Nautilus 2014 Annual Report Download - page 15
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Please find page 15 of the 2014 Nautilus annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.to respond to customer sales inquiries and process sales transactions using our call center communication systems, Internet websites and similar
data monitoring and communication systems provided and supported by third-
parties. If such systems were to fail, or experience significant or
lengthy interruptions in availability or service, our revenues could be materially affected. We also rely on information systems in all stages of
our product cycle, from design to distribution, and we use such systems as a method of communication between employees, suppliers and
customers. In addition, we use information systems to maintain our accounting records, assist in trade receivables collection and customer
service efforts, and forecast operating results and cash flows.
System failures or service interruptions may occur as the result of a number of factors, including: computer viruses; hacking or other unlawful
activities by third parties; disasters; equipment, hardware or software failures; ineffective design or implementation of new systems or systems
upgrades; cable outages, extended power failures, or our inability or failure to properly protect, repair or maintain our communication and
information systems. To mitigate the risk of business interruption, we have in place a disaster recovery program that targets our most
critical operational systems. If our disaster recovery system is ineffective, in whole or in part, or efforts conducted by us or third-
parties to
prevent or respond to system interruptions in a timely manner are ineffective, our ability to conduct operations would be significantly affected. If
we do not consider the potential impact of critical decisions related to systems or process design and implementation, this could lead to
operational challenges and increased costs. Any of the aforementioned factors could have a material adverse affect on our operating results,
financial position and cash flows.
System Security Risks, Data Protection Breaches and Cyber Attacks Could Disrupt Our Operations.
We manage and store various proprietary information and sensitive or confidential data relating to our business, including sensitive and
personally identifiable information. Breaches of our security measures or the accidental loss, inadvertent disclosure or unapproved dissemination
of proprietary information or sensitive or confidential data about us, or our customers, including the potential loss or disclosure of such
information or data as a result of fraud, trickery or other forms of deception, could expose us, our customers or the individuals affected to a risk
of loss or misuse of this information, result in litigation and potential liability for us, damage our brand and reputation or otherwise harm our
business. In addition, the cost and operational consequences of implementing further data protection measures could be significant.
Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our
confidential information or that of third parties, create system disruptions or cause shutdowns. Computer programmers and hackers also may be
able to develop and deploy viruses, worms and other malicious software programs that attack or otherwise exploit any security vulnerabilities of
our systems. In addition, sophisticated hardware and operating system software and applications that we procure from third parties may contain
defects in design or manufacture, including "bugs" and other problems that could unexpectedly interfere with the operation of the system. The
costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security
vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays,
cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Following is a summary of each of our properties as of December 31, 2014 :
Our properties are used by both our Direct and Retail segments. The properties generally are well-
maintained, adequate and suitable for their
intended purposes, and we believe our existing properties will meet our operational needs for the foreseeable future. If we require additional
warehouse or office space in the future, we believe we will be able to obtain such space on commercially reasonable terms.
11
Location
Primary Function(s)
Owned or
Leased
Washington
Corporate headquarters, customer call center and R&D facility
Leased
Oregon
Warehouse and distribution
Leased
Ohio
Warehouse and distribution
Leased
Canada
Warehouse and distribution
Leased
China
Quality assurance office
Leased