Nautilus 2003 Annual Report Download - page 57

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Table of Contents
The Company has determined that the StairMaster trademark has an indefinite useful life and thus will not be amortized. The Company
will evaluate the trademark each reporting period to determine whether events or circumstances warrant a revision to the indefinite useful
life assumption or whether the asset should be tested for impairment.
On October 2, 2002, Quinton Cardiology Systems, Inc. (“Quinton”) purchased certain fixed assets and inventories that the Company
originally acquired in the StairMaster acquisition for $1,725 consisting of $1,000 in cash and a $725 promissory note payable quarterly
over a two-year period at prime plus 2%. These assets consisted of medical treadmill manufacturing fixed assets and inventories, which
StairMaster used for outsourced production of Quinton branded medical treadmills. The allocation of the purchase price to the assets
acquired and liabilities assumed resulted in no goodwill being recorded.
The total cost of the StairMaster acquisition has been allocated to the assets acquired and liabilities assumed as follows:
Cash and cash equivalents
$
793
Trade receivables
8,025
Inventories
6,158
Prepaid expenses and other current assets
2,381
Property, plant and equipment
4,807
Trademark
6,115
Liabilities assumed
(3,355
)
Total acquisition cost
$
24,924
Effective September 20, 2001, the Company acquired the trade receivables, inventories, prepaid expenses and other current assets,
property, plant and equipment, certain intangible assets and the foreign subsidiaries of Schwinn Fitness for a cash purchase price of
approximately $69,843, including acquisition costs.
The total cost of the Schwinn Fitness acquisition has been allocated to the assets acquired and liabilities assumed as follows:
Trade receivables
$
9,809
Inventories
18,857
Prepaid expenses and other current assets
933
Property, plant and equipment
6,356
Other assets
40
Trademark
6,800
Goodwill
29,625
Liabilities assumed
(2,577
)
Total acquisition cost
$
69,843
The Company has determined that the Schwinn trademark, acquired as part of the Schwinn Fitness acquisition, has anticipated use and
cash flows of 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 each reporting period to determine whether events or circumstances
warrant a revision to the remaining period of amortization or whether the asset should be tested for impairment.
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