Nautilus 2003 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2003 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 93

  • 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
  • 90
  • 91
  • 92
  • 93

Table of Contents
THE NAUTILUS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 2003
(In Thousands, Except Share and Per Share Data)
1.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization – The Nautilus Group, Inc. (the “Company”), a Washington corporation, is a leading marketer, developer, and
manufacturer of branded health and fitness products sold under such well-known brands as Nautilus, Bowflex, Schwinn, StairMaster,
TreadClimber and Trimline. These products are distributed through well established direct to consumer, commercial, and retail channels.
The Company’
s consumer and commercial fitness equipment products include a full line of cardiovascular and weight resistance products
such as home gyms, free weight equipment, treadmills, indoor cycling equipment, steppers, ellipticals and fitness accessories. The
Company’s healthy lifestyle products also include a line of premium air support sleep systems and nutritional products.
Consolidation – The consolidated financial statements of the Company include The Nautilus Group, Inc. and its wholly owned
subsidiaries. All intercompany transactions have been eliminated in the preparation of the consolidated financial statements.
Use of Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates included in the
preparation of the financial statements are related to revenue recognition, stock-based compensation, warranty reserves, product safety
reinforcement (recall) program reserve, legal reserves, sales return reserves, the allowance for doubtful accounts, inventory valuation,
intangible asset valuation, and income tax provision.
Cash and Cash Equivalents
include cash on hand, cash deposited with banks and financial institutions and highly liquid debt instruments
purchased with maturity dates of three months or less at the date of acquisition. The Company maintains its cash in bank deposit
accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.
Short-Term Investments – Debt securities with maturities greater than three months and remaining maturities of less than one year are
classified as short-term investments. Short-term investments in debt securities are classified as held-to-maturity and valued at amortized
cost. We had no short-term investments as of December 31, 2003, and the balance in short-term investments as of December 31, 2002
consisted solely of corporate bonds.
-
47
-