|
|
FORM 10-K
|
|
[x]
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
NAUTILUS, INC.
|
||
(Exact name of Registrant as specified in its charter)
|
||
|
|
|
Washington
|
|
94-3002667
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, no par value
|
|
New York Stock Exchange
|
|
|
|
|
|
Item 1.
|
|
||
Item 1A.
|
|
||
Item 1B.
|
|
||
Item 2.
|
|
||
Item 3.
|
|
||
Item 4.
|
|
||
|
|
|
|
|
|
|
|
Item 5.
|
|
||
Item 6.
|
|
||
Item 7.
|
|
||
Item 7A.
|
|
||
Item 8.
|
|
||
Item 9.
|
|
||
Item 9A.
|
|
||
Item 9B.
|
|
||
|
|
|
|
|
|
|
|
Item 10.
|
|
||
Item 11.
|
|
||
Item 12.
|
|
||
Item 13.
|
|
||
Item 14.
|
|
||
|
|
|
|
|
|
|
|
Item 15.
|
|
||
|
|||
|
|
|
•
|
creatively marketing our equipment, both directly to consumers and through our Retail customers, while leveraging our well-known brand names;
|
•
|
enhancing our product lines by designing fitness equipment that meets or exceeds the high expectations of our customers;
|
•
|
utilizing our strengths in product engineering to reduce product costs;
|
•
|
continuing our investment in research and development activities aimed at acquiring or creating new technologies;
|
•
|
increasing our international Retail sales and distribution; and
|
•
|
maximizing available royalty revenues from the licensing of our brands and intellectual property.
|
•
|
Nautilus
®
is our corporate umbrella brand and is also used to differentiate certain specialized cardio, treadmills, ellipticals and bike products.
|
•
|
Our
Bowflex
®
brand represents a highly-regarded line of fitness equipment comprised of both cardio and strength products, including the Max Trainer
®
and TreadClimber
®
specialized cardio machines, PowerRod
®
and Revolution
®
home gyms and SelectTech
®
dumbbells.
|
•
|
Our
Octane Fitness
®
brand is known for its innovation around low-impact cardio products, including the perfection of the traditional elliptical machine, along with the creation of new categories of exercise, including the xRide
®
recumbent elliptical, the LateralX
®
elliptical, and the Zero Runner
®
.
|
•
|
Our
Schwinn
®
brand is known for its popular line of exercise bikes, including the Airdyne
®
, treadmills, and ellipticals.
|
•
|
Our
Universal
®
brand, one of the oldest and most recognized names in the fitness industry, currently offers a line of kettlebell weights and weight benches along with a recently launched cardio line.
|
•
|
Introduction and market acceptance of new products and sales trends affecting specific existing products;
|
•
|
Variations in product selling prices and costs and the mix of products sold;
|
•
|
Size and timing of Retail customer orders, which, in turn, often depend upon the success of our customers' businesses or specific products;
|
•
|
Changes in the market conditions for consumer fitness equipment;
|
•
|
Changes in macroeconomic factors;
|
•
|
Availability of consumer credit;
|
•
|
Timing and availability of products coming from our offshore contract manufacturing suppliers;
|
•
|
Seasonality of markets, which vary from quarter-to-quarter and are influenced by outside factors such as overall consumer confidence and the availability and cost of television advertising time;
|
•
|
Effectiveness of our media and advertising programs;
|
•
|
Customer consolidation in our Retail segment, or the bankruptcy of any of our larger Retail customers;
|
•
|
Restructuring charges;
|
•
|
Goodwill and other intangible asset impairment charges; and
|
•
|
Legal and contract settlement charges.
|
•
|
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;
|
•
|
preserving the important licensing, research and development, manufacturing and supply, distribution, marketing, customer and other relationships of acquired businesses;
|
•
|
minimizing the diversion of management’s attention from ongoing business concerns;
|
•
|
the potential loss of key employees of the acquired business;
|
•
|
coordinating geographically separate operations; and
|
•
|
regulatory and legal issues relating to the integration of legacy and newly-acquired businesses.
|
•
|
Unexpected increases in manufacturing and repair costs;
|
•
|
Interruptions in shipments if our contract manufacturer is unable to complete production;
|
•
|
Inability to completely control the quality of finished products;
|
•
|
Inability to completely control delivery schedules;
|
•
|
Changes in our contract manufacturer's business models or operations;
|
•
|
Potential increases in our negotiated product costs as a result of fluctuations in currency exchange rates;
|
•
|
Impact of the global market and economic conditions on the financial stability of our contract manufacturers and their ability to operate without requesting earlier payment terms or letters of credit;
|
•
|
Potential lack of adequate capacity to manufacture all or a part of the products we require; and
|
•
|
Potential unauthorized reproduction or counterfeiting of our products.
|
Company
|
|
Location
|
|
Primary Function(s)
|
|
Owned or
Leased
|
Nautilus
|
|
Washington
|
|
Corporate headquarters, customer call center, retail store and R&D facility
|
|
Leased
|
Octane
|
|
Minnesota
|
|
Design, sales, service and R&D facility
|
|
Leased
|
Nautilus
|
|
Ohio
|
|
Warehouse and distribution facility
|
|
Leased
|
Nautilus
|
|
Oregon
|
|
Warehouse and distribution facility
|
|
Leased
|
Nautilus
|
|
China
|
|
Quality assurance office
|
|
Leased
|
Octane
|
|
Netherlands
|
|
Sales and service office
|
|
Leased
|
Octane
|
|
United Kingdom
|
|
Sales office
|
|
Leased
|
|
High
|
|
Low
|
||||
2015
|
|
|
|
||||
Quarter 1
|
$
|
15.97
|
|
|
$
|
14.13
|
|
Quarter 2
|
$
|
22.81
|
|
|
$
|
15.42
|
|
Quarter 3
|
$
|
22.63
|
|
|
$
|
14.15
|
|
Quarter 4
|
$
|
19.68
|
|
|
$
|
14.57
|
|
2014
|
|
|
|
||||
Quarter 1
|
$
|
9.66
|
|
|
$
|
7.71
|
|
Quarter 2
|
$
|
11.99
|
|
|
$
|
7.94
|
|
Quarter 3
|
$
|
13.31
|
|
|
$
|
9.75
|
|
Quarter 4
|
$
|
15.48
|
|
|
$
|
10.72
|
|
|
|
For the Year Ended December 31,
|
||||||||||||||||||
(In thousands, except per share amounts)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Consolidated Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
335,764
|
|
|
$
|
274,447
|
|
|
$
|
218,803
|
|
|
$
|
193,926
|
|
|
$
|
180,412
|
|
Cost of sales
|
|
162,530
|
|
|
133,872
|
|
|
112,326
|
|
|
102,889
|
|
|
101,953
|
|
|||||
Gross profit
|
|
173,234
|
|
|
140,575
|
|
|
106,477
|
|
|
91,037
|
|
|
78,459
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling and marketing
|
|
101,618
|
|
|
81,059
|
|
|
66,486
|
|
|
58,617
|
|
|
54,494
|
|
|||||
General and administrative
|
|
21,441
|
|
|
22,131
|
|
|
18,705
|
|
|
17,669
|
|
|
17,143
|
|
|||||
Research and development
|
|
9,904
|
|
|
7,231
|
|
|
5,562
|
|
|
4,163
|
|
|
3,223
|
|
|||||
Total operating expenses
|
|
132,963
|
|
|
110,421
|
|
|
90,753
|
|
|
80,449
|
|
|
74,860
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
|
40,271
|
|
|
30,154
|
|
|
15,724
|
|
|
10,588
|
|
|
3,599
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
|
218
|
|
|
63
|
|
|
14
|
|
|
18
|
|
|
65
|
|
|||||
Interest expense
|
|
(22
|
)
|
|
(25
|
)
|
|
(36
|
)
|
|
56
|
|
|
(466
|
)
|
|||||
Other, net
|
|
(445
|
)
|
|
32
|
|
|
337
|
|
|
(246
|
)
|
|
(11
|
)
|
|||||
Total other income (expense)
|
|
(249
|
)
|
|
70
|
|
|
315
|
|
|
(172
|
)
|
|
(412
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes
|
|
40,022
|
|
|
30,224
|
|
|
16,039
|
|
|
10,416
|
|
|
3,187
|
|
|||||
Income tax expense (benefit)
(1)
|
|
13,219
|
|
|
9,841
|
|
|
(32,085
|
)
|
|
(226
|
)
|
|
686
|
|
|||||
Income from continuing operations
|
|
26,803
|
|
|
20,383
|
|
|
48,124
|
|
|
10,642
|
|
|
2,501
|
|
|||||
Income (loss) from discontinued operations
|
|
(201
|
)
|
|
(1,588
|
)
|
|
(170
|
)
|
|
6,241
|
|
|
(1,081
|
)
|
|||||
Net income
|
|
$
|
26,602
|
|
|
$
|
18,795
|
|
|
$
|
47,954
|
|
|
$
|
16,883
|
|
|
$
|
1,420
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic income per share from continuing operations
|
|
$
|
0.86
|
|
|
$
|
0.65
|
|
|
$
|
1.55
|
|
|
$
|
0.34
|
|
|
$
|
0.08
|
|
Basic income (loss) per share from discontinued operations
|
|
(0.01
|
)
|
|
(0.05
|
)
|
|
(0.01
|
)
|
|
0.21
|
|
|
(0.03
|
)
|
|||||
Basic net income per share
|
|
$
|
0.85
|
|
|
$
|
0.60
|
|
|
$
|
1.54
|
|
|
$
|
0.55
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted income per share from continuing operations
|
|
$
|
0.85
|
|
|
$
|
0.64
|
|
|
$
|
1.53
|
|
|
$
|
0.34
|
|
|
$
|
0.08
|
|
Diluted income (loss) per share from discontinued operations
|
|
(0.01
|
)
|
|
(0.05
|
)
|
|
(0.01
|
)
|
|
0.21
|
|
|
(0.03
|
)
|
|||||
Diluted net income per share
|
|
$
|
0.84
|
|
|
$
|
0.59
|
|
|
$
|
1.52
|
|
|
$
|
0.55
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
31,288
|
|
|
31,253
|
|
|
31,072
|
|
|
30,851
|
|
|
30,746
|
|
|||||
Diluted
|
|
31,589
|
|
|
31,688
|
|
|
31,457
|
|
|
30,974
|
|
|
30,776
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
As of December 31,
|
||||||||||||||||||
Consolidated Balance Sheets Data
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Cash and investments
(2)
|
|
$
|
60,776
|
|
|
$
|
72,190
|
|
|
$
|
40,979
|
|
|
$
|
23,207
|
|
|
$
|
17,427
|
|
Working capital
(2)
|
|
69,373
|
|
|
83,080
|
|
|
45,662
|
|
|
25,410
|
|
|
19,439
|
|
|||||
Total assets
|
|
315,912
|
|
|
175,654
|
|
|
143,567
|
|
|
94,311
|
|
|
82,813
|
|
|||||
Long-term note payable, net of current portion
(3)
|
|
63,971
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,598
|
|
|||||
Other long-term liabilities
|
|
29,432
|
|
|
4,911
|
|
|
4,077
|
|
|
6,508
|
|
|
6,614
|
|
|||||
Total shareholders' equity
|
|
126,991
|
|
|
111,072
|
|
|
91,565
|
|
|
43,326
|
|
|
31,953
|
|
(1)
|
Income tax benefit in 2013 includes a $38.9 million credit related to the reversal of our deferred tax asset valuation allowance.
|
|
|
(2)
|
The decreases in cash and investments and working capital at December 31, 2015 compared to December 31, 2014 were primarily due to our purchase of Octane on December 31, 2015. See Note 2 of Notes to Consolidated Financial Statements for additional information.
|
|
|
(3)
|
The increase in long-term notes payable at December 31, 2015 compared to December 31, 2014 was due to our purchase of Octane on December 31, 2015. See Notes 2 and 12 of Notes to Consolidated Financial Statements for additional information.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|||||||
Net sales
|
$
|
335,764
|
|
|
$
|
274,447
|
|
|
61,317
|
|
|
22.3
|
%
|
|
Cost of sales
|
162,530
|
|
|
133,872
|
|
|
28,658
|
|
|
21.4
|
%
|
|||
Gross profit
|
173,234
|
|
|
140,575
|
|
|
32,659
|
|
|
23.2
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||
Selling and marketing
|
101,618
|
|
|
81,059
|
|
|
20,559
|
|
|
25.4
|
%
|
|||
General and administrative
|
21,441
|
|
|
22,131
|
|
|
(690
|
)
|
|
(3.1
|
)%
|
|||
Research and development
|
9,904
|
|
|
7,231
|
|
|
2,673
|
|
|
37.0
|
%
|
|||
Total operating expenses
|
132,963
|
|
|
110,421
|
|
|
22,542
|
|
|
20.4
|
%
|
|||
Operating income
|
40,271
|
|
|
30,154
|
|
|
10,117
|
|
|
33.6
|
%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||
Interest income
|
218
|
|
|
63
|
|
|
155
|
|
|
|
||||
Interest expense
|
(22
|
)
|
|
(25
|
)
|
|
3
|
|
|
|
||||
Other, net
|
(445
|
)
|
|
32
|
|
|
(477
|
)
|
|
|
||||
Total other income (expense), net
|
(249
|
)
|
|
70
|
|
|
(319
|
)
|
|
|
||||
Income before income taxes
|
40,022
|
|
|
30,224
|
|
|
9,798
|
|
|
|
||||
Income tax expense
|
13,219
|
|
|
9,841
|
|
|
3,378
|
|
|
|
||||
Income from continuing operations
|
26,803
|
|
|
20,383
|
|
|
6,420
|
|
|
|
||||
Loss from discontinued operations, net of income taxes
|
(201
|
)
|
|
(1,588
|
)
|
|
1,387
|
|
|
|
||||
Net income
|
$
|
26,602
|
|
|
$
|
18,795
|
|
|
$
|
7,807
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2014
|
|
2013
|
|
Change
|
|
% Change
|
|||||||
Net sales
|
$
|
274,447
|
|
|
$
|
218,803
|
|
|
$
|
55,644
|
|
|
25.4
|
%
|
Cost of sales
|
133,872
|
|
|
112,326
|
|
|
21,546
|
|
|
19.2
|
%
|
|||
Gross profit
|
140,575
|
|
|
106,477
|
|
|
34,098
|
|
|
32.0
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||
Selling and marketing
|
81,059
|
|
|
66,486
|
|
|
14,573
|
|
|
21.9
|
%
|
|||
General and administrative
|
22,131
|
|
|
18,705
|
|
|
3,426
|
|
|
18.3
|
%
|
|||
Research and development
|
7,231
|
|
|
5,562
|
|
|
1,669
|
|
|
30.0
|
%
|
|||
Total operating expenses
|
110,421
|
|
|
90,753
|
|
|
19,668
|
|
|
21.7
|
%
|
|||
Operating income
|
30,154
|
|
|
15,724
|
|
|
14,430
|
|
|
91.8
|
%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||
Interest income
|
63
|
|
|
14
|
|
|
49
|
|
|
|
||||
Interest expense
|
(25
|
)
|
|
(36
|
)
|
|
11
|
|
|
|
||||
Other, net
|
32
|
|
|
337
|
|
|
(305
|
)
|
|
|
||||
Total other income (expense), net
|
70
|
|
|
315
|
|
|
(245
|
)
|
|
|
||||
Income before income taxes
|
30,224
|
|
|
16,039
|
|
|
14,185
|
|
|
|
||||
Income tax expense (benefit)
|
9,841
|
|
|
(32,085
|
)
|
|
41,926
|
|
|
|
||||
Income from continuing operations
|
20,383
|
|
|
48,124
|
|
|
(27,741
|
)
|
|
|
||||
Loss from discontinued operations, net of income taxes
|
(1,588
|
)
|
|
(170
|
)
|
|
(1,418
|
)
|
|
|
||||
Net income
|
$
|
18,795
|
|
|
$
|
47,954
|
|
|
$
|
(29,159
|
)
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|||||||
Direct net sales:
|
|
|
|
|
|
|
|
|||||||
Cardio products
(1)
|
$
|
210,578
|
|
|
$
|
160,249
|
|
|
$
|
50,329
|
|
|
31.4
|
%
|
Strength products
(2)
|
15,017
|
|
|
15,344
|
|
|
(327
|
)
|
|
(2.1
|
)%
|
|||
|
225,595
|
|
|
175,593
|
|
|
50,002
|
|
|
28.5
|
%
|
|||
Retail net sales:
|
|
|
|
|
|
|
|
|||||||
Cardio products
(1)
|
63,762
|
|
|
56,262
|
|
|
7,500
|
|
|
13.3
|
%
|
|||
Strength products
(2)
|
42,433
|
|
|
36,961
|
|
|
5,472
|
|
|
14.8
|
%
|
|||
|
106,195
|
|
|
93,223
|
|
|
12,972
|
|
|
13.9
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Royalty income
|
3,974
|
|
|
5,631
|
|
|
(1,657
|
)
|
|
(29.4
|
)%
|
|||
|
$
|
335,764
|
|
|
$
|
274,447
|
|
|
$
|
61,317
|
|
|
22.3
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2014
|
|
2013
|
|
Change
|
|
% Change
|
|||||||
Direct net sales:
|
|
|
|
|
|
|
|
|||||||
Cardio products
(1)
|
$
|
160,249
|
|
|
$
|
114,846
|
|
|
$
|
45,403
|
|
|
39.5
|
%
|
Strength products
(2)
|
15,344
|
|
|
21,817
|
|
|
(6,473
|
)
|
|
(29.7
|
)%
|
|||
|
175,593
|
|
|
136,663
|
|
|
38,930
|
|
|
28.5
|
%
|
|||
Retail net sales:
|
|
|
|
|
|
|
|
|||||||
Cardio products
(1)
|
56,262
|
|
|
36,692
|
|
|
19,570
|
|
|
53.3
|
%
|
|||
Strength products
(2)
|
36,961
|
|
|
40,083
|
|
|
(3,122
|
)
|
|
(7.8
|
)%
|
|||
|
93,223
|
|
|
76,775
|
|
|
16,448
|
|
|
21.4
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Royalty income
|
5,631
|
|
|
5,365
|
|
|
266
|
|
|
5.0
|
%
|
|||
|
$
|
274,447
|
|
|
$
|
218,803
|
|
|
$
|
55,644
|
|
|
25.4
|
%
|
|
|
|
|
|
|
|
|
|||||||
(1)
Cardio products include: TreadClimber
®
, Max Trainer
®
, treadmills, exercise bikes and ellipticals.
|
||||||||||||||
(2)
Strength products include: home gyms, selectorized dumbbells, kettlebell weights and accessories.
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2015
|
|
2014
|
|
$
|
|
%
|
Selling and marketing
|
$101,618
|
|
$81,059
|
|
$20,559
|
|
25.4%
|
As % of net sales
|
30.3%
|
|
29.5%
|
|
|
|
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
Selling and marketing
|
$81,059
|
|
$66,486
|
|
$14,573
|
|
21.9%
|
As % of net sales
|
29.5%
|
|
30.4%
|
|
|
|
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2015
|
|
2014
|
|
$
|
|
%
|
Media advertising
|
$54,756
|
|
$42,643
|
|
$12,113
|
|
28.4%
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
Media advertising
|
$42,643
|
|
$35,819
|
|
$6,824
|
|
19.1%
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2015
|
|
2014
|
|
$
|
|
%
|
General and administrative
|
$21,441
|
|
$22,131
|
|
$(690)
|
|
(3.1)%
|
As % of net sales
|
6.4%
|
|
8.1%
|
|
|
|
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
General and administrative
|
$22,131
|
|
$18,705
|
|
$3,426
|
|
18.3%
|
As % of net sales
|
8.1%
|
|
8.5%
|
|
|
|
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2015
|
|
2014
|
|
$
|
|
%
|
Research and development
|
$9,904
|
|
$7,231
|
|
$2,673
|
|
37.0%
|
As % of net sales
|
2.9%
|
|
2.6%
|
|
|
|
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
Research and development
|
$7,231
|
|
$5,562
|
|
$1,669
|
|
30.0%
|
As % of net sales
|
2.6%
|
|
2.5%
|
|
|
|
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2015
|
|
2014
|
|
$
|
|
%
|
Income tax expense
|
$13,219
|
|
$9,841
|
|
$3,378
|
|
34.3%
|
Effective tax rate
|
33.0%
|
|
32.6%
|
|
|
|
|
Dollars in thousands
|
Year Ended December 31,
|
|
Change
|
||||
|
2014
|
|
2013
|
|
$
|
|
%
|
Income tax expense (benefit)
|
$9,841
|
|
$(32,085)
|
|
$41,926
|
|
n/m
|
Effective tax rate
|
32.6%
|
|
n/m
|
|
|
|
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than 1
year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5
years
|
||||||||||
Long-term debt obligations
|
$
|
85,010
|
|
|
$
|
17,848
|
|
|
$
|
34,355
|
|
|
$
|
32,807
|
|
|
$
|
—
|
|
Purchase obligations
(1)
|
32,037
|
|
|
32,037
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations
|
30,272
|
|
|
5,327
|
|
|
8,331
|
|
|
7,883
|
|
|
8,731
|
|
|||||
Minimum royalty obligations
|
3,213
|
|
|
2,213
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
150,532
|
|
|
$
|
57,425
|
|
|
$
|
43,686
|
|
|
$
|
40,690
|
|
|
$
|
8,731
|
|
(1)
|
Our purchase obligations are comprised primarily of inventory purchase commitments. Because substantially all of our inventory is sourced from Asia, we have long lead times and therefore need to secure factory capacity from our vendors in advance.
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
30,778
|
|
|
$
|
45,206
|
|
Available-for-sale securities
|
29,998
|
|
|
26,984
|
|
||
Trade receivables, net of allowances of $918 and $108
|
45,155
|
|
|
26,260
|
|
||
Inventories
|
42,729
|
|
|
24,896
|
|
||
Prepaids and other current assets
|
6,888
|
|
|
6,987
|
|
||
Income taxes receivable
|
439
|
|
|
50
|
|
||
Deferred income tax assets
|
8,904
|
|
|
12,368
|
|
||
Total current assets
|
164,891
|
|
|
142,751
|
|
||
Property, plant and equipment, net
|
16,764
|
|
|
9,634
|
|
||
Goodwill
|
60,470
|
|
|
2,520
|
|
||
Other intangible assets, net
|
73,354
|
|
|
10,575
|
|
||
Long-term deferred income tax assets
|
—
|
|
|
9,546
|
|
||
Other assets
|
433
|
|
|
628
|
|
||
Total assets
|
$
|
315,912
|
|
|
$
|
175,654
|
|
Liabilities and Shareholders' Equity
|
|
|
|
||||
Trade payables
|
$
|
61,745
|
|
|
$
|
47,574
|
|
Accrued liabilities
|
13,027
|
|
|
9,851
|
|
||
Warranty obligations, current portion
|
4,753
|
|
|
2,246
|
|
||
Note payable, current portion, net of unamortized debt issuance costs of $7
|
15,993
|
|
|
—
|
|
||
Total current liabilities
|
95,518
|
|
|
59,671
|
|
||
Warranty obligations, non-current
|
3,792
|
|
|
—
|
|
||
Income taxes payable, non-current
|
4,116
|
|
|
3,725
|
|
||
Deferred income tax liabilities, non-current
|
18,380
|
|
|
—
|
|
||
Other long-term liabilities
|
3,144
|
|
|
1,186
|
|
||
Note payable, non-current, net of unamortized debt issuance costs of $29
|
63,971
|
|
|
—
|
|
||
Total liabilities
|
188,921
|
|
|
64,582
|
|
||
Commitments and contingencies (Note 20)
|
|
|
|
|
|
||
Shareholders' equity:
|
|
|
|
||||
Common stock - no par value, 75,000 shares authorized, 31,005 and 31,333 shares issued and outstanding
|
796
|
|
|
8,033
|
|
||
Retained earnings
|
127,522
|
|
|
103,347
|
|
||
Accumulated other comprehensive loss
|
(1,327
|
)
|
|
(308
|
)
|
||
Total shareholders' equity
|
126,991
|
|
|
111,072
|
|
||
Total liabilities and shareholders' equity
|
$
|
315,912
|
|
|
$
|
175,654
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net sales
|
$
|
335,764
|
|
|
$
|
274,447
|
|
|
$
|
218,803
|
|
Cost of sales
|
162,530
|
|
|
133,872
|
|
|
112,326
|
|
|||
Gross profit
|
173,234
|
|
|
140,575
|
|
|
106,477
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling and marketing
|
101,618
|
|
|
81,059
|
|
|
66,486
|
|
|||
General and administrative
|
21,441
|
|
|
22,131
|
|
|
18,705
|
|
|||
Research and development
|
9,904
|
|
|
7,231
|
|
|
5,562
|
|
|||
Total operating expenses
|
132,963
|
|
|
110,421
|
|
|
90,753
|
|
|||
Operating income
|
40,271
|
|
|
30,154
|
|
|
15,724
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
218
|
|
|
63
|
|
|
14
|
|
|||
Interest expense
|
(22
|
)
|
|
(25
|
)
|
|
(36
|
)
|
|||
Other, net
|
(445
|
)
|
|
32
|
|
|
337
|
|
|||
Total other income (expense), net
|
(249
|
)
|
|
70
|
|
|
315
|
|
|||
Income from continuing operations before income taxes
|
40,022
|
|
|
30,224
|
|
|
16,039
|
|
|||
Income tax expense (benefit)
|
13,219
|
|
|
9,841
|
|
|
(32,085
|
)
|
|||
Income from continuing operations
|
26,803
|
|
|
20,383
|
|
|
48,124
|
|
|||
Discontinued operations:
|
|
|
|
|
|
||||||
Loss from discontinued operations before income taxes
|
(601
|
)
|
|
(1,134
|
)
|
|
(559
|
)
|
|||
Income tax expense (benefit) of discontinued operations
|
(400
|
)
|
|
454
|
|
|
(389
|
)
|
|||
Loss from discontinued operations
|
(201
|
)
|
|
(1,588
|
)
|
|
(170
|
)
|
|||
Net income
|
$
|
26,602
|
|
|
$
|
18,795
|
|
|
$
|
47,954
|
|
|
|
|
|
|
|
||||||
Basic income per share from continuing operations
|
$
|
0.86
|
|
|
$
|
0.65
|
|
|
$
|
1.55
|
|
Basic loss per share from discontinued operations
|
(0.01
|
)
|
|
(0.05
|
)
|
|
(0.01
|
)
|
|||
Basic net income per share
|
$
|
0.85
|
|
|
$
|
0.60
|
|
|
$
|
1.54
|
|
|
|
|
|
|
|
||||||
Diluted income per share from continuing operations
|
$
|
0.85
|
|
|
$
|
0.64
|
|
|
$
|
1.53
|
|
Diluted loss per share from discontinued operations
|
(0.01
|
)
|
|
(0.05
|
)
|
|
(0.01
|
)
|
|||
Diluted net income per share
|
$
|
0.84
|
|
|
$
|
0.59
|
|
|
$
|
1.52
|
|
Shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic
|
31,288
|
|
|
31,253
|
|
|
31,072
|
|
|||
Diluted
|
31,589
|
|
|
31,688
|
|
|
31,457
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
$
|
26,602
|
|
|
$
|
18,795
|
|
|
$
|
47,954
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized gain (loss) on marketable securities, net of income tax expense (benefit) of $1, $(11) and $0
|
2
|
|
|
(18
|
)
|
|
—
|
|
|||
Foreign currency translation adjustment, net of income tax expense of $17, $15 and $20
|
(1,021
|
)
|
|
(534
|
)
|
|
(381
|
)
|
|||
Other comprehensive loss
|
(1,019
|
)
|
|
(552
|
)
|
|
(381
|
)
|
|||
Comprehensive income
|
$
|
25,583
|
|
|
$
|
18,243
|
|
|
$
|
47,573
|
|
|
Common Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders'
Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balances at January 1, 2013
|
30,924
|
|
|
$
|
6,103
|
|
|
$
|
36,598
|
|
|
$
|
625
|
|
|
$
|
43,326
|
|
Net income
|
—
|
|
|
—
|
|
|
47,954
|
|
|
—
|
|
|
47,954
|
|
||||
Foreign currency translation adjustment,
net of income tax expense of $20
|
—
|
|
|
—
|
|
|
—
|
|
|
(381
|
)
|
|
(381
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
454
|
|
|
—
|
|
|
—
|
|
|
454
|
|
||||
Common stock issued under equity
compensation plan
|
238
|
|
|
357
|
|
|
—
|
|
|
—
|
|
|
357
|
|
||||
Tax deficiency related to stock-based awards
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
||||
Balances at December 31, 2013
|
31,162
|
|
|
6,769
|
|
|
84,552
|
|
|
244
|
|
|
91,565
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
18,795
|
|
|
—
|
|
|
18,795
|
|
||||
Unrealized loss on marketable securities, net of income tax benefit of $(11)
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
||||
Foreign currency translation adjustment, net of income tax expense of $15
|
—
|
|
|
—
|
|
|
—
|
|
|
(534
|
)
|
|
(534
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
1,066
|
|
|
—
|
|
|
—
|
|
|
1,066
|
|
||||
Common stock issued under equity
compensation plan
|
171
|
|
|
378
|
|
|
—
|
|
|
—
|
|
|
378
|
|
||||
Tax deficiency related to stock-based awards
|
—
|
|
|
(180
|
)
|
|
—
|
|
|
—
|
|
|
(180
|
)
|
||||
Balances at December 31, 2014
|
31,333
|
|
|
8,033
|
|
|
103,347
|
|
|
(308
|
)
|
|
111,072
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
26,602
|
|
|
—
|
|
|
26,602
|
|
||||
Unrealized gain on marketable securities, net of income tax expense of $1
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Foreign currency translation adjustment,
net of income tax expense of $17
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,021
|
)
|
|
(1,021
|
)
|
||||
Stock-based compensation expense
|
—
|
|
|
1,484
|
|
|
—
|
|
|
—
|
|
|
1,484
|
|
||||
Common stock issued under equity
compensation plan, net of shares withheld
for tax payments
|
377
|
|
|
275
|
|
|
—
|
|
|
—
|
|
|
275
|
|
||||
Common stock issued under employee stock purchase plan
|
7
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
116
|
|
||||
Tax benefit related to stock-based awards
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||
Repurchased shares
|
(712
|
)
|
|
(9,140
|
)
|
|
(2,427
|
)
|
|
—
|
|
|
(11,567
|
)
|
||||
Balances at December 31, 2015
|
31,005
|
|
|
$
|
796
|
|
|
$
|
127,522
|
|
|
$
|
(1,327
|
)
|
|
$
|
126,991
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
26,803
|
|
|
$
|
20,383
|
|
|
$
|
48,124
|
|
Loss from discontinued operations
|
(201
|
)
|
|
(1,588
|
)
|
|
(170
|
)
|
|||
Net income
|
26,602
|
|
|
18,795
|
|
|
47,954
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
3,412
|
|
|
4,024
|
|
|
3,344
|
|
|||
Bad debt expense
|
786
|
|
|
104
|
|
|
588
|
|
|||
Inventory lower-of-cost-or-market adjustments
|
1,583
|
|
|
457
|
|
|
557
|
|
|||
Stock-based compensation expense
|
1,484
|
|
|
1,066
|
|
|
454
|
|
|||
Loss on asset disposals
|
313
|
|
|
145
|
|
|
2
|
|
|||
Deferred income taxes, net of valuation allowances
|
11,669
|
|
|
8,007
|
|
|
(32,814
|
)
|
|||
Excess tax (benefit) deficiency related to stock-based awards
|
(28
|
)
|
|
180
|
|
|
145
|
|
|||
Changes in operating assets and liabilities, net of effects of acquisition:
|
|
|
|
|
|
||||||
Trade receivables
|
(6,812
|
)
|
|
(1,331
|
)
|
|
(4,417
|
)
|
|||
Inventories
|
(7,147
|
)
|
|
(9,560
|
)
|
|
2,388
|
|
|||
Prepaids and other current assets
|
1,365
|
|
|
(314
|
)
|
|
(1,174
|
)
|
|||
Income taxes receivable
|
(389
|
)
|
|
30
|
|
|
(91
|
)
|
|||
Trade payables
|
4,506
|
|
|
10,456
|
|
|
4,487
|
|
|||
Accrued liabilities, including warranty obligations
|
3,776
|
|
|
2,313
|
|
|
(337
|
)
|
|||
Net cash provided by operating activities
|
41,120
|
|
|
34,372
|
|
|
21,086
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from sale of discontinued operations
|
—
|
|
|
—
|
|
|
116
|
|
|||
Proceeds from other asset sales
|
—
|
|
|
—
|
|
|
5
|
|
|||
Acquisition of business, net of cash acquired
|
(114,062
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of property, plant and equipment and intangible assets
|
(5,734
|
)
|
|
(3,181
|
)
|
|
(3,590
|
)
|
|||
Purchases of available-for-sale-securities
|
(61,933
|
)
|
|
(37,434
|
)
|
|
—
|
|
|||
Proceeds from maturities of available-for-sale securities
|
55,292
|
|
|
10,450
|
|
|
—
|
|
|||
Proceeds from sales of available-for-sale securities
|
3,602
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(122,835
|
)
|
|
(30,165
|
)
|
|
(3,469
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from long-term debt
|
80,000
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from employee stock purchases
|
116
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
1,050
|
|
|
378
|
|
|
357
|
|
|||
Tax payments related to stock award issuances
|
(775
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit (deficiency) related to stock-based awards
|
28
|
|
|
(180
|
)
|
|
(145
|
)
|
|||
Payments for stock repurchases
|
(11,567
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
68,852
|
|
|
198
|
|
|
212
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1,565
|
)
|
|
(178
|
)
|
|
(57
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
(14,428
|
)
|
|
4,227
|
|
|
17,772
|
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
||||||
Beginning of year
|
45,206
|
|
|
40,979
|
|
|
23,207
|
|
|||
End of year
|
$
|
30,778
|
|
|
$
|
45,206
|
|
|
$
|
40,979
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes, net
|
$
|
(1,308
|
)
|
|
$
|
(923
|
)
|
|
$
|
(450
|
)
|
Cash paid for interest
|
$
|
(22
|
)
|
|
$
|
(25
|
)
|
|
$
|
(36
|
)
|
Supplemental disclosure of non-cash investing activities:
|
|
|
|
|
|
||||||
Acquisition consideration owed but not yet paid
|
$
|
2,813
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capital expenditures incurred but not yet paid
|
$
|
1,000
|
|
|
$
|
86
|
|
|
$
|
—
|
|
Supplemental disclosure of non-cash financing activities:
|
|
|
|
|
|
||||||
Loan fees incurred but not yet paid
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Revenue recognition, net of returns and allowances;
|
•
|
Sales discounts and allowances;
|
•
|
Allowance for uncollectible trade receivables;
|
•
|
Valuation of excess and obsolete inventory;
|
•
|
Goodwill and other long-term assets valuation;
|
•
|
Product warranty obligations;
|
•
|
Litigation and loss contingencies;
|
•
|
Deferred tax assets and the related valuation allowance;
|
•
|
Unrecognized tax benefits; and
|
•
|
Valuation of assets and liabilities related to acquisition.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, January 1
|
$
|
4,296
|
|
|
$
|
4,106
|
|
|
$
|
4,990
|
|
Charges to reserve
|
16,700
|
|
|
15,285
|
|
|
13,345
|
|
|||
Reductions for sales discounts and returns
|
(15,569
|
)
|
|
(15,095
|
)
|
|
(14,229
|
)
|
|||
Business acquisition (Note 2)
|
250
|
|
|
—
|
|
|
—
|
|
|||
Balance, December 31
|
$
|
5,677
|
|
|
$
|
4,296
|
|
|
$
|
4,106
|
|
|
Preliminary Valuation at December 31, 2015
|
||
Cash
|
$
|
7,759
|
|
Accounts receivable
|
12,507
|
|
|
Inventories
|
12,168
|
|
|
Prepaid expenses
|
1,028
|
|
|
Deferred tax assets
|
1,287
|
|
|
Property, plant and equipment
|
3,240
|
|
|
Intangible assets
|
63,100
|
|
|
Total assets acquired
|
$
|
101,089
|
|
|
|
||
Accounts payable
|
6,215
|
|
|
Accrued liabilities
|
1,614
|
|
|
Warranty obligations
|
5,550
|
|
|
Deferred tax liabilities, non-current
|
20,914
|
|
|
Other non-current liabilities
|
519
|
|
|
Total liabilities assumed
|
$
|
34,812
|
|
|
|
||
Net identifiable assets acquired
|
$
|
66,277
|
|
Goodwill
|
58,357
|
|
|
Net assets acquired
|
$
|
124,634
|
|
|
Estimated fair value
|
|
Estimated useful life (years)
|
|
Weighted-average amortization period (years)
|
||
Trade name - Octane Fitness
|
$
|
23,000
|
|
|
Indefinite
|
|
N/A
|
Trade name - others
|
2,600
|
|
|
10 - 15
|
|
12.5
|
|
Patents
|
12,800
|
|
|
11 - 24
|
|
18
|
|
Customer relationships
|
24,700
|
|
|
10 - 15
|
|
13
|
|
|
$
|
63,100
|
|
|
|
|
|
|
|
(unaudited)
|
||||||
|
|
Year Ended December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Net sales
|
$
|
400,078
|
|
|
$
|
338,990
|
|
|
Net income
|
29,352
|
|
|
20,233
|
|
|||
Net income per share:
|
|
|
|
|||||
|
Basic
|
$
|
0.94
|
|
|
$
|
0.65
|
|
|
Diluted
|
0.93
|
|
|
0.64
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Loss from discontinued operations before income taxes
|
$
|
(601
|
)
|
|
$
|
(1,134
|
)
|
|
$
|
(559
|
)
|
Income tax expense (benefit)
|
(400
|
)
|
|
454
|
|
|
(389
|
)
|
|||
Total loss from discontinued operations
|
$
|
(201
|
)
|
|
$
|
(1,588
|
)
|
|
$
|
(170
|
)
|
|
Facilities
Leases
|
||
Balance as of January 1, 2013
|
$
|
1,118
|
|
Payments
|
(287
|
)
|
|
Balance as of December 31, 2013
|
831
|
|
|
Payments
|
(258
|
)
|
|
Balance as of December 31, 2014
|
573
|
|
|
Payments
|
(273
|
)
|
|
Balance as of December 31, 2015
|
$
|
300
|
|
•
|
Level 1 - observable inputs such as quoted prices (unadjusted) in active liquid 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.
|
|
|
December 31, 2015
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash Equivalents
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Corporate bonds
|
|
—
|
|
|
733
|
|
|
—
|
|
|
733
|
|
||||
Total Cash Equivalents
|
|
1
|
|
|
733
|
|
|
—
|
|
|
734
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
(1)
|
|
—
|
|
|
25,234
|
|
|
—
|
|
|
25,234
|
|
||||
Corporate bonds
|
|
—
|
|
|
4,764
|
|
|
—
|
|
|
4,764
|
|
||||
Total Available-for-Sale Securities
|
|
—
|
|
|
29,998
|
|
|
—
|
|
|
29,998
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total assets measured at fair value
|
|
$
|
1
|
|
|
$
|
30,731
|
|
|
$
|
—
|
|
|
$
|
30,732
|
|
|
|
December 31, 2014
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash Equivalents
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
2,591
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,591
|
|
Certificates of deposit
(1)
|
|
—
|
|
|
980
|
|
|
—
|
|
|
980
|
|
||||
Commercial paper
|
|
—
|
|
|
12,497
|
|
|
—
|
|
|
12,497
|
|
||||
Variable-rate demand notes
|
|
—
|
|
|
8,000
|
|
|
—
|
|
|
8,000
|
|
||||
Total Cash Equivalents
|
|
2,591
|
|
|
21,477
|
|
|
—
|
|
|
24,068
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
(1)
|
|
—
|
|
|
14,202
|
|
|
—
|
|
|
14,202
|
|
||||
Corporate bonds
|
|
—
|
|
|
12,782
|
|
|
—
|
|
|
12,782
|
|
||||
Total Available-for-Sale Securities
|
|
—
|
|
|
26,984
|
|
|
—
|
|
|
26,984
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total assets measured at fair value
|
|
$
|
2,591
|
|
|
$
|
48,461
|
|
|
$
|
—
|
|
|
$
|
51,052
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Trade receivables
|
$
|
46,073
|
|
|
$
|
26,368
|
|
Allowance for doubtful accounts
|
(918
|
)
|
|
(108
|
)
|
||
|
$
|
45,155
|
|
|
$
|
26,260
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, January 1
|
$
|
108
|
|
|
$
|
53
|
|
|
$
|
93
|
|
Charges to bad debt expense
|
786
|
|
|
104
|
|
|
588
|
|
|||
Recoveries (write-offs), net
|
24
|
|
|
(49
|
)
|
|
(628
|
)
|
|||
Balance, December 31
|
$
|
918
|
|
|
$
|
108
|
|
|
$
|
53
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Finished goods
|
$
|
39,115
|
|
|
$
|
23,765
|
|
Parts and components
|
3,614
|
|
|
1,131
|
|
||
|
$
|
42,729
|
|
|
$
|
24,896
|
|
|
Estimated
Useful Life
(in years)
|
|
December 31,
|
||||||||
|
|
2015
|
|
2014
|
|||||||
Automobiles
|
5
|
to
|
6
|
|
$
|
139
|
|
|
$
|
23
|
|
Leasehold improvements
|
5
|
to
|
20
|
|
3,397
|
|
|
2,144
|
|
||
Computer equipment
|
3
|
to
|
7
|
|
23,991
|
|
|
25,397
|
|
||
Machinery and equipment
|
3
|
to
|
5
|
|
10,867
|
|
|
6,709
|
|
||
Furniture and fixtures
|
5
|
|
1,605
|
|
|
1,108
|
|
||||
Work in progress
(1)
|
N/A
|
|
1,655
|
|
|
421
|
|
||||
Total cost
|
|
|
|
|
41,654
|
|
|
35,802
|
|
||
Accumulated depreciation
|
|
|
|
|
(24,890
|
)
|
|
(26,168
|
)
|
||
|
|
|
|
|
$
|
16,764
|
|
|
$
|
9,634
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Depreciation expense
|
$
|
2,558
|
|
|
$
|
1,983
|
|
|
$
|
1,254
|
|
|
Direct
|
|
Retail
|
|
Total
|
||||||
Balance, January 1, 2013
|
$
|
2,940
|
|
|
$
|
—
|
|
|
$
|
2,940
|
|
Currency exchange rate adjustment
|
(200
|
)
|
|
—
|
|
|
(200
|
)
|
|||
Balance, December 31, 2013
|
2,740
|
|
|
—
|
|
|
2,740
|
|
|||
Currency exchange rate adjustment
|
(220
|
)
|
|
—
|
|
|
(220
|
)
|
|||
Balance, December 31, 2014
|
2,520
|
|
|
—
|
|
|
2,520
|
|
|||
Currency exchange rate adjustment
|
(407
|
)
|
|
—
|
|
|
(407
|
)
|
|||
Business acquisition (Note 2)
|
—
|
|
|
58,357
|
|
|
58,357
|
|
|||
Balance, December 31, 2015
|
$
|
2,113
|
|
|
$
|
58,357
|
|
|
$
|
60,470
|
|
|
Estimated
Useful Life
(in years)
|
|
December 31,
|
||||||||
|
|
2015
|
|
2014
|
|||||||
Indefinite-lived trademarks
|
N/A
|
|
$
|
32,052
|
|
|
$
|
9,052
|
|
||
Definite-lived trademarks
|
10
|
to
|
15
|
|
2,600
|
|
|
—
|
|
||
Patents
|
8
|
to
|
24
|
|
31,487
|
|
|
18,154
|
|
||
Customer relationships
|
10
|
to
|
15
|
|
24,700
|
|
|
—
|
|
||
|
|
|
|
|
90,839
|
|
|
27,206
|
|
||
Accumulated amortization - definite-lived intangible assets
|
|
|
|
|
(17,485
|
)
|
|
(16,631
|
)
|
||
|
|
|
|
|
$
|
73,354
|
|
|
$
|
10,575
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Amortization expense
|
$
|
854
|
|
|
$
|
2,040
|
|
|
$
|
2,050
|
|
2016
|
$
|
3,553
|
|
2017
|
3,255
|
|
|
2018
|
3,162
|
|
|
2019
|
3,132
|
|
|
2020
|
3,106
|
|
|
Thereafter
|
25,094
|
|
|
|
$
|
41,302
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Payroll and related liabilities
|
$
|
6,556
|
|
|
$
|
5,058
|
|
Other
|
6,471
|
|
|
4,793
|
|
||
|
$
|
13,027
|
|
|
$
|
9,851
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, January 1
|
$
|
2,246
|
|
|
$
|
1,638
|
|
|
$
|
2,492
|
|
Accruals
|
2,302
|
|
|
2,264
|
|
|
1,097
|
|
|||
Adjustments
|
—
|
|
|
—
|
|
|
(186
|
)
|
|||
Payments
|
(1,553
|
)
|
|
(1,656
|
)
|
|
(1,765
|
)
|
|||
Business acquisition (Note 2)
|
5,550
|
|
|
—
|
|
|
—
|
|
|||
Balance, December 31
|
$
|
8,545
|
|
|
$
|
2,246
|
|
|
$
|
1,638
|
|
2016
|
$
|
16,000
|
|
2017
|
16,000
|
|
|
2018
|
16,000
|
|
|
2019
|
16,000
|
|
|
2020
|
16,000
|
|
|
|
$
|
80,000
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
39,242
|
|
|
$
|
29,115
|
|
|
$
|
15,386
|
|
Non-U.S.
|
780
|
|
|
1,109
|
|
|
653
|
|
|||
|
$
|
40,022
|
|
|
$
|
30,224
|
|
|
$
|
16,039
|
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
U.S. statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State tax, net of U.S. federal tax benefit
|
2.6
|
|
|
2.5
|
|
|
2.9
|
|
Non-U.S. income taxes
|
(0.1
|
)
|
|
(0.3
|
)
|
|
1.2
|
|
Nondeductible operating expenses
|
0.8
|
|
|
0.2
|
|
|
(0.4
|
)
|
Research and development credit
|
(0.6
|
)
|
|
(2.4
|
)
|
|
(0.7
|
)
|
Change in deferred tax measurement rate
|
—
|
|
|
0.1
|
|
|
0.2
|
|
Change in uncertain tax positions
|
1.1
|
|
|
1.5
|
|
|
2.2
|
|
Expiration of capital loss carryforward
|
—
|
|
|
—
|
|
|
26.9
|
|
Change in valuation allowance
|
(5.8
|
)
|
|
(4.1
|
)
|
|
(267.6
|
)
|
Other
|
—
|
|
|
0.1
|
|
|
0.2
|
|
Effective income tax rate
|
33.0
|
%
|
|
32.6
|
%
|
|
(200.1
|
)%
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred income tax assets:
|
|
|
|
||||
Accrued liabilities
|
$
|
6,392
|
|
|
$
|
3,510
|
|
Allowance for doubtful accounts
|
467
|
|
|
33
|
|
||
Inventory valuation
|
818
|
|
|
377
|
|
||
Capitalized indirect inventory costs
|
671
|
|
|
295
|
|
||
Stock-based compensation expense
|
693
|
|
|
558
|
|
||
Deferred rent
|
869
|
|
|
—
|
|
||
Net operating loss carryforward
|
3,361
|
|
|
19,742
|
|
||
Basis difference on long-lived assets
|
1,810
|
|
|
3,289
|
|
||
Credit carryforward
|
3,736
|
|
|
4,565
|
|
||
Other
|
171
|
|
|
339
|
|
||
Gross deferred income tax assets
|
18,988
|
|
|
32,708
|
|
||
Valuation allowance
|
(888
|
)
|
|
(6,156
|
)
|
||
Deferred income tax assets, net of valuation allowance
|
18,100
|
|
|
26,552
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Prepaid advertising
|
(523
|
)
|
|
(467
|
)
|
||
Other prepaids
|
(579
|
)
|
|
(696
|
)
|
||
Basis difference on long-lived assets
|
(26,285
|
)
|
|
(3,355
|
)
|
||
Undistributed earnings of foreign subsidiaries
|
(188
|
)
|
|
(179
|
)
|
||
Other
|
(1
|
)
|
|
(1
|
)
|
||
Deferred income tax liabilities
|
(27,576
|
)
|
|
(4,698
|
)
|
||
Net deferred income tax assets (liabilities)
|
$
|
(9,476
|
)
|
|
$
|
21,854
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred income tax assets
|
$
|
8,904
|
|
|
$
|
12,368
|
|
Long-term deferred income tax assets
|
—
|
|
|
9,546
|
|
||
Long-term deferred income tax liabilities
|
(18,380
|
)
|
|
—
|
|
||
Other long-term liabilities
|
—
|
|
|
(60
|
)
|
||
Net deferred income tax assets (liabilities)
|
$
|
(9,476
|
)
|
|
$
|
21,854
|
|
|
|
Amount
|
|
Expires in
|
||
Net operating loss carryforwards
|
|
|
|
|
||
U.S. State
|
|
$
|
71.1
|
|
|
2016 - 2035
|
China
|
|
$
|
0.3
|
|
|
2020
|
Italy
|
|
$
|
0.8
|
|
|
2016 - 2017
|
Income tax credit carryforwards
|
|
|
|
|
||
U.S. Federal
|
|
$
|
3.2
|
|
|
2018 - 2035
|
U.S. State
|
|
$
|
0.5
|
|
|
2018 - 2022
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, January 1
|
$
|
2,768
|
|
|
$
|
1,964
|
|
|
$
|
2,530
|
|
Additions for tax positions taken in prior years
|
1
|
|
|
72
|
|
|
166
|
|
|||
Reductions for tax positions taken in prior years
|
(426
|
)
|
|
—
|
|
|
(472
|
)
|
|||
Additions for tax positions related to the current year
|
43
|
|
|
821
|
|
|
54
|
|
|||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|||
Lapses of statutes of limitations
|
—
|
|
|
(89
|
)
|
|
(314
|
)
|
|||
Other
|
133
|
|
|
—
|
|
|
—
|
|
|||
Balance, December 31
|
$
|
2,519
|
|
|
$
|
2,768
|
|
|
$
|
1,964
|
|
|
|
Unrealized Gain (Loss) on Available-for-Sale Securities
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||
Balance, January 1, 2013
|
|
$
|
—
|
|
|
$
|
625
|
|
|
$
|
625
|
|
Current period other comprehensive loss
|
|
—
|
|
|
(381
|
)
|
|
(381
|
)
|
|||
Balance, December 31, 2013
|
|
—
|
|
|
244
|
|
|
244
|
|
|||
Current period other comprehensive loss
|
|
(18
|
)
|
|
(534
|
)
|
|
(552
|
)
|
|||
Balance, December 31, 2014
|
|
(18
|
)
|
|
(290
|
)
|
|
(308
|
)
|
|||
Current period other comprehensive income (loss)
|
|
2
|
|
|
(1,021
|
)
|
|
(1,019
|
)
|
|||
Balance, December 31, 2015
|
|
$
|
(16
|
)
|
|
$
|
(1,311
|
)
|
|
$
|
(1,327
|
)
|
|
Options Outstanding
|
|
Weighted-
Average
Exercise
Price
|
|||
Outstanding at December 31, 2014
|
798
|
|
|
$
|
4.41
|
|
Granted
|
18
|
|
|
16.21
|
|
|
Forfeited, canceled or expired
|
(12
|
)
|
|
15.40
|
|
|
Exercised
|
(284
|
)
|
|
3.70
|
|
|
Outstanding at December 31, 2015
|
520
|
|
|
$
|
5.01
|
|
|
Options Outstanding
|
|
Options Exercisable
|
|
Options Vested and Expected to Vest
|
||||||
Number (in thousands)
|
520
|
|
|
373
|
|
|
520
|
|
|||
Weighted-average exercise price
|
$
|
5.01
|
|
|
$
|
3.47
|
|
|
$
|
5.01
|
|
Aggregate intrinsic value (in thousands)
|
$
|
6,099
|
|
|
$
|
4,940
|
|
|
$
|
6,099
|
|
Weighted average remaining contractual term (in years)
|
3.9
|
|
|
3.4
|
|
|
3.9
|
|
|
RSUs Outstanding
|
|
Weighted-
Average
Grant Date Fair Value per Share
|
|||
Outstanding at December 31, 2014
|
87
|
|
|
$
|
5.93
|
|
Granted
|
69
|
|
|
17.58
|
|
|
Vested
|
(46
|
)
|
|
4.54
|
|
|
Outstanding at December 31, 2015
|
110
|
|
|
$
|
13.73
|
|
|
PSUs Outstanding
|
|
Weighted-
Average
Grant Date Fair Value per Share
|
|||
Outstanding at December 31, 2014
|
166
|
|
|
$
|
5.97
|
|
Granted and additional goal shares awarded
|
206
|
|
|
14.87
|
|
|
Vested
|
(95
|
)
|
|
2.85
|
|
|
Outstanding at December 31, 2015
|
277
|
|
|
$
|
13.67
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Stock options
|
$
|
327
|
|
|
$
|
592
|
|
|
$
|
337
|
|
RSUs
|
544
|
|
|
121
|
|
|
54
|
|
|||
PSUs
|
575
|
|
|
353
|
|
|
63
|
|
|||
ESPP
|
38
|
|
|
—
|
|
|
—
|
|
|||
|
$
|
1,484
|
|
|
$
|
1,066
|
|
|
$
|
454
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Weighted average grant-date per share fair value of stock options granted
|
$
|
8.94
|
|
|
$
|
5.36
|
|
|
$
|
4.37
|
|
Total intrinsic value of stock options exercised
|
4,142
|
|
|
736
|
|
|
451
|
|
|||
Fair value of RSUs vested
|
673
|
|
|
872
|
|
|
545
|
|
|||
Fair value of PSUs vested
|
1,454
|
|
|
—
|
|
|
386
|
|
|
Shares Available for Issuance
|
|
Weighted-
Average Purchase Price |
|
Weighted-Average Discount per Share
|
|||||
Balance at December 31, 2014
|
—
|
|
|
|
|
|
||||
Shares upon ESPP adoption
|
500
|
|
|
|
|
|
||||
Employee shares purchased
|
(7
|
)
|
|
$
|
16.69
|
|
|
$
|
1.85
|
|
Balance at December 31, 2015
|
493
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
|
2013
|
||
|
ESPP
|
|
Options
|
|
Options
|
|
Options
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
—%
|
Risk-free interest rate
|
0.1%
|
|
1.6%
|
|
1.7%
|
|
0.9%
|
Expected life (years)
|
N/A
|
|
4.28
|
|
4.75
|
|
4.75
|
Expected volatility
|
43%
|
|
71%
|
|
80%
|
|
89%
|
Quarter Ended
|
|
Number of Shares
|
|
Repurchased Amount
|
|
Average Price per Share
|
March 31, 2015
|
|
133,877
|
|
$1,995,982
|
|
$14.91
|
September 30, 2015
|
|
577,831
|
|
9,571,545
|
|
16.56
|
Totals to Date
|
|
711,708
|
|
$11,567,527
|
|
$16.25
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Shares used for basic per share calculations
|
31,288
|
|
|
31,253
|
|
|
31,072
|
|
Dilutive effect of outstanding options, PSUs and RSUs
|
301
|
|
|
435
|
|
|
385
|
|
Shares used for diluted per share calculations
|
31,589
|
|
|
31,688
|
|
|
31,457
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
401(k) matching contributions
|
$
|
746
|
|
|
$
|
631
|
|
|
$
|
544
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net Sales:
|
|
|
|
|
|
||||||
Direct
|
$
|
225,595
|
|
|
$
|
175,593
|
|
|
$
|
136,663
|
|
Retail
|
106,195
|
|
|
93,223
|
|
|
76,775
|
|
|||
Unallocated royalty income
|
3,974
|
|
|
5,631
|
|
|
5,365
|
|
|||
Consolidated net sales
|
$
|
335,764
|
|
|
$
|
274,447
|
|
|
$
|
218,803
|
|
Contribution:
|
|
|
|
|
|
||||||
Direct
|
$
|
39,940
|
|
|
$
|
29,345
|
|
|
$
|
14,126
|
|
Retail
|
12,850
|
|
|
13,279
|
|
|
11,431
|
|
|||
Unallocated royalty income
|
3,974
|
|
|
5,631
|
|
|
5,365
|
|
|||
Consolidated contribution
|
$
|
56,764
|
|
|
$
|
48,255
|
|
|
$
|
30,922
|
|
|
|
|
|
|
|
||||||
Reconciliation of consolidated contribution to income from continuing operations:
|
|
|
|
|
|
||||||
Consolidated contribution
|
$
|
56,764
|
|
|
$
|
48,255
|
|
|
$
|
30,922
|
|
Amounts not directly related to segments:
|
|
|
|
|
|
||||||
Operating expenses
|
(16,493
|
)
|
|
(18,101
|
)
|
|
(15,198
|
)
|
|||
Other income, net
|
(249
|
)
|
|
70
|
|
|
315
|
|
|||
Income tax expense (benefit)
|
13,219
|
|
|
9,841
|
|
|
(32,085
|
)
|
|||
Income from continuing operations
|
$
|
26,803
|
|
|
$
|
20,383
|
|
|
$
|
48,124
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization expense:
|
|
|
|
|
|
||||||
Direct
|
$
|
868
|
|
|
$
|
1,913
|
|
|
$
|
1,956
|
|
Retail
|
757
|
|
|
643
|
|
|
642
|
|
|||
Unallocated corporate
|
1,787
|
|
|
1,468
|
|
|
746
|
|
|||
Total depreciation and amortization expense
|
$
|
3,412
|
|
|
$
|
4,024
|
|
|
$
|
3,344
|
|
|
|
|
|
|
|
||||||
|
December 31,
|
|
|
||||||||
Assets:
|
2015
|
|
2014
|
|
|
||||||
Direct
|
$
|
35,356
|
|
|
$
|
25,263
|
|
|
|
||
Retail
|
202,696
|
|
|
37,203
|
|
|
|
||||
Unallocated corporate
|
77,860
|
|
|
113,188
|
|
|
|
||||
Total assets
|
$
|
315,912
|
|
|
$
|
175,654
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Rent expense
|
$
|
5,033
|
|
|
$
|
3,625
|
|
|
$
|
3,473
|
|
2016
|
$
|
5,327
|
|
2017
|
4,439
|
|
|
2018
|
3,892
|
|
|
2019
|
3,989
|
|
|
2020
|
3,894
|
|
|
Thereafter
|
8,731
|
|
|
|
$
|
30,272
|
|
|
Quarter Ended
|
|
|
||||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Total
|
||||||||||
2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
96,239
|
|
|
$
|
59,695
|
|
|
$
|
70,690
|
|
|
$
|
109,140
|
|
|
$
|
335,764
|
|
Gross profit
|
53,889
|
|
|
30,656
|
|
|
36,209
|
|
|
52,480
|
|
|
173,234
|
|
|||||
Operating income
|
17,605
|
|
|
3,932
|
|
|
6,389
|
|
|
12,345
|
|
|
40,271
|
|
|||||
Income from continuing operations
|
10,859
|
|
|
2,219
|
|
|
3,873
|
|
|
9,852
|
|
|
26,803
|
|
|||||
Income (loss) from discontinued operations
|
(127
|
)
|
|
205
|
|
|
(145
|
)
|
|
(134
|
)
|
|
(201
|
)
|
|||||
Net income
(1),(2)
|
10,732
|
|
|
2,424
|
|
|
3,728
|
|
|
9,718
|
|
|
26,602
|
|
|||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.34
|
|
|
$
|
0.08
|
|
|
$
|
0.12
|
|
|
$
|
0.31
|
|
|
$
|
0.85
|
|
Diluted
|
0.34
|
|
|
0.08
|
|
|
0.12
|
|
|
0.31
|
|
|
0.84
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
71,903
|
|
|
$
|
48,546
|
|
|
$
|
59,067
|
|
|
$
|
94,931
|
|
|
$
|
274,447
|
|
Gross profit
|
38,481
|
|
|
24,780
|
|
|
28,795
|
|
|
48,519
|
|
|
140,575
|
|
|||||
Operating income
|
9,001
|
|
|
2,379
|
|
|
4,281
|
|
|
14,493
|
|
|
30,154
|
|
|||||
Income from continuing operations
|
5,748
|
|
|
1,498
|
|
|
2,664
|
|
|
10,473
|
|
|
20,383
|
|
|||||
Loss from discontinued operations
|
(374
|
)
|
|
(941
|
)
|
|
(177
|
)
|
|
(96
|
)
|
|
(1,588
|
)
|
|||||
Net income
(1)
|
5,374
|
|
|
557
|
|
|
2,487
|
|
|
10,377
|
|
|
18,795
|
|
|||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.17
|
|
|
$
|
0.02
|
|
|
$
|
0.08
|
|
|
$
|
0.33
|
|
|
$
|
0.60
|
|
Diluted
|
0.17
|
|
|
0.02
|
|
|
0.08
|
|
|
0.33
|
|
|
0.59
|
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Plan Category
|
Number of securities
to be issued upon exercise
of outstanding options,
warrants and rights
(1),(2),(3)
(a)
|
|
Weighted average
exercise price of
outstanding options,
warrants and rights
(4)
(b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)
|
||||
Equity compensation plans approved by security holders
|
797
|
|
|
$
|
5.01
|
|
|
4,516
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
797
|
|
|
$
|
5.01
|
|
|
4,516
|
|
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
|
Consolidated Balance Sheets as of December 31, 2015 and 2014
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013
|
|
|
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2015, 2014 and 2013
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013
|
|
|
Notes to Consolidated Financial Statements
|
|
Exhibit No.
|
|
Description
|
|
|
|
2.1
|
|
Stock Purchase Agreement dated December 31, 2015 by and among Nautilus, Inc. and OF Holdings, Inc., the Holders of Stock in OF Holdings, Inc., and NCP-OFI Representative, LLC - Incorporated by reference to Exhibit 2.1 of our Form 8-K dated December 31, 2015, as filed with the Commission on January 4, 2016.
|
|
|
|
3.1
|
|
Amended and Restated Articles of Incorporation - Incorporated by reference to Exhibit A to Schedule 14A, as filed with the Commission on April 22, 2008.
|
|
|
|
3.2
|
|
Amended and Restated Bylaws - Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K, as filed with the Commission on April 5, 2005.
|
|
|
|
3.3
|
|
Amendment to Amended and Restated Bylaws of the Company - Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K, as filed with the Commission on January 31, 2007.
|
|
|
|
10.1*
|
|
Company 2005 Long-Term Incentive Plan - Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K, as filed with the Commission on June 10, 2005.
|
|
|
|
10.2*
|
|
First Amendment to Company 2005 Long-Term Incentive Plan - Incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the three months ended September 30, 2006, as filed with the Commission on November 9, 2006.
|
|
|
|
10.3*
|
|
Form of Nonstatutory Stock Option Agreement - Incorporated by reference to Exhibit 10 of our Current Report on Form 8-K, as filed with the Commission on July 29, 2005.
|
|
|
|
10.4*
|
|
Form of Non-Employee Director Nonstatutory Stock Option Agreement - Incorporated by reference to Exhibit 10 of our Current Report on Form 8-K, as filed with the Commission on August 19, 2005.
|
|
|
|
Exhibit No.
|
|
Description
|
10.5*
|
|
Form of Performance Unit Agreement - Incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the three months ended June 30, 2006, as filed with the Commission on August 9, 2006.
|
|
|
|
10.6
|
|
Trademark License Agreement, dated September 20, 2001, by and between Pacific Direct, LLC and Nautilus, Inc. - Incorporated by reference to Exhibit 2.1 of our Quarterly Report on Form 10-Q for the three months ended September 30, 2001, as filed with the Commission on November 14, 2001.
|
|
|
|
10.7
|
|
License Agreement dated as of December 29, 2009 between Nautilus, Inc. and Fit Dragon International, Inc. - Incorporated by reference to Exhibit 10.24 of our Form 10-K for the fiscal year ended December 31, 2009 as filed with the Commission on March 8, 2010.
|
|
|
|
10.8
|
|
Technology Transfer and License Agreement dated as of December 29, 2009 between Nautilus, Inc. and Fit Dragon International, Inc. - Incorporated by reference to Exhibit 10.26 of our Form 10-K for the fiscal year ended December 31, 2009 as filed with the Commission on March 8, 2010.
|
|
|
|
10.9
|
|
Private Label Consumer Credit Card Program Agreement, dated June 15, 2010, by and between Nautilus, Inc. and GE Money Bank - Incorporated by reference to Exhibit 10.1 of our Form 10-Q for the three months ended June 30, 2010 as filed with the Commission on August 16, 2010. [Confidential treatment has been granted with respect to a portion of this Exhibit]
|
|
|
|
10.10
|
|
HELPcard Merchant Agreement, dated June 14, 2010, effective as of June 11, 2010, by and between Nautilus, Inc. and Dent-A-Med, Inc. - Incorporated by reference to Exhibit 10.2 of our Form 10-Q for the three months ended June 30, 2010 as filed with the Commission on August 16, 2010. [Confidential treatment has been granted with respect to a portion of this Exhibit]
|
|
|
|
10.11
|
|
First Amendment dated November 6, 2010 to Private Label Consumer Credit Card Program Agreement, dated June 15, 2010, by and between the Company and GE Money Bank - Incorporated by reference to Exhibit 10.27 of our Form 10-K for the fiscal year ended December 31, 2012 as filed with the Commission on March 7, 2013.
|
|
|
|
10.12
|
|
Merchant Agreement dated December 15, 2010, between the Company and Hy Cite Corporation - Incorporated by reference to Exhibit 10.28 of our Form 10-K for the fiscal year ended December 31, 2012 as filed with the Commission on March 7, 2013. [Confidential treatment has been granted with respect to a portion of this Exhibit]
|
|
|
|
10.13*
|
|
Executive Employment Agreement, dated September 21, 2007, between the Company and Wayne M. Bolio - Incorporated by reference to Exhibit 10.33 of our Form 10-K for the fiscal year ended December 31, 2010 as filed with the Commission on March 8, 2011.
|
|
|
|
10.14*
|
|
Severance and Employment Agreement, dated April 23, 2012, between the Company and Robert O. Murdock - Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K as filed with the Commission on March 20, 2013.
|
|
|
|
10.15*
|
|
Severance and Employment Agreement, dated March 30, 2011, between the Company and William B. McMahon - Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K as filed with the Commission on March 31, 2011.
|
|
|
|
10.16
|
|
Office Lease Agreement dated as of July 25, 2011, by and between Nautilus, Inc. and Columbia Tech Center, L.L.C. - Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K as filed with the Commission on July 29, 2011.
|
|
|
|
10.17*
|
|
Executive Employment Agreement dated as of May 30, 2011, between Nautilus, Inc. and Bruce M. Cazenave - Incorporated by reference to Exhibit 10.1 of our Form 10-Q for the three months ended June 30, 2011 as filed with the Commission on August 11, 2011.
|
|
|
|
10.18*
|
|
Form of Restricted Stock Unit Agreement - Incorporated by reference to Exhibit 10.2 of our Form 10-Q for the three months ended June 30, 2011 as filed with the Commission on August 11, 2011.
|
|
|
|
10.19*
|
|
Form of Restricted Stock Unit Agreement - Incorporated by reference to Exhibit 10.3 of our Form 10-Q for the three months ended June 30, 2011 as filed with the Commission on August 11, 2011.
|
|
|
|
10.20*
|
|
Form of Non-Employee Director Nonstatutory Stock Option Agreement - Incorporated by reference to Exhibit 10.2 of our Form 10-Q for the three months ended March 31, 2012 as filed with the Commission on May 9, 2012.
|
|
|
|
10.21
|
|
Program Agreement between Nautilus, Inc. and Genesis Bankcard Services, Inc. - Incorporated by reference to Exhibit 10.1 of our Form 10-Q for the three months ended June 30, 2013 as filed with the Commission on August 8, 2013. [Confidential Treatment has been granted with respect to portions of this exhibit]
|
|
|
|
10.22*
|
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement - Incorporated by reference to Exhibit 10.2 of our Form 10-Q for the three months ended June 30, 2013 as filed with the Commission on August 8, 2013.
|
|
|
|
Exhibit No.
|
|
Description
|
10.23*
|
|
Executive Employment Agreement dated as of February 10, 2014, by and between Nautilus, Inc. and Sidharth Nayar - Incorporated by reference to Exhibit 10.1 of our Form 10-Q for the three months ended March 31, 2014 as filed with the Commission on May 8, 2014.
|
|
|
|
10.24*
|
|
Stock Unit Award Agreement dated as of February 28, 2014, by and between Nautilus, Inc. and Sidharth Nayar - Incorporated by reference to Exhibit 10.2 of our Form 10-Q for the three months ended March 31, 2014 as filed with the Commission on May 8, 2014.
|
|
|
|
10.25*
|
|
Offer Letter, dated July 26, 2013, between the Company and Jeffery Collins - Incorporated by reference to Exhibit 10.3 of our Form 10-Q for the three months ended March 31, 2014 as filed with the Commission on May 8, 2014.
|
|
|
|
10.26
|
|
First Lease Modification Agreement, dated as of June 19, 2014, to the Office Lease by and between Nautilus, Inc. and Columbia Tech Ceter, L.L.C. dated July 25, 2011 - Incorporated by reference to Exhibit 10.1 of our Form 10-Q for the three months ended June 30, 2014 as filed with the Commission on August 7, 2014.
|
|
|
|
10.27
|
|
Credit Agreement dated December 5, 2014 between Nautilus, Inc. and JPMorgan Chase Bank, N.A. - Incorporated by reference to Exhibit 10.1 of our Form 8-K dated December 5, 2014 as filed with the Commission on December 8, 2014.
|
|
|
|
10.28
|
|
Continuing Security Agreement dated December 5, 2014 between Nautilus, Inc. and JPMorgan Chase Bank, N.A. - Incorporated by reference to Exhibit 10.2 of our Form 8-K dated December 5, 2014 as filed with the Commission on December 8, 2014.
|
|
|
|
10.29
|
|
Line of Credit Note dated December 5, 2014 between Nautilus, Inc. and JPMorgan Chase Bank, N.A. - Incorporated by reference to Exhibit 10.3 of our Form 8-K dated December 5, 2014 as filed with the Commission on December 8, 2014.
|
|
|
|
10.30
|
|
Consent and Amendment to Loan Documents dated December 31, 2015 between Nautilus, Inc. and JPMorgan Chase Bank, N.A.
|
|
|
|
10.31
|
|
Term Note dated December 31, 2015 between Nautilus, Inc. and JPMorgan Chase Bank, N.A.
|
|
|
|
10.32*
|
|
Nautilus, Inc. 2015 Long-Term Incentive Plan - Incorporated by reference to Exhibit 10.1 of our Form 8-K dated April 28, 2015 as filed with the Commission on May 4, 2015.
|
|
|
|
10.33
|
|
Nautilus, Inc. Employee Stock Purchase Plan - Incorporated by reference to Exhibit 10.2 of our Form 8-K dated April 28, 2015 as filed with the Commission on May 4, 2015.
|
|
|
|
21
|
|
Subsidiaries of the Company.
|
|
|
|
23
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following financial statements from Nautilus, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Shareholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
|
*
|
Indicates management contract, compensatory agreement or arrangement, in which our directors or executive officers may participate.
|
|
|
NAUTILUS, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
February 25, 2016
|
|
By:
|
/s/ Bruce M. Cazenave
|
Date
|
|
|
Bruce M. Cazenave
|
|
|
|
Chief Executive Officer
(Principal Executive Officer) |
|
|
NAUTILUS, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
February 25, 2016
|
|
By:
|
/s/ Sidharth Nayar
|
Date
|
|
|
Sidharth Nayar
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer) |
Signature
|
|
Title
|
/s/ Bruce M. Cazenave
|
|
Chief Executive Officer
(Principal Executive Officer) |
Bruce M. Cazenave
|
|
|
|
|
|
/s/ Sidharth Nayar
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer) |
Sidharth Nayar
|
|
|
|
|
|
*
|
|
Chairman
|
M. Carl Johnson, III
|
|
|
|
|
|
*
|
|
Director
|
Ronald P. Badie
|
|
|
|
|
|
*
|
|
Director
|
Richard A. Horn
|
|
|
|
|
|
*
|
|
Director
|
Anne G. Saunders
|
|
|
|
|
|
*
|
|
Director
|
Marvin G. Siegert
|
|
|
*By:
|
/s/ Wayne M. Bolio
|
February 25, 2016
|
|
Wayne M. Bolio
|
|
|
Attorney-In-Fact
|
|
|
/s/ Deloitte & Touche LLP
|
|
Portland, Oregon
|
February 25, 2016
|
1.
|
I have reviewed this annual report on Form 10-K 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.
|
February 25, 2016
|
By:
|
/s/ Bruce M. Cazenave
|
Date
|
|
Bruce M. Cazenave
|
|
|
Chief Executive Officer
(Principal Executive Officer) |
1.
|
I have reviewed this annual report on Form 10-K 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.
|
February 25, 2016
|
By:
|
/s/ Sidharth Nayar
|
Date
|
|
Sidharth Nayar
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer) |
February 25, 2016
|
By:
|
/s/ Bruce M. Cazenave
|
Date
|
|
Bruce M. Cazenave
|
|
|
Chief Executive Officer
(Principal Executive Officer) |
February 25, 2016
|
By:
|
/s/ Sidharth Nayar
|
Date
|
|
Sidharth Nayar
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer) |