Columbia Sportswear 2009 Annual Report Download - page 22

communication between employees, with our subsidiaries and liaison offices overseas, as well as with our
customers and retail stores. We also rely on our information systems to allocate resources, develop demand plans
and forecast operating results. System failures, breaches of confidential information, or service interruptions may
occur as the result of a number of factors, including computer viruses, programming errors, hacking or other
unlawful activities by third parties, disasters, or our failure to properly maintain systems redundancy, or to
protect, repair, maintain, or upgrade our systems. Any breach or interruption of critical business information
systems could have a material adverse effect on our financial condition, results of operations or cash flows.
Our primary enterprise resource planning system is highly customized to our business. As a result, the
availability of internal and external resources with the expertise to maintain our enterprise resource planning
system is limited. We may experience difficulties if we transition to new or upgraded systems, including loss of
data and decreases in productivity as our personnel become familiar with new systems. In addition, transitioning
to new or upgraded systems could require significant capital investments. Difficulties in implementing new or
upgraded information systems or significant system failures could disrupt our operations and have a material
adverse effect on our financial condition, results of operations or cash flows.
As we implement our direct-to-consumer initiatives and plan for future growth, our customized enterprise
resource planning system may inhibit our ability to operate efficiently, which could have an adverse effect on our
results of operations. For example, our enterprise resource planning system may not be compatible with other
systems to support desired functionality for our operations.
We May be Adversely Affected by Currency Exchange Rate Fluctuations
Although the majority of our product purchases are denominated in U.S. dollars, the cost of these products
may be affected by the relative changes in the value of the local currency of the manufacturer. Price increases
caused by currency exchange rate fluctuations may make our products less competitive or have an adverse effect
on our margins. Our international revenues and expenses generally are derived from sales and operations in
currencies other than the U.S. dollar. Because the primary currency of many of our subsidiaries is not the U.S.
dollar, we are exposed to potentially material gains or losses from the remeasurement of monetary transactions
into the U.S. dollar. Currency exchange rate fluctuations may also disrupt the business of the independent
factories that produce our products by making their purchases of raw materials more expensive and more difficult
to finance. As a result, currency fluctuations may have a material adverse effect on our financial condition,
results of operations or cash flows.
Our Investments May be Adversely Affected by an Economic Downturn or Economic Uncertainty
Our investment portfolio is subject to a number of risks and uncertainties. Changes in market conditions,
such as those that accompany an economic downturn or economic uncertainty, may negatively affect the value
and liquidity of our investment portfolio, perhaps significantly. Our ability to find diversified investments that
are both safe and liquid and that provide a reasonable return may be impaired, resulting in lower interest income,
less diversification, longer investment maturities and/or higher other-than-temporary impairments.
We May be Adversely Affected by Labor Disruptions
Our business depends on our ability to source and distribute products in a timely manner. Labor disputes at
independent factories where our goods are produced, shipping ports, transportation carriers, retail stores or
distribution centers create significant risks for our business, particularly if these disputes result in work
slowdowns, lockouts, strikes, or other disruptions during our peak manufacturing and importing seasons, and
may have a material adverse effect on our business, potentially resulting in cancelled orders by customers,
unanticipated inventory accumulation, and reduced revenues and earnings.
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