Columbia Sportswear 2000 Annual Report Download - page 32

Our Success Depends on our Proprietary Rights
We believe our registered and common law trademarks have signiÑcant value and are important to our
ability to create and sustain demand for our products. We also place signiÑcant value on our trade dress, the
overall appearance and image of our products. In markets outside the United States, it may be more diÇcult
for us to establish our proprietary rights and to challenge successfully use of those rights by other parties. We
will also face additional challenges as we extend our brand into new product categories, in part through our
licensing program. Although we have not been materially inhibited from selling products in connection with
trademark or trade dress disputes, we could encounter more obstacles as we expand our product line and the
geographic scope of our marketing. From time to time, we discover products that are counterfeit reproductions
of our products or trade dress ""knock oÅs.'' If we are unsuccessful in challenging a party's products on the
basis of trademark or trade dress infringement, continued sales of these products could adversely impact our
sales and our brand and result in the shift of consumer preference away from our products. The actions we
take to establish and protect trademarks and other proprietary rights may not be adequate to prevent imitation
of our products by others or to prevent others from seeking to block sales of our products as violations of
proprietary rights. In addition, we could incur substantial costs in legal actions relating to our use of
intellectual property or the use of our intellectual property rights by others.
Our Business Is AÅected by Seasonality and Fluctuations in Operating Results
Our results of operations have Öuctuated and are likely to Öuctuate signiÑcantly from period to period.
Our products are marketed on a seasonal basis, with a product mix now weighted substantially toward the fall
season. Our results of operations for the quarter ending September 30 in the past have been much stronger
than the results for the other quarters. This seasonality, along with other factors that are beyond our control,
including general economic conditions, changes in consumer behavior, weather conditions, availability of
import quotas and currency exchange rate Öuctuations, could adversely aÅect our business and cause our
results of operations to Öuctuate. Results of operations in any period should not be considered indicative of the
results to be expected for any future period.
We Face Risks of Product Liability and Warranty Claims
Our products are used in outdoor activities, sometimes in severe conditions. Although we have not
experienced any signiÑcant expense as the result of product recalls or product liability claims, this could occur
in the future and have a material adverse aÅect on our business. Substantially all of our products are backed by
a lifetime limited warranty for defects in quality and workmanship. We maintain a warranty reserve for future
warranty claims, but the actual costs of servicing future warranty claims could exceed the reserve and have a
material adverse aÅect on us.
Our Common Stock Price May Be Volatile
The price of our common stock has Öuctuated substantially since our initial public oÅering. Our common
stock is traded on the Nasdaq National Market, which has experienced and is likely to experience signiÑcant
price and volume Öuctuations that could adversely aÅect the market price of our common stock without regard
to our operating performance. We also believe factors such as Öuctuations in Ñnancial results, variances from
Ñnancial market expectations, changes in earnings estimates by analysts, or announcements by us or
competitors may cause the market price of the common stock to Öuctuate, perhaps substantially.
Item 7a. Quantitative and Qualitative Disclosures about Market Risk
The information required by this item is included in Management's Discussion and Analysis of Financial
Condition and Results of Operations and is incorporated herein by this reference.
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