Nautilus, Inc. will be required to pay a $950,000 civil penalty as part of a settlement agreement with the U.S. Consumer Product Safety Commission. The deal settles allegations that NLS failed to timely report to the CPSC product defects associated with certain Bowflex Power Pro Fitness Machines and Bowflex Ultimate Fitness Machines sold between January 1995 and April 2004.
Nautilus has maintained that it did not knowingly violate the reporting requirements of the Consumer Product Safety Act and denied that a defect in any of its products caused injury to any person. The settlement deal did not require NLS to admit any of the allegations made by the CPSC.
The reason for the settlement was described as an effort to “resolve the Commissions claims without the expense and distraction of litigation.”
The Bowflex models that were the subject of the charges are either no longer marketed or have been redesigned, according to the company.
NLS said in a release that the penalty will be fully accrued in Q1 2005 and, based on preliminary financial results, they believe that higher-than-anticipated net sales in the quarter will offset the impact of the charge on anticipated first quarter earnings.
