Nautilus 2003 Annual Report Download - page 36

Table of Contents
We maintain a $10 million line of credit with a lending institution. The line of credit is secured by certain assets and contains several 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.
We believe our existing cash balances, cash generated from operations and borrowings available under our line of credit, will be sufficient to
meet our capital requirements for the foreseeable future.
The Company’s contractual obligations and commercial commitments (as defined in Item 303(a)(5) of Regulation S-K under the Securities
Exchange Act of 1934) as of December 31, 2003 are as follows:
OFF-BALANCE SHEET ARRANGEMENTS
(In Thousands)
Payments due by period
Total
Less than 1
year
1-
3 years
3-
5 years
More than 5
years
Long
-
term debt obligations
$
—
$
—
$
—
$
—
$
—
Capital lease obligations
—
—
—
—
—
Operating lease obligations
11,513
2,474
4,152
2,942
1,945
Purchase obligations
48,553
48,015
499
30
9
Other long
-
term liabilities *
—
—
—
—
—
Total
$
60,066
$
50,489
$
4,651
$
2,972
$
1,954
* Certain contractual obligations and commercial commitments are excluded from this table because they require imprecise measurement or
are of a contingent nature (e.g. off
-
balance sheet arrangements described below).
From time to time, we arrange for leases or other financing sources with third parties to enable certain of our commercial customers to purchase
our equipment. While most of these financings are without recourse, in certain cases we may offer a guaranty or other recourse provisions. The
purpose of these guaranties is to increase our selling opportunities to commercial customers that would not otherwise be able to obtain
financing to purchase our equipment. At December 31, 2003, the maximum contingent liability under all recourse provisions was
approximately $3.0 million. Refer to Note 1 of the Notes to Consolidated Financial Statements for further discussion of the accounting
treatment for these arrangements. We expect an increase in these types of arrangements going forward.
INFLATION AND PRICE CHANGES
Although we cannot accurately anticipate the effect of inflation on our operations, we do not believe that inflation has had, or is likely in the
foreseeable future to have, a material adverse effect on our financial position, results of operations or cash flows. However, increases in
inflation over historical levels or uncertainty in the general economy could decrease discretionary consumer spending for products like ours.
Very little of our revenue variation from prior periods is attributable to price changes.
RECENT ACCOUNTING PRONOUNCEMENTS
In July 2002, the Financial Accounting Standards Board (“the FASB”) issued Statement of Financial Accounting Standards (“SFAS”)
No. 146,
Accounting for Costs Associated with Exit or Disposal Activities
. The standard requires companies to recognize costs associated with exit or
disposal activities when they are incurred rather than at the date of commitment to an exit or disposal plan. Costs covered by the standard
include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant
closing, or other exit or disposal activity. The Company adopted this statement as of January 1, 2003. The Company believes this event is not
material enough to warrant further disclosure and, therefore, continues to conclude that the adoption of SFAS No. 146 has not had a material
effect on the Company’s financial position, results of operations, or cash flows.
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