This quarterly report contains forward-looking statements. Forward-looking statements include any statements related to our expectations regarding future performance or market position, including any statements regarding anticipated sales results across markets, distribution channels and product categories, access to raw materials and factory capacity, and financing and working capital requirements and resources.

These forward-looking statements, and others we make from time to time, are subject to a number of risks and uncertainties. Many factors may cause actual results to differ materially from those projected in forward-looking statements, including the risks described below in Part II, Item 1A, Risk Factors. We do not undertake any duty to update forward-looking statements after the date they are made or to conform them to actual results or to changes in circumstances or expectations.

Our Business

As one of the largest outdoor apparel and footwear companies in the world, we design, develop, market and distribute active outdoor apparel, footwear and related accessories and equipment under the Columbia, Mountain Hardwear, Sorel, Montrail, and Pacific Trail brands. Our brands are distributed through a mix of wholesale distribution channels, independent distributors, our own retail stores and licensees.

As a consumer products company, the popularity of outdoor activities and changing design trends affect the desirability of our products. Therefore, we seek to anticipate and respond to trends and shifts in consumer preferences by adjusting the mix of available product offerings, developing new products with innovative performance features and designs, and by creating persuasive and memorable marketing communications to drive consumer awareness and demand. Failure to respond to consumer needs and preferences in a timely and adequate manner could have a material adverse effect on our sales and profitability.

Strategy and Outlook Update

Our business, like other branded consumer product companies, is heavily dependent upon discretionary consumer spending patterns. Our net sales volumes have been negatively affected by the volatility of the global economy and its impact on consumer purchasing behavior, and retailers' behavior related to advance orders, replenishment orders, order cancellations and seasonal reorders. The current macro-economic environment has caused tightening of credit for some of our wholesale customers, independent distributors and consumers and a significant slowing of retail sales. This has resulted in, and could continue to cause, some bankruptcies among our wholesale customers and, overall, a more cautious approach by many of our wholesale customers and independent distributors when placing advance orders for seasonal products and reducing, delaying delivery of, or cancelling advance orders placed in earlier periods. In addition, the effects of foreign currency exchange rates may amplify potential net sales declines if the U.S. dollar strengthens compared to local currencies in our direct markets, as we have experienced in some markets. We expect our Company-owned retail and e-commerce revenues to partially offset some of this anticipated wholesale and international distributor revenue decline. We plan to launch our e-commerce website in the United States for the Columbia brand during the third quarter of 2009 and for the Sorel brand during the fourth quarter of 2009.

We believe that we have appropriately factored our historical experiences, incremental sales from our new Company-owned retail stores and e-commerce platform, and the estimated effect of changes in foreign currency exchange rates into our outlook for fiscal year 2009. However, unfavorable and unprecedented macro-economic conditions have increased the uncertainty of our planning and forecasts. In this challenging economic environment, we are also mindful of our reliance on the overall financial health of our wholesale customers and their ability to continue to access credit markets to fund their inventory purchases and day-to-day operations.

Although we cannot predict future results with certainty and despite current global economic conditions, we are committed to our business strategies including demand creation and direct-to-consumer initiatives intended to stimulate consumer demand and improve inventory management with minimal disruption to our wholesale distribution channels. Our direct-to-consumer initiatives include our retail expansion strategy and e-commerce platforms for the Columbia and Sorel brands in the United States. With our commitment to investment in these strategies, a well-developed sourcing and distribution infrastructure and emphasis on innovative design and product development, we believe that we are well positioned to establish sustainable platforms that will support long-term growth and profitability.

Overview

The following discussion of our results of operations and liquidity and capital resources, including known trends and uncertainties identified by management, should be read in conjunction with the condensed consolidated financial statements and accompanying notes that appear elsewhere in this quarterly report.

The second quarter is our smallest revenue quarter, historically accounting for approximately 15 percent of annual net sales. As a result, geographic, product category and brand net sales results often produce large percentage variances when compared with the prior year's comparable period due to the small base of comparison and because of shifts in the timing of shipments to international distributors which may occur late in the second quarter or early in the third quarter.

All references to quarters relate to the quarter ended June 30 of the particular year. Highlights for the second quarter of 2009 are as follows:

• Net sales decreased $33.9 million, or 16%, to $179.2 million from $213.1 million for the comparable period in 2008. Changes in foreign currency exchange rates compared with the second quarter of 2008 negatively affected the consolidated net sales comparison by approximately four percentage points. The decrease in net sales was primarily concentrated in our Columbia brand business with the largest decline in the EMEA region, followed by Canada and the LAAP region. Net sales in the United States increased in the quarter due to incremental sales through our expanded base of Company-owned retail stores which more than offset a decline in our wholesale business in comparison to the second quarter of 2008. Net sales by geographical segment, product category and brand category are summarized in the following table.

                                                              Three Months Ended June 30,                                 Six Months Ended June 30,
                                                      2009                  2008            % Change             2009                2008             % Change
                                                      (In millions, except for percentage changes)              (In millions, except for percentage changes)
Geographical Net Sales to Unrelated Entities:
United States                                    $          97.7       $         95.6          2%          $          254.0      $       251.4           1%
EMEA                                                        33.7                 63.4        (47)%                     83.5              129.1         (35)%
LAAP                                                        39.9                 40.1          -                       86.0               89.1          (3)%
Canada                                                       7.9                 14.0        (44)%                     27.7               40.9         (32)%

                                                 $         179.2       $        213.1        (16)%         $          451.2      $       510.5         (12)%

Categorical Net Sales to Unrelated Entities:
Sportswear                                       $          98.4       $        115.5        (15)%         $          236.6      $       276.6         (14)%
Outerwear                                                   35.1                 41.8        (16)%                    111.9              111.4           -
Footwear                                                    33.4                 42.5        (21)%                     73.4               93.8         (22)%
Accessories and Equipment                                   12.3                 13.3         (8)%                     29.3               28.7           2%

                                                 $         179.2       $        213.1        (16)%         $          451.2      $       510.5         (12)%

Brand Net Sales to Unrelated Entities:
Columbia                                         $         162.0       $        194.1        (17)%         $          403.6      $       461.3         (13)%
Mountain Hardwear                                           13.2                 13.8         (4)%                     36.4               35.6           2%
Sorel                                                        1.6                  2.4        (33)%                      4.6                6.1         (25)%
Montrail                                                     2.4                  2.8        (14)%                      5.0                6.7         (25)%
Pacific Trail                                                 -                    -           -                        1.6                0.8          100%

                                                 $         179.2       $        213.1        (16)%         $          451.2      $       510.5         (12)%

• Gross profit increased 130 basis points to 41.5% of net sales from 40.2% of net sales for the comparable period in 2008. This increase was primarily due to the favorable effect of the regional sales mix as the relative proportion of lower margin net sales through our international distributor business decreased and the relative proportion of higher margin net sales through our expanded base of United States Company-owned retail stores increased.

• Selling, general and administrative ("SG&A") expense increased $0.9 million, or 1%, to $92.2 million from $91.3 million for the comparable period in 2008. We expect full year 2009 SG&A expense, as a percentage of net sales, to increase compared to 2008 due primarily to anticipated lower 2009 net sales in our wholesale and international distributor businesses compared to 2008, along with an increased fixed cost base resulting from our expanding direct-to-consumer initiatives.

• Net loss was $9.9 million or $0.29 per diluted share, compared to a net loss of $1.8 million or $0.05 per diluted share, for the comparable period in 2008.

Results of Operations

Net loss increased $8.1 million to $9.9 million for the second quarter of 2009 from $1.8 million for the comparable period in 2008. Diluted loss per share was $0.29 for the second quarter of 2009 compared to $0.05 for the second quarter of 2008.

The following table sets forth, for the periods indicated, the percentage relationship to net sales of specified items in our condensed consolidated statements of operations:

                                                   Three Months Ended          Six Months Ended
                                                        June 30,                   June 30,
                                                   2009           2008         2009         2008
Net sales                                           100.0 %       100.0 %      100.0 %      100.0 %
Cost of sales                                        58.5          59.8         59.0         57.6

Gross profit                                         41.5          40.2         41.0         42.4
Selling, general and administrative expense          51.5          42.8         43.0         38.2
Net licensing income                                  1.1           0.6          0.8          0.3

Income (loss) from operations                        (8.9 )        (2.0 )       (1.2 )        4.5
Interest income, net                                  0.4           1.1          0.3          0.9

Income (loss) before income tax                      (8.5 )        (0.9 )       (0.9 )        5.4
Income tax benefit (expense)                          3.0           0.1          0.2         (1.8 )

Net income (loss)                                    (5.5 )%       (0.8 )%      (0.7 )%       3.6 %

Quarter Ended June 30, 2009 Compared to Quarter Ended June 30, 2008

Net Sales: Consolidated net sales decreased 16% to $179.2 million for the second quarter of 2009 from $213.1 million for the comparable period in 2008. Changes in foreign currency exchange rates compared with the second quarter of 2008 negatively affected the consolidated net sales comparison by approximately four percentage points.

The decrease in net sales was primarily concentrated in our Columbia brand business in the EMEA region, followed by Canada and the LAAP region. Net sales in the United States increased in the second quarter of 2009 compared to the second quarter of 2008 as increased net sales through our expanded base of Company-owned retail stores more than offset a decrease in net sales in our wholesale business. By product category, the decrease in net sales was concentrated in sportswear, followed by footwear, outerwear and accessories and equipment.

Sales by Geographic Region

Net sales in the United States increased $2.1 million, or 2%, to $97.7 million for the second quarter of 2009 from $95.6 million for the comparable period in 2008. The increase in net sales in the United States was attributable to an increase in net sales of outerwear, partially offset by decreases in net sales of sportswear, accessories and equipment and footwear. The net sales increase was primarily attributable to increased net sales of Columbia-branded products through our expanded base of Company-owned retail stores with 16 more retail stores operating at June 30, 2009 than were operating at June 30, 2008. The increase in net sales of our retail business was partially offset by decreased net sales in our wholesale business. The decrease in wholesale net sales was primarily concentrated in Columbia-branded sportswear, which is typically the largest category in our spring season business. The decrease in wholesale net sales reflected lower initial order volumes, increased cancellation rates of advance orders, customer credit limitations and the bankruptcy of several wholesale customers.

Net sales in the EMEA region decreased $29.7 million, or 47%, to $33.7 million for the second quarter of 2009 from $63.4 million for the comparable period in 2008. Changes in foreign currency exchange rates compared with the second quarter of 2008 negatively affected the EMEA net sales comparison by approximately five percentage points. The decrease in net sales in the EMEA region was driven by outerwear, followed by sportswear, footwear and accessories and equipment. The net sales decrease for the EMEA region was driven by the EMEA distributors followed by our EMEA direct business. The net sales decrease for our EMEA distributor business reflected very difficult macro-economic conditions in the largest distributors' regions, coupled with a shift in the timing of fall 2009 shipments into the third quarter of 2009 from the second quarter of 2009 as compared to the same periods in 2008. The decrease in net sales in our EMEA direct business was a result of lower initial order volumes reflecting difficult macro-economic conditions and continued product assortment and marketing challenges in that region.

Net sales in the LAAP region decreased $0.2 million, or less than 1%, to $39.9 million for the second quarter of 2009 from $40.1 million for the comparable period in 2008. Changes in foreign currency exchange rates compared with the second quarter of 2008 negatively affected the LAAP net sales comparison by approximately seven percentage points. The decrease in net sales in the LAAP region was driven by outerwear followed by sportswear, partially offset by net sales increases in accessories and equipment and footwear. The net sales decrease in the LAAP region was driven by LAAP distributors, followed by our Korea business, partially

offset by an increase in net sales in our Japan business. The net sales decrease for LAAP distributors primarily reflected difficult macro-economic conditions in the distributors' regions and the rescheduling of some shipments for southern hemisphere distributors from the second quarter of 2009 to the fourth quarter of 2009. This rescheduling better aligns with the selling seasons for southern hemisphere customers that lag our product seasons by six months. The decrease in Korea net sales was due to unfavorable changes in foreign currency exchange rates, compared to the second quarter of 2008, which offset a net sales increase in local currency. The increase in Japan net sales was primarily the result of continued expansion of our wholesale business and favorable changes in foreign exchange rates compared to the second quarter of 2008.

Net sales in Canada decreased $6.1 million, or 44%, to $7.9 million for the second quarter of 2009 from $14.0 million for the comparable period in 2008. Changes in foreign currency exchange rates compared with 2008 negatively affected the Canada net sales comparison by approximately ten percentage points. The decrease in net sales in Canada was concentrated in sportswear while net sales of outerwear, footwear and accessories and equipment remained essentially flat compared to the second quarter of 2008. The net sales decrease was primarily attributable to lower initial order volumes from customers, which include planned reductions by us in some channels of distribution, as well as increased order cancellations and a shift in the timing of shipments of fall 2009 shipments from the second quarter of 2009 to the third quarter of 2009.

Sales by Product Category

Net sales of sportswear decreased $17.1 million, or 15%, to $98.4 million for the second quarter of 2009 from $115.5 million for the comparable period in 2008. The decrease in sportswear net sales was concentrated in the EMEA region, followed by Canada, the United States and the LAAP region. The sportswear net sales decrease in the EMEA region was concentrated in our EMEA direct business and, to a lesser degree, our EMEA distributor business. The sportswear net sales decrease in the United States was primarily attributable to decreased net sales of Columbia-branded products to our wholesale customers, partially offset by increased net sales through our expanded base of Company-owned retail stores. We primarily attribute the decreases in EMEA direct, Canada and United States wholesale sportswear net sales to lower initial order volumes for the spring 2009 season resulting from difficult macro-economic conditions in those regions. The decreased net sales of sportswear to EMEA distributors reflected difficult macro-economic conditions in the distributors' regions coupled with a shift in the timing of fall 2009 shipments into the third quarter of 2009 from the second quarter of 2009 as compared to the same periods in 2008.

Net sales of outerwear decreased $6.7 million, or 16%, to $35.1 million for the second quarter of 2009 from $41.8 million for the comparable period in 2008. The decrease in outerwear net sales primarily consisted of decreased net sales in the EMEA region, followed by the LAAP region, partially offset by net sales increases in the United States and Canada. The outerwear net sales decreases in the EMEA and LAAP regions were primarily attributable to decreased net sales to distributors in these regions compared to the same period in 2008.

Net sales of footwear decreased $9.1 million, or 21%, to $33.4 million for the second quarter of 2009 from $42.5 million for the comparable period in 2008. The decrease in footwear net sales primarily consisted of decreased net sales in the EMEA region, followed by the United States and Canada, partially offset by an increase in net sales in the LAAP region. The decrease in net sales of footwear for the EMEA region was concentrated in our EMEA distributor business followed by our EMEA direct business. Net sales of footwear to EMEA distributors decreased reflecting very difficult macro-economic conditions in the largest distributors' regions, coupled with a shift in the timing of fall 2009 shipments into the third quarter of 2009 from the second quarter of 2009 as compared to the same periods in 2008. The decrease in footwear net sales for our EMEA direct business resulted from lower initial order volumes due to difficult macro-economic conditions and continued product assortment and marketing challenges in the region.

Net sales of accessories and equipment decreased $1.0 million, or 8%, to $12.3 million for the second quarter of 2009 from $13.3 million for the comparable period in 2008. The decrease in accessories and equipment net sales was driven by the United States, followed by the EMEA region, partially offset by a net sales increase in the LAAP region. Net sales of accessories and equipment remained essentially flat in Canada. The decrease in accessories and equipment net sales in the United States was primarily attributable to decreased net sales in the Columbia brand wholesale business.

Gross Profit: Gross profit increased 130 basis points to 41.5% of net sales for the second quarter of 2009 from 40.2% of net sales for the comparable period in 2008. The increase was primarily due to the favorable effect of the regional sales mix as the relative proportion of lower margin net sales through our international distributor business decreased and the relative proportion of higher margin net sales through our expanded base of United States Company-owned retail stores increased.

Our gross profits may not be comparable to those of other companies in our industry because some include all of the costs related to their distribution network in cost of sales. We, like many others, include these expenses in SG&A.

Selling, General and Administrative Expense: SG&A expense includes all costs associated with our design, merchandising, marketing, distribution and corporate functions, including related depreciation and amortization.

SG&A expense increased $0.9 million, or 1%, to $92.2 million for the second quarter of 2009 from $91.3 million for the comparable period in 2008. As a percentage of net sales, SG&A expense increased to 51.5% for the second quarter of 2009 from 42.8% for the comparable period in 2008. The increase in SG&A expense as a percentage of net sales was largely the result of reduced net sales in our wholesale and distributor businesses coupled with an increased fixed cost base related to our expanding direct-to-consumer initiatives. This increase was partially offset by cost reduction initiatives that began after the first quarter of 2008 and positively affected the second quarter of 2009. The cost reduction initiatives included reductions in headcount, incentive compensation, benefits, and other discretionary costs.

Selling expenses, including commissions and advertising, decreased $3.3 million, or 18%, to 8.5% of net sales for the second quarter of 2009 from 8.7% of net sales for the comparable period in 2008. We attribute the decrease in selling expenses as a percentage of net sales to lower commission expense as certain sales territories in the United States and the EMEA region have moved in-house. Operating expenses for the in-house sales territories are included in general and administrative expenses.

General and administrative expenses increased $4.2 million, or 6%, to 43.0% of net sales for the second quarter of 2009 from 34.1% of net sales for the comparable period in 2008. The increase in general and administrative expenses as a percentage of net sales was primarily due to incremental operating costs in support of our direct-to-consumer initiatives, the movement of certain sales territories in-house and increased bad debt expense. Depreciation and amortization included in SG&A expense totaled $8.4 million for the second quarter of 2009, compared to $7.1 million for the same period in 2008.

Net Licensing Income: We license our trademarks across a range of categories that complement our current product offerings.

Net licensing income increased $0.9 million to $2.1 million for the second quarter of 2009 from $1.2 million for the same period in 2008 and was primarily attributed to increased apparel and footwear licensing in the LAAP region. Products distributed by our licensees for the second quarter of 2009 included apparel, footwear, socks, bicycles, insulated products including soft-sided coolers, leather accessories, camping gear, eyewear, watches, leather outerwear, and other accessories.

Interest Income, Net: Net interest income decreased $1.7 million to $0.6 million for the second quarter of 2009 from $2.3 million for the same period in 2008. The decrease in interest income was due to lower interest rates compared to the same period in 2008. Interest expense was nominal for the second quarter of 2009 and for the comparable period in 2008.

Income Tax Benefit: The net income tax benefit increased to $5.4 million for the second quarter of 2009 from $0.2 million for the comparable period in 2008 due to a higher loss before income taxes and a higher effective income tax rate in the second quarter of 2009 compared to the second quarter of 2008. Our effective income tax rate was 35.5% for the second quarter of 2009 compared to 11.6% for the same period in 2008. Our effective income tax rate increased primarily because our second quarter 2008 tax rate was abnormally low due to the impact that certain discrete quarterly tax expense items had on our small pre-tax loss position. Many factors could cause our annual effective tax rate to differ materially from our quarterly effective tax rates, including changes in the geographic mix of taxable income and discrete events in future periods. We anticipate that our full year income tax rate for 2009 will be lower than our second quarter 2009 tax rate.

Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008

Net Sales: Consolidated net sales decreased 12% to $451.2 million for the six months ended June 30, 2009 from $510.5 million for the comparable period in 2008. Changes in foreign currency exchange rates compared with the six months ended June 30, 2008 negatively affected the consolidated net sales comparison by approximately four percentage points.

The decrease in net sales was primarily concentrated in the EMEA region, followed by Canada and the LAAP region, partially offset by a net sales increase in the United States. By product category, the net sales decrease was driven by sportswear, followed by footwear. Net sales of accessories and equipment and outerwear remained essentially flat compared to 2008.

Sales by Geographic Region

Net sales in the United States increased $2.6 million, or 1%, to $254.0 million from $251.4 million for the comparable period in 2008. The increase in net sales in the United States was led by outerwear, partially offset by decreases in net sales of sportswear, footwear and accessories and equipment. The net sales increase was due to increased net sales of Columbia-branded products through our expanded base of Company-owned retail stores with 16 more retail stores operating at June 30, 2009 than were operating at June 30, 2008. Our retail business net sales increase was partially offset by decreased net sales in our wholesale business. The decrease in wholesale net sales was primarily attributable to the Columbia brand and primarily concentrated in our sportswear . . .