Nautilus 2001 Annual Report Download - page 48

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establishes accounting and reporting standards for derivative instruments and hedging activities requiring that all derivatives be recognized in
the balance sheet and measured at fair value. The adoption of SFAS No. 133 did not have a material effect on the Company's financial position,
results of operations or cash flows.
The Company adopted SFAS No. 141, "Business Combinations," effective July 1, 2001. SFAS No. 141 requires all business combinations
initiated after June 30, 2001 to be accounted for using the purchase method of accounting.
In June 2001, the Financial Accounting Standards Board issued SFAS No. 142, "Goodwill and Other Intangible Assets." The statement requires
discontinuing the amortization of goodwill and other intangible assets with indefinite useful lives. Instead, these assets are to be tested
periodically for impairment and written down to their fair market value as necessary. The Company adopted the provisions of this statement
effective September 20, 2001 as a result of the Schwinn acquisition, the effect of which is to not amortize the goodwill recorded as part of this
acquisition but to annually test it for impairment.
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," addresses accounting and reporting for the impairment or
disposal of long-lived assets. SFAS No. 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." SFAS No. 144 establishes a single accounting model for long-lived assets to be disposed of by sale and
expands on the guidance provided by SFAS No. 121 with respect to cash flow estimations. SFAS No. 144 becomes effective for the Company's
fiscal year beginning January 1, 2002. The Company is evaluating SFAS No. 144 and has not yet determined the impact of adoption on its
financial position or results of operations.
RECLASSIFICATIONS
Certain amounts from 1999 and 2000 have been reclassified to conform to the 2001 presentation.
2. OPERATING SEGMENTS
The Company's operating segments include its direct products segment that includes all products marketed directly to consumers through a
variety of direct marketing channels. The Bowflex line of fitness equipment and the Nautilus Sleep Systems are the principal products in the
Company's direct products segment. The other operating segment is the commercial and retail products segment, which includes products and
operations that are not direct marketed to consumers. Products in this segment include Nautilus and Schwinn commercial and retail fitness
equipment and accessories. Accounting policies used by the segments are the same as those disclosed in Note 1.
The following table presents information about the Company's two operating segments (in thousands):
Commercial and
Direct Products Retail Products Total
------------------- --------------------- -----------------
YEAR ENDED DECEMBER 31, 2001
Revenues from external customers $ 292,539 $ 71,323 $ 363,862
Interest income 3,980 44 4,024
Depreciation and amortization expense 2,256 1,365 3,621
Income tax expense 36,166 2,069 38,235
Segment net income 62,908 3,675 66,583
44
2002. EDGAR Online, Inc.