direct focus ANNOUNCES RECORD First QUARTER results 

Quarterly Sales Up 82% and Earnings Up 63% from Previous Year

Vancouver, WA–April 16, 2002--Direct Focus, Inc. (Nasdaq: DFXI), a leading marketer, developer, and manufacturer of branded health and fitness products, today announced its results for the quarter ended March 31, 2002.

For the first quarter of 2002, Direct Focus reported net sales of $135.9 million, an increase of 82% from $74.9 million for the first quarter of 2001. Net income for the first quarter of 2002 was $24.0 million or $0.67 per diluted share, up 63% from $14.7 million or $0.41 per diluted share for the same period of 2001.

For the first quarter of 2002, commercial and retail sales represented 33% of total sales, up from 10% of total sales for the same period of 2001. As a result of the change in sales mix, the gross margin was 57% for the first quarter of 2002, compared to 66% for the same period of 2001.  For the full year 2002, the Company expects commercial and retail sales to represent about 40% of total sales.

During the quarter, Direct Focus completed its acquisition of substantially all of the assets of StairMaster Sports/Medical, Inc. (“StairMaster”) for approximately $25.8 million in cash. As of March 31, 2002, Direct Focus had cash and short-term investments of $51.0 million.

“We are very pleased with our record sales and earnings in the first quarter,” said Brian Cook, Chief Executive Officer. “During the quarter, we continued to build on our position as a leader in the health and fitness markets. Specifically, we completed the acquisition of StairMaster, which will enable us to extend our customer base and expand our commercial and retail market opportunities.”

“In our direct business, we believe that, even with a sluggish economy, we are benefiting from favorable advertising rates and a ‘nesting effect.’   We believe more consumers are staying at home, watching television and buying more products for their home. As a result, our Bowflex and Nautilus Sleep Systems sales have continued to be strong, and demand for our new high-end Bowflex model has exceeded our expectations.” 

“In our commercial and retail business, we continue to build a strong foundation for future growth. With our powerful combination of Nautilus, Schwinn and StairMaster brands, we offer a wide range of products for cardiovascular and strength training fitness.  We also have a strong product development platform, and we are developing sales and distribution synergies to enable us to expand our market share both domestically and internationally.”

Direct Focus will host a conference call today to discuss its financial results at 2:00 PM Pacific (5:00 PM Eastern). A listen-only broadcast of the conference call will be available on the Company’s website (www.directfocusinc.com) under “Investor Relations” or by calling 888-397-8274 or +1 706-679-7498 (Reservation No. 3161961). A 48-hour replay will be available by calling 800-642-1687 or +1 706-645-9291 (Reservation No. 3161961). A replay will also be available through April 30, 2002 under “Investor Relations” on the Company’s website.

About Direct Focus, Inc.

Direct Focus, Inc. is a leading marketer, developer, and manufacturer of branded health and fitness products sold under such well-known names as Nautilus, Bowflex, Schwinn and StairMaster. The Company markets and sells its Bowflex home fitness equipment and Nautilus Sleep Systems through its direct-marketing channel, using an effective combination of television commercials, infomercials, response mailings, the Internet, and inbound/outbound call centers. The Company sells its Nautilus, Schwinn and StairMaster commercial fitness equipment through its sales force and selected dealers to health clubs, government agencies, hotels, corporate fitness centers, colleges, universities, and assisted living facilities. Direct Focus also markets and sells a complete line of consumer fitness equipment, under its Nautilus, Schwinn and StairMaster brands, through a network of specialty dealers, distributors, and retailers worldwide. The Company is headquartered in Vancouver, Washington. Direct Focus is located on the Web at www.directfocusinc.com.

 

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This press release contains forward-looking statements relating to anticipated sales, revenue growth, and the development of Direct Focus' products and services, including statements regarding its Nautilus, Schwinn Fitness, and StairMaster businesses. Factors that could affect Direct Focus' actual results include its reliance on a limited product line, fluctuations in advertising rates, market acceptance of its existing and future products, growth management challenges including the growth resulting from the acquisition of the assets of Schwinn Fitness in September 2001 and StairMaster in February 2002, a decline in consumer spending due to unfavorable economic conditions, government regulatory action, its ability to effectively identify and negotiate any future strategic acquisitions, its ability to integrate the StairMaster business and any other acquired businesses into its operations, unpredictable events and circumstances relating to international operations including its use of foreign manufacturers, 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.