Columbia Sportswear 2000 Annual Report Download - page 25

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
All references to years relate to the Ñscal year ended December 31 of such year.
Results of Operations
The following table sets forth, for the periods indicated, the percentage relationship to net sales of certain
items in our consolidated statements of operations:
2000 1999 1998
Net sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100.0% 100.0% 100.0%
Cost of sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 54.4 55.2 56.3
Gross proÑt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 45.6 44.8 43.7
Selling, general and administrative ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29.9 32.1(1) 30.7
Income from operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15.7 12.7 13.0
Interest expense, netÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.7 1.0 0.9
Income before income tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15.0 11.7 12.1
Income tax expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.5 4.7 4.4(2)
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9.5% 7.0% 7.7%
(1) Includes a one-time charge of $1.5 million related to the closure of the Company's manufacturing facility
in ChaÅee, Missouri.
(2) Includes a non-recurring, non-cash beneÑt of approximately $2.0 million related to the termination of the
Company's ""S'' corporation status.
Year Ended December 31, 2000 Compared to Year Ended December 31,1999
Net sales: Net sales increased 30.7% to $614.8 million in 2000 from $470.5 million in 1999. Domestic
sales increased 28.5% to $438.9 million in 2000 from $341.6 million in 1999. Net international sales, excluding
Canada, increased 43.7% to $112.8 million in 2000 from $78.5 million in 1999. The increase in net
international sales was due primarily to increases in European and Japanese direct sales which increased
$17.6 million or 42.6% and $8.3 million or 46.0%, respectively. Canadian sales increased 25.2% to
$63.1 million in 2000 from $50.4 million in 1999. These increases were primarily attributable to increased
sales of outerwear units, predominantly in the United States, Canada and Europe, and increased sales of
sportswear and footwear units across all regions.
Gross ProÑt: Gross proÑt as a percentage of net sales was 45.6% and 44.8% for 2000 and 1999,
respectively. This increase of 80 basis points in gross margin was due to a combination of factors that may not
be replicated. These factors include: (1) decreased sales of carry-over fall close-out products during the three
months ended March 31, 2000 when compared to the three months ended March 31, 1999, (2) increased
margin on sales of spring sportswear close-out products for the three months ended June 30, 2000 when
compared to the three months ended June 30, 1999, and (3) strong domestic and Canadian margins resulting
from minimal oÅ price selling during the six months ended December 31, 2000, partially oÅset by the
weakness in the Euro currency.
Selling, General and Administrative Expense: Selling, general, and administrative expense (SG&A)
increased 21.8% to $183.7 million in 2000 from $150.8 million in 1999, primarily as a result of an increase in
variable selling and operating expenses to support the higher level of sales. As a percentage of sales, SG&A
decreased to 29.9% for the year ended December 31, 2000 from 32.1% for the comparable period in 1999. This
change was primarily due to strong sales growth in 2000, coupled with minimal additional investment in
infrastructure. In addition, the third quarter 1999 results included a $1.5 million charge for the closing of our
ChaÅee, Missouri manufacturing plant. Although we anticipate continued leverage of SG&A as a percentage
of sales for 2001, foreseeable international and current domestic infrastructure expansions will place upward
pressure on SG&A in 2002 as these projects are capitalized and begin to depreciate.
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