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

To: Don Carson who wrote (363)	12/13/1998 5:59:00 PM
From: Gordo	Read Replies (1) \| Respond to of 768

Got ahold of Rod Rice on Friday (I called him because he still hadn't returned my calls). With regards to the Nautilus acquisition, he didn't have much to offer that hasn't already been said - the two main reasons for the acquisition were brand name and the east coast distribution centre. They paid about half of book value for Nautilus, so there is no goodwill to write off. The deal will close in January. They will bring in a separate management team with fitness industry experience to run Nautilus as a subsidiary of DFX. Rod was confident they could make it profitable (I guess we will have to see). About 60% of Nautilus' sales are international, so this could provide an alternate distribution channel for the Bowflex and Instant Comfort - longer term of course. As well, they may be able to develop a retail or direct marketing strategy for Nautilus, but all of this will take time. In terms of the Instant Comfort, they will continue test marketing into Q1 - they want to make sure they are completely confident in the product and the best package to market it with before launching it. Rod is very bullish on the Instant Comfort, and believes it has more market potential than the Bowflex. He also believes it will take some time to build, just like the Bowflex. In terms of a NASDAQ listing, Rod would not provide a timeline, other than to say that it is currently "in the plans for the next year". I also tried to get a hint of Q4 results, but all Rod would say was that he was "comfortable" with the analyst's forecasts. (I believe Sprott is forecasting about $1.60 for the year, and BLSH is slightly higher - I'm just pulling these numbers from memory as I don't have the reports in front of me). That's all for now.