Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

LEM Purchase Commitments

 In January 2006, the Company acquired one of its manufacturers, LEM S.r.l. (“LEM”), and, on December 31, 2010, sold 90% of the capital stock of LEM.  In connection with the sale of LEM, the Company and LEM entered into a long-term supply agreement wherein the Company became obligated to make certain inventory purchases from LEM.  As of December 31, 2012, the remaining purchase commitment (to be spread evenly over the four quarters of 2013) was €452,235 (US$579,584).  As of September 30, 2013, the remaining purchase commitment was €113,059 (US$152,856), and on that date the Company had non-cancellable open purchase orders to LEM of approximately €247,999 (US$335,295), for which it anticipates delivery prior to December 31, 2013.

 Operating Leases

 The Company’s corporate headquarters totals 32,551 square feet and is located in Carlsbad, California.  Effective November 2010, the Company entered into an amended lease for this facility which expires in December 2013 and has average monthly rent payments of approximately $29,000 per month.  In April 2013, the Company amended its lease of its corporate headquarters to (i) extend the December 2013 expiration date to December 31, 2019, and (ii) have the right to terminate the lease commencing on April 1, 2015 with a nine month written notice.  The monthly rent payments after 2014 will increase by 3% per year.

 The Company also leases approximately 6,500 square feet of a facility in Varese, Italy with monthly lease payments effective March 2013 of €1,500 per month.  The lease expires in March 2019, and requires a nine month notice period in the event the Company decides to terminate the lease prior to its expiration date.  In addition, the Company leases an office space totaling approximately 400 square feet in Vancouver, Canada at a monthly rate of CN$1,352 (approximately US$1,284).  The Company also leases certain computer equipment and vehicles.

 Total rent expense was approximately $106,000 and $111,000 for the three months ended September 30, 2013 and 2012, respectively. Total rent expense was approximately $307,000 and $333,000 for the nine months ended September 30, 2013 and 2012, respectively.

 Future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows:

	(Thousands)
Year Ending December 31,
2013 remaining payments	$	101
2014		387
2015		390
2016		397
2017		408
Thereafter		832
Total	$	2,515

 Capital Leases

 Future minimum lease payments under capital leases at September 30, 2013 are as follows:

	(Thousands)
Year Ending December 31,
2013 remaining payments	$	21
2014		80
2015		81
2016		22
Total minimum lease payments		204
Amount representing interest		(17)
Present value of minimum lease payments		187
Less current portion		78
Noncurrent portion	$	109

 Athlete Contracts

 At September 30, 2013, the Company has entered into endorsement contracts with certain athletes to actively wear and endorse the Company’s products.  Payments under these contracts total approximately $225,000, $366,000, $75,000 and $28,000 in 2013, 2014, 2015 and 2016, respectively, and may include additional performance-based incentives and/or product-specific sales incentives.  At September 30, 2013, the Company also had pending endorsement contracts with athletes to actively wear and endorse the Company’s products, with payments totaling approximately $32,000 and $32,000 in 2014 and 2015, respectively.

 Litigation

 From time to time the Company may be party to lawsuits in the ordinary course of business.  The Company is not currently a party to any material legal proceedings, which it believes will have a material adverse impact on its financial position.