Nautilus 2005 Annual Report Download - page 57

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Table of Contents
Short-Term Borrowings –
On November 18, 2005, the Company entered into a five year unsecured credit agreement to include revolving
loans, letters of credit and swing loans for a maximum commitment of $65,000, with sub-limits on the swing loans and letters of credit. The
credit agreement includes an option for the Company to reduce the maximum commitment from time to time. Under the credit agreement,
borrowings will bear interest based upon the prime rate or Eurodollar rates with a provision for a spread over such rates based upon the
Company’s consolidated leverage ratio. At December 31, 2005, the interest rate ranged from 5.025% to 5.275% and the Company had $40,147
outstanding under the credit agreement. The credit agreement contains certain financial and non-financial covenants, which include but are not
limited to a leverage ratio and fixed charge coverage ratio. The credit facility was amended in March 2006, which included a waiver for the
fixed charge coverage ratio and certain technical covenants with which the Company was out of compliance.
At December 31, 2005, the Company had a line of credit for $10,000 with a financial institution. At December 31, 2005 and 2004, the
Company had $8,696 and $8,121, respectively in stand by letters of credit with Asian vendors reducing the available balance.
The Company issued a $1,291 non-interest bearing promissory note, net of imputed interest as part of the purchase price in the Belko
Canada acquisition payable in full in May 2008. As part of the acquisition of Pearl Izumi, the Company became obligated on two non-interest
bearing notes of $4,403 and $855, net of imputed interest. The $4,403 note requires payment of $300 in February 2006, and $150 per quarter
beginning March 2007 through December 2016. The $855 note requires payments of $150 per quarter beginning September 2005 through
December 2006.
Operating Leases – The Company has operating leases for various domestic and international properties with functional uses
predominantly ranging from, but not limited to, warehousing and distribution, product development, administration, and product sales. The
Company also has operating leases for certain equipment mainly consisting of product delivery trucks used in our commercial fitness
equipment business and product service vans for warranty related matters. Rent expense under all leases was $5,148, $2,921 and $3,215, in
2005, 2004 and 2003, respectively.
Obligations – Operating leases under which the Company is presently obligated expire over various terms through June 2015. Future
minimum lease payments under the noncancellable operating leases are as follows:
11. INCOME TAXES
2006
$
5,439
2007
5,400
2008
4,983
2009
3,793
2010
3,616
Thereafter
10,729
Minimum lease payments
$
33,960
The income before income taxes was as follows for each of the three years ended December 31, 2005:
56
2005
2004
2003
United States
$
35,300
$
43,168
$
50,990
Foreign
(7
)
2,479
2,763
Total
$
35,293
$
45,647
$
53,753