Nautilus 2012 Annual Report Download - page 29

Table of Contents
Discontinued Operation
Loss from discontinued operation, net of income taxes, was $1.1 million in 2011, compared to a loss of $13.0 million in 2010, as we completed
the disposal of assets held for sale of our former Commercial business in April 2011. Loss from discontinued operation in 2011 and 2010 was
net of reductions of $0.9 million and $3.7 million, respectively, in the amount of pre-tax disposal loss previously estimated in connection with
the divestiture of our Commercial business.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2012 , we had $23.2 million of cash and cash equivalents, compared to $17.4 million as of December 31, 2011 . The
principal source of this increase in liquidity was cash provided by operating activities of $12.8 million in 2012 , compared to $4.6 million in
2011 . Management believes that sufficient funds will be available to meet our expected cash needs for at least the next twelve months, based on
cash currently on hand and anticipated cash flows from operations.
Cash provided by operating activities of $12.8 million in 2012 consisted primarily of income from continuing operations of $10.6 million .
Income from discontinued operation of $6.2 million consisted almost entirely of a non-cash gain related to the substantial liquidation of foreign
entities. An increase in trade payables provided cash of $4.2 million and a decrease in trade receivables provided cash of $1.9 million in 2012 .
These increases in liquidity were partially offset by $7.6 million of cash used for an increase in inventories in 2012 aimed at supporting the
anticipated level of sales growth of our business.
Cash provided by operating activities of $4.6 million in 2011 consisted primarily of income from continuing operations, partially offset by loss
from discontinued operation, as adjusted for non-cash items. Cash provided by a $4.0 million increase in trade payables was more than offset by
a $4.6 million increase in trade receivables and a $1.3 million increase in inventories.
The following table presents comparative cash flows related to trade receivables and inventories for the years ended December 31, 2012 , 2011
and 2010 (in thousands):
Cash used in investing activities in 2012 of $2.0 million consisted of $2.4 million used to purchase computer software and production tooling,
partially offset by $0.4 million in previously deferred proceeds from the sale of portions of our discontinued Commercial business.
Cash used in investing activities in 2011 of $0.9 million consisted of $2.5 million used to purchase computer software and production tooling,
partially offset by $1.3 million in proceeds from the sale of portions of our discontinued Commercial business and $0.4 million from a decrease
in the amount of restricted cash collateralizing our outstanding letters of credit.
Cash used in financing activities in 2012 of $4.9 million consisted of $5.0 million used to repay our Increasing Rate Senior Discount Notes,
partially offset by $0.1 million provided by the exercise of stock options.
Cash used in financing activities in 2011 was less than $0.1 million for payment of bank financing costs.
Financing Arrangements
24
2012 2011 2010
Trade receivables:
Collections
$
195,854
$
175,832
$
188,290
Sales on account
(193,926
)
(180,412
)
(181,043
)
Net cash (used in)/provided by trade receivables
$
1,928
$
(4,580
)
$
7,247
Inventories:
Shipments
$
77,580
$
78,139
$
81,980
Purchases
(85,153
)
(79,426
)
(75,637
)
Net cash (used in)/provided by inventories
$
(7,573
)
$
(1,287
)
$
6,343