Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 June 30, 2019



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from_______to_______

Commission file number 0-23939

_____________________________

COLUMBIA SPORTSWEAR COMPANY

(Exact name of registrant as specified in its charter)



Oregon		93-0498284
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

14375 Northwest Science Park Drive

Portland, Oregon 97229

(Address of principal executive offices and zip code)

(503) 985-4000

(Registrant's telephone number, including area code)



Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	COLM	The Nasdaq Stock Market LLC

_____________________________________

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 ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer	x	Accelerated Filer	¨
Non-accelerated Filer	¨	Smaller Reporting Company	¨
Emerging Growth Company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares of Common Stock outstanding on July 19, 2019 was 67,557,251.

Table of Contents

COLUMBIA SPORTSWEAR COMPANY

JUNE 30, 2019

TABLE OF CONTENTS



Item		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements – Columbia Sportswear Company (Unaudited):	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Equity	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 6.	Exhibits	48
	Signatures	49

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)



	June 30, 2019			December 31, 2018			June 30, 2018
ASSETS
Current Assets:
Cash and cash equivalents (Note 16)	$	386,150		$	437,825		$	510,656
Restricted cash (Note 17)	—			13,970			—
Short-term investments (Note 16)	138,198			262,802			264,014
Accounts receivable, net of allowance of $8,072, $11,051, and $6,889, respectively	280,641			449,382			238,675
Inventories	756,378			521,827			570,473
Prepaid expenses and other current assets	100,800			79,500			76,399
Total current assets	1,662,167			1,765,306			1,660,217
Property, plant and equipment, at cost, net of accumulated depreciation of $510,267, $489,354, and $472,447, respectively	312,948			291,596			280,726
Operating lease right-of-use assets (Note 8)	368,856			—			—
Intangible assets, net (Note 5)	125,085			126,575			128,065
Goodwill	68,594			68,594			68,594
Deferred income taxes	82,418			78,155			70,351
Other non-current assets	42,379			38,495			38,997
Total assets	$	2,662,447		$	2,368,721		$	2,246,950
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	309,945		$	274,435		$	290,812
Accrued liabilities (Note 7)	200,816			275,684			191,511
Operating lease liabilities (Note 8)	60,804			—			—
Income taxes payable	6,416			22,763			4,000
Total current liabilities	577,981			572,882			486,323
Non-current operating lease liabilities (Note 8)	345,063			—			—
Income taxes payable	53,216			50,791			60,827
Deferred income taxes	8,518			9,521			13
Other long-term liabilities	22,475			45,214			45,412
Total liabilities	1,007,253			678,408			592,575
Commitments and contingencies (Note 9)
Columbia Sportswear Company Shareholders' Equity:
Preferred stock; 10,000 shares authorized; none issued and outstanding	—			—			—
Common stock (no par value); 250,000 shares authorized; 67,586, 68,246, and 69,988, issued and outstanding, respectively (Note 10)	100			—			23,162
Retained earnings	1,656,392			1,677,920			1,623,612
Accumulated other comprehensive loss (Note 13)	(1,298		)	(4,063		)	(6,374		)
Total Columbia Sportswear Company shareholders' equity	1,655,194			1,673,857			1,640,400
Non-controlling interest (Note 4)	—			16,456			13,975
Total equity	1,655,194			1,690,313			1,654,375
Total liabilities and equity	$	2,662,447		$	2,368,721		$	2,246,950

See accompanying notes to condensed consolidated financial statements.

Table of Contents

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Net sales	$	526,210	$	481,619		$	1,180,818		$	1,088,927
Cost of sales	272,619		252,998			590,498			560,868
Gross profit	253,591		228,621			590,320			528,059
Selling, general and administrative expenses	240,763		222,192			492,518			465,560
Net licensing income	3,537		3,320			6,521			6,571
Income from operations	16,365		9,749			104,323			69,070
Interest income, net	2,571		2,928			5,971			5,224
Other non-operating income (expense), net	1,032		(96		)	1,478			(364		)
Income before income tax	19,968		12,581			111,772			73,930
Income tax benefit (expense)	3,061		(2,086		)	(14,566		)	(14,706		)
Net income	23,029		10,495			97,206			59,224
Net income attributable to non-controlling interest	—		758			—			4,380
Net income attributable to Columbia Sportswear Company	$	23,029	$	9,737		$	97,206		$	54,844
Earnings per share attributable to Columbia Sportswear Company (Note 12):
Basic	$	0.34	$	0.14		$	1.43		$	0.78
Diluted	$	0.34	$	0.14		$	1.41		$	0.77
Weighted average shares outstanding (Note 12):
Basic	67,930		70,021			68,109			70,050
Diluted	68,560		70,748			68,825			70,824

See accompanying notes to condensed consolidated financial statements.

Table of Contents

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net income	$	23,029		$	10,495		97,206			59,224
Other comprehensive income:
Unrealized holding gains on available-for-sale securities, net	—			—			56			4
Unrealized gains (losses) on derivative transactions (net of tax effects of $827, $(6,540), $432, and $(4,974), respectively)	(1,881		)	20,553			(548		)	15,646
Foreign currency translation adjustments (net of tax effects of $224, $275, $887 and $1,819, respectively)	3,901			(18,262		)	3,356			(12,003		)
Other comprehensive income	2,020			2,291			2,864			3,647
Comprehensive income	25,049			12,786			100,070			62,871
Comprehensive income attributable to non-controlling interest	—			474			—			4,999
Comprehensive income attributable to Columbia Sportswear Company	$	25,049		$	12,312		$	100,070		$	57,872

See accompanying notes to condensed consolidated financial statements.

Table of Contents

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income	$	97,206		$	59,224
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and non-cash lease expense	57,487			29,067
Loss on disposal or impairment of property, plant, and equipment	1,599			578
Deferred income taxes	(4,338		)	2,041
Stock-based compensation	8,781			6,599
Changes in operating assets and liabilities:
Accounts receivable	169,631			188,897
Inventories	(232,117		)	(140,897		)
Prepaid expenses and other current assets	(21,815		)	(6,411		)
Other assets	(4,830		)	(11,867		)
Accounts payable	41,469			37,968
Accrued liabilities	(75,360		)	(49,781		)
Income taxes payable	(13,967		)	(12,835		)
Operating lease assets and liabilities	(27,068		)	—
Other liabilities	5,919			(3,258		)
Net cash provided by operating activities	2,597			99,325
Cash flows from investing activities:
Purchases of short-term investments	(181,257		)	(257,979		)
Sales and maturities of short-term investments	308,501			88,794
Capital expenditures	(50,800		)	(29,618		)
Proceeds from sale of property, plant, and equipment	—			19
Net cash provided by (used in) investing activities	76,444			(198,784		)
Cash flows from financing activities:
Proceeds from credit facilities	23,208			—
Repayments on credit facilities	(23,208		)	—
Proceeds from issuance of common stock related to stock-based compensation	11,286			14,971
Tax payments related to stock-based compensation	(5,589		)	(4,131		)
Repurchase of common stock	(100,293		)	(40,106		)
Purchase of non-controlling interest	(17,880		)	—
Cash dividends paid	(32,686		)	(30,856		)
Net cash used in financing activities	(145,162		)	(60,122		)
Net effect of exchange rate changes on cash	476			(2,929		)
Net decrease in cash, cash equivalents and restricted cash	(65,645		)	(162,510		)
Cash, cash equivalents and restricted cash, beginning of period	451,795			673,166
Cash, cash equivalents and restricted cash, end of period	$	386,150		$	510,656
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	66,604		$	31,346
Supplemental disclosures of non-cash investing and financing activities:
Property, plant and equipment acquired through increase in liabilities	$	9,524		$	4,009
Dividend to non-controlling interest declared but not yet paid	$	—		$	21,332

See accompanying notes to condensed consolidated financial statements.

Table of Contents

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except per share amounts)

(Unaudited)



	Three Months Ended June 30, 2019
	Columbia Sportswear Company Shareholders' Equity
	Common Stock					Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interest			Total
	Shares Outstanding		Amount			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interest			Total
BALANCE, MARCH 31, 2019	68,346		$	94		$	1,723,873		$	(3,318	)	$	—		$	1,720,649
Net income	—		—			23,029			—			—			23,029
Other comprehensive income:
Unrealized holding losses on derivative transactions, net	—		—			—			(1,881		)	—			(1,881		)
Foreign currency translation adjustment, net	—		—			—			3,901			—			3,901
Cash dividends ($0.24 per share)	—		—			(16,268		)	—			—			(16,268		)
Issuance of common stock related to stock-based compensation, net	76		2,550			—			—			—			2,550
Stock-based compensation expense	—		4,566			—			—			—			4,566
Repurchase of common stock	(836	)	(7,110		)	(74,242		)	—			—			(81,352		)
BALANCE, JUNE 30, 2019	67,586		$	100		$	1,656,392		$	(1,298	)	$	—		$	1,655,194

	Three Months Ended June 30, 2018
	Columbia Sportswear Company Shareholders' Equity
	Common Stock					Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interest			Total
	Shares Outstanding		Amount			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interest			Total
BALANCE, MARCH 31, 2018	70,113		$	36,190		$	1,629,279		$	(8,949	)	$	34,833		$	1,691,353
Net income	—		—			9,737			—			758			10,495
Other comprehensive income:
Unrealized holding gains on derivative transactions, net	—		—			—			19,690			863			20,553
Foreign currency translation adjustment, net	—		—			—			(17,115		)	(1,147		)	(18,262		)
Cash dividends ($0.22 per share)	—		—			(15,404		)	—			—			(15,404		)
Dividends to non-controlling interest	—		—			—			—			(21,332		)	(21,332		)
Issuance of common stock related to stock-based compensation, net	140		5,493			—			—			—			5,493
Stock-based compensation expense	—		3,486			—			—			—			3,486
Repurchase of common stock	(265	)	(22,007		)	—			—			—			(22,007		)
BALANCE, JUNE 30, 2018	69,988		$	23,162		$	1,623,612		$	(6,374	)	$	13,975		$	1,654,375

See accompanying notes to condensed consolidated financial statements.

Table of Contents

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except per share amounts)

(Unaudited)



	Six Months Ended June 30, 2019
	Columbia Sportswear Company Shareholders' Equity
	Common Stock					Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interest			Total
	Shares Outstanding		Amount			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interest			Total
BALANCE, DECEMBER 31, 2018	68,246		$	—		$	1,677,920		$	(4,063	)	$	16,456		$	1,690,313
Net income	—		—			97,206			—			—			97,206
Purchase of non-controlling interest	—		—			—			(99		)	(16,456		)	(16,555		)
Other comprehensive income:
Unrealized holding gains on available-for-sale securities, net	—		—			—			56			—			56
Unrealized holding losses on derivative transactions, net	—		—			—			(548		)	—			(548		)
Foreign currency translation adjustment, net	—		—			—			3,356			—			3,356
Cash dividends ($0.48 per share)	—		—			(32,686		)	—			—			(32,686		)
Issuance of common stock related to stock-based compensation, net	372		5,697			—			—			—			5,697
Stock-based compensation expense	—		8,781			—			—			—			8,781
Repurchase of common stock	(1,032	)	(14,378		)	(86,048		)	—			—			(100,426		)
BALANCE, JUNE 30, 2019	67,586		$	100		$	1,656,392		$	(1,298	)	$	—		$	1,655,194

	Six Months Ended June 30, 2018
	Columbia Sportswear Company Shareholders' Equity
	Common Stock					Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interest			Total
	Shares Outstanding		Amount			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interest			Total
BALANCE, DECEMBER 31, 2017	69,995		$	45,829		$	1,585,009		$	(8,887	)	$	30,308		$	1,652,259
Net income	—		—			54,844			—			4,380			59,224
Other comprehensive income:
Unrealized holding gains on available-for-sale securities, net	—		—			—			4			—			4
Unrealized holding gains on derivative transactions, net	—		—			—			15,120			526			15,646
Foreign currency translation adjustment, net	—		—			—			(12,096		)	93			(12,003		)
Dividends declared but not yet paid to non-controlling interest	—		—			—			—			(21,332		)	(21,332		)
Adoption of new accounting standards	—		—			14,615			(515		)	—			14,100
Cash dividends ($0.44 per share)	—		—			(30,856		)	—			—			(30,856		)
Issuance of common stock related to stock-based compensation, net	493		10,840			—			—			—			10,840
Stock-based compensation expense	—		6,599			—			—			—			6,599
Repurchase of common stock	(500	)	(40,106		)	—			—			—			(40,106		)
BALANCE, JUNE 30, 2018	69,988		$	23,162		$	1,623,612		$	(6,374	)	$	13,975		$	1,654,375

See accompanying notes to condensed consolidated financial statements.

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COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—BASIS OF PRESENTATION AND ORGANIZATION

The accompanying condensed consolidated financial statements have been prepared by the management of Columbia Sportswear Company (together with its wholly owned subsidiaries and entities in which it maintains a controlling financial interest, the "Company") and in the opinion of management include all normal recurring material adjustments necessary to present fairly the Company's financial position as of June 30, 2019, December 31, 2018 and June 30, 2018, and the results of operations for the three and six months ended June 30, 2019 and 2018, and cash flows for the six months ended June 30, 2019 and 2018. The December 31, 2018 financial information was derived from the Company's audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. A significant part of the Company's business is of a seasonal nature; therefore, results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of results to be expected for other quarterly periods or for the full year.

In accordance with the Disclosure Modernization and Simplification final rule issued by the Securities and Exchange Commission ("SEC") and effective for the Company beginning in the first quarter of 2019, a reconciliation of the changes of shareholders' equity is presented for all periods for which the results of operations are presented.

Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the SEC. The Company, however, believes that the disclosures contained in this report comply with the requirements of Section 13(a) of the Securities Exchange Act of 1934 for a Quarterly Report on Form 10-Q and are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Columbia Sportswear Company, its wholly owned subsidiaries and entities in which it maintains a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation.

Estimates and Assumptions

The preparation of financial statements in conformity with GAAP 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions. Some of these more significant estimates relate to revenue recognition, including sales returns and claims from customers, allowance for doubtful accounts, provisions for potential excess, slow-moving and closeout inventories, product warranty, long-lived and intangible assets, goodwill, income taxes, and stock-based compensation.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Except as disclosed below and in Note 8, pertaining to our adoption of new accounting pronouncements, there have been no significant changes to the Company's significant accounting policies as described in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.

Recently Adopted Accounting Pronouncements

On January 1, 2019, the Company adopted Accounting Standards Update ("ASU") No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The adoption of this provision did not have a material effect on the Company's financial position, results of operations or cash flows.

On January 1, 2019, the Company adopted ASU No. 2016-02, Leases ("ASC 842"), which increased transparency and comparability among organizations by recognizing right-of-use ("ROU") assets and lease liabilities on the balance sheet for most leases previously classified as operating leases. The updated guidance and subsequent clarifications require disclosures to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

The Company adopted this standard utilizing the modified retrospective approach. The comparative prior period information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company has elected to adopt the package of transition practical expedients and, therefore, has not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. The Company did not elect the practical expedient to use hindsight for leases existing at adoption date.

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COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The adoption of ASC 842 resulted in the recognition of ROU assets of $352.7 million, with corresponding lease liabilities of $387.1 million. As a result of adopting the standard, $34.4 million of pre-existing liabilities for deferred rent and various lease incentives were reclassified as a component of the ROU assets. At adoption, the measurement of the lease liabilities utilized the remaining minimum rental payments as defined under the previous accounting standard and the incremental borrowing rate as of January 1, 2019.

The adoption of ASC 842 did not materially impact the Condensed Consolidated Statements of Operations. Also, the adoption of ASC 842 had no material impact on operating, investing or financing cash flows in the Condensed Consolidated Statements of Cash Flows. See Note 8 for additional disclosure regarding the adoption of the new standard.

The following table presents the effect of the adoption of ASC 842 on our Condensed Consolidated Balance Sheets as of January 1, 2019:



	January 1, 2019
(in thousands)	December 31, 2018		Adjustments due to ASC 842			January 1, 2019
Operating lease right-of-use assets	$	—	$	352,679		$	352,679
Total assets	2,368,721		352,679			2,721,400
Accrued liabilities	275,684		(3,346		)	272,338
Operating lease liabilities	—		57,207			57,207
Current liabilities	572,882		53,861			626,743
Non-current operating lease liabilities	—		329,865			329,865
Other long-term liabilities	45,214		(31,047		)	14,167
Total liabilities	678,408		352,679			1,031,087
Total liabilities and equity	2,368,721		352,679			2,721,400

Recent Accounting Pronouncements Not Yet Adopted

In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), which clarifies certain aspects of accounting for implementation costs incurred in a cloud computing arrangement ("CCA") that is a service contract. Under the ASU, an entity would expense costs incurred in the preliminary-project and post-implementation-operation stages. The entity would also capitalize certain costs incurred during the application-development stage, as well as certain costs related to enhancements. The ASU does not change the accounting for the service component of a CCA. This standard is effective beginning in the first quarter of 2020, with early adoption permitted. The Company is currently evaluating the impact this accounting standard will have on the Company's financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Under this guidance, if the carrying amount of a reporting unit exceeds its estimated fair value, an impairment charge shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. This standard is effective beginning in the first quarter of 2020, with early adoption permitted. The impact of the new standard will depend on the specific facts and circumstances of future individual goodwill impairments, if any.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Subsequently, the FASB has issued amendments to clarify the codification, in addition to also clarifying the implementation dates and the items that fall within the scope of this pronouncement. The pronouncement changes the impairment model for most financial assets and will require the use of an "expected loss" model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This standard is effective beginning in the first quarter of 2020. The adoption of ASU 2016-13 is not expected to have a material effect on the Company's financial position, results of operations or cash flows.

NOTE 3—REVENUES

Disaggregated Revenue

As disclosed below in Note 14, the Company has aggregated its operating segments into four geographic segments: the United States, Latin America and Asia Pacific ("LAAP"), Europe, Middle East and Africa ("EMEA"), and Canada.

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COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The following tables disaggregate the Company's operating segment Net sales by product category and sales channel, which the Company believes provide a meaningful depiction of how the nature, timing, and uncertainty of Net sales are affected by economic factors:



	Three Months Ended June 30, 2019
(in thousands)	United States		LAAP		EMEA		Canada		Total
Product category net sales
Apparel, Accessories and Equipment	$	277,604	$	74,096	$	66,409	$	14,153	$	432,262
Footwear	37,923		27,518		25,118		3,389		93,948
Total	$	315,527	$	101,614	$	91,527	$	17,542	$	526,210
Sales channel net sales
Wholesale	$	151,714	$	51,171	$	83,521	$	9,884	$	296,290
Direct-to-consumer	163,813		50,443		8,006		7,658		229,920
Total	$	315,527	$	101,614	$	91,527	$	17,542	$	526,210



	Three Months Ended June 30, 2018
(in thousands)	United States		LAAP		EMEA		Canada		Total
Product category net sales
Apparel, Accessories and Equipment	$	250,394	$	74,600	$	56,881	$	12,782	$	394,657
Footwear	29,776		26,284		28,105