Mr. Cazenave continued, “We are excited about our outlook for the remainder of the year and remain confident that we are well positioned to continue to deliver improved year-over-year financial results. As part of our continuing initiative to introduce innovative new products that satisfy changing customer needs and diversify our product portfolio, we recently launched the Bowflex ® BodyTower™, which is a unique, strength training product that leverages our well recognized Bowflex ® brand. Initial consumer response to this product has been encouraging and we look forward to continuing to roll-out more new products in the coming quarters.”

The Company reported net income (including discontinued operation) of $2.5 million for the first quarter of 2012, compared to $1.6 million for the first quarter of 2011. Diluted net income per share for the first quarter of 2012 was $0.08, compared to $0.05 for the same quarter a year ago. Net income for the 2012 first quarter included a loss from discontinued operation of $0.1 million, or $(0.01) per diluted share, compared to income from discontinued operation of $0.5 million, or $0.01 per diluted share for the 2011 first quarter.

For further information, see "Results of Operations Information" attached hereto.

Segment Results

Net sales for the Direct segment were $33.7 million in the first quarter of 2012, an increase of 11.5% over the comparable period last year reflecting strong demand for the Company's cardio products. The higher sales were also partly driven by increased advertising effectiveness and higher consumer credit approval rates, which rose to 30% in the 2012 first quarter, from 21% for the same period last year.

First quarter 2012 operating income for the Direct segment improved to $3.0 million, a 37.6% increase over the same quarter last year. This improvement reflects stronger sales as well as a 90 basis point reduction in Direct selling and marketing expense as a percentage of sales. Gross margin for the Direct business was 56.5% for the first quarter of 2012, an increase of 20 basis points compared to the first quarter of last year.

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