Columbia Sales Up 8.8%; Income Falls 41.1%

Columbia Sportswear Company announced net sales for the second quarter ended June 30, 2005 increased 8.8% to $186.2 million from $171.1 million for the same period of 2004. The company reported net income for the quarter of $6.3 million, a 41.1% decrease over net income of $10.7 million for the same period of 2004. Earnings per diluted share were 16 cents, down from 26 cents (diluted) for the year-ago quarter.

Compared to the second quarter of 2004, Other International sales increased 44.7% to $40.8 million, U.S. sales increased 4.2% to $110.3 million, European sales increased 3.7% to $25.4 million, and Canadian sales decreased 22.4% to $9.7 million for the second quarter of 2005.

Excluding changes in currency exchange rates, Other International sales increased 41.2%, European sales decreased 0.8%, and Canadian sales decreased 28.3% for the second quarter of 2005. Consolidated net sales for the second quarter of 2005 increased 7.1%, excluding changes in currency exchange rates, compared to the same period of last year.

For the second quarter of 2005, sportswear sales increased 13.3% to $102.4 million, footwear sales increased 11.7% to $34.3 million, accessories sales increased 3.0% to $6.8 million, equipment sales increased 3.8% to $2.7 million, and outerwear sales decreased 2.0% to $40.0 million compared to the second quarter of 2004.

Tim Boyle, Columbia's president and chief executive officer, commented, “We have made significant long-term investments in distribution capacity, product design and sourcing infrastructure, and have increased advertising to strengthen our brands to support our long-term growth. These are essential investments and are competitive advantages that position us to remain a primary vendor in a consolidating retail landscape. During the second quarter, we significantly improved inventory levels going into the peak fall shipping season by increasing our shipments of closeout merchandise. These lower margin close-out sales, coupled with our long-term investments, are compressing operating margins in the near-term, but we believe these investments are essential to our long-term growth.”

“Our strong financial position provides significant financial flexibility. Our board previously authorized an aggregate $200 million share repurchase program, and during the second quarter, we repurchased approximately 2.6 million shares for $116.5 million. To date, we have repurchased approximately 3.5 million shares for an aggregate purchase price of $164.1 million, with $35.9 million remaining under the program.”

“In reviewing the second quarter results, investors should be aware that the second quarter is our smallest revenue quarter of the year, as we conclude our spring product shipping season and begin shipping fall products late in the quarter. Due to the comparatively low revenue levels in the quarter, changes in shipments in any one channel, geography or category may be excessively pronounced and may not necessarily be indicative of future results,” continued Mr. Boyle.

Guidance

Mr. Boyle continued, “Based on our current outlook, we expect third quarter 2005 revenue to decline 3 to 4 percent, and net income to decline 12% to 14%, compared to the third quarter of 2004. For the full year 2005, we continue to maintain previously stated revenue and earnings guidance of net sales growth of approximately 5%, and net income decline of 8% to 12% when compared to 2004. These projections are forward-looking in nature, and are based on backlog and forecasts, which may change, perhaps significantly.”

                  CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share amounts)
                               (Unaudited)

                                   Three Months Ended     Six Months Ended
                                        June 30,               June 30,
                                     2005      2004        2005      2004

  Net sales                        $186,231  $171,102    $431,937  $377,772
  Cost of sales                     112,678    97,871     251,141   210,658
    Gross profit                     73,553    73,231     180,796   167,114
                                      39.5%     42.8%       41.9%     44.2%

  Selling, general, and
   administrative                    66,119    58,327     142,910   122,856
  Net licensing income                 (907)     (781)     (1,623)   (1,478)
  Income from operations              8,341    15,685      39,509    45,736

  Interest (income) expense, net     (1,298)     (953)     (2,705)   (1,851)
  Income before income tax            9,639    16,638      42,214    47,587

  Income tax provision                3,326     5,906      14,564    16,893
  Net income                         $6,313   $10,732     $27,650   $30,694

  Net income per share:
    Basic                             $0.16     $0.27       $0.70     $0.76
    Diluted                            0.16      0.26        0.69      0.75