Columbia Sportswear 2009 Annual Report Download - page 51

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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, development, marketing and distribution of
active outdoor apparel, including sportswear, outerwear, footwear, accessories and equipment.
Principles of consolidation:
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.
Estimates and assumptions:
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 consolidated
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results may differ from these estimates and assumptions. Some of these more significant estimates relate to
revenue recognition, allowance for doubtful accounts, inventory, product warranty, long-lived and intangible
assets and income taxes.
Reclassifications:
Certain immaterial reclassifications of amounts reported in the prior period financial statements have been
made to conform to classifications used in the current period financial statements.
Dependence on key suppliers:
The Company’s products are produced by independent factories worldwide. For 2009, the Company sourced
nearly all of its products outside the United States, principally in the Southeast Asia. In 2009, the Company’s
four largest apparel factory groups accounted for approximately 15% of the Company’s total global apparel
production and the Company’s four largest footwear factory groups accounted for approximately 66% of the
Company’s total global footwear production. In addition, a single vendor supplied substantially all of the zippers
used in the Company’s products in 2009. From time to time, the Company has had difficulty satisfying its raw
material and finished goods requirements. Although the Company believes that it can identify and qualify
additional raw material suppliers and independent factories to produce these products, the unavailability of some
existing suppliers or independent factories for supply of these products may have a material adverse effect on the
Company.
Concentration of credit risk:
Trade Receivables
At December 31, 2009, the Company had one customer in its Canadian segment that accounted for
approximately 15.5% of consolidated accounts receivable. At December 31, 2008, the Company had one
customer in its EMEA segment and one customer in its Canadian segment that accounted for approximately
13.5% and 10.2% of consolidated accounts receivable, respectively. No single customer accounted for 10% or
more of consolidated revenues for any of the years ended December 31, 2009, 2008 or 2007.
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