Columbia Sportswear 2011 Annual Report Download - page 23

Our Investments May be Adversely Affected by Market Conditions
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.
We Depend on Key Suppliers
Some of the materials that we use may be available from only one source or a very limited number of
sources. For example, some specialty fabrics are manufactured to our specification by one source or a few
sources, and a single vendor supplies substantially all of the zippers used in our products. From time to time, we
have difficulty satisfying our raw material and finished goods requirements. Although we believe that we can
identify and qualify additional independent factories to produce these materials as necessary, there are no
guarantees that additional independent factories will be available. In addition, depending on the timing, any
changes in sources or materials may result in increased costs or production delays, which may have a material
adverse effect on our financial condition, results of operations or cash flows.
We Depend on Key Personnel
Our future success will depend in part on the continued service of key personnel and our ability to attract,
retain and develop key managers, designers, sales people and others. We face intense competition for these
individuals worldwide, and there is a significant concentration of well-funded apparel and footwear competitors
in and around our headquarters in Portland, Oregon. We may not be able to attract qualified new employees or
retain existing employees, which may have a material adverse effect on our financial condition, results of
operations or cash flows.
Our Business Is Affected by Seasonality
Our business is affected by the general seasonal trends common to the outdoor industry. Our products are
marketed on a seasonal basis and our product mix is weighted substantially toward the fall season. Our annual net
sales are weighted more heavily toward the fall/winter season, while our operating expenses are more equally
distributed throughout the year. As a result, the majority, and sometimes all, of our operating profits are
generated in the second half of the year. The expansion of our direct-to-consumer operations and sales growth in
our winter footwear business (both Sorel and Columbia brands) has increased the proportion of sales and profits
that we generate in the fourth calendar quarter. This seasonality, along with other factors that are beyond our
control and that are discussed elsewhere in this section, may adversely affect our business and cause our results
of operations to fluctuate. As a result, our profitability may be materially affected if management is not able to
timely adjust expenses in reaction to adverse events such as unfavorable weather, weak consumer spending
patterns or unanticipated levels of order cancellations. Results of operations in any period should not be
considered indicative of the results to be expected for any future period.
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