Columbia Sportswear 1998 Annual Report Download - page 2

SALES GROWTH
OPERATING EARNINGS
INTERNATIONAL SALES*
Millions
Millions
Millions
33
192
22 29
42
53
67
91
256
304 299
353
43
36
27
44
56
$10
'9 3
'9 3 '94 '95 '9 6 '97 '98
'9 3 '94 '95 '9 6 '97 '98
'9 4 '95 '96 '9 7 '98
$0
$20
$30
$40
$50
$60
$20
$0
$40
$60
$80
$100
$50
$0
$100
$150
$200
$250
$300
$350
$400
$450 427
RUGGED FOOTWEAR SALES
Millions
$0
$20
$40
$60
$80
$100
$120
Millions
$0
$5
$10
$15
$20
$25
$30
$35
'9 3 '94 '95 '9 6 '97 '98
'9 3 '94 '95 '9 6 '97 '98
28
1
78
12
24
32
52
74 76
91
119
*Includes all non-US sales
DIVERSITY OF REVENUE BASE
BY GEOGRAPHY
US Canada International
88%
79%
9% 12%
7% 5%
1993 1998
SPORTSWEAR SALES
value
outdoor
active
american
authentic
Shareholders and Friends,
1998 was a year of key milestones for Columbia Sportswear Company. Not only did the Company mark its 60th anniversary and
execute an initial public offering, but we were also able to achieve record sales and earnings for the year. We are very proud of the
accomplishments our team achieved and of the high-quality, value-oriented product we provided to consumers under the Columbia
Sportswear label. However, despite all of our successes, we are not going to rest on our laurels. We recognize our responsibility to
our shareholders, and the entire management team at Columbia is dedicated to growing our business in a responsible and profitable
manner to create shareholder value. Accordingly, I am not going to spend time focusing on past accomplishments. Instead, in
this inaugural report, I will provide shareholders with a better sense of what drives Columbia Sportswear and then outline some
objectives for 1999.
The cover of this report is imprinted with five words: AUTHENTIC, AMERICAN, ACTIVE, OUTDOOR AND VALUE.At Columbia, these
“five key words” not only help us stay focused on designing great products that people want to buy, but they also help reinforce and
strengthen our brand identity. To us, AUTHENTIC means more than our 60 years of experience creating innovative products for a
variety of outdoor activities. It also means that our products are designed by people who actually participate in outdoor activities.
We built our reputation designing products that look distinctly AMERICAN.We didn’t change that design strategy when we introduced
our products in over thirty countries around the world, and we continue to believe in our single design theme. True to our design
goals, our products are created for ACTIVE use. Whether fly-fishing or heli-skiing, our customers expect Columbia products to with-
stand the rigors they put them through. Additionally, our products are designed for OUTDOOR use, and while not everyone who pur-
chases a Columbia product will put it to the test, customers can be confident that our merchandise will perform as intended. VALUE
is the foundation upon which all of the other key words are based. Columbia is focused on providing products that fall within the
parameters of all of the above key words. Because of our innovative manufacturing and distribution models, we are able to offer con-
sumers superb products at affordable prices. It is the combination of providing great merchandise that people want to buy with price
points that are highly affordable that has enabled Columbia to grow to where it is today. We believe that a continuation of our core
philosophies will enable us to grow the business profitably.
Looking forward, I would like to briefly outline a few of our key corporate objectives for 1999. In the first half of 1999, we look
forward to implementing the newest phase of our North American distribution center. This state-of-the-art facility has been designed
to increase throughput while simultaneously providing the type of value-added services that many retailers are requesting from
vendors. Part of our strategic initiative is to continuously improve our service as an apparel and footwear vendor, thereby making
it easier for our customers to conduct business with Columbia. The distribution center project is designed to meet that goal and is
an important component of our five-year business plan.
Additionally, in 1999 we will increase our initiative to grow our business throughout Europe. Our compounded annual growth rate
in Europe was 79.5 percent from 1994-1998, culminating in sales of $27.2 million for 1998. The opportunities in Europe are
tremendous, and our corporate objective for 1999 on this front is to reinforce our management infrastructure to drive growth in that
business.
Finally, in 1999 we will seek to continue the rapid growth we have been experiencing in our sportswear and footwear product lines.
While Columbia’s roots are solidly in the outerwear business, we have made a conscious effort to selectively broaden our product
offerings and leverage the Columbia brand name. To that end, we became very focused on our sportswear and footwear divisions
in the early 1990s. The result has been compounded annual growth in our sportswear business of 33.6 percent since 1993, and
growth in our footwear business from $1 million in 1993 to more than $32 million in 1998. As you can see, these divisions have
become an increasingly important part of our revenue mix and growth strategy. We expect 1999 to show continued growth for both
of these categories.
While the challenges are formidable, the opportunity to grow this business is significant. I believe that we have the correct combi-
nation of management experience, market potential, and strategic planning to continue growing the business going forward. I thank
our customers, shareholders, and employees for their continued support, and I look forward to reporting the progress on our 1999
objectives in next year’s report.
Timothy P. Boyle
President and Chief Executive Officer
Columbia Sportswear Company