All things considered, NuStep, Inc. of Ann Arbor is a current success story.

While many Michigan companies have reported plummeting revenues due to the recession, NuStep’s revenues fell from $20 million in 2007 to about $19 million in both 2008 and 2009, said company president Dick Sarns.

And this was after a robust period during which the company saw revenues jump from $7 million in 2000 to $20 million in 2007, said Sarns - who’s projecting an increase in revenues for 2010, up to $21 million.

NuStep manufactures and sells specialty exercise machines and physical-rehabilitation equipment to hospitals, physical therapy centers, cardiac rehab clinics, and health and wellness centers, and one of their machines is being used on “The Biggest Loser” weight-loss TV show.

According to First Research, which provides market analysis tools to sales and marketing specialists, the overall U.S. fitness-equipment-manufacturing industry consists of about 100 companies, with combined annual revenues of more than $3 billion. Major companies include Nautilus, Precor and Life Fitness.

But Sarns said that NuStep, which employs 80, targets a much smaller niche market that’s “somewhere over $100 million, with about a half-dozen companies that we compete with directly.”

Chuck Leve, executive director of the Association of Fitness Industry Retailers & Manufacturers, confirmed Sarns’ estimate of the size of NuStep’s niche market. 

“There’s been a retraction in the fitness equipment industry overall in the last couple of years, what with access to credit being so difficult. One reason that NuStep has done well or held steady is because they do operate in that niche market,” said Leve.

Sarns said that a big factor in the company’s projected revenue increase for this year is a new product, the T5 Recumbent Cross Trainer -- a $6,000 unit that’s a “step up” from its other models.

About 2/3 of NuStep’s sales go to institutional customers, while about 1/3 of its machines are sold to the retail market - that is, individuals who have suffered a heart attack, or stroke, or some other injury -- or perhaps suffer from conditions like Multiple Sclerosis and want to continue their therapy at home. About 80 percent of the cross-trainers sold by NuStep are priced in the $3,500 range, said Sarns.

NuStep’s previous growth - and its ability to hold steady during the recession - is due in part to the fact that the enormous baby-boom generation is aging, and is experiencing some of the medical and health problems associated with age, explained Sarns. 

And the obesity epidemic in America has also fueled sales of its equipment - hence their use on “The Biggest Loser” show. “Our new product will accommodate weights of up to 600 pounds,” said Sarns.

NuStep’s ongoing business strategy is partly dependent on “continuing to respond to customer needs and working hard to stay close to them, and listen to them -- including getting their feedback when it comes to designing new products,” said Sarns.

When talking with its institutional and individual customers, NuStep reminds them that, “sadly, only 15 to 20 percent who’ve had a cardiac event or stroke receive rehabilitation. That number really has to go up for people to regain their quality of life,” he said.

Sarns, now 82 and an engineer by trade, founded NuStep in 1987. Prior to that, back in the 1960s, he helped develop the heart-lung machine used in open heart surgeries when he was running another company he founded, Sarns Medical, which he later sold to 3M and is now part of Terumo.

NuStep also manufactures and sells “accessory equipment,” like a Leg Stabilizer bar, which Sarns said “helps align and stabilize the legs of those who suffer from lower-body deficiencies.”

Sarns’ wife, Norma, is a daily NuStep user. She suffers from progressive MS, and “she’s unable to walk, but when she gets on our T5 machine, you wouldn’t know there was a problem,” Sarns said. “Machines like this help people to maintain muscle movement, which is key to their rehabilitation - and a key to maintaining muscle strength for those who cannot walk.”