COLUMBIA SPORTSWEAR CO, S-1/A, 1998-02-23

COLUMBIA SPORTSWEAR CO
S-1/A, 1998-02-23
APPAREL, PIECE GOODS & NOTIONS

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As filed with the Securities and Exchange Commission on February 23, 1998

Registration No. 333-43199

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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Amendment No. 1
to

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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COLUMBIA SPORTSWEAR COMPANY
(Exact name of Registrant as specified in its charter)

Oregon 5130 93-0498284
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction Classification Code Number) Identification
of incorporation) Number)
6600 North Baltimore
Portland, Oregon 97203
(503) 286-3676

(Address, including zip code, and telephone
number, including area code, of
Registrant's principal executive offices)

Patrick D. Anderson
Chief Financial Officer
COLUMBIA SPORTSWEAR COMPANY
6600 North Baltimore
Portland, Oregon 97203
(503) 286-3676

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

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Copies To:

Stephen E. Babson John L. Savva
Robert J. Moorman Sullivan & Cromwell
Stoel Rives LLP 444 South Flower Street, Suite 1200
900 SW Fifth Avenue, Suite 2300 Los Angeles, California 90071
Portland, Oregon 97204 (213) 955-8000
(503) 224-3380

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Approximate date of commencement of proposed
sale to the public: As soon as practicable after
this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _____

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _____

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _____

If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]

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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
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SUBJECT TO COMPLETION, DATED FEBRUARY 23, 1998
6,500,000 Shares

[LOGO]

Columbia Sportswear Company

Common Stock

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Of the 6,500,000 shares of Common Stock offered, 5,200,000 shares are being
offered hereby in the United States and 1,300,000 shares are being offered in a
concurrent international offering outside the United States. The initial public
offering price and the aggregate underwriting discount per share will be
identical for both offerings. See "Underwriting."

All of the 6,500,000 shares of Common Stock offered are being sold by the
Company.

Prior to this offering, there has been no public market for the Common
Stock of the Company. It is estimated that the initial public offering price per
share will be between $14.00 and $16.00. For factors to be considered in
determining the initial public offering price, see "Underwriting."

See "Risk Factors" beginning on page 8 for certain considerations relevant
to an investment in the Common Stock.

The Common Stock has been approved for quotation on the Nasdaq National
Market under the symbol "COLM" upon notice of issuance.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
Initial Public Underwriting Proceeds to
Offering Price Discount(1) Company(2)
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<S> <C> <C> <C>
Per Share.................................. $ $ $
Total (3).................................. $ $ $

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(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."

(2) Before deducting estimated expenses of $740,000 payable by the Company.
(3) The Company has granted the U.S. Underwriters an option for 30 days to
purchase up to an additional 780,000 shares at the initial public offering
price per share, less the underwriting discount, solely to cover
over-allotments. Additionally, the Company has granted the International
Underwriters a similar option with respect to an additional 195,000 shares
as part of the concurrent international offering. If such options are
exercised in full, the total initial public offering price, underwriting
discount and proceeds to Company will be $__________, $__________ and
$__________, respectively. See "Underwriting."

</TABLE>
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The shares offered hereby are offered severally by the U.S. Underwriters,
as specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
shares will be ready for delivery in New York, New York, on or about
________________, 1998 against payment therefor in immediately available funds.

Goldman, Sachs & Co.
NationsBanc Montgomery Securities LLC
PaineWebber Incorporated
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The date of this Prospectus is _______________, 1998.
<PAGE>

[Picture of Company advertisement featuring Gertrude Boyle, with caption "In
Oregon This Is Sexy.-- Tim Boyle, President, Columbia Sportswear."

[Picture of Company advertisement featuring Gertrude Boyle, with caption "Quotes
From Chairman Ma. Inspiration from Mother Boyle, the skiwear revolutionary who
kowtows to no one. 'Follow the correct path to outdoor comfort, through the
Columbia Interchange System.' 'All that is required to overcome adversity are
reinforced stress points, double sewn seams, taller tunnel collars and storm
flaps.' 'Am I the only one who thinks in this business?' 'Evolution through
adaptation: when weather changes, one's ski parka had better change with it.' 'A
sensible and functional design is well suited to the masses. Have it on my desk
tomorrow.' 'I asked for a fifth outside pocket. Not how much it would cost.' 'A
reversible liner that is also waterproof? Sounds impossible. Build me one.'
'It's perfect. Now make it better.'"]

[Pictures of (i) model on beach wearing Company jacket, (ii) model fly-fishing
in Company vest, (iii) model hunting in Company jacket, (iv) model skiing in
Company jacket, (v) model skiing in Company jacket and (vi) model jumping in
Company sportswear.]

The Company intends to furnish to its shareholders annual reports
containing financial statements audited by an independent public accounting
firm.
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CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERINGS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

"Columbia Sportswear Company," "Columbia," "Convert," "Bugaboo,"
"Bugabootoo," "Interchange," "Omni-Dry" and "Silent Rain" are trademarks of the
Company. All other trademarks or trade names referred to in this Prospectus are
the property of their respective owners.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus includes forward-looking statements, including statements
concerning planned expansion and financial resources, in "Summary" under the
captions "The Company," "Business Strengths" and "Growth Strategy," in "Risk
Factors" under the captions "Uncertain Ability to Implement Growth Strategy" and
"Management of Growth; Expansion of Distribution Facility," in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" under
the captions "Overview" and "Liquidity and Capital Resources" and in "Business"
under the captions "Introduction," "Business Strengths," "Growth Strategy,"
"Industry Overview," "Products," "Business Process" and "Management Information
System." These forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties related to the Company's
operations, some of which are beyond the Company's control. Certain factors that
could cause results to differ materially from those projected in the
forward-looking statements are described in "Risk Factors," including, but not
limited to, competition, new product offerings by competitors and price
pressures; seasonality, fluctuations in operating results and economic
cyclicality; effects of weather; changes in consumer preferences; the Company's
ability to implement its growth strategy, including management of growth and
expansion of its distribution facility; dependence on key personnel, independent
manufacturers and key suppliers; advance purchases of products; risks related to
collectibility of receivables; product liability and warranty exposures;
international operations, including risks associated with foreign operations
such as currency exchange rate fluctuations; and dependence on proprietary
rights. Risks and uncertainties that could have a material adverse effect on the
Company are also
<PAGE>
described in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" under the captions "Quarterly Results of Operations and
Seasonality" and "Liquidity and Capital Resources," and in "Business" under the
captions "Intellectual Property," "Competition" and "Government Regulation." Any
of these risks or uncertainties may cause actual results or future circumstances
to differ materially from any future results or circumstances expressed or
implied by the forward-looking statements contained in this Prospectus.
<PAGE>
PROSPECTUS SUMMARY

The following summary should be read in conjunction with, and is qualified
in its entirety by, the more detailed information and consolidated financial
statements and notes thereto appearing elsewhere in this Prospectus. Except as
otherwise noted, all information in this Prospectus (i) assumes no exercise of
the Underwriters' over-allotment options, (ii) gives retroactive effect to the
recapitalization described in "Description of Capital Stock" and (iii) gives
retroactive effect to a 0.59-for-one reverse split of the Common Stock to be
effected prior to the completion of the Offerings.

The Company

Columbia Sportswear Company ("Columbia" or the "Company") is a global
leader in the design, manufacture, marketing and distribution of active outdoor
apparel. As one of the largest outerwear manufacturers in the world and the
leading seller of skiwear in the United States, the Company has developed an
international reputation across an expanding product line for quality,
performance, functionality and value. The Company believes its award-winning
advertising campaigns effectively position the Columbia brand as active,
outdoor, authentic and distinctly American.

Established in 1938, the family-owned Company has grown from a small,
regional hat distributor to a global leader in the active outdoor apparel
industry. The Company has its roots and developed its initial expertise in the
production of high quality, rugged outdoor fishing and hunting gear for the
serious sportsman. Known for durability and dependability at a reasonable price,
the Company leveraged its brand awareness in the 1990s by expanding into related
merchandise categories and developing its "head-to-toe" outfitting concept. The
Columbia brand appeals to a large, increasingly international consumer base.
Today, the Company distributes its products to over 10,000 retailers in 30
countries. The Company's sales and operating income have increased to $353.5
million and $44.3 million in 1997 from $18.8 million and $1.6 million in 1987,
representing compound annual growth rates of 30.6% and 35.1%, respectively. The
Company believes it will continue to grow by focusing on enhancing the
productivity of existing retailers, expanding distribution in international
markets and further developing merchandise categories.

The Company groups its broad range of competitively priced merchandise into
four categories--outerwear, sportswear, rugged footwear and related accessories.
The durability, functionality and affordability of Columbia's products make them
ideal for use in a wide range of outdoor activities, including skiing,
snowboarding, hunting, fishing, hiking and golf, as well as for casual wear.
Throughout the product development cycle, merchandising and design teams
collaborate with retailers, the Columbia sales force and consumers to ensure
that the final product assortment of coordinated "head-to-toe" merchandise meets
or exceeds customer expectations. Across all of its product lines, Columbia
brings a commitment to innovative, functional product design and a reputation
for durable, high quality materials and construction. Columbia believes it
offers consumers one of the best price-value equations in the outdoor apparel
industry.

Business Strengths

3
<PAGE>
which feature Chairman Gertrude Boyle in the role of "Mother Boyle," an
overbearing taskmaster who enforces tough Columbia quality standards, emphasize
this distinctive brand image.

Broad and Growing Appeal. Columbia's merchandise appeals to a broad range
of consumers of varying ages and income levels, from serious outdoorsmen to
weekend sports enthusiasts. The Company's price-value equation is attractive to
a large segment of the $10.4 billion U.S. retail outdoor apparel market.
Columbia is effectively positioned to compete against lower priced or unbranded
products based on brand image and product features, and against higher priced,
largely technical or fashion brands based on superior value and generally lower
price points. The Company has benefited in the past and expects to continue to
benefit from the trend toward casual dressing and from the growth in demand for
active lifestyle apparel.

Premium Quality at a Reasonable Price. Columbia maintains a strong focus on
providing a superior mix of quality and value, which are defining elements of
the brand. The Company believes it is able to offer merchandise similar in
quality to its competitors at attractive price points by using its long standing
supplier relationships to source high quality products from around the world
while controlling costs, relying on Company-supervised production of merchandise
by independent manufacturers, involving itself in the supply chain at an earlier
stage than is typical in the industry and avoiding the overdesign of its
products.

Proven and Experienced Management Team. Senior management of Columbia has
substantial experience in the apparel industry and a demonstrated track record
of sales and earnings growth: Chairman Gertrude Boyle has been involved in the
business since 1970; President and Chief Executive Officer Timothy P. Boyle
joined Columbia in 1971; and Executive Vice President and Chief Operating
Officer Don Richard Santorufo joined the Company in 1979. Under their leadership
over the past decade, the Company's sales and operating income have increased at
compound annual growth rates of 30.6% and 35.1%, respectively. Immediately
following the Offerings, senior management will own over 74.3% of the Company.

Functional and Performance-Oriented Design. All Columbia merchandise is
designed and developed in-house by experienced merchandising and design teams.
Working closely with internal sales and production teams as well as with
retailers and consumers, the Company's merchandising and design teams can reduce
the risks of fashion swings by developing superior products that are tailored
specifically to meet consumer requirements. Because its products are designed
for functionality and durability, the Company does not attempt to lead consumer
preferences or differentiate its products based primarily on fashion. In fact,
many new products are based on existing designs, such as the Bugaboo Parka, a
consistent best seller for more than a decade.

Effective "Head-to-Toe" Merchandising. Columbia's "head-to-toe"
merchandising strategy presents retailers and consumers with a wide selection of
apparel and rugged footwear that shares common color palettes and outdoor
themes. Retailers and consumers both benefit from the ability to use Columbia as
a single source for an attractive array of merchandise. The Company's flagship
store, recently opened in Portland, Oregon, and the Company's successful store
within a store concept ("concept shops") provide showcases for Columbia's
coordinated merchandise.

Sourcing as a Competitive Advantage. Columbia's merchandise is produced
worldwide by independent manufacturers selected, monitored and coordinated by
local Columbia employees to assure conformity to strict quality and cost
standards. The Company believes the use of independent manufacturers, in
conjunction with the use of Columbia sourcing personnel rather than agents,
increases its production flexibility and capacity and allows it to maintain
control over critical aspects of the sourcing process, while at the same time
substantially reducing capital expenditures and avoiding the costs of managing a
large production work force.

4
<PAGE>
Superior Inventory Management. From the time of purchasing through
production, distribution and delivery, the Company manages its inventory to
reduce risk. The sequencing of the product design, sourcing, production and
selling cycle mitigates inventory risk, in part by offering special discounts to
customers that purchase merchandise early. Because the Company's products are
not based primarily on fashion, and because Columbia undertakes extensive
analysis to ensure that its products are what consumers require, the Company
believes its inventory risk is not as great as that of some of its competitors.
A new state-of-the-art inventory management information system, expected to be
fully operational in late 1998, is expected to further enhance the Company's
ability to manage its inventory.

Growth Strategy

Enhance Channel Productivity of Existing Customers. The Company plans to
improve the productivity of its existing customers by expanding its concept
shops and installing brand enhancement systems. Concept shops, which promote a
consistent brand image, are located within the stores of the Company's customers
and are dedicated exclusively to selling Columbia merchandise. As of December
31, 1997, the Company had 164 concept shops worldwide and plans to double this
number by the end of 1998. The Company believes its concept shops increase sales
by displaying a complete selection of merchandise and promoting
cross-merchandising opportunities on a year -round basis. Smaller-scale brand
enhancement systems, which include signage and fixtures that prominently display
consolidated groupings of Columbia merchandise, offer benefits similar to
concept shops. By the end of 1998, the Company also expects to have installed
1,000 in-store brand enhancement systems.

Leverage the Columbia Brand Name in International Markets. The Company
intends to capitalize on its size, strong U.S. brand position and its worldwide
brand recognition by targeting certain high opportunity markets for development
or expansion. The Company has identified Europe and Asia as regions where
outdoor activities are consistently popular and where the Company can exploit
its active, outdoor, authentic and distinctly American brand image and
reputation for value. The Company is seeking to enhance its distribution in a
number of countries, including the United Kingdom, Italy, France, Spain, The
Netherlands, Sweden and Germany. The Company will assume control of the
distribution of its products in Japan in late 1998 and recently opened sales
counters dedicated to Columbia merchandise in 15 retail stores in South Korea.
Although the Company has made significant progress in its international
expansion efforts over the last several years, substantial opportunity for
growth exists. Net sales outside North America have increased from $9.0 million
in 1993 to $35.4 million in 1997, but still represented only 10.0% of the
Company's total net sales in 1997.

Develop Existing Merchandise Categories. The Company intends to realize
growth by further developing existing product categories, such as sportswear and
rugged footwear, where there remains ample room for growth in market share. The
Company's success in designing and marketing products has allowed Columbia to
significantly broaden its assortment in existing categories. From 1993 through
1997, outerwear and sportswear sales increased 43.7% and 221.5%, respectively,
in part as a result of new product introductions. Since it was introduced in
1993, net sales of the Company's rugged footwear have increased from $1.2
million to $24.3 million in 1997. The Company believes opportunities exist for
continued rapid growth in sales of rugged footwear as distribution is expanded
to sporting goods and specialty outdoor stores that carry the Company's
outerwear and sportswear categories.

Selectively Broaden Retail Distribution. The Company believes that over the
longer term significant opportunities exist to increase sales of its products to
department stores and footwear specialty shops. Although sales to department
stores accounted for less than 19% of the Company's U.S. net sales in 1997, the
Company believes this percentage will rise because department store retailers
often prefer to purchase products from vendors that can offer complete
head-to-toe product lines.

5
<PAGE>
The Company was established in 1938 and was incorporated under Oregon law
in 1961. The Company's executive offices are located at 6600 North Baltimore,
Portland, Oregon 97203, and its telephone number is (503) 286-3676.

Risk Factors

See "Risk Factors" for a discussion of certain factors that should be
considered by prospective purchasers of the Common Stock.

6
<PAGE>
<TABLE>
<CAPTION>
The Offerings(1)

<S> <C>
Shares of Common Stock offered:
U.S. Offering............................................... 5,200,000 shares
International Offering...................................... 1,300,000 shares
Total Common Stock Offered............................... 6,500,000 shares
Total Common Stock to be outstanding after the Offerings....... 25,292,176 shares(2)
Use of proceeds................................................ Payment of S corporation
dividends to existing
shareholders. See "Use
of Proceeds."
Proposed Nasdaq National Market symbol......................... COLM

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(1) The offering of 5,200,000 shares of Common Stock initially offered in the
United States (the "U.S. Offering") and the concurrent offering of
1,300,000 shares of Common Stock initially offered outside the United
States (the "International Offering") are collectively referred to as the
"Offerings." The underwriters for the U.S. Offering (the "U.S.
Underwriters") and the underwriters for the International Offering (the
"International Underwriters") are collectively referred to as the
"Underwriters." The completion of the U.S. Offering is conditioned on the
completion of the International Offering, and vice versa.
(2) Excludes 4,000,000 shares reserved for issuance under the Company's 1997
Stock Incentive Plan (the "Stock Incentive Plan"), of which 736,774 shares
were subject to outstanding options at December 31, 1997 at a weighted
average exercise price of $10.40 per share. See "Management - Stock
Incentive Plan."

</TABLE>

<TABLE>
<CAPTION>
Summary Consolidated Financial Information
(in thousands, except per share data)

Year Ended December 31,
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1993 1994 1995 1996 1997
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<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net sales........................................... $ 192,055 $ 256,426 $ 303,797 $ 298,988 $ 353,452
Gross profit........................................ 79,511 107,486 120,826 122,129 154,506
Selling, general and administrative expense(1)...... 46,351 64,049 84,583 95,431 110,204
Earnings from operations............................ 33,160 43,437 36,243 26,698 44,302
Net income ......................................... 30,748 38,324 28,726 21,010 39,296
Pro forma net income (2)............................ $ 18,883 $ 24,130 $ 18,286 $ 13,487 $ 24,425
Pro forma net income per share (2):
Basic............................................. $ 0.97
Diluted........................................... $ 0.96
Pro forma weighted average shares outstanding (3):
Basic............................................. 25,292
Diluted........................................... 25,518

December 31, 1997
--------------------------
Actual As Adjusted(4)
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Balance Sheet Data:
Working capital............................................................... $ 69,706 $ 55,006
Inventories................................................................... 48,300 48,300
Total assets.................................................................. 174,477 177,377
Long-term debt................................................................ 2,831 2,831
Shareholders' equity.......................................................... 110,535 98,735

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(1) For 1995 includes a $2.5 million payment in settlement of certain
litigation; for 1996 includes an $8.5 million charge related to the
termination of a compensation arrangement in exchange for the issuance of
Common Stock. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Management - Certain Transactions"
and Note 13 of Notes to Consolidated Financial Statements.
(2) The Company was an S corporation and accordingly was not subject to federal
and, generally, state income taxes during the periods indicated. Pro forma
net income reflects federal and state income taxes as if the Company had
been a C corporation, based upon a pro forma effective tax rate of 40%. See
"Dividend Policy and S Corporation Status" and Note 1 of Notes to
Consolidated Financial Statements.
(3) Includes the number of shares to be sold in the Offerings to generate
proceeds to be used for the payment of dividends in the estimated aggregate
amount of $107 million to existing shareholders, which the Company expects
to declare prior to the completion of the Offerings. See "Dividend Policy
and S Corporation Status," "Certain Transactions" and Note 1 of Notes to
Consolidated Financial Statements.
(4) Adjusted to reflect (i) the payment of dividends of $107 million to
existing shareholders, which the Company expects to declare prior to
completion of the Offerings, (ii) the recording of $2.9 million of deferred
income tax benefit as if the Company had been a C corporation since 1988
and (iii) the sale of the 6,500,000 shares offered by the Company in the
Offerings at an assumed initial public offering price of $15.00 per share
and the application of the estimated net proceeds therefrom. See "Use of
Proceeds," "Dividend Policy and S Corporation Status," "Certain
Transactions" and Note 1 of Notes to Consolidated Financial Statements.

</TABLE>

7
<PAGE>
RISK FACTORS

In addition to the other information in this Prospectus, the following risk
factors should be carefully considered in evaluating the Company and its
business before purchasing the Common Stock offered by this Prospectus.

Competition

The markets for outerwear, sportswear and rugged footwear are highly
competitive. Within each of its geographic markets, the Company faces
significant competition from global and regional branded apparel and footwear
companies, as well as retailers that market apparel and footwear under their own
labels. These and other competitors pose significant challenges to the Company's
market share in its major U.S. and Canadian markets and make it more difficult
to make gains in newer markets in Europe and Asia. The Company also competes
with other apparel and footwear companies for the production capacity of
independent manufacturers that produce the Company's apparel and for import
quota capacity. See "--Dependence on Independent Manufacturers" and
"Business--Business Process--Sourcing and Manufacturing." Many of the Company's
competitors are significantly larger and have substantially greater financial,
distribution, marketing and other resources and have achieved greater
recognition for their brand names for product lines or certain products than the
Company. Increased competition by existing and future competitors could result
in reductions in display areas in retail locations, reductions in sales or
reductions in prices of the Company's products. There is no assurance that the
Company will be able to compete successfully against present or future
competitors or that competitive pressures faced by the Company will not have a
material adverse effect on the Company. See "Business--Competition."

Seasonality and Fluctuations in Operating Results; Economic Cyclicality

The Company's results of operations have fluctuated and may continue to
fluctuate significantly from period to period. The Company's products are
marketed on a seasonal basis, with a product mix now weighted substantially
toward the fall season. Consequently, the Company's results of operations for
the quarter ending September 30 have in the past been much stronger than the
results for the other quarters. This seasonality, along with other factors that
are beyond the Company's control, including general economic conditions, changes
in consumer behavior, weather conditions, availability of import quotas and
currency exchange rate fluctuations, could adversely affect the Company and
cause its results of operations to fluctuate. Results of operations in any
period should not be considered indicative of the results to be expected for any
future period. The sale of the Company's products, particularly skiwear, is
subject to substantial cyclical fluctuation. Sales tend to decline in periods of
recession or uncertainty regarding future economic prospects that affect
consumer spending, particularly on discretionary items. This cyclicality and any
related fluctuation in consumer demand could have a material adverse effect on
the Company's results of operations and financial condition. See

8
<PAGE>
"Management's Discussion and Analysis of Financial Condition and Results of
Operations-- Quarterly Results of Operations and Seasonality."

Effects of Weather

Sales of the Company's outerwear are dependent in part on the weather and
may decline in years in which weather conditions do not favor the use of the
Company's outerwear. For example, the Company believes unseasonably warm weather
in the northern United States in late 1994 caused customers to delay, and in
some cases reduce or cancel, orders for the Company's outerwear, including
skiwear and snowboarding apparel, which had an adverse effect on the Company's
net sales and gross margins in 1994 and 1995. Sustained periods of unseasonably
warm weather could have a material adverse effect on the Company.

Consumer Preferences

The Company believes it has benefited from changing consumer preferences
and increasing consumer interest in outdoor activities and from lifestyle
changes that emphasize apparel designed for these activities, but these trends
may not continue. Any change in consumer preferences or consumer interest in
outdoor activities could have a material adverse effect on the Company. In
addition, although the Company believes its products have not been significantly
affected by past fashion trends, changes in fashion trends could have a greater
impact as the Company expands its product offerings to include more sportswear.
Furthermore, decisions about product designs often are made in advance of
consumer acceptance. Although the Company attempts to manage its inventory risk
through early commitments by retailers, production orders must generally be
placed with manufacturers before all of a season's orders are received by the
Company. Failure to anticipate and respond to changes in consumer preferences
and demands could lead to, among other things, lower sales, excess inventories
and lower margins, which could have a material adverse effect on the Company.

Uncertain Ability to Implement Growth Strategy

As part of its growth strategy, the Company seeks to develop existing
merchandise categories and increase international distribution, including in
countries where the Company has little distribution experience and where the
Company's brand name is not well-known. There is no assurance that these
strategies will be successful. The Company also intends to increase its sales of
products to department stores and expand the number of concept shops located
within retailers. Increasing sales to department stores, and the actual number
of concept shops to be opened and their success, will each depend on various
factors, including strength of the Company's brand name, competitive conditions,
the ability of the Company to manage the increased sales and concept shop
expansion, the availability of desirable locations and the negotiation of terms
with the department stores and the retailers in which the concept shops are
located. There is no assurance that future terms will be as favorable to the
Company as those under which the Company now operates or that these terms will
not adversely affect the Company's ability to manage inventory risk. There is no
assurance that the Company will be

9
<PAGE>
able to increase its sales to department stores or to open and operate new
concept shops on a profitable basis. There is no assurance that the Company's
growth strategies will be successful or that the Company's sales or net income
will increase as a result of the implementation of such strategies. See
"Business--Growth Strategy" and "--Business Process."

Management of Growth; Expansion of Distribution Facility

Successful implementation of the Company's business strategy will require
the Company to manage growth. To manage growth effectively, the Company will
need to continue to implement changes in certain aspects of its business, to
enhance its information systems and operations to respond to increased demand,
to attract and retain qualified personnel and to develop, train and manage an
increasing number of management-level and other employees. Growth could place an
increasing strain on Company management, financial, product design, marketing,
distribution and other resources, and the Company could experience operating
difficulties. The Company is replacing its management information system with an
enterprise system that integrates electronic data interchange ("EDI") and
inventory management capabilities. The system, some aspects of which are already
operational, is expected to be fully operational in late 1998. Delays or other
difficulties in implementing this system could disrupt the Company's ability to
manage its inventory effectively. In addition, the Company plans to increase the
size of its Portland, Oregon distribution facility substantially by early 1999
to meet expected future growth. In connection with this expansion, the Company
plans to implement a new warehouse management system. There is no assurance that
this expansion will be completed on time or will not interfere with existing
operations. Any failure to manage growth effectively could have a material
adverse effect on the Company's results of operations and financial condition.

Dependence on Key Personnel

The Company's future success will depend in part on the continued service
of certain key management and other personnel, including Gertrude Boyle, the
Company's Chairman, Timothy P. Boyle, the Company's President and Chief
Executive Officer, and Don Richard Santorufo, the Company's Executive Vice
President and Chief Operating Officer, and on the Company's ability to attract
and retain qualified managerial, design, sales and marketing personnel.
Competition for these employees is intense. There is no assurance that the
Company can retain its existing key personnel or that it can attract and retain
sufficient numbers of qualified employees in the future. The loss of key
employees or the inability to hire or retain qualified personnel in the future
could have a material adverse effect on the Company. See "Management."

Dependence on Independent Manufacturers

The Company's products are produced by approximately 115 independent
manufacturers worldwide. For 1997 product sales, approximately 94% (by dollar
volume) of the Company's products were produced by independent manufacturers,
and approximately 86% (by dollar

10
<PAGE>
volume) of the Company's products were produced outside the United States,
principally in the Far East. Other than its facility for the production of
fleece products and accessories in Chaffee, Missouri, the Company does not
operate any production facilities. Six manufacturers engaged by the Company
accounted for approximately 38.5% (by dollar volume) of the Company's total
production for 1997 product sales. The primary production facilities of these
manufacturers are located in Asia. No other manufacturer accounted for more than
five percent of the Company's total production for 1997 product sales.

The inability of a manufacturer to ship orders of the Company's products in
a timely manner or to meet the Company's quality standards could cause the
Company to miss the delivery requirements of its customers for those items,
which could result in cancellation of orders, refusal to accept deliveries or a
reduction in purchase prices, any of which could have a material adverse effect
on the Company. Although the Company enters into a number of purchase order
commitments each season specifying a time frame for delivery, method of payment,
design and quality specifications and other standard industry provisions, the
Company does not have long-term contracts with any manufacturer. In addition,
the Company competes with other companies for the production capacity of
independent manufacturers and import quota capacity. Certain of these competing
companies have substantially greater brand recognition and financial and other
resources than the Company and thus may have an advantage in the competition for
production and import quota capacities. None of the manufacturers used by the
Company produces the Company's products exclusively.

For production of a significant portion of the Company's products,
principally in China, Columbia directly purchases the raw material from
suppliers, obtains or arranges for any necessary import quotas and ships the
materials in a "kit" to the independent manufacturer that has been selected by
Columbia to produce the finished garment. This arrangement advances the timing
for inventory purchases and advances the point in the sourcing process at which
the Company is subject to the risk of loss or damage to the materials before a
finished garment is manufactured. In addition, independent manufacturers may
find traditional vendor relationships more profitable and may therefore perceive
an incentive to give priority to customers using those methods.

The Company requires its independent manufacturers to operate in compliance
with applicable laws and regulations. Although the Company's internal and vendor
operating guidelines promote ethical business practices and the Company's
sourcing personnel periodically visit and monitor the operations of its
independent manufacturers, the Company does not control these vendors or their
labor practices. The violation of labor or other laws by an independent
manufacturer of the Company, or the divergence of an independent manufacturer's
labor practices from those generally accepted as ethical in the United States,
could result in adverse publicity for the Company and could have a material
adverse effect on the Company.

11
<PAGE>
Dependence on Key Suppliers

Certain of the specialty fabrics used by the Company and manufactured to
its custom specification may be available, in the short-term, from only one or a
very limited number of sources. While the Company believes it could identify and
qualify additional factories to produce these materials, the unavailability of
certain existing manufacturers for supply of these materials, for any reason,
could have a material adverse effect on the Company.

Advance Purchases of Products

To minimize purchasing costs, the time necessary to fill customer orders
and the risk of non-delivery, the Company places orders for its products with
its manufacturers prior to the time the Company has received all of its
customers' orders and maintains an inventory of certain products that it
anticipates will be in greater demand. There is no assurance, however, that the
Company will be able to sell the products it has ordered from manufacturers or
that it has in its inventory. Customer orders, moreover, are cancelable by the
customer up to 45 days prior to the date of the shipment of the products.
Inventory levels in excess of customer demand may result in inventory
write-downs and the sale of excess inventory at discounted prices, which could
have a material adverse effect on the Company. As of December 31, 1997, the
Company had $82.5 million of open purchase orders with its manufacturers and
$48.3 million of inventory at cost. See "Business--Business Process."

Risks Related to Collectibility of Receivables

The Company extends credit to its customers based on an assessment of a
customer's financial circumstances, generally without requiring collateral. To
assist in the scheduling of production and the shipping of seasonal products,
the Company offers customers discounts for placing pre-season orders and
extended payment terms for taking delivery before the peak shipping season.
These extended payment terms increase the Company's exposure to the risk of
uncollectible receivables. The Company's single largest customer, J.C. Penney
Company, Inc. ("J.C. Penney"), accounted for approximately nine percent of the
Company's net sales for 1997. Significant customers of the Company have
experienced financial difficulties in the past, and future financial
difficulties of customers could have a material adverse effect on the Company.

Product Liability; Warranty Exposure

The Company's products are used in outdoor activities, sometimes in severe
weather conditions. Purchasers of these products depend on products to be well
designed and durable. Although the Company has not experienced any significant
expense as the result of product recalls or product liability claims, there is
no assurance that it will not incur expenses in connection with product recalls
or product liability claims that could have a material adverse effect on the
Company.

12
<PAGE>
Substantially all of the Company's products are backed by a lifetime
limited warranty for defects in quality and workmanship. The Company maintains a
warranty reserve for future warranty claims, but the actual costs of servicing
future warranty claims may significantly exceed the reserve, which could have a
material adverse effect on the Company. See Note 2 of Notes to Consolidated
Financial Statements.

International Operations

Approximately 86% of the Company's products are sourced outside the United
States through arrangements with over 85 manufacturers in 12 countries. In
addition, the Company is increasing its international sales efforts. As a
result, the Company's business is subject to the risks generally associated with
doing business abroad, such as foreign governmental regulations, foreign
consumer preferences, political unrest, disruptions or delays in shipments and
changes in economic conditions in countries in which the Company manufactures or
sells its products. For example, the recent turmoil in Asian markets may
adversely affect the Company's ability to receive and deliver its products.
These factors, among others, could influence the Company's ability to sell its
products in international markets, as well as its ability to manufacture its
products or procure certain materials. If any such factors were to render the
conduct of business in a particular country undesirable or impractical, there
could be a material adverse effect on the Company. The Company continues to
monitor the political stability of the Asian countries and the financial
condition of the factories with which it conducts business. Many of the
Company's imports are subject to existing or potential duties, tariffs or quotas
that may limit the quantity of certain types of goods that may be imported into
the United States, including constraints imposed by bilateral textile agreements
between the United States and a number of foreign countries. These agreements
impose quotas on the amounts and types of merchandise that may be imported into
the United States from these countries. These agreements also allow the
signatories to adjust the quantity of imports for categories of merchandise
that, under the terms of the agreements, are not currently subject to specific
limits. The Company's imported products are also subject to United States
customs duties, which comprise a material portion of the cost of the
merchandise. The United States and the countries in which the Company's products
are produced or sold may impose new quotas, duties, tariffs or other
restrictions, or may adversely adjust prevailing quota, duty or tariff levels,
any of which could have a material adverse effect on the Company. A significant
portion of the Company's products is produced in China. In June 1997 President
Clinton extended to June 1998 "most favored nation" ("MFN") non-discriminatory
trading status to China. Under U.S. law, MFN status for China is reviewed
annually. The United States has extended MFN status to China each year since
1980. China is a material source of production for the Company. A revocation of
MFN status would result in a substantial increase in tariff rates on goods
imported from China and therefore could adversely affect the Company's
operations. In addition, in response to alleged transshipment of apparel by
China, the U.S. government may reduce quotas for certain garments imported from
China in 1998. A reduction in quotas for Chinese products could have a material
adverse effect on the Company. See "Business--Business Process--Sourcing and
Manufacturing" and "--Government Regulation."

13
<PAGE>
Currency Exchange Rate Fluctuations

The Company generally purchases its products in U.S. dollars. The Company,
however, sources a significant amount of its products overseas and the cost of
these products may be affected by changes in the value of the relevant
currencies. Price increases caused by currency exchange rate fluctuations could
make the Company's products less competitive or have an adverse effect on the
Company's margins. The Company's international revenue generally is derived from
sales in foreign currencies, and this revenue could be materially affected by
currency fluctuations, including upon translation of amounts received in foreign
currencies into U.S. dollars following sale by the Company. For example, net
sales and gross margins with respect to the Company's sales in Korea have been
adversely affected by the recent devaluation of the Korean won, although the
effect on the Company's overall operations has not been material. Currency
exchange rate fluctuations could also disrupt the business of the independent
manufacturers that produce the Company's apparel by making their purchases of
raw materials more expensive and adversely affecting their ability to obtain
financing for raw materials. Beginning in late 1997, the Company implemented a
program to hedge against its exposure to currency exchange rate fluctuations.
There is no assurance that the hedging program will be successful or that
foreign currency fluctuations will not have a material adverse effect on the
Company. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Overview."

Dependence on Proprietary Rights

The Company uses a number of trademarks, certain of which it has registered
with the United States Patent and Trademark Office and in selected foreign
countries. The Company believes its registered and common law trademarks have
significant value and that some of its trademarks are important to its ability
to create and sustain demand for its products. The Company also places
significant value on its trade dress, the overall appearance and the image of
its products. Although the Company has not been materially inhibited from
selling its products in connection with trademark or trade dress disputes, there
is no assurance that significant obstacles will not arise as it expands its
product line and geographic scope of its marketing. In markets outside the
United States, it may be more difficult for the Company to establish its
proprietary rights and to challenge successfully use of those rights by other
parties. There is no assurance, moreover, that the Company's trademarks or trade
dress do not or will not violate the proprietary rights of others, that they
would be upheld if challenged or that the Company would, in that event, not be
prevented from using its trademarks or trade dress, any of which could have a
material adverse effect on the Company. From time to time, the Company discovers
products that are counterfeit reproductions of the Company's products or that
otherwise infringe upon proprietary rights held by the Company. If the Company
is unsuccessful in challenging a party's products on the basis of trademark or
trade dress infringement, continued sales of these products by that or any other
party could adversely impact the Columbia brand, result in the shift of consumer
preference away from the Company and generally have a material adverse effect on
the Company. There is no assurance that actions taken by the Company to
establish and protect its trademarks and other proprietary rights will

14
<PAGE>

be adequate to prevent imitation of its products by others or to prevent others
from seeking to block sales of the Company's products as violating of trademarks
and proprietary rights. In addition, the Company could incur substantial costs
in legal actions relating to the Company's use of intellectual property or the
use of the Company's intellectual property rights by others, which even if
successful, could have a material adverse effect on the Company. In 1995 the
Company paid $2.5 million to another party to settle a dispute over the use of
certain marks, including the word "Columbia." See "Business--Intellectual
Property."

Absence of Prior Public Market; Possible Volatility of Stock Price

Prior to the Offerings, there has been no public market for the Company's
Common Stock. There is no assurance that an active trading market will develop
or be sustained after completion of the Offerings or that the market price of
the Common Stock will not decline below the initial public offering price. The
initial public offering price of the Common Stock will be determined through
negotiations between the Company and the representatives of the Underwriters.
See "Underwriting." The Company believes quarterly fluctuations in its financial
results and factors not directly related to the Company's operating performance,
such as product or financial results announcements by other apparel companies,
could contribute to the volatility of the price of its Common Stock, causing it
to fluctuate significantly. These factors, as well as general economic
conditions, such as recessions or high interest rates, may adversely affect the
market price of the Common Stock.

Control by Principal Shareholders; Benefits to Existing Shareholders

Upon completion of the Offerings, Gertrude Boyle, Chairman of the Board,
Timothy P. Boyle, President, Chief Executive Officer and a director and Ms.
Boyle's son, Sarah Bany, Director of Retail Operations and a director and Ms.
Boyle's daughter, and Don Santorufo, Executive Vice President and Chief
Operating Officer, will beneficially own approximately 74.3% of the outstanding
Common Stock. As a result, if acting together they will be able to control all
matters requiring approval by the shareholders of the Company, including the
election of directors and the amendment of the Company's articles of
incorporation, without the cooperation of other shareholders. Furthermore, the
Company will use the net proceeds of the Offerings and increased borrowings to
pay dividends of approximately $107 million to existing shareholders of the
Company. See "Use of Proceeds," "Dividend Policy and S Corporation Status,"
"Certain Transactions" and "Principal Shareholders."

Shares Eligible for Future Sale

Sales of a substantial number of shares of the Common Stock in the public
market following the Offerings, or the prospect of such sales, could adversely
affect the market price of the Common Stock and the Company's ability to raise
capital in the future in the equity markets. Upon completion of the Offerings,
there will be 25,292,176 shares of Common Stock outstanding. Of these shares,
the 6,500,000 shares to be sold in the Offerings will be eligible for immediate
resale without restriction under the Securities Act of 1933, as amended (the

15
<PAGE>

"Securities Act"), unless purchased by an "affiliate" of the Company, as that
term is defined in Rule 144 under the Securities Act. Upon expiration of lock-up
agreements with the representatives of the Underwriters, 180 days after the date
of this Prospectus (or earlier with the consent of the representatives of the
Underwriters), 18,575,903 shares will be eligible for immediate resale subject
to the limitations of Rule 144. As of December 31, 1997, options to purchase
736,774 shares of Common Stock had been granted under the Stock Incentive Plan.
The Company intends to file as soon as practicable following completion of the
Offerings a registration statement on Form S-8 under the Securities Act covering
shares of Common Stock reserved for issuance under the Stock Incentive Plan.
This registration statement is expected to become effective immediately upon
filing, whereupon, subject to the satisfaction of applicable exercisability
periods, Rule 144 volume limitations applicable to affiliates and, in certain
cases, the agreements with the representatives of the Underwriters referred to
above, shares of Common Stock issued upon exercise of outstanding options
granted pursuant to the Stock Incentive Plan will be available for immediate
resale in the open market.

Potential Issuance of Preferred Stock; Anti-Takeover Effect of Oregon Law

The Company is authorized to issue up to 10,000,000 shares of Preferred
Stock, and the Board of Directors may fix the preferences, limitations and
relative rights of those shares without any vote or action by the shareholders.
The potential issuance of Preferred Stock, certain provisions of Oregon law and
the concentrated ownership of the Company could make it more difficult for a
party to gain control of the Company. See "Description of Capital Stock."

16
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the 6,500,000 shares of
Common Stock by the Company in the Offerings (assuming an initial public
offering price of $15.00 per share and after deducting an assumed underwriting
discount and estimated offering expenses) are estimated to be $89.9 million
($103.5 million if the Underwriters' over-allotment options are exercised in
full). The Company intends to use the net proceeds to pay dividends to the
Company's existing shareholders.

DIVIDEND POLICY AND S CORPORATION STATUS

The Company expects to retain any earnings to finance the expansion and
development of its business and, except as described below, has no plans to pay
cash dividends after the Offerings for the foreseeable future. The payment of
dividends is within the discretion of the Company's Board of Directors and will
depend on the earnings, capital requirements and operating and financial
condition of the Company, among other factors. Certain of the Company's credit
agreements restrict the Company's ability to pay dividends. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

Since 1988 the Company has been treated for federal income tax purposes as
an S corporation under Subchapter S of the Internal Revenue Code and has
generally been treated as an S corporation for state income tax purposes under
comparable state tax laws. As a result, the Company's earnings through the day
preceding the date of termination of the Company's S corporation status (the
"Termination Date") have been or will be for federal and, generally, state
income tax purposes taxed directly to the Company's shareholders, at their
individual federal and state income tax rates, rather than to the Company. The
Termination Date will occur on or prior to the date of the closing of the
Offerings. Subsequent to the Termination Date, the Company will no longer be
treated as an S corporation and, accordingly, will be subject to federal and
state income taxes on its earnings. See Notes 1 and 2 of Notes to Consolidated
Financial Statements.

In 1997 and 1996 , the Company declared cash dividends to its shareholders
in the aggregate amounts of $18,525,000 and $8,543,000 , respectively. The
Company expects to declare, prior to the completion of the Offerings, additional
dividends to its existing shareholders in the estimated aggregate amount of $107
million. See "Use of Proceeds" and "Certain Transactions."

17
<PAGE>
DILUTION

As of December 31, 1997, the Company had a net tangible book value (giving
effect to dividends of $107 million expected to be declared prior to completion
of the Offerings and the recording of a deferred tax asset in the amount of $2.9
million as described under "Capitalization") of approximately $5.7 million or
$0.30 per share. Net tangible book value per share is equal to total tangible
assets (total assets less intangible assets) less total liabilities of the
Company, divided by the number of shares of Common Stock then outstanding.
Without taking into account any adjustment in net tangible book value
attributable to operations after December 31, 1997, after giving effect to the
sale by the Company of 6,500,000 shares in the Offerings at an assumed initial
public offering price of $15.00, the net tangible book value of the Company as
of December 31, 1997 (after deduction of an assumed underwriting discount and
estimated offering expenses and the application of the net proceeds as described
under "Use of Proceeds") would have been approximately $95.6 million or $3.78
per share. This represents an immediate increase in net tangible book value of
$3.48 per share to existing shareholders and an immediate dilution of $11.22 per
share to new investors. The following table illustrates this per share dilution:

<TABLE>
<CAPTION>
<S> <C> <C>
Assumed initial public offering price per share.......................... $ 15.00
Net tangible book value per share as of December 31, 1997........... 0.30
Increase per share attributable to new investors...................... 3.48
----
Net tangible book value per share after the Offerings.................... 3.78
--------
Dilution per share to new investors...................................... $ 11.22
========
</TABLE>

The following table summarizes as of December 31, 1997 the relative
investments of all existing shareholders and new investors, giving effect to the
sale by the Company of shares in the Offerings at an assumed initial public
offering price of $15.00 per share (without giving effect to underwriting
discount and offering expenses payable by the Company):

<TABLE>
<CAPTION>
Shares Purchased Total Consideration Average
---------------------- ---------------------- Price
Number Percent Amount Percent Per Share
---------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Existing shareholders................... 18,792,176 74.3% $ 3,535,000 3.5% $ 0.19
New investors........................... 6,500,000 25.7 97,500,000 96.5 15.00
----------- ---------- ------------ ----------
25,292,176 100.0% $101,035,000 100.0%
=========== ========== ============ ==========
</TABLE>

The above information assumes no exercise of any outstanding options after
December 31, 1997. As of December 31, 1997, there were outstanding options to
purchase an aggregate of 736,774 shares of Common Stock at exercise prices
ranging from $9.68 to $15.20 per share. Purchasers of shares of Common Stock
offered in the Offerings may incur additional dilution to the extent outstanding
stock options are exercised. See "Management--Stock Incentive Plan" and Note 10
of Notes to Consolidated Financial Statements.

18
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization and short-term
obligations of the Company on an actual basis as of December 31, 1997 and on an
as adjusted basis to give effect to (i) the payment of dividends after December
31, 1997 and (ii) the receipt and application of the estimated net proceeds to
the Company from the sale of the 6,500,000 shares of Common Stock offered by the
Company in the Offerings at an assumed initial public offering price of $15.00
per share. This table should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements and notes thereto included elsewhere in
this Prospectus.

December 31, 1997
----------------------------
Actual As Adjusted(1)
---------- --------------
(in thousands)
<S> <C> <C>
Short-term obligations:
Notes payable (2)........................................................... $ 20,427 $ 37,452
---------- ----------
Current portion of long-term obligations.................................... 154 154
---------- ----------
Total short-term obligations............................................. 20,581 37,606
Long-term obligations, net of current portion.................................. 2,831 2,831
---------- ----------
Shareholders' equity:
Preferred Stock, 10,000,000 shares authorized; no shares
issued and outstanding................................................... -- --
Common Stock, 50,000,000 shares authorized; 18,792,176
shares issued and outstanding, actual; 25,292,176 shares
issued and outstanding, as adjusted (3)................................ 17,886 107,821
Retained earnings (deficit)................................................ 101,805 (2,295)
Foreign currency adjustments................................................ (3,806) (3,806)
Unearned portion of restricted stock issued for future
services (5,350) (5,350)
---------- ----------
Total shareholders' equity............................................ 110,535 96,370
---------- ----------
Total capitalization.................................................. $ 133,947 $ 136,807
========== ==========
- --------------

(1) Adjusted to reflect (i) the payment of dividends in the estimated aggregate
amount of $107 million for S corporation distributions to existing
shareholders, which the Company expects to declare prior to completion of
the Offerings, (ii) the recording of $2.9 million of deferred income tax
benefit as if the Company had been a C corporation and (iii) the sale of
the 6,500,000 shares offered by the Company in the Offerings, receipt of
the estimated net proceeds of $89.9 million therefrom and the application
of such proceeds to payment of dividends by the Company. See "Use of
Proceeds," "Dividend Policy and S Corporation Status," "Certain
Transactions" and Notes 1 and 2 of Notes to Consolidated Financial
Statements.

19
<PAGE>
(2) Represents (i) amounts due under certain of the Company's credit lines and
(ii) increased borrowings of $17.0 million to pay dividends to
shareholders. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources" and
Note 7 of Notes to Consolidated Financial Statements.

(3) Excludes 4,000,000 shares reserved for issuance under the Stock Incentive
Plan, of which 736,774 shares were subject to outstanding options at
December 31, 1997 at a weighted average exercise price of $10.40 per share.
See "Management--Stock Incentive Plan" and Note 10 of Notes to Consolidated
Financial Statements.

</TABLE>

20
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The selected financial data presented below for, and as of the end of, each
of the years in the five-year period ended December 31, 1997 have been derived
from the audited financial statements of the Company. The financial data should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Consolidated Financial Statements
and related notes thereto included elsewhere in this Prospectus.

Year Ended December 31,
--------------------------------------------------------------
1993 1994 1995 1996 1997
---------- ---------- ---------- ---------- ----------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net sales.................... $ 192,055 $ 256,426 $ 303,797 $ 298,988 $ 353,452
Cost of sales................ 112,544 148,940 182,971 176,859 198,946
---------- ---------- ---------- ---------- ----------
Gross profit................. 79,511 107,486 120,826 122,129 154,506
Selling, general and
administrative expense(1).... 46,351 64,049 84,583 95,431 110,204
---------- ---------- ---------- ---------- ----------
Income from operations....... 33,160 43,437 36,243 26,698 44,302
---------- ---------- ---------- ---------- ----------
Interest expense, net........ 1,688 3,220 5,767 4,220 3,593
Provision (benefit) for
income taxes................. 724 1,893 1,750 1,468 1,413
Net income................... $ 30,748 $ 38,324 $ 28,726 $ 21,010 $ 39,296
========== ========== ========== ========== ==========
Earnings per share:
Basic................... $ 1.55 $ 1.94 $ 1.45 $ 1.06 $ 2.09
Diluted ................ $ 1.55 $ 1.94 $ 1.45 $ 1.06 $ 2.07
Weighted average shares
outstanding:
Basic................... 19,797 19,797 19,808 19,825 18,792
Diluted ................ 19,797 19,797 19,808 19,825 19,018

Pro forma net
income(2).................... $ 18,883 $ 24,130 $ 18,286 $ 13,487 $ 24,425
========== ========== ========== ========== ==========
Pro forma net income
per share (2):
Basic................... $ 0.97
Diluted ............... $ 0.96
Pro forma weighted average shares outstanding (3):
Basic .................. 25,292
Diluted ................ 25,518

</TABLE>

21
<PAGE>
<TABLE>
<CAPTION>

December 31,
--------------------------------------------------------
1993 1994 1995 1996 1997
-------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Working capital.............................. $ 35,002 $ 48,971 $ 47,726 $ 59,797 $ 69,706
Inventories.................................. 18,937 43,442 48,404 34,638 48,300
Total assets................................. 78,428 133,349 162,301 135,967 174,477
Long-term debt............................... 3,750 1,250 --- 2,963 2,831
Shareholders' equity......................... 43,394 61,992 70,458 91,936 110,535

- --------------

(2) The Company was an S corporation and accordingly was not subject to federal
and, generally, state income taxes during the periods indicated. Pro forma
net income reflects federal and state income taxes as if the Company had
been a C corporation, based upon a pro forma effective tax rate of 40%. See
"Dividend Policy and S Corporation Status" and Note 1 of Notes to
Consolidated Financial Statements.

(3) For 1997 includes the number of shares to be sold in the Offerings to
generate proceeds to be used for the payment of dividends in the estimated
aggregate amount of $107 million to existing shareholders, which the
Company expects to declare prior to the completion of the Offerings. See
"Dividend Policy and S Corporation Status," "Certain Transactions" and Note
1 of Notes to Consolidated Financial Statements.

</TABLE>

22
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Overview

Established in 1938, Columbia has grown from a small, regional hat
distributor to a global leader in outdoor apparel. The Company has its roots and
developed its initial expertise in the production of high quality, rugged
outdoor fishing and hunting apparel for the serious sportsman. The Company
broadened its product offerings in the 1980s to include related merchandise
categories. In 1985 the Company introduced the Interchange System into its
outerwear line and opened the first of its six international sourcing offices,
further enhancing the value component of the Company's merchandise. In the 1990s
the Company leveraged its brand awareness by expanding its sportswear offerings
and introducing a rugged footwear line to complement its successful outerwear
line. Based on this success, the Company expanded into the international markets
through the establishment of direct sales operations in Canada, Europe and South
Korea and a network of independent distributors in South America, Japan,
Australia, New Zealand and certain European countries. Today, the Company sells
its products in 30 countries and its sales have increased to $353.5 million in
1997 from $18.8 million in 1987.

From 1992 through 1995, sales increased at a compound annual growth rate of
34%. During this period of rapid sales growth, the Company recognized the need
to diversify its product offerings, which were dominated by the
fall/winter-oriented outerwear and accessory lines (84.6% in 1993), and to
expand its geographic distribution, which was dominated by domestic sales (88.5%
in 1993). To accomplish this, the Company established an internal merchandise
and design department for its sportswear line and purchased its Canadian
distributor in 1992. In 1993 the Company introduced its first footwear offering
to the market and expanded its wholesale distribution into Europe. In 1997 the
Company opened a flagship store in South Korea, and in the fall of 1998 the
Company will assume the wholesale operations in Japan now operated by its
Japanese distributor. See "Business--Business Process-- Sales and Distribution
- --Asia." These actions diversified the Company's product offerings and
geographic distribution. For 1997 sales of the Company's sportswear and footwear
accounted for 25.8% and 6.9% of net sales, respectively, and sales outside the
United States accounted for 18.8% of net sales.

Sales decreased slightly in 1996, primarily as a result of a poor retail
environment in 1995 that caused domestic customers to hold unseasonably high
inventories during the fall 1996 order season. This had the effect of depressing
fall 1996 orders. In addition, two of the Company's larger customers, which
together accounted for $10.2 million of the Company's net sales in 1995,
declared bankruptcy after the fall 1995 season. The decrease in the domestic
business was offset in part by a $10.3 million, or 65%, increase in foreign
sales for 1996. After 1996 the Company's sales growth resumed, with an 18.2%
increase for 1997. This increase in sales was the result of an improved retail
environment for most of the Company's significant U.S. customers, the continued
growth in sportswear and rugged footwear sales and the Company's increasing
brand acceptance in its foreign markets.

23
<PAGE>

The Company's gross margins are affected by its ability to maintain or
increase the price of its products and control production costs. Sales prices
are influenced by the strength of the Company's brand, competitive conditions
and the amount of inventory sold in close-out sales, which depends in part on
weather conditions and the retail environment as well as the Company's ability
to manage these factors through effective control of inventory levels. Prior to
1995 the Company had experienced several years of improved gross profit margins.
This increase was the result of improved efficiencies in the production of the
foreign sourced goods as well as the strength of the brand in the marketplace.
In 1995 and 1996 the Company experienced a decline in gross profit margins from
the prior years. For both years the decrease was attributable to close-out sales
of excess fall inventory from the prior season. The excesses were the result of
lower than anticipated reorders due to a late winter in 1994 and a poor retail
environment in 1995. In response to the adverse effect on margins in 1995 and
1996, the Company has implemented an inventory management strategy to reduce the
exposure to excess inventory positions. This strategy includes obtaining
customer orders closer to the production cycle as well as reducing the reorder
percentage assumed in the production schedule. For 1996 the Company sold out of
fall products with only minimal off-priced sales. Excess inventories also were
minimal for 1997 and the Company's gross margins improved significantly. The
Company believes this inventory management strategy, its increasing revenue
derived from international operations and the greater significance of sportswear
and footwear in the product offering have substantially reduced its exposure to
weather-related sales fluctuations.

The Company's gross margins are also influenced by changes in its product
mix and relative levels of domestic and international sales. Generally, the
Company's outerwear products have generated higher gross margins than its
sportswear and rugged footwear products. In addition, the Company's
international sales have typically generated higher gross margins than those
realized on its domestic sales. Accordingly, the Company believes its increasing
emphasis on sportswear and rugged footwear products may tend to reduce gross
margins, while its expansion of international sales activity may strengthen
gross margins.

In 1993 the Company experienced sales growth of 50.4%, followed by a 33.5%
increase in 1994. This near doubling of sales in a two-year period resulted in
sales volumes that strained the supporting infrastructure and resulted in
relatively low selling, general and administrative expense as a percentage of
sales. During this period of rapid sales growth, the Company focused on
investing in its infrastructure to enable continued expansion. Major areas of
investment consisted of expansion of the domestic distribution facilities, the
establishment of sportswear and footwear design and development departments,
creation of a product development facility in Hong Kong and establishment of a
European sales headquarters. Significant investment in infrastructure
contributed to an increase in selling, general and administrative expense as a
percentage of sales to 31.2% for 1997 from 24.1% in 1993. The Company
anticipates that it will be able to leverage selling, general and administrative
expense as a percentage of sales as the international sales operations become
more established and the sportswear and footwear segments of the business
continue to expand.

24
<PAGE>

Inventory purchases from independent manufacturers and suppliers in the Far
East are denominated primarily in U.S. dollars. Purchase prices for materials
and finished goods, however, may be affected by fluctuations in exchange rates
between the U.S. dollar and the local currency where the products are sourced.
Any such fluctuations may increase the Company's cost of goods sold in the
future. In the last two years, exchange rates have not materially affected the
Company's inventory costs. The Company sells its products in Canada and Europe
in the local currency of the retailer. A stronger U.S. dollar would negatively
affect the Company's net sales and gross margins in Canada , Europe and Asia.
For 1997 the Company's European and Korean net sales and gross margins were
negatively affected by the strengthening U.S. dollar. Beginning in late 1997,
the Company implemented a program to hedge against its exposure to currency
exchange rate fluctuations. See "Risk Factors--Currency Exchange Rate
Fluctuations."

The Company has operated as an S corporation since 1988 and, as a result,
has not been subject to federal or, generally, state income taxes. Accordingly,
the following discussion of the Company's historical results of operations does
not include a discussion of income tax expense. In connection with the
Offerings, the Company will become a C corporation subject to federal and state
income taxation and will record a net deferred tax asset of approximately $2.7
million and a corresponding nonrecurring benefit to income tax expense. See
"Dividend Policy and S Corporation Status" and Note 1 of Notes to Consolidated
Financial Statements.

Results of Operations

The following table sets forth certain financial data for the Company for
the periods indicated as a percentage of revenue.

Year Ended December 31,
-------------------------------------
1993 1994 1995 1996 1997
----- ----- ----- ----- -----
Statement of Operations Data:
Net Sales:
United States.............. 88.5% 88.8% 86.2% 82.1% 81.2%
Canada..................... 6.8 6.9 8.6 9.1 8.8
Other International........ 4.7 4.3 5.2 8.8 10.0
----- ----- ----- ----- -----
Total................ 100.0 100.0 100.0 100.0 100.0
Cost of sales............... 58.6 58.1 60.2 59.2 56.3
Gross profit................. 41.4 41.9 39.8 40.8 43.7

Selling, general and
administrative expense..... 24.1 25.0 27.8 31.9 31.2
Income from operations....... 17.3 16.9 11.9 8.9 12.5
- -----------

25
<PAGE>

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Net Sales. Net sales increased 18.2% to $353.5 million in 1997 from $299.0
million in 1996. Domestic sales increased 16.8% to $287 million in 1997 from
$245.6 million in 1996. The domestic sales increase was due to strong growth in
volume for outerwear and sportswear categories, including the youth and fleece
products. Rugged footwear increased 87.1% or $10.0 million in 1997. The growth
in the sportswear and outerwear categories was primarily due to larger existing
customers who had experienced strong sell through on the 1996 product, while the
increase in rugged footwear was attributable to several new customers in
addition to the existing customer base. International sales, excluding Canada,
increased 34.9% to $35.4 million in 1997 from $26.3 million in 1996. The
increase was due primarily to a $5.3 million or 49.6% increase in European
direct sales. The increase is also attributable to volume growth in the
international markets where the Company's brand is gaining recognition. Canadian
sales grew 14.7% to $31.1 million in 1997 from $27.2 million in 1996.

Gross Profit. Gross profit as a percentage of net sales was 43.7% in 1997
compared to 40.9% in 1996. The increase in gross margin was due to improved
inventory management resulting in fewer mark downs and close-outs as well as
efficiencies in the manufacturing process and continued strength of the brand in
the market.

Selling, General and Administrative Expense. Selling, general, and
administrative expense increased 15.5% to $110.2 million in 1997 from $95.4
million in 1996. As a percentage of sales, selling, general, and administrative
expense decreased from 31.9% to 31.2%. Net of the $7.5 million nonrecurring
portion of the compensation expense recognized in 1996 for the conversion of
participation shares described below under "--Year Ended December 31, 1996
Compared to Year Ended December 31, 1995--Selling, General and Administrative
Expense," selling, general and administrative expense actually increased $22.3
million, or 25.3%. This increase was primarily attributable to the Company's
investment in personnel and operational infrastructure to support the product
line expansion, additional advertising and promotional expenditures to support
the brand and international expansion into Europe, South Korea and Japan.
Because these markets are in the start-up phase, personnel expenses and
advertising and promotional expenditures are disproportionately high as the
Company establishes the Columbia brand. The Company believes it can leverage
selling, general, and administrative expenses as a percentage of sales as its
international operations become more established and its sportswear and footwear
sales expand.

Interest Expense. Interest expense decreased 14.9% in 1997 from 1996. The
decrease was attributable to lower borrowing requirements for working capital in
1997.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Net Sales. Net sales decreased 1.6% to $299.0 million in 1996 from $303.8
million in 1995. This decrease was due to a decline in domestic sales, which
decreased 6.2% to $245.6 million in 1996 from $261.9 million in 1995. The
domestic sales decrease primarily reflects the

26
<PAGE>
poor retail environment experienced in the industry in fall 1995 selling season
that resulted in decreased preseason orders for 1996. In response to significant
excess inventory levels from the fall 1995 season and the high inventory levels
held at the retailers, the Company deliberately reduced the production of fall
1996 merchandise to limit the Company's exposure to reorder business. In
addition, two of the Company's larger customers, which together accounted for
$10.2 million of the Company's sales in 1995, filed for bankruptcy after the
fall 1995 season. This decrease was partially offset by the opening of two new
outlet stores in late 1995 and the Company's flagship store in late 1996.
International sales, excluding Canada, increased 65.4% to $26.3 million in 1996
from $15.9 million in 1995. The increase was due primarily to a $5.2 million, or
96.1%, increase in European direct sales and a $5.1 million increase in sales to
international distributors. Canadian sales increased 4.6% to $27.2 million in
1996 from 1995.

Gross Profit. Gross profit as a percentage of net sales was 40.8% in 1996
compared to 39.8% in 1995. The lower gross margin experienced in 1995 was
attributable to excess off-priced inventory sales. Due to a very mild fall 1994
in the United States, the Company experienced a low reorder rate, resulting in
excess inventory that was sold off-price in the first quarter of 1995. In fall
1995, many of the Company's retail customers experienced poor sales, resulting
in cancellations for fall 1995 merchandise. In anticipation of lower reorders,
the Company elected to sell a significant amount of excess inventory in late
1995 at discount prices. The effect of these sales was lower gross margins for
the first and fourth quarters of 1995. Gross margins for the first quarter of
1996 were negatively affected by off-priced inventory sales carried over from
fall 1995. In 1996 the Company deliberately reduced the reorder factor for fall
1996 production. The reduced inventory exposure, coupled with a healthier retail
environment, resulted in minimal markdown sales in the fall 1996 selling season
and, consequently, improved gross margins in 1996 over the prior year.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased 12.8% to $95.4 million in 1996 from $84.6
million in 1995. As a percentage of net sales, selling, general and
administrative expense increased to 31.9% of sales in 1996 from 27.8% in 1995.
The increase was primarily due to the Company's investment in personnel and
systems infrastructure to support the growth of the Company's product offering
and the expansion of the European operation. In addition, the second phase of
the distribution center became operational in late 1995. The increase as a
percentage of sales was also affected by lower than anticipated preseason order
volume in 1996, influenced by the poor 1995 retail selling season. Based on the
lower order volume, the Company initiated a corporate cost containment strategy
for 1996 which included a reduced advertising budget, a delay in hiring of
additional personnel and reduced spending for discretionary projects. Selling,
general and administrative expense includes compensation recognized upon
conversion of participation shares to Common Stock for Don Richard Santorufo,
the Company's Executive Vice President and Chief Operating Officer. Total
non-cash compensation recognized by the Company for 1996 related to the
conversion was $5.7 million. In addition to the non-cash compensation
recognized, the Company awarded Mr. Santorufo a cash bonus of $2.8 million to
cover the personal tax liability associated with the transaction. The Company
will continue to recognize additional compensation relating to the vesting of
these shares through the year 2004.

27
<PAGE>
Interest Expense. Interest expense decreased 26.8% in 1996 from 1995. The
decrease was attributable to lower borrowing requirements for working capital
needs.

Quarterly Results of Operations and Seasonality

For the Quarter Ended
---------------------------------------------------------------------------------------------------------------
1995 1996 1997
----------------------------------- ---------------------------------- ------------------------------------
Statements of
Earnings Data: Mar. 31 June 30 Sept. 30 Dec 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31
------- ------- -------- ------ ------- ------- -------- ------- ------- ------- -------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales........... $ 44,762 $ 62,933 $126,409 $ 69,693 $ 49,292 $55,350 $121,597 $ 72,749 $54,495 $49,695 $154,165 $95,097
As a % of full year 14.7% 20.7% 41.6% 23.0% 16.5% 18.5% 40.7% 24.3% 15.4% 14.1% 43.6% 26.9%
Gross profit........ $ 14,851 $ 26,551 $ 54,604 $ 24,820 $ 16,035 $20,192 $ 54,386 $ 31,516 $20,752 $21,623 $ 71,409 $40,722
As a % of full year 12.3% 22.0% 45.2% 20.5% 13.1% 16.5% 44.5% 25.9% 13.4% 14.0% 46.2% 26.4%
As a % of net sales. 33.2% 42.2% 43.2% 35.6% 32.5% 36.5% 44.7% 43.3% 38.1% 43.5% 46.3% 42.8%
Income (loss) from
operations.......... $ (1,070) $ 7,989 $ 30,074 $ 1,750 $(2,890) $ 1,572 $ 28,338 $ 7,155 $(1,131) $ (852) $ 38,010 $ 8,275
As a % of net sales. (2.4)% 12.7% 23.8% 2.5% (5.9)% 2.9% 23.3% 9.8% (2.1)% (1.7)% 24.7% 8.7%
</TABLE>

The Company's business is based on two primary wholesale selling seasons,
spring (December to June), which represented 20% of the 1997 business, and fall
(June to December), which represented 80% of the 1997 business by wholesale
dollar volume. The spring product mix is weighted toward sportswear, footwear
and lighter outerwear. These products generally have a lower unit selling price
and lower gross margin than the fall products. The fall product mix is weighted
toward the higher unit priced, higher margin outerwear. These seasonal
differences lead to significant fluctuations in operating results from quarter
to quarter. Historically the Company has recognized the majority of its profits
in the third quarter and has realized losses in the first quarter. Second and
fourth quarter results vary from year to year based on the shipping efficiencies
and reorder activity for fall product.

Liquidity and Capital Resources

The Company's main sources of liquidity have been cash flows from
operations and borrowings on short term credit facilities. Net cash provided by
operations for the years ended December 31, 1997, 1996 and 1995 was $18.9
million, $66.8 million and $11.8 million, respectively.

The Company's primary capital requirements have been for working capital,
investing activities associated with expansion of the distribution center,
systems development, build-out of the new flagship store and general corporate
needs. Net cash used in investing activities for the years ended December 31,
1997, 1996 and 1995 was $14.0 million, $10.9 million and $13.0 million,
respectively.

Financing activities consist primarily of distributions to shareholders for
tax payments and net changes in the short term borrowings. Net cash provided by
(used in) financing

28
<PAGE>
activities for the years ended December 31, 1997, 1996 and 1995 was $(3.6
million), $(53.7 million) and $588,000, respectively.

Prior to the Offerings, the Company was an S corporation and net income was
included in the shareholders' income for federal and certain state income tax
filings. To accommodate the payment of taxes, the Company generally made
substantial cash distributions to the shareholders in the first, third and
fourth quarters of each year. After the Offerings, the Company's cash flows from
financing activities will no longer reflect the distribution to shareholders for
tax purposes. The Company will be responsible, however, for corporate tax
payments, which will be reflected in the cash flow from operating activities.

The Company has an unsecured revolving line of credit for $50 million with
Wells Fargo Bank, N.A., which expires June 30, 1998. Funds borrowed bear
interest, at the Company's option, at a rate of (i) the CD Rate (as defined
therein) plus up to .75%, (ii) the Base Rate (as defined therein) minus up to
2.1% or (iii) LIBOR plus up to .75%. The amount of interest varies depending on
the ratio of the Company's indebtedness to tangible net worth. If an event of
default occurs, the Company is prohibited, subject to certain exceptions, from
making dividend payments or other distributions. As of December 31, 1997, $14.0
million was outstanding under this line of credit bearing interest at a rate of
6.5%. The Company expects to renew or replace this line of credit upon its
expiration.

The Company is party to a Buying Agency Agreement with Nissho Iwai American
Corporation ("Nissho") pursuant to which Nissho provides the Company unsecured
credit, the amount of which varies annually at Nissho's discretion, and acts as
a buying agent on behalf of the Company. At December 31, 1997, the maximum
amount available under the Nissho Agreement was $120.0 million, which includes
$70.0 million allowed under the credit line and amounts available for letters of
credit. Borrowings bear interest at a rate of 0.5% above the three month LIBOR
rate. In addition, the Company pays Nissho a commission of 1.5% of the FOB price
of the goods purchased by Nissho in its capacity as buying agent. The Company is
prohibited from paying dividends in excess of (i) 50 percent of the Company's
income after provision for state and federal income taxes and (ii) 100 percent
of the proceeds of a common stock offering. The Offerings and the distribution
of proceeds from the Offerings will not violate the agreement with Nissho. The
agreement expires September 30, 1998. As of December 31, 1997, $11.0 million was
outstanding under the Company's line of credit with Nissho.

The Company maintains a credit agreement with The Hong Kong and Shanghai
Banking Corporation Limited for an uncommitted and unsecured line of credit with
a combined limit of $60 million. Within this limit, up to $45 million may be
used as an import line of credit for issuing documentary letters of credit and
up to $25 million may be used as a revolving line of credit for working capital.
Funds borrowed under the agreement bear interest, at the Company's option, at
either a fixed rate for a specified number of days at the bank's cost of funds
plus 0.35%, or a floating rate of the prime rate minus 2%. As of December 31,
1997, no balance was outstanding under the agreement.

29
<PAGE>
The Company's Canadian and Japanese subsidiaries also maintain separate
credit arrangements. If a subsidiary's credit arrangement is unsecured, the
Company generally guarantees the subsidiary's obligations under the credit
arrangement.

To assist in the scheduling of production and the smooth shipping of
seasonal products, the Company offers customers discounts for placing pre-season
orders and extended payment terms for taking delivery before the peak shipping
season. Accordingly, the Company may have significant exposure regarding the
collection of receivables from its customers. The Company has credit policies
and procedures in place to manage the credit risk. The Company believes the
additional costs associated with the payment term extension program are more
than offset by the reduced exposure to inventory excesses and the increased
distribution efficiencies. The payment term extension program results in peak
short term borrowing on the credit facilities in October before the first due
date under the payment term extension program. See "Risk Factors -- Risks
Related to Collectibility of Receivables."

The Company estimates that capital expenditures for 1998 will be
approximately $40 million. This amount will be primarily for the final
implementation of the new management information system and the expansion and
reconfiguration (including a new warehouse management system) of the existing
distribution center. The new enterprise management information system, which is
expected to be fully operational by late 1998, will address the Year 2000 issue
on all core Company business systems. The Company has other ancillary systems
that will be modified to address the Year 2000 issue. The Company, however,
cannot be certain that these planned system modifications will be completed in a
timely fashion. In addition, the Company has not thoroughly analyzed the impact
of other parties' computer system failures, but the Company believes costs
incurred in responding to other parties' Year 2000 computer system failures,
together with the cost of modifications to the Company's computer systems, will
not have a material impact on the Company's results of operations or financial
condition. The total expenditure for the distribution center project, scheduled
for completion in April 1999, is estimated to be $33 million, including $30
million expected to be expended in 1998 and the remaining $3 million to be
expended in 1999.

The Company's current primary sources of liquidity are cash flow from
operations and borrowings under short term credit facilities. The Company
believes cash flow from operations, funds available under its credit facilities
and funds available under the borrowing arrangement it expects to enter into to
fund the expected construction and reconfiguration of its distribution center
will be sufficient to satisfy the Company's liquidity requirements for the next
12 months. In connection with the anticipated distribution center project, the
Company intends to enter into a long term borrowing arrangement in mid-1998 to
provide funds to complete the project. The Company believes that its liquidity
requirements for the next 12 months and beyond will be adequately covered by the
anticipated long term borrowing facility and its short term arrangements.

30
<PAGE>
BUSINESS

Introduction

Columbia is a global leader in the design, manufacture, marketing and
distribution of active outdoor apparel. As one of the largest outerwear
manufacturers in the world and the leading seller of skiwear in the United
States, the Company has developed an international reputation across an
expanding product line for quality, performance, functionality and value. The
Company believes its award-winning advertising campaigns effectively position
the Columbia brand as active, outdoor, authentic and distinctly American.

Business Strengths

Established and Differentiated Outdoor Lifestyle Brand. The Company
believes the Columbia brand represents a differentiated, active, outdoor,
authentic and distinctly American image built on quality, functionality,
performance and value. The Company's award-winning international marketing
campaigns, which feature Chairman Gertrude Boyle in the role of "Mother Boyle,"
an overbearing taskmaster who enforces tough Columbia quality standards,
emphasize this distinctive brand image.

31
<PAGE>
Broad and Growing Appeal. Columbia's merchandise appeals to a broad range
of consumers of varying ages and income levels, from serious outdoorsmen to
weekend sports enthusiasts. The Company's price-value equation is attractive to
a large segment of the $10.4 billion U.S. retail outdoor apparel market.
Columbia is effectively positioned to compete against lower priced or unbranded
products based on brand image and product features, and against higher priced,
largely technical or fashion brands based on superior value and generally lower
price points. The Company has benefited in the past and expects to continue to
benefit from the trend toward casual dressing and from the growth in demand for
active lifestyle apparel.

32
<PAGE>
Sourcing as a Competitive Advantage. Columbia's merchandise is produced
worldwide by independent manufacturers selected, monitored and coordinated by
local Columbia employees to assure conformity to strict quality and cost
standards. The Company believes the use of independent manufacturers, in
conjunction with the use of Columbia sourcing personnel rather than agents,
increases its production flexibility and capacity and allows it to maintain
control over critical aspects of the sourcing process, while at the same time
substantially reducing capital expenditures and avoiding the costs of managing a
large production work force.

Superior Inventory Management. From the time of purchasing through
production, distribution and delivery, the Company manages its inventory to
reduce risk. The sequencing of the product design, sourcing, production and
selling cycle mitigates inventory risk, in part by offering special discounts to
customers that purchase merchandise early. Because the Company's products are
not based primarily on fashion, and because Columbia undertakes extensive
analysis to ensure that its products are what consumers require, the Company
believes its inventory risk is not as great as that of some of its competitors.
A new state-of-the-art inventory management information system, expected to be
fully operational in late 1998, is expected to further enhance the Company's
ability to manage its inventory.

Growth Strategy

Enhance Channel Productivity of Existing Customers. The Company plans to
improve the productivity of its existing customers by expanding its concept
shops and installing brand enhancement systems. Concept shops, which promote a
consistent brand image, are located within the stores of the Company's customers
and are dedicated exclusively to selling Columbia merchandise. As of December
31, 1997, the Company had 164 concept shops worldwide and plans to double this
number by the end of 1998. The Company believes its concept shops increase sales
by displaying a complete selection of merchandise and promoting
cross-merchandising opportunities on a year -round basis. Smaller-scale brand
enhancement systems which include signage and fixtures that prominently display
consolidated groupings of Columbia merchandise, offer benefits similar to
concept shops. By the end of 1998, the Company also expects to have installed
1,000 in-store brand enhancement systems.

33
<PAGE>
outside North America have increased from $9.0 million in 1993 to $35.4 million
in 1997, but still represented only 10.0% of the Company's total net sales in
1997.

Industry Overview

Between 1991 and 1996 the U.S. retail market for outdoor apparel grew 18.0%
to $10.4 billion from $8.8 billion. The increased sales of outdoor apparel has
resulted, in large part, from the growth in the popularity of outdoor
activities. For example, according to the National Sporting Goods Association,
between 1994 and 1996 the number of people who participated in snowboarding
increased 76%, climbing 39%, in-line skating 31%, mountain biking 27% and
backpacking 17%. The growth in the popularity of outdoor activities has also
spurred an increase in sales of active outdoor apparel to consumers who do not
participate in these activities. The global trend toward casual dressing both in
and out of the workplace has also contributed to the increase in sales of active
outdoor apparel.

Sales of sportswear and rugged footwear have also increased in recent
years. From 1995 to 1996 sales of sportswear and rugged footwear in the United
States increased 6.6% and 4.3%, respectively. The Company believes the growth in
the sportswear market is fueled by a number of factors, including increasing
popularity of casual dressing worldwide, global interest in sports and active
lifestyles, consumer interest in brands, as well as innovative product design,
increased marketing and promotion expenditures and larger and more attractive
retail formats. The Company expects the growth in the rugged footwear market to
continue as the number of products designed to suit a greater variety of outdoor
activities and conditions proliferates.

34
<PAGE>
Products

The Company offers a broad range of durable and functional outdoor apparel
that represents exceptional value to the consumer. The Company's products are
grouped into four broad categories -- outerwear, sportswear, rugged footwear and
related accessories -- and are sold as casual wear as well as for use in a wide
range of outdoor activities, including skiing, snowboarding, hunting, fishing,
hiking and golf.

The Company believes its Columbia brand represents a differentiated active,
outdoor, authentic, value-oriented and distinctly American image and designs its
products to reinforce this image. In both the design and production phases, the
Company focuses its efforts on the development of popular, higher volume
products at moderate price points. The Company's merchandise is durable and
functional, incorporating useful technical details such as pockets that double
as vents, double storm flaps over zippers and "gutters" that facilitate water
run-off. The Company's attention to technical details derives from Columbia's
long experience producing specialized hunting and fishing apparel and
contributes to the authenticity and functionality of Columbia's entire selection
of merchandise. In the manufacture of its apparel, the Company uses special
technical materials that possess functionality similar to branded materials, but
are produced at a lower cost, thereby enhancing the price-value equation.

35
<PAGE>
The charts below set forth net sales information by product category.

Net Sales by Product Category

[PIE CHART: 1993

Outerwear 79.7% ($153.2 million)
Sportswear 14.8% ($ 28.4 million)
Accessories 4.9% ($ 9.3 million)
Rugged Footwear 0.6% ($ 1.2 million)

Total sales: $192 million]

[PIE CHART: 1996

Outerwear 62.3% ($220.2 million)
Sportswear 25.8% ($ 91.3 million)
Accessories 5.0% ($ 17.6 million)
Rugged Footwear 6.9% ($ 24.3 million)

Total sales: $299 million]

Outerwear

Outerwear is the Company's most established product category. Although
sales of outerwear drive the Company's business, outerwear sales as a percentage
of the Company's net sales are likely to continue to decrease as Columbia
develops the markets for its growing sportswear and rugged footwear categories.
The Company intends to use its leading U.S. market position and extensive
experience in outerwear as a foundation upon which to grow its international
business. The Company's growth strategy primarily involves expanding the
category in international markets, improving the productivity of its existing
customers and increasing outerwear sales to more department store retailers over
the longer term.

The Company's outerwear is designed to protect the wearer from inclement
weather in everyday use and in a variety of outdoor activities, including
skiing, snowboarding, hiking, hunting and fishing. Many of the Company's jackets
incorporate Columbia's revolutionary Interchange System, which was introduced in
1983 and features a 3- or 4-jackets-in-1 design. Jackets incorporating the
Interchange System typically combine a durable, nylon outershell with a
removable, zip-out liner. The outershell and the liner may be worn separately or
together. This layered ensemble provides the wearer with a jacket for all
seasons and weather conditions at a reasonable price.

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Skiwear. The Company's skiwear line is the best selling brand of skiwear in
the United States. The Company's skiwear products include parkas, vests, ski
pants, ski suits, pullovers and sweaters. Many of the Company's ski parkas
feature the Interchange System. The Bugaboo Parka, which was an early Columbia
skiwear product incorporating the Interchange System, has been the Company's
best selling ski parka for over a decade. Columbia's attention to detail and
commitment to technical and useful features contribute to products with a
distinctive and differentiated look and feel.

Snowboard Apparel. Columbia's Convert brand is the second best selling
brand of snowboard apparel in the United States. The Convert line includes
parkas, vests, snowboard pants, pullovers and shirts. Columbia was one of the
first major outdoor apparel companies to identify and react to the rapid
emergence of snowboarding as a popular sport. Demonstrating its ability to move
quickly to capture a significant share of a growth niche, Columbia achieved
rapid consumer acceptance as net sales of its snowboard apparel increased to
$14.4 million in 1997 from its introduction in 1994.

Hunting and Fishing Apparel. Hunting and fishing products constitute one of
the Company's oldest product lines and include apparel for the serious sportsman
engaged in a variety of outdoor activities, including waterfowl hunting, upland
hunting, big game hunting and fishing. Products include parkas, shells, vests,
liners, bib pants and rain suits. All of these products incorporate a variety of
specific-purpose, tailored features that enhance Columbia's reputation as a
producer of outerwear. Examples of Columbia's attention to detail include shell
loops and Ethefoam fly patches, terrain and seasonal camouflage patterns, recoil
cushioned shoulders and Silent Rain cloth for noise-proof movement.

Youth Outerwear. The Company's youth line of products includes ski parkas,
vests, snow pants, snow suits and pullovers. The youth product line benefits
from the Company's expertise in its adult lines and enables a Columbia customer
to outfit the entire family in dependable outerwear at a reasonable price.

Sportswear

The Company believes the global market for sportswear is significantly
larger than the global market for outerwear, and the continued development of
this market represents a substantial opportunity for the Company. Beginning in
the latter part of 1993, the Company targeted sportswear as a growth
opportunity. Building on a foundation of authentic fishing and hunting shirts,
the Company rapidly expanded its sportswear product offering, resulting in
sportswear sales increasing as a percentage of the Company's net sales from
14.8% for 1993 to 25.8% for 1997. The Company believes sportswear sales as a
percentage of the Company's net sales are likely to continue to increase.

The majority of the Company's sportswear sales are to sporting goods and
specialty outdoor stores. Department stores, which represent a substantially
larger portion of sportswear distribution, accounted for 18% of the Company's
U.S. net sales for 1997. The Company's

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growth strategy for sportswear sales consists of increasing productivity of
existing customers, improving merchandising at the store level (including
opening additional concept shops and installing brand enhancement systems),
expanding distribution to department stores and enhancing the product offerings
to take advantage of apparel trends.

The Company's sportswear products consist of durable, functional,
value-priced, authentic, active outdoor apparel that appeals both to the serious
outdoorsman and the more casual wearer who wants to project an outdoor image.
Sportswear products are designed to be sold alongside the Company's outerwear
and rugged footwear products as part of a unified "head-to-toe" outfitting
concept. In particular, fleece and pile products are merchandised to provide a
bridge to the outerwear products.

Outdoor Sportswear. The Company's outdoor sportswear is designed to meet
the recreation needs of walkers, hikers, campers, mountain bikers, fishermen,
hunters and the general outdoor enthusiast. Authentic design and affordable
prices also make the Company's sportswear products attractive to active outdoor
apparel consumers who purchase these products for casual wear. The outdoor
sportswear product line consists primarily of jeans, chinos, hiking shorts,
water sport trunks, knit shirts, woven shirts, sweats, sweaters and fleece and
pile products.

Golf Apparel. Introduced in 1997, the Company's golf line includes shorts,
pants, polo shirts, fleece products, windshirts and rainwear designed
specifically for the needs of golfers. The Company's golf line is differentiated
from competitors by its focus on golf as an outdoor activity that requires
specific fabrics and features to enhance performance.

GRT. The Company's GRT line of active outdoor performance apparel consists
of pants, shirts, shorts, vests, polo shirts, tee shirts, tank shirts and
lightweight jackets designed specifically for training, trekking and adventure
travel. Many of the items in the line incorporate the Company's Omni-Dry system
of moisture management.

Rugged Footwear

The Company's newest product category, rugged footwear, was introduced in
1993. The success of the introduction demonstrates Columbia's ability to expand
its head-to-toe merchandising assortment and to leverage its reputation as a
provider of durable, comfortable outdoor apparel, enabling consumers to broaden
their purchases of Columbia branded apparel. Rugged footwear as a percentage of
the Company's net sales has increased from 0.6% in 1993 to 6.9% in 1997. The
Company believes the market for rugged footwear remains a substantial growth
opportunity. The Company expects sales of its rugged footwear will be driven
primarily by the design and development of new footwear and by expanding the
distribution of rugged footwear within existing U.S. and international
distribution channels, such as sporting goods stores, outdoor specialty and
footwear retailers and department stores.

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The Company's rugged footwear category consists primarily of active
all-weather and performance outdoor products. Many of the Company's footwear
styles feature innovative technical designs that incorporate
waterproof/breathable constructions, thermal insulation, advanced cushioning
systems and high abrasion, slip-resistant outsoles. Several styles are offered
within each of the following classifications: All-Weather, Active Outdoor,
Performance Outdoor and Classic Columbia Comfort.

Accessories

The Company also produces and sells hats, caps, scarves, gloves, mittens
and headbands to complement its outerwear and sportswear lines.

Advertising, Marketing and Promotion

The Company's creative and award-winning print and broadcast advertising
campaigns have built brand awareness and have helped to highlight the strengths
of Columbia's products among consumers. The humorous advertisements, which have
received 18 awards in the past seven years, feature Chairman Gertrude Boyle as
an overbearing taskmaster--"one tough mother"--who demands high quality
standards for Columbia products. The advertisements, which often include witty
dialogue between "Mother Boyle" and her son Tim, Columbia's President, remind
consumers of the Company's long history of providing authentic outdoor apparel
with exceptional value and help to create a distinctly American brand. The
Company's advertising appears in a wide variety of print and broadcast media,
ranging from GQ, Rolling Stone, Ski (Germany), Be-Pal (Japan) and Desnival
(Spain) to The David Letterman Show, ESPN and MTV. The Company has also
sponsored several high profile sporting events, including three America's Cups,
the Eco Challenge, the Albuquerque International Balloon Fiesta and the
Paris-Dakkar Rally.

Business Process

From the time of purchasing through production, distribution and delivery,
the Company manages its inventory to reduce risk. Because the Company's products
are not based primarily on fashion and because Columbia undertakes extensive
analysis to ensure that its products are what consumers desire, the Company
believes its inventory risk is not as great as that of some of its competitors.
A new state-of-the-art inventory management information system, expected to be
fully operational in late 1998, should further enhance the Company's ability to
manage its inventory.

The Company encourages early purchases by its customers to promote
inventory management. To achieve this goal, the Company offers a select
assortment of its products to its entire roster of customers approximately one
to two months before most competing lines are introduced. Discounts are
available for customers who place early orders. In addition, the Company
provides its customers with staggered delivery times through the spring and fall

39
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seasons, which also permits the Company and its customers to manage inventory
effectively and thereby diminish the likelihood of closeout sales.

The following charts depict the purchasing, order and delivery cycles for
the Company's spring 1997 and fall 1997 merchandise. (For example, as of May
1997 the Company had placed orders for its fall 1997 season with its independent
manufacturers for 98% of its product needs, had already received orders from its
customers for 98% of the planned production and had shipped 9% of its products.)
There is no assurance that future purchasing, order and delivery cycles will be
similar to those illustrated below.

[Graph showing purchasing, order and delivery cycles for spring 1997
merchandise, with percentage of (i) purchases increasing from 1% at March 15,
1996 to 100% at February 15, 1997, (ii) orders increasing from 1% at June 15,
1996 to 100% at May 15, 1997 and (iii) delivery and invoicing increasing from 1%
at November 15, 1996 to 99% at August 15, 1997. Specific monthly percentages are
as follows:

Date Purchasing Orders Delivery and Invoicing
- ---- ---------- ------ ----------------------
Mar. 15, 1996 1%
Apr. 15, 1996 2%
May 15, 1996 4%
Jun. 15, 1996 7% 1%
Jul. 15, 1996 27% 26%
Aug. 15, 1996 55% 56%
Sep. 15, 1996 83% 78%
Oct. 15, 1996 95% 96%
Nov. 15, 1996 96% 100% 1%
Dec. 15, 1996 97% 100% 5%
Jan. 15, 1997 99% 101% 23%
Feb. 15, 1997 100% 102% 48%
Mar. 15, 1997 103% 75%
Apr. 15, 1997 104% 89%
May 15, 1997 100% 96%
Jun. 15, 1997 100% 97%
Jul. 15, 1997 98%
Aug. 15, 1997 99%
Sep. 15, 1997 99%]

[Graph showing purchasing, order and delivery cycles for fall 1997 merchandise,
with percentage of (i) purchases increasing from 1% at August 15, 1996 to 100%
at June 15, 1997, (ii) orders increasing from 0% at November 15, 1996 to 100% at
September 15, 1997 and (iii) delivery and invoicing increasing from 3% at April
15, 1997 to 99% at December 15, 1997. Specific monthly percentages are as
follows:

Date Purchasing Orders Delivery and Invoicing
- ---- ---------- ------ ----------------------
Aug. 15, 1996 1%
Sep. 15, 1996 3%
Oct. 15, 1996 8%
Nov. 15, 1996 20% 0%
Dec. 15, 1996 35% 5%
Jan. 15, 1997 57% 64%
Feb. 15, 1997 76% 79%
Mar. 15, 1997 89% 87%
Apr. 15, 1997 96% 96% 3%
May 15, 1996 98% 98% 9%
Jun. 15, 1997 100% 99% 16%
Jul. 15, 1997 100% 99% 31%
Aug. 15, 1997 99% 49%
Sep. 15, 1997 100% 70%
Oct. 15, 1997 100% 83%
Nov. 15, 1997 96%
Dec. 15, 1997 99%]

The Company attempts to mitigate its inventory risk in part by matching
purchases of inventory to the receipt of customer orders, as illustrated by the
charts above. By avoiding significant inventory build-ups in anticipation of
orders not yet received, the Company believes it is able to reduce the risk of
overcommitting to inventory purchases. Because customer orders

40
<PAGE>
can be canceled up to 45 days prior to shipment, however, this strategy does not
eliminate inventory risk in the event of significant cancellations of customer
orders.

Product Design

All Columbia merchandise is designed and developed in-house by experienced
merchandising and design teams. Working closely with internal sales and
production teams as well as with retailers and consumers, the Company's
merchandising and design teams can mitigate the risks of fashion swings by
developing superior products that are tailored specifically to meet consumer
requirements. Because its products are designed for functionality and
durability, the Company does not attempt to lead consumer preferences or
differentiate its products based primarily on fashion. In fact, many new
products are based on existing designs such as the Bugaboo Parka, a consistent
best seller for more than a decade. By pursuing this strategy, the Company
believes it can attract a wider, value-oriented consumer audience than its more
technical or fashion-oriented competitors.

The Company uses several special materials, such as Omni-Tech and
Bergundtal Cloth, in the design of its products, some of which were developed in
collaboration with textile mills. Omni-Tech fabrics have micro-porous
polyurethane coatings that provide a waterproof finish and breathability.
Bergundtal Cloth, constructed with taslanized filament nylon in the horizontal
direction and filament nylon in the vertical direction, has a water-repellent
finish on its face and is coated with polyurethane on its back to provide added
water resistance and wind protection. The Company's special materials
substantially enhance the value of the Company's products without adding
significant cost.

All designs are created by approximately 70 members of Columbia's product
development team. Prototypes of the designed products are created in the
Company's Hong Kong facility. Prototypes are reviewed by groups of retailers,
sales personnel and consumers for commercial acceptance. The design process
requires approximately six to seven months from conceptualization until the
product line is finalized. After the product line is finalized, costing and
scheduling of manufacture of the product line at factories commences. This
process requires approximately one and one-half months to complete. Pricing of
the product line is then completed over the following two months, after which
the Company's sales force receives samples. At approximately the same time,
placement of orders for the product line commences, and the Company will
purchase finished garments for the following four or five months. When the
finished garments arrive for shipment to retailers, approximately 18 months will
have passed since the initial conceptualization of the product line.

Sourcing and Manufacturing

Columbia's apparel is produced worldwide by independent manufacturers
selected, monitored and coordinated by regional Columbia employees to assure
conformity to strict quality standards. The Company believes the use of these
independent manufacturers, whether

41
<PAGE>
producing products from materials provided by the Company or obtained directly
by the manufacturer, increases the Company's production capacity and flexibility
and reduces its costs.

Unlike many apparel companies, Columbia uses few independent agents in its
sourcing activities. Rather, the Company maintains 10 sourcing and quality
control offices in the Far East, in Hong Kong, Thailand, Taiwan, India, Sri
Lanka, South Korea, China (three) and Malaysia, in each case staffed by Columbia
employees and managed by personnel native to the region. At December 31, 1997,
the Company employed a total of approximately 240 persons in these offices,
including approximately 101 persons in its Hong Kong office. Personnel in these
offices include those engaged in direct sourcing activities, such as
specification and sample distribution, production capability certification,
order placement, contract management and price and quantity negotiations, as
well as communications with the U.S.-based design teams, sample preparation,
quality control, quota and other import restriction monitoring, warehouse and
shipment coordination and pattern making. Final pricing for all orders, however,
is approved by personnel from the Company's U.S. headquarters. The Company
believes the use of dedicated Columbia personnel rather than independent agents
reduces its sourcing costs. Columbia personnel who are focused narrowly on the
Company's interests are more responsive to the Company's needs than independent
agents would be, and are more likely to build long-term relationships with key
vendors. The relationships enhance the Company's access to raw materials and
factory capacity at more favorable prices.

The Company's merchandise is produced by approximately 115 independent
manufacturers worldwide. For 1997 product sales, approximately 94% (by dollar
volume) of the Company's products were produced by independent manufacturers,
and approximately 86% (by dollar volume) of the Company's products were produced
outside the United States, principally in the Far East. Other than its facility
for the production of fleece products and headware in Chaffee, Missouri, the
Company does not operate any production facilities. The Company attempts to
monitor its selection of independent factories to ensure that no one
manufacturer or country is responsible for a disproportionate amount of the
Company's merchandise. Six manufacturers engaged by the Company accounted for
approximately 38.5% (by dollar volume) of the Company's total production for
1997 product sales. The primary production facilities of these manufacturers are
located in Asia. No other manufacturer accounted for more than five percent of
the Company's total production for 1997 product sales.

The Company believes the use of independent manufacturers, in conjunction
with the use of Columbia sourcing personnel rather than agents, increases its
production flexibility and capacity and allows it to maintain control over
critical aspects of the sourcing process, while at the same time substantially
reducing capital expenditures and avoiding the costs of managing a large
production work force. There are no formal arrangements between the Company and
any of its contractors or suppliers; however, the Company believes its
relationships with its contractors and suppliers are excellent and that its
long-term, reliable and cooperative relationships with many of its vendors
provide it an advantage over many of its competitors.

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<PAGE>
The Company's quality control program is designed to ensure its products
meet the Company's high quality standards. The Company monitors the quality of
its fabrics and inspects prototypes of each product before production runs are
commenced. The Company also performs random in-line quality control checks
during and after production before the garments leave the factory. Columbia
quality control personnel visit most of their independent manufacturers'
facilities at least weekly. Final inspections occur when the garments are
received in the Company's distribution centers. The Company employs a total of
approximately 75 full-time quality control personnel in its 10 Far East sourcing
and quality control offices, as well as additional inspectors at its warehouses
in Portland, Oregon and at its one U.S. manufacturing facility. In addition, a
staff of approximately 22 persons in the Company's headquarters facility
oversees and coordinates global quality control standards and efforts. The
Company believes its quality control program is an important and effective means
of maintaining the quality and reputation of its products.

Production of apparel by independent manufacturers is accomplished through
one of two principal arrangements. In the first, the supplier purchases the raw
materials needed to produce the garment from sources approved by Columbia
personnel, at prices and on terms negotiated by that independent supplier. Most
of the Company's merchandise is manufactured under this arrangement. In the
second, sometimes referred to as "cut, make, pack, and quota" and used
principally for production in China, Columbia directly purchases the raw
material, principally fabric, from suppliers, obtains or arranges for any
necessary U.S. import quotas, and ships the materials in a "kit," together with
patterns, samples, and most other necessary items, to the independent
manufacturer that has been selected by Columbia to produce the finished garment.
Prior to shipment, materials for the kits are stored and consolidated at the
Company's Hong Kong warehouse. While this second arrangement advances the timing
for inventory purchases and exposes the Company to certain additional risks
before a garment is manufactured, the Company believes this arrangement further
increases its manufacturing flexibility and frequently provides it with a cost
advantage over other production methods. See "Risk Factors--Dependence Upon
Independent Manufacturers."

While the Company has traditionally received a significant portion of its
customers' orders prior to placement of its initial manufacturing orders,
production orders must generally be placed with manufacturers before all of a
season's orders are received by the Company from customers. Columbia, therefore,
takes into account market trends and the early orders received from customers in
placing its orders with suppliers. Many of these customer orders may change with
respect to colors, sizes, allotments or assortments before delivery. The Company
uses these orders and its experience to estimate production requirements to
secure necessary fabrics and manufacturing capacity.

The Company's independent manufacturers sell finished products to the
Company on an FOB basis and are at risk for the quality and timely delivery of
the products. To date, substantially all of the Company's international
production requirements have been financed with letters of credit rather than
purchased under open credit terms. The suppliers are able to obtain payment
under the letter of credit upon delivery of the merchandise to the freight
consolidator

43
<PAGE>
chosen by the Company, together with a certificate from a Columbia quality
control inspector, purchase order identification and, if necessary for the goods
in question, a quota "visa." The Company believes payment to its suppliers under
this arrangement, while increasing the Company's need for inventory financing,
enhances its attractiveness to suppliers and improves its ability to negotiate
more favorable terms in other areas. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources."

The Company transacts business on an order-by-order basis and does not
maintain any long-term or exclusive commitments or arrangements to purchase from
any vendor. The Company competes with other companies for the production
capacity of independent manufacturers and import quota capacity. The Company
believes it has good relationships with its vendors and there will be adequate
sources to produce a sufficient supply of goods in a timely manner and on
satisfactory economic terms in the future. Manufacturers' delivery dates are
generally specified to ensure that products will be available in the Company's
warehouses in a timely manner assuming shipment by ocean freight. Manufacturers
are generally given a grace period after their scheduled delivery date to make
goods available for shipment; they are often obligated to pay any increased
costs resulting from the need to ship products by air as a result of delivery
after this period. The Company has from time to time experienced difficulty in
satisfying its raw material and finished goods requirements, and any such future
difficulties could adversely affect the Company. See "Risk Factors--Dependence
on Independent Manufacturers" and "--Dependence on Key Suppliers."

Sales and Distribution

The Company's products are sold to approximately 10,000 specialty and
department store retailers in the United States, Canada, Asia, Europe, South
America, Australia and New Zealand. The Company believes continued growth will
result from its focus on enhancing the productivity of existing retailers,
expanding distribution in international markets and developing merchandise
categories.

The Company plans to improve the productivity of its existing customers by
expanding its concept shops worldwide and installing brand enhancement systems.
Concept shops create an environment that is consistent with the Company's image
and enables the retailer to display and stock a greater volume of the Company's
products per square foot of retail space. Each concept shop requires an
investment by the Company in display fixtures and other materials of about
$15,000 and, typically, an increased inventory commitment by the retailer. These
concept shops also encourage longer term commitment by the retailer to the
Company's products and enhance consumer brand awareness. As of December 31,
1997, the Company had 164 concept shops worldwide and plans to double this
number by the end of 1998. Smaller-scale brand enhancement systems, which
include signage and fixtures that prominently display consolidated groupings of
Columbia merchandise, offer benefits similar to concept shops. By the end of
1998, the Company expects to have installed 1,000 in-store brand enhancement
systems.

44
<PAGE>
The Company intends to continue to capitalize on its strong U.S. brand
position and its worldwide brand recognition by targeting certain high
opportunity markets for development or expansion. Having already achieved a
significant share of the North American outerwear market, Columbia's strategy
for its existing and new North American customer base is to develop further
sales of its sportswear and rugged footwear. In new markets in Europe and Asia,
Columbia's strategy is to replicate its success in its core North American
market by establishing relationships with retailers through its highly visible
outerwear line. As Columbia's brand image and reputation strengthens through
acceptance of its outerwear, it introduces its sportswear and rugged footwear
lines into these new markets.

The Company believes that over the longer term significant opportunities
exist to increase sales of its products to department stores and footwear
specialty shops. The Company expects to expand its sales to these retailers, in
part by attracting new customers and in part by expanding sales in existing
retailers. In 1997 approximately 82% of the Company's U.S. net sales were to
specialty stores and 18% were to department store retailers.

Net Sales by Region

[PIE CHART: 1993 [PIE CHART: 1996
United States 88.5% United States 82.1%
Canada 6.8% Canada 9.1%
International 4.7%] International 8.8%]

North America

The Company sells its products to approximately 3,900 U.S. retailers and
1,100 Canadian retailers. Of these, J.C. Penney is the Company's largest
customer, representing just over nine percent of the Company's net sales in
1997. Not all of the Company's product lines are
sold to each of its North American retailers.

45
<PAGE>
The Company uses 25 independent sales agencies, which employ a total of
approximately 80 sales representatives, to distribute its products in North
America. Columbia operates nine outlet stores in North America: one each in
Portland, Lake Oswego and Lincoln City, Oregon; Gilroy, California; Birch Run,
Michigan; Medford, Minnesota; Kenosha, Wisconsin; Lancaster, Pennsylvania and
Windsor, Ontario. The Company's outlet stores sell excess inventory in a manner
that does not adversely affect its retailers. Columbia also operates a
free-standing flagship store in Portland, Oregon. This retail store is designed
to create a distinctive "Columbia" environment and reinforces the active and
outdoor image of the Columbia brand. In addition, the retail store provides the
Company with the ability to test new marketing and merchandising techniques. The
Company has also established 83 concept shops in retail stores in North America
and plans to more than double this number in 1998.

The Company distributes most of its products to U.S. retailers from its
300,000 square foot Rivergate Distribution Center, which is located in Portland,
Oregon. At this distribution facility, the Company's products are inspected,
sorted, packed and shipped. The Company is planning to enlarge its Rivergate
Distribution Center by at least 240,000 square feet within the next two years.
The Company also distributes a small portion of its products in the United
States from a smaller facility adjacent to its Chaffee, Missouri manufacturing
facility. The Company distributes its products in Canada from a 66,000 square
foot warehouse in Strathroy, Ontario.

European Common Market

The Company sells its products to approximately 3,800 European retailers.
The Company maintains a European sales and marketing office in Strasbourg,
France and, with the exception of the United Kingdom, Switzerland and Greece,
distributes its products in Europe from an independent logistics company based
in The Netherlands. In the United Kingdom, Switzerland and Greece, the Company
sells through independent distributors. The Company has approximately 22 concept
shops in European retailers. Although the Company's marketing and sales efforts
to date have been most successful in France, Spain, The Netherlands and Sweden,
Columbia believes substantial opportunities exist in other countries such as
Germany. Net sales of the Company's products in Europe have increased at a
compound annual growth rate of 83% from 1994 to 1997.

Asia

The Company has distributed its products in Japan since the mid-1970s and
sells its merchandise to approximately 1,000 Japanese retailers. In the fall of
1998, the Company will begin distributing its products directly in Japan, which
the Company believes will create the opportunity for significant acceleration of
sales in Japan. Based on its experience in Japan, the Company also believes the
South Korean market represents another significant growth opportunity in Asia.
In 1997 the Company began selling its products in South Korea through 15 retail
locations. Sales and marketing efforts in Asia are directed from Tokyo and
Seoul. The

46
<PAGE>
Company's products will be warehoused and shipped in Japan by an independent
company based in Tokyo, and in South Korea from a warehouse near Seoul.

Other Countries

The Company sells its products to independent exclusive distributors,
representing approximately 350 retailers, in Argentina, Australia, Chile, Czech
Republic, Ecuador, Greece, Hungary, Ireland, Japan, New Zealand, Poland, Russia,
Sweden (hunting and fishing products only), Switzerland and the United Kingdom.
The Company expects to begin selling its products in 1998 to distributors
representing retailers in Mexico, Norway and Turkey.

The Company plans to improve the productivity of its existing international
distributors and, except for the anticipated expansion in 1998, does not intend
to expand sales to additional countries. Over the longer term, the Company
believes international sales to some of its existing countries could be made
directly.

Intellectual Property

The Company owns trademarks for many of its products, including "Columbia,"
"Columbia Sportswear Company," "Convert," "Bugaboo," "Bugabootoo," "Silent Rain"
and "Interchange." The Company's trademarks, many of which are registered or
subject to pending applications in the United States and other nations, are for
use on a variety of items of apparel. The Company believes that its reputation,
built through years of providing high quality apparel at a good value for
consumers and through its distinctive advertising, are linked in the minds of
consumers with the Company's trademarks. The Company believes its trademarks are
of great value and are instrumental to its ability to create and sustain demand
for its products. The Company also places significant value on the overall
appearance and image of its products. The Company's trade dress (the overall
appearance and image of its products), as much as its trademarks, distinguishes
Columbia's products in the marketplace. As the Company expands its markets it
attempts to establish and protect its proprietary rights. From time to time the
Company discovers products in the marketplace that are counterfeit
reproductions, and the Company attempts to prevent or terminate such infringing
activity. In the past the Company has successfully resolved conflicts over
proprietary rights through legal action and negotiated settlements. Although the
Company has not been materially inhibited from selling its products in
connection with trademark or trade dress disputes, there is no assurance that
significant obstacles will not arise as it expands its product line and
geographic scope. See "Risk Factors--Dependence on Proprietary Rights."

Management Information System

The Company is committed to maintaining technically advanced systems that
will help it achieve its overall growth strategy. The Company is replacing its
current management information system with an enterprise system that integrates
EDI and inventory management capabilities. This system, some aspects of which
are already operational, is expected to be fully

47
<PAGE>
operational by late 1998. The new system updates current and historical net
sales, inventory and merchandise planning on a daily basis. It also provides a
stronger and more timely link between the Company and its customers, enhancing
the Company's ability to monitor its performance against historical and
budgetary benchmarks, to manage inventory and labor costs as well as to make
more informed purchasing decisions. The Company believes this system will also
help to improve customer service and operating efficiency. The system is
expected to serve the Company for at least the next five years.

Backlog

The Company generally receives the bulk of the orders for each of the fall
and spring seasons a minimum of three months prior to the date the products are
shipped to customers. The orders are cancelable by the customer up to 45 days
prior to the date of shipment. At December 31, 1997, the Company's backlog was
$200.3 million, compared to $158.5 million at December 31, 1996. To manage
inventory risk, the Company estimates its production requirements conservatively
and engages in certain other inventory management techniques. See "--Business
Process." For a variety of reasons, including the timing of shipments, product
mix of customer orders and the amount of in-season orders, backlog may not be a
reliable measure of future sales for any succeeding period.

Competition

The active outerwear, sportswear and rugged footwear segments of the
apparel industry are highly competitive. The Company encounters substantial
competition in the active outerwear and sportswear business from, among others,
The North Face, Inc., Marmot Mountain Ltd., Woolrich Woolen Mills, Inc., The
Timberland Company ("Timberland"), Patagonia Corporation ("Patagonia") and
Helly-Hansen A/S. In addition, the Company competes with major sport companies,
such as Nike, Inc. ("Nike"), Adidas AG and Reebok International Ltd., and with
fashion-oriented competitors, such as Polo Ralph Lauren Corporation, Nautica
Enterprises, Inc. and Tommy Hilfiger Corporation. The Company's rugged footwear
line competes with, among others, Timberland, Kaufman Footwear (a division of
William H. Kaufman, Inc.), Nike ACG, Salomon S.A. and The Rockport Company. Many
of these companies have global operations and compete with the Company in Europe
and Asia. In Europe the Company also faces competition from such brands as
Berghaus, Jack Wolfskin and Craft of Sweden, and in Asia the Company faces
competition from such brands as Mont-Bell and Patagonia. In addition to name
brand competitors, the Company also faces competition from its own retailer
customers that manufacture and market clothing and footwear under their own
labels. Some of the Company's competitors are substantially larger and have
substantially greater financial, distribution, marketing and other resources
than the Company. The Company believes the primary competitive factors in the
market for activewear are functionality, durability, style, price and brand
name, and that its product offerings are well positioned within the market. See
"Risk Factors--Competition."

48
<PAGE>
Government Regulation

Many of the Company's imports are subject to existing or potential duties,
tariffs or quotas that may limit the quantity of certain types of goods which
may be imported into the United States and other countries, including
constraints imposed by bilateral textile agreements between the United States
and a number of foreign countries. These agreements, which have been negotiated
bilaterally either under the framework established by the Arrangement Regarding
International Trade in Textiles, known as the Multifiber Agreement, or other
applicable statutes, impose quotas on the amounts and types of merchandise that
may be imported into the United States from these countries. These agreements
also allow the signatories to adjust the quantity of imports for categories of
merchandise that, under the terms of the agreements, are not now subject to
specific limits. The Company's imported products are also subject to United
States customs duties, which are a material portion of the cost of the
merchandise. The United States and the countries in which the Company's products
are produced or sold may impose new quotas, duties, tariffs or other
restrictions, or may adversely adjust prevailing quota, duty or tariff levels,
any of which could have a material adverse effect on the Company. See "Risk
Factors--International Operations."

Employees

At December 31, 1997 the Company had 1,234 full-time employees. Of these
employees, 863 were based in the United States, 62 in Canada, 23 in Europe and
286 in Asia. None of the Company's employees is represented by a labor union.
The Company believes it maintains good employee relations.

Properties

The principal executive and administrative offices of the Company are
located at 6600 North Baltimore, Portland, Oregon. The general location, use and
approximate size of the Company's principal owned and leased properties are set
forth below:

<TABLE>
<CAPTION>
Approximate
Location Owned/Leased Use Square Feet
- -------- ------------ ---- -----------
<S> <C> <C> <C>
Portland, Oregon Owned Distribution Facility 300,000

Portland, Oregon Leased Headquarters Offices 172,000

Chaffee, Missouri Leased Manufacturing and Distribution Facility 75,000
</TABLE>

49
<PAGE>
MANAGEMENT

Directors , Executive Officers and Key Employees

The following table sets forth the executive officers, directors and
certain key employees of the Company.

Name Age Position
- ---- --- --------
Gertrude Boyle 73 Chairman of the Board
Timothy P. Boyle 48 President, Chief Executive Officer,
Treasurer, Secretary and Director
Don Richard Santorufo 51 Executive Vice President and Chief Operating
Officer
Patrick D. Anderson 40 Chief Financial Officer
Carl K. Davis 49 Vice President and General Counsel
Terry J. Brown 55 Executive Planner and International
Distributor Planner
Robert G. Masin 49 National Sales Manager
Grant D. Prentice 43 General Manager - Outerwear Merchandising
Michael R. Egeck 39 General Manager - Sportswear Merchandising
Rodney R. Gumringer 36 General Manager - Footwear Merchandising
Douglas R. Hamilton 45 Director of Operations - Canada and Europe;
President and Chief Operating Officer -
Columbia Sportswear Canada Limited
Sarah Bany 39 Director of Retail Stores , Director and
Assistant Secretary
Murrey R. Albers(1)(2) 56 Director
Edward S. George(1)(2) 60 Director
John Stanton(1)(2) 42 Director

- --------------

(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.

Gertrude Boyle has served as Chairman of the Board of Directors since 1983. The
Company was founded by her parents in 1938 and managed by her husband, Neal
Boyle, from 1964 until his death in 1970. Ms. Boyle also served as the Company's
President from 1970 to 1988.

Timothy P. Boyle joined the Company in 1971 as General Manager and has served as
President and Chief Executive Officer since 1988. He has been a member of the
Board of Directors since 1978. Mr. Boyle is also a member of the board of
directors of Triad Machinery, a heavy equipment retailer. Mr. Boyle is Gertrude
Boyle's son.

50
<PAGE>
Don Richard Santorufo joined the Company in 1979 as Purchasing and Production
Manager, and in 1984 he was promoted to Vice President, Manufacturing and
oversaw the development of the Company's Asian manufacturing operations. He has
served as Executive Vice President and Chief Operating Officer of the Company
since January 1995. From 1975 to 1977 Mr. Santorufo was Production and
Purchasing Manager for Alpine Designs, a Colorado skiwear manufacturer, and from
1977 to 1979 he was Production Manager for Jen-Cel-Lite Corporation, a
Washington sleeping bag and insulation manufacturer.

Patrick D. Anderson joined the Company in June 1992 as Manager of Financial
Reporting, became Corporate Controller in August 1993 and was appointed Chief
Financial Officer of the Company in December 1996. From 1985 to 1992, Mr.
Anderson was an accountant with Deloitte & Touche LLP.

Carl K. Davis joined the Company in October 1997 as Vice President and General
Counsel. He was employed by Nike from 1981 to October 1997 where he served in a
variety of capacities, most recently as Director of International Trade.

Terry J. Brown joined the Company in January 1983 as Planner and served as
Executive Planner and International Distributor Manager since November 1995.
Prior to joining the Company, Mr. Brown was Vice President and Chief Financial
Officer of Agoil, Inc., an oil and gas exploration and development company, from
1978 to 1981, and Planner for Jantzen Incorporated, an apparel company, from
1968 to 1978.

Robert G. Masin joined the Company in May 1989 as National Sales Manager. From
1976 to 1989 he worked for W.L. Gore and Associates, a polymer technology and
manufacturing and service company. From 1982 to 1989 he was National Sales
Manager of Gore's Fabric Division.

Grant D. Prentice joined the Company in May 1984 as General Manager of Outerwear
Merchandising. From 1977 to 1984, Mr. Prentice worked as a sales representative
for Gerry Outdoor Products, a skiwear company based in Colorado.

Michael R. Egeck has been General Manager - Sportswear Merchandising for the
Company since August 1992. From 1983 to 1992, Mr. Egeck was with Seattle Pacific
Industries, a sportswear apparel company, where his most recent title was
Director of Merchandising, Design and Sales Operations.

Rodney R. Gumringer joined the Company in December 1993 as General Manager
Footwear. From 1988 to 1993, Mr. Gumringer was Product Development Manager for
the casual shoe division of Nike.

Douglas R. Hamilton became President and Chief Operating Officer of the
Company's Canadian subsidiary in August 1992. In August 1995 he also became
Director of Operations - Canada and Europe. From 1987 to 1992, Mr. Hamilton was
a principal shareholder and President of

51
<PAGE>
Canada-Trans Limited, a clothing distributor and silk screening company, which
was acquired by the Company in 1992.

Sarah Bany joined the Company in 1979 and has held various positions since that
time, most recently (since December 1988) as Director of Retail Stores. She
became a director in December 1988. Ms. Bany is Gertrude Boyle's daughter.

Murrey R. Albers became a director of the Company in July 1993. Mr. Albers is
President and Chief Executive Officer of United States Bakery, a bakery with
operations in Oregon, Washington, Idaho, Montana and California. Mr. Albers, who
has been in his current position since June 1985, joined United States Bakery as
general manager of Franz Bakery in 1975.

Edward S. George became a director of the Company in April 1989. For 30 years,
until his retirement, Mr. George worked in the banking industry and, since
January 1991, has served as a financial consultant to Bell Enterprises.

John Stanton became a director of the Company in July 1997. Since 1994, Mr.
Stanton has served as Chairman and Chief Executive Officer of Western Wireless
Corporation, a publicly held company that operates cellular communications
systems in 23 western states. Mr. Stanton was Chairman and Chief Executive
Officer of General Cellular Corporation, a predecessor and now subsidiary of
Western Wireless Corporation, in 1992. He previously co-founded McCaw Cellular
Communications, where he served as Chief Operating Officer from 1985 to 1988 and
as Vice Chairman from 1988 to 1991. Mr. Stanton also serves as a director of
other corporations, including Advanced Digital Information Corporation and
SmarTone.

Directors are elected at the annual shareholders meeting and hold office
until the next annual shareholders meeting and until their successors are
elected and qualified. Non-employee directors receive an annual retainer of
$15,000, $1,000 for each meeting of the Company's Board of Directors or a
committee of the Board of Directors attended and reimbursement of travel
expenses. Non-employee directors also receive an annual merchandise allowance of
$2,000 to acquire the Company's products, and annual stock option grants to
acquire 3,500 shares of Common Stock. Officers are appointed by the Board of
Directors and serve at its discretion.

The Company maintains an Audit Committee and a Compensation Committee. The
Audit Committee oversees actions taken by the Company's independent auditors.
The Compensation Committee reviews the compensation levels of the Company's
executive officers and makes recommendations to the Board of Directors regarding
compensation. The Compensation Committee also administers the Stock Incentive
Plan. See "--Stock Incentive Plan."

In May 1993, Mr. Santorufo pled guilty to one count of falsely understating
to the U.S. Customs Service the prices of certain merchandise imported by the
Company. Mr. Santorufo paid the imposed fine and completed probation.

52
<PAGE>
Compensation Committee Interlocks and Insider Participation

In the last fiscal year there was no compensation committee of the
Company's Board of Directors. Compensation decisions with respect to executive
officers of the Company were made by Gertrude Boyle, Chairman of the Board, and
Timothy P. Boyle, President and Chief Executive Officer.

Executive Compensation

Compensation Summary. The following table sets forth compensation information
for the Chief Executive Officer and the four most highly compensated executive
officers of the Company other than the Chief Executive Officer whose total
annual compensation exceeded $100,000 in 1997
(collectively, the "Named Executive Officers").

<TABLE>
<CAPTION>
Summary Compensation Table

Long Term
Compensation
-----------
Awards
Annual Compensation -----------
-------------------------------------------- Securities
Other Annual Underlying
Salary Bonus Compensation Options
-------- -------- ------------ ----------
<S> <C> <C> <C> <C>
Gertrude Boyle, Chairman of
the Board ......................... $153,920 $460,000 $ 4,750 (1) ----

Timothy P. Boyle, President
and Chief Executive Officer........ 323,733 805,000 4,750 (1) ----

Don Richard Santorufo,
Executive Vice President and
Chief Operating Officer............ 286,946 690,000 4,750 (1) ----

Grant D. Prentice, General
Manager - Outerwear
Merchandising...................... 227,199 90,919 4,750 (1) 59,000

Robert G. Masin, National 213,370 85,385 4,750 (1) 29,500
Sales Manager......................

- --------------

(1) Represents amounts paid as a matching contribution to the Company's 401(k)
Plan. Excludes a profit sharing contribution, which will be determined in
early 1998.

</TABLE>

53
<PAGE>

Options Granted in Last Fiscal Year. The following table summarizes option
grants to Named Executive Officers during the year ended December 31, 1997.

<TABLE>
<CAPTION>
Option Grants in 1997

Potential
Realizable
Individual Grants Value at
- ----------------------------------------------------------------------------------------- Assumed
Number of Annual Rates of
Securities % of Total Stock Price
Underlying Options Exercise Appreciation for
Options Granted to or Base Option Term
Granted Employees Price Expiration ----------------------
Name (#) in Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---- ---------- -------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Gertrude Boyle --- --- --- --- --- ---

Timothy P. Boyle --- --- --- --- --- ---

Don Richard Santorufo --- --- --- --- --- ---

Grant D. Prentice 35,400 4.8% $ 9.68 3/12/07 $215,459 $546,016
23,600 3.2 15.20 11/14/07 225,645 571,830

Robert G. Masin 29,500 4.0 9.68 3/12/07 179,549 455,013
</TABLE>

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values. No Named Executive Officer exercised stock options during the year ended
December 31, 1997 . The following table summarizes information with respect to
option exercises and option values for the year ended December 31, 1997 for
Named Executive Officers.

54
<PAGE>
<TABLE>
<CAPTION>

Aggregated Option Exercises in 1997
and Year-End Option Values

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money(1)
Options Options
Shares at Year-End (#) at Year-End ($)
Acquired on Value ----------------------------- ------------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gertrude Boyle --- --- --- --- --- ---
Timothy P. Boyle --- --- --- --- --- ---
Don Richard Santorufo --- --- --- --- --- ---
Grant D. Prentice --- --- 0 59,000 $0 $157,000
Robert G. Masin --- --- 0 29,500 0 188,400
- --------------

(1) Options are "in-the-money" at the year-end if the fair market value of the
underlying securities on such date exceeds the exercise price of the
options. The amounts set forth represent the difference between an assumed
price to the public in the Offerings of $15.00 per share and the exercise
price of the options, multiplied by the applicable number of option shares.

</TABLE>

Limitation of Liability and Indemnification

The Company's Second Amended and Restated Articles of Incorporation (the
"Articles") eliminate, to the fullest extent permitted by Oregon law, liability
of a director to the Company or its shareholders for monetary damages for
conduct as a director. Although liability for monetary damages has been
eliminated, equitable remedies such as injunctive relief or rescission remain
available. In addition, a director is not relieved of his or her
responsibilities under any other law, including the federal securities laws.

The Company's Articles require the Company to indemnify its directors to
the fullest extent not prohibited by law. The Company has also entered into
indemnification agreements with each of the Company's directors. The Company
believes that the limitation of liability

55
<PAGE>
provisions in its Articles and indemnification agreements may enhance the
Company's ability to attract and retain qualified individuals to serve as
directors.

Stock Incentive Plan

1997 Stock Incentive Plan. On March 12, 1997, the Board of Directors
adopted, and the shareholders of the Company approved, the Stock Incentive Plan.
The Stock Incentive Plan provides for the award of incentive stock options to
employees and the award of nonqualified stock options, stock appreciation
rights, bonus rights and other incentive grants to directors, employees,
independent contractors, advisors and consultants. The Company has reserved
4,000,000 shares of Common Stock for issuance under the Stock Incentive Plan. At
December 31, 1997, options to purchase 736,774 shares at a weighted average
exercise price of $10.40 per share were outstanding under the Stock Incentive
Plan.

The Stock Incentive Plan is administered by the Board of Directors, which
has the authority, subject to the terms of the Stock Incentive Plan, to
determine the persons to whom options or rights may be granted, the exercise
price and number of shares subject to each option or right, the character of the
grant, the time or times at which all or a portion of each option or right may
be exercised and certain other provisions of each option or right. The Board of
Directors may delegate administration of the Stock Incentive Plan to a
committee.

The exercise price of incentive stock options must not be less than the
fair market value of the Common Stock at the date of the grant or, in the case
of incentive stock options issued to holders of more than 10% of the outstanding
Common Stock, 110% of the fair market value. The maximum term of incentive stock
options is 10 years, or five years in the case of 10% shareholders. The
aggregate fair market value, on the date of the grant, of the Common Stock for
which incentive stock options are exercisable for the first time by an employee
during any calendar year may not exceed $100,000. Options are exercisable over a
period of time in accordance with the terms of option agreements entered into at
the time of grant. Generally, options become exercisable over a five-year
period. Annual stock option awards to non-employee directors will generally
become exercisable over a three-year period. Options granted under the Stock
Incentive Plan are generally nontransferable by the optionee and, unless
otherwise determined by the Board of Directors, must be exercised by the
optionee during the period of the optionee's employment or service with the
Company or within a specified period following termination thereof.

56
<PAGE>
CERTAIN TRANSACTIONS

In December 1997 the Company acquired all of the outstanding capital stock
of GTS, Inc. ("GTS") from Gertrude Boyle, Timothy P. Boyle and Sarah Bany. GTS
holds a 21 percent interest in each of the Company's Canadian, French and German
subsidiaries and a less than one percent interest in the Company's Korean
subsidiary. GTS was formed because the Company, as an S corporation, was
prohibited from owning 80 percent or more of the stock of another corporation.
As a result of the transaction, all of the Company's subsidiaries are now wholly
owned. The Company issued 45,657, 129,240 and 41,736 shares of Common Stock to
Ms. Boyle, Mr. Boyle and Ms. Bany, respectively, in connection with this
transaction.

The Company leases its corporate headquarters in Portland, Oregon from Ms.
Boyle and leases a warehouse from Ms. Boyle and Mr. Boyle. Pursuant to written
leases, the Company pays $76,800 annually to Ms. Boyle for use of the
headquarters building and $56,100 annually to Ms. Boyle and Mr. Boyle for use of
the warehouse. In each of 1995, 1996 and 1997, the lease payments totaled
$132,900 .

In December 1996 the Company entered into a Deferred Compensation
Conversion Agreement with Don Richard Santorufo, Executive Vice President and
Chief Operating Officer of the Company, providing for the conversion of deferred
compensation units granted under a prior agreement into an aggregate of
1,800,435 shares of the Company's Common Stock. Of those shares, 1,075,321
shares vested immediately, 333,725 shares vest ratably over three years
commencing December 31, 1997, and 391,389 shares vest ratably over five years
commencing December 31, 2000. The agreement provides the Company with a right to
repurchase unvested shares if Mr. Santorufo's employment is terminated. In
connection with the transaction, the Company loaned Mr. Santorufo approximately
$5.7 million for payment of related income taxes, of which Mr. Santorufo is
obligated to repay $3,818,316 on December 31, 2001 and $1,906,466 on April 15,
2002. These amounts bear interest at the rates of 6.31% and 6.49%, respectively.
In addition, the Company agreed to make a loan for up to 50 percent of any
additional tax liability that may be imposed on Mr. Santorufo with respect to
the compensation received under the agreement as well as to pay a cash bonus to
cover 50 percent of any such tax liability. The amount of this cash bonus will
be increased to offset taxes owed by Mr. Santorufo as a result of such bonus.
The agreement also provided for a cash bonus of $2,750,000 in consideration of
past services and future bonuses in amounts equal to the accrued interest due
and owing on Mr. Santorufo's loan from the Company, increased to offset taxes
owed by Mr. Santorufo as the result of such bonuses. The bonuses are subject to
Mr. Santorufo's agreement to assign certain proceeds and distributions on his
shares to the Company as security for repayment of the loans. Mr. Santorufo
pledged and granted a security interest in his shares to the Company to secure
the performance of his obligations under the agreement. The agreement also
grants Mr. Santorufo the right to require the Company to register certain of his
shares of Common Stock for sale to the public in connection with the Offerings.
Mr. Santorufo does not intend to exercise this right in connection with the
Offerings.

57
<PAGE>
In connection with the Offerings and the termination of the Company's S
corporation tax status, the Company entered into a tax indemnification agreement
with each of its shareholders, including Gertrude Boyle, Timothy P. Boyle, Sarah
Bany, Don Richard Santorufo and certain trusts. The agreements provide that the
Company will indemnify and hold harmless each of these shareholders for federal,
state, local or foreign income tax liabilities, and costs relating thereto,
resulting from any adjustment to the Company's income that is the result of an
increase or change in character of the Company's income during the period it was
treated as an S corporation. The agreements also provide that if there is a
determination that the Company was not an S corporation prior to the Offerings,
the shareholders will pay to the Company certain refunds actually received by
them as a result of that determination.

In February 1996 the Company acquired its Rivergate facility from Mr. Boyle
and Mr. Santorufo for $4,500,000 (including the assumption of an outstanding
loan). Mr. Boyle and Mr. Santorufo had acquired the property from the Company in
June 1994 for $4,225,000 (including the assumption of the associated loan and
subsequently leased it back to the Company.

Since January 1994 the Company's Canadian subsidiary has leased office and
warehouse space from B.A.R.K. Holdings, Inc., a company owned by Douglas R.
Hamilton, President and Chief Operating Officer of the Company's Canadian
subsidiary and Director of Operations-Canada and Europe, and his wife. The
Company pays basic rent (as defined in the lease) in the amount of C$83,400 per
year under the lease, which terminates in December 2003.

Mr. Hamilton, individually and as trustee for his wife, was a shareholder
in the Canadian company acquired by Columbia in 1992. In the acquisition the
Hamiltons received common stock in the new Columbia Canadian subsidiary, which
was repurchased by the subsidiary in April 1996 for an aggregate of C$724,516.
The Company has proposed acquiring the assets of a retail store in Bend, Oregon
that specializes in the Company's products and is owned by Gertrude Boyle's
daughter and son-in-law (the sister and brother-in-law of Timothy P. Boyle and
Sarah Bany). The proposed acquisition price, approximately $1,500,000, was based
on a determination of the fair market value of the tangible assets and goodwill
associated with the business. This determination was made by the principal
accounting officer of the Company.

In connection with the Offerings, the shareholders of the Company entered
into an agreement regarding a plan of recapitalization, which provides for an
issuance of voting Common Stock to the Company's shareholders followed by a
one-for-one conversion of the Company's nonvoting Common Stock into voting
Common Stock. Pursuant to the agreement, which will be effective prior to the
completion of the Offerings, Gertrude Boyle is to receive 637,777 shares of
voting Common Stock, Timothy P. Boyle is to receive 34,076 shares of voting
Common Stock, Sarah Bany is to receive 5,332 shares of voting Common Stock and
Don Richard Santorufo is to receive 20,518 shares of voting Common Stock.

58
<PAGE>
PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership, as of December 31, 1997 and as adjusted to reflect the sale of the
Common Stock in the Offerings, of the Common Stock by (i) each person known by
the Company to own beneficially more than five percent of the Common Stock, (ii)
each director of the Company, (iii) each Named Executive Officer and (iv) all
directors and executive officers as a group. Except as otherwise noted, the
Company believes the persons listed below have sole investment and voting power
with respect to the Common Stock owned by them.

<TABLE>
<CAPTION>
Shares Percentage of Common
Beneficially ------------------------------------
Name Owned (1) Before Offering After Offering
- ---- ------------ --------------- ---------------
<S> <C> <C> <C>
Gertrude Boyle......................... 4,033,343(2) 21.5% 15.9%
6600 North Baltimore
Portland, Oregon 97203

Timothy P. Boyle....................... 9,785,508(3) 52.1% 38.7%
6600 North Baltimore
Portland, Oregon 97203

Don Richard Santorufo.................. 1,800,435 9.6% 7.1%
6600 North Baltimore
Portland, Oregon 97203

Grant D. Prentice...................... 11,603(4) * *

Robert G. Masin........................ 7,375(5) * *

Sarah Bany............................. 3,172,890(6) 16.9% 12.5%
6600 North Baltimore
Portland, Oregon 97203

Murrey R. Albers....................... 1,106(7) * *

Edward S. George....................... 2,213(8) * *

John Stanton........................... 811(9) * *

All directors and executive
officers as a group (15
persons)............................... 19,055,475(10) 100% 75.3%

59
<PAGE>

- --------------

* Less than 1.0%

(1) Shares that the person has the right to acquire within 60 days after March
31, 1998 are deemed to be outstanding in calculating the percentage
ownership of the person or group but are not deemed to be outstanding as to
any other person or group.

(2) Includes 874,074 shares held in two grantor retained annuity trusts for
which Ms. Boyle is the income beneficiary and Ms. Bany is the beneficiary
of the remainder.

(3) Includes 123,900 shares held in trust, of which Mr. Boyle's wife is
trustee, for the benefit of Mr. Boyle's children.

(4) Includes options to purchase 11,603 shares of Common Stock exercisable
within 60 days after March 31, 1998. Excludes options to purchase 47,397
shares of Common Stock not exercisable within 60 days after March 31, 1998.

(5) Includes options to purchase 7,375 shares of Common Stock exercisable
within 60 days after March 31, 1998. Excludes options to purchase 22,125
shares of Common Stock not exercisable within 60 days after March 31, 1998.

(6) Includes 118,000 shares held in trust, of which Ms. Bany's husband is
trustee, for the benefit of Ms. Bany's children. Also includes 657,750
shares held in two grantor retained annuity trusts for which Ms. Bany is
the income beneficiary and Ms. Bany's husband and children are the
beneficiaries of the remainder.

(7) Includes options to purchase 1,106 shares of Common Stock exercisable
within 60 days after March 31, 1998. Excludes options to purchase 3,319
shares of Common Stock not exercisable within 60 days after March 31, 1998.

(8) Includes options to purchase 2,213 shares of Common Stock exercisable
within 60 days after March 31, 1998. Excludes options to purchase 6,637
shares of Common Stock not exercisable within 60 days after March 31, 1998.

(9) Includes options to purchase 811 shares of Common Stock exercisable within
60 days after March 31, 1998. Excludes options to purchase 3,614 shares of
Common Stock not exercisable within 60 days after March 31, 1998.

(10) Includes options to purchase 56,776 shares of Common Stock exercisable
within 60 days after March 31, 1998. Excludes options to purchase 206,523
shares of Common Stock not exercisable within 60 days after March 31, 1998.

</TABLE>

60
<PAGE>
DESCRIPTION OF CAPITAL STOCK

Concurrently with the completion of the Offerings (i) each share of the
Company's voting Common Stock held by Gertrude Boyle will be exchanged for and
converted into 1.705 shares of the Company's voting Common Stock, and each share
of the Company's voting Common Stock held by shareholders other than Gertrude
Boyle will be exchanged for and converted into 1.0695 shares of the Company's
voting Common Stock, (ii) each share of the Company's nonvoting Common Stock
held by shareholders will be exchanged for and converted into one share of the
Company's voting Common Stock, and (iii) each share of the Company's voting
Common Stock will be subsequently converted into 0.59 shares of Common Stock
pursuant to a reverse stock split. The following description of rights assumes
the completion of these conversions and reverse split.

The authorized capital stock of the Company consists of 50,000,000 shares
of Common Stock and 10,000,000 shares of Preferred Stock.

Common Stock

As of December 31, 1997, 18,792,176 shares of Common Stock were
outstanding, held of record by eleven shareholders. After the Offerings,
25,292,176 shares will be outstanding.

Holders of Common Stock are entitled to receive dividends as may from time
to time be declared by the Board of Directors of the Company out of funds
legally available therefor. See "Dividend Policy and S Corporation Status."
Holders of Common Stock are entitled to one vote per share on all matters on
which the holders of Common Stock are entitled to vote and do not have any
cumulative voting rights. Holders of Common Stock have no preemptive,
conversion, redemption or sinking fund rights. In the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to share equally and ratably in the assets of the Company, if any, remaining
after the payment of all liabilities of the Company and the liquidation
preference of any outstanding class or series of Preferred Stock. The
outstanding shares of Common Stock are, and the shares of Common Stock offered
by the Company in the Offerings when issued will be, fully paid and
nonassessable. The rights, preferences and privileges of holders of Common Stock
are subject to any series of Preferred Stock that the Company may issue in the
future, as described below.

Preferred Stock

The Board of Directors has the authority to issue Preferred Stock in one or
more series and to fix the number of shares constituting any such series and the
preferences, limitations and relative rights, including dividend rights,
dividend rate, voting rights, terms of redemption, redemption price or prices,
conversion rights and liquidation preferences of the shares constituting any
series, without any further vote or action by the shareholders of the Company.

61
<PAGE>
The issuance of Preferred Stock by the Board of Directors could adversely affect
the rights of holders of Common Stock.

The potential issuance of Preferred Stock may have the effect of delaying
or preventing a change in control of the Company, may discourage bids for the
Common Stock at a premium over the market price of the Common Stock and may
adversely affect the market price of, and the voting and other rights of the
holders of, Common Stock. The Company has no plans to issue shares of Preferred
Stock.

Oregon Control Share and Business Combination Statutes

Upon completion of the Offerings, the Company will become subject to the
Oregon Control Share Act (the "Control Share Act"). The Control Share Act
generally provides that a person (the "Acquiror") who acquires voting stock of
an Oregon corporation in a transaction (other than a transaction in which voting
shares are acquired from the issuing public corporation) that results in the
Acquiror holding more than 20%, 33 1/3% or 50% of the total voting power of the
corporation (a "Control Share Acquisition") cannot vote the shares it acquires
in the Control Share Acquisition ("control shares") unless voting rights are
accorded to the control shares by (i) a majority of each voting group entitled
to vote and (ii) the holders of a majority of the outstanding voting shares,
excluding the control shares held by the Acquiror and shares held by the
Company's officers and inside directors. The term "Acquiror" is broadly defined
to include persons acting as a group.

The Acquiror may, but is not required to, submit to the Company a statement
setting forth certain information about the Acquiror and its plans with respect
to the Company. The statement may also request that the Company call a special
meeting of shareholders to determine whether voting rights will be accorded to
the control shares. If the Acquiror does not request a special meeting of
shareholders, the issue of voting rights of control shares will be considered at
the next annual or special meeting of shareholders. If the Acquiror's control
shares are accorded voting rights and represent a majority or more of all voting
power, shareholders who do not vote in favor of voting rights for the control
shares will have the right to receive the appraised "fair value" of their
shares, which may not be less than the highest price paid per share by the
Acquiror for the control shares.

Upon completion of the Offerings, the Company will become subject to
certain provisions of the Oregon Business Corporation Act that govern business
combinations between corporations and interested shareholders (the "Business
Combination Act"). The Business Combination Act generally provides that if a
person or entity acquires 15% or more of the outstanding voting stock of an
Oregon corporation (an "Interested Shareholder"), the corporation and the
Interested Shareholder, or any affiliated entity of the Interested Shareholder,
may not engage in certain business combination transactions for three years
following the date the person became an Interested Shareholder. Business
combination transactions for this purpose include (a) a merger or plan of share
exchange, (b) any sale, lease, mortgage or other disposition of 10% or more of
the assets of the corporation and (c) certain transactions that result in the
issuance or transfer

62
<PAGE>
of capital stock of the corporation to the Interested Shareholder. These
restrictions do not apply if (i) the Interested Shareholder, as a result of the
transaction in which such person became an Interested Shareholder, owns at least
85% of the outstanding voting stock of the corporation (disregarding shares
owned by directors who are also officers and certain employee benefit plans),
(ii) the board of directors approves the business combination or the transaction
that resulted in the shareholder becoming an Interested Shareholder before the
Interested Shareholder acquires 15% or more of the corporation's voting stock or
(iii) the board of directors and the holders of at least two-thirds of the
outstanding voting stock of the corporation (disregarding shares owned by the
Interested Shareholder) approve the business combination after the Interested
Shareholder acquires 15% or more of the corporation's voting stock.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offerings, there has not been any public market for the Common
Stock. Future sales of substantial amounts of Common Stock in the public market,
or the prospect of such sales, could adversely affect prevailing market prices.

Upon completion of the Offerings, 25,292,176 shares of Common Stock will be
outstanding. Of these shares, the 6,500,000 shares sold in the Offerings will be
freely tradeable without restriction under the Securities Act, unless purchased
by an "affiliate" of the Company, as that term is defined in Rule 144. The
remaining 18,792,176 shares outstanding after completion of the Offerings are
"restricted securities" as defined in Rule 144 and may be sold in the public
market only if registered under the Securities Act or if they qualify for an
exemption from registration, including an exemption pursuant to Rule 144.

The Company, its directors and officers and the holders of all of the
Company's outstanding Common Stock as of the date hereof have agreed that,
during the period beginning from the date of this Prospectus, and continuing to
and including the date 180 days after the date of this Prospectus (or earlier
with the consent of the representatives of the Underwriters), they will not
offer, sell, contract to sell or otherwise dispose of any shares of Common Stock
(other than (i) pursuant to employee stock option plans existing, or on the
conversion or exchange of convertible or exchangeable securities outstanding, on
the date of this Prospectus, (ii) bona fide gifts to transferees who agree to be
bound by a like restriction or (iii) private sales to persons who were
shareholders prior to the closing of the Offerings) or any securities of the
Company that are substantially similar to the shares of the Common Stock or
which are convertible into or exchangeable for securities that are substantially
similar to the shares of the Common Stock without the prior written consent of
the representatives of the Underwriters, except for the shares of Common Stock
offered in connection with the concurrent U.S. and international offerings. Upon
expiration of these agreements, 18,575,903 of these shares will be eligible for
immediate resale in the public market subject to the limitations of Rule 144.

In general under Rule 144, a person, including an "affiliate" of the
Company, who has beneficially owned restricted shares for at least one year is
entitled to sell within any three-month period a number of shares that does not
exceed the greater of 1% of the then

63
<PAGE>
outstanding shares of Common Stock (approximately 253,000 shares immediately
following the Offerings) or the average weekly trading volume of the Common
Stock during the four calendar weeks preceding such sale. Sales under Rule 144
are subject to certain manner of sale limitations, notice requirements and the
availability of current public information about the Company. Rule 144(k)
provides that a person who is not an "affiliate" of the issuer at any time
during the three months preceding a sale and who has beneficially owned shares
for at least two years is entitled to sell those shares at any time without
compliance with the public information, volume limitation, manner of sale and
notice provisions of Rule 144.

As of December 31, 1997, options to purchase 736,774 shares of Common Stock
were outstanding under the Stock Incentive Plan. The Company intends to file as
soon as practicable following completion of the Offerings a registration
statement on Form S-8 under the Securities Act covering shares of Common Stock
reserved for issuance under the Stock Incentive Plan. Based on the number of
options expected to be outstanding upon completion of the Offerings and shares
reserved for issuance under the Stock Incentive Plan, the registration statement
would cover 4,000,000 shares. See "Management - Stock Incentive Plan." The
registration statement will become effective immediately upon filing, whereupon,
subject to the satisfaction of applicable exercisability periods, Rule 144
volume limitations applicable to affiliates and, in certain cases, the
agreements with the representatives of the Underwriters referred to above,
shares of Common Stock to be issued upon exercise of outstanding options granted
pursuant to the Stock Incentive Plan will be available for immediate resale in
the open market.

VALIDITY OF THE ISSUANCE OF THE COMMON STOCK

The validity of the issuance of the Common Stock offered in the Offerings
will be passed upon for the Company by Stoel Rives LLP, Portland, Oregon and for
the Underwriters by Sullivan & Cromwell, Los Angeles, California.

EXPERTS

The Consolidated Financial Statements included in this Prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report appearing herein, and are included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. 20549, a Registration Statement on Form S-1
under the Securities Act with respect to the Common Stock offered in the
Offerings. This Prospectus omits certain information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Common Stock offered in the
Offerings, reference is made to such Registration Statement, exhibits and
schedules. Statements contained in this Prospectus as to the contents of any
contract or other document

64
<PAGE>
referred to are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. The Registration Statement, including the exhibits and schedules
filed therewith, may be inspected without charge at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the Commission located at
Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such materials may be obtained from the Public Reference Section of the
Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates and from the Commission's Internet Web site at
http://www.sec.gov.

65
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
----

Independent Auditors' Report................................................ F-2
Consolidated Balance Sheets at December 31, 1996 and 1997................. F-3
Consolidated Statements of Operations for the years ended
December 31, 1995, 1996 and 1997.......................................... F-5
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1995, 1996 and 1997.............................. F-6
Consolidated Statements of Cash Flows for the years ended
December 31, 1995 , 1996 and 1997........................................ F-7
Notes to Consolidated Financial Statements.................................. F-9

F-1
<PAGE>

The accompanying financial statements give effect to the reverse stock split as
a result of the initial pubic offering of Common Stock and the related
conversion from an S corporation to a C corporation as described in Note 1, to
the financial statements. The following report is in the form that will be
furnished by Deloitte & Touche LLP upon consummation of the initial public
offering assuming that no other material events have occurred that would affect
the accompanying financial statements or required disclosures therein.

INDEPENDENT AUDITORS' REPORT

The Shareholders of Columbia Sportswear Company:

We have audited the accompanying consolidated balance sheets of Columbia
Sportswear Company as of December 31, 1996 and 1997, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the consolidated financial position of Columbia Sportswear Company and
subsidiaries as of December 31, 1996 and 1997, and the consolidated results of
their operations and their consolidated cash flows for each of the three years
in the period ended December 31, 1997, in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE LLP

Portland, Oregon
February 6, 1998
(March ____ as to Notes 1, 2, and 9)

F-2
<PAGE>
<TABLE>
<CAPTION>
COLUMBIA SPORTSWEAR COMPANY

CONSOLIDATED BALANCE SHEETS
(In Thousands)
- ---------------------------------------------------------------------------------------------

December 31,
--------------------------
<S> <C> <C>
ASSETS 1996 1997

CURRENT ASSETS:
Cash and cash equivalents $ 3,283 $ 4,001
Short-term investments 848 -
Accounts receivable, net of allowance of
$2,440 and 2,461, respectively 60,423 76,086
Inventories (Note 3) 34,638 48,300
Prepaid expenses and other 1,673 2,430
--------- ---------

Total current assets 100,865 130,817

PROPERTY, PLANT, AND EQUIPMENT (Note 4) 28,197 35,277

INTANGIBLES AND OTHER ASSETS (Note 5) 6,905 8,383
--------- ---------

TOTAL ASSETS $ 135,967 $ 174,477
========= =========

(Continued)
</TABLE>

F-3
<PAGE>
<TABLE>
<CAPTION>
COLUMBIA SPORTSWEAR COMPANY

CONSOLIDATED BALANCE SHEETS
(In Thousands)
- --------------------------------------------------------------------------------------------------------------------

December 31,
1997
December 31, Pro Forma
-------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1997 (Note 1)

CURRENT LIABILITIES:
Notes payable to bank (Note 7) $ 11,520 $ 20,427 $ 20,427
Accounts payable 18,090 21,765 21,765
Accrued expenses (Note 6) 11,166 12,899 12,899
Current portion of long-term debt (Note 8) 160 154 154
Distribution payable to shareholders 132 5,866 112,866
--------- --------- ---------

Total current liabilities 41,068 61,111 168,111

LONG-TERM DEBT (Note 8) 2,963 2,831 2,831

COMMITMENTS AND CONTINGENCIES
(Notes 7, 14, and 15) - - -

SHAREHOLDERS' EQUITY:
Preferred shares; 10,000 shares authorized; none
issued and outstanding - - -
Common shares; 50,000 shares authorized;
issued and outstanding 18,792 17,886 17,886 17,886
Retained earnings (deficit) 81,034 101,805 (5,195)
Foreign currency adjustments (664) (3,806) (3,806)
Unearned portion of restricted stock issued
for future services (6,320) (5,350) (5,350)
--------- --------- ---------

Total shareholders' equity 91,936 110,535 3,535
--------- --------- ---------

TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 135,967 $ 174,477 $ 174,477
========= ========= =========

See notes to consolidated financial statements. (Concluded)
</TABLE>

F-4
<PAGE>
<TABLE>
<CAPTION>
COLUMBIA SPORTSWEAR COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
- ------------------------------------------------------------------------------------------------------------------------

For the Years Ended
December 31,
-------------------------------------------
1995 1996 1997
<S> <C> <C> <C>
NET SALES $ 303,797 $ 298,988 $ 353,452

COST OF SALES 182,971 176,859 198,946
--------- --------- ---------

Gross profit 120,826 122,129 154,506

SELLING, GENERAL, AND ADMINISTRATIVE
(Note 13) 84,583 95,431 110,204
--------- --------- ---------

INCOME FROM OPERATIONS 36,243 26,698 44,302

OTHER EXPENSE - Interest expense, net 5,767 4,220 3,593
--------- --------- ---------

INCOME BEFORE PROVISION FOR
INCOME TAXES 30,476 22,478 40,709

PROVISION FOR INCOME TAXES 1,750 1,468 1,413
--------- --------- ---------

NET INCOME $ 28,726 $ 21,010 $ 39,296
========= ========= =========

EARNINGS PER SHARE:
Basic $ 1.69 $ 1.24 $ 2.09
Diluted $ 1.69 $ 1.24 $ 2.07

WEIGHTED AVERAGE SHARES:
Basic 16,986 16,997 18,792
Diluted 16,986 16,997 19,018

PRO FORMA NET INCOME DATA:
Income before provision for income
taxes, as reported $ 30,476 $ 22,478 $ 40,709

Pro forma provision for income taxes (Note 1) 12,190 8,991 16,284
--------- --------- ---------

PRO FORMA NET INCOME $ 18,286 $ 13,487 $ 24,425
========= ========= =========

PRO FORMA NET INCOME PER
SHARE (Note 1):
Basic $ 0.97
Diluted $ 0.96

PRO FORMA WEIGHTED AVERAGE SHARES:
Basic 25,292
Diluted 25,518

See notes to consolidated financial statements.
</TABLE>

F-5
<PAGE>
<TABLE>
<CAPTION>
COLUMBIA SPORTSWEAR COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In Thousands)
- ---------------------------------------------------------------------------------------------------------------------------------

Foreign Unearned
Common Stock Currency portion of re-
---------------------------- Translation stricted stock
Shares Retained Adjust- issued for
Outstanding Amount Earnings ment future services Total
------------ ------------ ------------ ----------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995 16,973 $ 2,082 $ 60,230 $ (320) $ - $ 61,992

Stock bonus 19 81 - - - 81
Distribution to shareholders - - (20,389) - - (20,389)
Net income - - 28,726 - - 28,726
Foreign currency translation adjustment - - - 48 - 48
---------- ---------- ---------- --------- ---------- ---------

BALANCE, DECEMBER 31, 1995 16,992 2,163 68,567 (272) - 70,458

Capital contribution - 30 - - - 30
Issuance of common stock 1,800 15,693 - - (6,320) 9,373
Distribution to shareholders - - (8,543) - - (8,543)
Net income - - 21,010 - - 21,010
Foreign currency translation adjustment - - - (392) - (392)
---------- ---------- ---------- --------- ---------- ---------

BALANCE, DECEMBER 31, 1996 18,792 17,886 81,034 (664) (6,320) 91,936

Distribution to shareholders - - (18,525) - - (18,525)
Net income - - 39,296 - - 39,296
Foreign currency translation adjustment - - - (3,142) - (3,142)
Amortization of unearned compensation - - - - 970 970
---------- ---------- ---------- --------- --------- ---------

BALANCE, DECEMBER 31, 1997 18,792 $ 17,886 $ 101,805 $ (3,806) $ (5,350) $ 110,535
========== ========== ========== ========= ========== =========

See notes to consolidated financial statements.
</TABLE>

F-6
<PAGE>
<TABLE>
<CAPTION>
COLUMBIA SPORTSWEAR COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
- ----------------------------------------------------------------------------------------------------------------------

For the Years Ended
December 31,
-------------------------------------
1995 1996 1997
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 28,726 $ 21,010 $ 39,296
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 5,048 6,419 7,518
Noncash compensation 81 5,655 970
Loss on disposal of equipment 36 155 4
Changes in operating assets and liabilities:
Accounts receivable (16,852) 26,340 (17,674)
Inventories (4,912) 13,749 (14,745)
Prepaid expenses and other (1,007) (709) (963)
Other assets 215 (5,585) (2,577)
Accounts payable (1,458) (3,605) 5,199
Accrued expenses 1,970 3,385 1,875
-------- -------- --------

Net cash provided by operating activities 11,847 66,814 18,903
-------- -------- --------

CASH FLOW FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (13,074) (10,103) (14,816)
Proceeds from sale of property, plant, and equipment 87 33 49
Purchase of short-term certificates of deposit - (855) -
Maturity of short-term investments - - 813
-------- -------- --------

Net cash used in investing activities (12,987) (10,925) (13,954)
-------- -------- --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) on notes payable to bank 27,615 (39,876) 9,284
Repayments on long-term debt (2,500) (1,250) (137)
Distributions to shareholders (24,527) (12,562) (12,791)
Capital contribution from shareholders - 30 -
-------- -------- --------

Net cash provided by (used in) financing activities 588 (53,658) (3,644)
-------- -------- --------

NET EFFECT OF EXCHANGE RATE CHANGES ON CASH (40) (236) (587)
-------- -------- --------

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (592) 1,995 718

CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 1,880 1,288 3,283
-------- -------- --------

CASH AND CASH EQUIVALENTS, END OF YEAR $ 1,288 $ 3,283 $ 4,001
======== ======== ========

(Continued)
</TABLE>

F-7
<PAGE>
<TABLE>
<CAPTION>
COLUMBIA SPORTSWEAR COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
- -----------------------------------------------------------------------------------------------------------------------

For the Years Ended
December 31,
-------------------------------------
1995 1996 1997
<S> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for interest, net of capitalized interest $ 5,725 $ 4,419 $ 4,055
State and foreign income taxes 1,887 2,765 1,510

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Property, plant, and equipment acquired through assumption
of debt $ - $ 3,123 $ -
Note receivable from sale of fixed assets - - 152

See notes to consolidated financial statements. (Concluded)
</TABLE>

F-8
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1. BASIS OF PRESENTATION AND ORGANIZATION

Nature of the Business - Columbia Sportswear Company (the "Company") is a
global leader in the design, manufacture, marketing and distribution of
active outdoor apparel throughout North America, Europe, Japan, and Korea.
The Company owned a 79% subsidiary, Columbia Sportswear Canada Limited
("CSCL"), which distributes outerwear in Canada. GTS, Inc. ("GTS"), a
holding company, held a 21% interest in CSCL. GTS was wholly-owned by
substantially the same shareholders of the Company. In December 1997,
the Company and GTS were merged. This merger has been accounted for in a
manner similar to a pooling-of-interest and, accordingly, the combined
financial statements presented herein reflect the merged companies as if
GTS had always been a wholly-owned subsidiary of the Company.

Pro Forma Adjustments - Upon completion of the contemplated initial public
offering of Common Stock, the Company will be subject to federal and state
income taxes from the effective date of the sale of Common Stock by the
Company. The pro forma consolidated statement of operations income data for
each of the three years in the period ended December 31, 1997 reflects
adjustments for income taxes based upon income before provision for income
taxes as if the Company had been subject to additional federal and state
income taxes based upon a pro forma effective tax rate of 40%. In addition,
the Company will be required to provide a deferred tax asset for cumulative
temporary differences between financial statement and income tax basis of
the Company's assets and liabilities by recording a benefit for such
deferred tax assets in its combined statement of operations for the period
following the effective date of the offerings. Such deferred tax assets
will be based on the cumulative temporary difference upon the conversion
from an S corporation to a C corporation at the effective date of the sale
of the Common Stock by the Company. The net difference between the
financial statement and income tax basis of the Company's assets and
liabilities was approximately $7,400,000 at December 31, 1997.

The pro forma balances of liabilities and shareholders' equity at December
31, 1997 reflect the liability and reduction in shareholders' equity for
the dividend distribution of $107,000,000 related to the termination of the
S corporation status.

Pro Forma Net Income Per Share - Pro forma net income per share is based on
the weighted average number of shares of Common Stock outstanding and
dilutive common equivalent shares from stock options (using the treasury
stock method). The shares outstanding for all periods give effect to a
400-for-1 split which occurred in 1996. In addition, the average shares
outstanding reflect the conversion of voting and nonvoting shares into
shares of voting Common Stock and the conversion into 0.59 shares of
Common Stock pursuant to a reverse stock split which occurred at
consummation of the offering of Common Stock by the Company (in thousands):

Year Ended
December 31,
1997

Weighted average shares 18,792

Shares issued to pay shareholder dividend 6,500
------

Pro forma weighted average shares - basic 25,292

Common Stock equivalent - stock options 226
------

Pro forma weighted average shares - diluted 25,518
======

F-9
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------

Common equivalent shares issued during the 12-month period prior to the
proposed offering have been included in the calculation of diluted earnings
per share using the treasury stock method as if they were outstanding for
all periods presented with an offering price equivalent to $15 per share.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation - The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany accounts have been eliminated.

Short-Term Investments - Amounts consist of monies invested in certificates
of deposit with original maturities greater than three months.

Inventories are carried at the lower of cost or market. Cost is determined
using the first-in, first-out method.

Derivatives - The Company enters into foreign currency contracts in order
to reduce the impact of certain foreign currency fluctuations. Firmly
committed transactions and the related receivables and payables may be
hedged with forward exchange contracts or purchased options. Anticipated,
but not yet firmly committed, transactions may be hedged through the use of
purchased options. Premiums paid on purchased options are included in
prepaid expenses and are amortized over the life of the option. Gains and
losses arising from foreign currency forward and option contracts are
recognized in income or expense as offsets of gains and losses resulting
from the underlying hedged transactions.

Property, Plant, and Equipment are stated at cost. Depreciation of
equipment and amortization of leasehold improvements is provided using the
straight-line method over the estimated useful lives of the assets, ranging
from 3 to 10 years. Buildings are depreciated using the straight-line
method over 30 years. The Company evaluates their long-lived assets for
impairment using undiscounted cash flows to estimate fair value.

Intangibles - Goodwill is being amortized on a straight-line basis over
eight years.

Common Stock - In 1996, the Company's Board of Directors declared a
400-for-1 stock split of its Common Stock. All per share information in the
accompanying consolidated financial statements has been retroactively
adjusted to reflect this stock split. In addition, the shares outstanding
for all periods reflect the conversion of voting and nonvoting shares of
Common Stock of the Company and the conversion into 0.59 shares of Common
Stock pursuant to a reverse stock split which occurred at the consummation
of the offering of Common Stock by the Company.

Advertising Costs are expensed as incurred. Advertising expense was
$12,700,000, $12,006,000, and $16,649,000 for the years ended December 31,
1995, 1996, and 1997, respectively.

Product Warranty - Substantially all of the Company's products carry
lifetime warranty provisions for defects in quality and workmanship. The
Company's estimated liability for future warranty claims related to past
sales at December 31, 1996 and 1997 is approximately $2,699,000 and
$3,400,000, respectively, and is recorded in accrued expenses. Warranty
expense was approximately $2,738,000, $2,800,000, and $2,848,000 for the
years ended December 31, 1995, 1996, and 1997, respectively.

F-10
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------

Taxes on Income - Shareholders of the Company have elected to have the
Company be treated as an S corporation under provisions of the Internal
Revenue Code of 1986. Accordingly, payment of federal and state taxes on
income is the responsibility of the shareholders rather than the Company.
The Company and its Board of Directors have declared distributions to
shareholders in amounts approximately equal to the shareholders' federal
and state tax liability on the earnings of the Company. In the states of
California and New York, the Company has elected C corporation status and
is subject to those states' income taxes. CSCL is subject to federal and
provincial income tax in Canada. The provision for income taxes differs
from the amounts computed by applying the statutory federal income tax rate
to income before income taxes since the Company's income is not subject to
federal and certain state income taxes.

Foreign Currency Translation - The assets and liabilities of the Company's
foreign subsidiaries have been translated into U.S. dollars using the
exchange rates in effect at period end, and the revenues and expenses have
been translated into U.S. dollars using the average exchange rates in
effect during the period. Adjustments resulting from translation
adjustments are included as a separate component of stockholders' equity.

Statement of Cash Flows - For purposes of the statement of cash flows, cash
and cash equivalents includes cash on hand, amounts in demand deposit
accounts, and pooled investment funds with original maturities of three
months or less.

Recently Adopted Accounting Pronouncements - In February 1997, the
Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards ("SFAS") No. 128, Earnings Per Share, which was
adopted by the Company effective December 31, 1997. This statement
establishes standards for computing and presenting earnings per share
("EPS") and applies to entities with publicly held Common Stock or
potential Common Stock. It replaces the presentation of primary EPS with a
presentation of basic EPS and requires the dual presentation of basic and
diluted EPS on the face of the income statement. This statement requires
restatement of all prior period EPS data presented. The Company had a
simple capital structure in 1995 and 1996. Diluted EPS for 1997 includes
the incremental effect of stock options granted.

Adoption of Accounting Pronouncements - In June 1997, the FASB issued SFAS
No. 131, Disclosures About Segments of an Enterprise and Related
Information, which will be effective for the Company beginning January 1,
1998. SFAS No. 131 redefines how operating segments are determined and
requires qualitative disclosure of certain financial and descriptive
information about a company's operating segments. The Company believes the
segment information required to be disclosed under SFAS No. 131 will be
more comprehensive than previously provided, including expanded disclosure
of income statement and balance sheet items for each of its reportable
operating segments. The Company has not yet completed its analysis of which
operating segments it will report on.

Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

F-11
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------

3. INVENTORIES

Inventories as of December 31, 1996 and 1997 consist of the following (in
thousands):

1996 1997

Raw materials $ 4,020 $ 4,565
Work-in-process 5,936 7,637
Finished goods 24,682 36,098
-------- --------

Total $ 34,638 $ 48,300
======== ========

4. PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment as of December 31, 1996 and 1997 consist of
the following (in thousands):

1996 1997

Land $ 1,359 $ 1,359
Buildings 12,330 12,337
Machinery and equipment 20,488 23,786
Furniture and fixtures 4,432 5,326
Leasehold improvements 5,062 6,428
Automobiles 438 551
Construction in progress - 7,704
-------- --------

Subtotal 44,109 57,491

Less accumulated depreciation 15,912 22,214
-------- --------

Total $ 28,197 $ 35,277
======== ========

5. INTANGIBLES AND OTHER ASSETS

Intangibles and other assets as of December 31, 1996 and 1997 consist of
the following (in thousands):

1996 1997

Notes receivable from shareholder (see Note 13) $ 3,818 $ 5,723
Goodwill 1,099 767
Other 1,988 1,893
-------- --------

Total $ 6,905 $ 8,383
======== ========

F-12
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------

The balance due from shareholder consists of a note receivable of
$3,818,000 maturing on December 31, 2002 and a note receivable of
$1,905,000 maturing on April 15, 2002. These notes bear interest at the
federal rate under the Internal Revenue Code of 1986 (6.31% and 6.49%,
respectively).

6. ACCRUED EXPENSES

Accrued expenses as of December 31, 1996 and 1997 consist of the following
(in thousands):

1996 1997

Accrued bonuses $ 4,460 $ 4,703
Accrued warranty reserve 2,698 3,400
Other 4,008 4,796
-------- --------

Total $ 11,166 $ 12,899
======== ========

7. NOTES PAYABLE TO BANK

The Company has available an unsecured operating line of credit providing
for borrowings to a maximum of $70,000,000 during the period from August
1st to December 15th and $50,000,000 at all other times. The maturity date
is June 30, 1998 at which time both parties can elect to extend the
financing agreements. Interest, due monthly, is computed at the bank's
prime rate minus up to 2.1% per annum, which was 6.35% and 6.50% at
December 31, 1996 and 1997, respectively. If the Company defaults on its
payments, it is prohibited, subject to certain exceptions, from making
dividend payments or other distributions. The balance outstanding was
$6,250,000 and $13,992,000 at December 31, 1996 and 1997, respectively. The
amended agreement also includes a fixed rate option based on the Eurodollar
rate plus 75 basis points.

The Company also has available an unsecured revolving line of credit of
$25,000,000 with a $45,000,000 import line of credit to issue documentary
letters of credit on a sight basis. The combined limit under this agreement
is $60,000,000. The revolving line accrues interest at the bank's prime
rate minus 2% per annum. The revolving line also has a fixed rate option
based on the bank's cost of funds plus 35 basis points. There was no
balance outstanding on this line as of December 31, 1996 and 1997.

The Company is party to a Buying Agency Agreement with Nissho Iwai American
Corporation and its Canadian affiliate ("Nissho") pursuant to which Nissho
provides the Company an unsecured line of credit. This line of credit is
used to finance the purchase of goods outside the U.S. which are produced
by the Company's independent manufacturers worldwide. The available funds
are limited to $120,000,000 with a sublimit of $70,000,000 on the import
line of credit. Borrowings bear interest at a rate of .5% above the three
month LIBOR rate. In addition, the Company is obligated to pay Nissho a
commission of 1.5% of the FOB price of the goods purchased by Nissho in its
capacity as buying agent. The agreement expires September 30, 1998 but will
automatically renew for a five year term unless either party elects
otherwise. The balance outstanding on the import line of credit was
$11,664,000 and $13,397,000 at December 31, 1996 and 1997, respectively,
and is included in accounts payable. At December 31, 1997, Columbia
Sportswear had $34,307,000 of firm purchase orders placed under these
financing arrangements.

F-13
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------

CSCL has available a line of credit providing for borrowing to a maximum of
$C18,000,000 (US$13,138,000). Borrowings against this line of credit bear
interest at either the B/A option rate which is the bank's prime acceptance
fee minus 50 basis points or at the prime rate. B/A's are issued in
multiples of C$100,000 with a maturity of not less than 30 days and not
more than 360 days. The facility is guaranteed by the Company. At December
31, 1996, the balance outstanding was C$720,000 and C$6,500,000 (US$525,000
and US$4,745,000) under the prime and B/A options, respectively, and the
B/A's average rate of interest was 3.06%. At December 31, 1997, the entire
balance outstanding of C$7,000,000 (US$4,894,000) was borrowed under the
B/A option rate, at an average interest rate of 4.06%. The Canadian prime
lending rate was 4.75% and 6.0%, respectively, at December 31, 1996 and
1997.

At December 31, 1997, the Company's Japanese Subsidiary had bank borrowings
outstanding of $1,541,000 at an interest rate of 1.625%.

8. LONG-TERM DEBT

Long-term debt as of December 31, 1996 and 1997 consists of the following
(in thousands):

1996 1997

Mortgage note payable $ 3,123 $ 2,985

Less current portion 160 154
-------- --------

Total long-term debt $ 2,963 $ 2,831
======== ========

The Company assumed a mortgage in conjunction with the acquisition of a
distribution center (see Note 14). The loan matures in June 2009 and bears
interest at 8.76%. Principal payments due on the mortgage note payable as
of December 31, 1997 were as follows: $154,000 in 1998; $169,000 in 1999;
$183,000 in 2000; $201,000 in 2001; $219,000 in 2002; and $2,059,000
thereafter.

9. SHAREHOLDERS' EQUITY

The Company is authorized to issue 50,000,000 shares of Common Stock. At
December 31, 1996 and 1997, 18,792,176 shares of Common Stock were issued
and outstanding. Shares for all periods are restated to reflect a 400-for-1
split in 1996. Additionally, all shares and per share amounts for all
periods are restated to reflect the conversion of voting and nonvoting
shares into voting shares of Common Stock, and the conversion into 0.59
shares of Common Stock pursuant to a reverse stock split which occurred at
consummation of the offering of Common Stock by the Company.

10. STOCK INCENTIVE PLANS

On March 12, 1997, the Board of Directors of the Company approved an
Employee Stock Incentive Plan (the "Plan"). The Company has reserved
2,000,000 shares of Common Stock for issuance pursuant to the Plan. At that
date, 595,900 incentive stock options and 13,275 nonqualified options were
granted under the Plan at an exercise price of $9.68 per share, the
estimated fair value at the date of grant.

F-14
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------

On July 21, 1997, the Board of Directors of the Company granted an
additional 26,550 shares of Common Stock under the Employee Stock Incentive
Plan and 4,425 nonqualified options, at an exercise price of $9.68 per
share, the estimated fair value at the date of grant.

On November 14, 1997, the Board of Directors of the Company granted an
additional 28,773 shares of Common Stock under the Employee Stock Incentive
Plan and 61,851 nonqualified options at an exercise price of $15.20 a
share, the estimated fair value at the date of grant.

In January 1998, the Board of Directors increased the number of shares
authorized for issuance under the 1997 Stock Incentive Plan from 2,000,000
to 4,000,000 shares.

All options are exercisable if the Company completes a final underwritten
public offering of Common Stock registered with the Securities and Exchange
Commission, ratably over a five-year period beginning from the date of
grant, and expire ten years from the date of grant. If an offering is not
completed, the options are exercisable nine years from the date of the
grant.

In October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based
Compensation, which defines a fair value based method of accounting for
employee stock options and similar equity instruments and encourages all
entities to adopt that method of accounting for all of their employee stock
compensation plans. However, it also allows an entity to continue to
measure compensation cost for those plans using the method of accounting
prescribed by Accounting Principles Board Opinion No. 25 ("APB 25").
Entities electing to remain with the accounting in APB 25 must make pro
forma disclosures of net income and, if presented, earnings per share, as
if the fair value based method of accounting defined in SFAS No. 123 had
been adopted.

The Company has elected to account for its stock-based compensation plans
under APB 25; however, the Company has computed, for pro forma disclosure
purposes, the value of all stock options granted during 1997 using the
Black-Scholes option pricing model as prescribed by SFAS No. 123 using the
following weighted average assumptions:

Risk-free interest rate 6.69 - 5.77%
Expected dividend yield 0%
Expected lives 4 to 8 years
Expected volatility Minimum value

Using the Black-Scholes methodology, the total value of stock options
granted during 1997 was $2,431,000 which would be amortized on a pro forma
basis over the vesting period of the options. The weighted average fair
value of options granted during 1997 was $3.30 per share.

If the Company had accounted for its stock incentive plan in accordance
with SFAS No. 123, the Company's net income and earnings per share would
approximate the pro forma disclosures below:

1997
--------------------------
As Reported Pro Forma

Net income $ 39,296 $ 38,970
Earnings per share - basic $ 2.09 $ 2.07
Earnings per share - diluted $ 2.07 $ 2.05

F-15
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------

The effects of applying SFAS No. 123 in this pro forma disclosure are not
indicative of future amounts.

The following table summarizes information about stock options outstanding
at December 31, 1997:

<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
--------------------------------------------------- ------------------------------
Weighted Avg. Weighted Weighted
Range of Remaining Average Number Average
Exercise Number Contractual Exercise of Shares Exercise
Prices Outstanding Life (yrs) Price Exercisable Price

<S> <C> <C> <C> <C> <C>
$ 9.68 640,150 8.23 $ 9.68 - $ 9.68
$15.20 96,624 8.88 15.20 - 15.20
--------- ------ ------- ------- -------

$ 9.68 - 15.20 736,774 8.31 10.40 - 10.40
</TABLE>

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

FASB Statement No. 107, Disclosures About Fair Value of Financial
Instruments, requires disclosure of fair value information about financial
instruments when it is practicable to estimate that value. The carrying
value of cash and cash equivalents, short-term investments, accounts
receivable, notes payable, and long-term debt reflect their approximate
fair value at December 31, 1996 and 1997 based on their stated terms and
conditions.

12. PROFIT-SHARING PLAN

The Company has a 401(k) profit-sharing plan, which covers substantially
all employees with more than one year of service.

The Company may elect to make discretionary matching and/or non-matching
contributions. All contributions to the plan are determined by the Board of
Directors and totaled $1,269,000, $1,465,000, and $1,681,000 for the years
ended December 31, 1995, 1996, and 1997, respectively.

13. PARTICIPATION SHARE AGREEMENT

Effective December 1990, the Company adopted a Participation Share
Agreement (the "Plan") with a key employee. The Plan provided for the grant
of participation shares equivalent to 10% of the Company, which were to be
awarded at various dates through January 2000. Shares awarded were
subjected to vesting at a rate of 20% per year. The original Plan granted
the employee deferred compensation in the appreciation of a defined
per-share book value of the Company since January 1987 and contained an
anti-dilutive provision.

Effective December 31, 1996, the original Plan was terminated and a
Deferred Compensation Conversion Agreement (the "Agreement") was entered
into. Under the Agreement, the participation shares, whether or not vested
or awarded under the Plan, were converted to 1,800,435 shares of Common
Stock. Of the converted shares, 725,114 shares of Common Stock awarded are
subject to vesting through December 2004.

F-16
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------

The total value of the share conversion is $15,693,000 ($8.72 per share of
Common Stock), of which $6,320,000 was unvested. The unvested portion is
recorded as a reduction in shareholders' equity and will be amortized to
compensation expense through December 2004 as shares are earned.
Compensation expense related to the Plan and the 1996 conversion totaled
$922,000, $5,742,000, and $970,000 for the years ended December 31, 1995,
1996, and 1997, respectively. Additionally, the Agreement also provided for
a cash bonus of $2,750,000 in consideration for past services and for
future bonuses to be paid in amounts equal to the accrued interest due and
owing on the note receivable from shareholder (see Note 5).

14. LEASE OBLIGATIONS

The Company has a long-term lease agreement for a manufacturing facility
constructed to the Company's specifications. The initial lease term is for
ten years with three five-year renewal options and the lease also contains
purchase options at the end of five and ten years.

In December 1995, the Company acquired a long-term operating lease on a
commercial building with the intent of operating a retail outlet. The
remaining lease term is 33 years. The agreement contains a payment
escalation clause which increases the payment amount every four years with
the minimum increase the greater of the Consumer Price Index or 4% per
annum. Rent expense is recognized on a straight-line basis over the life of
the lease. The minimum lease payments are included in the schedule below.

Additionally, the Company leases certain operating facilities from
shareholders/directors of the Company. Total rent expense, including
month-to-month rentals, for these leases amounted to $626,000, $277,000,
and $198,000 for the years ended December 31, 1995, 1996, and 1997,
respectively.

In March 1996, the Company acquired the existing distribution center for
approximately $4.5 million from a shareholder and an officer of the Company
from whom the Company had previously leased the facility on a long-term
basis.

Rent expense was $1,998,000, $2,408,000, and $2,941,000 for third-party
leases during the years ended December 31, 1995, 1996, and 1997,
respectively.

Future minimum payments on all lease obligations greater than one year are
as follows (amounts in thousands):

Year Ending Third Related
December 31, Parties Parties Total

1998 $ 3,068 $ 209 $ 3,277
1999 2,578 219 2,797
2000 1,412 230 1,642
2001 644 242 886
2002 490 254 744
Thereafter 7,964 - 7,964
-------- ------- --------

$ 16,156 $ 1,154 $ 17,310
======== ======= ========

F-17
<PAGE>
COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------

15. COMMITMENTS AND CONTINGENCIES

Contingencies - The Company is a party to various legal claims, actions and
complaints. Although the ultimate resolution of legal proceedings cannot be
predicted with certainty, management believes that disposition of these
matters will not have a material adverse effect on the Company's
consolidated financial statements.

16. HEDGING AND DERIVATIVES

The Company utilizes options and forward contracts related to certain of
its business activities. Gains and losses on these contracts are recognized
or accrued as a component of the related transactions. The Company is
exposed to certain losses in the event of nonperformance by the other
parties to these agreements, but the Company does not anticipate
nonperformance by the counterparties, which are major financial
institutions.

The Company manages a portion of its exposures to fluctuations in
currencies related to foreign sales and accounts receivable with short-term
strategies after giving consideration to market conditions, contractual
agreements, anticipated sale and purchase transactions, and other factors
affecting the Company's risk profile. At December 31, 1997, the Company had
approximately $7,050,000 (notional) in foreign currency option contracts
and approximately $2,000,000 (notional) in forward exchange contracts. The
carrying value and unrealized gains and losses related to such contracts
were not material at December 31, 1997. No derivative financial instruments
were held at December 31, 1996.

17. GEOGRAPHIC INFORMATION

The majority of the Company's revenues are derived from its North American
operations. Such revenues amounted to 95%, 91%, and 90% of total revenues
for the years ended December 31, 1995, 1996, and 1997, respectively. The
remaining revenues are derived from throughout the world, with the majority
occurring in Europe for each of the past three years.

* * * * * *

F-18
<PAGE>
UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the U.S. Underwriters named below, and
each of such U.S. Underwriters, for whom Goldman, Sachs & Co, NationsBanc
Montgomery Securities LLC and PaineWebber Incorporated are acting as
representatives, has severally agreed to purchase from the Company, the
respective number of shares of Common Stock set forth opposite its name below:

Number of Shares
U.S. Underwriter of Common Stock
---------------- ----------------
Goldman, Sachs & Co.......................................
NationsBanc Montgomery Securities LLC.....................
PaineWebber Incorporated..................................

----------------
Total............................................. 5,200,000
================

Under the terms and conditions of the Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.

The U.S. Underwriters propose to offer the shares of Common Stock in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus and in part to certain securities dealers at such
price less a concession of $_____ per share. The U.S. Underwriters may allow,
and such dealers may reallow, a concession not in excess of $_____ per share to
certain brokers and dealers. After the shares of Common Stock are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the representatives.

The Company has entered into an underwriting agreement (the "International
Underwriting Agreement") with the underwriters of the International Offering
(the "International Underwriters") providing for the concurrent offer and sale
of 1,300,000 shares of Common Stock in an international offering outside the
United States. The offering price and aggregate underwriting discounts and
commissions per share for the two Offerings are identical. The closing of the
offering made hereby is a condition to the closing of the International
Offering, and vice versa. The representatives of the International Underwriters
are Goldman Sachs International, NationsBanc Montgomery Securities LLC and
PaineWebber International (U.K.) Ltd.

Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the two Offerings, each of the
U.S. Underwriters named herein has agreed that, as a part of the distribution of
the shares offered hereby and subject to certain exceptions, it will offer, sell
or deliver the shares of Common Stock, directly or

U-1
<PAGE>
indirectly, only in the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas subject
to its jurisdiction (the "United States") and to U.S. persons, which term shall
mean, for purposes of this paragraph: (a) any individual who is a resident of
the United States or (b) any corporation, partnership or other entity organized
in or under the laws of the United States or any political subdivision thereof
and whose office most directly involved with the purchase is located in the
United States. Each of the International Underwriters has agreed pursuant to the
Agreement Between that, as a part of the distribution of the shares offered as a
part of the International Offering, and subject to certain exceptions, it will
(i) not, directly or indirectly, offer, sell or deliver shares of Common Stock
(a) in the United States or to any U.S. persons or (b) to any person who it
believes intends to reoffer, resell or deliver the shares in the United States
or to any U.S. persons, and (ii) cause any dealer to whom it may sell such
shares at any concession to agree to observe a similar restriction.

Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Common Stock as may be mutually agreed. The price of any shares so sold shall be
the initial public offering price, less an amount not greater than the selling
concession.

The Company has granted the U.S. Underwriters an option exercisable for 30
days after the date of this Prospectus to purchase up to an aggregate of 780,000
additional shares of Common Stock solely to cover over-allotments, if any. If
the U.S. Underwriters exercise their over-allotment option, the U.S.
Underwriters have severally agreed, subject to certain conditions, to purchase
approximately the same percentage thereof that the number of shares to be
purchased by each of them, as shown in the foregoing table, bears to the
5,200,000 shares of Common Stock offered. The Company has granted the
International Underwriters a similar option to purchase up to an aggregate of
195,000 additional shares of Common Stock.

The Company, its directors and officers and the holders of all of the
Company's outstanding Common Stock as of the date hereof have agreed that,
during the period beginning from the date of this Prospectus and continuing to
and including the date 180 days after the date of the Prospectus, they will not
offer, sell, contract to sell or otherwise dispose of any shares of Common Stock
(other than (i) pursuant to employee stock option plans existing, or on the
conversion or exchange of convertible or exchangeable securities outstanding, on
the date of this Prospectus, (ii) bona fide gifts to transferees who agree to be
bound by a like restriction or (iii) private sales to persons who were
shareholders prior to the closing of the Offerings) or any securities of the
Company that are substantially similar to the shares of the Common Stock or
which are convertible into or exchangeable for securities that are substantially
similar to the shares of the Common Stock without the prior written consent of
the representatives, except for the shares of Common Stock offered in connection
with the concurrent U.S. and international offerings.

U-2
<PAGE>
The representatives of the Underwriters have informed the Company that they
do not expect sales to accounts over which the Underwriters exercise
discretionary authority to exceed five percent of the total number of shares of
Common Stock offered by them.

Prior to the Offerings, there has been no public market for the shares. The
initial public offering price will be negotiated among the Company and the
representatives of the U.S. Underwriters and the International Underwriters.
Among the factors to be considered in determining the initial public offering
price of the Common Stock, in addition to prevailing market conditions, will be
the Company's historical performance, estimates of the business potential and
earnings prospects of the Company, an assessment of the Company's management and
the consideration of the above factors in relation to market valuation of
companies in related businesses.

The Common Stock will be quoted on the Nasdaq National Market under the
symbol "COLM."

In connection with the Offerings, the Underwriters may purchase and sell
the Common Stock in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover syndicate
short positions created in connection with the Offerings. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Common Stock; and syndicate
short positions involve the sale by the Underwriters of a greater number of
shares of Common Stock than they are required to purchase from the Company in
the Offerings. The Underwriters also may impose a penalty bid, whereby selling
concessions allowed to syndicate members or other broker-dealers in respect of
the Common Stock sold in the Offerings for their account may be reclaimed by the
syndicate if such securities are repurchased by the syndicate in stabilizing or
covering transactions. These activities may stabilize, maintain or otherwise
affect the market price of the Common Stock, which may be higher than the price
that might otherwise prevail in the open market; and these activities, if
commenced, may be discontinued at any time. These transactions may be effected
on the Nasdaq National Market, in the over-the-counter market or otherwise.

The Underwriters may reserve, for sale at the initial public offering
price, up to 425,000 shares of Common Stock which may be sold to directors,
employees and persons having business relationships with the Company. The number
of shares of Common Stock available for sale to the general public will be
reduced to the extent such persons purchase such reserved shares. Any reserved
shares of Common Stock not so purchased will be offered by the Underwriters on
the same basis as the other shares of Common Stock offered in the Offerings.

The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.

U-3
<PAGE>
This Prospectus may be used by underwriters and dealers in connection with
offers and sales of the Common Stock, including shares initially sold in the
International Offering, to persons located in the United States.

U-4
<PAGE>

[Pictures of (i) model cycling in Company sportswear, (ii) model in Company
sportswear with bonefish, (iii) model in downpour in Company jacket, (iv) model
crossing river in Company sportswear, (v) model snowboarding in Company Convert
jacket and (vi) child model in Company youth jacket and accessories in snow.]

<PAGE>

===================================== =====================================

No person has been authorized to
give any information or to make any
representations other than those
contained in this Prospectus, and, if
given or made, such information or
representations must not be relied
upon as having been authorized. This
Prospectus does not constitute an
offer to sell or the solicitation of
an offer to buy any securities other
than the securities to which it
relates or an offer to sell or the
solicitation of an offer to buy such 6,500,000 Shares
securities in any circumstances in
which such offer or solicitation is
unlawful. Neither the delivery of this Columbia Sportswear
Prospectus nor any sale made hereunder Company
shall, under any circumstances, create
any implication that there has been no
change in the affairs of the Company Common Stock
since the date hereof or that the
information contained herein is
correct as of any time subsequent to
its date.
---------------
--------------

TABLE OF CONTENTS [LOGO]

Page
---- ---------------
Prospectus Summary................. 3
Risk Factors....................... 8
Use of Proceeds.................... 17
Dividend Policy and S Corporation
Status........................... 17
Dilution........................... 18
Capitalization..................... 19 Goldman, Sachs & Co.
Selected Consolidated Financial
Data............................. 21 NationsBanc Montgomery
Management's Discussion and Securities LLC
Analysis of Financial Condition
and Results of Operations....... 23 PaineWebber Incorporated
Business........................... 32
Management......................... 51 Representatives of the Underwriters
Certain Transactions............... 58
Principal Shareholders............. 60
Description of Capital Stock....... 62
Shares Eligible for Future Sale.... 64
Validity of the Issuance of the
Common Stock..................... 65
Experts............................ 65
Additional Information............. 65
Index to Consolidated Financial
Statements.......................F-1
Underwriting.......................U-1

--------------

Through and including ____________,
1998 (the 25th day after the date of
this Prospectus), all dealers
effecting transactions in the Common
Stock, whether or not participating in
this distribution, may be required to
deliver a Prospectus. This is in
addition to the obligation of dealers
to deliver a Prospectus when acting as
Underwriters and with respect to their
unsold allotments or subscriptions.
===================================== =====================================

<PAGE>
PART II INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses, other than
underwriting discounts, payable by the Registrant in connection with the offer
and sale of the Common Stock being registered. All amounts are estimates except
the registration fee, the NASD filing fee and the Nasdaq National Market entry
fee.

Registration fee................................................. $ 36,187
NASD filing fee.................................................. 12,767
Blue Sky fees and expenses (including legal fees)................ 8,500
Nasdaq National Market entry fee................................. 90,000
Accounting fees and expenses..................................... 200,000
Other legal fees and expenses.................................... 200,000
Transfer agent and registrar fee................................. 15,000
Printing and engraving........................................... 100,000
Miscellaneous.................................................... 77,546
----------
Total...................................................... $ 740,000
==========

- --------------

Item 14. Indemnification of Directors and Officers

Article IV of the Registrant's Second Amended and Restated Articles of
Incorporation (the "Articles"), to be effective upon completion of the
Offerings, requires indemnification of current or former directors of the
Registrant to the fullest extent not prohibited by the Oregon Business
Corporation Act (the "Act"). The Act permits or requires indemnification of
directors and officers in certain circumstances. The effects of the Articles and
the Act (the "Indemnification Provisions") are summarized as follows:

(a) The Indemnification Provisions grant a right of indemnification in
respect of any proceeding (other than an action by or in the right of the
Company), if the person concerned acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
Company, was not adjudged liable on the basis of receipt of an improper personal
benefit and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the conduct was unlawful. The termination of a
proceeding by judgment, order, settlement, conviction or plea of nolo
contendere, or its equivalent, is not, of itself, determinative that the person
did not meet the required standards of conduct.

(b) The Indemnification Provisions grant a right of indemnification in
respect of any proceeding by or in the right of the Company against the expenses
(including attorney fees) actually and reasonably incurred if the person
concerned acted in good faith and in a manner the person reasonably believed to
be in or not opposed to the best interests of the Company, except

II-1
<PAGE>
that no right of indemnification will be granted if the person is adjudged to be
liable to the Company.

(c) Every person who has been wholly successful, on the merits or
otherwise, in the defense of any proceeding to which the person was a party
because of the person's status as a director or officer of a controversy
described in (a) or (b) above is entitled to indemnification as a matter of
right.

(d) Because the limits of permissible indemnification under Oregon law are
not clearly defined, the Indemnification Provisions may provide indemnification
broader than that described in (a) and (b).

(e) The Registrant may advance to a director or officer the expenses
incurred in defending any proceeding in advance of its final disposition if the
director or officer affirms in writing in good faith that he or she has met the
standard of conduct to be entitled to indemnification as described in (a) or (b)
above and undertakes to repay any amount advanced if it is determined that the
person did not meet the required standard of conduct.

The Company has entered into indemnification agreements with each of the
Company's directors, a form of which is attached as an exhibit hereto and is
incorporated herein by reference.

The Registrant may obtain insurance for the protection of its directors and
officers against any liability asserted against them in their official
capacities. The rights of indemnification described above are not exclusive of
any other rights of indemnification to which the persons indemnified may be
entitled under any bylaw, agreement, vote of shareholders or directors or
otherwise.

Item 15. Recent Sales of Unregistered Securities

(a) In December 1996 the Registrant entered into a Deferred Compensation
Conversion Agreement with Don Richard Santorufo, the Registrant's Chief
Operating Officer, providing for the conversion of deferred compensation units
granted under a prior agreement into an aggregate of 1,800,435 shares of the
Registrant's Common Stock. The issuance to Mr. Santorufo was made pursuant to
Section 4(2) of the Securities Act of 1933 (the "Securities Act") as a
transaction not involving a public offering. The Registrant reasonably believed
that the purchaser had such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the investment.
Mr. Santorufo represented his intention to acquire the securities for investment
and not with a view to distribution thereof.

(b) In December 1997 the Registrant issued an aggregate of 216,633 shares
of Common Stock to Gertrude Boyle, Timothy P. Boyle and Sarah Bany in exchange
for the capital stock of GTS, Inc., a minority shareholder in certain of the
Registrant's subsidiaries. The issuance was made pursuant to Section 4(2) of the
Securities Act as a transaction not involving

II-2
<PAGE>
a public offering. The Registrant reasonably believed that each purchaser had
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of the investment. Each represented an
intention to acquire the securities for investment and not with a view to
distribution thereof.

(c) Prior to completion of the Offerings, the Company intends to issue
635,777 shares of Common Stock to Gertrude Boyle, 34,076 shares of Common Stock
to Timothy P. Boyle, 5,332 shares of Common Stock to Sarah Bany and 20,518
shares of Common Stock to Don Santorufo, each in connection with an agreement
regarding a plan of recapitalization. The issuance is to be made pursuant to
Section 3(a)(9) of the Securities Act.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

*1.1 Form of U.S. Underwriting Agreement
*1.2 Form of International Underwriting Agreement
*2.1 Plan of Share Exchange Exchanging Shares of Columbia
Sportswear Company for all of the Shares of GTS, Inc.
**3.1 Second Amended and Restated Articles of Incorporation
**3.2 1998 Restated Bylaws
4.1 See Article II of Exhibit 3.1 and Article I of Exhibit 3.2
**5.1 Opinion of Stoel Rives LLP *10.1 1997 Stock Incentive Plan
*10.2 Form of Incentive Stock Option Agreement
*10.3 Form of Nonstatutory Stock Option Agreement
*10.4 Credit Agreement between the Hong Kong and Shanghai Banking
Corporation Limited and the Registrant dated September 17,
1991, as amended.
*10.5 Buying Agency Agreement between Nissho Iwai American
Corporation and the Registrant dated January 1, 1992, as
amended.
*10.6 Credit Agreement between the Registrant and Wells Fargo Bank,
N.A. dated July 31, 1997.
*10.7 Assumption Agreement by and between the Registrant, Timothy P.
Boyle and Don Santorufo and First Interstate Bank of Oregon,
N.A., dated February 1997.
*10.8 Lease between Penzel & Company and the Registrant dated
February 23, 1988, as amended.
10.9 Form of Lease between Timothy P. Boyle and Gertrude Boyle and
the Registrant, dated _______________, 1997.
10.10 Form of Lease between Gertrude Boyle and the Registrant dated
______________, 1997.
*10.11 Lease between BB&S Development Company and the Registrant,
dated February 12, 1996.
*10.12 Lease between B.A.R.K. Holdings, Inc. and Columbia Sportswear
Canada Limited, dated January 3, 1994.
*10.13 Form of Stock Purchase Agreement between Columbia Sportswear
Holdings Limited and Douglas Hamilton and Doug Hamilton in
trust for Elizabeth K. Hamilton, dated August 24, 1992.
*10.14 Deferred Compensation Conversion Agreement between the
Registrant and Don Santorufo, dated December 31, 1996.
10.15 Form of Tax Indemnification Agreement for existing
shareholders.
*10.16 Employment Agreement between Carl K. Davis and the Registrant
dated as of December 5, 1997.
*10.17 Form of Indemnity Agreement for Directors
**10.18 Form of Agreement Regarding Plan of Recapitalization Among the
Registrant and Shareholders
*21.1 Subsidiaries of the Registrant
23.1 Consent of Deloitte & Touche LLP
**23.2 Consent of Stoel Rives LLP (included in Exhibit 5.1)

II-3
<PAGE>
*24.1 Power of Attorney (included on signature page)
27.1 Financial Data Schedule

- ---------------

* Previously filed.
** To be filed by amendment.

(b) Financial Statement Schedules

Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.

Item 17. Undertakings

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreements certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Portland, State of
Oregon, on February 23, 1998.

COLUMBIA SPORTSWEAR COMPANY

By TIMOTHY P. BOYLE
--------------------------------------
Timothy P. Boyle
President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in the following
capacities on February 23, 1998.

Signature Title
- --------- -----

Principal Executive Officer:

TIMOTHY P. BOYLE* President, Secretary, Treasurer and
- ---------------------------------- Director
Timothy P. Boyle

Principal Financial and Accounting Officer:

PATRICK D. ANDERSON Chief Financial Officer
- ----------------------------------
Patrick D. Anderson

GERTRUDE BOYLE* Chairman of the Board of Directors
- ----------------------------------
Gertrude Boyle

SARAH BANY* Director
- ----------------------------------
Sarah Bany

II-5
<PAGE>
MURREY R. ALBERS* Director
- ----------------------------------
Murrey R. Albers

EDWARD S. GEORGE* Director
- ----------------------------------
Edward S. George

JOHN STANTON* Director
- ----------------------------------
John Stanton

* By PATRICK D. ANDERSON
------------------------------
Patrick D. Anderson
Attorney-in-fact

II-6
<PAGE>
EXHIBIT INDEX

Exhibit Sequential
No. Description Page No.
- ------- ----------- ----------

- --------------

* Previously filed.
** To be filed by amendment.

WAREHOUSE LEASE

DATED AS OF: _______________, 199___

BETWEEN: TIMOTHY P. BOYLE and GERTRUDE BOYLE,
as tenants in common
c/o 6600 N. Baltimore
P.O. Box 83239
Portland, OR 97382-0239 LANDLORD

AND: COLUMBIA SPORTSWEAR COMPANY,
an Oregon corporation
6600 N. Baltimore
P.O. Box 83239
Portland, OR 97382-0239 TENANT

Tenant wishes to lease from Landlord and Landlord wishes to lease to Tenant
the following property (the "Property") located in the State of Oregon and
described as follows:

Certain real property and the building and other
improvements, including, without limitation, the related
parking and access areas ("Building") located at 8638 North
Crawford Street in the City of Portland, Multnomah County,
Oregon, consisting of a parcel of land containing
approximately 40,000 square feet and a Building containing
approximately 24,468 sq. ft. of gross area; commonly known
as the Columbia Sportswear North Crawford Street Warehouse,
Portland, Oregon, together with all appurtenances, easements
and rights of way related thereto.

NOW, THEREFORE, Landlord hereby leases the Property to Tenant on the
following terms:

1. Term; Possession.

1.1 Term. The term of this Lease shall commence on the Commencement
Date described below and continue for sixty (60) full calendar months (plus the
partial month, if any, in which this Lease commences), unless sooner terminated
or extended as provided in this Lease. As used in this Lease, "Commencement
Date" shall mean the date first set forth above.
<PAGE>
1.2 Acceptance of Property. Tenant has been in occupancy of the
Property for a considerable period prior to the Commencement Date and accepts
the land and Property in its present condition, AS IS, WHERE IS. Landlord shall
not be required to perform or pay for any work to ready or keep the Property for
Tenant's occupancy.

1.3 Extension Options. So long as Tenant is not then in default under
this Lease, Tenant will have an option to extend the term of this Lease for an
additional period of five (5) years, commencing upon the otherwise scheduled
expiration of the initial term. In the event an option is not exercised, such
option automatically shall be extinguished. The other terms and conditions of
this Lease will remain the same during the extension period. Exercise of the
extension option shall be by notice given not more than one hundred eighty (180)
days nor less than ninety (90) days prior to expiration of the initial term.

2. Rental.

2.1 Base Rental. During the term, as the same may be extended, Tenant
will pay to Landlord on a monthly basis a monthly base rent of $4,404.00 per
month, subject to adjustment as provided below.

2.2 Time and Place of Payment. Rent will be paid in advance on the
first day of each month to Landlord at the address for Landlord set forth in
this Lease (or such other address as Landlord may direct by notice to Tenant),
without offset, abatement or deduction. Rent is uniformly apportionable
day-to-day. Rent for the partial month (if any) in which the Lease term
commences shall be prorated and paid at commencement of the Lease term.

2.3 Interest on Late Payments. All rent and other payments owed by
Tenant to Landlord under this Lease not paid when due shall bear interest from
the due date until fully paid at the rate specified in paragraph 11.3 below.

2.4 Net Lease Provision. This is intended to be an absolutely net
lease, meaning that Tenant shall pay all expenses of every type relating to its
operation of the Property during the Lease term or otherwise related to Tenant's
occupancy.

2.5 Adjustment of Monthly Base Rent. On each annual anniversary date
of the Commencement Date of this Lease, Lessor shall increase the monthly base
rent in the same percentage as the increase, if any, in the Consumer Price Index
(the "Index") published by the United States Department of Labor, Bureau of
Labor Statistics, not to exceed an increase of five percent (5%) for any payment
period over the monthly base rent for the immediately prior period. The change
shall be computed by comparing the schedule entitled "U.S. City Average, All
Items, All Urban Consumers, 1982-84=100" for the latest available month
preceding the month in which the Lease term commenced with the same figure for
the same month in the year immediately preceding the commencement of the period
for which the adjustment is computed.

2
<PAGE>
All comparisons shall be made using Index figures derived from the same base
period and in no event shall this provision operate to decrease the monthly base
rent for the Property below the monthly base rent in place for the period
immediately preceding the adjustment date. If the Index cited above is revised
or discontinued during the Lease term, then the index that is designated to
replace it by the Portland Association of Building Owners and Managers, or its
successor, shall be used, or, if none, a comparable index selected by Landlord
reasonably estimated to reflect the change in earning power of American
consumers.

3. Use of Property.

3.1 Permitted Use. Tenant shall use the Property only for conducting
the following business and for no other purpose without Landlord's written
consent: receiving, warehousing, distribution and related, incidental uses
consistent with applicable laws, ordinances, regulations, covenants, conditions
and restrictions of record affecting the Property.

3.2 Compliance with Laws and Restrictions. In connection with its use,
Tenant shall comply, at its expense, with all applicable laws, regulations and
requirements of all public authorities, and any private restrictions, covenants
and conditions of record affecting the Property, including, without limitation,
those regarding maintenance, operation and use of the Property and equipment and
appliances on the Property (including signs), except that Tenant may withhold
compliance in connection with a good faith dispute so long as Landlord's
property interest is not jeopardized and Landlord is not subject to any criminal
or civil liability with respect thereto. In addition to Tenant's other
responsibilities, Tenant has been and remains solely responsible for the
surveying, monitoring and record keeping and all other work, education,
disclosures and other requirements related to the presence or possible presence
of asbestos or asbestos containing materials in the Property. In so doing,
Tenant shall perform or cause to be performed such disclosure, work and training
and such keep and maintain such records as are required by applicable law
(including, without limitation, OSHA requirements) and, upon demand by Landlord
or its designated lender, shall provide Landlord and, if requested, its
designated lender(s) with true copies of all such surveys, disclosures, reports
and other information and records. In any event, Tenant shall provide Landlord
with true and complete copies of all such materials upon the expiration or
earlier termination of this Lease.

3.3 Hazardous Substances. Tenant shall comply fully with all laws
pertaining to the protection of human health and the environment related to
Tenant's use and occupancy of the Property and all laws regarding the use,
generation, storage, transportation, treatment, disposal or other handling of
hazardous substances. Tenant shall exercise extreme care in handling any
hazardous substances and shall not cause or permit hazardous substances to be
spilled, leaked, disposed of or otherwise released on or about the Property by
Tenant or any invitee or permittee of Tenant. In the event Tenant learns of any
such spill, leak, disposal or release, Tenant shall immediately notify Landlord
of such occurrence and shall remediate (or cause remediation of) such spill,
leak, disposal or release in accordance with applicable law

3
<PAGE>
within a reasonable time after Tenant discovers the presence of such material,
not to exceed the period required or allowed by applicable law, rule or order.
The term "hazardous substances" is used in its very broadest sense, and refers
to materials which, because of their quantity, concentration, or physical,
chemical, or infectious characteristics, may cause or pose a present or
potential hazard to human health or the environment when improperly handled,
treated, stored, transported, disposed of or otherwise managed. The term shall
include, but is not limited to, all hazardous substances, hazardous materials
and hazardous wastes listed by the U.S. Environmental Protection Agency and the
state in which the Property is located under the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), the Resource Conservation and
Recovery Act (RCRA), the Toxic Substances Control Act (TSCA), and the Federal
Water Pollution Control Act (FWPCA) and comparable state statutes. As between
Landlord and Tenant, Tenant shall also be responsible for any existing
contamination of the Property arising during or related to the period of
Tenant's occupancy of the Property prior to the Commencement Date of this Lease.

3.4 No Nuisance. Tenant shall not conduct or permit any activities on
the Property that create a nuisance or violate the applicable covenants,
restrictions and conditions of record affecting the Property.

3.5 Signs. Signs will be designed and constructed in compliance with
applicable city and county sign codes and covenants, conditions and restrictions
affecting the Property.

4. Maintenance and Alterations.

4.1 Tenant's Obligations. Tenant, at its expense, shall keep the
Property and every portion thereof, structural and nonstructural, exposed and
unexposed, including, without limitation, the land, parking areas, sidewalks,
landscaping, Building, improvements, roof, HVAC system, fixtures, and all
personal property, trade fixtures and equipment in good repair, operating
condition, working order and appearance, and shall make all exterior and
interior repairs, renewals, and replacements necessary to that end. Landlord
shall have no obligation to pay for or make any repairs or perform any
maintenance on the Property.

4.2 Alterations. Tenant shall not make any alterations or additions to
the Property that are structural or change the character of the Property or
lessen its value, without Landlord's prior written consent. All alterations
shall be made in a good and workmanlike manner, and in compliance with
applicable laws and building codes.

4
<PAGE>
5. Taxes; Utilities.

5.1 Personal Property Taxes. Tenant shall pay all personal property
taxes assessed against all personal property, equipment or trade fixtures on the
Property.

5.2 Real Property Taxes and Assessments. Tenant shall pay before
delinquency all taxes, assessments and public charges of every description on
the Property. Taxes and assessments for any partial year at the commencement the
Lease term shall be the responsibility of Tenant and those for any partial tax
year at the expiration of the Lease term shall be prorated between the parties
based on the portion of such tax year relative to the Lease term. Tenant may use
any available installment payment plans for special assessments and, in such
case, shall be obligated to pay only those installments coming due during the
term of this Lease.

5.3 Payment of Utilities Charges. Tenant shall pay all charges for
services and utilities incurred in connection with the use, occupancy, operation
and maintenance of the Property, including, but not limited to, charges for
fuel, water, gas, electricity, sewage disposal, power, refrigeration, air
conditioning, telephone and janitorial services.

6. Liability to Third Persons.

6.1 Liens. Tenant shall pay all claims for work done on or for
services rendered or material furnished to the Property by or for Tenant, and
shall keep the Property free from any liens created by or through Tenant, except
that Tenant may withhold payment of any such claim in connection with a good
faith dispute over the obligation to pay, so long as Landlord's property
interest is not jeopardized and Landlord is not subject to civil or criminal
liability. Subject to paragraph 6.2 below, if Tenant fails to pay such claim or
to discharge any lien within the period (including the cure period) allowed by
this Lease, Landlord may do so and collect such amount as additional rent.
Amounts paid by Landlord hereunder shall bear interest and be repaid by Tenant
as provided in paragraph 11.3 below. Such payment by Landlord shall not
constitute a waiver of any right or remedy Landlord may have because of Tenant's
default.

6.2 Contest by Tenant. If Tenant withholds payment of a claim
described in paragraph 6.1 above and a lien is filed as a result of such
nonpayment, Tenant shall secure the discharge of the lien or deposit with
Landlord cash or sufficient corporate surety bond or other security satisfactory
to Landlord in an amount sufficient to discharge the lien plus any costs,
attorneys' fees and other charges that could accrue as a result of a foreclosure
or sale under the lien and such lien is discharged from the Property before the
earlier to occur of twenty (20) days before foreclosure of the lien and
forty-five (45) days after the lien is filed.

5
<PAGE>
6.3 Indemnification of Landlord. Tenant shall indemnify, reimburse and
(at Landlord's demand, with counsel satisfactory to and in consultation with
Landlord) defend Landlord for, from and against any actual or alleged claim,
loss, damage, fine, penalty, action, proceedings or other liability arising out
of or related to any action or inaction of Tenant or its invitees, any condition
of the Property which is the responsibility of the Tenant under this Lease, or
any breach of this Lease by Tenant to the extent such does not arise out of and
is not related to the intentional misconduct or gross negligence of Landlord.
For the purposes of this Lease, as between Landlord and Tenant, Tenant shall be
responsible for any and all conditions of the Property and occurrences thereon,
whether or not caused by Tenant and whether or not arising during or before the
term of this Lease to the extent such does not arise out of and is not related
to the intentional misconduct or gross negligence of Landlord.

6.4 Landlord's Liability. Landlord shall have no responsibility or
liability to Tenant for acts of any third party not under the direct control of
Landlord, or for any defect in the Property, or for any interruption or failure
in the supply of utilities or services to the Property.

7. Insurance and Damage.

7.1 Liability Insurance. Tenant shall obtain and continuously
maintain, at its expense, comprehensive general liability insurance with a
combined single limit of not less than $2,000,000, or such other commercially
reasonable limits as Landlord may reasonably require consistent with prudent
insurance practices for similar properties and uses in the Portland metropolitan
area. In the event of any dispute as to the amount of such insurance, the
direction of Landlord's insurance broker or agent shall prevail. Among other
things, such insurance shall be noncontributing, primary and written on an
occurrence, not a claims made, basis and shall name Landlord as an additional
insured and shall contain a contractual liability endorsement referring to this
Lease. The policies shall be in form, amounts and with companies reasonably
acceptable to Landlord. Certificates evidencing such insurance and bearing
endorsements requiring ten (10) days' written notice to Landlord prior to any
change or cancellation shall be furnished to Landlord at or prior to the
Commencement Date.

7.2 Property Damage Insurance. Tenant shall be responsible for
insuring the Property and Building and its personal property, equipment and
trade fixtures located on the Property under an all risk special forms policy of
insurance, or such other coverages and in such amounts and with such
endorsements as may be required by Landlord or Landlord's designated lender
under any loan to which this Lease is subordinated. Neither party shall be
liable to the other for any loss or damage caused by water damage or any of the
risks covered by a standard fire insurance policy with extended coverage
endorsements, and there shall be no subrogated claim by one party's insurance
carrier against the other party arising out of any such loss. Landlord and
Landlord's designated lender (under a standard lender's loss payable endorsement
approved by such lender) shall be named as additional loss payees, as their
interests may appear. The policies shall be in form, amount and with companies
reasonably acceptable to Landlord and

6
<PAGE>
its designated lender. Tenant will deliver to Landlord and its designated lender
originals of the policies or ACORD 27 certificates of coverage acceptable to
Landlord and its lender, if any, reflecting the requirements of this Lease and
bearing endorsements requiring thirty (30) days' written notice to Landlord and
such lender prior to any cancellation or reduction of coverage.

7.3 Restoration of Damage. During the initial term or any extended or
renewal term of this Lease, in the event of a fire or other casualty causing
damage to the Building or balance of the Property (each a "Casualty"), Tenant
shall immediately notify Landlord. For purposes of this Section, a "Minor
Casualty" means, with respect to the Building, a Casualty which causes damage to
less than fifty percent (50%) (in terms of square footage of floor area) of the
Building and a "Major Casualty" means a Casualty which causes damage to fifty
percent (50%) or more (in terms of square footage of floor area) of the
Building. In the event of a Minor Casualty, so long as Landlord's lender makes
the insurance proceeds available for such work, Tenant shall promptly restore
the damage to the Building and Property. Any restoration, rebuilding or repair
shall be at Tenant's expense and shall comply with the provisions of this Lease,
provided that the insurance proceeds payable with respect to such Casualty shall
be made available to Tenant for such purpose as restoration progresses in a
manner similar to that in which a prudent commercial lender would distribute
loan proceeds for similar work, subject to the requirements of Landlord's
lender. The restored Building and Property shall be at least equal in value,
quality and use to the Building and Property immediately before the Casualty. In
the event of a Major Casualty, Tenant shall, within six (6) months after the
date of the Casualty (or such earlier time required by applicable law) either
terminate this Lease, by written notice to Landlord, or restore or replace the
damaged portion of the Building and balance of the Property. If Tenant elects to
restore or replace the damaged portion of the Building and Property, the
restored or replaced Building and Property shall be at least equal in value,
quality and use to the Building and Property immediately before the Casualty. If
Tenant elects to terminate this Lease, then the insurance proceeds related to
the damage to the Building and Property arising from the Casualty shall be
allocated to Landlord, except for the unamortized cost of Tenant's improvements
as described below. In the event of such termination, all rent and other amounts
payable by Tenant under this Lease shall abate as of the date of casualty. In
the event of termination of this Lease by reason of casualty, Tenant shall be
entitled to recover, in addition to Tenant's other rights under this Lease, an
amount equal to that portion of the Tenant's cost of improvements to the
Building made by Tenant after the date of this Lease (with Landlord's consent,
where required by this Lease) that remains unamortized on Tenant's corporate
books using Tenant's historic accounting method consistently applied to the
extent Landlord recovers insurance proceeds related to such improvements in
excess of amounts due to Landlord's lender, and any prepaid amounts attributable
to periods following the date of such casualty, including, without limitation,
prepaid rent, additional rent and security deposit, if any. There shall be no
abatement of rent or other charges payable by Tenant hereunder in the event of
any Casualty except upon termination of this Lease as provided in this Section
7.3.

7
<PAGE>
7.4 Repair of Tenant's Property. Repair, replacement or restoration of
any fixtures, equipment and personal property owned by Tenant or otherwise
located on or used in connection with the Property shall be the responsibility
of Tenant.

8. Condemnation.

8.1 Notice/Consent. In the event either Landlord or Tenant receives
any notice of an intended taking affecting the Property or any portion thereof,
or is served with a complaint in condemnation, then such party shall promptly
provide a copy of such notice or complaint to the other party. No sale,
transfer, agreement or settlement with the condemning authority shall be made
without the prior consent of both Landlord and Tenant. For purposes of this
Lease, taking or condemnation includes the sale to a purchaser with the power of
eminent domain in the face of a threat or the probability of the exercise of the
power of eminent domain.

8.2 Right to Termination on Major Taking. If the Property or any
portion thereof is taken as a result of the exercise of the power of eminent
domain, this Lease shall terminate as to such portion which is so taken on the
date the condemning authority takes possession. If Tenant determines in good
faith that the remaining portion does not feasibly permit the economic
continuation of the operation of the Property by Tenant for its intended purpose
(in which case the taking shall be deemed a "Major Taking"), Tenant shall have
the right to terminate this Lease within forty-five (45) days after the full
extent of such intended condemnation is ascertained and fixed. The termination
shall be effective as of the date that the condemning authority takes
possession.

8.3 Allocation of Award on Major Taking. In the event of a Major
Taking giving rise to a termination of this Lease as provided above, the entire
condemnation award shall be allocated to Landlord, except for any award that may
be allocable to permanent improvements to the Building made by Tenant (with
Landlord's consent, where required by this Lease) that remains unamortized on
Tenant's corporate books using Tenant's historic accounting method consistently
applied to the extent Landlord recovers condemnation proceeds related to such
improvements in excess of amounts due to Landlord's lender and any award made to
Tenant expressly for the taking of Tenant's trade fixtures located on the
Property and Tenant shall have no claim for any portion of the unexpired term of
this Lease.

8.4 Minor Taking/Restoration. In the event of a taking other than a
Major Taking giving rise to termination of this Lease as provided above (a
"Minor Taking"), the condemnation award shall be allocated as follows: (a) first
to restore the remainder of the Property to as close to its utility for Tenant's
purposes and condition immediately before such taking as is possible in the
circumstances; (b) then to the reasonable cost of obtaining the condemnation
award; and (c) then to Landlord and Tenant as their respective interests may
appear, provided that Tenant shall not be entitled only to amounts awarded for
taking of its trade fixtures and not to any award related to the unexpired term
of this Lease or the Property.

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<PAGE>
8.5 Inverse Condemnation. In the event of any inverse condemnation or
regulatory taking, either party shall be free to pursue its own claim for
damages resulting from such event. Each party shall reasonably cooperate with
the other in connection with the pursuit of any such claim by the other party,
provided neither party shall be obligated to incur unreimbursed out-of-pocket
expenses in so doing.

8.6 Abatement of Rent. In the event of a Minor Taking, rent shall be
abated during any period of restoration and shall be reduced for the remainder
of the Lease term to the extent and in the same proportion as the reduction in
the reasonable rental value of the Property for Tenant's use caused by the
condemnation.

9. Transfers by Tenant.

9.1 Prohibition of Transfer. Except as provided below, Tenant shall
not assign, mortgage, pledge or encumber the Property or Tenant's leasehold
estate, or otherwise transfer any interest in the Property, without the prior
written consent of Landlord. Any attempted transfer without such consent, where
required, shall be null and void and, at the option of Landlord, will be deemed
a default under this Lease. Notwithstanding the above, Tenant shall have the
right, without Landlord's further consent, to assign or otherwise transfer its
interest under this Lease to any person or entity acquiring all or substantially
all of the assets of Tenant or to any person or entity controlled by,
controlling or under common control with Tenant and to sublet to or allow the
use of all or any portion of the Property by third parties, subject to the other
terms and conditions of this Lease; provided that, so long as a lienholder or
security interest holder, or its successor or assigns, holds any lien or
security interest in the Landlord's interest in the Property, this Lease or the
rents accruing hereunder, which lien or security interest documentation requires
such lienholder's approval or consent to any encumbrance, transfer or assignment
of Tenant's interest under this Lease, Tenant shall not encumber, assign or
transfer its interest in this Lease without the express, prior written consent
of such lienholder. In the event that during the term of this Lease, as it may
be renewed or extended, any person hereafter holding both the Landlord's and
Tenant's interest in the Property, this Lease shall not be deemed to have merged
into the fee so long as any lienholder of a lien to which Tenant's interest in
this Lease has been subordinated, or its successor or assigns, holds any lien or
security interest in this Lease or the rents accruing hereunder, without the
express, prior written consent of such lienholder.

9.2 Obligations After Transfer. The giving of such consent in one
instance shall not preclude the need for Tenant to obtain Landlord's consent to
further transfers where required by this Lease. If Tenant is permitted to make
any transfer, Tenant shall not be relieved of its obligations, but shall remain
liable to Landlord for performance of all such obligations.

9
<PAGE>
10. Tenant Default. The following shall be events of default:

10.1 Payment Default. Tenant fails to make any rent or other payment
under this Lease within ten (10) days after written notice to Tenant from
Landlord that it is past due.

10.2 Default in Other Covenants. Tenant fails to comply with any other
term or condition or fulfill any other obligation of this Lease within thirty
(30) days after written notice by Landlord specifying the nature of the default
with reasonable particularity. If the default is of such a nature that it cannot
be remedied fully within the 30-day period, this requirement shall be satisfied
if Tenant begins correction of the default within the 30-day period and
thereafter proceeds with reasonable diligence and in good faith to effect the
remedy as soon as practicable.

10.3 Insolvency Defaults. Dissolution, termination of existence of
Tenant; the commencement by Tenant of a voluntary case under the federal
bankruptcy laws or under any other federal or state law relating to insolvency
or debtor's relief; the entry of a decree or order for relief against Tenant in
an involuntary case under the federal bankruptcy laws or under any other
applicable federal or state law relating to insolvency or debtor's relief; the
appointment of or the consent by Tenant to the appointment of a receiver,
trustee or custodian of the Property; an assignment for the benefit of creditors
by Tenant.

11. Remedies on Default. Upon default, Landlord may exercise any one or
more of the following remedies, or any other remedy available under applicable
law:

11.1 Retake Possession. Landlord may re-enter and retake possession of
the Property, either by summary proceedings, force, any other applicable action
or proceeding, or otherwise, in conformity with applicable law . Landlord may
use the Property for Landlord's own purposes or relet it upon any reasonable
terms without prejudice to any other remedies that Landlord may have by reason
of Tenant's default. None of these actions will be deemed an acceptance of
surrender by Tenant.

11.2 Damages for Default. Whether or not Landlord retakes possession
or relets the Property, Landlord may recover all damages caused by the default
(including, but not limited to, unpaid rent, attorneys' fees relating to the
default, and costs of reletting reasonably incurred by Landlord). Landlord may
sue periodically to recover damages as they accrue during the remainder of the
Lease term without barring a later action for further damages. Landlord may at
any time bring an action for accrued damages plus damages for the remaining
Lease term equal to the difference between the rent specified in this Lease and
the reasonable rental value of the Property for the remainder of the term,
discounted to the time of judgment at the rate of nine percent (9%) per annum.

10
<PAGE>
11.3 Cure of Tenant's Default. Without prejudice to any other remedy
for default, Landlord may perform any obligation or make any payment required to
cure a default by Tenant in the event Tenant fails to do so after notice and
opportunity to cure as provided in this Lease. The reasonable cost of such
performance, including attorneys' fees and all disbursements, shall be repaid by
Tenant upon demand, together with interest from the date of expenditure until
fully paid at the rate of nine percent (9%) per annum, but not in any event at a
rate greater than the maximum rate of interest permitted by law.

12. Surrender at Expiration.

12.1 Condition of Property. Upon expiration of the Lease term or
earlier termination on account of default, Tenant shall deliver all keys to
Landlord and surrender the leased Property and each component thereof in good,
safe and serviceable condition and broom clean; provided that ordinary
depreciation and wear from ordinary use for the purpose for which the Property
was let, casualty loss covered by the waiver of subrogation or casualty loss
provisions of this Lease need not be restored, but all repair, restoration and
maintenance for which Tenant is responsible shall be completed to the latest
practical date prior to such surrender.

12.2 Fixtures. Upon the expiration or earlier termination of this
Lease, Tenant shall remove all of its furnishings, furniture and trade fixtures
and restore all damage caused by such removal.

12.3 Holdover. If Tenant does not vacate the Property at the time
required by this Lease, Landlord shall have the option to treat Tenant as a
tenant from month to month, subject to all of the provisions of this Lease
(except that the term will be month to month) or to eject Tenant from the
Property and recover damages caused by wrongful holdover. Failure of Tenant to
remove furniture, furnishings or trade fixtures which Tenant is required to
remove under this Lease shall constitute a failure to vacate to which this
paragraph shall apply if the Tenant's property not removed substantially
interferes with occupancy of the Property by another tenant or with occupancy by
Landlord for any purpose, including preparation for a new tenant. If a
month-to-month tenancy results from a holdover by Tenant, the tenancy shall be
terminable at the end of any monthly rental period on written notice from
Landlord given not less than thirty (30) days prior to the termination date
which shall be specified in the notice. Tenant waives any notice which would
otherwise be provided by law with respect to month-to-month tenancy.

13. Warranty of Quiet Enjoyment. So long as Tenant complies with this
Lease, Tenant shall be entitled to peaceable possession of the Property under
this Lease free from any interference by Landlord and those claiming through
Landlord, subject to the terms and conditions of this Lease.

11
<PAGE>
14. General Provisions.

14.1 Time of Essence. Time is of the essence of the performance of
each obligation under this Lease.

14.2 Modifications. This Lease may not be modified except by
endorsement in writing attached to this Lease, dated and signed by the parties.

14.3 Nonwaiver. Waiver of performance of any provision of this Lease
shall not be a waiver of nor prejudice the party's right otherwise to require
performance of the same provision or any other provision.

14.4 Succession. Subject to the limitations on transfer of Tenant's
interest, this Lease shall bind and inure to the benefit of the parties, their
respective heirs, successors and assigns.

14.5 Inspection. Landlord and its authorized representatives may enter
at any reasonable time upon reasonable prior written notice (except in the case
of an emergency) to determine Tenant's compliance with this Lease, to make
necessary repairs or, during the final ninety (90) days of a term if Tenant has
not exercised its right to extend the Lease for a subsequent period, to show the
Property to any prospective tenants.

14.6 Attornment. In the event any proceedings are brought for
termination of any ground lease or foreclosure of any mortgage or deed of trust,
or in the event of the exercise of the power of sale under any ground lease,
mortgage or trust deed made by Landlord covering the Property, Tenant shall
attorn to the ground lessor or purchaser upon any such termination, foreclosure
or sale and recognize such ground lessor or purchaser as Landlord under this
Lease.

14.7 Subordination to Ground Leases and Mortgages. This Lease, at
Landlord's option, shall be subordinate to any ground lease hereinafter entered
into by Landlord with respect to the Building or Property, the lien of any trust
deed or mortgage subsequently placed upon the Building or Property, and to any
and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof; provided,
however, that as to any such ground lease and the lien of any such trust deed or
mortgage, Tenant's right to quiet possession of the Property and enjoyment of
its rights under this Lease shall not be disturbed so long as Tenant is not in
default under this Lease. Tenant's agreement to subordinate its interest in this
Lease to any ground lease, mortgage or deed of trust is expressly conditioned
upon Tenant's continued right to quiet enjoyment of the Property and to the
exercise of the other rights granted Tenant under this Lease without
disturbance, interference or reduction, notwithstanding any termination of such
ground lease or the foreclosure or other action, so long as Tenant is not in
material default under this Lease and further provided that Tenant first
receives a written agreement to that effect reasonably

12
<PAGE>
satisfactory to Tenant from each such party to whom subordination is sought or
that holds an interest superior to this Lease.

14.8 Estoppel Certificates. Within ten (10) days after either party's
(or such party's lender's) written request, the other party shall deliver a
written statement stating the date to which the rent and other charges have been
paid, whether this Lease is unmodified and in full force and effect, and any
other matters that may reasonably be requested regarding the status of the
Lease.

14.9 Notices. Notices under this Lease shall be in writing, effective
when delivered, or, if mailed, effective on the second day after mailed, postage
prepaid to the address for the party stated in this Lease, or to such other
address as either party may specify by notice to the other. Rent shall be
payable to Landlord at the same address and in the same manner.

14.10 Attorneys' Fees. In the event suit or action is instituted to
interpret or enforce the terms of this Lease or to rescind this Lease, the
prevailing party shall be entitled to recover from the other party such sum as
the court may adjudge reasonable as attorneys' fees at trial, on appeal and on
any petition for review or other proceeding, including any bankruptcy case or
proceeding or arbitration, in addition to all other sums provided by law.

14.11 Applicable Law. This Lease shall be construed, applied and
enforced in accordance with the laws of the State of Oregon.

14.12 Prior Agreements. This Lease (including the exhibit(s)
incorporated in this Lease by this reference as though fully set forth in this
Lease) is the entire, final and complete agreement of the parties with respect
to the matters set forth in this Lease, and supersedes and replaces all prior
written and oral agreements between the parties or their representatives with
respect to such matters.

14.13 Validity of Provisions. If any provision in this Lease shall be
invalid, illegal or unenforceable in any respect, the validity of the remaining
provisions contained in this Lease shall not be affected.

14.14 Consents/Actions of Parties. Wherever this Lease calls for the
consent, approval, determination or exercise of judgment by either party, such
shall not be unreasonably withheld, delayed, conditioned, made or exercised. For
the purposes of this Lease, the consent, approval, determination or exercise of
judgment by either of the persons making up Landlord shall be binding upon all
persons making up Landlord.

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<PAGE>
continuance of such force majeure, and Tenant's time for performance of such
obligation shall be delayed on a day for day basis for the period of such force
majeure, provided written notice thereof is given to Landlord. The term "force
majeure" as used herein shall mean the following: unusually adverse weather;
acts of God; acts of public enemies; injunctions; strikes; orders or restraints
of the United States of America or the State of Oregon, or their respective
departments, agencies or officials, or any civil or military authority;
insurrections; riots; or any other similar cause or event not reasonably within
the control of Tenant and to the extent not resulting from Tenant's negligence.
Tenant agrees, however, to proceed with all reasonable dispatch to perform its
obligations under this Lease after the cause or causes preventing Tenant from
carrying out its obligations under this Lease cease to exist.

14.16 Memorandum of Lease. At the option of either party, the parties
shall execute a memorandum of this Lease, in recordable form, for the purpose of
placing third parties on notice of Tenant's lease of the Property.

IN WITNESS WHEREOF, the parties have executed this Lease as of the
date first above written.

LANDLORD: TIMOTHY P. BOYLE
-----------------------------------------
Timothy P. Boyle

GERTRUDE BOYLE
-----------------------------------------
Gertrude Boyle

TENANT: COLUMBIA SPORTSWEAR COMPANY,
an Oregon corporation

By:
-------------------------------------
Title:
----------------------------------

OFFICE LEASE

DATED AS OF: ___________________, 199___

BETWEEN: GERTRUDE BOYLE
c/o 6600 N. Baltimore
P.O. Box 83239
Portland, OR 97382-0239 LANDLORD

AND: COLUMBIA SPORTSWEAR COMPANY,
an Oregon corporation
6600 N. Baltimore
P.O. Box 83239
Portland, OR 97382-0239 TENANT

Tenant wishes to lease from Landlord and Landlord wishes to lease to Tenant
the following property (the "Property") located in the State of Oregon and
described as follows:

Certain real property and the office building and other
improvements, including, without limitation, the related
parking and access areas ("Building") located at 6600 N.
Baltimore Street in the City of Portland, Multnomah County,
Oregon, consisting of a parcel of land containing
approximately 40,000 square feet and a Building containing
approximately 23,650 sq. ft. of gross area; commonly known
as the Columbia Sportswear Office, Portland, Oregon,
together with all appurtenances, easements and rights of way
related thereto.

NOW, THEREFORE, Landlord hereby leases the Property to Tenant on the
following terms:

1. Term; Possession.

1.1 Term. The term of this Lease shall commence on the Commencement
Date described below and continue for sixty (60) full calendar months (plus the
partial month, if any, in which this Lease commences), unless sooner terminated
or extended as provided in this Lease. As used in this Lease, "Commencement
Date" shall mean the date first set forth above.
<PAGE>
1.2 Acceptance of Property. Tenant has been in occupancy of the
Property for a considerable period prior to the Commencement date and accepts
the land and Property in its present condition, AS IS, WHERE IS. Landlord shall
not be required to perform or pay for any work to ready or keep the Property for
Tenant's occupancy.

1.3 Extension Option. So long as Tenant is not then in default under
this Lease, Tenant will have an option to extend the term of this Lease for one
additional period of five (5) years, commencing upon the otherwise scheduled
expiration of the initial term. In the event an option is not exercised, such
option automatically shall be extinguished. The other terms and conditions of
this Lease will remain the same during the extension period. Exercise of the
extension option shall be by notice given not more than one hundred eighty (180)
days nor less than ninety (90) days prior to expiration of the initial term.

2. Rental.

2.1 Base Rental. During the term, as the same may be extended, Tenant
will pay to Landlord on a monthly basis a monthly base rent of $13,008.00 per
month, subject to adjustment as provided below.

3. Use of Property.

3.1 Permitted Use. Tenant shall use the Property only for conducting
the following business and for no other purpose without Landlord's written
consent: general office and related, incidental uses consistent with applicable
laws, ordinances, regulations, covenants, conditions and restrictions of record
affecting the Property.

3.5 Signs. Signs will be designed and constructed in compliance with
applicable city and county sign codes and covenants, conditions and restrictions
affecting the Property.

4. Maintenance and Alterations.

4
<PAGE>
5. Taxes; Utilities.

5.1 Personal Property Taxes. Tenant shall pay all personal property
taxes assessed against all personal property, equipment or trade fixtures on the
Property.

6. Liability to Third Persons.

7. Insurance and Damage.

6
<PAGE>
The policies shall be in form, amount and with companies reasonably acceptable
to Landlord and its designated lender. Tenant will deliver to Landlord and its
designated lender originals of the policies or ACORD 27 certificates of coverage
acceptable to Landlord and its lender, if any, reflecting the requirements of
this Lease and bearing endorsements requiring thirty (30) days' written notice
to Landlord and such lender prior to any cancellation or reduction of coverage.

7
<PAGE>
Tenant hereunder in the event of any Casualty except upon termination of this
Lease as provided in this Section 7.3.

7.4 Repair of Tenant's Property. Repair, replacement or restoration of
any fixtures, equipment and personal property owned by Tenant or otherwise
located on or used in connection with the Property shall be the responsibility
of Tenant.

8. Condemnation.

8
<PAGE>
condemnation award; and (c) then to Landlord and Tenant as their respective
interests may appear, provided that Tenant shall not be entitled only to amounts
awarded for taking of its trade fixtures and not to any award related to the
unexpired term of this Lease or the Property.

8.5 Inverse Condemnation. In the event of any inverse condemnation or
regulatory taking, either party shall be free to pursue its own claim for
damages resulting from such event. Each party shall reasonably cooperate with
the other in connection with the pursuit of any such claim by the other party,
provided neither party shall be obligated to incur unreimbursed out-of-pocket
expenses in so doing.

9. Transfers by Tenant.

9.2 Obligations After Transfer. The giving of such consent in one
instance shall not preclude the need for Tenant to obtain Landlord's consent to
further transfers where

9
<PAGE>
required by this Lease. If Tenant is permitted to make any transfer, Tenant
shall not be relieved of its obligations, but shall remain liable to Landlord
for performance of all such obligations.

10. Tenant Default. The following shall be events of default:

10.1 Payment Default. Tenant fails to make any rent or other payment
under this Lease within ten (10) days after written notice to Tenant from
Landlord that it is past due.

11. Remedies on Default. Upon default, Landlord may exercise any one or
more of the following remedies, or any other remedy available under applicable
law:

10
<PAGE>
of the Property for the remainder of the term, discounted to the time of
judgment at the rate of nine percent (9%) per annum.

11.3 Cure of Tenant's Default. Without prejudice to any other remedy
for default, Landlord may perform any obligation or make any payment required to
cure a default by Tenant in the event Tenant fails to do so after notice and
opportunity to cure as provided in this Lease. The reasonable cost of such
performance, including attorneys' fees and all disbursements, shall be repaid by
Tenant upon demand, together with interest from the date of expenditure until
fully paid at the rate of nine percent (9%) per annum, but not in any event at a
rate greater than the maximum rate of interest permitted by law.

12. Surrender at Expiration.

12.2 Fixtures. Upon the expiration or earlier termination of this
Lease, Tenant shall remove all of its furnishings, furniture and trade fixtures
and restore all damage caused by such removal.

11
<PAGE>
13. Warranty of Quiet Enjoyment. So long as Tenant complies with this
Lease, Tenant shall be entitled to peaceable possession of the Property under
this Lease free from any interference by Landlord and those claiming through
Landlord, subject to the terms and conditions of this Lease.

14. General Provisions.

14.1 Time of Essence. Time is of the essence of the performance of
each obligation under this Lease.

14.2 Modifications. This Lease may not be modified except by
endorsement in writing attached to this Lease, dated and signed by the parties.

14.4 Succession. Subject to the limitations on transfer of Tenant's
interest, this Lease shall bind and inure to the benefit of the parties, their
respective heirs, successors and assigns.

12
<PAGE>
is expressly conditioned upon Tenant's continued right to quiet enjoyment of the
Property and to the exercise of the other rights granted Tenant under this Lease
without disturbance, interference or reduction, notwithstanding any termination
of such ground lease or the foreclosure or other action, so long as Tenant is
not in material default under this Lease and further provided that Tenant first
receives a written agreement to that effect reasonably satisfactory to Tenant
from each such party to whom subordination is sought or that holds an interest
superior to this Lease.

14.11 Applicable Law. This Lease shall be construed, applied and
enforced in accordance with the laws of the State of Oregon.

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<PAGE>
approval, determination or exercise of judgment by either of the persons making
up Landlord shall be binding upon all persons making up Landlord.

14.15 Force Majeure. If by reason of force majeure Tenant is unable in
whole or in part to carry out its obligations under this Lease (excluding the
payment of rent or other amount payable by Tenant under this Lease), Tenant
shall not be deemed in default during the continuance of such force majeure, and
Tenant's time for performance of such obligation shall be delayed on a day for
day basis for the period of such force majeure, provided written notice thereof
is given to Landlord. The term "force majeure" as used herein shall mean the
following: unusually adverse weather; acts of God; acts of public enemies;
injunctions; strikes; orders or restraints of the United States of America or
the State of Oregon, or their respective departments, agencies or officials, or
any civil or military authority; insurrections; riots; or any other similar
cause or event not reasonably within the control of Tenant and to the extent not
resulting from Tenant's negligence. Tenant agrees, however, to proceed with all
reasonable dispatch to perform its obligations under this Lease after the cause
or causes preventing Tenant from carrying out its obligations under this Lease
cease to exist.

IN WITNESS WHEREOF, the parties have executed this Lease as of the
date first above written.

LANDLORD: GERTRUDE BOYLE
-----------------------------------------
Gertrude Boyle

TENANT: COLUMBIA SPORTSWEAR COMPANY,
an Oregon corporation

By:
-------------------------------------
Title:
----------------------------------

TAX INDEMNIFICATION AGREEMENT

This Tax Indemnification Agreement ("Agreement") is made this ___ day of
__________, 1998, by and among Columbia Sportswear Company, an Oregon
corporation (the "Corporation"), the undersigned shareholders of the Corporation
(jointly the "Shareholders" and each individually a "Shareholder") and the
undersigned spouses of certain Shareholders.

WHEREAS, the Corporation and the Shareholders believe that the Corporation
has been an "S corporation" (within the meaning of Section 1361 of the Internal
Revenue Code of 1986, as amended ("IRC")) for federal and Oregon income tax
purposes since February 1, 1988;

WHEREAS, the Corporation contemplates a public offering (the "Offering") of
its stock;

WHEREAS, it is anticipated that the Corporation's election to be an S
corporation will terminate as a result of the Offering; and

WHEREAS, in connection with the public offering the Corporation and the
Shareholders wish to provide for certain indemnifications with respect to the
Corporation's prior status as an S corporation.

NOW, THEREFORE, the parties agree as follows:

1. Consistent Reporting by Corporation. For all taxable years ended on or
before the day before the Corporation's S corporation election terminates, the
Corporation shall not, without the unanimous consent of the Shareholders, file
any amended income tax return or change any election or accounting method with
respect to the Corporation if such filing or change would increase any federal,
state, local (including but not limited to city or county) or foreign income tax
liability (including interest and penalties, if any) (collectively "Tax
Liability") of any Shareholder for any period.

2. Indemnification.

(a) Indemnification of Shareholders.

(i) Indemnification for Tax Liability. The Corporation hereby agrees
to indemnify and hold the Shareholders harmless from, against and in respect of
any Tax Liability incurred by them resulting from a final judicial or
administrative adjustment (by reason of an amended return, claim for refund,
audit or otherwise) to the Corporation's taxable income which is the result of
an increase or change in character of the Corporation's income during the period
it was treated as an S corporation.
<PAGE>
(ii) Tax Adjustment. In the event that an indemnification payment
pursuant to Section 2(a)(i) exceeds the amount of the increase in the
Corporation's accumulated adjustments account (as defined in IRC ss. 1368(e)(1))
resulting from the adjustment (or to the extent such payment to the Shareholders
does not qualify as a distribution during the post-termination transition period
as defined in IRC ss. 1377(b)) such amount shall be increased by an amount
necessary to equal the Shareholder's additional Tax Liability related to such
amount.

(iii) Fees and Costs. The Corporation hereby agrees to reimburse the
Shareholders for such professional fees or other costs as are reasonably
necessary to properly defend the Shareholders in the event of an audit or review
of a Shareholder's income tax return during a year in which the Shareholders
were reporting corporate income by virtue of the S corporation election.

(iv) Indemnification for Additional Tax. In all events, and to the
extent not otherwise reimbursed, the Corporation hereby agrees that if any
payment pursuant to this Section 2(a) is deemed to be taxable income to a
Shareholder, the amount of such payment to the Shareholder shall be increased by
an amount necessary to equal the Shareholder's additional Tax Liability related
to such amount (including, without limitation any taxes on such additional
amounts) so that the net amount received and retained by the Shareholder after
payment by the Shareholder of all taxes associated with the payment is equal to
the payment otherwise required to be made.

(b) Indemnification of Corporation. If there is a final judicial or
administrative determination that the Corporation was not an S corporation for
all or any part of a taxable year beginning on or after February 1, 1988, and
ended on or before the day before the Offering (the "Non S Period"), each
Shareholder agrees to pay to the Corporation the amount by which (i) the net
aggregate Tax Liability of the Shareholder attributable to the pass through of
tax items from the Corporation had the Corporation been an S corporation
throughout the Non S Period exceeds (ii) the net aggregate Tax Liability of the
Shareholder as a result of non S corporation distributions made by the
Corporation to the Shareholder (including, without limitation, distributions
that would have qualified as distributions within the post-termination
transition period as defined in IRC ss. 1377(b) had the Corporation been an S
corporation during the entire Non S Period); provided, however, that the amount
payable by any Shareholder pursuant to this Section 2(b) shall not exceed the
net amount of refunds actually received by the Shareholder with respect to the
Non S Period that are attributable to Corporation tax items passed through to
the Shareholder or to Corporation distributions paid to the Shareholder. Each
Shareholder agrees, at the request of the Company, to take reasonable actions to
seek refunds of any excess Tax Liability paid by the Shareholder for the Non S
Period. The Corporation shall pay for the preparation and prosecution of such
refund claims.

2
<PAGE>
(c) Payment. Any payment required to be made pursuant to this Agreement
shall be paid within seven days after receipt of written notice from the
indemnified person that a payment is due hereunder.

3. Waiver of Invalid Election or Termination of S Status. If the Internal
Revenue Service determines that the Corporation failed validly or timely to
elect to be an S corporation or that the Corporation's status as an S
corporation was terminated inadvertently, and if the Corporation wishes to
obtain a ruling pursuant to IRC ss. 1362(f), each Shareholder agrees to make any
adjustments required pursuant to IRC ss. 1362(f)(4) and approved by the
Corporation's board of directors. Any such adjustments shall be subject to the
indemnification provisions of Section 2(a).

4. Miscellaneous. This Agreement shall be governed by Oregon law, without
regard to choice of law rules applied by Oregon courts. This Agreement shall be
binding on and shall inure to the benefit of successors and assigns of the
parties, including all persons to whom any Shareholder transfers stock of the
Corporation. Section headings shall not affect the interpretation of this
Agreement. This Agreement embodies the entire agreement of the parties with
respect to the subject matter contained herein. The parties hereto agree to take
all further actions necessary to effect the agreements contained herein.

CORPORATION: COLUMBIA SPORTSWEAR COMPANY

By:
-------------------------------------
President

SHAREHOLDERS:

-----------------------------------------
Gertrude Boyle

-----------------------------------------
Gertrude Boyle, Trustee of Gertrude Boyle
Trust #1 u/a dtd December 15, 1997

-----------------------------------------
Gertrude Boyle, Trustee of Gertrude Boyle
Trust #2 u/a dtd December 15, 1997

3
<PAGE>

-----------------------------------------
[Gertrude Boyle, Trustee u/a/d December ___,
1997 f/b/o Gertrude Boyle]

-----------------------------------------
Timothy Boyle

-----------------------------------------
Mary R. Boyle, Trustee u/a/d September 18,
1997 f/b/o Molly E. Boyle

-----------------------------------------
Mary R. Boyle, Trustee u/a/d September 18,
1997 f/b/o Joseph P. Boyle

-----------------------------------------
Sarah A. Bany

-----------------------------------------
David C. Bany, Trustee of the Bany Family
Trust u/a/d July 31, 1997

-----------------------------------------
Sarah A. Bany, Trustee of Sarah A. Bany
Trust #1 u/a dtd December 15, 1997

-----------------------------------------
Sarah A. Bany, Trustee of Sarah A. Bany
Trust #2 u/a dtd December 15, 1997

-----------------------------------------
Don Richard Santorufo

4
<PAGE>
If I have any interest, under community property laws or otherwise, in the
shares of Corporation stock by my spouse, I hereby consent to the foregoing
agreement and agree to be bound by the provisions thereof.

-----------------------------------------
Mary R. Boyle

-----------------------------------------
David C. Bany

-----------------------------------------
Carole Santorufo

Exhibit 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Columbia Sportswear
Company on Form S-1 of our report dated February 6, 1998 (March __, 1998 as to
Note 1) appearing in the Prospectus, which is part of this Registration
Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP

Portland, Oregon
February 23, 1998

- --------------------------------------------------------------------------------

The preceding consent is in the form that will be furnished by Deloitte & Touche
LLP that will be furnished upon consummation of the initial public offering
assuming that no material events have occurred that would affect the
accompanying financial statements or required disclosures therein.

<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 4,001
<SECURITIES> 0
<RECEIVABLES> 78,547
<ALLOWANCES> 2,461
<INVENTORY> 48,300
<CURRENT-ASSETS> 130,817
<PP&E> 35,277
<DEPRECIATION> 0
<TOTAL-ASSETS> 174,477
<CURRENT-LIABILITIES> 168,111
<BONDS> 2,831
0
0
<COMMON> 17,886
<OTHER-SE> 92,649
<TOTAL-LIABILITY-AND-EQUITY> 174,477
<SALES> 353,452
<TOTAL-REVENUES> 0
<CGS> 198,946
<TOTAL-COSTS> 110,204
<OTHER-EXPENSES> 3,593
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 40,709
<INCOME-TAX> 1,413
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,296
<EPS-PRIMARY> .97
<EPS-DILUTED> .96

</TABLE>