Exhibit 99.1
     
Contact:   David W. Kiser
Director of Investor Relations
Columbia Sportswear Company
(503) 985-4584
COLUMBIA SPORTSWEAR COMPANY
REPORTS FIRST QUARTER 2006 RESULTS
Highlights:
•   First quarter net sales increased 5.9 percent to $260.2 million.
•   First quarter diluted earnings per share were $0.52 on 37.3 million weighted average shares, compared to $0.52 on 40.7 million weighted average shares for the first quarter of 2005.
•   Global fall future orders product backlog increased 11.6 percent to $720.7 million.
•   Fiscal 2006 net sales are estimated to increase approximately 10 percent, and diluted earnings per share are expected to be approximately $3.18, including approximately $0.20 from projected stock-based compensation expense in 2006.
PORTLAND, Ore. — April 27, 2006 — Columbia Sportswear Company (NASDAQ: COLM), a global leader in the active outdoor apparel and footwear industries, today announced first quarter net sales of $260.2 million for the quarter ended March 31, 2006, an increase of 5.9 percent over net sales of $245.7 million for the same period of 2005. The Company reported net income for the first quarter of $19.5 million, an 8.5 percent decrease compared to net income of $21.3 million for the same period of 2005. Diluted earnings per share for the first quarter of 2006 were $0.52 on 37.3 million weighted average shares, compared to diluted earnings per share of $0.52 for the first quarter of 2005 on 40.7 million weighted average shares. The decrease in weighted average shares outstanding is the result of the Company’s repurchase of shares over the past year.
Compared to the first quarter of 2005, U.S. sales increased 5.9 percent to $144.4 million, Other International sales increased 12.2 percent to $41.4 million, European sales increased 3.0 percent to $48.0 million, and Canadian sales increased 1.9 percent to $26.4 million for the first quarter of 2006.
Excluding changes in currency exchange rates, consolidated net sales increased 7.7 percent, U.S. sales increased 5.9 percent, European sales increased 13.7 percent, Other International sales increased 15.8 percent, and Canadian sales decreased 5.4 percent for the first quarter of 2006, compared to the same period of 2005 (see “Reconciliation of Net Sales Changes to Net Sales Changes Excluding Changes in Currency Exchange Rate” table below).
For the first quarter of 2006, sportswear sales increased 7.3 percent to $141.8 million, outerwear sales increased 7.8 percent to $55.2 million, equipment sales increased 52.9 percent to $5.2 million, footwear sales increased 1.8 percent to $50.7 million and accessories sales decreased 19.8 percent to $7.3 million, compared to the first quarter of 2005.
Tim Boyle, Columbia’s president and chief executive officer, commented, “First quarter sales were consistent with our expectations. Sales were driven by Columbia and Mountain Hardwear spring sportswear shipments in the U.S. and Japan, and were benefited by incremental footwear sales from

 

our newly acquired Montrail brand. Improved gross margins of fall closeout products in the U.S. favorably impacted global gross margins, but contracting European margins and the unfavorable impact of recording the Montrail inventory at fair value in purchase accounting more than offset the domestic gross margin increase. Gross margins in Europe decreased due to a challenging competitive environment, foreign currency hedge rates and costs associated with certain promotional campaigns. Consolidated selling and operating expenses were managed well, but increased $8.0 million, primarily due to additional personnel costs, including $3.1 million of incremental stock-based compensation expense. EPS results were benefited by the shares that we repurchased over the past year.”
Backlog
The Company reported that as of March 31, 2006, consolidated backlog increased 11.9 percent to $848.9 million compared to consolidated backlog of $758.9 million at March 31, 2005. Of this total, fall product backlog at March 31, 2006 was $720.7 million, an 11.6 percent increase over fall product backlog of $645.6 million at March 31, 2005. Excluding changes in currency exchange rates, consolidated backlog increased 13.1 percent, and fall product backlog increased 12.7 percent, compared to the prior year.
Organic consolidated backlog (backlog excluding orders for Montrail and Pacific Trail-brand products) increased 8.1 percent, and organic fall product backlog increased 7.6 percent. Excluding changes in currency exchange rates, organic consolidated backlog increased 9.3 percent, and organic fall product backlog increased 8.7 percent.
Boyle continued, “Organic domestic fall orders increased low double digits, driven by continued strength in our U.S. sportswear business and a modest rebound in domestic outerwear orders. Organic Other International backlog also increased low double digits in U.S. dollars, driven by strong growth in Japan, while Europe and Canada were essentially flat. Sportswear orders were strong in the U.S. and other key markets globally, but global outerwear orders only increased low single digits, due to weakness in Europe and Canada. Global fall footwear orders also increased low single digits on an organic basis, hampered by warm winter weather conditions in key cold weather footwear markets.”
“The current global markets for our products are very competitive, and while we have made changes in our business to address these challenges, including acquiring brands to address new distribution channels, these initiatives have not yet gained significant traction. While we continue to execute these growth initiatives, we will also focus on diligent expense management to assure that our capital is deployed strategically. We will continue to focus on developing compelling products that provide retailers and consumers with exceptional value at all price points, which is the core of our business,” commented Boyle.
Guidance
Mr. Boyle continued, “Considering the backlog we released today, we currently anticipate second quarter 2006 revenue growth of 10 to 12 percent and diluted earnings per share of approximately $0.03, including approximately $0.05 in stock-based compensation expense. For the full year 2006, we anticipate net sales growth of approximately 10 percent, and diluted earnings per share of approximately $3.18, including $0.20 in stock-based compensation expense, compared to 2005. These projections are forward-looking in nature, and are based on backlog and forecasts, which may change, perhaps significantly.”

 

The Company will host a conference call to elaborate on first quarter 2006 results on Thursday, April 27, 2006 at 5:00 p.m. Eastern. The call will include discussions regarding the Company’s first quarter 2006 performance in general, the Company’s geographic and merchandise category performance, and the Company’s future opportunities. To participate, please dial 800-851-3059 in the United States (outside the United States, please dial 706-679-8430) five to ten minutes prior to the call. The call will also be webcast live on the investor information section of the Company’s website at www.columbia.com, where it will remain available until May 10, 2006.
Founded in 1938 in Portland, Oregon, Columbia Sportswear Company is a global leader in the design, sourcing, marketing and distribution of active outdoor apparel and footwear. As one of the largest outerwear manufacturers in the world and a leading seller of skiwear in the United States, the Company has developed an international reputation for quality, performance, functionality and value. The Company manages a portfolio of outdoor brands including Columbia Sportswear, Mountain Hardwear, Sorel, Montrail and Pacific Trail. To learn more about Columbia, please visit the Company’s website at www.columbia.com.
This press release contains forward-looking statements, including Mr. Boyle’s statements regarding anticipated revenues and earnings for the second quarter and full year 2006 and growth in future periods. Actual results could differ materially from those projected in these and other forward-looking statements as a result of a number of risks and uncertainties, including those set forth in this press release, those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, under the heading “Risk Factors,” and other risks and uncertainties that have been or may be described from time to time in other reports filed by the Company, including reports on Form 8-K, Form 10-Q, and Form 10-K.
Risks and uncertainties that may affect the Company’s future revenues and earnings include growth trends in the industry in general; local, national, and international economic conditions; the financial health of the Company’s customers; intense competition in the industry (which the Company expects to increase); the effects of unseasonable weather on consumer demand for the Company’s products; international risks, including foreign laws and regulations, trade disruptions, political instability in foreign markets, exchange rate fluctuations, and changes in quotas and tariffs or other duties; business disruptions and costs arising from disease outbreaks, disasters, acts of terrorism or military activities around the globe; the Company’s dependence on key personnel; the effective implementation of the Company’s Kentucky distribution center and expansion of its other distribution facilities; the Company’s ability to fully and cost-effectively integrate acquired businesses into its existing operations; the Company’s ability to effectively deliver its products to customers in a timely manner despite potential service interruptions; the Company’s reliance on product acceptance by consumers; the Company’s dependence on independent manufacturers and suppliers; the effectiveness of the Company’s sales and marketing efforts; the Company’s ability to achieve and manage growth effectively; the operations of the Company’s own and third party computer systems; and the Company’s ability to establish and protect its intellectual property. The Company does not undertake any duty to update any of the forward-looking statements after the date of this release to conform them to actual results or to changes in its expectations.
-tables follow-

 

COLUMBIA SPORTSWEAR COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                 
    March 31,  
    2006     2005  
       
Current Assets:
                
Cash and cash equivalents
   $ 57,197     $ 157,283  
Short-term investments
     181,835       181,050  
Accounts receivable, net
     218,986       229,424  
Inventories
     194,599       164,793  
Deferred tax asset
     22,835       21,297  
Prepaid expenses and other current assets
     12,882       9,447  
 
            
Total current assets
     688,334       763,294  
Property, plant and equipment, net
     176,985       155,267  
Intangibles and other assets
     69,606       38,212  
 
            
Total assets
   $ 934,925     $ 956,773  
 
            
       
Current Liabilities:
                
Notes payable
   $ 15,609     $ —  
Accounts payable
     57,435       69,899  
Accrued liabilities
     47,518       40,865  
Income taxes payable
     24,531       16,246  
Current portion of long-term debt
     4,640       7,246  
 
            
Total current liabilities
     149,733       134,256  
       
Long-term debt and other liabilities
     7,382       13,071  
Deferred tax liability
     8,395       9,663  
Shareholders’ equity
     769,415       799,783  
 
            
Total liabilities and shareholders’ equity
   $ 934,925     $ 956,773  
 
            
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                 
    Three Months Ended March 31,  
    2006     2005  
       
Net sales
   $ 260,211     $ 245,706  
Cost of sales
     148,574       138,463  
 
            
Gross profit
     111,637       107,243  
 
     42.9 %     43.6 %
       
Selling, general, and administrative
     84,819       76,791  
Net licensing income
     (1,005 )     (716 )
 
            
Income from operations
     27,823       31,168  
Interest (income) expense, net
     (1,898 )     (1,407 )
 
            
Income before income tax
     29,721       32,575  
Income tax provision
     10,254       11,238  
 
            
Net income
   $ 19,467     $ 21,337  
 
            
       
Net income per share:
                
Basic
   $ 0.53     $ 0.53  
Diluted
     0.52       0.52  
Weighted average shares outstanding:
                
Basic
     36,900       40,143  
Diluted
     37,339       40,659  

 

Reconciliation of Net Sales Changes to Net Sales Changes Excluding Changes in Currency Exchange Rates
Net sales from year to year are affected by changes in selling prices and unit volume as well as changes in currency exchange rates where we have sales in foreign locations. The Company’s net sales changes excluding the effect of changes in currency exchange rates are presented below. The Company discloses changes in sales excluding changes in currency exchange rates because it uses the measure to understand sales growth excluding any impact from foreign currency exchange rate changes. In addition, the Company’s foreign management teams are generally evaluated and compensated in part based on the results of operations excluding currency exchange rate changes for their respective regions. Amounts calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP, are denoted.
The Company’s net sales excluding the effect of changes in currency exchange rates are presented below:
                 
    Quarter ended  
    March 31, 2006  
    Amount     %  
    (millions)     Change  
             
Consolidated:
                
Net sales increase (GAAP)
   $ 14.5       5.9 %
Increase due to currency exchange rate changes
     4.4       1.8 %
 
            
Net sales increase excluding changes in currency exchange rates
   $ 18.9       7.7 %
 
            
             
United States:
                
Net sales increase (GAAP)
   $ 8.1       5.9 %
 
            
             
Europe:
                
Net sales increase (GAAP)
   $ 1.4       3.0 %
Increase due to currency exchange rate changes
     5.0       10.7 %
 
            
Net sales increase excluding changes in currency exchange rates
   $ 6.4       13.7 %
 
            
             
Canada:
                
Net sales increase (GAAP)
   $ 0.5       1.9 %
Decrease due to currency exchange rate changes
     (1.9 )     (7.3 )%
 
            
Net sales decrease excluding changes in currency exchange rates
   $ (1.4 )     (5.4 )%
 
            
             
Other International:
                
Net sales increase (GAAP)
   $ 4.5       12.2 %
Increase due to currency exchange rate changes
     1.3       3.6 %
 
            
Net sales increase excluding changes in currency exchange rates
   $ 5.8       15.8 %