Nautilus 2015 Annual Report Download - page 10
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Please find page 10 of the 2015 Nautilus annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.•Seasonality of markets, which vary from quarter-to-quarter and are influenced by outside factors such as overall consumer confidence and the
availability and cost of television advertising time;
• Effectiveness of our media and advertising programs;
• Customer consolidation in our Retail segment, or the bankruptcy of any of our larger Retail customers;
• Restructuring charges;
• Goodwill and other intangible asset impairment charges; and
• Legal and contract settlement charges.
These trends and factors could adversely affect our business, operating results, financial position and cash flows in any particular period.
Intense competition or loss of one or more of our large Retail customers could negatively impact our sales and operating results.
Our products are sold in highly competitive markets with limited barriers to entry. As a result, introduction by competitors of lower-priced or more innovative
products could result in a significant decline in our revenues and have a material adverse effect on our operating results, financial position and cash flows.
Additionally, we derive a significant portion of our revenue from a small number of Retail customers. A loss of business from one or more of these large
customers, if not replaced with new business, could negatively affect our operating results and cash flow.
A decline in sales of TreadClimber ® and/or Max Trainer ® products without a corresponding increase in sales of other products would negatively affect
our future revenues and operating results.
Sales of cardio products, especially TreadClimber ® and Max Trainer ® products, represent a substantial portion of our Direct segment revenues. Introduction by
competitors of comparable products at lower price-points, a maturing product lifecycle or other factors could result in a decline in our revenues derived from these
products. A significant decline in our sales of these products would have a material adverse effect on our operating results, financial position and cash flows.
Portions of our operating expenses and costs of goods sold are relatively fixed, and we may have limited ability to reduce expenses sufficiently in response
to any revenue shortfalls.
Many of our operating expenses are relatively fixed. We may not be able to adjust our operating expenses or other costs sufficiently to adequately respond to any
revenue shortfalls. If we are unable to reduce operating expenses or other costs quickly in response to any declines in revenue, it would negatively impact our
operating results, financial condition and cash flows.
If we are unable to anticipate consumer preferences or to effectively develop, market and sell future products, our future revenues and operating results
could be adversely affected.
Our future success depends on our ability to effectively develop, market and sell new products that respond to new and evolving consumer preferences.
Accordingly, our revenues and operating results may be adversely affected if we are unable to develop or acquire rights to new products that satisfy consumer
preferences. In addition, any new products that we market may not generate sufficient revenues to recoup their acquisition, development, production, marketing,
selling and other costs.
Decline in consumer spending would likely negatively affect our product revenues and earnings.
Success of each of our products depends substantially on the amount of discretionary funds available to our customers. Global credit and financial markets have
experienced extreme disruptions in the recent past, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in
economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that similar disruptions will not occur in
the future. Deterioration in general economic conditions may depress consumer spending, especially spending for discretionary consumer products such as ours.
Poor economic conditions could in turn lead to substantial decreases in our net sales or have a material adverse effect on our operating results, financial position
and cash flows.
Our business is affected by seasonality which results in fluctuations in our operating results.
We experience fluctuations in aggregate sales volume during the year. Sales are typically strongest in the first and fourth quarters, followed by the third quarter,
and are generally weakest in the second quarter. However, the mix of product sales may vary
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