Nautilus 2001 Annual Report Download - page 59

12. STOCK REPURCHASE PROGRAM
Four times during fiscal 2000, the Board of Directors authorized the expenditure of up to $8 million to purchase shares of Direct Focus, Inc.
common stock in open market transactions. During the year ended December 31, 2000, the Company repurchased a total of 417,531 shares of
common stock in open market transactions for an aggregate purchase price of $3.3 million. All authorizations had expired at December 31,
2000.
Three times during fiscal 2001, the Board of Directors authorized the expenditure of up to $20 million to purchase shares of Direct Focus, Inc.
common stock in open market transactions. In October 2001, the Board of Directors authorized a $10 million repurchase program extending
through January 31, 2002 and the remaining balance of the $20 million repurchase program was terminated. During the year ended December
31, 2001, the Company repurchased a total of 941,759 shares of common stock in open market transactions for an aggregate purchase price of
$16.3 million.
13. STOCK SPLITS
On June 26, 2000, the Board of Directors approved a three-for-two stock split in the form of a share dividend, payable to the Company's
stockholders of record as of July 31, 2000. Shares resulting from the split were distributed by the transfer agent on August 14, 2000. On
December 8, 2000, the Board of Directors approved another three-for-two stock split payable to Company stockholders of record as of January
2, 2001 with a payment date of January 15, 2001. On July 13, 2001, the Board of Directors approved another three-for-two stock split in the
form of a share dividend, payable August 13, 2001 to the Company's stockholders of record as of August 2, 2001. All share and per-share
numbers contained herein reflect these stock splits.
14. RELATED-PARTY TRANSACTIONS
The Company incurred royalty expense under an agreement with a stockholder of the Company of $2,815,116 in 1999, $4,837,212 in 2000, and
$6,786,211 in 2001, of which $1,481,886 and $1,885,186 was payable at December 31, 2000 and 2001, respectively. In addition to the royalty
agreement, the stockholder has separately negotiated an agreement dated June 18, 1992, when the Company was privately held, between the
stockholder and the Company's Chief Executive Officer and a former Director of the Company, whereby the stockholder agreed to pay each
twenty percent of the royalty amount paid to him.
15. LITIGATION SETTLEMENT
On July 17, 1999, the Company reached an agreement with a competitor to settle pending litigation. As a result of the settlement, the Company
took a one-time, after-tax charge of $2.6 million in the second quarter of fiscal 1999. The Company made an $8 million cash payment to the
competitor, of which $4 million was paid by insurance. This settlement did not affect the ongoing direct marketing campaign for the Company's
Bowflex home fitness equipment.
Additionally, in the normal course of business, the Company is a party to various other legal claims, actions and complaints. Although it is not
possible to predict with certainty whether the Company will ultimately be successful in any of these legal matters, or what the impact might be,
the Company believes that disposition of these matters will not have a material adverse effect on the Company's financial position, results of
operations or cash flows.
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2002. EDGAR Online, Inc.