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Gold/Mining/Energy : Direct Focus Inc. (DFXI) -- Ignore unavailable to you. Want to Upgrade?

To: whenitgoesup who wrote (657)	7/17/2001 10:18:24 PM
From: trilobyte	Read Replies (1) \| Respond to of 768

note 1: unusually long CC... 50 minutes. DFXI getting attention! note 2: flat Q/Q performance even though this is traditiona- lly their weakest quarter. DFXI had outstanding quarter despite slow environment in retail sector. Records, records, records. 92% of sales from direct channel. Bow Flex and nautilus direct continue to achieve expectation. Commercial retail prodocts expected to be seasonnally stronger next 2 quarters. Repurchased 51 000 shares for 1.2 million. Expects sales growth to increase next 2 quarters due to seasonal factors. in Q&A wells fargo. question about favorable trend in advertising? Benifited from sales and marketing at 30%. Do expect the advertising rates to return to normal. How many BFX sold to date: 47 000 for the Q, over life of product: 440 000 units. Any change in ASP: held constant. Comment on strategy with Champion nutrition? Very large market. Natural extension. Potentially another nautilus commercial product. No special advertising, ad-on sale to BFX. Congrats! USbancorppiperjaffreys: Nutritional supplement, new line? yes, but some products already exist. Offer a nutritional kit. We will market it under champion name. Any guidance? no, because ad-on. Nautilus sleep, performing ahead of expectations? yes! Roughly 16-20 million $/year? yes. Are you running more informercials because of low cost? Seeing an economic benefit. Run the number of informecials needed to accomplish sales targets. davidson investment: give us feedback relative to conversion rates? see softening of rates and more available time. What do you expect with airbeds? comfortable with 16-20 million estimate. Update on new products? will announce new products at the denver show in a month. Also goal to add 1 new product every couple of year on direct product. Therefore, getting reasonably close to new product? won't tell you! What's note receivables? partnership from Champion--loan to them as working capital. ... patents on BFX? 3-4 patents. patents on sleep system? a couple of pending applications. Taking advantage of cross selling opportunities? not at this time. Very heavily baby boomer, one more female oriented database. Increased our inventory about 5 million: 3 million due to renegotiation with vendor and anticipated growth going forward. Try to have 6 weeks lead. Expect another 2-3 million next q. --- congrats! general idea of sales volume from Champion? ad-on sale to BFX. future, nautilus retail group. Do not have much guidance now. But we selected Champion because they are respected as premium product. Good product. with good profit margins. --- update on share buyback? 51000 shares for 1.2 million. Authorization ending Oct 1 for 10mil. Nukber of units sold for nautilus system? Won't disclose... davidson: suprised by upside? but one downside, e-commerce was down sequentially... e-commerce were up 94% yr/yr. Were down q/q, not much, and believe it's a seasonal effect. Tell us about results at nautilus? Gross profit margin of 1.9 million. G&A 540 000, income from operations, loss of 130 000, net income, loss of 53000 due to front loading for products to come later this year. BFX sales were also around 47000 units. Surprised you matched 1st Q? Yes, very surprised! that sales and marketing could do so well at 30%. How are third party finance vendor? default rate? no change, using them since 1997, very conservative on approval rates. Default rates have not deteriorated. Approving baby boomers with good income. red chip review: good q! Asp on BFX is 1360. Turns trending relative to previous Qs? flat compared to previous Qs. Believe of sales of beds are heavier certain times of years? haven't seen seasonal factors yeat due to novelty of product, but Christmas season should be strong. ----: congrats! decline price rates? been able to buy better commercials. putting adds on network vs national cable? experimenting and expanding our reach. How far out can you buy adds? about 90 days in advance. Infomercials may buy slightly farther out, but we're not a media speculation company! Has environment become more or less favorable to acquisitions? Potentially... ----: identify Kevin's biggest impact? Act as a team on management. Kevin has a strong background of direct and commercial markets. Kevin will concentrate on Nautilus commercial business to improve things. Always looking for great talent. -...: eps? already have 1.2$ for 1st half and expect 2nd half to be strong in commercial and retail sector. Would you be surprised if 2nd 1/2 earnings would be less than 1st half? Don't know how long favorable environment remains. Let's suppose earnings can get to the 2.5$ basis, do you expect 20% growth next year? Business is a marathon! business looks good, but won't give forecast that far ahead!