Under Armour 2015 Annual Report Download - page 13

EMEA
We sell our apparel, footwear and accessories primarily through wholesale distributors, website operations,
independent distributors and a limited number of stores we operate in certain European countries. We also sell
our branded products to various sports clubs and teams in Europe. We generally distribute our products to our
retail customers and e-commerce consumers in Europe through a third-party logistics provider based out of
Venlo, The Netherlands. This agreement continues through April 2017.
Asia-Pacific
We sell our apparel, footwear and accessories products in China through stores operated by our distribution
partners along with a limited number of stores we operate. We also sell our products to distributors in Australia,
New Zealand, Taiwan and Hong Kong where we do not have direct sales operations. We distribute our products
in Asia-Pacific primarily through a third-party logistics provider based out of Hong Kong.
We have a license agreement with Dome Corporation, which produces, markets and sells our branded
apparel, footwear and accessories in Japan and Korea. We are actively involved with this licensee to develop
variations of our products for the different sizes, sports interests and preferences of Japanese and Korean
consumers. Our branded products are sold in Japan and Korea to large sporting goods retailers, independent
specialty stores and professional sports teams, and through Dome-owned retail stores. We hold a cost-based
minority investment in Dome Corporation.
Latin America
We sell our products in Chile, Mexico and Brazil through wholesale distributors, website operations and
brand and factory house stores. In these countries we operate through third-party distribution facilities. In other
Latin American countries we sell our products through independent distributors which are sourced through our
international distribution hubs in Hong Kong, Jordan and the United States. Prior to 2014, we primarily sold our
products in Latin America through an independent distributor in Mexico.
Connected Fitness
In 2013, we began offering digital fitness subscriptions and licenses, along with digital advertising through
our MapMyFitness platform. In 2014, we introduced the UA Record platform and in 2015, we acquired the
Endomondo and MyFitnessPal platforms to create our Connected Fitness business. Approximately 1% of our net
revenues were generated from our Connected Fitness business in 2015. We plan to engage and grow this
community by developing innovative applications, services and other digital solutions to impact how athletes and
fitness-minded individuals train, perform and live.
Seasonality
Historically, we have recognized a majority of our net revenues and a significant portion of our income from
operations in the last two quarters of the year, driven primarily by increased sales volume of our products during
the fall selling season, including our higher priced cold weather products, along with a larger proportion of
higher margin direct to consumer sales. The level of our working capital generally reflects the seasonality and
growth in our business. We generally expect inventory, accounts payable and certain accrued expenses to be
higher in the second and third quarters in preparation for the fall selling season.
Product Design and Development
Our products are manufactured with technical fabrications produced by third parties and developed in
collaboration with our product development teams. This approach enables us to select and create superior,
technically advanced fabrics, produced to our specifications, while focusing our product development efforts on
design, fit, climate and product end use.
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