Nautilus 2012 Annual Report Download - page 47

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Table of Contents
(8) ACCRUED LIABILITIES
Accrued liabilities as of December 31, 2012 and 2011 consisted of the following (in thousands):
(9) PRODUCT WARRANTIES
Changes in the Company's product warranty liability in the years ended December 31, 2012 and 2011 were as follows (in thousands):
Product warranty payments in 2012 and 2011 primarily related to retained obligations of the Company's former Commercial business. Product
warranty liability adjustments in 2011 primarily related to the assignment of certain outstanding Commercial warranty obligations to the buyer
of certain components of the Commercial business. As of December 31, 2012 and 2011 , total outstanding obligations of the Company's former
Commercial business included in product warranty liability were $0.4 million and $0.6 million , respectively.
(10) BORROWINGS
The Company has a Credit Agreement (the "Loan Agreement”) with Bank of the West that, as amended and restated on March 30, 2012,
provides for a $15,750,000 maximum revolving secured credit line. The line of credit is available through March 31, 2015 for working capital,
standby letters of credit and general corporate purposes. Borrowing availability under the Loan Agreement is subject to the Company's
compliance with certain financial and operating covenants at the time borrowings are requested. Standby letters of credit under the Loan
Agreement are treated as a reduction of the available borrowing amount and are subject to covenant testing.
The interest rate applicable to borrowings under the Loan Agreement is based on either, at the Company's discretion, Bank of the West's base
rate, a floating rate or LIBOR , plus an applicable margin based on certain Company financial performance metrics. The Company's borrowing
rate was 2.00% as of December 31, 2012 . The Loan Agreement contains customary covenants, including minimum fixed charge coverage ratio
and leverage ratio, and limitations on capital expenditures, mergers and acquisitions, indebtedness, liens, dispositions, dividends and
investments. The Loan Agreement also contains customary events of default. Upon an event of default, the lender has the option of terminating
its commitment with respect to the credit line and accelerating all obligations under the Loan Agreement. Borrowings under the Loan Agreement
are collateralized by substantially all of the Company's assets, including intellectual property assets.
As of December 31, 2012 , the Company had no outstanding borrowings and $1.0 million in standby letters of credit issued under the Loan
Agreement. As of December 31, 2012 , the Company was in compliance with the financial covenants of the Loan Agreement and approximately
$14.8 million was available for borrowing.
41
December 31,
2012 2011
Exit costs of discontinued operation
$
340
$
796
Payroll and benefits
3,327
2,389
Royalties
1,063
821
Legal and professional fees
834
825
Other
2,607
2,387
Total accrued liabilities
$
8,171
$
7,218
2012 2011
Balance, January 1
$
2,017
$
3,935
Accruals
2,615
1,789
Adjustments
(170
)
(660
)
Payments
(1,970
)
(3,047
)
Balance, December 31
$
2,492
$
2,017