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Table of Contents
8. OTHER ASSETS, net
Details of other assets are summarized as follows at December 31:
Amortization of intangible assets for 2005 and 2004 was $1,275 and $401, respectively. The estimated amortization expense for the next
five full succeeding years (2006 through 2010) is $2,111, $2,009, $1,673, $1,193, and $881 per year, respectively. Such estimated amortization
will change if businesses or portions thereof are either acquired or disposed, or if changes in events or circumstances warrant the revision of
estimated useful lives.
9. ACCRUED LIABILITIES
Estimated
Useful Life
(in years) 2005
2004
Indefinite life trademarks
N/A
$
30,465
$
10,465
Definite life trademarks
20
6,800
6,800
Patents
1 to 17
1,597
1,567
Customer base
8
3,400
—
Developed technology
4
2,500
—
Non
-
compete agreement
3
1,647
—
Other assets
1,195
789
Total other assets
47,604
19,621
Accumulated amortization
Trademarks
(2,097
)
(1,777
)
Patents
(261
)
(181
)
Other assets
(875
)
—
Other assets, net
$
44,371
$
17,663
Accrued liabilities consisted of the following at December 31:
10. COMMITMENTS AND CONTINGENCIES
2005 2004
Accrued payroll
$
8,457
$
8,581
Accrued warranty expense
10,210
7,537
Sales return reserve
1,049
1,785
Accrued other
9,381
6,800
Accrued liabilities
$
29,097
$
24,703
Product Warranty Matters – Our product warranty accrual reflects management’s best estimate of probable liability under its product
warranties. We determine the warranty accrual based on known product failures (if any), historical experience, and other currently available
evidence.
Product Safety Matters – In February 2004, the Company was notified that the Consumer Product Safety Commission (“CPSC”) was
investigating whether the Company violated the reporting obligations of the Consumer Product Safety Act (the “Act”) in connection with
bench and lat tower incidents reported by users of the Bowflex Power Pro with lat tower attachment. Under the Act, the CPSC may assess
penalties if it is determined that a product defect was not reported in accordance with the Act. The Company fully cooperated with this
investigation. A civil penalty in the amount of $950 was levied against the Company by the CPSC and was paid during the first quarter of
2005.
55