Nautilus 2007 Annual Report Download - page 49

Table of Contents
Revenues, income (loss) before income taxes, income tax expense (benefit) and net gain (loss) generated from discontinued operations were as
follows:
The carrying value of all assets and liabilities of the discontinued operations were adjusted to fair market value resulting in an impairment charge
of $13.2 million in the fourth quarter of 2007. No costs associated with exit or disposal activities as contemplated by SFAS No. 146 Accounting
for Costs Associated with Exit or Disposal Activities
(“SFAS 146”) have been recorded.
The provision for income tax expense for discontinued operations was $2.1 million in 2007 on a pretax loss of $7.7 million. The change from
book loss to taxable income is mainly related to the $13.2 million impairment charge which is nondeductible for tax purposes.
Assets, including assets held for sale and liabilities associated with the Pearl Izumi operation have been segregated from continuing operations
and presented as assets and liabilities of discontinued operations in the consolidated balance sheets for all periods presented. Depreciation and
amortization related to assets held for sale ceased as of December 15, 2007. Assets and liabilities for the discontinued operations were as
follows:
As part of the acquisition of Pearl Izumi, the Company became obligated on two non-interest bearing notes of $4.4 million and $0.9 million, net
of imputed interest. The $4.4 million note required payments of $0.3 million in February 2006, and $0.15 million per quarter beginning March
2007 through December 2016. The $0.9 million note required payments of $0.15 million per quarter beginning September 2005 through
December 2006 and was paid off in January 2007.
46
Years Ended December 31,
(In thousands) 2007 2006 2005
Revenue
$
67,172
$
63,024
$
24,036
Gain (loss) before income taxes
(7,743
)
6,653
2,074
Income tax expense
2,058
2,473
1,048
Net gain (loss) from discontinued operations
$
(9,801
)
$
4,180
$
1,026
December 31,
(In thousands) 2007 2006
Current assets
$
28,660
$
30,595
Property and equipment, net
1,411
1,238
Goodwill
19,743
32,763
Intangible and other assets
23,957
24,862
Assets of discontinued operations
$
73,771
$
89,458
Current liabilities
$
5,332
$
5,325
Current portion of long
-
term debt
447
259
Long
-
term debt excluding current portion
3,797
4,158
Noncurrent deferred tax liabilities
6,291
6,288
Liabilities of discontinued operations
$
15,867
$
16,030