Columbia Sportswear 2003 Annual Report Download - page 43

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1—BASIS OF PRESENTATION AND ORGANIZATION
Nature of the business:
Columbia Sportswear Company is a global leader in the design, manufacture, marketing and distribution of
active outdoor apparel, including outerwear, sportswear, footwear, and related accessories.
Basis of presentation:
The consolidated financial statements include the accounts of Columbia Sportswear Company and its
wholly-owned subsidiaries (the “Company”). All significant intercompany balances and transactions have been
eliminated in consolidation.
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from these estimates and assumptions.
Certain reclassifications of amounts reported in the prior period financial statements have been made to
conform to classifications used in the current period financial statements.
Beginning this year, net licensing income was presented as a separate line item in the Company’s
consolidated statement of operations for all years presented. Net licensing income has historically been presented
as an offset to selling, general and administrative expense (“SG&A”).
Dependence on key suppliers:
The Company’s products are produced by independent manufacturers worldwide. For 2003 the Company
sourced approximately 98% (by dollar volume) of its products outside the United States, principally in the Far
East. The Company’s three largest factory groups accounted for approximately 16% of the Company’s total
global production for 2003 and another company produced substantially all of the zippers used in the Company’s
products. From time to time, the Company has experienced difficulty satisfying its raw material and finished
goods requirements. Although the Company believes that it could identify and qualify additional factories to
produce these materials, the unavailability of some existing manufacturers for supply of these materials could
have a material adverse affect on the Company.
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents:
Cash and cash equivalents are stated at cost and include investments with maturities of three months or less
at the date of acquisition. At December 31, 2003 and 2002, cash and cash equivalents included $264,585,000 and
$194,670,000 of investments, respectively, primarily comprised of investment grade asset-backed debt
obligations, municipal tax-exempt securities, preferred auction rate securities and money market funds.
Accounts receivable:
Accounts receivable have been reduced by an allowance for doubtful accounts, which was $8,852,000 and
$9,341,000 at December 31, 2003 and 2002, respectively. The provision for bad debt expense was $2,325,000,
$3,704,000 and $3,531,000 in 2003, 2002, and 2001, respectively. The charges to the reserve were $2,814,000,
$2,379,000 and $1,341,000 in 2003, 2002 and 2001, respectively.
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