Columbia Sportswear 2003 Annual Report Download - page 49

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COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
technically advanced equipment and apparel for outdoor enthusiasts and professionals. The acquisition was
accounted for under the purchase method of accounting and the results of operations of Mountain Hardwear have
been recorded in the Company’s consolidated financial statements beginning on April 1, 2003. The cost of the
acquisition was allocated on the basis of the estimated fair value of the assets acquired and the liabilities
assumed. The fair values of assets and liabilities acquired are presented below (in thousands):
Cash .............................................................................. $ 370
Accounts receivable .................................................................. 6,236
Inventory .......................................................................... 8,600
Prepaids and other assets .............................................................. 19
Property, plant and equipment .......................................................... 440
Intangible assets ..................................................................... 28,357
Total assets acquired ............................................................. 44,022
Accounts payable and accrued liabilities .................................................. 1,181
Deferred tax liabilities ................................................................ 6,193
Debt .............................................................................. 6,413
Total liabilities assumed ........................................................... 13,787
Net assets acquired ............................................................... $30,235
Intangible assets acquired consist of $15.0 million for the trademark and trade names of Mountain
Hardwear, $12.2 million for goodwill and $1.2 million related to patents. The $16.2 million of purchase price
allocated to the trademark and trade names and patents was determined by management, and in part, by a third
party appraiser through established valuation techniques. The trademark and trade names and goodwill are not
subject to amortization as these assets are deemed to have indefinite useful lives. Patents are subject to
amortization over 17 years from the date filed with the U.S. Patent and Trademark Office. At the time of the
acquisition, the remaining useful lives of these patents ranged from 13 to 15 years and the weighted average
useful life is 14.3 years. These intangible assets will be reviewed for impairment in accordance with SFAS
No. 142, “Goodwill and Other Intangible Assets.”
NOTE 4—INVENTORIES, NET
Inventories consist of the following (in thousands):
December 31,
2003 2002
Raw materials ............................................................. $ 3,386 $ 1,540
Work in process ............................................................ 3,692 2,714
Finished goods ............................................................. 119,730 90,608
$126,808 $94,862
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