Columbia Sportswear 2010 Annual Report Download - page 33

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Annual Report, including Item 1 of Part I and Item 6 of Part II, contains forward-looking statements.
Forward-looking statements include any statements related to our expectations regarding future performance or
market position, including any statements regarding anticipated sales across markets, distribution channels and
product categories, access to raw materials and factory capacity, financing and working capital requirements and
resources and our exposure to market risk associated with interest rates and foreign currency exchange rates.
These forward-looking statements, and others we make from time to time, are subject to a number of risks
and uncertainties. Many factors may cause actual results to differ materially from those projected in forward-
looking statements, including the risks described above in Item 1A, Risk Factors. We do not undertake any duty
either 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.
Our Business
As one of the largest outdoor apparel and footwear companies in the world, we design, source, market and
distribute active outdoor apparel, footwear, accessories and equipment under the Columbia, Mountain Hardwear,
Sorel and Montrail brands. Our products are sold through a mix of wholesale distribution channels, independent
distributors, our own direct-to-consumer channels and licensees.
The popularity of outdoor activities, changing design trends and consumer adoption of innovative
performance technologies affect consumer desire for our products. Therefore, we seek to anticipate and respond
to trends and shifts in consumer preferences by adjusting the mix of available product offerings, developing new
products with innovative performance features and designs, and creating persuasive and memorable marketing
communications to drive consumer awareness and demand. Failure to anticipate or respond to consumer needs
and preferences in a timely and adequate manner could have a material adverse effect on our sales and
profitability.
Seasonality and Variability of Business
Our business is affected by the general seasonal trends common to the outdoor industry and is heavily
dependent upon discretionary consumer spending patterns. Our products are marketed on a seasonal basis and
our product mix is weighted substantially toward the fall season, resulting in sales and profits being highest in the
third calendar quarter. The expansion of our own direct-to-consumer operations beginning in 2008 has increased
the proportion of sales and profits that we generate in the fourth calendar quarter. In 2009 and 2010, our profits
were earned entirely in the second half of the year, reflecting the dependence upon our sales results in the latter
part of the year as well as a higher fixed cost structure of our business.
Results of operations in any period should not be considered indicative of the results to be expected for any
future period, particularly in light of persistent volatility in economic conditions. Sales of our products are
subject to substantial cyclical fluctuation, the effects of unseasonable weather conditions, and the continued
popularity of outdoor activities as part of an active lifestyle in key markets. The current economic environment in
key markets, coupled with challenging capacity constraints across the independent manufacturing and
transportation segments of our supply chain, reduced the predictability of our business throughout 2010 and into
2011.
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