Nautilus 2001 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2001 Nautilus annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 89

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89

Segment assets 87,264 106,640 193,904
Additions to property, plant and equipment 5,266 450 5,716
YEAR ENDED DECEMBER 31, 2000
Revenues from external customers $ 198,107 $ 25,820 $ 223,927
Interest income 3,630 2 3,632
Depreciation and amortization expense 2,068 806 2,874
Income tax expense 22,883 530 23,413
Segment net income 40,684 942 41,626
Segment assets 95,815 21,311 117,126
Additions to property, plant and equipment 8,237 525 8,762
YEAR ENDED DECEMBER 31, 1999
Revenues from external customers $ 113,004 $ 20,075 $ 133,079
Interest income 1,002 2 1,004
Depreciation and amortization expense 565 618 1,183
Income tax expense 11,084 411 11,495
Segment net income 19,715 628 20,343
Segment assets 47,753 19,557 67,310
Additions to property, plant and equipment 1,379 550 1,929
3. ACQUISITION OF SCHWINN
Effective September 20, 2001, the Company acquired the accounts receivable, inventories, fixed assets, certain intangible assets and all assets
and liabilities of the foreign subsidiaries of the Fitness Division ("Schwinn Fitness") of Schwinn/GT Corp. and its affiliates for a cash purchase
price of approximately $69.8 million, including acquisition costs of $ 4.2 million. Schwinn Fitness was acquired through a bankruptcy auction
in the United States Bankruptcy Court for the District of Colorado, which auction was completed on September 12, 2001. The Company's bid
for Schwinn Fitness was submitted as part of a $151 million bid with Pacific Cycle, LLC, which was awarded the right to purchase Schwinn/GT
Corp.'s cycling division through the Chapter 11 proceeding. Schwinn/GT Corp. filed voluntary petitions for reorganization under Chapter 11 of
the U.S. Bankruptcy Code on July 16, 2001.
The acquired assets include plant, equipment and other property used to manufacture, assemble, distribute and sell fitness equipment, including
treadmills, upright stationary bicycles, recumbent stationary bicycles, elliptical machines and stair-climbing machines. The Company intends to
continue to use the acquired assets for these purposes.
The purchase price for Schwinn Fitness was determined in the court auction. The Company's bid was formulated on the basis of historical and
projected financial performance, which resulted in goodwill that has been recorded in the Commercial/Retail segment along with the acquired
assets and liabilities. The Company financed the acquisition from cash-on-hand. In accordance with the Asset Purchase Agreement by and
among the Company and Schwinn, the purchase price based on the formula set forth in the Asset Purchase Agreement was finalized in January
2002.
The Company has determined that the intangible asset associated with the Schwinn Fitness acquisition (a trademark valued at $6.8 million) has
an indefinite useful life. However, as the expected use and cash flows from the trademark is expected to be approximately 20 years, the
Company will amortize the trademark using the straight-line method over this period. The Company will evaluate the remaining useful life of
the trademark that is being amortized each reporting period to determine whether
45
2002. EDGAR Online, Inc.