Columbia Sportswear Company saw net sales increase 10.8% to $454.1 million for the third quarter from $409.8 million for the same period last year. Net income for the quarter decreased 9.3%to $60.3 million from $66.5 million last year. For purposes of comparison, Columbia recorded a tax benefit of $5.6 million, or 14 cents per diluted share in the third quarter of last year, resulting from the favorable conclusion of various income tax audits. Earnings per share for the third quarter of 2006 were $1.67 (diluted) on 36.1 million weighted average shares, net of 4 cents per share of stock-based compensation expense, compared to earnings per share of $1.74 (diluted) for the third quarter of 2005 on 38.1 million weighted average shares.

Compared to the third quarter of 2005, U.S. sales increased 12.8% to $276.3 million, Other International sales increased 15.1% to $57.8 million, European sales increased 6.9% to $66.4 million, and Canadian sales increased 1.9% to $53.6 million for the third quarter of 2006.

Excluding changes in currency exchange rates, consolidated net sales for the third quarter of 2006 increased 9.1%. U.S. sales increased 12.8%, Other International sales increased 14.9%, European sales increased 2.3%, and Canadian sales decreased 5.7% for the third quarter of 2006.

For the third quarter of 2006, sportswear sales increased 16.6% to $146.6 million, outerwear sales increased 8.1% to $217.8 million, footwear sales increased 8.8% to $69.4 million, equipment sales increased 150% to $4.5 million, and accessories sales decreased 7.6% to $15.8 million compared to the third quarter of 2005.

Tim Boyle, Columbia's president and chief executive officer, commented, “Third quarter gross margins were higher than anticipated due to better than expected gross margins on Columbia-branded sportswear, Pacific Trail, and Mountain Hardwear apparel. Growth in global sales was driven by strong demand for our sportswear and outerwear products domestically and, to a lesser degree, sportswear in Europe and outerwear in our international distributor markets. Selling and operating expenses were managed effectively, increasing in line with sales growth. The stronger than projected gross margins and effective cost management drove better than expected third quarter results.”


Backlog

The company reported that as of September 30, 2006, spring backlog increased 15.4% to $414.5 million, compared to spring backlog of $359.3 million at September 30, 2005. Consolidated product backlog, which includes global fall orders at September 30, 2006, was $693.9 million, an increase of 17.8% compared to consolidated product backlog of $588.8 million at September 30, 2005.

Mr. Boyle commented, “Spring order growth was strong, driven by exceptional sportswear growth globally. Spring outerwear orders were also strong. Footwear orders, including our new Montrail brand, increased less than the corporate average; however, excluding Montrail orders, global spring footwear backlog decreased slightly. Geographically, domestic spring apparel orders were very strong, and international growth was driven by exceptional strength in international distributor markets. The growth in consolidated orders, including spring backlog, provides good near-term revenue visibility. Revenue from the consolidated backlog that we reported today will begin to be recognized when these orders are shipped, beginning in the fourth quarter of this year and continuing into the third quarter of next year. As always, you should be aware that there are a number of factors that could cause our future sales to differ from reported future order backlog, including order cancellations, reorders and fluctuations in foreign currency rates.”


Dividend Initiation

The company announced today that the board of directors has approved the initiation of a quarterly dividend of 14 cents per share, initially payable on November 30, 2006 to shareholders of record on November 16, 2006.


Guidance

Mr. Boyle continued, “Based on our current outlook, we anticipate fourth quarter 2006 revenue growth of approximately 14 percent and net income decline of 4 to 7 percent, including approximately $1.1 million in after-tax stock- based compensation expense, compared to the same period of 2005. For the full year 2006, we anticipate net sales growth of approximately 11 percent compared to 2005, and diluted earnings per share of $3.26 to $3.29, including approximately $0.18 in stock-based compensation expense. These projections are forward-looking in nature, and are based on backlog and forecasts, which may change, perhaps significantly.”

Mr. Boyle concluded, “Based in part on the reported spring backlog, we expect revenue growth for the first quarter of 2007 of approximately 11 percent and diluted earnings per share of approximately $0.55 to $0.58. As a reminder, spring accounts for a relatively small percentage of our overall business; the bulk of our revenues and profits historically come in the second half of the year. Further out, it is difficult for us to gauge revenue and profitability levels until we gain more visibility into the fall 2007 season. We will provide full year 2007 financial guidance when we report our fall backlog results in April 2007. Please note that 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          Nine Months Ended
                              September 30,              September 30,
                            2006         2005         2006         2005

    Net sales             $454,140     $409,757     $925,904     $841,694
    Cost of sales          255,892      221,383      534,595      472,524
      Gross profit         198,248      188,374      391,309      369,170
                             43.7%        46.0%        42.3%        43.9%

    Selling, general,
     and administrative    108,292       97,450      270,191      240,360
    Net licensing income   (1,226)      (1,163)      (3,350)      (2,786)
    Income from
     operations             91,182       92,087      124,468      131,596

    Interest (income)
     expense, net            (927)        (989)      (4,740)      (3,694)
    Income before
     income tax             92,109       93,076      129,208      135,290

    Income tax provision    31,778       26,620       44,577       41,184
    Net income             $60,331      $66,456      $84,631      $94,106

    Net income per share:
      Basic                  $1.69        $1.76        $2.33        $2.42
      Diluted                 1.67         1.74         2.30         2.39
    Weighted average
     shares outstanding:
      Basic                 35,687       37,782       36,366       38,964
      Diluted               36,059       38,138       36,768       39,377