Columbia Sportswear 2002 Annual Report Download - page 45

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NOTE 5—SHORT-TERM BORROWINGS AND CREDIT LINES
The Company has available an unsecured and committed operating line of credit providing for borrowings in
an aggregate amount not to exceed at any time outstanding (1) $50,000,000 during the period of July 15 through
December 15 of the calendar year, (2) $25,000,000 during the period of December 16 through February 15 of the
calendar year and (3) $10,000,000 at all other times. The maturity date of this agreement is June 30, 2004. Interest,
payable monthly, is computed at the bank’s prime rate minus up to 2.05% per annum. The agreement also includes
a fixed rate option based on the LIBOR rate plus up to 65 basis points. There was no balance outstanding on this
line as of December 31, 2002 and 2001. The unsecured operating line of credit requires the Company to comply
with certain covenants including a Capital Ratio, which limits indebtedness to tangible net worth. As of December
31, 2002, the Company was in compliance with all of these covenants. If the Company defaults on its payments, it is
prohibited, subject to certain exceptions, from making dividend payments or other distributions.
The Company has arrangements in place to facilitate the import and purchase of inventory through the
issuance of sight letters of credit. The arrangements consist of an unsecured and uncommitted revolving line of
credit of $25,000,000 and a $125,000,000 import line of credit at December 31, 2002, to issue documentary
letters of credit on a sight basis and are renewed on an annual basis. The combined limit under this agreement
was $150,000,000 at December 31, 2002. The revolving line accrues interest at the bank’s prime rate minus 2%
per annum. The revolving line also has a fixed rate option based on the bank’s cost of funds plus 45 basis points.
There was no balance outstanding on this line as of December 31, 2002 and 2001. At December 31, 2002, the
Company had $76,562,000 of firm purchase orders placed under this facility.
The Company also has available an unsecured and uncommitted $125,000,000 import letter of credit line
subject to annual renewal. At December 31, 2002, the Company had $35,477,000 of firm purchase orders placed
under this facility.
The Company’s Canadian subsidiary has available an unsecured and uncommitted line of credit providing
for borrowing to a maximum of C$25,000,000 (US$15,900,000 at December 31, 2002). The balance outstanding
was US$0 and US$10,208,000 at December 31, 2002 and 2001, respectively. The interest rate at December 31,
2001 was 4.0%.
During 2002, the Company’s European subsidiary opened two separate unsecured and uncommitted lines of
credit providing for borrowing to a maximum of 20,000,000 EURO per credit line (combined US$41,999,000 at
December 31, 2002). There was no balance outstanding at December 31, 2002. These lines accrue interest based on
Euribor plus 0.5% and Eonia plus 0.55% respectively. At December 31, 2001, the Company’s European branch had a
balance outstanding of $5,650,000 under a previous credit facility. The interest rate at December 31, 2001 was 5.0%.
The Company’s Japanese subsidiary also has an unsecured and uncommitted line of credit providing for
borrowing to a maximum of 1,650,000,000 JPY (US$13,894,000 at December 31, 2002). The balance
outstanding was US$9,835,000 and US$9,047,000, at an interest rate of 1.9%, at December 31, 2002 and 2001.
NOTE 6—ACCRUED LIABILITIES
Accrued liabilities consist of the following (in thousands):
December 31,
2002 2001
Accrued salaries, bonus, vacation and other benefits ................................ $16,161 $16,611
Accrued warranty reserve ..................................................... 7,800 7,475
Accrued cooperative advertising reserve ......................................... 5,530 4,895
Other ..................................................................... 5,655 5,073
$35,146 $34,054
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