Nautilus 2001 Annual Report Download - page 53

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8. COMMITMENTS AND CONTINGENCIES
LINES OF CREDIT
The Company has a line of credit for $10 million with a bank. The line is secured by the Company's general assets, and interest is payable on
outstanding borrowings under the line at the bank's prime rate (4.5% at December 31, 2001). There were no outstanding borrowings on the line
of credit at December 31, 2001.
OPERATING LEASES
The Company leases its Vancouver, Washington call center facility under an operating lease, which expires April 30, 2002. We plan to move
our entire Vancouver operation to our headquarters building in 2002.
Since December 1999, the Company has leased a distribution center in Las Vegas, Nevada to service the Southwestern United States. This
operating lease expires November 30, 2002.
Nautilus HPS, Inc. leases trucks and trailers and other equipment used in the Nautilus commercial business. These leases expire over various
terms through December 2002.
Leased facilities were acquired in 2001 due to the acquisition of the Fitness Division of Schwinn/GT Corp. We lease sales and administrative
office space in various properties in Boulder, Colorado. All but one of these leases are month-to-month with no defined future commitment.
Due to the purchase of the new 85,000 square foot facility on March 1, 2002, for $6 million, all previous Boulder facility leases will be
canceled. The only exception is the 40,000 square foot facility that carries a lease term through November 30, 2003, which we intend to
sublease through the remaining lease term once we move into the new facility. We also lease manufacturing and distribution facilities in
Bolingbrook, Illinois, and Tyler, Texas. Additionally, we lease sales and administrative office space in Givisiez, Switzerland and warehouse
space in Fribourg, Switzerland. These leases expire over various terms through November 30, 2003.
In addition to the acquired facilities, the Fitness Division leases, on a month-to-month basis flexible warehouse space in multiple countries in
Asia and Europe devoted to international distribution.
In general, our properties are well maintained, adequate and suitable for their purposes, and we believe these properties will meet our
operational needs for the foreseeable future. If we require additional warehouse or office space, we believe we will be able to obtain such space
on commercially reasonable terms.
Rent expense under all leases was $664,922 in 1999, $473,920 in 2000, and $937,078 in 2001.
OBLIGATIONS
Future minimum lease payments under the operating leases for the years ending December 31 are as follows:
2002.......................................... $ 1,151,528
2003.......................................... 527,461
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Total minimum lease payments.................. $ 1,678,989
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48
2002. EDGAR Online, Inc.