Columbia Sportswear 2013 Annual Report Download - page 23

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produce our products by making their purchases of raw materials more expensive and more difficult to finance. As a result,
currency fluctuations may have a material adverse effect on our financial condition, results of operations or cash flows.
All of our independent distributors purchase the vast majority of their inventory from us in U.S. dollars and, therefore,
are dependent upon their ability to exchange their functional currency for U.S. dollars on global currency exchanges. At
times, some of our distributors have experienced periods during which they have been unable to obtain U.S. dollars in
sufficient quantity to complete their purchase of goods or to pay amounts owed for past deliveries. Disruptions in currency
exchange markets may have a material adverse effect on our financial condition, results of operations, or cash flows.
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, potentially resulting in lower interest income, less diversification, longer
investment maturities and/or 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. While a majority of our
own operations are not subject to organized labor agreements, our relationship with our Cambrai distribution center
employees is governed by French law, including a formal representation of employees by a Works' Council and the application
of a collective bargaining agreement. 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, shipping and
selling 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 the majority 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 and information technology professionals 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 annual net sales are weighted 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 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,