Nautilus 2003 Annual Report Download - page 63

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Table of Contents
The calculation of weighted-average outstanding shares for the three years ended December 31, 2003 is as follows:
2003
2002
2001
Basic shares outstanding
32,579,533
34,499,482
35,183,632
Dilutive effect of stock options
439,161
643,312
782,406
Diluted shares outstanding
33,018,694
35,142,794
35,966,038
Antidilutive stock options*
1,164,194
263,575
169,500
*
Stock options not included in the calculation of diluted earnings per share for each respective year because they would be antidilutive.
12.
STOCK REPURCHASE PROGRAM
In January 2003, the Board of Directors authorized the expenditure of up to $50,000 to purchase shares of the Company’s common stock
in open-market transactions. During 2003, the Company repurchased a total of 100,300 shares of common stock in open market
transactions for an aggregate purchase price of $1,422. The authorization expired on June 30, 2003 and has not been renewed.
During the year ended December 31, 2002, the Company repurchased a total of 2,843,120 shares of common stock in open-market
transactions for an aggregate purchase price of $49,969.
13.
STOCK SPLITS
The Board of Directors approved three-for-two stock splits in the form of a share dividend to Company stockholders payable on January
15, 2001 and August 13, 2001. All share and per-share numbers contained herein reflect these stock splits.
14.
RELATED
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PARTY TRANSACTIONS
The Company incurred royalty expense under an agreement with a stockholder of the Company of $6,556 in 2003, $9,089 in 2002, and
$6,786 in 2001, of which $2,133 and $1,997 was payable at December 31, 2003 and 2002, 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, the Company’s former Chairman and Chief Executive Officer (CEO), and a former director of the Company. That
separate agreement stipulates that annual royalties above $90 would be paid 60% to the stockholder, 20% to the former Chairman and
CEO, and 20% to the former director. The Company will no longer be obligated to pay royalties related to Bowflex sales under this
agreement following the expiration of the patent for the Bowflex Power Rod resistance technology on April 27, 2004.
15.
LITIGATION
The Company is subject to litigation, claims and assessments in the ordinary course of business, many of which are covered in whole or
in part by insurance. Although the ultimate resolution of legal proceedings cannot be predicted with certainty, management 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. Our legal reserve accrual reflects management’s best estimate of probable liability under outstanding legal matters.
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