Under Armour 2014 Annual Report Download - page 11

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P
A
RT I
I
TEM 1. B
US
INE
SS
G
enera
l
Our principal business activities are the development, marketing and distribution of branded performance
apparel, footwear and accessories for men, women and youth. The brand’s moisture-wicking fabrications are
engineered in many designs and styles for wear in nearly every climate to provide a performance alternative to
traditional products. Our products are sold worldwide and are worn by athletes at all levels, from youth t
o
p
rofessional, on playing fields around the globe, as well as by consumers with active lifestyles
.
Our net revenues are generated primarily from the wholesale sales of our products to national, regional,
independent and specialty retailers. We also generate net revenue from the sale of our products through our direc
t
to consumer sales channel, which includes our brand and factory house stores and websites, and from product
licensing. A large majority of our products are sold in North America; however we believe that our product
s
appeal to athletes and consumers with active lifestyles around the globe. Internationally, our net revenues ar
e
generated from a mix of wholesale sales to retailers and distributors and sales through our direct to consume
r
sales channels, and license revenue from sales by our third party licensee. We plan to continue to grow ou
r
business over the long term through increased sales of our apparel, footwear and accessories, expansion of our
wholesale distribution, growth in our direct to consumer sales channel and expansion in international markets
.
Virtually all of our products are manufactured by our unaffiliated primary manufacturers operating i
n
13 countries outside of the United States
.
I
n December 2013, we acquired MapMyFitness, Inc. (“MapMyFitness”), a digital connected fitnes
s
company with users primarily in the U.S., and in January 201
5
, we acquired Endomondo, ApS. (“Endomondo”) a
digital connected fitness company with over 20 million registered users primarily in Europe and other regions
o
utside the U.S. In February 201
5
, we entered into an agreement to acquire MyFitnessPal, Inc. (“MyFitnessPal”)
,
a digital nutrition and connected fitness company with over 80 million registered users. Combined with the
growth of MapMyFitness, these acquisitions will expand our Connected Fitness Community to include more tha
n
120 million registered users. The acquisition is expected to close in the first quarter of 201
5
, subject to regulatory
approval. These businesses will form the core of our Connected Fitness business and strategy.
Our Connected Fitness strategy is focused on connecting with our consumers and increasing awareness and
sales of our existing product offerings through our global wholesale and direct to consumer channels. We plan to
engage and grow this community by developing innovative applications, services and other digital solutions t
o
im
p
act how athletes and fitness-minded individuals train,
p
erform and live
.
We were incorporated as a Maryland corporation in 1996. As used in this report, the terms “we,” “our,
”
“us,” “Under Armour” and the “Company” refer to Under Armour, Inc. and its subsidiaries unless the context
indicates otherwise. We have registered trademarks around the globe, including UNDER ARMOUR
®
,
HEAT
G
EA
R
®
,
CO
LD
G
EA
R
®
, ALL
S
EA
SO
N
G
EAR
®
a
nd the Under Armour UA Logo, and we have applied to
r
egister many other trademarks. This Annual Report on Form 10-K also contains additional trademarks an
d
tradenames of our Company and our subsidiaries. All trademarks and tradenames appearing in this Annual
R
eport on Form 10-K are the property of their respective holders
.
P
ro
d
uct
s
Our product offerings consist of apparel, footwear and accessories for men, women and youth. We marke
t
o
ur
p
roducts at multi
p
le
p
rice levels and
p
rovide consumers with
p
roducts that we believe are a su
p
erior
alternative to traditional athletic
p
roducts. In 2014, sales of a
pp
arel, footwear and accessories re
p
resented 74%,
14% and 9% of net revenues, respectively. Licensing arrangements, primarily for the sale of our products, and
o
ther revenue represented the remaining 3% of net revenues. Refer to Note 16 to the Consolidated Financial
Statements for net revenues by product.
1