Nautilus 2008 Annual Report Download - page 41

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Table of Contents
and seasonal weather patterns influence television viewership and cause our television commercials on national cable television to be less
effective in the second quarter than in other periods of the year. In addition, during the spring and summer months, consumers tend to be
involved in outdoor activities, including exercise, which impacts sales of fitness equipment used indoors. This seasonality can have a significant
affect on our inventory levels, working capital needs and the utilization of resources in our manufacturing and warehousing locations.
NEW ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 to the consolidated financial statements located at Item 8 of this Form 10-K for information concerning the actual or anticipated
impact of new accounting pronouncements on the Company’s consolidated financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to foreign exchange risk from currency fluctuations, mainly in Canada, China and Europe, due to sourcing of our products in
U.S. dollars and selling them primarily in Canadian dollars, Chinese renminbi, British pounds, Swiss francs and euros in addition to U.S. dollars.
Given the relative size of our current foreign operations, the exposure to the exchange risk could have a significant impact on our results of
operations. Based on our assets and liabilities denominated in other than U.S. dollars at December 31, 2008, a ten percent change in all European
currencies would result in a change in our net foreign position totaling approximately $2.4 million. A ten percent change in either the Canadian
dollar or Chinese renminbi would not have a significant impact on our net foreign position.
We are exposed to market risk from fluctuations in the general level of interest rates on our variable-
rate credit agreement with Bank of America,
N.A. As of December 31, 2008, our outstanding borrowings under this credit facility totaled $17.9 million.
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