Nautilus 2015 Annual Report Download - page 11
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Please find page 11 of the 2015 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.considerably from time to time as a result of changes in seasonal and geographic demand for particular types of fitness equipment. In addition, our customers may
cancel orders, change delivery schedules or change the mix of products ordered with minimal notice. As a result, we may not be able to accurately predict our
quarterly sales. Accordingly, our results of operations are likely to fluctuate significantly from period to period.
Government regulatory actions could disrupt our marketing efforts and product sales.
Various international and U.S. federal, state and local governmental authorities, including the Federal Trade Commission, the Consumer Product Safety
Commission, the Securities and Exchange Commission and the Consumer Financial Protection Bureau, regulate our product and marketing efforts. Our sales and
profitability could be significantly harmed if any of these authorities commence a regulatory enforcement action that interrupts our marketing efforts, results in a
product recall or negative publicity, or requires changes in product design.
Substantially higher advertising rates or a significant decline in availability of media time may hinder our ability to effectively market our products and
may reduce profitability.
We depend on television advertising to market certain products sold directly to consumers. Consequently, a marked increase in the price we must pay for our
preferred media time and/or a reduction in its availability may adversely impact our financial performance.
We may be unable to adapt to significant changes in media consumption habits, which could diminish the effectiveness or efficiency of our advertising.
New television technologies and services, such as video-on-demand, digital video recorders and Internet streaming services are changing traditional patterns of
television viewing. Additionally, consumer attention is increasingly fragmented across a variety of games, apps, the Internet and other digital media. If we are
unable to successfully adapt our media strategies to new television viewing and media consumption habits, the effectiveness and efficiency of our media
placements could be adversely affected, and our operating results may be harmed.
Our revenues could decline due to changes in credit markets and decisions made by credit providers.
Historically, a significant portion of our Direct sales have been financed for our customers under various programs offered by third-party consumer credit financing
sources. Reductions in consumer lending and the availability of consumer credit could limit the number of customers with the financial means to purchase our
products. Higher interest rates could increase monthly payments for consumer products financed through one of our financing partners or through other sources of
consumer financing. In the past, we have partnered with financial service companies to assist our customers in obtaining financing to purchase our products. Our
present agreements with our third party consumer credit financing providers enable certain customers to obtain financing if they qualify for the provider's private
label revolving credit card. We cannot be assured that our third party financing providers will continue to provide consumers with access to credit or that credit
limits under such arrangements will not be reduced. Such restrictions or reductions in the availability of consumer credit could have a material adverse impact on
our results of operations, financial position and cash flows.
We may encounter difficulties in integrating acquired businesses and anticipated benefits of acquisitions may not be realized.
On December 31, 2015, we acquired all of the outstanding capital stock of OF Holdings, Inc., sole parent of Octane. The ultimate success of our acquisition of
Octane, and any future acquisitions we may complete, depends, in part, on our ability to realize the anticipated synergies, channel and product diversification and
growth opportunities from integrating newly-acquired businesses or assets into our existing businesses. However, the acquisition and successful integration of
independent businesses or assets is a complex, costly and time-consuming process, and the benefits we realize may not meet targeted expectations. The risk and
difficulties associated with acquiring and integrating companies and other assets include, among others:
• consolidating research and development, logistics, product sourcing, human resources, information technology and other aspects of the
combined operations, where appropriate;
• integrating newly-acquired businesses and product lines into a uniform financial reporting system;
• coordinating sales, distribution and marketing functions and strategies across new and existing channels of trade;
•establishing or expanding manufacturing, research and development, sales, distribution and marketing functions in order to accommodate newly-
acquired businesses or product lines or rationalizing these functions to take advantage of synergies;
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