Columbia Sportswear 2004 Annual Report Download - page 2

Dear฀Fellow฀Shareholders,
2004 was another successful year for Columbia Sportswear. We delivered exceptional
financial results through consistent execution of our growth strategies. Annual sales
increased 15.1 percent and reached $1,095.3 million, exceeding the $1 billion mark for
the first time in Company history, and net income increased 15.4 percent to $138.6
million during 2004. Our balance sheet at year end was solid, with $290.2 million in
cash and short-term investments, and 1.6 percent long-term debt to equity.
Our key growth strategies remain consistent and our goals of diversifying revenues
and broadening addressable market opportunities remain steady. Our strategies of further developing our sportswear
and footwear product categories, leveraging our brands in international markets, enhancing our customers’ retail
productivity, selectively broadening retail distribution and expanding the global awareness of our brands through
profitable license agreements have advanced and will continue to drive organic growth for the Company.
The further development of our sportswear and footwear product categories is a key growth initiative, and sales in these
expanding product categories generated more than 80 percent of 2004 sales growth. Sportswear sales surged 27.3 percent
to $396.4 million during 2004, driven by increased sales of key sportswear styles across all major worldwide markets
and distribution channels. Footwear sales were also robust, increasing 24.2 percent to $184.6 million, with sales growth
in all major markets worldwide. Our capital investment in footwear distribution and increased financial commitment in
footwear design, merchandising and production personnel underscore our commitment to this product category, which I
believe provides the largest product opportunity for the Company long term.
International expansion continues to be another significant growth strategy. Net sales outside of North America soared
from $35.4 million in 1997 to $311.7 million in 2004, but still represented only 28.5 percent of total net sales during 2004.
We are exploring significant opportunities in many markets worldwide, with a sharp focus on the European market.
Europe is a region where outdoor activities are consistently popular and where we can leverage our active, outdoor,
authentic and distinctly American brand image. The significant investments in our European product distribution facility
demonstrate our commitment to the region and provide a competitive advantage in growing our European market share.
We continued to execute our other growth strategies during 2004. Installations of in-store concept shops and brand
enhancement systems increased significantly and we selectively broadened retail distribution in the department store and
specialty footwear channels. Our licensing relationships have continued to expand the global awareness of our brands
and have generated profitable revenue during the year.
The underlying global market opportunities in each of our key product categories of footwear, sportswear, outerwear
and accessories provide optimism for our continued growth. Our sourcing and distribution infrastructure, product
design and merchandising talent and strong capital base establish the foundation upon which we can consistently execute
our growth strategies and broaden our market opportunities. We are making the necessary investments in distribution
facilities and personnel to support the continued growth of our organization.
In conclusion, I am grateful for the dedicated service of our employees who share the vision of what Columbia can
become. Due principally to their efforts, we continue to grow as a global leader in the design and distribution of high
quality outdoor apparel and footwear.
Sincerely,
Timothy P. Boyle
President and Chief Executive Officer
Columbia Sportswear Company