Columbia Sportswear 2000 Annual Report Download - page 19

In several other countries throughout the world, we sell our products to independent exclusive
distributors. These distributors service retail customers in locations such as Australia, New Zealand, South
America, Eastern Europe and Russia. Distributors also oÅer Columbia products in Mexico, Norway, Turkey,
Switzerland and Greece. In late 1999, we established a subsidiary in the United Kingdom for direct sales in
that market beginning with spring 2001.
Intellectual Property
We own many trademarks including ""Columbia»,'' ""Columbia Sportswear Company»,'' ""Convert»,''
""Sorel»,'' ""Bugaboo»,'' ""Bugabootoo»,'' ""Silent Rain»,'' ""Columbia Interchange System»,'' ""Tough
Mother»,'' the Columbia diamond shaped logo and the Sorel polar bear. Our trademarks, many of which are
registered or subject to pending applications in the United States and other nations, are used on a variety of
items of apparel, footwear, and other products. We believe that our trademarks are of great value, providing
the consumer with an assurance that the product being purchased is high quality and provides a good value.
We also place signiÑcant value on trade dress (the overall appearance and image of our products) which, as
much as trademarks, distinguishes our products in the marketplace. In addition, in connection with the
acquisition of the Sorel trademarks we acquired industrial designs and patents protecting some Sorel styles.
We are very protective of these proprietary rights and frequently take action to prevent counterfeit
reproductions or other infringing activity. In the past we have successfully resolved conÖicts over proprietary
rights through legal action and negotiated settlements. As we expand in market share, geographic scope and
product categories, intellectual property disputes are anticipated to increase as well, making it more diÇcult to
establish and protect our proprietary rights.
Backlog
We typically receive the bulk of our orders for each of the fall and spring seasons a minimum of three
months prior to the date the products are shipped to customers. Generally, the orders are subject to
cancellation prior to the date of shipment. At December 31, 2000, our backlog was $321.8 million, compared
to $272.8 million at December 31, 1999. For a variety of reasons, including the timing of shipments, product
mix of customer orders and the amount of in-season orders, backlog may not be a reliable measure of future
sales for any succeeding period.
Seasonality
Our business is aÅected by the general seasonal trends common to the outdoor apparel industry, with
sales and proÑts highest in the third calendar quarter. Our products are marketed on a seasonal basis, with a
product mix weighted substantially toward the fall season. Results of operations in any period should not be
considered indicative of the results to be expected for any future period. The sale of our products is subject to
substantial cyclical Öuctuation or impact from unseasonal weather conditions. Sales tend to decline in periods
of recession or uncertainty regarding future economic prospects that aÅect consumer spending, particularly on
discretionary items. This cyclicality and any related Öuctuation in consumer demand could have a material
adverse eÅect on the Company's results of operations, cash Öows and Ñnancial position.
Competition
The active outerwear, sportswear and rugged footwear segments of the apparel industry are highly
competitive. We encounter substantial competition in the active outerwear and sportswear business from,
among others, The North Face, Inc., Marmot Mountain Ltd., Woolrich Woolen Mills, Inc., The Timberland
Company (""Timberland''), Patagonia Corporation and Helly-Hansen A/S. In addition, we compete with
major sport companies, such as Nike, Inc., Adidas AG and Reebok International Ltd., and with fashion-
oriented competitors, such as Polo Ralph Lauren Corporation, Nautica Enterprises, Inc. and Tommy HilÑger
Corporation. Our rugged footwear line competes with, among others, Timberland, Nike ACG, and Salo-
mon S.A. Many of these companies have global operations and compete with us in Europe and Asia. In
Europe we also face competition from such brands as Berghaus, Jack Wolfskin and Craft of Sweden and many
other lesser-known regional brands. In Asia our competition is from brands such as Mont-Bell and Patagonia
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