 earnings, The Nautilus Group, in cooperation with the U.S. Consumer Product Safety Commission, announced a voluntary product recall to address two safety issues on approximately 420,000 Bowflex Power Pro models with a Lat Tower attachment.
Nautilus and the federal commission have received at least 70 reports of the machine's backboard bench cracking and collapsing, resulting in at least 59 back, neck and shoulder injuries. The company also has received at least 18 reports of the Lat Tower rotating forward and falling, resulting in at least 14 back, neck, shoulder, head, nose and teeth injuries, some of which required stitches. The company did confirm that three lawsuits had been filed to date.
"We have a quality image and we strive to be perfect, which is why we are voluntarily doing this," Gregg Hammann, president and CEO of The Nautilus Group, told SNEWSÂ®. "These 70 cases represent only .02 percent of all the Power Pro units sold, and less than .01 percent of the entire Bowflex line, and some incidents were due to consumers altering the product and its intended use, such as drilling holes in the Lat Tower."
Recalled are the Bowflex Power Pro XL, XTL and XTLU systems with the Lat Tower attachment that were made in China, Taiwan and the United States. Of the total recalled, 350,000 were sold directly to consumers, while 70,000 were sold through specialty fitness retailers nationwide. The affected units were sold from January 1995 through December 2003 for between $1,200 and $1,600. The recall does not apply to Bowflex Power Pro models without the Lat Tower, nor the Bowflex Motivator, Ultimate, Xtreme or Versatrainer.
Owners were jointly contacted in January through direct mail by Nautilus and the commission, and safety reinforcement kits were shipped to retailers to upgrade existing inventory. Hammann said that the fix is a reinforcement rod on the back of the bench and a four-bolt bracket attachment for the Lat Tower, which he told SNEWS his 10-year-old son installed on their machine in about 15 minutes.
On Dec. 8, Nautilus filed a Form 8-K with the U.S. Securities and Exchange Commission confirming that its retailers had been notified, indicating that a safety reinforcement program was being implemented and estimating the cost of the program not to exceed $2.6 million. Hammann said the company took a $3 million reserve in September 2003 to cover the anticipated expenses of the kits and direct mail program, and he emphasized that the recall will not impact first quarter 2004 EPS guidance of $0.18-$0.20 or total 2004 earnings.
"We are proactive in our approach to product enhancements," said Hammann. "When we see a potential issue, we react quickly and openly. We want every product to be perfect, and we want to provide our customers with the best possible support."
To receive the free safety reinforcement kit or to get more information, contact Nautilus at 888-424-3020 or e-mail email@example.com. In addition, click here to view the federal commission's release and a photo of the product.
SNEWS View: Not exactly the thing Nautilus needs or wants right now, since the company has been diligently focused on restructuring, refocusing and reenergizing for growth. Bowflex has been a signature line, so there is no telling what the image costs will be to the company as a result of the recall -- perhaps none, perhaps a lot. As for the financial implications, the recall shouldn't prove too costly, but with three lawsuits already filed the additional financial impacts could sting a bit.