Nautilus 2009 Annual Report Download - page 30

Table of Contents
matters, which were settled for $1.0 million less than the amount previously estimated and accrued in 2008. In addition, general and
administrative expenses in 2008 included $2.0 million for legal and contract settlement costs; $1.1 million for the writeoff of deferred financing
costs from amending our loan agreement; and $0.6 million for reimbursement obligations related to a shareholder action.
Research and Development
Research and development expenses were $5.2 million in 2009, a decrease of $1.4 million, or 21.1%, as compared to the prior year, primarily
due to lower employee costs and reduced third-party intellectual property costs.
Restructuring
Our restructuring expenses primarily relate to the reorganization or termination of business activities and initiatives and include: contract
termination fees, costs associated with abandoned purchase agreements, and severance.
Restructuring expenses in 2009 were $14.2 million, and included: $8.0 million in impairment charges for abandoned leasehold improvements in
space we are no longer using at our Vancouver, Washington headquarters facility; $2.8 million in lease termination costs and accrued lease
obligations associated with the reduction of leased space at our headquarters facility; $1.8 million in charges due to our abandonment of
information technology software; a $0.9 million fee to terminate a third-party service agreement for distribution of repair and replacement parts
in the U.S.; and employee termination severance costs of $0.6 million.
Restructuring expenses in 2008 were $13.9 million, and included: $8.0 million in charges related to the termination of an agreement to acquire a
manufacturing operation in China; $4.8 million in employee termination benefits and other employee costs; $0.6 million in other contract
termination costs; and $0.5 million for the disposal of unused creative media assets related to a change in our marketing strategies.
Intangible asset impairments
In 2009, in light of changes in long-term product strategies, we recognized impairment charges of $5.9 million for intangible assets of our retail
business segment.
Goodwill Impairment
In 2008, in connection with our annual impairment review, we determined that goodwill was impaired and recognized a $29.8 million non-cash
impairment charge.
Interest Income
Interest income was $0.1 million in 2009, compared to $0.2 million in 2008, a decrease of $0.1 million, primarily due to a reduction in interest
earned on income tax refunds.
Interest Expense
Interest expense was $0.2 million in 2009, compared to $1.8 million in 2008, a decrease of $1.6 million, primarily due to lower average short-
term borrowings in 2009.
Other Income (Expense)
Other expense was $0.2 million in 2009, compared to income of $0.5 million in 2008, primarily due to fluctuations in currency exchange rates.
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