Columbia Sportswear 2002 Annual Report Download - page 23

second and fourth quarters of 2001 as compared to the same periods in 2000 combined with our decreased
borrowings and an overall reduction in the short-term rates in 2001 when compared to 2000.
Income Tax Expense: The provision for income taxes increased to $56.8 million in 2001 from $33.5
million in 2000. The effective tax rate was 39.0% for 2001 and 36.4% for 2000. The lower tax rate in 2000 was
due primarily to the utilization of foreign tax credits which were not replicated in 2001.
Liquidity and Capital Resources
We financed our operations for the year ended December 31, 2002 primarily through cash provided by
operating activities. At December 31, 2002, we had total cash and cash equivalents of $194.7 million compared
to $79.1 million at December 31, 2001. Cash provided by operating activities was $168.6 million for 2002
compared to $68.3 million in 2001. The increase in cash provided by operating activities was primarily due to an
increase in net income, decreases in accounts receivable and inventories and an increase in accounts payable.
Our primary capital requirements are for working capital and general corporate needs. Net cash used in
investing activities was $38.0 million in 2002 and $39.7 million for the comparable period in 2001. In 2002, our
major capital expenditures consisted of approximately $26.9 million for the construction of our European
distribution facility in Cambrai, France and approximately $11.1 million for other North American distribution
related projects as well as maintenance capital requirements. In 2001 our major capital expenditures consisted of
the expansion and retrofit of our United States distribution center, the development of our new corporate
headquarters and the construction of our European distribution facility.
Cash used in financing activities was $15.1 million in 2002 as compared to cash provided by financing
activities of $15.4 million for the comparable period in 2001. In 2002, net cash used in financing activities was
primarily due to repayment of borrowings on short-term notes payable of $16.9 million and net repayment of
$5.1 million on long-term debt offset by proceeds from the sale of stock under employee stock plans of $6.9
million. In 2001, net cash provided by financing activities was primarily due to proceeds from the sale of stock
under employee stock plans of $8.2 million, net borrowings of short-term notes payable of $3.4 million, and net
borrowings of $3.8 million of long-term debt.
To fund our domestic working capital requirements, we have available unsecured revolving lines of credit
with aggregate seasonal limits ranging from $35 million to $75 million, of which $10 million to $50 million is
committed. As of December 31, 2002, no domestic balance was outstanding under these lines of credit.
Internationally, our subsidiaries have local currency operating lines in place guaranteed by us with a combined
limit of approximately $71.8 million at December 31, 2002. The balance outstanding under these lines of credit
was $9.8 million as of December 31, 2002.
Additionally, we maintain unsecured and uncommitted lines of credit with a combined limit of $250 million
at December 31, 2002, available for issuing letters of credit. At December 31, 2002, the balance outstanding
under these letters of credit was $112.0 million.
As we continue our investment in global infrastructure to support our growth, we anticipate the capital
expenditures for 2003 will be approximately $15 million, consisting of maintenance capital requirements and
information technology and distribution projects. We expect to fund these costs with existing cash and cash
provided by operations. If the need for additional expenditures arises, we may need to seek additional funding.
Our ability to obtain additional credit facilities will depend on many factors, including prevailing market
conditions, our financial condition, and our ability to negotiate favorable terms and conditions. We do not assure
you that financing will be available on terms that are acceptable or favorable to us, if at all.
Our operations are affected by seasonal trends typical in the outdoor apparel industry, which have
historically resulted in higher sales and profits in the third calendar quarter. This pattern has resulted primarily
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