Columbia Sportswear 2004 Annual Report Download - page 32

heading “Factors That May Affect Our Business and the Price of Our Common Stock.” We do not undertake any
duty to update forward-looking statements after the date they are made or to conform them to actual results or to
changes in circumstances or expectations.
Factors That May Affect Our Business and the Price of Our Common Stock
We May be Adversely Affected by Weather Conditions
Our business is adversely affected by unseasonal weather conditions. Sales of our outerwear and cold
weather footwear are dependent in part on the weather and may decline in years in which weather conditions do
not favor the use of these products. For example, in 2004, unseasonably warm weather in the United States
caused customers to delay, and in some cases reduce or cancel, orders for our outerwear, which had an adverse
effect on our net sales and profitability. Periods of unseasonably warm weather in the fall or winter or
unseasonably cold or wet weather in the spring could have a material adverse effect on our results of operations
and financial condition.
We May be Adversely Affected by an Economic Downturn or Economic Uncertainty
Sales of our products are subject to substantial cyclical fluctuation. Consumer demand for our products may
not reach our growth targets, or may decline, when there is an economic downturn or economic uncertainty in
our key markets, particularly markets in North America and Europe. Weakness in the Japanese economy, for
example, has limited growth opportunities in recent years, and a slower economy in the United States in 2002
and 2003 created additional uncertainties for our customers and our business. In addition, continued volatility in
the global oil markets has resulted in rising fuel prices, which many shipping companies are passing on to their
customers. Our shipping costs have continued to increase over the past several years, and we expect these
increases to continue. Because we price our products to our customers in advance, we may not be able to pass
these increased costs on to our customers. Our sensitivity to economic cycles and any related fluctuation in
consumer demand and rising shipping costs could have a material adverse effect on our results of operations and
financial condition.
Our International Operations Involve Many Risks
We are subject to the risks generally associated with doing business abroad. These risks include foreign
governmental laws and regulations, foreign consumer preferences, political unrest, disruptions or delays in
shipments and changes in economic conditions in countries in which we manufacture or sell products. In
addition, disease outbreaks, terrorist acts and U.S. military operations have increased the risks of doing business
abroad. These factors, among others, could affect our ability to sell products in international markets, our ability
to manufacture products or procure materials, and our cost of doing business. If any of these or other factors
make the conduct of business in a particular country undesirable or impractical, our business could be materially
and adversely affected. In addition, many of our imported products are subject to duties, tariffs or quotas that
affect the cost and quantity of various types of goods imported into the United States or into our other sales
markets. The countries in which our products are produced or sold may eliminate, adjust or impose new quotas,
duties, tariffs or other restrictions, any of which could have a material adverse effect on our results of operations
and financial condition.
We May be Adversely Affected by the Financial Health of Retailers
We extend credit to our customers based on an assessment of a customer’s financial circumstances,
generally without requiring collateral. To assist in the scheduling of production and the shipping of seasonal
products, we offer customers discounts for placing pre-season orders and extended payment terms for taking
delivery before the peak shipping season. These extended payment terms increase our exposure to the risk of
uncollectible receivables. In addition, we face increased risk of order reduction or cancellation when dealing with
financially ailing retailers or retailers struggling with economic uncertainty. Some of our significant customers
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