Nautilus had a rough 4th quarter as sales dropped by 6.9 percent to $181.3 million, and the company’s net income plummeted by more than 80 percent to $2.8 million. Nautilus places the blame on its U.S. manufacturing facilities, which couldn’t keep up with the introduction of six new products for the holiday season. Retail sales, which include sporting goods, warehouse and department stores, rose by 46 percent to $46 million, while the specialty retail channel, which includes fitness specialty retailers, rose by 14 percent to $23 million. Sales outside of the USA fell by 4 percent to $14 million in the period. Hardgoods sales were up by 1.7 percent. The commercial channel saw sales rise by 5 percent and the direct channel had a 17 percent drop. For the full year, the group’s sales were still up by 20.4 percent to $630.6 million, but the gross margin dropped by 240 basis points to 44.3 percent and net income dropped by 20.4 percent to $23.8 million. Nautilus is projecting sales for the 1st quarter of 2006 at $180-185 million.