Nautilus Mails Letter to Shareholders; Informs Shareholders About Value Decline of Ampex Corporation Under Sherborne

Market Wire, November, 2007

Global fitness company Nautilus, Inc. (NYSE: NLS) today announced that it has mailed the following letter to its shareholders:

Dear Fellow Shareholder:

As you decide how to vote at the important special meeting of shareholders scheduled for December 18, 2007, do not be fooled by Sherborne's empty rhetoric. Instead, consider the following and decide for yourself whether Edward Bramson and the other Sherborne nominees can legitimately represent your interests. We believe that our shareholders deserve better.

Your vote is extremely important. To ensure that Sherborne's nominees do not seize control of your board, we urge you to vote AGAINST the removal of a majority of your board on the enclosed WHITE proxy card TODAY -- by telephone, Internet or by signing, dating and returning the WHITE proxy card in the postage-paid envelope provided.

The Story of Edward Bramson at Ampex Corporation
In our view -- Bad Strategy, Bad Management, Bad Investment

Sherborne would have you believe that it is experienced in "undertak[ing] operational turnarounds." However the three examples they tout include no publicly-listed U.S. companies and no companies in the fitness industry.

More importantly, Sherborne fails to disclose the unfortunate story of Ampex Corporation -- a California-based company that prior to Edward Bramson's involvement was the brand of choice for high-performance recording systems and magnetic tape media. We believe that once you review Bramson's track record with Ampex, you will agree that Bramson and the other Sherborne nominees do not deserve to control the Nautilus board. Consider the chart below as you decide whether Edward Bramson, whose tenure at Ampex stretched from 1987 to February 2007 (just months before the company stated it "might be forced to reorganize under federal bankruptcy laws"(1)), and the other Sherborne nominees deserve control over your company's board.

Mr. Bramson's and Sherborne's Involvement with Ampex

In 1987, Bramson was the president and CEO of a company that purchased Ampex for $479 million. In the full year immediately prior to this acquisition, Ampex had revenues of $522 million and a workforce of approximately 6,700 employees. After the acquisition, Ampex initially performed well. However in 1989, Ampex, with Bramson as Chairman and President of Ampex Group, Inc., decided to restructure and reduce its workforce. By January 1991, the company's workforce had been reduced to approximately 4,500 employees from the 6,700 headcount at the time Ampex was acquired. During that same period, Ampex's net income plummeted, from approximately $23 million to losses of approximately $8 million and $65 million in 1989 and 1990, respectively.

Between May 1987 and January 1991, Ampex had gone through three CEOs. Additionally, 38 of the vice presidents at Ampex as of December 1990 left within the following six months, some of whom left because of declining morale, or as indicated by one former executive, because the managers Bramson brought in "had no idea what was going on."(3) In January 1991, Bramson was named CEO of Ampex. By July 1992, the Ampex workforce had been reduced to approximately 3,000 employees, less than 50% of the workforce when Ampex was acquired. Additionally, revenues began dropping precipitously during this period, from approximately $318 million in 1991 to approximately $238 million in 1992 and $170 million in 1993.

The Disappointing Ampex Initial Public Offering

In 1992, Ampex conducted its initial public offering. Instead of selling shares at the originally estimated price range of $12 to $14 per share, the IPO was only able to garner investors at $6 per share. Based on the initial public offering price, Ampex was worth $102 million -- a sharp reduction from the $479 million Bramson and his associates had paid just five years earlier.

After a Series of Unsuccessful Turnarounds, Ampex Now Faces Possible Bankruptcy

In October 1993, under Bramson's leadership, Ampex announced that it would sell its videotape business and focus solely on the digital storage industry. This announcement was the culmination of five years' worth of attempts to turn around Ampex. During this five-year period, Ampex lost approximately $500 million. By the end of 1993, Ampex had a workforce of around 800 -- approximately 88% fewer employees than in 1987 when Ampex was acquired. In May 1994, Ampex was delisted from The Nasdaq Stock Market as its stock price dipped below $1.00.

Focused primarily on digital storage, Ampex became marginally profitable, but Ampex was not able to increase its revenues, which steadily declined between 1989 and 2002 as demonstrated in the chart below. Beginning in 1998, under the leadership of Bramson, Ampex entered the Internet market through a series of investments. This new Internet strategy ultimately failed, ending in Ampex shutting down its streaming media content business. By 2001, Ampex had revenues of only $46 million, with losses of $27 million, and only 156 employees.