Nautilus 2000 Annual Report Download - page 40

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A reconciliation of the statutory income tax rate with the Company's effective income tax rate is as follows:
1999 2000
Federal 35.00 %
35.00 %
State 1.08 %
0.03 %
Other 0.03 %
0.97 %
Total 36.11 %
36.00 %
11.EARNINGS PER SHARE
The per share amounts are based on the weighted average number of basic and dilutive common equivalent shares assumed to be outstanding
during the period of computation. Net income for the calculation of both basic and diluted earnings per share is the same for all periods.
The calculation of weighted average outstanding shares is as follows:
Average Shares
1998 1999 2000
Basic shares outstanding 21,007,180 22,872,637 23,525,068
Dilutive effect of stock options 876,225 584,080 473,175
Diluted shares outstanding 21,883,405 23,456,717 23,998,243
12.STOCK REPURCHASE PROGRAM
Four times during fiscal 2000, the Board of Directors authorized the expenditure of up to $8million to purchase shares of Direct Focus,Inc.
common stock in open market transactions. During the year ended December31, 2000, the Company repurchased a total of 278,353 shares of
common stock in open market transactions for an aggregate purchase price of $3.3million. All authorizations had expired at December31, 2000.
13.STOCK SPLITS
On June26, 2000, the Board of Directors approved a three-for-two stock split in the form of a share dividend, payable to the Company's
stockholders of record as of July31, 2000. Shares resulting from the split were distributed by the transfer agent on August14, 2000. On
December8, 2000, the Board of Directors approved another three-for-two stock split payable to Company stockholders of record as of
January2, 2001 with a payment date of January15, 2001. All share and per-share numbers contained herein reflect these stock splits.
14.RELATED-PARTY TRANSACTIONS
The Company incurred royalty expense under an agreement with a stockholder of the Company of $1,603,821 in 1998, $2,815,116 in 1999, and
$4,837,212 in 2000, of which $893,563 and $1,481,886 was payable at December31, 1999 and 2000, respectively.
15.LITIGATION SETTLEMENT
On July17, 1999, the Company reached an agreement with a competitor to settle pending litigation. As a result of the settlement, the Company
took a one-time, after-tax charge of $2.6million in the second quarter of fiscal 1999. The Company made an $8million cash payment to the
competitor, of which $4million was paid by insurance.
38
2002. EDGAR Online, Inc.