Columbia Sportswear 2012 Annual Report Download - page 13

9
Item 1A. RISK FACTORS
In addition to the other information contained in this Form 10-K, the following risk factors should be considered
carefully in evaluating our business. Our business, financial condition, results of operations or cash flows may be materially
adversely affected by these and other risks. Please note that additional risks not presently known to us or that we currently
deem immaterial may also impair our business and operations.
Our Success Depends on Our Business Strategies
Our business strategies are designed to achieve sustainable, profitable growth by creating innovative products, focusing
on product design, utilizing innovations to differentiate our brand from competitors, ensuring that our products are sold
through brand enhancing distribution partners around the world, increasing the impact of consumer communications to
drive demand for our brands and sell-through of our products, making sure our products are merchandised and displayed
appropriately in retail environments and continuing to build a brand enhancing direct-to-consumer business. We intend to
pursue these strategies across our portfolio of brands, product categories and geographic markets. We face many challenges
in implementing our business strategies. For example, our focus on innovation depends on our ongoing ability to identify,
develop or secure rights to product improvements or developments through internal research, joint developments,
acquisitions or licenses. Once obtained, these innovations and developments may not be profitable or have the desired effect
of increasing demand for our products or enhancing our brands' image. The failure to implement our business strategies
successfully could have a material adverse effect on our financial condition, results of operations or cash flows.
To implement our business strategies, we must continue to modify and fund various aspects of our business, to maintain
and enhance our information systems and supply chain operations to respond to changes in demand, and to attract, retain
and manage qualified personnel. Changes in our business, including efforts to contain costs, may place an increasing strain
on management, financial, product design, marketing, distribution, supply chain and other resources, and we may have
operating difficulties as a result. For example, in support of our strategic initiatives, we are making significant investments
in our business processes and information technology infrastructure that require significant management attention and
corporate resources. In addition, we may need to adapt our information technology systems and business processes to
integrate business acquisitions. These business initiatives involve many risks and uncertainties that, if not managed
effectively, may have a material adverse effect on our financial condition, results of operations or cash flows.
Our business strategies and related increased expenditures could also cause our operating margin to decline if we are
unable to offset our increased spending with increased sales or gross margins, or comparable reductions in other operating
costs. If our sales or gross margins decline or fail to grow as planned and we fail to sufficiently leverage our operating
expenses, our profitability will decline. This could result in a decision to delay, reduce, modify or terminate our strategic
business initiatives, which could limit our ability to invest in and grow our business and could have a material adverse effect
on our financial condition, results of operations or cash flows.
Initiatives to Upgrade Our Business Processes and Information Technology Infrastructure Involve Many Risks Which
Could Result In, Among Other Things, Business Interruptions and Higher Costs
We regularly implement business process improvement initiatives to optimize our performance. Our current business
process initiatives include plans to improve business results through standardization of business processes and technology
that support our supply chain and go-to-market strategies through implementation of an integrated ERP software solution
over the next several years. We may experience difficulties as we transition to these new or upgraded systems and processes,
including loss of data, decreases in productivity as our personnel become familiar with new systems and lost revenues. In
addition, transitioning to these new or upgraded systems requires significant capital investments and personnel resources.
Difficulties in implementing new or upgraded information systems or significant system failures could disrupt our operations
and have a material adverse effect on our capital resources, financial condition, results of operations or cash flows.
We expect implementation of this new information technology infrastructure to have a pervasive impact on our business
processes and information systems across a significant portion of our operations. As a result, we will experience significant
changes in our operational processes and internal controls as our implementation progresses. If we are unable to successfully
implement this system, including harmonizing our systems, data and processes, our ability to conduct routine business
functions could be negatively impacted and significant disruptions to our business could occur. In addition, we could incur