Nautilus 2001 Annual Report Download - page 31

LIQUIDITY AND CAPITAL RESOURCES
Historically, we have financed our growth and acquisitions primarily from cash generated by our operating activities. During 2001, our
operating activities generated approximately $66.9 million in net cash, which contributed to an aggregate $35.6 million balance in cash and
cash equivalents and $16.1 million of short-term investments, compared with $52.8 million and $20.8 million net cash generated by our
operating activities in 2000 and 1999, respectively.
Net cash used in our investing activities increased substantially in 2001 to $94.3 million, from $8.7 million in 2000 and $18.6 million in 1999.
This was primarily due to the acquisition of Schwinn Fitness and net purchase of short-term investments.
Net cash used in financing activities increased to $14.0 million from $2.6 million in 2000, compared with net cash generated from financing
activities in 1999 of $14.5 million. In 1999, cash was largely generated by our public offering in the United States, while increased use of funds
for stock repurchases during 2001 resulted in the increase in net cash used. In January 2001, our Board of Directors authorized management to
repurchase up to $20 million of the Company's common stock in open-market transactions, with the terms of the purchases to be determined by
management based on market conditions. In 2001, the Company used $16.3 million of the authorized $20 million to repurchase shares. A $10
million repurchase program was approved in October 2001 by the Board of Directors and the remaining balance of the $20 million repurchase
program was terminated. As of January 31, 2002, the $10 million repurchase authorization had expired unused.
Despite the drop in the balance of cash and cash equivalents from $77.2 million as of December 31, 2000 to $35.6 million as of December 31,
2001, our cash flow position remains very strong. The decrease last year was primarily due to the $69.8 million paid to acquire Schwinn
Fitness, the purchase of short-term investments of $16.1 million, and the repurchase of $16.3 million of the Company's stock, part of which was
offset by cash generated from operations.
Our working capital needs have increased marginally as we continue to implement our growth strategy. Working capital in 2001, 2000 and
1999 was $84.4 million, $72.5 million and $38.2 million, respectively. We anticipate that our working capital requirements will increase going
forward as a result of us growing our commercial and retail segment through our acquisition strategy and internal growth. We also expect to
materially increase our cash expenditures on spot commercials and infomercials as we expand the direct marketing campaigns for our Bowflex
products and Nautilus Sleep Systems.
We maintain a $10 million line of credit with US Bank National Association. The line of credit is secured by certain assets and contains two
financial covenants. As of the date of this filing, we are in compliance with the covenants applicable to the line of credit and there is no
outstanding balance under the line.
As of December 31, 2001, the Company had no contractual capital obligations or commercial commitments other than operating leases, which
are described in Note 8 of the Notes to Consolidated Financial Statements.
On February 8, 2002, the Company paid approximately $26.1 million to acquire StairMaster Sports/Medical Products, Inc., as described in
Note 17 of the Notes to consolidated Financial Statements. The Company used cash generated from operations to finance the acquisition.
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2002. EDGAR Online, Inc.