Nautilus 2012 Annual Report Download - page 48

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Table of Contents
On September 3, 2010, the Company entered into a Note Purchase Agreement (the “Purchase Agreement”)
with certain entities (collectively, the
“Sherborne Purchasers”) under common control of Sherborne Investors GP, LLC and its affiliates (collectively “Sherborne”). Sherborne was
formerly the Company's largest shareholder and is controlled by Edward J. Bramson, the Company's former Chairman and Chief Executive
Officer, and Craig L. McKibben, a former member of the Company's Board of Directors.
Pursuant to the Purchase Agreement, the Company issued to the Sherborne Purchasers $6,096,996 in aggregate principal amount at maturity of
Increasing Rate Senior Discount Notes due December 31, 2012 (the “Notes”). The Notes had an original principal amount totaling $5,000,000
and an original maturity date of December 31, 2012. On March 12, 2012, the maturity date of the Notes was automatically extended under
certain terms of the Purchase Agreement to May 2, 2013.
On July 19, 2011, beneficial interest in the Notes was assigned by the Sherborne Purchasers pro-rata to their respective investors in the manner
permitted by the Purchase Agreement. Such assignment was made in connection with the resignation of Messrs. Bramson and McKibben from
their respective positions with Nautilus on May 26, 2011, and the subsequent pro-rata distribution by certain Sherborne-affiliated entities to their
respective investors of the common stock of the Company owned by such entities.
The Company repaid all amounts outstanding under the Notes on March 30, 2012. If all of the Notes were paid on the original maturity date, the
effective rate of interest over the term of the Purchase Agreement would have been approximately 8.7% per annum, which was the rate at which
interest expense was accrued by the Company in periods preceding the repayment date. The actual effective rate of interest through the
repayment date was approximately 6.4% per annum.
(11) INCOME TAXES
Income (loss) from continuing operations before income taxes for the years ended December 31, 2012 , 2011 and 2010 consisted of the
following (in thousands):
Income tax (benefit) expense for continuing operations for the years ended December 31, 2012 , 2011 and 2010 consisted of the following (in
thousands):
42
2012 2011
2010
United States
$
10,025
$
2,876
$
(11,077
)
Non-U.S.
391
311
1,847
Total income (loss) from continuing operations
before income taxes
$
10,416
$
3,187
$
(9,230
)
2012 2011 2010
Current:
U.S. federal
$
(579
)
$
172
$
(349
)
U.S. state
53
26
26
Non-U.S.
155
77
656
Total current
(371
)
275
333
Deferred:
U.S. federal
177
314
202
U.S. state
17
27
17
Non-U.S.
(49
)
70
36
Total deferred
145
411
255
Total income tax expense (benefit)
$
(226
)
$
686
$
588