EX-99.1 2 a12401exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
(Quiksilver)
         
 
  Company Contact:   Steven L. Brink
Chief Financial Officer
Quiksilver, Inc.
(714) 889-2200
 
        
 
  Investor Relations:   Chad A. Jacobs, James Palczynski
Integrated Corporate Relations
(203) 682-8200
— Quiksilver, Inc. Reports 2005 Third Quarter Financial Results —
- Net Revenues Increase 11% to $373.8 million -
- Earnings Per Share increase 25% to $0.20 -
Huntington Beach, California, September 8, 2005—Quiksilver, Inc. (NYSE: ZQK) today announced operating results for the third quarter ended July 31, 2005. Consolidated net revenues for the third quarter of fiscal 2005 increased 11% to $373.8 million from $337.9 million in the third quarter of fiscal 2004. Consolidated net income for the third quarter of fiscal 2005 increased 26% to $24.6 million from $19.5 million the year before. Third quarter fully diluted earnings per share was $0.20 versus $0.16 for the third quarter of fiscal 2004, both amounts as adjusted for the two-for-one stock split that took effect in May 2005.
Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “Once again, we are reporting strong results for the third quarter, and at the same time, we effectively executed on a number of key strategic initiatives that better position us for the future. During the quarter, we closed our acquisition of Skis Rossignol S.A., completed a highly successful bond offering and put a new global management structure in place. We also signed an exclusive licensing agreement with Kohl’s to distribute the Tony Hawk brand in the United States, opened our first Quiksilver Boardriders/Andaska store in Anglet, France and participated in a series of unique marketing events, including skateboarder Danny Way’s unprecedented jump over the Great Wall of China. Our teams around the world continue to perform at the highest level, and we look forward to building on the positive momentum that we have created in the marketplace.”
Net revenues in the Americas increased 4% during the third quarter of fiscal 2005 to $196.3 million from $187.9 million in the third quarter of fiscal 2004. As measured in U.S. dollars and reported in the financial statements, European net revenues increased 16% during the third quarter of fiscal 2005 to $133.6 million from $115.4 million in the third quarter of fiscal 2004. As measured in euros, European net revenues increased 14% for those same periods. Asia/Pacific net revenues increased 30% to $43.1 million in the third quarter of fiscal 2005 from $33.1 million in the third quarter of fiscal 2004. As measured in Australian dollars, Asia/Pacific net revenues increased 21% for those same periods.
Bernard Mariette, President of Quiksilver, Inc., commented, “Our integration plans for Rossignol continue to exceed our expectations, and we are more encouraged than ever with regard to our future in the snow and mountain lifestyle market. We have brought our people together to share a unified, global mind set which can be seen in the new Roxy line of ski products, which we believe will get a strong reception from both our customers and consumers. It is perhaps even more evident in the recent announcement we made to combine all of our U.S. mountain sports businesses together under one roof in Park City, Utah next Spring. We are working hard to bring

 

 

(Quiksilver)
Quiksilver, Inc. Third Quarter 2005 Results
September 8, 2005
Page 2 of 7
our vision to life and thank all of our employees, partners and customers for helping take this great company to the next level.”
Mr. Mariette continued, “Even as we focus on maximizing the opportunities for the core business within Rossignol, we recognize that our largest prospect for growth with Rossignol will come from expanding the brand into a leader in the sportswear and outerwear market. Our design and merchandising teams are excited about this opportunity, and just as we have come to be the leading lifestyle brand for the beach, we intend to dominate the mountain as well.”
Excluding the inventory acquired as part of the Rossignol acquisition, consolidated inventories amounted to $204.4 million at July 31, 2005, a 19% increase from $171.6 million at July 31, 2004. Excluding the accounts receivable acquired as part of the Rossignol acquisition, consolidated trade accounts receivable increased 23% to $333.5 million at July 31, 2005 from $271.4 million at July 31, 2004.
The Company also indicated its expectations for the fourth quarter ending October 31, 2005, that revenues will range between $582 million and $592 million, and diluted earnings per share will range from $0.26 to $0.27. For the full fiscal year, revenues are expected to range between $1.73 billion and $1.74 billion with diluted earnings per share ranging from $0.86 to $0.87.
Mr. McKnight concluded, “The positive response we received at the recent trade shows, both in the U.S. and abroad, gives us further confidence that our brands remain strong, our products are among the best in the industry and our powerful market position continues to grow. Over the past year, we have significantly enhanced our global platform, and now we move forward as the world leader in the outdoor market. Our entire team is energized and focused on further capitalizing on the great number of compelling opportunities that lie ahead.”
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, Leilani and Island Soul. 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. Quiksilver’s corporate and Americas’ headquarters are in Huntington Beach, California, while its European headquarters are in St. Jean de Luz and Voiron, France, and its Asia/Pacific headquarters are in Torquay, Australia.

 

 

(Quiksilver)
Quiksilver, Inc. Third Quarter 2005 Results
September 8, 2005
Page 3 of 7
Forward looking statements:
This press release contains forward-looking statements. 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.
* * * * *
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.

 

 

(Quiksilver)
Quiksilver, Inc. Third Quarter 2005 Results
September 8, 2005
Page 4 of 7
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                 
    Three Months Ended July 31,  
In thousands, except per share amounts   2005     2004  
Revenues, net
   $ 373,751     $ 337,930  
Cost of goods sold
     198,836       187,523  
 
            
Gross profit
     174,915       150,407  
 
                
Selling, general and administrative expense
     133,589       118,864  
 
            
 
                
Operating income
     41,326       31,543  
 
                
Interest expense
     5,490       1,498  
Foreign currency gain
     (388 )     (28 )
Other expense
     207       392  
 
            
Income before provision for income taxes
     36,017       29,681  
 
                
Provision for income taxes
     11,382       10,151  
 
            
 
                
Net income
   $ 24,635     $ 19,530  
 
            
 
                
Net income per share
   $ 0.21     $ 0.17  
 
            
 
                
Net income per share, assuming dilution
   $ 0.20     $ 0.16  
 
            
 
                
Weighted average common shares outstanding
     118,764       116,772  
 
            
 
                
Weighted average common shares outstanding, assuming dilution
     124,308       121,626  
 
            

 

 

(Quiksilver)
Quiksilver, Inc. Third Quarter 2005 Results
September 8, 2005
Page 5 of 7
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                 
    Nine Months Ended July 31,  
In thousands, except per share amounts   2005     2004  
Revenues, net
   $ 1,143,464     $ 916,651  
Cost of goods sold
     622,278       505,532  
 
            
Gross profit
     521,186       411,119  
 
                
Selling, general and administrative expense
     402,386       318,246  
 
            
 
                
Operating income
     118,800       92,873  
 
                
Interest expense
     10,548       4,563  
Foreign currency (gain) loss
     (213 )     2,059  
Other expense
     352       901  
 
            
Income before provision for income taxes
     108,113       85,350  
 
                
Provision for income taxes
     34,597       28,856  
 
            
 
                
Net income
   $ 73,516     $ 56,494  
 
            
 
                
Net income per share
   $ 0.62     $ 0.50  
 
            
 
                
Net income per share, assuming dilution
   $ 0.59     $ 0.48  
 
            
 
                
Weighted average common shares outstanding
     118,175       113,460  
 
            
 
                
Weighted average common shares outstanding, assuming dilution
     123,729       118,336  
 
            

 

 

(Quiksilver)
Quiksilver, Inc. Third Quarter 2005 Results
September 8, 2005
Page 6 of 7
CONSOLIDATED BALANCE SHEETS (Unaudited)
                 
    July 31,     October 31,  
Amounts in thousands   2005     2004  
ASSETS
Current assets:
                
Cash and cash equivalents
   $ 159,860     $ 55,197  
Trade accounts receivable, less allowance for doubtful accounts of $12,067 (2005) and $11,367 (2004)
     428,266       281,263  
Other receivables
     45,778       16,165  
Inventories
     438,336       179,605  
Deferred income taxes
     25,175       22,299  
Prepaid expenses and other current assets
     22,500       12,267  
 
            
Total current assets
     1,119,915       566,796  
 
                
Fixed assets, net
     252,245       122,787  
Intangibles, net
     244,196       121,116  
Goodwill
     415,471       169,785  
Deferred income taxes
     5,003       —  
Other assets
     34,133       10,506  
 
            
Total assets
   $ 2,070,963     $ 990,990  
 
            
LIABILITIES & STOCKHOLDERS’ EQUITY
Current Liabilities:
                
Lines of credit
   $ 198,366     $ 10,801  
Accounts payable
     219,806       105,054  
Accrued liabilities
     163,771       79,095  
Current portion of long-term debt
     74,396       10,304  
Income taxes payable
     22,252       18,442  
 
            
Total current liabilities
     678,591       223,696  
 
                
Long-term debt
     609,324       163,209  
Deferred income taxes
     73,943       15,841  
 
            
Total liabilities
     1,361,858       402,746  
 
                
Minority interest
     10,109       —  
Stockholders’ equity:
                
Common stock
     1,240       1,203  
Additional paid-in capital
     241,427       200,118  
Treasury stock
     (6,778 )     (6,778 )
Retained earnings
     432,439       358,923  
Accumulated other comprehensive income
     30,668       34,778  
 
            
Total stockholders’ equity
     698,996       588,244  
 
            
 
                
Total liabilities & stockholders’ equity
   $ 2,070,963     $ 990,990  
 
            

 

 

(Quiksilver)
Quiksilver, Inc. Third Quarter 2005 Results
September 8, 2005
Page 7 of 7
Information related to geographic segments is as follows:
                 
    Three Months Ended July 31,  
Amounts in thousands   2005     2004  
Revenues, net:
                
Americas
   $ 196,261     $ 187,880  
Europe
     133,573       115,436  
Asia/Pacific
     43,145       33,108  
Corporate operations
     772       1,506  
 
            
 
   $ 373,751     $ 337,930  
 
            
 
                
Gross Profit:
                
Americas
   $ 78,791     $ 75,286  
Europe
     73,419       58,194  
Asia/Pacific
     22,298       16,254  
Corporate operations
     407       673  
 
            
 
   $ 174,915     $ 150,407  
 
            
 
                
SG&A Expense:
                
Americas
   $ 55,872     $ 52,676  
Europe
     54,323       44,898  
Asia/Pacific
     16,499       12,442  
Corporate operations
     6,895       8,848  
 
            
 
   $ 133,589     $ 118,864  
 
            
 
                
Operating Income:
                
Americas
   $ 22,919     $ 22,610  
Europe
     19,096       13,296  
Asia/Pacific
     5,799       3,812  
Corporate operations
     (6,488 )     (8,175 )
 
            
 
   $ 41,326     $ 31,543