ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES

On September 25, 2009 the Board of Directors of Nautilus, Inc., a Washington corporation (the "Company"), committed to a plan to divest itself of all of the assets, liabilities and ongoing operations of its commercial business. The assets of the Company's commercial business include a manufacturing facility and three warehouses in Virginia, the StairMaster cardio brand and related stepper and StepMill lines, the commercial indoor cycling line, and commercial strength and cardio equipment including the Nautilus ONE strength line. Liabilities of the commercial business include normal trade payables and accrued expenses, such as warranty obligations. The Company took this action to improve margins, utilize capital more efficiently, and focus its organization on the branded consumer fitness business. The Company expects to present the commercial business as a discontinued operation beginning with its financial statements for the quarter ended September 30, 2009.

The Company is unable at this time to provide a good faith estimate of the costs associated with the actions described above, or the time for completion of the plan. The Company will file an amended report on Form 8-K under this Item 2.05 at such time as such determination is made.

The Company issued a press release on September 29, 2009 regarding the plan to divest the commercial business. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit
No. Description

99.1 Nautilus, Inc. Press Release dated September 29, 2009

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