The transaction consists of separate terms and conditions for each brand. With respect to Schwinn(R), Fit Dragon is acquiring a license for the indoor cycling products for the Schwinn(R) Fitness brand for use in the commercial channel. The license will include complete rights to the industry leading educational and training programs for which Schwinn(R) is known. Fit Dragon will also have marketing rights to Independent Bicycle dealers as well as to the specialty fitness channel. Under the Agreement, Nautilus will continue to market Schwinn(R) products through retail and direct marketing channels.
With respect to StairMaster(R), under the Agreement, Fit Dragon has acquired substantially all of the assets of the Brand. Fit Dragon has granted back to Nautilus a license to sell StairMaster(R) product built by Fit Dragon strictly in the direct channel. Also for 18 months from the effective date of the Agreement, Nautilus is permitted to sell StairMaster(R) branded product in the retail channel.
Fit Dragon and its affiliated companies is a recognized leader in the design, manufacture, and marketing of fitness and healthy lifestyle products throughout the world. The company currently has operations in Asia, North America and Europe including approximately 3,000 employees. According to Reed Brown, General Counsel for the company, the Schwinn(R) and StairMaster(R) brands will be marketed through its affiliate Core Fitness LLC.
Core Fitness LLC will be hiring a number of current and former Nautilus employees who were previously responsible for the Schwinn(R) and StairMaster(R) Brands. "We are working closely with Nautilus to insure a seamless transition of ownership. This will help maintain a high degree of continuity with existing distributors and customers as we work to grow both legendary brands," said Mr. Brown. Core Fitness will continue with manufacturing of all commercial Schwinn(R) and StairMaster(R) products at the present facilities. The industry leading Schwinn(R) Cycling Instructor program will also continue without interruption.
During the transition period Nautilus will continue to provide administrative services for Core Fitness such as order processing, customer service and scheduling of training. Customers and anyone with questions about the change in ownership are encouraged to call the same person they have been dealing with in the past at Nautilus with any question as to how the change in ownership will affect them if at all.