EX-99.1 2 a28156exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
 

Exhibit 99.1
(Quiksilver Logo)
         
 
  Company Contact:   Steven L. Brink
Chief Financial Officer
Quiksilver, Inc.
(714) 889-2200
 
       
 
  Investor Relations:   Chad A. Jacobs, Joe Teklits
Integrated Corporate Relations
(203) 682-8200
— Quiksilver, Inc. Reports Fiscal 2007 First Quarter Financial Results —
— First Quarter Net Revenues Increase 2% to $552.5 million —
— First Quarter Earnings Per Share of $0.02 —
— Company Revises Fiscal 2007 Guidance —
Huntington Beach, California, March 8, 2007 — Quiksilver, Inc. (NYSE:ZQK) today announced operating results for the first quarter ended January 31, 2007. Consolidated net revenues for the first quarter of fiscal 2007 increased 2% to $552.5 million from $541.1 million in the first quarter of fiscal 2006. Consolidated net income for the first quarter of fiscal 2007 amounted to $2.5 million compared to $18.6 million in the first quarter the year before. First quarter fully diluted earnings per share was $0.02 compared to $0.15 for the first quarter of fiscal 2006.
Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “We are obviously very disappointed with our recent results and our guidance revision for fiscal 2007. Feedback on the wintersports season, which was the worst in decades, has further deteriorated over the last several weeks. We are experiencing poor reorders, heavy markdowns, and a significant reduction in the order book for next season and the effects of that can be expected to continue throughout the year. On a more positive note, Quiksilver, Roxy and DC continue to prosper, all meeting or exceeding plan, and we remain excited about the significant growth opportunities that still exist.”
Net revenues in the Americas increased 9% during the first quarter of fiscal 2007 to $240.6 million from $220.7 million in the first quarter of fiscal 2006. As measured in U.S. dollars and reported in the financial statements, European net revenues decreased 3% during the first quarter of fiscal 2007 to $254.0 million from $261.2 million in the first quarter of fiscal 2006. As measured in euros, European net revenues decreased 11% for those same periods. Asia/Pacific net revenues decreased 2% to $57.2 million in the first quarter of fiscal 2007 from $58.3 million in the first quarter of fiscal 2006.
Consolidated inventories increased 19% to $485.3 million at January 31, 2007 from $406.5 million at January 31, 2006. Consolidated trade accounts receivable increased 15% to $612.9 million at January 31, 2007 from $533.5 million at January 31, 2006.
Bernard Mariette, President of Quiksilver, Inc., commented, “We are working hard to accelerate expense savings and maximize the business opportunities across our entire organization. While we are unhappy with our results and near-term outlook, we believe this past season is a clear aberration that resulted from weather. Rossignol’s prospects for growth remain extremely compelling. At the same time, Quiksilver, Roxy, DC and our entire portfolio of powerful brands continue to lead the industry in terms of design, innovation, product development and marketing. In fiscal 2007, we will further streamline our operations, institute a global sourcing initiative, and take advantage of opportunities to extend our product lines, deepen our distribution, and create new vehicles for growth.”

 


 

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Quiksilver, Inc. 2007 First Quarter Results
March 8, 2007
Page 2 of 6
The company revised its fiscal 2007 annual revenue guidance to roughly $2.45 billion and its fiscal 2007 annual diluted earnings per share guidance to approximately $0.53.
Mr. McKnight concluded, “There is no question that we have challenges ahead of us this year. At the same time, we remain very confident about our prospects for the future. We believe that we will prove capable of developing a stronger, leaner, more focused business. To our shareholders, we are dedicated to exploring all potential avenues to improve profitability and enhance shareholder value. Our strategy is intact. Rossignol remains the premier mountain brand and continues to represent a tremendous, untapped opportunity. We move forward undeterred in our mission to leverage our position in the outdoor market and to build the reputation and reach of our brands around the globe.”
About Quiksilver:
Quiksilver, Inc. (NYSE:ZQK) is the world’s leading outdoor sports lifestyle company, which designs, produces and distributes a diversified mix of branded apparel, wintersports and golf equipment, footwear, accessories and related products. The Company’s apparel and footwear brands represent a casual lifestyle for young-minded people that connect with its boardriding culture and heritage, while its wintersports and golf brands symbolize a long standing commitment to technical expertise and competitive success on the mountains and on the links.
The reputation of Quiksilver’s brands is based on different outdoor sports. The Company’s Quiksilver, Roxy, DC Shoes and Hawk brands are synonymous with the heritage and culture of surfing, skateboarding and snowboarding, and its beach and water oriented swimwear brands include Raisins, Radio Fiji and Leilani. The Rossignol, Dynastar, Lange, Look and Kerma brands are leaders in the alpine ski market, and the Company makes snowboarding equipment under its Rossignol, Dynastar, DC Shoes, Roxy, Lib Technologies, Gnu and Bent Metal labels. The Company’s golf business includes Cleveland Golf, as well as Never Compromise putters and Fidra apparel. Gotcha is the Company’s surf-based European brand addressing street fashion.
The Company’s products are sold in over 90 countries in a wide range of distribution, including surf shops, ski shops, skateboard shops, snowboard shops, its proprietary Boardriders Club shops, other specialty stores and select department stores. The Company’s corporate and Americas’ headquarters are in Huntington Beach, California, while its European headquarters are in St. Jean de Luz and Moirans, France, and its Asia/Pacific headquarters are in Torquay, Australia.
Forward looking statements:
This press release contains forward-looking statements including but not limited to statements regarding the company’s financial forecast and, earnings guidance. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. Please refer to Quiksilver’s SEC filings for more information on the risk factors that could cause actual results to differ materially from expectations, specifically the section titled “Forward-Looking Statements” in Quiksilver’s Annual Report on Form 10-K.
* * * * *

 


 

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Quiksilver, Inc. 2007 First Quarter Results
March 8, 2007
Page 3 of 6
NOTE: For further information about Quiksilver, Inc., you are invited to take a look at our world at
www.quiksilver.com, www.roxy.com, www.dcshoecousa.com, www.quiksilveredition.com, www.hawkclothing.com,
www.rossignol.com, www.dynastar.com,
www.clevelandgolf.com, and www.fidragolf.com.

 


 

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Quiksilver, Inc. 2007 First Quarter Results
March 8, 2007
Page 4 of 6
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                 
    Three Months Ended January 31,  
In thousands, except per share amounts   2007     2006  
Revenues, net
  $ 552,524     $ 541,142  
Cost of goods sold
    294,173       292,581  
 
           
Gross profit
    258,351       248,561  
 
               
Selling, general and administrative expense
    239,219       211,305  
 
           
 
               
Operating income
    19,132       37,256  
 
               
Interest expense
    15,554       12,591  
Foreign currency loss (gain)
    1,943       (497 )
Minority interest and other (income) expense
    (1,691 )     (1,226 )
 
           
Income before provision for income taxes
    3,326       26,388  
 
               
Provision for income taxes
    851       7,785  
 
           
 
               
Net income
  $ 2,475     $ 18,603  
 
           
 
               
Net income per share
  $ 0.02     $ 0.15  
 
           
 
               
Net income per share, assuming dilution
  $ 0.02     $ 0.15  
 
           
 
               
Weighted average common shares outstanding
    123,049       121,434  
 
           
 
               
Weighted average common shares outstanding, assuming dilution
    129,234       127,240  
 
           

 


 

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Quiksilver, Inc. 2007 First Quarter Results
March 8, 2007
Page 5 of 6
CONSOLIDATED BALANCE SHEETS (Unaudited)
                 
    January 31,     October 31,  
In thousands   2007     2006  
ASSETS
Current assets:
               
Cash and cash equivalents
  $ 45,996     $ 36,834  
Trade accounts receivable, less allowance for doubtful accounts of $30,732 (2007) and $32,840 (2006)
    612,865       721,562  
Other receivables
    36,195       35,324  
Inventories
    485,287       425,864  
Deferred income taxes
    85,101       84,672  
Prepaid expenses and other current assets
    55,995       28,926  
 
           
Total current assets
    1,321,439       1,333,182  
 
               
Fixed assets, net
    296,394       282,334  
Intangibles, net
    251,503       248,206  
Goodwill
    517,722       515,710  
Other assets
    44,574       45,954  
Assets held for sale
    18,506       21,842  
 
           
Total assets
  $ 2,450,138     $ 2,447,228  
 
           
 
               
LIABILITIES & STOCKHOLDERS’ EQUITY
 
               
Current Liabilities:
               
Lines of credit
  $ 303,059     $ 315,891  
Accounts payable
    253,502       220,177  
Accrued liabilities
    177,712       201,087  
Current portion of long-term debt
    25,111       24,621  
Income taxes payable
    ¯       2,810  
 
           
Total current liabilities
    759,384       764,586  
 
               
Long-term debt
    679,633       689,690  
Deferred income taxes and other long-term liabilities
    99,150       100,632  
 
           
Total liabilities
    1,538,167       1,554,908  
 
               
Minority interest
    10,464       11,193  
 
               
Stockholders’ equity:
               
Preferred stock
    ¯       ¯  
Common stock
    1,272       1,264  
Additional paid-in capital
    284,970       274,488  
Treasury stock
    (6,778 )     (6,778 )
Retained earnings
    561,534       559,059  
Accumulated other comprehensive income
    60,509       53,094  
 
           
Total stockholders’ equity
    901,507       881,127  
 
           
 
               
Total liabilities & stockholders’ equity
  $ 2,450,138     $ 2,447,228  
 
           

 


 

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Quiksilver, Inc. 2007 First Quarter Results
March 8, 2007
Page 6 of 6
Information related to operating segments is as follows:
                 
    Three Months Ended January 31,  
In thousands   2007     2006  
Revenues, net:
               
Americas
  $ 240,558     $ 220,718  
Europe
    253,997       261,152  
Asia/Pacific
    57,195       58,342  
Corporate operations
    774       930  
 
           
 
  $ 552,524     $ 541,142  
 
           
 
               
Gross Profit:
               
Americas
  $ 96,749     $ 87,782  
Europe
    135,324       134,708  
Asia/Pacific
    25,767       25,812  
Corporate operations
    511       259  
 
           
 
  $ 258,351     $ 248,561  
 
           
 
               
SG&A Expense:
               
Americas
  $ 98,710     $ 83,819  
Europe
    101,591       91,455  
Asia/Pacific
    26,389       22,844  
Corporate operations
    12,529       13,187  
 
           
 
  $ 239,219     $ 211,305  
 
           
 
               
Operating Income:
               
Americas
  $ (1,961 )   $ 3,963  
Europe
    33,733       43,253  
Asia/Pacific
    (622 )     2,968  
Corporate operations
    (12,018 )     (12,928 )
 
           
 
  $ 19,132     $ 37,256