Columbia Sportswear 2014 Annual Report Download - page 18

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the sale of excess inventory at discounted prices through our owned outlet stores or third-party liquidation channels, which
could have a material adverse effect on our brand image, financial condition, results of operations or cash flows.
Conversely, if we underestimate demand for our products or if our contract manufacturers are unable to supply products
when we need them, we may experience inventory shortages. Inventory shortages may prevent us from fulfilling customer
orders, delay shipments to customers, negatively affect customer relationships, result in increased costs to expedite
production and delivery, and diminish our ability to build brand loyalty. Shipments delayed due to limited factory capacity,
transportation or port disruption or other factors could result in order cancellations by our customers, which could have a
material adverse effect on our financial condition, results of operations or cash flows.
We May Be Adversely Affected by Weather Conditions, Including Global Climate Change Trends
Our business is adversely affected by unseasonable weather conditions. A significant portion of the sales of our
products is dependent in part on the weather and likely to decline in years in which weather conditions do not stimulate
demand for our products. Periods of unseasonably warm weather in the fall or winter or unseasonably cold or wet weather
in the spring and summer may have a material adverse effect on our financial condition, results of operations or cash flows.
Unintended inventory accumulation by our wholesale customers resulting from unseasonable weather in one season generally
negatively affects orders in future seasons, which may have a material adverse effect on our financial condition, results of
operations or cash flows.
A significant portion of our business is highly dependent on cold-weather seasons and patterns to generate consumer
demand for our cold-weather apparel and footwear. Consumer demand for our cold-weather apparel and footwear may be
negatively affected to the extent global weather patterns trend warmer, reducing typical patterns of cold-weather events, or
increasing weather volatility, which could have a material adverse effect on our financial condition, results of operations
or cash flows.
Acquisitions are Subject to Many Risks
From time to time, we may pursue growth through strategic acquisitions of assets or companies. Acquisitions, including
our acquisition of prAna in May 2014, are subject to many risks, including potential loss of significant customers or key
personnel of the acquired business as a result of the change in ownership; difficulty integrating the operations of the acquired
business or achieving targeted efficiencies; the incurrence of substantial costs and expenses related to the acquisition effort
and diversion of management's attention from other aspects of our business operations.
Acquisitions may also cause us to incur debt or result in dilutive issuances of our equity securities. Our acquisitions
may cause large one-time expenses or create goodwill or other intangible assets that could result in significant impairment
charges in the future. We also make various estimates and assumptions in order to determine purchase price allocation and
estimate the fair value of assets acquired and liabilities assumed. If our estimates or assumptions used to value these assets
and liabilities are not accurate, we may be exposed to losses that could be material.
We do not provide any assurance that we will be able to successfully integrate the operations of any acquired businesses
into our operations or achieve the expected benefits of any acquisitions. The failure to successfully integrate newly acquired
businesses or achieve the expected benefits of strategic acquisitions in the future could have an adverse effect on our business,
capital resources, cash flows, results of operations and financial position. We may not complete a potential acquisition for
a variety of reasons, but we may nonetheless incur material costs in the preliminary stages of such an acquisition that we
cannot recover.
We May Not Succeed in Realizing the Anticipated Benefits of Our New Joint Venture in China
Effective January 2014, our joint venture in China with Swire began operations. The joint venture, in which we hold
a 60% interest, is subject to a number of risks and uncertainties, including the following:
• Our ability to operate the joint venture is dependent upon, among other things, our ability to attract and retain
personnel with the skills, knowledge and experience necessary to carry out the operations of the joint venture.
Approximately 600 employees working with, or for Swire, became employees of, or provide services to, the
joint venture. Our ability to effectively operate the joint venture depends upon our ability to manage the employees