Columbia Sportswear 2011 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 7 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 drive, 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 generate 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 weather and discretionary consumer spending patterns. Our products are marketed on a seasonal
basis and our product mix is weighted substantially toward the fall season, while our operating costs are more
equally distributed throughout the year. Since 2008, the expansion of our direct-to-consumer operations has
increased the proportion of sales and profits that we generate in the fourth calendar quarter. As a result, our sales
and profits tend to be highest in the third and fourth calendar quarters. In 2011, approximately 65 percent of our
net sales and all of our profitability were realized in the second half of the year, illustrating our dependence upon
sales results in the second half of the year, as well as the less seasonal nature of our operating costs.
We generally solicit orders from wholesale customers and independent distributors for the fall and spring
seasons based on seasonal ordering deadlines that we establish to aid our efforts in planning manufacturing
volumes to meet demand for each of our selling seasons.
We typically ship the majority of our advance fall season orders to wholesale customers and independent
distributors beginning in June and continuing through November. Similarly, the majority of our advance spring
season orders ship to wholesale customers and independent distributors beginning in December and continuing
through May. Generally, orders are subject to cancellation prior to the date of shipment.
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
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