<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF
1934
For the transition period from ______________ to ______________
COLUMBIA SPORTSWEAR COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Oregon 0-23939 93-0498284
----------------------------------- ---------------- ----------------------
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification Number)
6600 North Baltimore Portland, Oregon 97203
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
</TABLE>
(503) 286-3676
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
----- ------
The number of shares of Common Stock outstanding on September 30, 2000, was
25,609,667.
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COLUMBIA SPORTSWEAR COMPANY
SEPTEMBER 30, 2000
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1 - Financial Statements - Columbia Sportswear Company (Unaudited)
Condensed Consolidated Balance Sheets .................................... 2
Condensed Consolidated Statements of Operations .......................... 3
Condensed Consolidated Statements of Cash Flows .......................... 4
Notes to Condensed Consolidated Financial Statements ..................... 5
ITEM 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................. 8
ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk ......... 11
PART II. OTHER INFORMATION
ITEM 6 - Exhibits and Reports on Form 8-K ..................................... 12
SIGNATURES .................................................................... 13
</TABLE>
1
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ITEM 1 - FINANCIAL STATEMENTS
COLUMBIA SPORTSWEAR COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 DECEMBER 31,1999
------------------ ----------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 10,652 $ 14,622
Accounts receivable, net of allowance of $6,114
and $4,535, respectively 219,888 118,709
Inventories (Note 2) 120,837 86,465
Deferred tax asset 11,138 11,822
Prepaid expenses and other current assets 4,262 2,425
--------- ---------
Total current assets 366,777 234,043
Property, plant, and equipment, net 64,241 68,960
Intangibles and other assets (Note 3) 9,590 1,987
--------- ---------
Total assets $ 440,608 $ 304,990
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 74,741 $ 31,676
Accounts payable 55,530 36,779
Accrued liabilities 32,865 19,156
Income taxes payable 13,359 2,075
Current portion of long-term debt 301 252
--------- ---------
Total current liabilities 176,796 89,938
Long-term debt 26,080 26,665
Deferred tax liability 3,849 4,012
--------- ---------
Total liabilities 206,725 120,615
Commitments and contingencies -- --
Shareholders' Equity:
Preferred stock; 10,000 shares authorized; none
issued and outstanding -- --
Common stock; 50,000 shares authorized; 25,610
and 25,350 issued and outstanding 131,334 126,265
Retained earnings 110,398 65,290
Accumulated other comprehensive loss (4,950) (3,770)
Unearned portion of restricted stock issued for
future services (2,899) (3,410)
--------- ---------
Total shareholders' equity 233,883 184,375
--------- ---------
Total liabilities and shareholders' equity $ 440,608 $ 304,990
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements
2
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COLUMBIA SPORTSWEAR COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $247,346 $187,568 $452,938 $348,198
Cost of sales 131,179 98,097 246,504 194,813
-------- -------- -------- --------
Gross profit 116,167 89,471 206,434 153,385
Selling, general, and administrative 55,362 47,421 132,673 109,668
-------- -------- -------- --------
Income from operations 60,805 42,050 73,761 43,717
Interest expense, net 1,413 1,729 2,837 3,392
-------- -------- -------- --------
Income before income tax 59,392 40,321 70,924 40,325
Income tax expense (Note 4) 21,174 16,430 25,816 16,432
-------- -------- -------- --------
Net income (Note 5) $ 38,218 $ 23,891 $ 45,108 $ 23,893
======== ======== ======== ========
Net income per share (Note 6):
Basic $ 1.49 $ 0.94 $ 1.76 $ 0.94
Diluted $ 1.44 $ 0.93 $ 1.72 $ 0.94
Weighted average shares outstanding
(Note 6) :
Basic 25,603 25,303 25,596 25,292
Diluted 26,547 25,627 26,278 25,552
</TABLE>
See accompanying notes to condensed consolidated financial statements
3
<PAGE> 5
COLUMBIA SPORTSWEAR COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 45,108 $ 23,893
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization 10,048 9,175
Non-cash compensation 511 726
(Gain) loss on disposition of property, plant, and
equipment (318) 73
Deferred income taxes 494 403
Changes in operating assets and liabilities:
Accounts receivable (103,954) (77,356)
Inventories (35,879) (22,785)
Prepaid expenses and other current assets (1,859) 926
Intangibles and other assets 57 108
Accounts payable 21,030 4,766
Accrued liabilities 13,848 10,341
Income taxes payable 12,820 10,781
--------- ---------
Net cash used in operating activities (38,094) (38,949)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (5,390) (10,734)
Proceeds from sale of property, plant, and equipment 432 14
Purchase of trademarks (7,967) --
--------- ---------
Net cash used in investing activities (12,925) (10,720)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from notes payable 44,718 51,749
Repayment on long-term debt (537) (499)
Proceeds from issuance of common stock 3,524 476
--------- ---------
Net cash provided by financing activities 47,705 51,726
--------- ---------
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH (656) (233)
--------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (3,970) 1,824
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 14,622 6,777
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,652 $ 8,601
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements
4
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COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared by the management of Columbia Sportswear Company (the "Company") and in
the opinion of management contain all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the Company's financial
position as of September 30, 2000, and the results of operations for the three
and nine months ended September 30, 2000 and 1999 and cash flows for the nine
months ended September 30, 2000 and 1999. It should be understood that
accounting measurements at interim dates inherently involve greater reliance on
estimates than at year end. The results of operations for the three and nine
months ended September 30, 2000 are not necessarily indicative of the results to
be expected for the full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. It is suggested
that these condensed consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999.
NOTE 2. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
------------------ -----------------
<S> <C> <C>
Raw materials $ 3,431 $ 3,459
Work in process 5,491 9,197
Finished goods 111,915 73,809
------------- ------------------
$ 120,837 $ 86,465
============= ==================
</TABLE>
NOTE 3. INTANGIBLES AND OTHER ASSETS
In September 2000, the Company acquired the Sorel trademark rights, associated
brand names and other related intellectual property rights for approximately $8
million in cash. The acquired intangible assets are being amortized over their
estimated useful lives on a straight-line basis of ten years.
NOTE 4. INCOME TAXES
A reconciliation of the statutory U.S. federal tax provision and the Company's
reported tax provision for the indicated periods is provided below.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------- ----------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Provision for federal income taxes at the
statutory rate 35.0% 35.0% 35.0% 35.0%
State and local income taxes, net of federal
benefit 3.0 3.7 3.0 3.7
Non-U.S. income taxed at different rates 1.3 1.5 1.3 1.5
Foreign tax credits (3.3) -- (2.6) --
Other (0.3) 0.5 (0.3) 0.5
---- ---- ---- ----
Actual provision for income taxes 35.7% 40.7% 36.4% 40.7%
==== ==== ==== ====
</TABLE>
5
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The decrease in tax rates, both for the quarter and nine months ended September
30, 2000, was primarily due to the utilization of foreign tax credits which were
generated through the repatriation of earnings from a foreign subsidiary. It is
the Company's intention to repatriate additional earnings from our foreign
subsidiaries as soon as we determine it is tax effective to do so.
NOTE 5. COMPREHENSIVE INCOME
Comprehensive income and its components, net of tax, is as follows (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income $ 38,218 $ 23,891 $ 45,108 $ 23,893
Foreign currency translation adjustments (1,160) (680) (1,452) (354)
Unrealized gain (loss) on derivative
transactions 307 (28) 272 (80)
-------- -------- -------- --------
Comprehensive income $ 37,365 $ 23,183 $ 43,928 $ 23,459
======== ======== ======== ========
</TABLE>
NOTE 6. NET INCOME PER SHARE
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share," requires dual presentation of basic and diluted earnings per share
("EPS"). Basic EPS is based on the weighted average number of common shares
outstanding. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock.
There were no adjustments to net income in computing diluted net income per
share for the three and nine months ended September 30, 2000 and 1999. A
reconciliation of the common shares used in the denominator for computing basic
and diluted net income per share is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Weighted average common shares outstanding,
used in computing basic net income per share 25,603 25,303 25,596 25,292
Effect of dilutive stock options 944 324 682 260
------ ------ ------ ------
Weighted-average common shares outstanding,
used in computing diluted net income per
share 26,547 25,627 26,278 25,552
====== ====== ====== ======
Net income per share of common stock:
Basic $ 1.49 $ 0.94 $ 1.76 $ 0.94
Diluted $ 1.44 $ 0.93 $ 1.72 $ 0.94
</TABLE>
6
<PAGE> 8
NOTE 7. SEGMENT INFORMATION
The Company operates in one industry segment: the design, production, marketing
and selling of active outdoor apparel and footwear including outerwear,
sportswear, rugged footwear, and accessories. The geographic distribution of the
Company's net sales, income before income tax, and identifiable assets are
summarized in the following table (in thousands). Inter-geographic net sales,
which are recorded at a negotiated mark-up and eliminated in consolidation, are
not material.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales to unrelated entities:
United States $ 182,046 $ 139,836 $ 322,721 $ 256,314
Canada 30,766 25,189 48,142 38,946
Other International 34,534 22,543 82,075 52,938
--------- --------- --------- ---------
$ 247,346 $ 187,568 $ 452,938 $ 348,198
========= ========= ========= =========
Income before income tax:
United States $ 50,934 $ 33,989 58,511 35,020
Canada 8,256 8,098 9,604 10,429
Other International 2,322 1,464 4,446 6
Less interest and other income
(expense) and eliminations (2,120) (3,230) (1,637) (5,130)
--------- --------- --------- ---------
$ 59,392 $ 40,321 $ 70,924 $ 40,325
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
--------- ---------
<S> <C> <C>
Total assets:
United States $ 405,132 $ 274,222
Canada 42,140 24,905
Other international 56,558 45,254
--------- ---------
Total identifiable assets 503,830 344,381
Eliminations (63,222) (39,391)
--------- ---------
Total assets $ 440,608 $ 304,990
========= =========
</TABLE>
NOTE 8. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
As part of the Company's risk management programs, the Company uses a variety of
financial instruments, including foreign currency option and forward exchange
contracts. The Company does not hold or issue derivative financial instruments
for trading purposes.
The Company uses a combination of foreign currency option and forward exchange
contracts to hedge against the currency risk associated with Japanese yen,
Canadian dollar and European Euro denominated, firmly committed and anticipated
transactions for the next twelve months.
The Company accounts for these instruments as cash flow hedges. In accordance
with SFAS No. 133, such financial instruments are marked-to-market with the
offset to shareholders' equity and then subsequently recognized as a component
of gross margin when the underlying transaction is recognized. The Company
measures hedge effectiveness of foreign currency option and forward exchange
contracts based on the forward price of the underlying commodity. Hedge
ineffectiveness was not material during the three and nine months ended
September 30, 2000 and 1999.
7
<PAGE> 9
NOTE 9. FUTURE ACCOUNTING CHANGES
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements". The
effective date of the bulletin was delayed by the issuance of SAB No. 101A and
SAB NO. 101B and will be effective for the Company's fourth quarter of fiscal
year 2000. Management does not expect this bulletin to have a material effect on
the Company's consolidated financial statements.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS
The statements in this report and statements management may make from time to
time concerning future liquidity, financing, working capital requirements and
the impact of Euro implementation on our business constitute forward-looking
statements that are subject to risks and uncertainties. Many factors could cause
actual results to differ materially from those projected in such forward looking
statements, including risks described in our annual report on form 10-K for the
year ended December 31, 1999 under the heading "Factors That May Affect Our
Business".
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected income
statement data expressed as a percentage of net sales.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ---------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 53.0 52.3 54.4 55.9
Gross profit 47.0 47.7 45.6 44.1
Selling, general and administrative 22.4 25.3(1) 29.3 31.5(1)
Income from operations 24.6 22.4 16.3 12.6
Interest expense, net 0.6 0.9 0.6 1.0
Income before income tax 24.0 21.5 15.7 11.6
Income tax expense 8.6 8.8 5.7 4.7
Net income 15.4% 12.7% 10.0% 6.9%
</TABLE>
(1) Includes a one-time charge of $1.5 million related to the closure of the
Company's manufacturing facility in Chaffee, Missouri.
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1999
NET SALES: Net sales increased 31.8% to $247.3 million for the three month
period ended September 30, 2000 from $187.6 million for the comparable period in
1999. Domestic sales increased 30.2% to $182.0 million for the three month
period ended September 30, 2000 from $139.8 million for the comparable period in
1999. Net international sales, excluding Canada, increased 53.3% to $34.5
million for the three month period ended September 30, 2000 from $22.5 million
for the comparable period in 1999. Canadian sales increased 22.2% to $30.8
million for the three month period ended September 30, 2000 from $25.2 million
for the same period in 1999. These increases were primarily attributable to
increased sales of outerwear, sportswear and footwear units across all regions.
8
<PAGE> 10
GROSS PROFIT: Gross profit as a percentage of net sales was 47.0% for the three
months ended September 30, 2000 compared to 47.7% for the comparable period in
1999. The decrease in gross margin was due primarily to weakness in the Euro
currency, which was partially offset by strong domestic margins resulting from
minimal off price sales during the three months ended September 30, 2000.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE: Selling, general, and
administrative expense increased 16.9% to $55.4 million for the three months
ended September 30, 2000 from $47.4 million for the comparable period in 1999,
primarily as a result of an increase in variable selling and operating expenses
to support the higher level of sales. As a percentage of sales, selling,
general, and administrative expenses decreased to 22.4% for the three months
ended September 30, 2000 from 25.3% for the comparable period in 1999. The
improvement in selling, general, and administrative expenses as a percentage of
sales was primarily the result of strong sales growth in the quarter and
continued leveraging of infrastructure investments. In addition, the third
quarter 1999 results included a $1.5 million charge for the closing of our
Chaffee, Missouri manufacturing plant.
INTEREST EXPENSE: Interest expense decreased by 18.3% for the three months ended
September 30, 2000 from the comparable period in 1999. This decrease was
attributable to our decreased borrowing requirements during the three months
ended September 30, 2000.
INCOME TAX EXPENSE: The provision for income taxes was $21.2 million and $16.4
million for the three months ended September 30, 2000 and 1999, respectively.
The provision for income taxes, as a percentage of pre-tax income was 35.7% and
40.7% for the three months ended September 30, 2000 and 1999, respectively. We
expect the provision for income taxes, as a percentage of pre-tax income to be
36.4% for the fiscal year ending December 31, 2000. The decrease in tax rates
was due primarily to the utilization of foreign tax credits.
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30,1999
NET SALES: Net sales increased 30.1% to $452.9 million for the nine month period
ended September 30, 2000 from $348.2 million for the comparable period in 1999.
Domestic sales increased 25.9% to $322.7 million for the nine month period ended
September 30, 2000 from $256.3 million for the comparable period in 1999. Net
international sales, excluding Canada, increased 55.2% to $82.1 million for the
nine month period ended September 30, 2000 from $52.9 million for the comparable
period in 1999. Canadian net sales increased 23.7% to $48.1 million for the nine
month period ended September 30, 2000 from $38.9 million for the comparable
period in 1999. These increases were primarily attributable to increased sales
of outerwear, sportswear and footwear units across all regions
GROSS PROFIT: Gross profit as a percentage of net sales was 45.6% for the nine
months ended September 30, 2000 compared to 44.1% for the comparable period in
1999. The increase in gross margin was due to several factors including: (1)
decreased sales of carry-over fall close-out products during the three months
ended March 31, 2000 when compared to the three months ended March 31, 1999, (2)
increased margin on sales of spring sportswear close-out products for the three
months ended June 30, 2000 when compared to the three months ended June 30,
1999, and (3) strong domestic margins resulting from minimal off price selling
during the three months ended September 30, 2000.
9
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSE: Selling, general, and
administrative expense increased 21.0% to $132.7 million for the nine months
ended September 30, 2000 from $109.7 million for the comparable period in 1999,
primarily as a result of an increase in variable selling and operating expenses
to support the higher level of sales. As a percentage of sales, selling,
general, and administrative expenses decreased to 29.3% for the nine months
ended September 30, 2000 from 31.5% for the comparable period in 1999 as we were
able to leverage our sales growth over our fixed operating expenses. In
addition, the third quarter 1999 results included a $1.5 million charge for the
closing of our Chaffee, Missouri manufacturing plant.
INTEREST EXPENSE: Interest expense decreased by 16.4% for the nine months ended
September 30, 2000 from the comparable period in 1999. This decrease was
attributable to our decreased borrowing requirements during the nine months
ended September 30, 2000.
INCOME TAX EXPENSE: The provision for income taxes was $25.8 million and $16.4
million for the nine months ended September 30, 2000 and 1999, respectively. The
provision for income taxes, as a percentage of pre-tax income was 36.4% and
40.7% for the nine months ended September 30, 2000 and 1999, respectively. We
expect the provision for income taxes, as a percentage of pre-tax income to be
36.4% for the fiscal year ending December 31, 2000. The decrease in tax rates
was due primarily to the utilization of foreign tax credits.
SEASONALITY OF BUSINESS
Our business is impacted by the general seasonal trends that are characteristic
of many companies in the outdoor apparel industry in which sales and profits are
highest in the third calendar quarter. Our products are marketed on a seasonal
basis, with a product mix weighted substantially toward the fall season. Results
of operations in any period should not be considered indicative of the results
to be expected for any future period. The sale of our products is subject to
substantial cyclical fluctuation or impact from unseasonal weather conditions.
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, cash
flows and financial position.
LIQUIDITY AND CAPITAL RESOURCES
Our primary ongoing funding requirements are to finance working capital and
expansion of the business. At September 30, 2000, we had total cash equivalents
of $10.7 million compared to $8.6 million at September 30, 1999. Cash used in
operating activities was $38.1 million for the nine months ended September 30,
2000 compared to cash used in operating activities of $38.9 million for the
comparable period in 1999. This decrease was primarily due to an increase in
earnings offset by an increase in accounts receivable and inventories for the
period, as a result of the higher sales level, as compared to the nine months
ended September 30, 1999.
Our primary capital requirements are for working capital, investing activities
associated with the expansion of our international operations and general
corporate needs. Net cash used in investing activities was $12.9 million for the
nine months ended September 30, 2000 and $10.7 million for the comparable period
in 1999. Net cash used for the nine months ended September 30, 2000 includes the
purchase of Sorel trademarks rights, associated brand names and other related
intellectual property rights for approximately $8.0 million.
Net cash provided by financing activities was $47.7 million for the nine months
ended September 30, 2000 compared to net cash provided by financing activities
of $51.7 million for the comparable period in 1999. This decrease was
attributable to our decreased borrowings relating to inventory purchases for the
nine months ended September 30, 2000.
10
<PAGE> 12
To fund our working capital requirements, we have available unsecured revolving
lines of credit with aggregate seasonal limits up to approximately $113 million.
As of September 30, 2000, $74.7 million was outstanding under these lines of
credit. Additionally, we maintain credit agreements in order to provide us with
unsecured import lines of credit with a combined limit of approximately $105
million available for issuing documentary letters of credit.
To finance expansion of our domestic distribution center, we entered into a note
purchase agreement in 1998. Pursuant to the note purchase agreement, we issued
senior promissory notes in the aggregate principal amount of $25 million,
bearing an interest rate of 6.68% and maturing August 11, 2008. Up to an
additional $15 million in shelf notes may be issued under the note purchase
agreement.
EURO CURRENCY CONVERSION
On January 1, 1999, the Euro was adopted as the national currency of
participating European Union countries - Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain. Initially,
the Euro will be used for non-cash transactions. Legacy currencies of the
participating member states will remain legal tender until January 1, 2002. On
that date, Euro-denominated bills and coins will be issued for use in cash
transactions.
The introduction of the Euro is a significant event with potential implications
for our existing operations within the participating countries. As such, we have
committed resources to conduct risk assessments and to take corrective actions,
where required, to ensure that we are prepared for the introduction of the Euro.
Progress regarding Euro implementation is reported periodically to management.
We have not experienced any significant operational disruptions to date and do
not expect the continued implementation of the Euro to cause any significant
operational disruptions. In addition, we have not incurred and do not expect to
incur any significant costs from the continued implementation of the Euro,
including any additional currency risk, which could materially affect our
liquidity or capital resources.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has not been any material change in the market risk disclosure contained
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999.
11
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
None.
12
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COLUMBIA SPORTSWEAR COMPANY
Date: __________________ _________________________________________
Patrick D. Anderson
Chief Financial Officer and Authorized
Officer
13
