Nautilus 2001 Annual Report Download - page 60

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16. EMPLOYEE BENEFIT PLAN
The Company adopted a 401(k) profit sharing plan in 1999 covering all employees over the age of 18. The plan was amended in 2000 to allow
for immediate eligibility in the plan. Each participant in the 401(k) plan may contribute up to 20% of eligible compensation during any calendar
year, subject to certain limitations. The 401(k) plan provides for Company matching contributions of up to 50% of the first 6% of eligible
contributions made by participants who have one year of service. In addition, the Company may make discretionary contributions. Employees
are 100% vested in the matching and discretionary contributions after four years of service. Expense for the plan was $103,793, $134,669, and
$224,806 for the years ended December 31, 1999, 2000, and 2001, respectively.
17. ACQUISITION OF STAIRMASTER
Effective February 8, 2002, the Company acquired the accounts receivable, inventories, fixed assets, certain intangible assets and all assets and
liabilities of the foreign subsidiaries of StairMaster Sports/Medical, Inc. ("StairMaster") and its affiliates for a cash purchase price of
approximately $26.1 million, including acquisition costs. StairMaster was acquired through a bankruptcy auction in the United States
Bankruptcy Court for the Western District of Washington, which auction was completed on January 17, 2002.
The acquired assets include property, plant, equipment and other property used to manufacture, assemble, distribute and sell fitness equipment,
including steppers, stepmills, treadmills and exercise bicycles. The Company intends to continue to use the acquired assets for these purposes.
The purchase price for StairMaster was determined in the court auction. The Company's bid was formulated on the basis of historical and
projected financial performance. The Company financed the acquisition from cash-on-hand. In accordance with the Asset Purchase Agreement
by and among the Company and StairMaster, the purchase price based on the formula set forth in the Asset Purchase Agreement should be
finalized in the second quarter of 2002.
The Company has determined that the intangible asset associated with the StairMaster acquisition (a trademark valued at $6.2 million) has an
indefinite useful life and thus will not be amortized. The Company will evaluate the remaining useful life of the trademark each reporting period
to determine whether events and circumstances warrant a revision to the remaining period of amortization or if the asset should be tested for
impairment.
The total cost of the acquisition has preliminarily been allocated to the assets acquired and liabilities assumed as follows:
Trade receivables $ 8,421,618
Inventories 6,689,414
Property, plant and equipment 5,250,079
Other assets 309,887
Trademark 6,200,000
Goodwill 2,438,792
Liabilities assumed
(3,252,010)
--------------
Total acquisition cost $ 26,057,780
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2002. EDGAR Online, Inc.