Columbia Sportswear 2003 Annual Report Download - page 25

Interest expense was $1.6 million in 2003 compared to $2.4 million for the comparable period in 2002. The
decrease in interest expense was attributable to the repayment of short-term notes payable and long-term debt.
Income Tax Expense: The provision for income taxes increased to $70.5 million in 2003 from $61.5
million in 2002. The reduction in the effective tax rate from 37.5% to 37.0% is primarily due to a reduction in
accrued income taxes related to favorable outcomes of various federal, state and international income tax audits
during the year.
In 2004, we anticipate further reductions in our effective tax rate due to several factors, including an
increase in the relative mix of international and consolidated profitability, as our growth rates internationally
exceed our domestic growth rates and reductions in our overall state income tax expense.
Year Ended December 31, 2002 Compared to Year Ended December 31, 2001
Net Sales: Consolidated net sales increased 4.7% to $816.3 million in 2002 from $779.6 million for 2001.
Our net sales growth was predominantly driven by the expansion of our international business, particularly in
Europe, followed by our international distributor and Canadian businesses. The growth of our business in the
United States has been slower than our international growth primarily due to the relative maturity of our
outerwear product category and economic conditions in the United States coupled with the warm climate
experienced in the United States during 2002. Increased unit sales volume was the primary reason for the
increase in net sales across all geographic markets.
In particular, the increase in net sales in 2002 was primarily attributable to increased unit shipments of
sportswear and outerwear and to a lesser degree increased unit shipments of footwear and accessories. Outerwear
net sales increased 4.8% to $422.5 million in 2002 from $403.3 million for 2001. One of the key drivers for the
increased net sales of outerwear was the expansion of our business and the acceptance of our products in
international markets. To a lesser degree, the introduction of new product styles also contributed to increased
sales of outerwear units. Sportswear net sales increased 5.3% to $245.2 million in 2002 from $232.9 million for
2001. Similar to our outerwear net sales growth, the increase in net sales of sportswear was largely attributable to
an increase in unit shipments from the expansion of our business internationally. Footwear net sales increased
1.3% to $110.0 million in 2002 from $108.6 million for 2001. Although the shipment of footwear units increased
in Europe and other international markets, the shipment of U.S. footwear units were off in 2002 due to a highly
competitive retail market and difficult economic conditions in the U.S. as well as a transitional 2002 footwear
product offering. Net sales of accessories increased 10.9% to $38.6 million in 2002 from $34.8 million in 2001
primarily as a result of increased unit shipments of hats and gloves.
Net sales in the United States increased 1.1% to $557.5 million in 2002 from $551.3 million for 2001. The
$6.3 million increase in net sales was attributable to increased unit shipments of outerwear, sportswear and
accessories partially offset by a decrease in footwear unit shipments.
European direct sales increased 16.5% to $95.9 million in 2002 from $82.3 million for 2001. The $13.6
million increase in net sales was attributable to increased unit shipments in all product categories. Outerwear led
the increase in net sales growth followed by sportswear, footwear and accessories. The increase in European
direct sales was primarily attributable to higher sales with existing customers coupled with an increase in the
number of retailers we sell to in Europe.
Canadian sales increased 6.6% to $86.7 million in 2002 from $81.3 million for 2001. The $5.4 million
increase in net sales was attributable to increased unit shipments in all product categories. Outerwear led the
increase in net sales growth followed by footwear and accessories partially offset by a decrease in sportswear net
sales.
Net other international sales, excluding Canadian and European direct sales, increased 17.8% to $76.2
million in 2002 from $64.7 million for 2001. The $11.5 million increase in net sales was attributable to increased
unit shipments in all product categories, led by outerwear and followed by sportswear, footwear and accessories.
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