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FORM 10-Q
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[x]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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NAUTILUS, INC.
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(Exact name of Registrant as specified in its charter)
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Washington
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94-3002667
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Legal Proceedings
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Item 1A.
|
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Item 2.
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Item 6.
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||
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As of
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||||||
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March 31, 2014
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|
December 31, 2013
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
42,035
|
|
|
$
|
40,979
|
|
Marketable securities, current
|
12,512
|
|
|
—
|
|
||
Trade receivables, net of allowances of $38 and $53
|
13,394
|
|
|
25,336
|
|
||
Inventories
|
13,462
|
|
|
15,824
|
|
||
Prepaids and other current assets
|
4,389
|
|
|
6,927
|
|
||
Income taxes receivable
|
31
|
|
|
80
|
|
||
Deferred income tax assets
|
5,237
|
|
|
4,441
|
|
||
Total current assets
|
91,060
|
|
|
93,587
|
|
||
|
|
|
|
||||
Marketable securities, long-term
|
1,006
|
|
|
—
|
|
||
Property, plant and equipment, net
|
8,670
|
|
|
8,499
|
|
||
Goodwill
|
2,649
|
|
|
2,740
|
|
||
Other intangible assets, net
|
12,105
|
|
|
12,615
|
|
||
Long-term deferred income tax assets
|
22,333
|
|
|
25,725
|
|
||
Other assets
|
307
|
|
|
401
|
|
||
Total assets
|
$
|
138,130
|
|
|
$
|
143,567
|
|
|
|
|
|
||||
Liabilities and Shareholders' Equity
|
|
|
|
||||
Trade payables
|
$
|
27,320
|
|
|
$
|
37,192
|
|
Accrued liabilities
|
7,836
|
|
|
9,123
|
|
||
Warranty obligations, current portion
|
1,983
|
|
|
1,610
|
|
||
Total current liabilities
|
37,139
|
|
|
47,925
|
|
||
Warranty obligations, non-current
|
—
|
|
|
28
|
|
||
Income taxes payable, non-current
|
2,664
|
|
|
2,577
|
|
||
Other long-term liabilities
|
1,359
|
|
|
1,472
|
|
||
Total liabilities
|
41,162
|
|
|
52,002
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
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||
Shareholders' equity:
|
|
|
|
||||
Common stock - no par value, 75,000 shares authorized, 31,188 and 31,162 shares issued and outstanding
|
6,975
|
|
|
6,769
|
|
||
Retained earnings
|
89,926
|
|
|
84,552
|
|
||
Accumulated other comprehensive income
|
67
|
|
|
244
|
|
||
Total shareholders' equity
|
96,968
|
|
|
91,565
|
|
||
Total liabilities and shareholders' equity
|
$
|
138,130
|
|
|
$
|
143,567
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Net sales
|
$
|
71,903
|
|
|
$
|
59,214
|
|
Cost of sales
|
33,422
|
|
|
28,520
|
|
||
Gross profit
|
38,481
|
|
|
30,694
|
|
||
Operating expenses:
|
|
|
|
||||
Selling and marketing
|
21,774
|
|
|
18,626
|
|
||
General and administrative
|
5,803
|
|
|
4,947
|
|
||
Research and development
|
1,903
|
|
|
1,127
|
|
||
Total operating expenses
|
29,480
|
|
|
24,700
|
|
||
Operating income
|
9,001
|
|
|
5,994
|
|
||
Other income (expense):
|
|
|
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||||
Interest income
|
8
|
|
|
1
|
|
||
Interest expense
|
(7
|
)
|
|
(9
|
)
|
||
Other
|
(61
|
)
|
|
(109
|
)
|
||
Total other income (expense)
|
(60
|
)
|
|
(117
|
)
|
||
Income from continuing operations before income taxes
|
8,941
|
|
|
5,877
|
|
||
Income tax provision
|
3,193
|
|
|
353
|
|
||
Income from continuing operations
|
5,748
|
|
|
5,524
|
|
||
Discontinued operations:
|
|
|
|
||||
Loss from discontinued operations before income taxes
|
(512
|
)
|
|
(374
|
)
|
||
Income tax benefit from discontinued operations
|
(138
|
)
|
|
(9
|
)
|
||
Loss from discontinued operations
|
(374
|
)
|
|
(365
|
)
|
||
Net income
|
$
|
5,374
|
|
|
$
|
5,159
|
|
|
|
|
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||||
Basic income per share from continuing operations
|
$
|
0.18
|
|
|
$
|
0.18
|
|
Basic loss per share from discontinued operations
|
(0.01
|
)
|
|
(0.01
|
)
|
||
Basic net income per share
|
$
|
0.17
|
|
|
$
|
0.17
|
|
|
|
|
|
||||
Diluted income per share from continuing operations
|
$
|
0.18
|
|
|
$
|
0.18
|
|
Diluted loss per share from discontinued operations
|
(0.01
|
)
|
|
(0.01
|
)
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||
Diluted net income per share
|
$
|
0.17
|
|
|
$
|
0.17
|
|
Shares used in per share calculations:
|
|
|
|
||||
Basic
|
31,172
|
|
|
30,947
|
|
||
Diluted
|
31,550
|
|
|
31,264
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Net income
|
$
|
5,374
|
|
|
$
|
5,159
|
|
Other comprehensive income (loss):
|
|
|
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||||
Unrealized loss on marketable securities, net of income tax expense of $0 and $0
|
(13
|
)
|
|
—
|
|
||
Foreign currency translation, net of income tax expense of $5 and $8
|
(164
|
)
|
|
(147
|
)
|
||
Comprehensive income
|
$
|
5,197
|
|
|
$
|
5,012
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Income from continuing operations
|
$
|
5,748
|
|
|
$
|
5,524
|
|
Loss from discontinued operations
|
(374
|
)
|
|
(365
|
)
|
||
Net income
|
5,374
|
|
|
5,159
|
|
||
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
865
|
|
|
818
|
|
||
Bad debt expense
|
30
|
|
|
169
|
|
||
Inventory lower-of-cost-or-market adjustments
|
589
|
|
|
—
|
|
||
Stock-based compensation expense
|
265
|
|
|
214
|
|
||
Loss on asset dispositions
|
1
|
|
|
14
|
|
||
Deferred income taxes, net of valuation allowance
|
2,321
|
|
|
257
|
|
||
Excess tax deficiency related to stock-based awards
|
102
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Trade receivables, net
|
11,752
|
|
|
9,280
|
|
||
Inventories
|
1,765
|
|
|
5,130
|
|
||
Prepaids and other current assets
|
2,617
|
|
|
1,498
|
|
||
Income taxes payable
|
356
|
|
|
(105
|
)
|
||
Trade payables
|
(9,830
|
)
|
|
(14,968
|
)
|
||
Accrued liabilities, including warranty obligations
|
(1,085
|
)
|
|
(1,431
|
)
|
||
Net cash provided by operating activities
|
15,122
|
|
|
6,035
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of marketable securities
|
(13,518
|
)
|
|
—
|
|
||
Proceeds from sale of assets of discontinued operations
|
—
|
|
|
96
|
|
||
Purchases of property, plant and equipment
|
(521
|
)
|
|
(762
|
)
|
||
Net cash used in investing activities
|
(14,039
|
)
|
|
(666
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from exercise of stock options
|
42
|
|
|
147
|
|
||
Excess tax deficiency related to stock-based awards
|
(102
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
(60
|
)
|
|
147
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
33
|
|
|
(43
|
)
|
||
Increase in cash and cash equivalents
|
1,056
|
|
|
5,473
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
40,979
|
|
|
23,207
|
|
||
End of period
|
$
|
42,035
|
|
|
$
|
28,680
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
7
|
|
|
$
|
10
|
|
Cash paid for income taxes, net
|
95
|
|
|
109
|
|
|
Facilities
Leases
|
||
Balance, December 31, 2013
|
$
|
831
|
|
Adjustments
|
—
|
|
|
Payments
|
(63
|
)
|
|
Balance, March 31, 2014
|
$
|
768
|
|
|
As of
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Finished goods
|
$
|
12,246
|
|
|
$
|
14,259
|
|
Parts and components
|
1,216
|
|
|
1,565
|
|
||
Total inventories
|
$
|
13,462
|
|
|
$
|
15,824
|
|
|
Estimated
Useful Life
(in years)
|
|
As of
|
||||||||
|
|
March 31, 2014
|
|
December 31, 2013
|
|||||||
Leasehold improvements
|
5
|
to
|
20
|
|
$
|
2,850
|
|
|
$
|
2,869
|
|
Computer equipment
|
3
|
to
|
5
|
|
35,519
|
|
|
35,554
|
|
||
Machinery and equipment
|
3
|
to
|
5
|
|
5,755
|
|
|
5,648
|
|
||
Furniture and fixtures
|
5
|
|
700
|
|
|
688
|
|
||||
Work in progress
1
|
N/A
|
|
4,630
|
|
|
4,281
|
|
||||
Total cost
|
|
|
|
|
49,454
|
|
|
49,040
|
|
||
Accumulated depreciation
|
|
|
|
|
(40,784
|
)
|
|
(40,541
|
)
|
||
Total property, plant and equipment, net
|
|
|
|
|
$
|
8,670
|
|
|
$
|
8,499
|
|
Balance, January 1, 2013
|
$
|
2,940
|
|
Currency exchange rate adjustment
|
(200
|
)
|
|
Balance, December 31, 2013
|
2,740
|
|
|
Currency exchange rate adjustment
|
(91
|
)
|
|
Balance, March 31, 2014
|
$
|
2,649
|
|
|
Estimated
Useful Life
(in years)
|
|
As of
|
||||||||
|
|
March 31, 2014
|
|
December 31, 2013
|
|||||||
Other intangible assets:
|
|
|
|
|
|
|
|
||||
Indefinite-lived trademarks
|
N/A
|
|
$
|
9,052
|
|
|
$
|
9,052
|
|
||
Patents
|
8
|
to
|
16
|
|
18,154
|
|
|
18,154
|
|
||
|
|
|
|
|
27,206
|
|
|
27,206
|
|
||
Accumulated amortization - patents
|
|
|
|
|
(15,101
|
)
|
|
(14,591
|
)
|
||
|
|
|
|
|
$
|
12,105
|
|
|
$
|
12,615
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Patent amortization
|
$
|
510
|
|
|
$
|
513
|
|
|
As of
|
||||||
|
March 31, 2014
|
|
December 31, 2013
|
||||
Payroll and related liabilities
|
$
|
3,257
|
|
|
$
|
4,244
|
|
Other
|
4,579
|
|
|
4,879
|
|
||
Total accrued liabilities
|
$
|
7,836
|
|
|
$
|
9,123
|
|
•
|
Level 1 - observable inputs such as quoted prices (unadjusted) in active markets for identical securities as of the reporting date;
|
•
|
Level 2 - other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; or observable market prices in markets with insufficient volume and/or infrequent transactions; and
|
•
|
Level 3 - significant inputs that are generally unobservable inputs for which there is little or no market data available, including our own assumptions in determining fair value.
|
|
|
March 31, 2014
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash Equivalents
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
27,975
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,975
|
|
|
|
|
|
|
|
|
|
|
||||||||
Available for Sale Securities
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
—
|
|
|
5,352
|
|
|
—
|
|
|
5,352
|
|
||||
Commercial paper
|
|
—
|
|
|
4,495
|
|
|
—
|
|
|
4,495
|
|
||||
Certificates of deposit
|
|
—
|
|
|
3,671
|
|
|
—
|
|
|
3,671
|
|
||||
|
|
—
|
|
|
13,518
|
|
|
—
|
|
|
13,518
|
|
||||
|
|
$
|
27,975
|
|
|
$
|
13,518
|
|
|
$
|
—
|
|
|
$
|
41,493
|
|
|
|
Three months ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Balance, beginning of period
|
|
$
|
1,638
|
|
|
$
|
2,492
|
|
Accruals
|
|
921
|
|
|
653
|
|
||
Adjustments
|
|
—
|
|
|
—
|
|
||
Payments
|
|
(576
|
)
|
|
(535
|
)
|
||
Balance, end of period
|
|
$
|
1,983
|
|
|
$
|
2,610
|
|
|
Three months ended March 31,
|
||||
|
2014
|
|
2013
|
||
Shares used to calculate basic income per share
|
31,172
|
|
|
30,947
|
|
Dilutive effect of outstanding options, performance stock units and restricted stock units
|
378
|
|
|
317
|
|
Shares used to calculate diluted income per share
|
31,550
|
|
|
31,264
|
|
|
Three months ended March 31,
|
||||
|
2014
|
|
2013
|
||
Stock options
|
320
|
|
|
340
|
|
Performance stock units
|
84
|
|
|
125
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Net sales:
|
|
|
|
||||
Direct
|
$
|
50,735
|
|
|
$
|
42,635
|
|
Retail
|
20,103
|
|
|
15,134
|
|
||
Unallocated royalty income
|
1,065
|
|
|
1,445
|
|
||
Consolidated net sales
|
$
|
71,903
|
|
|
$
|
59,214
|
|
Contribution:
|
|
|
|
||||
Direct
|
$
|
10,352
|
|
|
$
|
6,708
|
|
Retail
|
2,509
|
|
|
1,960
|
|
||
Unallocated royalty income
|
1,065
|
|
|
1,445
|
|
||
Consolidated contribution
|
$
|
13,926
|
|
|
$
|
10,113
|
|
|
|
|
|
||||
Reconciliation of consolidated contribution to income
from continuing operations:
|
|
|
|
||||
Consolidated contribution
|
$
|
13,926
|
|
|
$
|
10,113
|
|
Amounts not directly related to segments:
|
|
|
|
||||
Operating expenses
|
(4,925
|
)
|
|
(4,120
|
)
|
||
Other expense, net
|
(60
|
)
|
|
(116
|
)
|
||
Income tax expense
|
(3,193
|
)
|
|
(353
|
)
|
||
Income from continuing operations
|
$
|
5,748
|
|
|
$
|
5,524
|
|
|
Three months ended March 31,
|
|
Change
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
Net sales
|
$
|
71,903
|
|
|
$
|
59,214
|
|
|
$
|
12,689
|
|
|
21.4
|
%
|
Cost of sales
|
33,422
|
|
|
28,520
|
|
|
4,902
|
|
|
17.2
|
%
|
|||
Gross profit
|
38,481
|
|
|
30,694
|
|
|
7,787
|
|
|
25.4
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling and marketing
|
21,774
|
|
|
18,626
|
|
|
3,148
|
|
|
16.9
|
%
|
|||
General and administrative
|
5,803
|
|
|
4,947
|
|
|
856
|
|
|
17.3
|
%
|
|||
Research and development
|
1,903
|
|
|
1,127
|
|
|
776
|
|
|
68.9
|
%
|
|||
Total operating expenses
|
29,480
|
|
|
24,700
|
|
|
4,780
|
|
|
19.4
|
%
|
|||
Operating income
|
9,001
|
|
|
5,994
|
|
|
3,007
|
|
|
50.2
|
%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|||||||
Interest income
|
8
|
|
|
1
|
|
|
7
|
|
|
|
|
|||
Interest expense
|
(7
|
)
|
|
(9
|
)
|
|
2
|
|
|
|
|
|||
Other
|
(61
|
)
|
|
(109
|
)
|
|
48
|
|
|
|
|
|||
Total other income (expense), net
|
(60
|
)
|
|
(117
|
)
|
|
57
|
|
|
|
|
|||
Income from continuing operations before income taxes
|
8,941
|
|
|
5,877
|
|
|
3,064
|
|
|
|
|
|||
Income tax expense
|
3,193
|
|
|
353
|
|
|
2,840
|
|
|
|
||||
Income from continuing operations
|
5,748
|
|
|
5,524
|
|
|
224
|
|
|
|
||||
Loss from discontinued operations, net of income taxes
|
(374
|
)
|
|
(365
|
)
|
|
(9
|
)
|
|
|
||||
Net income
|
$
|
5,374
|
|
|
$
|
5,159
|
|
|
$
|
215
|
|
|
|
|
|
Three months ended March 31,
|
|
Change
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
Net sales:
|
|
|
|
|
|
|
|
|||||||
Direct
|
$
|
50,735
|
|
|
$
|
42,635
|
|
|
$
|
8,100
|
|
|
19.0
|
%
|
Retail
|
20,103
|
|
|
15,134
|
|
|
4,969
|
|
|
32.8
|
%
|
|||
Royalty income
|
1,065
|
|
|
1,445
|
|
|
(380
|
)
|
|
(26.3
|
)%
|
|||
|
$
|
71,903
|
|
|
$
|
59,214
|
|
|
$
|
12,689
|
|
|
21.4
|
%
|
Cost of sales:
|
|
|
|
|
|
|
|
|||||||
Direct
|
$
|
18,417
|
|
|
$
|
17,158
|
|
|
$
|
1,259
|
|
|
7.3
|
%
|
Retail
|
15,005
|
|
|
11,362
|
|
|
3,643
|
|
|
32.1
|
%
|
|||
Royalty income
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||
|
$
|
33,422
|
|
|
$
|
28,520
|
|
|
$
|
4,902
|
|
|
17.2
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Direct
|
$
|
32,318
|
|
|
$
|
25,477
|
|
|
$
|
6,841
|
|
|
26.9
|
%
|
Retail
|
5,098
|
|
|
3,772
|
|
|
1,326
|
|
|
35.2
|
%
|
|||
Royalty income
|
1,065
|
|
|
1,445
|
|
|
(380
|
)
|
|
(26.3
|
)%
|
|||
|
$
|
38,481
|
|
|
$
|
30,694
|
|
|
$
|
7,787
|
|
|
25.4
|
%
|
Gross margin:
|
|
|
|
|
|
|
|
|||||||
Direct
|
63.7
|
%
|
|
59.8
|
%
|
|
390
|
|
basis points
|
|||||
Retail
|
25.4
|
%
|
|
24.9
|
%
|
|
50
|
|
basis points
|
Dollars in thousands
|
Three months ended March 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
Selling and Marketing
|
$21,774
|
|
$18,626
|
|
$3,148
|
|
16.9%
|
As % of Net Sales
|
30.3%
|
|
31.5%
|
|
|
|
|
Dollars in thousands
|
Three months ended March 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
Media advertising
|
$10,667
|
|
$9,963
|
|
$704
|
|
7.1%
|
Dollars in thousands
|
Three months ended March 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
General and Administrative
|
$5,803
|
|
$4,947
|
|
$856
|
|
17.3%
|
As % of Net Sales
|
8.1%
|
|
8.4%
|
|
|
|
|
Dollars in thousands
|
Three months ended March 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
Research and Development
|
$1,903
|
|
$1,127
|
|
$776
|
|
68.9%
|
As % of Net Sales
|
2.6%
|
|
1.9%
|
|
|
|
|
Dollars in thousands
|
Three months ended March 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
Income Tax Provision
|
$3,193
|
|
$353
|
|
$2,840
|
|
n/m
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
(a)
Total Number of
Shares (or Units)
Purchased
(1)
|
(b)
Average
Price Paid
per Share (or Unit)
|
(c)
Total Number of
Shares (or Units)
Purchased as Part
of Publicly Announced Plans or Programs
|
(d)
Maximum Number
(or Approximate Dollar
Value) of Shares (or
Units) that May Yet Be Purchased Under the Plans or Programs
|
||
January 1, to January 31, 2014
|
|
2,017
|
$
|
8.52
|
|
—
|
—
|
February 1 to February 28, 2014
|
|
1,689
|
8.39
|
|
—
|
—
|
|
March 1 to March 31, 2014
|
|
1,688
|
9.63
|
|
—
|
—
|
|
Total
|
|
5,394
|
8.83
|
|
—
|
—
|
|
(1)
Consists of shares withheld from the vesting portion of a restricted stock unit award granted to Bruce M. Cazenave, our Chief Executive Officer. We will withhold from each monthly vesting portion of the award the number of shares sufficient to satisfy Mr. Cazenave's tax withholding obligation incident to such vesting, unless Mr. Cazenave should first elect to satisfy the tax obligation by cash payment to us. We do not have any publicly announced equity securities repurchase plans or programs.
|
|
N
AUTILUS
, I
NC
.
|
|
|
|
|
May 8, 2014
|
By:
|
/
S
/ Bruce M. Cazenave
|
|
|
Bruce M. Cazenave
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
N
AUTILUS
, I
NC
.
|
|
|
|
|
May 8, 2014
|
By:
|
/
S
/ Sidharth Nayar
|
|
|
Sidharth Nayar
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
6.
|
Miscellaneous Provisions
.
|
1.
|
Annual base salary in the amount of $200,000.
|
2.
|
An initial grant of 12,500 stock options in accordance with the terms of the Company’s 2005 Long Term Incentive Plan. The stock options vest in equal annual amounts over three years. You will be eligible for additional annual grants on the same basis as other similarly situated members of the management team.
|
3.
|
Entitlement to a bonus in 2013 in the amount of 50% of your base salary earned in 2013, on the same basis as other members of the senior management team and premised on Company performance objectives and individual personal goals. The short term incentive plan also allows you to earn an additional 50% of your target range if the Company exceeds its performance objectives which could result in a potential maximum, in total, of 75% of annual base salary earned.
|
4.
|
Severance benefits in the amount of 9 months upon relocation, reducing by one month for each calendar month of employment until the on-going level of 4 months is reached. Severance includes base salary and continued health care benefits on the same basis as an active employee (and subject to regular employee contributions and deductions) for the severance period in the event you are terminated without cause.
|
5.
|
Four weeks paid time off.
|
6.
|
A one-time signing bonus of $30,000 upon the beginning of employment. The bonus will vest monthly in 1/12 increments beginning in your first month of employment and over the next 12 months. Should you resign from the Company or be terminated for cause before 12 months of employment you agree to re-pay a pro rata amount of that bonus for any remaining time that you are no longer employed. For example, if you begin employment on August 1, 2013 and you resign in February 2014, you will repay 6/12ths of the signing bonus to reflect the fact that you resigned 6 months before fulfilling the 12 month commitment.
|
7.
|
A household goods allowance of up to $25,000. Paid family travel for up to two house hunting trips in the Vancouver area. Nautilus will also pay for temporary housing in the Vancouver area for up to three months.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Nautilus, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
May 8, 2014
|
By:
|
/s/ Bruce M. Cazenave
|
Date
|
|
Bruce M. Cazenave
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Nautilus, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
May 8, 2014
|
By:
|
/s/ Sidharth Nayar
|
Date
|
|
Sidharth Nayar
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
May 8, 2014
|
By:
|
/s/ Bruce M. Cazenave
|
Date
|
|
Bruce M. Cazenave
|
|
|
Chief Executive Officer
(Principal Executive Officer) |
May 8, 2014
|
By:
|
/s/ Sidharth Nayar
|
Date
|
|
Sidharth Nayar
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer) |