Last week, Sports Executive Weekly reported a federal judge declared that Nautilus owed $325,000 in damages to Icon Health and Fitness, Inc. after a jury found that Nautilus had infringed on Icon’s “Soft Strider” treadmill trademark, engaged in false advertising when marketing its “Power Rods,” and was guilty of false marketing for claiming the rods were patented or made with patented technology, but had not yet made a decision in regards to the $7.8 million award suggested by the jury (See SEW_0514). The Court has now made a decision to refuse a modification of the terms of the jury verdict, meaning that Nautilus will owe just over $8 million to Icon.

Nautilus intends to appeal this matter to the appropriate Federal Court of Appeals, believing the verdict to be inconsistent with the law and evidence presented at trial and that the evidence does not support the damage award.

In other Nautilus news, the company plans to consolidate its domestic manufacturing of cardiovascular equipment to its Tulsa, Okla., plant and close its Tyler, Tex. cardio manufacturing facilities by the end of 2006.

The move will create about 50 new positions in Tulsa, bringing the facility’s total employment to about 220 positions. Meanwhile, about 100 positions will be eliminated in Tyler over the course of the year. The transition will begin in June as the company shifts production of Sport Series treadmills and Bowflex TreadClimber 5300 cardio units to Tulsa.

The Tyler facility, which consists of a 135,000 square foot manufacturing facility and 63,000 square foot distribution center, became part of Nautilus through an acquisition in 2001. The Tyler properties are valued at approximately $4 million to $5 million in total, and will be offered for sale.

Nautilus expects modest efficiency contributions from the consolidation in late 2006, inclusive of transition costs, and expects operating improvement of $3 million to $4 million annually beginning in 2007.