Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 24, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | NAUTILUS, INC. | ||
Entity Central Index Key | 1,078,207 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 31,005,367 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 663,336,780 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current 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 | 0 | 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 | 0 |
Total current liabilities | 95,518 | 59,671 |
Warranty obligations, non-current | 3,792 | 0 |
Income taxes payable, non-current | 4,116 | 3,725 |
Deferred income tax liabilities, non-current | 18,380 | 0 |
Other long-term liabilities | 3,144 | 1,186 |
Note payable, non-current, net of unamortized debt issuance costs of $29 | 63,971 | 0 |
Total liabilities | $ 188,921 | $ 64,582 |
Commitments and contingencies (Note 20) | ||
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 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheet Parenthetical [Abstract] | ||
Allowance for Doubtful Accounts Receivable, Current | $ 918 | $ 108 |
Unamortized debt issuance costs | 7 | 0 |
Unamortized debt issuance costs, noncurrent | $ 29 | $ 0 |
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 31,005,000 | 31,333,000 |
Common stock, shares outstanding | 31,005,000 | 31,333,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
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 net income per share | |||
Basic income per share from continuing operations (in dollars per share) | $ 0.86 | $ 0.65 | $ 1.55 |
Basic income (loss) per share from discontinued operations (in dollars per share) | (0.01) | (0.05) | (0.01) |
Basic net income per share (in dollars per share) | 0.85 | 0.60 | 1.54 |
Diluted net income per share | |||
Diluted income per share from continuing operations (in dollars per share) | 0.85 | 0.64 | 1.53 |
Diluted income (loss) per share from discontinued operations (in dollars per share) | (0.01) | (0.05) | (0.01) |
Diluted net income per share (in dollars per share) | $ 0.84 | $ 0.59 | $ 1.52 |
Shares used in per share calculations: | |||
Basic (in shares) | 31,288 | 31,253 | 31,072 |
Diluted (in shares) | 31,589 | 31,688 | 31,457 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 26,602 | $ 18,795 | $ 47,954 |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Unrealized gain (loss) on marketable securities, net of income tax expense (benefit) of $1, $(11) and $0 | 2 | (18) | 0 |
Foreign currency translation adjustment, net of income tax expense of $17, $15 and $20 | (1,021) | (534) | (381) |
Current period other comprehensive income (loss) | (1,019) | (552) | (381) |
Comprehensive income | $ 25,583 | $ 18,243 | $ 47,573 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | $ 1 | $ (11) | $ 0 |
Foreign currency translation tax expense | $ 17 | $ 15 | $ 20 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2012 | $ 43,326 | $ 6,103 | $ 36,598 | $ 625 |
Balance, shares at Dec. 31, 2012 | 30,924 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 47,954 | 47,954 | ||
Unrealized gain on marketable securities, net of income tax expense of $1 | 0 | |||
Foreign currency translation adjustment, including income tax expense (benefit) | (381) | (381) | ||
Foreign currency translation tax expense | 20 | |||
Stock-based compensation expense | 454 | $ 454 | ||
Common stock issued under equity compensation plan, shares | 238 | |||
Common stock issued under equity compensation plan | 357 | $ 357 | ||
Tax benefit related to stock-based awards | (145) | $ (145) | ||
Balance, shares at Dec. 31, 2013 | 31,162 | |||
Balance at Dec. 31, 2013 | 91,565 | $ 6,769 | 84,552 | 244 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 18,795 | 18,795 | ||
Unrealized gain on marketable securities, net of income tax expense of $1 | (18) | (18) | ||
Foreign currency translation adjustment, including income tax expense (benefit) | (534) | (534) | ||
Foreign currency translation tax expense | 15 | |||
Stock-based compensation expense | 1,066 | $ 1,066 | ||
Common stock issued under equity compensation plan, shares | 171 | |||
Common stock issued under equity compensation plan | 378 | $ 378 | ||
Tax benefit related to stock-based awards | (180) | $ (180) | ||
Balance, shares at Dec. 31, 2014 | 31,333 | |||
Balance at Dec. 31, 2014 | 111,072 | $ 8,033 | 103,347 | (308) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 26,602 | 26,602 | ||
Unrealized gain on marketable securities, net of income tax expense of $1 | 2 | 2 | ||
Foreign currency translation adjustment, including income tax expense (benefit) | (1,021) | (1,021) | ||
Foreign currency translation tax expense | 17 | |||
Stock-based compensation expense | 1,484 | $ 1,484 | ||
Common stock issued under equity compensation plan, shares | 377 | |||
Common stock issued under equity compensation plan | 275 | $ 275 | ||
Common stock issued under employee stock purchase plan, shares | 7 | |||
Common stock issued under employee stock purchase plan | 116 | $ 116 | ||
Tax benefit related to stock-based awards | 28 | $ 28 | ||
Repurchased shares, in shares | (712) | |||
Repurchased shares | (11,567) | $ (9,140) | (2,427) | |
Balance, shares at Dec. 31, 2015 | 31,005 | |||
Balance at Dec. 31, 2015 | $ 126,991 | $ 796 | $ 127,522 | $ (1,327) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 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 | 0 | 0 | 116 |
Proceeds from other asset sales | 0 | 0 | 5 |
Acquisition of business, net of cash acquired | (114,062) | 0 | 0 |
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) | 0 |
Proceeds from maturities of available-for-sale securities | 55,292 | 10,450 | 0 |
Proceeds from sales of available-for-sale securities | 3,602 | 0 | 0 |
Net cash used in investing activities | (122,835) | (30,165) | (3,469) |
Cash flows from financing activities: | |||
Proceeds from long-term debt | 80,000 | 0 | 0 |
Proceeds from employee stock purchases | 116 | 0 | 0 |
Tax payments related to stock award issuances | 1,050 | 378 | 357 |
Excess tax benefit (deficiency) related to stock-based awards | (775) | 0 | 0 |
Excess tax benefit (deficiency) related to stock-based awards | 28 | (180) | (145) |
Payments for stock repurchases | (11,567) | 0 | 0 |
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 |
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) |
Acquisition consideration owed but not yet paid | 2,813 | 0 | 0 |
Capital expenditures incurred but not yet paid | 1,000 | 86 | 0 |
Loan fees incurred but not yet paid | $ 36 | $ 0 | $ 0 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Organization and Business Nautilus, Inc. and subsidiaries (collectively, "Nautilus" or the "Company") was founded in 1986 and incorporated in the State of Washington in 1993. Our headquarters are located in Vancouver, Washington. We are committed to providing innovative, quality solutions to help people achieve their fitness goals through a fit and healthy lifestyle. Our principal business activities include designing, developing, sourcing and marketing high-quality cardio and strength fitness products and related accessories for consumer use, primarily in the United States and Canada, but also in international markets outside North America. Our products are sold under some of the most-recognized brand names in the fitness industry: Nautilus ® , Bowflex ® , Octane Fitness ® , Schwinn ® and Universal ® . We market our products through two distinct distribution channels, Direct and Retail, which we consider to be separate business segments. Our Direct business offers products directly to consumers through television advertising, catalogs and the Internet. Our Retail business offers our products through a network of independent retail companies with stores and websites located in the United States and internationally. We also derive a portion of our revenue from the licensing of our brands and intellectual property. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and relate to Nautilus, Inc. and its subsidiaries, all of which are wholly-owned, directly or indirectly. Intercompany transactions and balances have been eliminated in consolidation. Discontinued Operations Results from discontinued operations relate to the disposal of our former Commercial business, which began in 2009 and was completed in April 2011. We reached substantial completion of asset liquidation at December 31, 2012. However, we continue to have legal and accounting expenses as we work with authorities on final deregistration of each entity and product liability and other legal expenses associated with product previously sold into the Commercial channel. Results of operations related to the Commercial business have been presented in the consolidated financial statements as discontinued operations for all periods presented. Use of Estimates 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, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities in the financial statements. Our most significant estimates relate to the following: • 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. Actual results could differ from our estimates. Concentrations Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents held in bank accounts in excess of federally-insured limits and trade receivables. Trade receivables are generally unsecured and therefore collection is affected by the economic conditions in each of our principal markets. We rely on third-party contract manufacturers in Asia for substantially all of our products and for certain product engineering support. Business operations could be disrupted by natural disasters, difficulties in transporting products from non-U.S. suppliers, as well as political, social or economic instability in the countries where contract manufacturers or their vendors or customers conduct business. While any such contract manufacturing arrangement could be replaced over time, the temporary loss of the services of any primary contract manufacturer could delay product shipments and cause a significant disruption in our operations. We derive a significant portion of our net sales from a small number of our Retail customers. A loss of business from one or more of these large customers, if not replaced with new business, would negatively affect our operating results and cash flows. In each of 2015 , 2014 and 2013 , one customer accounted for more than 10% , but less than 15% , of our net sales. Cash and Cash Equivalents All highly liquid investments with maturities of three months or less at purchase are considered to be cash equivalents. As of December 31, 2015 , cash equivalents consisted of money market funds and corporate bonds and totaled $0.7 million . Our cash equivalents as of December 31, 2014 consisted of money market funds, certificates of deposit, commercial paper, and variable-rate demand notes and totaled $24.1 million . Available-For-Sale Securities We classify our marketable securities as available-for-sale and, accordingly, record them at fair value. Marketable securities with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Unrealized holding gains and losses, which are immaterial, are excluded from earnings and are reported net of tax in other comprehensive income until realized. Dividend and interest income is recognized when earned. Realized gains and losses, which were not material in 2015 or 2014 , are included in earnings and are derived using the specific identification method for determining the cost of securities sold. We periodically evaluate whether declines in fair values of our investments below their cost are "other-than-temporary." This evaluation consists of qualitative and quantitative factors regarding the severity and duration of the unrealized loss, as well as our ability and intent to hold the investment until a forecasted recovery occurs. For additional information, refer to Note 4, Fair Value Measurements . 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 acquired from Octane as of December 31, 2015 have been recorded at provisional fair values. For additional information, see Note 2, Business Acquisition . Property, Plant and Equipment Property, plant and equipment is stated at cost, net of accumulated depreciation. Improvements or betterments which add new functionality or significantly extend the life of an asset are capitalized. Expenditures for maintenance and repairs are expensed as incurred. The cost of assets retired, or otherwise disposed of, and the related accumulated depreciation, are removed from the accounts at the time of disposal. Gains and losses resulting from asset sales and dispositions are recognized in the period in which assets are disposed. Depreciation is recognized, using the straight-line method, over the lesser of the estimated useful lives of the assets or, in the case of leasehold improvements, the lease term, including renewal periods if we expect to exercise our renewal options. Depreciation on computer equipment, machinery and equipment and furniture and fixtures is determined based on estimated useful lives, which generally range from three -to- seven years. Property, plant and equipment acquired from Octane as of December 31, 2015 have been recorded at provisional fair values. For additional information, see Note 2, Business Acquisition . Goodwill Goodwill consists of the excess of acquisition costs over the fair values of net assets acquired in business combinations. We review goodwill for impairment in the fourth quarter of each year and when events or changes in circumstances indicate that the carrying amount may be impaired. For this purpose, goodwill is evaluated at the reporting unit level. Our goodwill asset related to our Canadian subsidiary is attributable to our Direct reporting unit, and our goodwill related to the Octane acquisition is attributable to our Retail reporting unit. We performed an assessment of goodwill in the fourth quarters of 2015 , 2014 and 2013 and concluded that circumstances did not more likely than not indicate an impairment had occurred. For further information regarding goodwill, see Note 8, Goodwill . Other Intangible Assets Definite-lived intangible assets, primarily acquired trade names, customer relationships, patents and patent rights, are stated at cost, net of accumulated amortization. We recognize amortization expense for our definite-lived intangible assets on a straight-line basis over the estimated useful lives. Indefinite-lived intangible assets consist of acquired trademarks, specifically trade names. Indefinite-lived intangible assets are stated at cost and are not amortized; instead, they are tested for impairment at least annually. We review our acquired trademarks for impairment in the fourth quarter of each year and when events or changes in circumstances indicate that the assets may be impaired. The fair value of trademarks is estimated using the relief from royalty method to estimate the value of the cost savings and a discounted cash flows method to estimate the value of future income. The sum of these two values for each trademark is the fair value of the trademark. If the carrying amount of trademarks exceeds the estimated fair value, we calculate impairment as the excess of carrying amount over the estimate of fair value. We tested our acquired trademarks for impairment in the fourth quarters of 2015 , 2014 and 2013 and determined that no impairment was indicated. For further information regarding other intangible assets, see Note 9, Other Intangible Assets . Other intangible assets acquired from Octane as of December 31, 2015 have been recorded at provisional fair values. For additional information, see Note 2, Business Acquisition . Impairment of Long-Lived Assets Long-lived assets, including property, plant and equipment and definite-lived intangible assets, are evaluated for impairment when events or circumstances indicate the carrying value may be impaired. When such an event or condition occurs, we estimate the future undiscounted cash flows to be derived from the use and eventual disposition of the asset to determine whether a potential impairment exists. If the carrying value exceeds estimated future undiscounted cash flows, we record impairment expense to reduce the carrying value of the asset to its estimated fair value. No impairment charges were recorded in 2015 , 2014 or 2013 . Revenue Recognition Direct and Retail product sales and shipping revenues are recorded when products are shipped and title passes to customers. In most instances, Retail sales to customers are made pursuant to a sales contract that provides for transfer of both title and risk of loss to the customer upon our delivery to the carrier. For Direct sales, revenue is generally recognized when products are shipped. Revenue is recognized net of applicable sales incentives, such as promotional discounts, rebates and return allowances. We estimate the revenue impact of incentive programs based on the planned duration of the program and historical experience. Many Direct business customers finance their purchases through a third-party credit provider, for which we pay a commission or financing fee to the credit provider. Revenue for such transactions is recognized based on the sales price charged to the customer and the related commission or financing fee is included in selling and marketing expense. Sales Discounts and Returns Allowance Product sales and shipping revenues are reported net of promotional discounts and return allowances. We estimate the revenue impact of retail sales incentive programs based on the planned duration of the program and historical experience. If the amount of sales incentives is reasonably estimable, the impact of such incentives is recorded at the later of the time the customer is notified of the sales incentive or the time of the sale. We estimate our liability for product returns based on historical experience and record the expected obligation as a reduction of revenue. If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. Activity in our sales discounts and returns allowance was as follows (in thousands): 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 Taxes Collected from Customers and Remitted to Governmental Authorities Taxes collected from customers and remitted to governmental authorities are recorded on a net basis and excluded from net sales. Shipping and Handling Fees Shipping and handling fees billed to customers are recorded net of discounts and included in both net sales and cost of sales. Cost of Sales Cost of sales primarily consists of: inventory costs; royalties paid to third parties; employment and occupancy costs of warehouse and distribution facilities, including depreciation of improvements and equipment; transportation expenses; product warranty expenses; distribution information systems expenses; and allocated expenses for shared administrative functions. Product Warranty Obligations Our products carry 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. Litigation and Loss Contingencies 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. We record expenses for litigation and loss contingencies as a component of general and administrative expense when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When a loss contingency is not both probable and estimable, we do not establish an accrued liability. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then we disclose an estimate of the possible loss or range of loss, if such estimate can be made, or disclose that an estimate cannot be made. Advertising and Promotion We expense our advertising and promotion costs as incurred. Production costs of television advertising commercials are recorded as prepaid expenses until the initial broadcast, at which time such costs are expensed. Advertising and promotion costs are included in selling and marketing expenses and totaled $54.8 million , $42.6 million and $35.8 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Prepaid advertising and promotion costs were $1.5 million and $1.4 million as of December 31, 2015 and 2014 , respectively. Research and Development Internal research and development costs, which primarily consist of salaries and wages, employee benefits, expenditures for materials, and fees to use licensed technologies, are expensed as incurred. Third party research and development costs for products under development or being researched, if any, are expensed as the contracted work is performed. Income Taxes We account for income taxes based on the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when the temporary differences are expected to be included, as income or expense, in the applicable tax return. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the enactment. Valuation allowances are provided against deferred income tax assets if we determine it is more likely than not that such assets will not be realized. Unrecognized Tax Benefits We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained based on the technical merits of the position upon examination, including resolutions of any related appeals or litigation. We recognize tax-related interest and penalties as a component of income tax expense. Foreign Currency Translation We translate the accounts of our non-U.S. subsidiaries into U.S. dollars as follows: revenues, expenses, gains and losses are translated at weighted-average exchange rates during the year; and assets and liabilities are translated at the exchange rate on the balance sheet date. Translation gains and losses are reported in our consolidated balance sheets as a component of accumulated other comprehensive income. Gains and losses arising from foreign currency transactions, including transactions between us and our non-U.S. subsidiaries, are recorded as a component of other income (expense) in our consolidated statements of operations. Fair Value of Financial Instruments The carrying values of cash and cash equivalents, trade receivables, prepaids and other current assets, trade payables and accrued liabilities approximate fair value due to their short maturities. For additional information on financial instruments recorded at fair value on a recurring basis as of December 31, 2015 and 2014 , refer to Note 4, Fair Value Measurements . Stock-Based Compensation We recognize stock-based compensation expense on a straight-line basis over the applicable vesting period, based on the grant-date fair value of the award. To the extent a stock-based award is subject to performance conditions, the amount of expense recorded in a given period, if any, reflects our assessment of the probability of achieving the performance targets. Fair value of stock options is estimated using the Black-Scholes-Merton option valuation model; fair value of performance share unit ("PSU") awards, restricted stock unit ("RSU") awards and restricted stock awards ("RSA") is based on the closing market price on the day preceding the grant. We estimate future forfeitures, at the time of grant and in subsequent periods, based on historical turnover rates, previous forfeiture experience and changes in the business or key personnel that would suggest future forfeitures may differ from historical data. We recognize compensation expense for only those stock options and other stock-based awards that are expected to vest. We reevaluate estimated forfeitures monthly and, if applicable, recognize a cumulative effect adjustment in the period of the change if the revised estimate of the impact of forfeitures differs significantly from the previous estimate. Income Per Share Amounts Basic income per share amounts were computed using the weighted average number of common shares outstanding. Diluted income 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. New Accounting Pronouncements ASU 2016-02 In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)." ASU 2016-02 replaces the existing guidance in Accounting Standards Codification ("ASC") 840, Leases. The new standards would require companies and other organizations to include lease obligations on their balance sheets, including a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use ("ROU") asset and a corresponding lease liability. For finance leases the lessee would recognize interest expense and amortization of the ROU asset, and for operating leases the lessee would recognize a straight-line total lease expense. ASU 2016-02 is effective for public companies' annual periods, and interim periods within those fiscal years, beginning after December 15, 2018. We are currently evaluating any potential impact that adoption of ASU 2016-02 may have on our financial position, results of operations and cash flows. ASU 2015-17 In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes." ASU 2015-17 simplifies the presentation of deferred income taxes, and requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments apply to all entities that present a classified statement of financial position, and aligns the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards ("IFRS") IAS 1. ASU 2015-17 is effective for public companies' financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We do not expect the adoption of ASU 2015-17 to have a material effect on our financial position, results of operations or cash flows. ASU 2015-11 In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory (Topic 330).” ASU 2015-11 simplifies the accounting for the valuation of all inventory not accounted for using the last-in, first-out (“LIFO”) method by prescribing inventory be valued at the lower of cost and net realizable value. ASU 2015-11 is effective for public companies' annual periods, including interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. Early adoption is permitted. We do not expect the adoption of ASU 2015-11 to have a material effect on our financial position, results of operations or cash flows. ASU 2015-05 In April 2015, the FASB issued ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40).” ASU 2015-05 provides guidance regarding the accounting for a customer's fees paid in a cloud computing arrangement, specifically about whether a cloud computing arrangement includes a software license, and if so, how to account for the software license. ASU 2015-05 is effective for public companies' annual periods, including interim periods, beginning after December 15, 2015. Early adoption is permitted. We do not expect the adoption of ASU 2015-05 to have a material 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, as amended, for annual and interim periods beginning on or after December 15, 2017. 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 was effective for annual periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015. Our adoption of ASU 2014-08 in January 2015 did not have a material effect on our financial position, results of operations or cash flows. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Acquisition | BUSINESS ACQUISITION On December 31, 2015, we acquired all of the outstanding capital stock of OF Holdings, Inc., sole parent of Octane Fitness, LLC ("Octane" or "Octane Fitness") for an aggregate base purchase price of $115.0 million , plus net adjustments for working capital and cash acquired on the closing date. We funded the acquisition through an $80.0 million term loan and cash on hand. Based in Brooklyn Park, Minnesota, Octane is a leader in zero-impact training with a line of fitness equipment focused on Retail specialty and commercial channels. The acquisition of Octane is expected to strengthen and diversify our brand portfolio, broaden our distribution and deepen our talent pool. Octane's business is anticipated to be highly complementary to our existing business from both product and channel perspectives and create numerous revenue synergies for us. Since the acquisition occurred on December 31, no amount of net sales or net income related to the Octane business were included in our reported 2015 amounts. We expect to categorize Octane's results of operations in our Retail segment. Total acquisition costs incurred through December 31, 2015 were $0.6 million and were expensed in general and administrative costs. Purchase Price Allocation Acquired assets and liabilities were recorded at estimated fair value as of the acquisition date. The excess of the purchase price over the estimated fair value of identifiable net assets resulted in the recognition of goodwill of $58.4 million , all of which was assigned to the Retail segment, and is attributed primarily to Octane's intellectual property base, benefits of access to different markets and customers, and employee workforce. The goodwill is not expected to be deductible for income tax purposes. The goodwill was determined on the basis of the provisional fair values of the assets and liabilities identified as of the acquisition date. It may be adjusted, within a period of no more than 12 months from the acquisition date, if the provisional fair values change as a result of circumstances existing at the acquisition date. Such fair value adjustments may arise in respect to intangible assets, inventories, and property, plant and equipment, upon completion of the necessary valuations and physical verifications of such assets. The amount of deferred taxes may also be adjusted during the measurement period. As of December 31, 2015, the fair values of the assets acquired and liabilities assumed for the acquisition of Octane are provisional because final appraisals and/or valuations have not yet been completed. The following table summarizes the preliminary fair values of the net assets acquired and liabilities assumed, net of any working capital and other adjustments, as of December 31, 2015 (in thousands): 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 The following table sets forth the components of identifiable intangible assets and their estimated fair values and useful lives as of December 31, 2015 (dollars in thousands): 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 Summary of Unaudited Pro Forma Information The following table reflects the unaudited pro forma consolidated results of operations for the period presented, as though the acquisition of Octane had occurred on January 1, 2014 (in thousands): (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 The unaudited pro forma financial information is presented for illustrative purposes only and is not indicative of the results of operations that would have been realized if the acquisition had been completed on the date indicated, nor is it indicative of future operating results. The pro forma results do not include, for example, the effects of anticipated synergies from combining the two companies. |
Discontinued Operation
Discontinued Operation | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operation | DISCONTINUED OPERATIONS Following is a summary of certain financial information regarding our discontinued operations (in thousands): 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 ) The following table summarizes liabilities for exit costs related to discontinued operations, included in accrued liabilities and other long-term liabilities in our consolidated balance sheets (in thousands): 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 We expect the lease obligations to be paid out through 2016 . |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 12 Months Ended |
Dec. 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 December 31, 2015 and 2014 were as follows (in thousands): 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 (1) All certificates of deposit are within current FDIC insurance limits. 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 year ended December 31, 2015 . We did not have any changes to our valuation techniques during the year ended December 31, 2015 . We classify our marketable securities as available-for-sale and, accordingly, record them at fair value. Level 1 investment valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 investment 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 other comprehensive income until realized. During the years ended December 31, 2015 and 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. 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. Other than our annual goodwill and indefinite-lived trade names impairment valuations effective as of October 1, 2015 and 2014 , we did not perform any valuations on assets or liabilities that are valued at fair value on a nonrecurring basis. The carrying value of our term loan approximates its fair value and falls under Level 2 of the fair value hierarchy, as the interest rate is variable and based on current market rates. |
Trade Receivables
Trade Receivables | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Trade Receivables | TRADE RECEIVABLES Trade receivables, net, consisted of the following (in thousands): December 31, 2015 2014 Trade receivables $ 46,073 $ 26,368 Allowance for doubtful accounts (918 ) (108 ) $ 45,155 $ 26,260 Changes in our allowance for doubtful trade receivables were as follows (in thousands): 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 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories consisted of the following (in thousands): December 31, 2015 2014 Finished goods $ 39,115 $ 23,765 Parts and components 3,614 1,131 $ 42,729 $ 24,896 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 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 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 (1) Work in progress includes computer hardware and software and production tooling construction in progress. Depreciation expense was as follows (in thousands): Year Ended December 31, 2015 2014 2013 Depreciation expense $ 2,558 $ 1,983 $ 1,254 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL The rollforward of goodwill was as follows (in thousands): 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 |
Other Intangible Assets
Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | OTHER INTANGIBLE ASSETS Other intangible assets consisted of the following (in thousands): 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 Amortization expense was as follows (in thousands): Year Ended December 31, 2015 2014 2013 Amortization expense $ 854 $ 2,040 $ 2,050 Future amortization of definite-lived intangible assets is as follows (in thousands): 2016 $ 3,553 2017 3,255 2018 3,162 2019 3,132 2020 3,106 Thereafter 25,094 $ 41,302 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following (in thousands): December 31, 2015 2014 Payroll and related liabilities $ 6,556 $ 5,058 Other 6,471 4,793 $ 13,027 $ 9,851 |
Product Warranties
Product Warranties | 12 Months Ended |
Dec. 31, 2015 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | PRODUCT WARRANTIES Changes in our product warranty obligations were as follows (in thousands): 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 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS Term Loan and Line of Credit On December 31, 2015 we entered into an amendment (the “Amendment”) to our existing Credit Agreement, dated December 5, 2014, with JPMorgan Chase Bank, N.A. (“Chase Bank”) that provided for an $80 million term loan to finance the acquisition described in Note 2, Business Acquisition , above (the “Term Loan”). The Term Loan and our existing $20 million revolving line of credit with Chase Bank are secured by substantially all of the assets of Nautilus. The Term Loan matures on December 31, 2020. The Amendment also extended the maturity date of our existing revolving line of credit to December 31, 2020. The Credit Agreement, as amended, contains customary covenants, including minimum fixed charge coverage ratio and funded debt to EBITDA ratio, and limitations on capital expenditures, mergers and acquisitions, indebtedness, liens, dispositions, dividends and investments. The Credit Agreement also contains customary events of default. Upon an event of default, the lender may terminate its credit line commitment, accelerate all outstanding obligations and exercise its remedies under the continuing security agreement. Borrowing availability under the Credit Agreement is subject to our compliance with certain financial and operating covenants at the time borrowings are requested. Letters of credit under the Credit Agreement are treated as a reduction of the available borrowing amount and are subject to covenant testing. The interest rate applicable to the Term Loan and to each advance under the revolving line of credit is based on either Chase Bank's floating prime rate or adjusted LIBOR, plus an applicable margin. As of December 31, 2015 , our borrowing rate for the Term Loan and line of credit advances was 1.68% . As of December 31, 2015 , we had outstanding borrowings of $80.0 million on our term loan and $0.5 million in letters of credit issued under the Credit Agreement with expiration dates through April 2016 . As of December 31, 2015 , we were in compliance with the financial covenants of the Credit Agreement and approximately $19.5 million was available for borrowing under the line of credit. Maturities of our Term Loan over the next five years are as follows (in thousands): 2016 $ 16,000 2017 16,000 2018 16,000 2019 16,000 2020 16,000 $ 80,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income Tax Expense Income from continuing operations before income taxes was as follows (in thousands): 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 Income tax expense (benefit) from continuing operations was as follows (in thousands): Year Ended December 31, 2015 2014 2013 Current: U.S. federal $ 858 $ 1,086 $ 541 U.S. state 171 100 56 Non-U.S. 355 222 (12 ) Total current 1,384 1,408 585 Deferred: U.S. federal 11,324 8,913 (29,552 ) U.S. state 573 (558 ) (3,370 ) Non-U.S. (62 ) 78 252 Total deferred 11,835 8,433 (32,670 ) $ 13,219 $ 9,841 $ (32,085 ) Following is a reconciliation of the U.S. statutory federal income tax rate with our effective income tax rate for continuing operations: 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 )% Deferred Income Taxes Individually significant components of deferred income tax assets and liabilities were as follows (in thousands): 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 Our net deferred income tax assets (liabilities) were recorded on our consolidated balance sheets as follows (in thousands): 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 The table of deferred tax assets and liabilities shown above does not include certain deferred tax assets as of December 31, 2015 and 2014, that arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting. Instead, equity will be increased by $1.4 million if and when such deferred tax assets are ultimately realized. We use FASB ASC 740 ordering for purposes of determining when excess tax benefits have been realized. We account for income taxes based on the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. We have recorded a valuation allowance to reduce our deferred income tax assets to the amount we believe is more likely than not to be realized. Evaluating the need for, and amount of, a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence on a jurisdiction-by-jurisdiction basis. Such judgments require us to interpret existing tax law and other published guidance as applied to our circumstances. As part of this assessment, we consider both positive and negative evidence. The weight given to the potential effect of positive and negative evidence must be commensurate with the extent to which the strength of the evidence can be objectively verified. Each quarter, we assess the total weight of positive and negative evidence including cumulative income or loss for the past three years and forecasted taxable income and re-evaluate whether any adjustments or release of all or any portion of valuation allowance is appropriate. As a result of this evaluation, in 2014, we determined that a portion of the existing valuation allowance against the state net operating loss deferred tax assets was no longer necessary. Accordingly, an income tax benefit of $1.2 million was recorded in the fourth quarter of 2014 related to the reduction of our existing valuation allowance. Further, in the fourth quarter of 2015, after re-evaluating the potential realization of the remainder of our deferred income tax assets, we concluded that, as of December 31, 2015, the existing valuation allowance against the foreign tax credit deferred tax assets as well as the substantially all of the remaining valuation allowance against the state net operating loss deferred tax assets were no longer necessary. As such, an income tax benefit of $2.4 million was recorded in the fourth quarter of 2015 related to the reduction of our existing valuation allowance. As of December 31, 2015, we have a valuation allowance against net deferred income tax assets of $0.9 million . Of the remaining valuation allowance, $0.6 million primarily relates to domestic tax credit carryforwards as we currently do not anticipate generating the income of appropriate character to utilize those credits. The remainder of $0.3 million relates to foreign net operating loss carryforwards. Should it be determined in the future that it is more likely than not that our domestic deferred income tax assets will be realized, an additional valuation allowance would be released during the period in which such an assessment is made. There have been no material changes to our foreign operations since December 31, 2014 and, accordingly, we maintain our existing valuation allowance on foreign deferred income tax assets in such jurisdictions at December 31, 2015. Income Tax Carryforwards As of December 31, 2015 , we had the following income tax carryforwards (in millions): 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 As previously mentioned, the table of tax attributes shown above does not include deferred tax assets created by, and associated with, excess tax benefits arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting. The timing and manner in which we are permitted to utilize our net operating loss carryforwards may be limited by Internal Revenue Code Section 382, Limitation on Net Operating Loss Carry-forwards and Certain Built-in-Losses Following Ownership Change . Unrecognized Tax Benefits Following is a reconciliation of gross unrecognized tax benefits from uncertain tax positions, excluding the impact of penalties and interest (in thousands): 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 Of the $2.5 million of gross unrecognized tax benefits from uncertain tax positions outstanding as of December 31, 2015 , $2.4 million would affect our effective tax rate if recognized. We recorded tax-related interest and penalties of $0.5 million , $0.4 million and $0.0 million in 2015 , 2014 and 2013 , respectively. We had a cumulative liability for interest and penalties related to uncertain tax positions as of December 31, 2015 and 2014 of $2.5 million and $2.0 million , respectively. Our U.S. federal income tax returns for 2009 through 2015 are open to review by the U.S. Internal Revenue Service. Our state income tax returns for 2006 through 2015 are open to review, depending on the respective statute of limitation in each state. In addition, we file income tax returns in several non-U.S. jurisdictions with varying statutes of limitation. As of December 31, 2015 , we believe it is reasonably likely that, within the next 12 months, $0.6 million of the previously unrecognized tax benefits related to certain non-U.S. filing positions will be recognized as we anticipate the deregistration of certain entities. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 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 consolidated balance sheets consists of unrealized holding gains and losses on available-for-sale securities and foreign currency translation adjustments. The following table sets forth the changes in accumulated other comprehensive income (loss), net of tax (in thousands): 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 ) |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION 2015 Long-Term Incentive Plan On April 28, 2015, our shareholders approved our 2015 Long-Term Incentive Plan (the “2015 Plan”), which replaced our 2005 Long-Term Incentive Plan that expired in 2015. The 2015 Plan is administered by the Compensation Committee of the Board of Directors and authorizes us to grant various types of stock-based awards including: stock options, stock appreciation rights, RSAs, RSUs and PSUs. Stock options granted under the 2015 Plan shall not have an exercise price less than the fair market value of our common stock on the date of the grant. The exercise price of a stock option or stock appreciation right may not be reduced without shareholder approval. Stock options generally vest over periods of three or four years of continuous service, commencing on the date of grant. Stock options granted under the 2015 Plan have a seven -year contractual term. Upon adoption, there were approximately 4.8 million shares available for issuance under the 2015 Plan. The number of shares available for issuance upon adoption of the 2015 Plan included new shares approved plus any shares of common stock which were previously reserved for issuance under our preceding plan, and were not subject to grant as of April 28, 2015 or as to which the stock-based compensation award is forfeited on or after April 28, 2015. The number of shares available for issuance is reduced by (i) two shares for each share delivered in settlement of any stock appreciation rights, for each share of RSA, RSU or PSU award, and (ii) one share for each share delivered in settlement of a stock option award. In no event shall more than 1.0 million aggregate shares of common stock subject to stock options, stock appreciation rights, RSA, RSU or PSU awards be granted to any one participant in any one year under the 2015 Plan. At December 31, 2015 , we had 4.5 million shares available for future grant under our 2015 Plan, and a total of 5.4 million shares of our common stock are reserved for future issuance pursuant to the 2015 Plan and our previous plan combined. Stock Option Activity Stock option activity was as follows (shares in thousands): 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 Certain information regarding options outstanding at December 31, 2015 was as follows: 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 RSU Activity Compensation expense for RSUs is recognized over the estimated vesting period. Following is a summary of RSU activity (shares in thousands): 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 PSU Activity Compensation expense for PSUs is recognized over the estimated requisite service period based on the number of PSUs ultimately expected to vest. In February and August 2012, we granted PSU awards to certain executive officers covering a total of 82,000 shares of our common stock. The PSUs vested based on achievement of certain operating income and return on asset goals established for a three-year performance period. The number of PSUs that vest can range from 60% of the PSUs if minimum thresholds are achieved to a maximum of 150% . These awards vested in full at the 150% maximum achievement, net of forfeitures, for a total of 95,250 shares. In May 2013, we granted PSU awards to certain of our executive officers covering a total of 24,500 shares of our common stock. The PSUs vest based on achievement of certain operating income and return on asset goals established for a three-year performance period. The number of shares vesting under the PSU awards following conclusion of the performance period will be determined based on the level at which the financial goals are achieved. The number of shares vesting can range from 60% of the PSU awards if minimum thresholds are achieved to a maximum of 150% . These awards are expected to vest in full at the 150% maximum achievement, with the exception of any forfeitures. In February 2014, we granted PSU awards to certain of our executive officers covering a total of 82,494 shares of our common stock. The PSUs vest based on achievement of goals established for operating income and revenue growth for a three-year performance period. The number of shares vesting under the PSU awards following conclusion of the performance period will be determined based on the level at which the financial goals are achieved. The number of shares vesting can range from 60% of the PSU awards if minimum thresholds are achieved to a maximum of 150% . In April and September 2015, we granted PSU awards to certain of our executive officers and management team covering a total of 56,820 shares of our common stock. The PSUs vest based on achievement of goals established for certain operating income and return on asset criteria for a three-year performance period. The number of shares vesting under the PSU awards following conclusion of the performance period will be determined based on the level at which the financial goals are achieved. The number of shares vesting can range from 60% of the PSU awards if minimum thresholds are achieved to a maximum of 150% . In December 2015, we granted PSU awards to a certain executive officer and management team personnel covering a total of 117,230 shares of our common stock. The PSUs vest based on achievement of certain operating income and operating margin goals for a three-year performance period. The number of shares vesting under the PSU awards following conclusion of the performance period will be determined based on the level at which the financial goals are achieved. Following is a summary of PSU activity (shares in thousands): 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 Stock-Based Compensation We receive income tax deductions as a result of the exercise of certain stock options and vesting of RSUs and PSUs. Stock-based compensation expense, primarily included in general and administrative expense, was as follows (in thousands): 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 Certain other information regarding our stock-based compensation was as follows (in thousands, except per share amounts): 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 As of December 31, 2015 , unrecognized compensation expense for outstanding, but unvested stock option awards was $0.4 million , which is expected to be recognized over a weighted average period of 1.2 years. Employee Stock Purchase Plan On April 28, 2015, our shareholders approved our Employee Stock Purchase Plan (the “ESPP”). The ESPP is administered by the Compensation Committee of the Board of Directors and provides a means by which eligible employees may be given an opportunity to purchase shares of our common stock at a discount using payroll deductions. The ESPP authorizes the issuance of up to 0.5 million shares of our common stock, subject to adjustment as provided in the ESPP for stock splits, stock dividends, recapitalizations and other similar events. Pursuant to the ESPP, and subject to certain limitations specified therein, eligible employees may elect to purchase shares of our common stock in one or more of a series of offerings conducted pursuant to the procedures set forth in the ESPP at a purchase price equal to 90% of the lower of the fair market value of the common stock on the first trading day of the offering period or on the last day of the offering period. Offering periods commence on May 15 and November 15 of each year and are six-months in duration, with the exception of the first offering period in 2015, which was a four-month offering. Purchases under the ESPP may be made exclusively through payroll deductions. Persons eligible to participate in the ESPP generally include employees who have been employed for at least 12 months prior to the applicable offering date and who, immediately upon purchasing shares under the ESPP, would own directly or indirectly, an aggregate of less than 5% of the total combined voting power or value of all outstanding shares of our common stock. ESPP activity was as follows (shares in thousands): Shares Available for Issuance Weighted- 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 Assumptions used in calculating the fair value of stock option grants and employee stock purchases were as follows: 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% Dividend yield is based on our current expectation that no dividend payments will be made in future periods. Risk-free interest rate is the U.S. Treasury zero-coupon rate, as of the grant date, for issues having a term approximately equal to the expected life of the stock option. Expected life is the period of time over which stock options are expected to remain outstanding. We calculate expected term based on the average of the sum of the vesting periods and the full contractual term. Expected volatility is the percentage amount by which the price of our common stock is expected to fluctuate annually during the estimated expected life for stock options. Expected price volatility is calculated using historical daily closing prices over a period matching the weighted-average expected life, as management believes such changes are the best indicator of future volatility. |
Stock Repurchase Program Stock
Stock Repurchase Program Stock Repurchase Program | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stock Repurchase Program | STOCK REPURCHASE PROGRAM On November 3, 2014 , our Board of Directors approved a stock repurchase program that authorizes 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. Repurchases pursuant to the program were as follows: 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 As of December 31, 2015 , $3.4 million remains available for future repurchases. |
Income Per Share
Income Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Income Per Share | INCOME PER SHARE The weighted average numbers of shares outstanding used to compute income per share amounts were as follows (in thousands): 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 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, primarily because the average market price did not exceed the exercise price. These shares may be dilutive potential common shares in the future (in thousands): As of December 31, 2015 2014 2013 Stock options 12 225 304 PSUs — — 12 |
401(k) Savings Plan 401(k) Savi
401(k) Savings Plan 401(k) Savings Plan | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
401(k) Savings Plan | 401(k) SAVINGS PLAN The Company sponsors a 401(k) savings plan that allows eligible employees to contribute a certain percentage of their salary. Employees are automatically enrolled within the first month of employment and have the ability to opt out. As a safe harbor plan sponsor, we are subject to non-discretionary matching contributions. Currently, we match 100% of the employee's first 1% of eligible pay contributed plus 50% of eligible pay contributed on the next 5% , for a maximum employer matching of 3.5% . Employees vest in the employer matching portions at 25% after the first year of employment, and 100% after two years of employment. Our matching contributions for the savings plan were as follows (in thousands): Year ended December 31, 2015 2014 2013 401(k) matching contributions $ 746 $ 631 $ 544 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT AND ENTERPRISE-WIDE INFORMATION In accordance with FASB ASC 280, Segment Reporting , Nautilus determined that it has three operating segments as of December 31, 2015 - Direct, Retail and Octane. Based on the aggregation criteria of ASC 280-10, we determined that two of the operating segments (Retail and Octane) can be aggregated due to these segments having similar economic characteristics and meeting the aggregation criteria. As a result, we have two reportable segments - Direct and Retail. This financial reporting structure was effective as of December 31, 2015, the acquisition date of Octane. Since the acquisition occurred on December 31, no amount of net sales, contribution or expenses related to the Octane business were included in our reported Retail segment results for 2015. Retail segment assets, however, do include the identifiable assets acquired from Octane, as further discussed in Note 2, Business Acquisition . We evaluate performance using several factors, of which the primary financial measures are net sales and reportable segment contribution. 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, shared information technology infrastructure, distribution centers, corporate headquarters, prepaids and other current assets, deferred income tax assets and other assets. Capital expenditures directly attributable to the Direct and Retail segments were not significant in any period. The accounting policies of the reportable segments are the same as the policies described in Note 1, Significant Accounting Policies . Following is summary information by reportable segment (in thousands): 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 Net sales by geographic area were as follows: Year Ended December 31, 2015 2014 2013 U.S. $ 295,366 $ 231,230 $ 181,381 Canada 33,230 35,367 34,166 All other 7,168 7,850 3,256 $ 335,764 $ 274,447 $ 218,803 There are no material long-lived assets held outside of the U.S. In 2015 , 2014 and 2013 , Amazon.com accounted for 11.1% , 11.3% and 11.2% , respectively, of our net sales. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Operating Leases We lease property and equipment under non-cancellable operating leases which, in the aggregate, extend through 2025. Many of these leases contain renewal options and provide for rent escalations and payment of real estate taxes, maintenance, insurance and certain other operating expenses of the properties. Rent expense under all operating leases was as follows (in thousands): Year Ended December 31, 2015 2014 2013 Rent expense $ 5,033 $ 3,625 $ 3,473 As of December 31, 2015 , future minimum lease payments under non-cancellable leases, reduced for sublease income, were as follows (in thousands): 2016 $ 5,327 2017 4,439 2018 3,892 2019 3,989 2020 3,894 Thereafter 8,731 $ 30,272 Guarantees, Commitments and Off-Balance Sheet Arrangements As of December 31, 2015 , we had approximately $0.5 million in 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 December 31, 2015 , we had approximately $32.0 million in non-cancellable 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 December 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 on summary judgment. On May 27, 2015, we filed a petition for a rehearing en banc in the Federal Circuit, which was denied on August 4, 2015 and a Petition for Review by the U. S. Supreme Court which was also denied. The case will be returned to the District Court for further proceedings. 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 to resolve a dispute with the licensor under a 1999 license agreement pursuant to which we had licensed certain rights relating to our TreadClimber ® products. We asserted that our obligation to pay royalties under the license agreement ceased in the fourth quarter of 2013 and sought a declaratory ruling in the arbitration that there is no continuing royalty obligation and that we had performed all of our obligations under the license agreement. The licensor disputed this and asserted various intellectual property and contract claims. The matter proceeded to mediation by agreement of the parties and was settled in December 2015. Under the settlement agreement, we agreed to pay certain cash amounts and sales-based royalties over a period of multiple years. In connection with this settlement, in the fourth quarter of 2015, we recorded a charge of $2.5 million as a component of cost of sales. Future royalty payments under the settlement agreement are not expected to have a material impact on our financial position, results of operations or cash flows. 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 December 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. |
Supplementary Information - Qua
Supplementary Information - Quarterly Results of Operations (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Supplementary Information - Quarterly Results of Operations Unaudited | SUPPLEMENTARY INFORMATION - QUARTERLY RESULTS OF OPERATIONS (unaudited) The following table summarizes our unaudited quarterly financial data for 2015 and 2014 (in thousands, except per share amounts): 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 (1) Net income for the quarters ended December 31, 2015 and 2014 included a $2.4 million and $1.2 million credit, respectively, related to the reversal of a portion of our deferred tax asset valuation allowance. (2) Net income for the quarter ended December 31, 2015 also include d $4.5 million of unusual items including the following: settlement expense related to a licensing arbitration; write-off of nutrition inventory; unrecorded current period royalty revenue and reversal of prior period royalty revenue related to a dispute with the licensee; an accounts receivable reserve related to potentially uncollectible balances from a large sporting goods retailer; and transaction expenses related to the acquisition of Octane. |
Significant Accounting Polici30
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Discontinued Operation | Discontinued Operations Results from discontinued operations relate to the disposal of our former Commercial business, which began in 2009 and was completed in April 2011. We reached substantial completion of asset liquidation at December 31, 2012. However, we continue to have legal and accounting expenses as we work with authorities on final deregistration of each entity and product liability and other legal expenses associated with product previously sold into the Commercial channel. Results of operations related to the Commercial business have been presented in the consolidated financial statements as discontinued operations for all periods presented. |
Use of estimates | Use of Estimates 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, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities in the financial statements. Our most significant estimates relate to the following: • 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. Actual results could differ from our estimates. |
Concentrations | Concentrations Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents held in bank accounts in excess of federally-insured limits and trade receivables. Trade receivables are generally unsecured and therefore collection is affected by the economic conditions in each of our principal markets. We rely on third-party contract manufacturers in Asia for substantially all of our products and for certain product engineering support. Business operations could be disrupted by natural disasters, difficulties in transporting products from non-U.S. suppliers, as well as political, social or economic instability in the countries where contract manufacturers or their vendors or customers conduct business. While any such contract manufacturing arrangement could be replaced over time, the temporary loss of the services of any primary contract manufacturer could delay product shipments and cause a significant disruption in our operations. We derive a significant portion of our net sales from a small number of our Retail customers. A loss of business from one or more of these large customers, if not replaced with new business, would negatively affect our operating results and cash flows. In each of 2015 , 2014 and 2013 , one customer accounted for more than 10% , but less than 15% , of our net sales. |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid investments with maturities of three months or less at purchase are considered to be cash equivalents. As of December 31, 2015 , cash equivalents consisted of money market funds and corporate bonds and totaled $0.7 million . Our cash equivalents as of December 31, 2014 consisted of money market funds, certificates of deposit, commercial paper, and variable-rate demand notes and totaled $24.1 million |
Available-For-Sale Securities | Available-For-Sale Securities We classify our marketable securities as available-for-sale and, accordingly, record them at fair value. Marketable securities with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Unrealized holding gains and losses, which are immaterial, are excluded from earnings and are reported net of tax in other comprehensive income until realized. Dividend and interest income is recognized when earned. Realized gains and losses, which were not material in 2015 or 2014 , are included in earnings and are derived using the specific identification method for determining the cost of securities sold. We periodically evaluate whether declines in fair values of our investments below their cost are "other-than-temporary." This evaluation consists of qualitative and quantitative factors regarding the severity and duration of the unrealized loss, as well as our ability and intent to hold the investment until a forecasted recovery occurs. For additional information, refer to Note 4, Fair Value Measurements . |
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 acquired from Octane as of December 31, 2015 have been recorded at provisional fair values. For additional information, see Note 2, Business Acquisition . |
Property, plant and equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost, net of accumulated depreciation. Improvements or betterments which add new functionality or significantly extend the life of an asset are capitalized. Expenditures for maintenance and repairs are expensed as incurred. The cost of assets retired, or otherwise disposed of, and the related accumulated depreciation, are removed from the accounts at the time of disposal. Gains and losses resulting from asset sales and dispositions are recognized in the period in which assets are disposed. Depreciation is recognized, using the straight-line method, over the lesser of the estimated useful lives of the assets or, in the case of leasehold improvements, the lease term, including renewal periods if we expect to exercise our renewal options. Depreciation on computer equipment, machinery and equipment and furniture and fixtures is determined based on estimated useful lives, which generally range from three -to- seven years. Property, plant and equipment acquired from Octane as of December 31, 2015 have been recorded at provisional fair values. For additional information, see Note 2, Business Acquisition . |
Goodwill | Goodwill Goodwill consists of the excess of acquisition costs over the fair values of net assets acquired in business combinations. We review goodwill for impairment in the fourth quarter of each year and when events or changes in circumstances indicate that the carrying amount may be impaired. For this purpose, goodwill is evaluated at the reporting unit level. Our goodwill asset related to our Canadian subsidiary is attributable to our Direct reporting unit, and our goodwill related to the Octane acquisition is attributable to our Retail reporting unit. We performed an assessment of goodwill in the fourth quarters of 2015 , 2014 and 2013 and concluded that circumstances did not more likely than not indicate an impairment had occurred. For further information regarding goodwill, see Note 8, Goodwill . |
Other intangible assets | Other Intangible Assets Definite-lived intangible assets, primarily acquired trade names, customer relationships, patents and patent rights, are stated at cost, net of accumulated amortization. We recognize amortization expense for our definite-lived intangible assets on a straight-line basis over the estimated useful lives. Indefinite-lived intangible assets consist of acquired trademarks, specifically trade names. Indefinite-lived intangible assets are stated at cost and are not amortized; instead, they are tested for impairment at least annually. We review our acquired trademarks for impairment in the fourth quarter of each year and when events or changes in circumstances indicate that the assets may be impaired. The fair value of trademarks is estimated using the relief from royalty method to estimate the value of the cost savings and a discounted cash flows method to estimate the value of future income. The sum of these two values for each trademark is the fair value of the trademark. If the carrying amount of trademarks exceeds the estimated fair value, we calculate impairment as the excess of carrying amount over the estimate of fair value. We tested our acquired trademarks for impairment in the fourth quarters of 2015 , 2014 and 2013 and determined that no impairment was indicated. For further information regarding other intangible assets, see Note 9, Other Intangible Assets . Other intangible assets acquired from Octane as of December 31, 2015 have been recorded at provisional fair values. For additional information, see Note 2, Business Acquisition . |
Impairment of long-lived assets | Impairment of Long-Lived Assets Long-lived assets, including property, plant and equipment and definite-lived intangible assets, are evaluated for impairment when events or circumstances indicate the carrying value may be impaired. When such an event or condition occurs, we estimate the future undiscounted cash flows to be derived from the use and eventual disposition of the asset to determine whether a potential impairment exists. If the carrying value exceeds estimated future undiscounted cash flows, we record impairment expense to reduce the carrying value of the asset to its estimated fair value. No impairment charges were recorded in 2015 , 2014 or 2013 . |
Revenue recognition | Revenue Recognition Direct and Retail product sales and shipping revenues are recorded when products are shipped and title passes to customers. In most instances, Retail sales to customers are made pursuant to a sales contract that provides for transfer of both title and risk of loss to the customer upon our delivery to the carrier. For Direct sales, revenue is generally recognized when products are shipped. Revenue is recognized net of applicable sales incentives, such as promotional discounts, rebates and return allowances. We estimate the revenue impact of incentive programs based on the planned duration of the program and historical experience. Many Direct business customers finance their purchases through a third-party credit provider, for which we pay a commission or financing fee to the credit provider. Revenue for such transactions is recognized based on the sales price charged to the customer and the related commission or financing fee is included in selling and marketing expense. |
Sales discounts and allowances | Sales Discounts and Returns Allowance Product sales and shipping revenues are reported net of promotional discounts and return allowances. We estimate the revenue impact of retail sales incentive programs based on the planned duration of the program and historical experience. If the amount of sales incentives is reasonably estimable, the impact of such incentives is recorded at the later of the time the customer is notified of the sales incentive or the time of the sale. We estimate our liability for product returns based on historical experience and record the expected obligation as a reduction of revenue. If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. Activity in our sales discounts and returns allowance was as follows (in thousands): |
Taxes collected from customers and remitted to governmental authorities | Taxes Collected from Customers and Remitted to Governmental Authorities Taxes collected from customers and remitted to governmental authorities are recorded on a net basis and excluded from net sales. |
Shipping and handling fees | Shipping and Handling Fees Shipping and handling fees billed to customers are recorded net of discounts and included in both net sales and cost of sales. |
Cost of sales | Cost of Sales Cost of sales primarily consists of: inventory costs; royalties paid to third parties; employment and occupancy costs of warehouse and distribution facilities, including depreciation of improvements and equipment; transportation expenses; product warranty expenses; distribution information systems expenses; and allocated expenses for shared administrative functions. |
Product warranty obligations | Product Warranty Obligations Our products carry 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. |
Litigation and loss contingencies | Litigation and Loss Contingencies 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. We record expenses for litigation and loss contingencies as a component of general and administrative expense when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When a loss contingency is not both probable and estimable, we do not establish an accrued liability. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then we disclose an estimate of the possible loss or range of loss, if such estimate can be made, or disclose that an estimate cannot be made. |
Advertising and promotion | Advertising and Promotion We expense our advertising and promotion costs as incurred. Production costs of television advertising commercials are recorded as prepaid expenses until the initial broadcast, at which time such costs are expensed. Advertising and promotion costs are included in selling and marketing expenses and totaled $54.8 million , $42.6 million and $35.8 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Prepaid advertising and promotion costs were $1.5 million and $1.4 million as of December 31, 2015 and 2014 , respectively. |
Research and development | Research and Development Internal research and development costs, which primarily consist of salaries and wages, employee benefits, expenditures for materials, and fees to use licensed technologies, are expensed as incurred. Third party research and development costs for products under development or being researched, if any, are expensed as the contracted work is performed. |
Income taxes | Income Taxes We account for income taxes based on the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when the temporary differences are expected to be included, as income or expense, in the applicable tax return. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the enactment. Valuation allowances are provided against deferred income tax assets if we determine it is more likely than not that such assets will not be realized. Unrecognized Tax Benefits We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained based on the technical merits of the position upon examination, including resolutions of any related appeals or litigation. |
Foreign currency translation | Foreign Currency Translation We translate the accounts of our non-U.S. subsidiaries into U.S. dollars as follows: revenues, expenses, gains and losses are translated at weighted-average exchange rates during the year; and assets and liabilities are translated at the exchange rate on the balance sheet date. Translation gains and losses are reported in our consolidated balance sheets as a component of accumulated other comprehensive income. Gains and losses arising from foreign currency transactions, including transactions between us and our non-U.S. subsidiaries, are recorded as a component of other income (expense) in our consolidated statements of operations. |
Fair value of financial instruments | Fair Value of Financial Instruments The carrying values of cash and cash equivalents, trade receivables, prepaids and other current assets, trade payables and accrued liabilities approximate fair value due to their short maturities. For additional information on financial instruments recorded at fair value on a recurring basis as of December 31, 2015 and 2014 , refer to Note 4, Fair Value Measurements . |
Share-Based Compensation | Stock-Based Compensation We recognize stock-based compensation expense on a straight-line basis over the applicable vesting period, based on the grant-date fair value of the award. To the extent a stock-based award is subject to performance conditions, the amount of expense recorded in a given period, if any, reflects our assessment of the probability of achieving the performance targets. Fair value of stock options is estimated using the Black-Scholes-Merton option valuation model; fair value of performance share unit ("PSU") awards, restricted stock unit ("RSU") awards and restricted stock awards ("RSA") is based on the closing market price on the day preceding the grant. We estimate future forfeitures, at the time of grant and in subsequent periods, based on historical turnover rates, previous forfeiture experience and changes in the business or key personnel that would suggest future forfeitures may differ from historical data. We recognize compensation expense for only those stock options and other stock-based awards that are expected to vest. We reevaluate estimated forfeitures monthly and, if applicable, recognize a cumulative effect adjustment in the period of the change if the revised estimate of the impact of forfeitures differs significantly from the previous estimate. |
Income Per Share Amounts | Income Per Share Amounts Basic income per share amounts were computed using the weighted average number of common shares outstanding. Diluted income 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. |
New Accounting Pronouncements | New Accounting Pronouncements ASU 2016-02 In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)." ASU 2016-02 replaces the existing guidance in Accounting Standards Codification ("ASC") 840, Leases. The new standards would require companies and other organizations to include lease obligations on their balance sheets, including a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use ("ROU") asset and a corresponding lease liability. For finance leases the lessee would recognize interest expense and amortization of the ROU asset, and for operating leases the lessee would recognize a straight-line total lease expense. ASU 2016-02 is effective for public companies' annual periods, and interim periods within those fiscal years, beginning after December 15, 2018. We are currently evaluating any potential impact that adoption of ASU 2016-02 may have on our financial position, results of operations and cash flows. ASU 2015-17 In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes." ASU 2015-17 simplifies the presentation of deferred income taxes, and requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments apply to all entities that present a classified statement of financial position, and aligns the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards ("IFRS") IAS 1. ASU 2015-17 is effective for public companies' financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We do not expect the adoption of ASU 2015-17 to have a material effect on our financial position, results of operations or cash flows. ASU 2015-11 In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory (Topic 330).” ASU 2015-11 simplifies the accounting for the valuation of all inventory not accounted for using the last-in, first-out (“LIFO”) method by prescribing inventory be valued at the lower of cost and net realizable value. ASU 2015-11 is effective for public companies' annual periods, including interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. Early adoption is permitted. We do not expect the adoption of ASU 2015-11 to have a material effect on our financial position, results of operations or cash flows. ASU 2015-05 In April 2015, the FASB issued ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40).” ASU 2015-05 provides guidance regarding the accounting for a customer's fees paid in a cloud computing arrangement, specifically about whether a cloud computing arrangement includes a software license, and if so, how to account for the software license. ASU 2015-05 is effective for public companies' annual periods, including interim periods, beginning after December 15, 2015. Early adoption is permitted. We do not expect the adoption of ASU 2015-05 to have a material 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, as amended, for annual and interim periods beginning on or after December 15, 2017. 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 was effective for annual periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015. Our adoption of ASU 2014-08 in January 2015 did not have a material effect on our financial position, results of operations or cash flows. |
Significant Accounting Polici31
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Sales Discounts and Returns Allowance | Activity in our sales discounts and returns allowance was as follows (in thousands): 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 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of the net assets acquired and liabilities assumed, net of any working capital and other adjustments, as of December 31, 2015 (in thousands): 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 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of identifiable intangible assets and their estimated fair values and useful lives as of December 31, 2015 (dollars in thousands): 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 |
Business Acquisition, Pro Forma Information | The following table reflects the unaudited pro forma consolidated results of operations for the period presented, as though the acquisition of Octane had occurred on January 1, 2014 (in thousands): (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 |
Discontinued Operation (Tables)
Discontinued Operation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Operating Results of Company's Former Commercial Business | Following is a summary of certain financial information regarding our discontinued operations (in thousands): 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 ) The following table summarizes liabilities for exit costs related to discontinued operations, included in accrued liabilities and other long-term liabilities in our consolidated balance sheets (in thousands): 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 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | Assets measured at fair value on a recurring basis as of December 31, 2015 and 2014 were as follows (in thousands): 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 (1) All certificates of deposit are within current FDIC insurance limits. |
Trade Receivables (Tables)
Trade Receivables (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Allowance for doubtful accounts | Trade receivables, net, consisted of the following (in thousands): December 31, 2015 2014 Trade receivables $ 46,073 $ 26,368 Allowance for doubtful accounts (918 ) (108 ) $ 45,155 $ 26,260 |
Schedule Of Changes In Allowance For Doubtful Accounts | Changes in our allowance for doubtful trade receivables were as follows (in thousands): 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 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net of Valuation Allowances | Inventories consisted of the following (in thousands): December 31, 2015 2014 Finished goods $ 39,115 $ 23,765 Parts and components 3,614 1,131 $ 42,729 $ 24,896 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): 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 (1) Work in progress includes computer hardware and software and production tooling construction in progress. Depreciation expense was as follows (in thousands): Year Ended December 31, 2015 2014 2013 Depreciation expense $ 2,558 $ 1,983 $ 1,254 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | The rollforward of goodwill was as follows (in thousands): 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 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | ntangible assets consisted of the following (in thousands): 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 |
Amortization expense | Amortization expense was as follows (in thousands): Year Ended December 31, 2015 2014 2013 Amortization expense $ 854 $ 2,040 $ 2,050 |
Future amortization expense | Future amortization of definite-lived intangible assets is as follows (in thousands): 2016 $ 3,553 2017 3,255 2018 3,162 2019 3,132 2020 3,106 Thereafter 25,094 $ 41,302 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities consisted of the following (in thousands): December 31, 2015 2014 Payroll and related liabilities $ 6,556 $ 5,058 Other 6,471 4,793 $ 13,027 $ 9,851 |
Product Warranties (Tables)
Product Warranties (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | Changes in our product warranty obligations were as follows (in thousands): 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 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Maturities of our Term Loan over the next five years are as follows (in thousands): 2016 $ 16,000 2017 16,000 2018 16,000 2019 16,000 2020 16,000 $ 80,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Income from continuing operations before income taxes was as follows (in thousands): 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 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax expense (benefit) from continuing operations was as follows (in thousands): Year Ended December 31, 2015 2014 2013 Current: U.S. federal $ 858 $ 1,086 $ 541 U.S. state 171 100 56 Non-U.S. 355 222 (12 ) Total current 1,384 1,408 585 Deferred: U.S. federal 11,324 8,913 (29,552 ) U.S. state 573 (558 ) (3,370 ) Non-U.S. (62 ) 78 252 Total deferred 11,835 8,433 (32,670 ) $ 13,219 $ 9,841 $ (32,085 ) |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Individually significant components of deferred income tax assets and liabilities were as follows (in thousands): 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 Our net deferred income tax assets (liabilities) were recorded on our consolidated balance sheets as follows (in thousands): 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 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Following is a reconciliation of the U.S. statutory federal income tax rate with our effective income tax rate for continuing operations: 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 )% |
Summary of Income Tax Carryforwards [Table Text Block] | As of December 31, 2015 , we had the following income tax carryforwards (in millions): 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 |
Schedule of Reconciliatin of Gross Unrecognized Tax Benefits From Uncertain Tax Positions Roll Forward [Table Text Block] | Following is a reconciliation of gross unrecognized tax benefits from uncertain tax positions, excluding the impact of penalties and interest (in thousands): 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 |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table sets forth the changes in accumulated other comprehensive income (loss), net of tax (in thousands): 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 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stock option activity | Stock option activity was as follows (shares in thousands): 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 |
Stock options outstanding | Certain information regarding options outstanding at December 31, 2015 was as follows: 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 |
RSU activity | Following is a summary of RSU activity (shares in thousands): 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 |
PSU activity | Following is a summary of PSU activity (shares in thousands): 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 |
Stock-based compensation | Stock-based compensation expense, primarily included in general and administrative expense, was as follows (in thousands): 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 |
Other information regarding stock-based compensation | Certain other information regarding our stock-based compensation was as follows (in thousands, except per share amounts): 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 |
ESPP Activity | ESPP activity was as follows (shares in thousands): Shares Available for Issuance Weighted- 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 |
Assumptions | Assumptions used in calculating the fair value of stock option grants and employee stock purchases were as follows: 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% |
Stock Repurchase Program Stoc46
Stock Repurchase Program Stock Repurchase Program (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Class of Treasury Stock | Repurchases pursuant to the program were as follows: 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 |
Income Per Share (Tables)
Income Per Share (Tables) | 12 Months Ended |
Dec. 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 amounts were as follows (in thousands): 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 |
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, primarily because the average market price did not exceed the exercise price. These shares may be dilutive potential common shares in the future (in thousands): As of December 31, 2015 2014 2013 Stock options 12 225 304 PSUs — — 12 |
401(k) Savings Plan (Tables)
401(k) Savings Plan (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Contribution Plan, Schedule Of Matching Contributions | Our matching contributions for the savings plan were as follows (in thousands): Year ended December 31, 2015 2014 2013 401(k) matching contributions $ 746 $ 631 $ 544 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Summary Information by Reportable Segments | Following is summary information by reportable segment (in thousands): 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 |
Net Sales by Geographic Regions | Net sales by geographic area were as follows: Year Ended December 31, 2015 2014 2013 U.S. $ 295,366 $ 231,230 $ 181,381 Canada 33,230 35,367 34,166 All other 7,168 7,850 3,256 $ 335,764 $ 274,447 $ 218,803 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Rent Expense | Rent expense under all operating leases was as follows (in thousands): Year Ended December 31, 2015 2014 2013 Rent expense $ 5,033 $ 3,625 $ 3,473 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2015 , future minimum lease payments under non-cancellable leases, reduced for sublease income, were as follows (in thousands): 2016 $ 5,327 2017 4,439 2018 3,892 2019 3,989 2020 3,894 Thereafter 8,731 $ 30,272 |
Supplementary Information - Q51
Supplementary Information - Quarterly Results of Operations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information [Table Text Block] | The following table summarizes our unaudited quarterly financial data for 2015 and 2014 (in thousands, except per share amounts): 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 (1) Net income for the quarters ended December 31, 2015 and 2014 included a $2.4 million and $1.2 million credit, respectively, related to the reversal of a portion of our deferred tax asset valuation allowance. (2) Net income for the quarter ended December 31, 2015 also include d $4.5 million of unusual items including the following: settlement expense related to a licensing arbitration; write-off of nutrition inventory; unrecorded current period royalty revenue and reversal of prior period royalty revenue related to a dispute with the licensee; an accounts receivable reserve related to potentially uncollectible balances from a large sporting goods retailer; and transaction expenses related to the acquisition of Octane. |
Significant Accounting Polici52
Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)customer | Dec. 31, 2014USD ($)customer | Dec. 31, 2013USD ($) | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Marketing and advertising expense | $ 54,800 | $ 42,600 | $ 35,800 |
Prepaid advertising | $ 1,500 | $ 1,400 | |
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Product Warranty Period | 30 days | ||
Furniture, equipment and information systems [Member] | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life (in years) | 3 years | ||
Furniture, equipment and information systems [Member] | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life (in years) | 7 years | ||
Customer Concentration Risk | Consolidated Net Sales [Member] | |||
Significant Accounting Policies [Line Items] | |||
Number of major customers | customer | 1 | 1,000 | |
Customer Concentration Risk | Customer A [Member] | Consolidated Net Sales [Member] | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 10.00% | 10.00% | |
Customer Concentration Risk | Customer A [Member] | Consolidated Net Sales [Member] | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 15.00% | 15.00% | |
Sales Discounts and Returns Allowance | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | $ 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 | 0 | 0 |
Ending Balance | 5,677 | 4,296 | $ 4,106 |
Fair Value, Measurements, Recurring | |||
Significant Accounting Policies [Line Items] | |||
Cash Equivalents | $ 734 | $ 24,068 |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Maximum revolving secured credit line | $ 20,000,000 | $ 20,000,000 | ||
Goodwill | 60,470,000 | 60,470,000 | $ 2,520,000 | $ 2,740,000 |
Goodwill, acquired during period | 58,357,000 | |||
Octane Fitness | ||||
Business Acquisition [Line Items] | ||||
Purchase price | 115,000,000 | |||
Acquisition costs | 600,000 | |||
Goodwill | 58,357,000 | 58,357,000 | ||
JPMorgan Chase Bank, N.A. | Term Loan | Line of Credit | ||||
Business Acquisition [Line Items] | ||||
Maximum revolving secured credit line | 80,000,000 | 80,000,000 | ||
JPMorgan Chase Bank, N.A. | Term Loan | Line of Credit | Octane Fitness | ||||
Business Acquisition [Line Items] | ||||
Maximum revolving secured credit line | $ 80,000,000 | $ 80,000,000 |
Business Acquisition - Assets A
Business Acquisition - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||
Goodwill | $ 60,470 | $ 2,520 | $ 2,740 |
Octane Fitness | |||
Business Acquisition [Line Items] | |||
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 |
Business Acquisition - Intangib
Business Acquisition - Intangible Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 63,100 |
Patents | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 12,800 |
Weighted-average amortization period (years) | 18 years |
Trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 2,600 |
Weighted-average amortization period (years) | 12 years 6 months |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 24,700 |
Weighted-average amortization period (years) | 13 years |
Trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Indefinite-lived intangible assets acquired | $ 23,000 |
Minimum | Patents | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (years) | 11 years |
Minimum | Trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (years) | 10 years |
Minimum | Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (years) | 10 years |
Maximum | Patents | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (years) | 24 years |
Maximum | Trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (years) | 15 years |
Maximum | Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (years) | 15 years |
Business Acquisition - Pro Form
Business Acquisition - Pro Forma (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Combinations [Abstract] | ||
Net sales | $ 400,078 | $ 338,990 |
Net income | $ 29,352 | $ 20,233 |
Basic (in dollars per share) | $ 0.94 | $ 0.65 |
Diluted (in dollars per share) | $ 0.93 | $ 0.64 |
Discontinued Operation (Details
Discontinued Operation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loss from discontinued operations before income taxes | $ (601) | $ (1,134) | $ (559) | ||||||||
Income tax expense (benefit) | 400 | (454) | 389 | ||||||||
Loss from discontinued operations | $ (134) | $ (145) | $ 205 | $ (127) | $ (96) | $ (177) | $ (941) | $ (374) | (201) | (1,588) | (170) |
Commercial [Member] | Lease Obligations [Member] | |||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||
Balance | $ 573 | $ 831 | 573 | 831 | 1,118 | ||||||
Payments | (273) | (258) | (287) | ||||||||
Balance | $ 300 | $ 573 | 300 | 573 | 831 | ||||||
Commercial [Member] | Commercial [Member] | |||||||||||
Loss from discontinued operations before income taxes | (601) | (1,134) | (559) | ||||||||
Income tax expense (benefit) | 400 | (454) | 389 | ||||||||
Loss from discontinued operations | $ (201) | $ (1,588) | $ (170) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | $ 734 | $ 24,068 |
Available-for-Sale Securities | 29,998 | 26,984 |
Total assets measured at fair value | 30,732 | 51,052 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 1 | 2,591 |
Available-for-Sale Securities | 0 | 0 |
Total assets measured at fair value | 1 | 2,591 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 733 | 21,477 |
Available-for-Sale Securities | 29,998 | 26,984 |
Total assets measured at fair value | 30,731 | 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 |
Total 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 | 1 | 2,591 |
Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 1 | 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 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 980 | |
Available-for-Sale Securities | 25,234 | 14,202 |
Certificates of deposit | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 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 | 980 | |
Available-for-Sale Securities | 25,234 | 14,202 |
Certificates of deposit | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | |
Available-for-Sale Securities | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 733 | 12,497 |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 733 | 12,497 |
Commercial paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | 0 |
Variable-rate demand notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 8,000 | |
Variable-rate demand notes | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | |
Variable-rate demand notes | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 8,000 | |
Variable-rate demand notes | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents | 0 | |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 4,764 | 12,782 |
Corporate bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 0 | 0 |
Corporate bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | 4,764 | 12,782 |
Corporate bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-Sale Securities | $ 0 | $ 0 |
Trade Receivables (Details)
Trade Receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Receivables [Abstract] | |||
Trade receivables | $ 46,073 | $ 26,368 | |
Allowance for doubtful accounts | (918) | (108) | |
Total trade receivable | 45,155 | 26,260 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
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 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 39,115 | $ 23,765 |
Parts and components | 3,614 | 1,131 |
Total inventories | $ 42,729 | $ 24,896 |
Property, Plant and Equipment (
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 41,654 | $ 35,802 | |
Accumulated depreciation | (24,890) | (26,168) | |
Total property, plant and equipment, net | 16,764 | 9,634 | |
Depreciation expense | 2,558 | 1,983 | $ 1,254 |
Automobiles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 139 | 23 | |
Estimated useful life (in years) | 5 years | ||
Automobiles [Member] | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life (in years) | 6 years | ||
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 3,397 | 2,144 | |
Leasehold improvements [Member] | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life (in years) | 5 years | ||
Leasehold improvements [Member] | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life (in years) | 20 years | ||
Computer equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 23,991 | 25,397 | |
Computer equipment [Member] | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life (in years) | 3 years | ||
Computer equipment [Member] | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life (in years) | 7 years | ||
Machinery and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 10,867 | 6,709 | |
Machinery and equipment [Member] | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life (in years) | 3 years | ||
Machinery and equipment [Member] | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life (in years) | 5 years | ||
Furniture and fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 1,605 | 1,108 | |
Estimated useful life (in years) | 5 years | ||
Work in progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 1,655 | $ 421 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Roll Forward] | |||
Balance | $ 2,520 | $ 2,740 | |
Currency exchange rate adjustment | (407) | ||
Business acquisition (Note 2) | 58,357 | ||
Balance | 60,470 | 2,520 | $ 2,740 |
Direct | |||
Goodwill [Roll Forward] | |||
Balance | 2,520 | 2,740 | 2,940 |
Currency exchange rate adjustment | (407) | (220) | (200) |
Business acquisition (Note 2) | 0 | ||
Balance | 2,113 | $ 2,520 | $ 2,740 |
Retail | |||
Goodwill [Roll Forward] | |||
Business acquisition (Note 2) | 58,357 | ||
Balance | $ 58,357 |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Indefinite life trademarks | $ 32,052 | $ 9,052 | |
Intangible Assets, Gross (Excluding Goodwill) | 90,839 | 27,206 | |
Accumulated amortization - patents | (17,485) | (16,631) | |
Total other intangible assets, net | 73,354 | 10,575 | |
Amortization expense for intangible assets | 854 | 2,040 | $ 2,050 |
2,016 | 3,553 | ||
2,017 | 3,255 | ||
2,018 | 3,162 | ||
2,019 | 3,132 | ||
2,020 | 3,106 | ||
Thereafter | 25,094 | ||
Finite-Lived Intangible Assets, Net | $ 41,302 | ||
Minimum | Definite-lived trademarks | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 10 years | ||
Minimum | Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 8 years | ||
Minimum | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 10 years | ||
Maximum | Definite-lived trademarks | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 15 years | ||
Finite-lived intangible assets, gross | $ 2,600 | 0 | |
Maximum | Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 24 years | ||
Finite-lived intangible assets, gross | $ 31,487 | 18,154 | |
Maximum | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 15 years | ||
Finite-lived intangible assets, gross | $ 24,700 | $ 0 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Liabilities [Abstract] | ||
Payroll and benefits | $ 6,556 | $ 5,058 |
Other | 6,471 | 4,793 |
Accrued liabilities | $ 13,027 | $ 9,851 |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement in Product Warranty Liability [Roll Forward] | |||
Beginning Balance | $ 2,246 | $ 1,638 | $ 2,492 |
Accruals | 2,302 | 2,264 | 1,097 |
Adjustments | 0 | 0 | (186) |
Payments | (1,553) | (1,656) | (1,765) |
Business acquisition (Note 2) | 5,550 | 0 | 0 |
Ending Balance | $ 8,545 | $ 2,246 | $ 1,638 |
Borrowings (Loan Agreement) (De
Borrowings (Loan Agreement) (Details) | Dec. 31, 2015USD ($) |
Line of Credit Facility [Line Items] | |
Maximum revolving secured credit line | $ 20,000,000 |
Borrowing rate under agreement, at period end | 1.68% |
Standby letters of credit outstanding | $ 500,000 |
Avaiable for borrowing under line of credit | 19,500,000 |
2,016 | 16,000,000 |
2,017 | 16,000,000 |
2,018 | 16,000,000 |
2,019 | 16,000,000 |
2,020 | 16,000,000 |
Long-term Debt | 80,000,000 |
Line of Credit | JPMorgan Chase Bank, N.A. | Term Loan | |
Line of Credit Facility [Line Items] | |
Maximum revolving secured credit line | 80,000,000 |
Amount outstanding | $ 80,000,000 |
Income Taxes - Income (Loss) Be
Income Taxes - Income (Loss) Before Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 39,242 | $ 29,115 | $ 15,386 |
Non-U.S. | 780 | 1,109 | 653 |
Income from continuing operations before income taxes | $ 40,022 | $ 30,224 | $ 16,039 |
Income Taxes - Expense (Details
Income Taxes - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
U.S. federal | $ 858 | $ 1,086 | $ 541 |
U.S. state | 171 | 100 | 56 |
Non-U.S. | 355 | 222 | (12) |
Total current | 1,384 | 1,408 | 585 |
Deferred: | |||
U.S. federal | 11,324 | 8,913 | (29,552) |
U.S. state | 573 | (558) | (3,370) |
Non-U.S. | (62) | 78 | 252 |
Total deferred | 11,835 | 8,433 | (32,670) |
Total income tax expense (benefit) | $ 13,219 | $ 9,841 | $ (32,085) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation Allowance [Line Items] | ||||
Equity increase, deferred tax realization | $ 1,400 | |||
Components of Deferred Tax Assets and Liabilities [Abstract] | ||||
Accrued liabilities | $ 6,392 | 6,392 | $ 3,510 | |
Allowance for doubtful accounts | 467 | 467 | 33 | |
Inventory valuation | 818 | 818 | 377 | |
Capitalized indirect inventory costs | 671 | 671 | 295 | |
Stock-based compensation expense | 693 | 693 | 558 | |
Deferred rent | 869 | 869 | 0 | |
Net operating loss carryforward | 3,361 | 3,361 | 19,742 | |
Basis difference on long-lived assets | 1,810 | 1,810 | 3,289 | |
Credit carryforward | 3,736 | 3,736 | 4,565 | |
Other | 171 | 171 | 339 | |
Total deferred income tax assets before valuation allowance | 18,988 | 18,988 | 32,708 | |
Valuation allowance | (888) | (888) | (6,156) | |
Total deferred income tax assets, net of valuation allowance | 18,100 | 18,100 | 26,552 | |
Prepaid advertising | (523) | (523) | (467) | |
Other prepaids | (579) | (579) | (696) | |
Basis difference on long-lived assets | 26,285 | 26,285 | 3,355 | |
Undistributed earnings of foreign subsidiaries | (188) | (188) | (179) | |
Other | (1) | (1) | (1) | |
Deferred income tax liabilities | (27,576) | (27,576) | (4,698) | |
Net deferred income tax assets (liabilities) | (9,476) | (9,476) | 21,854 | |
Number of Years Cumulative Income or Loss Evaluated | 3 years | |||
Income tax benefit due to reduction of existing valuation allowance | 2,400 | $ 1,200 | ||
Domestic Tax Authority [Member] | Loss and Other Credit Carryforward [Member] | ||||
Components of Deferred Tax Assets and Liabilities [Abstract] | ||||
Valuation allowance | $ (600) | $ (600) |
Income Taxes - Deferred Tax Lia
Income Taxes - Deferred Tax Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Equity increase, deferred tax realization | $ 1,400 | |
Net Deferred Income Tax Liability [Abstract] | ||
Deferred income tax assets | 8,904 | $ 12,368 |
Long-term deferred income tax assets | 0 | 9,546 |
Non-current deferred income tax liabilities | (18,380) | 0 |
Other long-term liabilities | 0 | (60) |
Net deferred income tax liabilities | $ (9,476) | $ 21,854 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | |||
U.S. statutory income tax rate | 35.00% | 35.00% | 35.00% |
State tax, net of U.S. federal tax benefit | 2.60% | 2.50% | 2.90% |
Non-U.S. income taxes | (0.10%) | (0.30%) | 1.20% |
Nondeductible incentive stock option expense | 0.80% | 0.20% | (0.40%) |
Research and development credit | (0.60%) | (2.40%) | (0.70%) |
Change in deferred tax measurement rate | 0.00% | 0.10% | 0.20% |
Change in uncertain tax positions | 1.10% | 1.50% | 2.20% |
Expiration of capital loss carryforward | 0.00% | 0.00% | 26.90% |
Valuation allowance | (5.80%) | (4.10%) | (267.60%) |
Other | 0.00% | 0.10% | 0.20% |
Effective income tax rate for continuing operations | 33.00% | 32.60% | (200.10%) |
Valuation allowance | $ 888 | $ 6,156 | |
Loss and Other Credit Carryforward [Member] | Domestic Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | 600 | ||
Loss and Other Credit Carryforward [Member] | Foreign Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | $ 300 |
Income Taxes - Carryforwards (D
Income Taxes - Carryforwards (Details) $ in Millions | Dec. 31, 2015USD ($) |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Income tax credit carryforwards | $ 3.2 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 71.1 |
Income tax credit carryforwards | 0.5 |
Switzerland | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 0.3 |
Italy | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 0.8 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning of year | $ 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) | 0 | (472) |
Additions for tax positions related to the current year | 43 | 821 | 54 |
Settlements | 0 | 0 | 0 |
Other | 133 | 0 | 0 |
Lapses of statutes of limitations | 0 | (89) | (314) |
Unrecognized tax benefits, end of year | 2,519 | 2,768 | 1,964 |
Unrecognized tax benefits that would impact effective tax rate, if recognized | 2,400 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 500 | 400 | $ 0 |
Cumulative liability for interest and penalties related to uncertain tax positions | 2,500 | $ 2,000 | |
Previously unrecognized tax benefit likely to be recognized within the next 12 months | $ 600 |
Accumulated Other Comprehensi74
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | $ (308) | $ 244 | $ 625 |
Current period other comprehensive income (loss) | (1,019) | (552) | (381) |
Balance, end of period | (1,327) | (308) | 244 |
Unrealized Gain (Loss) on Available-for-Sale Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (18) | 0 | 0 |
Current period other comprehensive income (loss) | 2 | (18) | 0 |
Balance, end of period | (16) | (18) | 0 |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (290) | 244 | 625 |
Current period other comprehensive income (loss) | (1,021) | (534) | (381) |
Balance, end of period | $ (1,311) | $ (290) | $ 244 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Detail) - shares | 12 Months Ended | |
Dec. 31, 2015 | Apr. 28, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, shares reserved for future issuance | 5,423,000 | |
2015 Long-Term Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 4,800,000 | |
Reduction in number of shares available for issuance due to settlement of stock appreciation rights and stock unit or performance unit award | 2 | |
Reduction in number of shares available for issuance due to settlement of stock option award | 1 | |
Shares available for issuance | 4,500,000 | |
Maximum aggregate shares of common stock subject to stock options, appreciation rights, restricted stock or performance stock unit awards | 1,000,000 | |
Stock Options [Member] | 2015 Long-Term Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 7 years | |
Stock Options [Member] | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Stock Options [Member] | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Option Activity and Outstanding Options | |||
Options outstanding | 798 | ||
Granted | 18 | ||
Forfeited, cancelled or expired | (12) | ||
Exercised | (284) | ||
Options outstanding | 520 | 798 | |
Stock Option Activity and Weighted-Average Exercise Price | |||
Options outstanding, Weighted Average Exercise Price | $ 4.41 | ||
Granted, Weighted Average Exercise Price | 16.21 | ||
Forfeited, canceled or expired, Weighted Average Exercise Price | 15.40 | ||
Exercises, Weighted Average Exercise Price | 3.70 | ||
Options outstanding, Weighted Average Exercise Price | $ 5.01 | $ 4.41 | |
Options outstanding, Aggregate Intrinsic Value | $ 6,100 | ||
Options outstanding, Weighted-Average Remaining Contractual Life | 3 years 10 months 24 days | ||
Options exercisable, Number of Options Exercisable | 373 | ||
Options exercisable, Weighted-Average Exercise Price | $ 3.47 | ||
Options exercisable, aggregate intrinsic value | $ 4,900 | ||
Options exercisable, Weighted average remaining contractual term | 3 years 4 months 24 days | ||
Vested and expected to vest | 520 | ||
Vested and expected to vest, Weighted Average Exercise Price | $ 5.01 | ||
Vested and expected to vest, Aggregate Intrinsic Value | $ 6,100 | ||
Vested and expected to vest, remaining contractual term (in years) | 3 years 10 months 24 days | ||
Weighted average grant-date fair value of stock options granted | $ 8.94 | $ 5.36 | $ 4.37 |
Stock Options [Member] | |||
Stock Option Activity and Weighted-Average Exercise Price | |||
General and administrative | $ 327 | $ 592 | $ 337 |
Compensation expense for unvested stock options | $ 400 | ||
Weighted average period for unvested stock options | 1 year 2 months 12 days |
Stock-Based Compensation - St77
Stock-Based Compensation - Stock-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation | $ 1,484 | $ 1,066 | $ 454 |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
General and administrative | 327 | 592 | 337 |
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
General and administrative | 544 | 121 | 54 |
Performance Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
General and administrative | 575 | 353 | 63 |
Employee Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
General and administrative | $ 38 | $ 0 | $ 0 |
Stock-Based Compensation- Restr
Stock-Based Compensation- Restricted Stock Units (Details) - Restricted Stock Units [Member] shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Restricted Stock Units Activity and Outstanding | |
Stock units outstanding | shares | 87 |
Granted | shares | 69 |
Vested | shares | (46) |
Stock units outstanding | shares | 110 |
Restricted Stock Units Activity and Weighted Average Grant Date Fair Value per Share | |
Stock units outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 5.93 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 17.58 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 4.54 |
Stock units outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 13.73 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units (Details) - $ / shares | 1 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 28, 2014 | May. 31, 2013 | Sep. 30, 2015 | Aug. 31, 2012 | Dec. 31, 2015 | |
Performance Shares [Member] | ||||||
Performance Stock Units Activity and Outstanding | ||||||
Stock units outstanding | 166,000 | |||||
Granted | 206,000 | |||||
Vested | (95,250) | |||||
Stock units outstanding | 277,000 | 277,000 | ||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Stock units outstanding, Weighted Average Grant Date Fair Value | $ 5.97 | |||||
Granted, Weighted Average Grant Date Fair Value | 14.87 | |||||
Vested, Weighted Average Grant Date Fair Value | 2.85 | |||||
Stock units outstanding, Weighted Average Grant Date Fair Value | $ 13.67 | $ 13.67 | ||||
Key Executive Employees Member [Member] | Performance Shares [Member] | ||||||
Performance Stock Units Activity and Outstanding | ||||||
Granted | 117,230 | 82,494 | 24,500 | 56,820 | 82,000 | |
Minimum | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Percentage of award able to vest | 60.00% | 60.00% | ||||
Maximum | ||||||
Performance Stock Units Activity and Weighted Average Grant Date Fair Value per Share | ||||||
Percentage of award able to vest | 150.00% | 150.00% |
Stock-Based Compensation Stock
Stock-Based Compensation Stock Compensation, Other (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value of stock options granted | $ 8.94 | $ 5.36 | $ 4.37 |
Total intrinsic value of stock options exercised | $ 4,142 | $ 736 | $ 451 |
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of units vested | 1 | 1 | 1 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of units vested | $ 1 | $ 0 | $ 0 |
Stock-Based Compensation Fair V
Stock-Based Compensation Fair Value Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0.00% | ||
Risk-free interest rate | 0.10% | ||
Expected volatility | 43.00% | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.60% | 1.70% | 0.90% |
Expected life (years) | 4 years 3 months 11 days | 4 years 9 months | 4 years 9 months |
Expected volatility | 71.00% | 80.00% | 89.00% |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Apr. 28, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Discount from market price, offering date | 90.00% | |
Percentage of outstanding stock maximum | 5.00% | |
Balance at December 31, 2014 | 0 | |
Number of shares authorized | 500,000 | |
Employee shares purchased (shares) | (7,000) | |
Weighted- Average Purchase Price | $ 16.69 | |
Weighted-Average Discount per Share | $ 1.85 | |
Balance at December 31, 2015 | 493,000 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | |
Class of Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 15,000,000 | ||
Stock Repurchase Program, Period in Force | 24 months | ||
Stock Repurchase Program Expiration Date | Nov. 3, 2016 | ||
Repurchased Amount | $ 11,567,000 | ||
Common Stock | |||
Class of Stock [Line Items] | |||
Number of Shares | 577,831 | 133,877 | 711,708 |
Repurchased Amount | $ 9,571,545 | $ 1,995,982 | $ 11,567,527 |
Average Price per Share | $ 16.56 | $ 14.91 | $ 16.25 |
Remaining authorized repurchase amount | $ 3,400,000 |
Income Per Share (Details)
Income Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income per share: | |||
Basic weighted average shares outstanding | 31,288 | 31,253 | 31,072 |
Dilutive potential common shares | 301 | 435 | 385 |
Diluted weighted average shares outstanding | 31,589 | 31,688 | 31,457 |
Stock Options [Member] | |||
Income per share: | |||
Anti-dilutive securities excluded from computation of diluted income per share | 12 | 225 | 304 |
Performance Stock Units [Member] | |||
Income per share: | |||
Anti-dilutive securities excluded from computation of diluted income per share | 0 | 0 | 12 |
401(k) Savings Plan (Details)
401(k) Savings Plan (Details) - United States Postretirement Benefit Plan of US Entity - 401K Savings Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Percent of employer's match of the employee's first 1% of eligible pay | 100.00% | ||
Percent of employee eligible pay (first 1%) | 1.00% | ||
Percent of employer's match of the employee's next 5% of eligible pay | 50.00% | ||
Percent of employee eligible pay (next 5%) | 5.00% | ||
Maximum employer matching, percent | 3.50% | ||
Annual vesting percentage | 25.00% | ||
Employer's match after two years (fully vested) | 100.00% | ||
Number of years until employer matches 100% | 2 years | ||
401(k) matching contributions | $ 746 | $ 631 | $ 544 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments | segment | 3 | ||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Net sales | $ 109,140 | $ 70,690 | $ 59,695 | $ 96,239 | $ 94,931 | $ 59,067 | $ 48,546 | $ 71,903 | $ 335,764 | $ 274,447 | $ 218,803 |
Consolidated contribution | 56,764 | 48,255 | 30,922 | ||||||||
Operating Expenses | 132,963 | 110,421 | 90,753 | ||||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||||||||
Income tax expense | (13,219) | (9,841) | 32,085 | ||||||||
Income from continuing operations | 9,852 | $ 3,873 | $ 2,219 | $ 10,859 | 10,473 | $ 2,664 | $ 1,498 | $ 5,748 | 26,803 | 20,383 | 48,124 |
Depreciation and amortization expense | 3,412 | 4,024 | 3,344 | ||||||||
Assets | 315,912 | 175,654 | 315,912 | 175,654 | |||||||
UNITED STATES | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 295,366 | 231,230 | 181,381 | ||||||||
CANADA | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 33,230 | 35,367 | 34,166 | ||||||||
All Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 7,168 | 7,850 | 3,256 | ||||||||
Direct | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 225,595 | 175,593 | 136,663 | ||||||||
Consolidated contribution | 39,940 | 29,345 | 14,126 | ||||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||||||||
Depreciation and amortization expense | 868 | 1,913 | 1,956 | ||||||||
Assets | 35,356 | 25,263 | 35,356 | 25,263 | |||||||
Retail | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 106,195 | 93,223 | 76,775 | ||||||||
Consolidated contribution | 12,850 | 13,279 | 11,431 | ||||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||||||||
Depreciation and amortization expense | 757 | 643 | 642 | ||||||||
Assets | 202,696 | 37,203 | 202,696 | 37,203 | |||||||
Unallocated royalty income [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 3,974 | 5,631 | 5,365 | ||||||||
Consolidated contribution | 3,974 | 5,631 | 5,365 | ||||||||
Unallocated corporate [Member] | |||||||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||||||||
Depreciation and amortization expense | 1,787 | 1,468 | 746 | ||||||||
Assets | $ 77,860 | $ 113,188 | 77,860 | 113,188 | |||||||
Less expenses not directly related to segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Expenses | (16,493) | (18,101) | (15,198) | ||||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||||||||
Other income (expense), net | (249) | 70 | 315 | ||||||||
Income tax expense | $ (13,219) | $ (9,841) | $ 32,085 | ||||||||
Customer Concentration Risk | Sales Revenue, Net | Amazon.com | |||||||||||
Reconciliation of consolidated contribution to income (loss) from continuing operations: | |||||||||||
Net sales outside of the United States, percent of consolidated net sales | 11.10% | 11.30% | 11.20% |
Commitments and Contingencies87
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Standy by letters of credit with certain vendors | $ 0.5 |
Non-cancelable market-based purchase obligation | $ 32 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense under all operating leases | $ 5,033 | $ 3,625 | $ 3,473 |
2,016 | 5,327 | ||
2,017 | 4,439 | ||
2,018 | 3,892 | ||
2,019 | 3,989 | ||
2,020 | 3,894 | ||
Thereafter | 8,731 | ||
Total minimum non-cancelable lease payments, net | $ 30,272 |
Supplementary Information - Q89
Supplementary Information - Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 109,140 | $ 70,690 | $ 59,695 | $ 96,239 | $ 94,931 | $ 59,067 | $ 48,546 | $ 71,903 | $ 335,764 | $ 274,447 | $ 218,803 |
Gross profit | 52,480 | 36,209 | 30,656 | 53,889 | 48,519 | 28,795 | 24,780 | 38,481 | 173,234 | 140,575 | 106,477 |
Operating income (loss) | 12,345 | 6,389 | 3,932 | 17,605 | 14,493 | 4,281 | 2,379 | 9,001 | 40,271 | 30,154 | 15,724 |
Income from continuing operations | 9,852 | 3,873 | 2,219 | 10,859 | 10,473 | 2,664 | 1,498 | 5,748 | 26,803 | 20,383 | 48,124 |
Income (loss) from discontinued operation | (134) | (145) | 205 | (127) | (96) | (177) | (941) | (374) | (201) | (1,588) | (170) |
Net income | $ 9,718 | $ 3,728 | $ 2,424 | $ 10,732 | $ 10,377 | $ 2,487 | $ 557 | $ 5,374 | $ 26,602 | $ 18,795 | $ 47,954 |
Basic | $ 0.31 | $ 0.12 | $ 0.08 | $ 0.34 | $ 0.33 | $ 0.08 | $ 0.02 | $ 0.17 | $ 0.85 | $ 0.60 | $ 1.54 |
Diluted | $ 0.31 | $ 0.12 | $ 0.08 | $ 0.34 | $ 0.33 | $ 0.08 | $ 0.02 | $ 0.17 | $ 0.84 | $ 0.59 | $ 1.52 |
Income tax benefit due to reduction of existing valuation allowance | $ 2,400 | $ 1,200 | |||||||||
Settlement and transaction related to acquisition expenses | $ 4,500 |