Under Armour 2007 Annual Report Download - page 11

PART I
ITEM 1. BUSINESS
General
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 synthetic
fabrications are designed to keep perspiration away from the skin, help regulate body temperature, enhance
comfort and mobility and improve performance regardless of weather conditions. Our products are engineered in
many different designs and styles for wear in nearly every climate to provide a performance alternative to
traditional natural fiber products. Our products are sold worldwide and are worn by consumers with active
lifestyles and athletes at all levels, from youth to professional, on playing fields around the globe.
Our products are offered globally in approximately 15,000 retail stores and can be purchased primarily
across the United States, Canada, Japan and Western Europe through large national and regional chains of
retailers, as well as smaller, independent and specialty retailers. Virtually all of our products are manufactured by
unaffiliated manufacturers operating in 15 countries outside of the United States.
Our revenues are generated primarily from wholesale distribution to retail stores. We also derive revenue
from product licensing, the sale of our products direct to athletes and teams and direct to consumer sales through
our own retail stores, website and toll-free call center. During 2007, our net revenues grew approximately 41% to
$606.6 million from $430.7 million in 2006. Income from operations increased approximately 52% to $86.3
million in 2007 from $56.9 million in 2006. Our net income increased to $52.6 million in 2007 from $39.0
million in 2006.
We were incorporated as a Maryland corporation in 1996. As used in this report, the terms “we,” “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®, HEATGEAR®,
COLDGEAR®, ALLSEASONGEAR®, LOOSEGEAR®and the Under Armour UA Logo, and we have applied
to register many other trademarks. This Annual Report on Form 10-K also contains additional trademarks and
tradenames of our Company and other companies. All trademark and tradenames appearing in this Annual
Report on Form 10-K are the property of their respective holders.
Products
Our product offerings consist of apparel, footwear and accessories. Our products are offered in a variety of
styles and fits intended to reduce friction, enhance comfort and keep the body cool and dry. We market our
products at multiple price levels and seek to provide all consumers with what we believe to be a superior
alternative to cotton and other traditional products. Performance product lines are offered for men, women and
youth and extend across the sporting goods, outdoor and active lifestyle markets. In 2007, sales of men’s,
women’s, and youth apparel products and footwear products represented approximately 57%, 19%, 8% and 7%
of net revenues, respectively. In addition, the sale of accessories and our license revenues represented
approximately 5% and 4% of net revenues, respectively.
Apparel
Our apparel products are engineered to replace cotton and other traditional non-performance fabrics in the
world of athletics and fitness with performance alternatives designed and merchandised along gearlines. Our
three primary apparel gearlines are marketed to tell a very simple story about our highly technical products. We
market our products for consumers to choose HEATGEAR®when it is hot, COLDGEAR®when it is cold and
ALLSEASONGEAR®between the extremes. Within each gearline our apparel comes in three fit types:
compression (tight fitting), fitted (athletic cut) and loose (relaxed).
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