Nautilus 2001 Annual Report Download - page 33

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WE ARE A RAPIDLY GROWING COMPANY; OUR FAILURE TO PROPERLY MANAGE GROWTH MAY ADVERSELY
AFFECT OUR FINANCIAL PERFORMANCE.
We have grown significantly in recent years, with an increase in net sales from $9.2 million in 1996 to $363.9 million in 2001. Our organic
growth has been complemented by acquisitions of Schwinn Fitness in September 2001 and StairMaster in February 2002. Our rapid growth and
recent acquisitions may strain our management team, production facilities, information systems and other resources. In addition, we may be
unable to effectively allocate our existing and future resources to our various businesses while maintaining our focus on our core competencies.
We cannot assure you that we will succeed in effectively managing our existing operations or our anticipated growth, which could adversely
affect our financial performance.
IF WE ARE UNABLE TO EFFECTIVELY INTEGRATE NEWLY ACQUIRED BUSINESSES, SUCH AS STAIRMASTER, INTO OUR
OPERATIONS, WE MAY NOT ACHIEVE ANTICIPATED REVENUE, EARNINGS AND BUSINESS SYNERGIES.
We face significant challenges in integrating acquired businesses, including recently acquired StairMaster, into our operations, particularly with
respect to corporate cultures and management teams. Failure to successfully effect the integration could adversely impact the revenue, earnings
and business synergies we expect from the acquisition. In addition, the process of integrating acquired businesses may be disruptive to our
operations and may cause an interruption of, or a loss of momentum in, our core business.
Our future integration efforts may be jeopardized, and our actual return on investment from such acquisitions may be lower than anticipated, as
a result of various factors, including the following:
o Challenges in the successful integration of the products, services or personnel of the acquired business into our operations;
o Loss of employees or customers that are key to the acquired business;
o Time and money spent by our management team focusing on the integration, which could distract it from our core operations;
o Our potential lack of experience in markets of the acquired businesses;
o Possible inconsistencies in standards, controls, procedures and policies among the combined companies and the need to implement our
company financial, accounting, information and other systems; and
o The need to coordinate geographically diverse operations.
UNFAVORABLE ECONOMIC CONDITIONS COULD CAUSE A DECLINE IN CONSUMER SPENDING AND ACCORDINGLY
HINDER OUR PRODUCT SALES.
The success of each of our products depends substantially on the amount of discretionary funds available to consumers and their purchasing
preferences. Economic and political uncertainties could continue to adversely impact the U.S. and international economic environment.
Although our revenues have not been adversely impacted by the current economic slowdown to date, a continued decline in economic
conditions could further depress consumer spending, especially discretionary spending for premium priced products like ours. These poor
economic conditions could in turn lead to substantial decreases in our sales and revenues.
31
2002. EDGAR Online, Inc.