Nautilus 2006 Annual Report Download - page 22

Table of Contents
Item 6. Selected Financial Data
The selected consolidated financial data presented below is for, and as of the end of, each of the years in the five-year period ended
December 31, has been derived from the audited consolidated financial statements. This data should be read in conjunction with our financial
statements and notes thereto and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation .
Comparability of financial results is affected by the acquisition of StairMaster in February 2002 and Pearl Izumi in July 2005.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation
This Management’s Discussion and Analysis of Financial Condition and Results of Operation (the “MD&A”) should be read in
conjunction with our consolidated financial statements and related notes located at Item 8 of this Form 10-K. We believe that period-to-period
comparisons of our operating results are not necessarily indicative of future performance. You should consider our prospects in light of the
risks, expenses and difficulties frequently encountered by companies that operate in evolving markets. We may not be able to successfully
address these risks and difficulties and, consequently, we cannot assure you of any future growth or profitability. For more information, see our
discussion of Risk Factors located at Part I, Item IA of this Form 10-K.
EXECUTIVE OVERVIEW
In 2006, we continued to focus on repositioning our Company for sustainable and profitable long-term growth by following our FIT #1
business principles: Financial rigor, Innovation, Trust, and being #1 in the categories in which we compete . We believe those principles
helped us to establish ourselves across multiple channels of distribution, be an industry leader in innovation, and provide a strong and
improving manufacturing and supply chain base. This serves as our foundation for achieving sustainable revenue and earnings growth into the
future.
With the acquisition of the Universal brand and the purchase of a cardiovascular fitness equipment intellectual property (“IP”) portfolio
earlier in the year, we believe we now have the five leading fitness brands that are segmented across multiple channels of distribution and an
ever stronger IP portfolio. As the result of our initiatives, we will continue to offer a complete range of high-
quality fitness products in virtually
every business channel where a consumer shops or exercises, and continue to focus on our future with significant investment in the
introduction of new innovative high-quality products.
For the year, we delivered net sales of $680.3 million, an increase of 7.8% from 2005 and the highest in our Company’s history. Our
gross profit margin decreased slightly to 43.9%, primarily a result of a continued shift in our sales product mix both between and within
product categories and among our selling channels. Our operating income improved by 21.5% as a result of operational improvements that
were put in place during the year. As a
20
(In thousands except per share amounts)
2006 2005 2004 2003 2002
Net sales
$
680,295
$
631,310
$
523,837
$
498,836
$
584,650
Gross profit
298,602
278,814
244,794
251,816
337,052
Operating income
41,079
33,804
44,462
51,816
151,184
Net income
$
29,100
$
23,000
$
29,985
$
34,402
$
97,887
Earnings per share:
Basic
$
0.90
$
0.69
$
0.92
$
1.06
$
2.84
Diluted
$
0.90
$
0.68
$
0.90
$
1.04
$
2.79
Cash dividends declared and paid per share
$
0.40
$
0.40
$
0.40
$
0.40
$
—
Cash, cash equivalents, and short
-
term investments
$
4,262
$
7,984
$
104,585
$
72,634
$
49,297
Working capital
103,403
106,971
169,549
138,711
109,023
Total assets
424,942
413,286
359,641
311,935
276,653
Long
-
term debt
4,158
5,610
200
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