Columbia Sportswear 2002 Annual Report Download - page 8

PART I
Item 1. BUSINESS
General
Founded in 1938 in Portland, Oregon, Columbia Sportswear Company®is a global leader in design,
sourcing, marketing and distribution of active outdoor apparel and footwear, with operations in North America,
Europe and Asia. As one of the largest outerwear companies in the world and the leading seller of skiwear in the
United States, we have developed an international reputation across an expanding product line for quality,
performance, functionality and value. We believe our award-winning advertising campaign effectively positions
the Columbia®brand as outdoor, active, authentic and distinctly American.
Since 1938 we have grown from a small family-owned, regional hat distributor to a global leader in the
active outdoor apparel and footwear industries. Known for durability and dependability at a reasonable price, we
leveraged Columbia’s brand awareness in the 1990s by expanding into related merchandise categories and
developing our “head-to-toe” outfitting concept. During 2002, we distributed our products to approximately
10,000 retailers in over 40 countries.
In September 2000 we added another internationally known brand to our business, acquiring the Sorel
trademark and associated intellectual property through a Canadian bankruptcy proceeding for approximately $8
million in cash. We believe that Sorel®, a brand associated with quality cold weather boots for roughly four
decades, complements our existing product offering, enhances our growth opportunities in footwear and apparel,
and opens the door to distribution channels where we have not previously sold Columbia brand products.
On March 13, 2003, the Company entered into a merger agreement to acquire Mountain Hardwear, Inc.
(“Mountain Hardwear”) for aggregate consideration of approximately $36 million, including approximately $30
million in cash and $6 million of debt assumption. The merger is subject to approval by the shareholders of
Mountain Hardwear and other customary closing conditions and is expected to close on March 31, 2003.
Mountain Hardwear, which is based in Richmond, California, designs, develops and markets technically
advanced equipment and apparel for outdoor enthusiasts and professionals.
Our business is subject to many risks and uncertainties that could have a material adverse effect on our
financial condition, results of operations and stock price. For a description of some of these risks and
uncertainties, we encourage you to read “Factors That May Affect Our Business and the Price of Our Common
Stock” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Products
We group our merchandise into four principal categories—(1) outerwear, (2) sportswear, (3) rugged
footwear and (4) related accessories. The durability, functionality and affordability of our products make them
ideal for use in a wide range of outdoor activities, including skiing, snowboarding, hunting, fishing and hiking, as
well as for casual wear. We are committed to innovative, functional product design and use durable, high quality
materials and construction across all of our product lines. We believe our broad range of competitively priced
merchandise offers consumers one of the best price-value equations in the outdoor apparel and footwear
industries.
We believe the Columbia brand represents a differentiated outdoor, active, authentic, value-oriented and
distinctly American image. Our products are designed to reinforce this image. In both the design and production
phases, we focus our efforts on the development of popular, higher volume products at moderate price points.
Our attention to technical details such as pockets that double as vents, double storm flaps over zippers and
“gutters” that facilitate water run-off, as well as the use of special technical materials, contribute to the
authenticity and functionality of our entire selection of merchandise.
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