Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NAUTILUS, INC. | |
Entity Central Index Key | 1078207 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 31,382,889 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $30,693 | $45,206 |
Available-for-sale securities | 51,390 | 26,984 |
Trade receivables, net of allowances of $36 and $108 | 16,816 | 26,260 |
Inventories | 19,966 | 24,896 |
Prepaids and other current assets | 5,342 | 6,987 |
Income taxes receivable | 22 | 50 |
Deferred income tax assets | 11,030 | 12,368 |
Total current assets | 135,259 | 142,751 |
Property, plant and equipment, net | 9,665 | 9,634 |
Goodwill | 2,318 | 2,520 |
Other intangible assets, net | 10,285 | 10,575 |
Long-term deferred income tax assets | 4,797 | 9,546 |
Other assets | 533 | 628 |
Total assets | 162,857 | 175,654 |
Liabilities and Shareholders' Equity | ||
Trade payables | 26,829 | 47,574 |
Accrued liabilities | 9,140 | 9,851 |
Warranty obligations, current portion | 2,497 | 2,246 |
Total current liabilities | 38,466 | 59,671 |
Income taxes payable, non-current | 3,828 | 3,725 |
Other long-term liabilities | 1,186 | 1,186 |
Total liabilities | 43,480 | 64,582 |
Commitments and contingencies (Note 13) | ||
Shareholders' equity: | ||
Common stock - no par value, 75,000 shares authorized, 31,382 and 31,333 shares issued and outstanding | 6,091 | 8,033 |
Retained earnings | 114,079 | 103,347 |
Accumulated other comprehensive loss | -793 | -308 |
Total shareholders' equity | 119,377 | 111,072 |
Total liabilities and shareholders' equity | $162,857 | $175,654 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance for doubtful trade receivables | $36 | $108 |
Common stock, par value (in dollars per share) | $0 | $0 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 31,382,000 | 31,333,000 |
Common stock, shares outstanding | 31,382,000 | 31,333,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Net sales | $96,239 | $71,903 |
Cost of sales | 42,350 | 33,422 |
Gross profit | 53,889 | 38,481 |
Operating expenses: | ||
Selling and marketing | 28,399 | 21,774 |
General and administrative | 5,578 | 5,803 |
Research and development | 2,307 | 1,903 |
Total operating expenses | 36,284 | 29,480 |
Operating income | 17,605 | 9,001 |
Other income (expense): | ||
Interest income | 44 | 8 |
Interest expense | -5 | -7 |
Other, net | -116 | -61 |
Total other income (expense), net | -77 | -60 |
Income from continuing operations before income taxes | 17,528 | 8,941 |
Income tax provision | 6,669 | 3,193 |
Income from continuing operations | 10,859 | 5,748 |
Discontinued operations: | ||
Loss from discontinued operations before income taxes | -153 | -512 |
Income tax benefit from discontinued operations | -26 | -138 |
Loss from discontinued operations | -127 | -374 |
Net income | $10,732 | $5,374 |
Earnings Per Share, Basic [Abstract] | ||
Basic income per share from continuing operations (in dollars per share) | $0.35 | $0.18 |
Basic loss per share from discontinued operation (in dollars per share) | $0 | ($0.01) |
Basic net income per share (in dollars per share) | $0.34 | $0.17 |
Earnings Per Share, Diluted [Abstract] | ||
Diluted income per share from continuing operations (in dollars per share) | $0.34 | $0.18 |
Diluted loss per share from discontinued operation (in dollars per share) | $0 | ($0.01) |
Diluted net income per share (in dollars per share) | $0.34 | $0.17 |
Shares used in per share calculations: | ||
Basic (in shares) | 31,396 | 31,172 |
Diluted (in shares) | 31,767 | 31,550 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net income | $10,732 | $5,374 |
Other comprehensive loss: | ||
Unrealized loss on marketable securities, net of income tax expense of $0 and $0 | -1 | -13 |
Foreign currency translation, net of income tax expense of $5 and $5 | -484 | -164 |
Comprehensive income | $10,247 | $5,197 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Unrealized loss on marketable securities, tax expense | $0 | $0 |
Foreign currency translation, tax expense | $5 | $5 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Income from continuing operations | $10,859 | $5,748 |
Loss from discontinued operations | -127 | -374 |
Net income | 10,732 | 5,374 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 910 | 865 |
Provision for (benefit from) allowance for doubtful accounts | -108 | 30 |
Inventory lower-of-cost-or-market adjustments | 18 | 589 |
Stock-based compensation expense | 301 | 265 |
(Gain) loss on asset dispositions | -2 | 1 |
Deferred income taxes, net of valuation allowance | 6,102 | 2,321 |
Excess tax deficiency related to stock-based awards | 2 | 102 |
Changes in operating assets and liabilities: | ||
Trade receivables | 9,719 | 11,752 |
Inventories | 4,930 | 1,765 |
Prepaids and other current assets | 1,763 | 2,617 |
Income taxes | 27 | 356 |
Trade payables | -20,612 | -9,830 |
Accrued liabilities, including warranty obligations | -298 | -1,085 |
Net cash provided by operating activities | 13,484 | 15,122 |
Cash flows from investing activities: | ||
Purchases of available-for-sale securities | -30,440 | -13,518 |
Proceeds from maturities of available-for-sale securities | 3,680 | 0 |
Proceeds from sales of available-for-sale securities | 2,354 | 0 |
Purchases of property, plant and equipment | -590 | -521 |
Net cash used in investing activities | -24,996 | -14,039 |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 407 | 42 |
Payments for stock repurchases | -1,996 | 0 |
Tax payments related to stock award issuances | -652 | 0 |
Excess tax deficiency related to stock-based awards | -2 | -102 |
Net cash used in financing activities | -2,243 | -60 |
Effect of exchange rate changes on cash and cash equivalents | -758 | 33 |
Increase (decrease) in cash and cash equivalents | -14,513 | 1,056 |
Cash and cash equivalents: | ||
Beginning of period | 45,206 | 40,979 |
End of period | 30,693 | 42,035 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | -6 | -7 |
Cash paid for income taxes, net | -332 | -95 |
Supplemental disclosure of non-cash investing activities: | ||
Capital expenditures incurred but not yet paid | $64 | $0 |
General_Information
General Information | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General Information | GENERAL INFORMATION |
Basis of Consolidation and Presentation | |
The accompanying condensed consolidated financial statements present the financial position, results of operations and cash flows of Nautilus, Inc. and its subsidiaries, all of which are wholly owned. Intercompany transactions and balances have been eliminated in consolidation. | |
The accompanying condensed consolidated financial statements have not been audited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes the disclosures contained herein are adequate to make the information presented not misleading. However, these condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”). | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Further information regarding significant estimates can be found in our 2014 Form 10-K. | |
In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of March 31, 2015 and December 31, 2014, and our results of operations, comprehensive income and cash flows for the three months ended March 31, 2015 and 2014. Interim results are not necessarily indicative of results for a full year. Our revenues typically vary seasonally and this seasonality can have a significant effect on operating results, inventory levels and working capital needs. | |
Unless indicated otherwise, all information regarding our operating results pertain to our continuing operations. | |
New Accounting Pronouncements | |
ASU 2015-02 | |
In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-02, “Consolidation (Topic 810).” ASU 2015-02 amends guidance regarding the consolidation of certain legal entities. ASU 2015-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We do not expect the adoption of ASU 2015-02 to have any effect on our financial position, results of operations or cash flows. | |
ASU 2015-01 | |
In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20).” ASU 2015-01 simplifies income statement presentation by eliminating the concept of extraordinary items. ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of ASU 2015-01 will not have any effect on our financial position, results of operations or cash flows. | |
ASU 2014-12 | |
In June 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718)". ASU No. 2014-12 addresses accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. ASU 2014-12 indicates that, in such situations, the performance target should be treated as a performance condition and, accordingly, the performance target should not be reflected in estimating the grant-date fair value of the award. Instead, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. We do not expect the adoption of ASU 2014-12 to have a material effect on our financial position, results of operations or cash flows. | |
ASU 2014-09 | |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers". ASU 2014-09 clarifies the principles for recognizing revenue and develops a common revenue standard for U.S. GAAP and the International Accounting Standards Board that: | |
• removes inconsistencies and weaknesses in revenue requirements; | |
• provides a more robust framework for addressing revenue issues; | |
• improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; | |
• provides more useful information to users of financial statements through improved disclosure requirements; and | |
• simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. | |
ASU 2014-09 is effective for annual and interim periods beginning on or after December 15, 2016. While we do not expect the adoption of ASU 2014-09 to have a material effect on our business, we are still evaluating any potential impact that adoption of | |
ASU 2014-09 may have on our financial position, results of operations or cash flows. | |
ASU 2014-08 | |
In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) and Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". ASU 2014-08 amends the definition for what types of asset disposals are to be considered discontinued operations, and amends the required disclosures for discontinued operations and assets held for sale. ASU 2014-08 also enhances the convergence of the FASB’s and the International Accounting Standard Board’s reporting requirements for discontinued operations. ASU 2014-08 is effective for annual periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015. We do not expect the adoption of ASU 2014-08 to have a material effect on our financial position, results of operations or cash flows. |
Discontinued_Operations
Discontinued Operations | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Discontinued Operations and Disposal Groups [Abstract] | ||||
Discontinued Operations | DISCONTINUED OPERATIONS | |||
There was no revenue related to discontinued operations for the three months ended March 31, 2015 or the year ended December 31, 2014. However, we continue to have legal and accounting expenses as we work with authorities on final deregistration of certain foreign entities and product liability expenses associated with product previously sold into the Commercial channel. | ||||
The following table summarizes liabilities for exit costs related to discontinued operations, included in Accrued Liabilities and Other Long-Term Liabilities in our Condensed Consolidated Balance Sheets (in thousands): | ||||
Facilities | ||||
Leases | ||||
Balance, December 31, 2014 | $ | 573 | ||
Adjustments | — | |||
Payments | (67 | ) | ||
Balance, March 31, 2015 | $ | 506 | ||
We expect the lease obligations to be paid out through 2016. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS | ||||||||||||||||
Factors used in determining the fair value of financial assets and liabilities are summarized into three broad categories: | |||||||||||||||||
• | 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. | ||||||||||||||||
Assets measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014 were as follows (in thousands): | |||||||||||||||||
March 31, 2015 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash Equivalents | |||||||||||||||||
Money market funds | $ | 10,630 | $ | — | $ | — | $ | 10,630 | |||||||||
Certificates of deposit(1) | — | 245 | — | 245 | |||||||||||||
Commercial paper | — | 1,000 | — | 1,000 | |||||||||||||
Corporate bonds | — | 2,029 | — | 2,029 | |||||||||||||
Variable-rate demand notes | — | — | — | — | |||||||||||||
Total Cash Equivalents | 10,630 | 3,274 | — | 13,904 | |||||||||||||
Available-for-Sale Securities | |||||||||||||||||
Certificates of deposit(1) | — | 21,318 | — | 21,318 | |||||||||||||
Commercial paper | — | 4,996 | — | 4,996 | |||||||||||||
Corporate bonds | — | 25,076 | — | 25,076 | |||||||||||||
Total Available-for-Sale Securities | — | 51,390 | — | 51,390 | |||||||||||||
Total assets measured at fair value | $ | 10,630 | $ | 54,664 | $ | — | $ | 65,294 | |||||||||
(1) All certificates of deposit are within current FDIC insurance limits. | |||||||||||||||||
31-Dec-14 | |||||||||||||||||
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 | |||||||||
(1) All certificates of deposit are within current FDIC insurance limits. | |||||||||||||||||
We did not have any liabilities measured at fair value on a recurring basis as of March 31, 2015 or December 31, 2014. | |||||||||||||||||
We recognize transfers between levels at the actual date of the event or change in circumstance that caused the transfer. There were no transfers between levels during the three months ended March 31, 2015, nor for the year ended December 31, 2014. | |||||||||||||||||
We did not have any changes to our valuation techniques during the three months ended March 31, 2015. | |||||||||||||||||
We classify our marketable securities as available-for-sale and, accordingly, record them at fair value. Level 1 investments valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 investments valuations are obtained from inputs, other than quoted market prices in active markets, that are directly or indirectly observable in the marketplace and quoted prices in markets with limited volume or infrequent transactions. The factors or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Unrealized holding gains and losses are excluded from earnings and are reported net of tax in Comprehensive Income until realized. | |||||||||||||||||
We recognize or disclose the fair value of certain assets, such as non-financial assets, primarily Property, Plant and Equipment, Goodwill, Other Intangible Assets and certain other long-lived assets in connection with impairment evaluations. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. We did not perform any valuations on assets or liabilities that are valued at fair value on a nonrecurring basis during the first quarter of 2015. During the fourth quarter of 2014, we performed our annual Goodwill and indefinite-lived trade names impairment valuations effective as of October 1, 2014. During the three months ended March 31, 2015 and the year ended December 31, 2014, we did not record any other-than-temporary impairments on our financial assets required to be measured at fair value on a nonrecurring basis. |
Inventories
Inventories | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventories | INVENTORIES | |||||||
Inventories are stated at the lower of cost or market, with cost determined based on the first-in, first-out method. We establish inventory allowances for excess, slow-moving and obsolete inventory based on inventory levels, expected product life and forecasted sales. Inventories are written down to market value based on historical demand, competitive factors, changes in technology and product lifecycles. | ||||||||
Inventories consisted of the following (in thousands): | ||||||||
As of | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Finished goods | $ | 18,660 | $ | 23,765 | ||||
Parts and components | 1,306 | 1,131 | ||||||
Total inventories | $ | 19,966 | $ | 24,896 | ||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT | |||||||||||
Property, plant and equipment consisted of the following (in thousands): | ||||||||||||
Estimated | As of | |||||||||||
Useful Life | ||||||||||||
(in years) | March 31, 2015 | December 31, 2014 | ||||||||||
Automobiles | 5 | $ | 23 | $ | 23 | |||||||
Leasehold improvements | 5 | to | 20 | 2,159 | 2,144 | |||||||
Computer software and equipment | 3 | to | 7 | 25,550 | 25,397 | |||||||
Machinery and equipment | 3 | to | 5 | 6,724 | 6,709 | |||||||
Furniture and fixtures | 5 | 1,104 | 1,108 | |||||||||
Work in progress(1) | N/A | 861 | 421 | |||||||||
Total cost | 36,421 | 35,802 | ||||||||||
Accumulated depreciation | (26,756 | ) | (26,168 | ) | ||||||||
Total property, plant and equipment, net | $ | 9,665 | $ | 9,634 | ||||||||
(1) Work in progress includes production tooling and internal use software development. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||
Goodwill | ||||||||||||
All goodwill is assigned to our Direct reporting segment. The rollforward of goodwill was as follows (in thousands): | ||||||||||||
Balance, January 1, 2014 | $ | 2,740 | ||||||||||
Currency exchange rate adjustment | (220 | ) | ||||||||||
Balance, December 31, 2014 | 2,520 | |||||||||||
Currency exchange rate adjustment | (202 | ) | ||||||||||
Balance, March 31, 2015 | $ | 2,318 | ||||||||||
Other Intangible Assets | ||||||||||||
Other intangible assets consisted of the following (in thousands): | ||||||||||||
Estimated | As of | |||||||||||
Useful Life | ||||||||||||
(in years) | March 31, 2015 | December 31, 2014 | ||||||||||
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 | (16,921 | ) | (16,631 | ) | ||||||||
Other intangible assets, net | $ | 10,285 | $ | 10,575 | ||||||||
Amortization expense was as follows (in thousands): | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Patent amortization | $ | 290 | $ | 510 | ||||||||
Future amortization of patents is as follows (in thousands): | ||||||||||||
Remainder of 2015 | $ | 538 | ||||||||||
2016 | 430 | |||||||||||
2017 | 143 | |||||||||||
2018 | 65 | |||||||||||
2019 | 35 | |||||||||||
Thereafter | 22 | |||||||||||
$ | 1,233 | |||||||||||
Accrued_Liabilities
Accrued Liabilities | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Payables and Accruals [Abstract] | ||||||||
Accrued Liabilities | ACCRUED LIABILITIES | |||||||
Accrued liabilities consisted of the following (in thousands): | ||||||||
As of | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Payroll and related liabilities | $ | 3,632 | $ | 5,058 | ||||
Other | 5,508 | 4,793 | ||||||
Total accrued liabilities | $ | 9,140 | $ | 9,851 | ||||
Product_Warranties
Product Warranties | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Product Warranties Disclosures [Abstract] | |||||||||
Product Warranties | PRODUCT WARRANTIES | ||||||||
Our products carry limited, defined warranties for defects in materials or workmanship which, according to their terms, generally obligate us to pay the costs of supplying and shipping replacement parts to customers and, in certain instances, pay for labor and other costs to service products. Outstanding product warranty periods range from thirty days to, in limited circumstances, the lifetime of certain product components. We record a liability at the time of sale for the estimated costs of fulfilling future warranty claims. If necessary, we adjust the liability for specific warranty-related matters when they become known and are reasonably estimable. Estimated warranty expense is included in Cost of Sales, based on historical warranty claim experience and available product quality data. Warranty expense is affected by the performance of new products, significant manufacturing or design defects not discovered until after the product is delivered to the customer, product failure rates, and higher or lower than expected repair costs. If warranty expense differs from previous estimates, or if circumstances change such that the assumptions inherent in previous estimates are no longer valid, the amount of product warranty obligations is adjusted accordingly. | |||||||||
Changes in our product warranty obligations were as follows (in thousands): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Balance, beginning of period | $ | 2,246 | $ | 1,638 | |||||
Accruals | 815 | 921 | |||||||
Payments | (564 | ) | (576 | ) | |||||
Balance, end of period | $ | 2,497 | $ | 1,983 | |||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Equity [Abstract] | ||||||||||||
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||
Accumulated other comprehensive income (loss), net of applicable taxes, reported on our Condensed Consolidated Balance Sheets consists of unrealized holding losses on available-for-sale securities and foreign currency translation adjustments. The following tables set forth the changes in accumulated other comprehensive income (loss), net of tax (in thousands): | ||||||||||||
Unrealized Loss on Available-for-Sale Securities | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||
Balance, December 31, 2014 | $ | (18 | ) | $ | (290 | ) | $ | (308 | ) | |||
Current period other comprehensive loss | (1 | ) | (484 | ) | (485 | ) | ||||||
Balance, March 31, 2015 | $ | (19 | ) | $ | (774 | ) | $ | (793 | ) | |||
Unrealized Loss on Available-for-Sale Securities | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Income (Loss) | ||||||||||
Balance, December 31, 2013 | $ | — | $ | 244 | $ | 244 | ||||||
Current period other comprehensive loss | (13 | ) | (164 | ) | (177 | ) | ||||||
Balance, March 31, 2014 | $ | (13 | ) | $ | 80 | $ | 67 | |||||
Income_Per_Share
Income Per Share | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Earnings Per Share [Abstract] | |||||||
Income Per Share | INCOME PER SHARE | ||||||
Basic per share amounts were computed using the weighted average number of common shares outstanding. Diluted per share amounts were calculated using the number of basic weighted average shares outstanding increased by dilutive potential common shares related to stock-based awards, as determined by the treasury stock method. The weighted average numbers of shares outstanding used to compute income per share were as follows (in thousands): | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Shares used to calculate basic income per share | 31,396 | 31,172 | |||||
Dilutive effect of outstanding stock options, performance stock units and restricted stock units | 371 | 378 | |||||
Shares used to calculate diluted income per share | 31,767 | 31,550 | |||||
The weighted average numbers of shares outstanding listed in the table below were anti-dilutive and excluded from the computation of diluted income per share because, in the case of stock options, the average market price did not exceed the exercise price, and for the performance stock units, because these shares are subject to performance conditions that had not been met. These shares may be dilutive potential common shares in the future (in thousands): | |||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Stock options | 25 | 320 | |||||
Performance stock units | 163 | 84 | |||||
Stock_Repurchase_Program
Stock Repurchase Program | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stock Repurchase Program | STOCK REPURCHASE PROGRAM |
On November 3, 2014, our Board of Directors approved a stock repurchase program that authorized us to repurchase up to $15.0 million of our outstanding common stock from time to time over a period of 24 months. The repurchase program expires November 3, 2016. Share repurchases will be funded with existing cash balances and repurchased shares will be retired and returned to unissued authorized shares. During the first quarter of 2015, we repurchased 133,877 shares at an average price of $14.91 per share for a total of $2.0 million, and, as of March 31, 2015, $13.0 million remains available for future repurchases. | |
For additional information, see Issuer Purchases of Equity Securities at Part II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds" in this Form 10-Q. |
Segment_and_Enterprisewide_Inf
Segment and Enterprise-wide Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Segment and Enterprise-wide Information | SEGMENT AND ENTERPRISE-WIDE INFORMATION | ||||||||
We have two reportable segments - Direct and Retail. Contribution is the measure of profit or loss, defined as Net Sales less product costs and directly attributable expenses. Directly attributable expenses include Selling and Marketing expenses, General and Administrative expenses, and Research and Development expenses that are directly related to segment operations. Segment assets are those directly assigned to an operating segment's operations, primarily Accounts Receivable, Inventories, Goodwill and Other Intangible Assets. Unallocated assets primarily include Cash and Cash Equivalents, Available-for-Sale Securities, Prepaids and Other Current Assets, Deferred Income Tax Assets, Other Assets, shared information technology infrastructure, distribution centers and corporate headquarters. Capital expenditures directly attributable to the Direct and Retail segments were not significant in either period presented. | |||||||||
Following is summary information by reportable segment (in thousands): | |||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales: | |||||||||
Direct | $ | 74,057 | $ | 50,735 | |||||
Retail | 21,290 | 20,103 | |||||||
Unallocated royalty income | 892 | 1,065 | |||||||
Consolidated net sales | $ | 96,239 | $ | 71,903 | |||||
Contribution: | |||||||||
Direct | $ | 19,571 | $ | 10,352 | |||||
Retail | 1,500 | 2,509 | |||||||
Unallocated royalty income | 892 | 1,065 | |||||||
Consolidated contribution | $ | 21,963 | $ | 13,926 | |||||
Reconciliation of consolidated contribution to income from continuing operations: | |||||||||
Consolidated contribution | $ | 21,963 | $ | 13,926 | |||||
Amounts not directly related to segments: | |||||||||
Operating expenses | (4,358 | ) | (4,925 | ) | |||||
Other expense, net | (77 | ) | (60 | ) | |||||
Income tax expense | (6,669 | ) | (3,193 | ) | |||||
Income from continuing operations | $ | 10,859 | $ | 5,748 | |||||
There was no material change in the allocation of assets by segment during the first three months of 2015 and, accordingly, assets by segment are not presented. | |||||||||
For the three months ended March 31, 2015 and 2014, no customer represented 10.0% or more of total Net Sales. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES |
Guarantees, Commitments and Off-Balance Sheet Arrangements | |
As of March 31, 2015, we had approximately $0.6 million in standby letters of credit with certain vendors with expiration dates through April 2016. | |
We have long lead times for inventory purchases and, therefore, must secure factory capacity from our vendors in advance. As of March 31, 2015, we had approximately $20.5 million in noncancelable market-based purchase obligations, primarily for inventory purchases expected to be received within the next twelve months. Purchase obligations can vary from quarter-to-quarter and versus the same period in prior years due to a number of factors, including the amount of products that are shipped directly to Retail customer warehouses versus through Nautilus warehouses. | |
In the ordinary course of business, we enter into agreements that require us to indemnify counterparties against third-party claims. These may include: agreements with vendors and suppliers, under which we may indemnify them against claims arising from use of their products or services; agreements with customers, under which we may indemnify them against claims arising from their use or sale of our products; real estate and equipment leases, under which we may indemnify lessors against third-party claims relating to the use of their property; agreements with licensees or licensors, under which we may indemnify the licensee or licensor against claims arising from their use of our intellectual property or our use of their intellectual property; and agreements with parties to debt arrangements, under which we may indemnify them against claims relating to their participation in the transactions. | |
The nature and terms of these indemnification obligations vary from contract to contract, and generally a maximum obligation is not stated within the agreements. We hold insurance policies that mitigate potential losses arising from certain types of indemnification obligations. Management does not deem these obligations to be significant to our financial position, results of operations or cash flows and, therefore, no related liabilities were recorded as of March 31, 2015. | |
Legal Matters | |
In 2004, we were sued in the Southern District of New York by BioSig Instruments, Inc. for alleged patent infringement in connection with our incorporation of heart rate monitors into certain cardio products. No significant activity in the litigation occurred until 2008. In 2012, the United States District Court granted summary judgment to us on grounds that BioSig’s patents | |
were invalid as a matter of law. BioSig appealed the grant of summary judgment and, in April 2013, the United States Court of Appeals for the Federal Circuit reversed the District Court’s decision on summary judgment and remanded the case to the District Court for further proceedings. On January 10, 2014, the U.S. Supreme Court granted our petition for a writ of certiorari to address the legal standard applied by the Federal Circuit in determining whether the patents may be valid under applicable law. The case was argued before the Supreme Court on April 28, 2014. By decision dated June 2, 2014, the Supreme Court unanimously reversed the Federal Circuit, holding that its standard of when a patent may be “indefinite” was incorrect and remanding to the Federal Circuit for reconsideration under the correct standard. The remand hearing in the Federal Circuit was held on October 29, 2014. By decision dated April 27, 2015, the same panel of the Federal Circuit affirmed its earlier reversal of the District Court’s decision. Unless we elect to petition for a rehearing en banc in the Federal Circuit or for further review in the United States Supreme Court the case will be returned to the District Court for further proceedings. We are currently evaluating these procedural options. We do not believe that our use of heart rate monitors utilized or purchased from third parties, and otherwise, infringes the BioSig patents. | |
In August 2014, we initiated an arbitration proceeding under a 1999 license agreement pursuant to which we had licensed certain rights relating to our TreadClimber® products. We believe that our obligation to pay royalties under the license agreement ceased in the fourth quarter of 2013. The licensor disputes this and issued a notice under the contract claiming breach of the license agreement and asserting various remedies. We are seeking a declaratory ruling in the arbitration that we have performed all of our obligations under the license agreement, and that there is no continuing obligation for us to pay royalties. The licensor has asserted various counterclaims in the arbitration, including contract and intellectual property claims, and asserted various remedies, including termination of the license agreement. We replied to the counterclaim, denying the allegations and demanding remedies and asserting defenses. The arbitration is being administered by the American Arbitration Association and is in its preliminary stages. An arbitrator has been selected, however, a stay of the arbitration proceedings has been issued. | |
In addition to the matters described above, from time to time, we may be involved in various claims, lawsuits and other proceedings. These legal and tax proceedings involve uncertainty as to the eventual outcomes and losses which may be realized when one or more future events occur or fail to occur. | |
Litigation and jury verdicts are, to some degree, inherently unpredictable, and, although we have determined that a loss is not probable in connection with any current legal proceeding, it is reasonably possible that a loss may be incurred in connection with proceedings to which we are a party. Assessment of whether incurrence of a loss is probable, or a reasonable possibility, in connection with a particular proceeding, and estimation of the loss, or a range of loss, involves complex judgments and numerous uncertainties. Management is unable to estimate a range of reasonably possible losses related to litigation in its early stages, especially when the damages sought are indeterminate, or the legal and factual basis for the relevant claims have not been developed with specificity. As such, zero liability is recorded as of March 31, 2015. | |
We regularly monitor our estimated exposure to these contingencies and, as additional information becomes known, may change our estimates accordingly. We evaluate, on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would make a loss probable or reasonably possible, and whether the amount of a probable or reasonably possible loss is estimable. Among other factors, we evaluate the advice of internal and external counsel, the outcomes from similar litigation, current status of the lawsuits (including settlement initiatives), legislative developments and other factors. Due to the numerous variables associated with these judgments and assumptions, both the precision and reliability of the resulting estimates of the related loss contingencies are subject to substantial uncertainties. |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Discontinued Operations and Disposal Groups [Abstract] | ||||
Schedule of liabilities for exit costs related to discontinued operations | The following table summarizes liabilities for exit costs related to discontinued operations, included in Accrued Liabilities and Other Long-Term Liabilities in our Condensed Consolidated Balance Sheets (in thousands): | |||
Facilities | ||||
Leases | ||||
Balance, December 31, 2014 | $ | 573 | ||
Adjustments | — | |||
Payments | (67 | ) | ||
Balance, March 31, 2015 | $ | 506 | ||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Assets measured at fair value on a recurring basis | Assets measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014 were as follows (in thousands): | ||||||||||||||||
March 31, 2015 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash Equivalents | |||||||||||||||||
Money market funds | $ | 10,630 | $ | — | $ | — | $ | 10,630 | |||||||||
Certificates of deposit(1) | — | 245 | — | 245 | |||||||||||||
Commercial paper | — | 1,000 | — | 1,000 | |||||||||||||
Corporate bonds | — | 2,029 | — | 2,029 | |||||||||||||
Variable-rate demand notes | — | — | — | — | |||||||||||||
Total Cash Equivalents | 10,630 | 3,274 | — | 13,904 | |||||||||||||
Available-for-Sale Securities | |||||||||||||||||
Certificates of deposit(1) | — | 21,318 | — | 21,318 | |||||||||||||
Commercial paper | — | 4,996 | — | 4,996 | |||||||||||||
Corporate bonds | — | 25,076 | — | 25,076 | |||||||||||||
Total Available-for-Sale Securities | — | 51,390 | — | 51,390 | |||||||||||||
Total assets measured at fair value | $ | 10,630 | $ | 54,664 | $ | — | $ | 65,294 | |||||||||
(1) All certificates of deposit are within current FDIC insurance limits. | |||||||||||||||||
31-Dec-14 | |||||||||||||||||
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 | |||||||||
(1) All certificates of deposit are within current FDIC insurance limits. |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Schedule of Inventories, Net of Valuation Allowances | Inventories consisted of the following (in thousands): | |||||||
As of | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Finished goods | $ | 18,660 | $ | 23,765 | ||||
Parts and components | 1,306 | 1,131 | ||||||
Total inventories | $ | 19,966 | $ | 24,896 | ||||
Property_Plant_and_Equipment_T
Property, Plant, and Equipment (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): | |||||||||||
Estimated | As of | |||||||||||
Useful Life | ||||||||||||
(in years) | March 31, 2015 | December 31, 2014 | ||||||||||
Automobiles | 5 | $ | 23 | $ | 23 | |||||||
Leasehold improvements | 5 | to | 20 | 2,159 | 2,144 | |||||||
Computer software and equipment | 3 | to | 7 | 25,550 | 25,397 | |||||||
Machinery and equipment | 3 | to | 5 | 6,724 | 6,709 | |||||||
Furniture and fixtures | 5 | 1,104 | 1,108 | |||||||||
Work in progress(1) | N/A | 861 | 421 | |||||||||
Total cost | 36,421 | 35,802 | ||||||||||
Accumulated depreciation | (26,756 | ) | (26,168 | ) | ||||||||
Total property, plant and equipment, net | $ | 9,665 | $ | 9,634 | ||||||||
(1) Work in progress includes production tooling and internal use software development. |
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Schedule of Goodwill and Other Intangible Assets | The rollforward of goodwill was as follows (in thousands): | |||||||||||
Balance, January 1, 2014 | $ | 2,740 | ||||||||||
Currency exchange rate adjustment | (220 | ) | ||||||||||
Balance, December 31, 2014 | 2,520 | |||||||||||
Currency exchange rate adjustment | (202 | ) | ||||||||||
Balance, March 31, 2015 | $ | 2,318 | ||||||||||
Other Intangible Assets | ||||||||||||
Other intangible assets consisted of the following (in thousands): | ||||||||||||
Estimated | As of | |||||||||||
Useful Life | ||||||||||||
(in years) | March 31, 2015 | December 31, 2014 | ||||||||||
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 | (16,921 | ) | (16,631 | ) | ||||||||
Other intangible assets, net | $ | 10,285 | $ | 10,575 | ||||||||
Amortization Expense | Amortization expense was as follows (in thousands): | |||||||||||
Three Months Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Patent amortization | $ | 290 | $ | 510 | ||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future amortization of patents is as follows (in thousands): | |||||||||||
Remainder of 2015 | $ | 538 | ||||||||||
2016 | 430 | |||||||||||
2017 | 143 | |||||||||||
2018 | 65 | |||||||||||
2019 | 35 | |||||||||||
Thereafter | 22 | |||||||||||
$ | 1,233 | |||||||||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Payables and Accruals [Abstract] | ||||||||
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): | |||||||
As of | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Payroll and related liabilities | $ | 3,632 | $ | 5,058 | ||||
Other | 5,508 | 4,793 | ||||||
Total accrued liabilities | $ | 9,140 | $ | 9,851 | ||||
Product_Warranties_Tables
Product Warranties (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Product Warranties Disclosures [Abstract] | |||||||||
Schedule of Product Warranty Liability | Changes in our product warranty obligations were as follows (in thousands): | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Balance, beginning of period | $ | 2,246 | $ | 1,638 | |||||
Accruals | 815 | 921 | |||||||
Payments | (564 | ) | (576 | ) | |||||
Balance, end of period | $ | 2,497 | $ | 1,983 | |||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Equity [Abstract] | ||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables set forth the changes in accumulated other comprehensive income (loss), net of tax (in thousands): | |||||||||||
Unrealized Loss on Available-for-Sale Securities | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||
Balance, December 31, 2014 | $ | (18 | ) | $ | (290 | ) | $ | (308 | ) | |||
Current period other comprehensive loss | (1 | ) | (484 | ) | (485 | ) | ||||||
Balance, March 31, 2015 | $ | (19 | ) | $ | (774 | ) | $ | (793 | ) | |||
Unrealized Loss on Available-for-Sale Securities | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Income (Loss) | ||||||||||
Balance, December 31, 2013 | $ | — | $ | 244 | $ | 244 | ||||||
Current period other comprehensive loss | (13 | ) | (164 | ) | (177 | ) | ||||||
Balance, March 31, 2014 | $ | (13 | ) | $ | 80 | $ | 67 | |||||
Income_Per_Share_Tables
Income Per Share (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Earnings Per Share [Abstract] | |||||||
Schedule of Weighted Average Number of Shares Outstanding Used to Compute Income Per Share | The weighted average numbers of shares outstanding used to compute income per share were as follows (in thousands): | ||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Shares used to calculate basic income per share | 31,396 | 31,172 | |||||
Dilutive effect of outstanding stock options, performance stock units and restricted stock units | 371 | 378 | |||||
Shares used to calculate diluted income per share | 31,767 | 31,550 | |||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The weighted average numbers of shares outstanding listed in the table below were anti-dilutive and excluded from the computation of diluted income per share because, in the case of stock options, the average market price did not exceed the exercise price, and for the performance stock units, because these shares are subject to performance conditions that had not been met. These shares may be dilutive potential common shares in the future (in thousands): | ||||||
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Stock options | 25 | 320 | |||||
Performance stock units | 163 | 84 | |||||
Segment_and_Enterprisewide_Inf1
Segment and Enterprise-wide Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Summary Information by Reportable Segments | Following is summary information by reportable segment (in thousands): | ||||||||
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Net sales: | |||||||||
Direct | $ | 74,057 | $ | 50,735 | |||||
Retail | 21,290 | 20,103 | |||||||
Unallocated royalty income | 892 | 1,065 | |||||||
Consolidated net sales | $ | 96,239 | $ | 71,903 | |||||
Contribution: | |||||||||
Direct | $ | 19,571 | $ | 10,352 | |||||
Retail | 1,500 | 2,509 | |||||||
Unallocated royalty income | 892 | 1,065 | |||||||
Consolidated contribution | $ | 21,963 | $ | 13,926 | |||||
Reconciliation of consolidated contribution to income from continuing operations: | |||||||||
Consolidated contribution | $ | 21,963 | $ | 13,926 | |||||
Amounts not directly related to segments: | |||||||||
Operating expenses | (4,358 | ) | (4,925 | ) | |||||
Other expense, net | (77 | ) | (60 | ) | |||||
Income tax expense | (6,669 | ) | (3,193 | ) | |||||
Income from continuing operations | $ | 10,859 | $ | 5,748 | |||||
Discontinued_Operations_Detail
Discontinued Operations (Details) (Facilities Leases, USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Facilities Leases | |
Restructuring Reserve [Roll Forward] | |
Balance, December 31, 2014 | $573 |
Adjustments | 0 |
Payments | -67 |
Balance, March 31, 2015 | $506 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Fair Value, Measurements, Recurring, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | $13,904 | $24,068 |
Available for Sale Securities | 51,390 | 26,984 |
Assets measured at fair value | 65,294 | 51,052 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 10,630 | 2,591 |
Available for Sale Securities | 0 | 0 |
Assets measured at fair value | 10,630 | 2,591 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 3,274 | 21,477 |
Available for Sale Securities | 51,390 | 26,984 |
Assets measured at fair value | 54,664 | 48,461 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Available for Sale Securities | 0 | 0 |
Assets measured at fair value | 0 | 0 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 10,630 | 2,591 |
Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 10,630 | 2,591 |
Money market funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Money market funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 1,000 | 12,497 |
Available for Sale Securities | 4,996 | |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Available for Sale Securities | 0 | |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 1,000 | 12,497 |
Available for Sale Securities | 4,996 | |
Commercial paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Available for Sale Securities | 0 | |
Variable-rate demand notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 8,000 |
Variable-rate demand notes | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Variable-rate demand notes | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 8,000 |
Variable-rate demand notes | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 245 | 980 |
Available for Sale Securities | 21,318 | 14,202 |
Certificates of deposit | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Available for Sale Securities | 0 | 0 |
Certificates of deposit | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 245 | 980 |
Available for Sale Securities | 21,318 | 14,202 |
Certificates of deposit | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Available for Sale Securities | 0 | 0 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 2,029 | |
Available for Sale Securities | 25,076 | 12,782 |
Corporate bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | |
Available for Sale Securities | 0 | 0 |
Corporate bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 2,029 | |
Available for Sale Securities | 25,076 | 12,782 |
Corporate bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | |
Available for Sale Securities | $0 | $0 |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Finished goods | $18,660 | $23,765 |
Parts and components | 1,306 | 1,131 |
Total inventories | $19,966 | $24,896 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $36,421 | $35,802 |
Accumulated depreciation | -26,756 | -26,168 |
Total property, plant and equipment, net | 9,665 | 9,634 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 23 | 23 |
Estimated Useful Life (in years) | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,159 | 2,144 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 5 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 20 years | |
Computer software and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 25,550 | 25,397 |
Computer software and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 3 years | |
Computer software and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 7 years | |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 6,724 | 6,709 |
Machinery and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 3 years | |
Machinery and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 5 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,104 | 1,108 |
Estimated Useful Life (in years) | 5 years | |
Work in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $861 | $421 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets Goodwill Roll Forward (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Goodwill [Roll Forward] | ||
Balance | $2,520 | $2,740 |
Currency exchange rate adjustment | -202 | -220 |
Balance | $2,318 | $2,520 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Other intangible assets: | ||
Indefinite-lived trademarks | 9,052 | $9,052 |
Patents | 18,154 | 18,154 |
Total other intangible assets, gross | 27,206 | 27,206 |
Accumulated amortization - patents | -16,921 | -16,631 |
Other intangible assets, net | 10,285 | $10,575 |
Patents | Minimum | ||
Other intangible assets: | ||
Estimated Useful Life (in years) | 8 years | |
Patents | Maximum | ||
Other intangible assets: | ||
Estimated Useful Life (in years) | 16 years |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets Patent amortization (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patent amortization | $290 | $510 |
Goodwill_and_Other_Intangible_5
Goodwill and Other Intangible Assets Future intangible amortization (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2015 | $538 |
2016 | 430 |
2017 | 143 |
2018 | 65 |
2019 | 35 |
Thereafter | 22 |
Finite-Lived Intangible Assets, Net | $1,233 |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Payroll and related liabilities | $3,632 | $5,058 |
Other | 5,508 | 4,793 |
Total accrued liabilities | $9,140 | $9,851 |
Product_Warranties_Details
Product Warranties (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Movement in Product Warranty Liability [Roll Forward] | ||
Balance, beginning of period | $2,246 | $1,638 |
Accruals | 815 | 921 |
Payments | -564 | -576 |
Balance, end of period | $2,497 | $1,983 |
Minimum | ||
Product Liability Contingency [Line Items] | ||
Product warranty period | 30 days |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | ($308) | $244 |
Current period other comprehensive loss | -485 | -177 |
Balance at end of period | -793 | 67 |
Unrealized Loss on Available-for-Sale Securities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | -18 | 0 |
Current period other comprehensive loss | -1 | -13 |
Balance at end of period | -19 | -13 |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | -290 | 244 |
Current period other comprehensive loss | -484 | -164 |
Balance at end of period | ($774) | $80 |
Income_Per_Share_Details
Income Per Share (Details) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income per share: | ||
Shares used to calculate basic income per share | 31,396 | 31,172 |
Dilutive effect of outstanding stock options, performance stock units and restricted stock units | 371 | 378 |
Shares used to calculate diluted income per share | 31,767 | 31,550 |
Stock options | ||
Income per share: | ||
Anti-dilutive securities excluded from computation of diluted income per share | 25 | 320 |
Performance stock units | ||
Income per share: | ||
Anti-dilutive securities excluded from computation of diluted income per share | 163 | 84 |
Stock_Repurchase_Program_Detai
Stock Repurchase Program (Details) (Common Stock, USD $) | 0 Months Ended | 3 Months Ended | |
Nov. 03, 2014 | Mar. 31, 2015 | Nov. 03, 2014 | |
Common Stock | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchase program, authorized amount | $15,000,000 | $15,000,000 | |
Stock repurchase program, period in force | 24 months | ||
Shares repurchased (shares) | 133,877 | ||
Average cost per share repurchased | $14.91 | ||
Shares repurchased (value) | 2,000,000 | ||
Remaining authorized repurchase amount | $13,000,000 |
Segment_and_Enterprisewide_Inf2
Segment and Enterprise-wide Information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
segment | ||
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 2 | |
Net sales | $96,239 | $71,903 |
Contribution | 21,963 | 13,926 |
Reconciliation of consolidated contribution to income (loss) from continuing operations: | ||
Operating expenses | -36,284 | -29,480 |
Income tax expense | -6,669 | -3,193 |
Income from continuing operations | 10,859 | 5,748 |
Direct | ||
Segment Reporting Information [Line Items] | ||
Net sales | 74,057 | 50,735 |
Contribution | 19,571 | 10,352 |
Retail | ||
Segment Reporting Information [Line Items] | ||
Net sales | 21,290 | 20,103 |
Contribution | 1,500 | 2,509 |
Unallocated royalty income | ||
Segment Reporting Information [Line Items] | ||
Net sales | 892 | 1,065 |
Contribution | 892 | 1,065 |
Reconciliation of consolidated contribution to income (loss) from continuing operations: | ||
Operating expenses | -4,358 | -4,925 |
Other expense, net | -77 | -60 |
Income tax expense | -6,669 | -3,193 |
Income from continuing operations | $10,859 | $5,748 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
Standby letters of credit outstanding | $0.60 |
Non-cancelable market-based purchase obligation | $20.50 |