Under Armour 2012 Annual Report Download - page 9

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 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 to
professional, on playing fields around the globe, as well as by consumers with active lifestyles.
Our net revenues are generated primarily from the wholesale distribution of our products to national,
regional, independent and specialty retailers. We also generate net revenue from product licensing and from the
sale of our products through our direct to consumer sales channel, which includes sales through our factory house
and specialty stores and websites. A large majority of our products are sold in North America; however we
believe that our products appeal to athletes and consumers with active lifestyles around the globe. Internationally,
we sell our products in China and certain countries in Europe. A third party licensee sells our products in Japan
and distributors sell our products in other foreign countries. We plan to continue to grow our 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 unaffiliated manufacturers operating in 14 countries outside of the United
States.
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®,
HEATGEAR®, COLDGEAR®, ALLSEASONGEAR®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. All trademarks 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 for men, women and youth. We market
our products at multiple price levels and provide consumers with products that we believe are a superior
alternative to traditional athletic products. In 2012, sales of apparel, footwear and accessories represented 76%,
13% and 9% of net revenues, respectively. Licensing arrangements for the sale of our products represented the
remaining 2% of net revenues. Refer to Note 16 to the Consolidated Financial Statements for net revenues by
product.
Apparel
Our apparel is offered in a variety of styles and fits intended to enhance comfort and mobility, regulate body
temperature and improve performance regardless of weather conditions. Our apparel is engineered to replace
traditional non-performance fabrics in the world of athletics and fitness with performance alternatives designed
and merchandised along gearlines. Our three gearlines are marketed to tell a very simple story about our highly
technical products and extend across the sporting goods, outdoor and active lifestyle markets. We market our
apparel 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 primary fit types:
compression (tight fit), fitted (athletic fit) and loose (relaxed).
HEATGEAR®is designed to be worn in warm to hot temperatures under equipment or as a single layer. Our
first compression T-shirt was the original HEATGEAR®product and remains one of our signature styles. While
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