EX-99.1 2 a31051exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
(QUIKSILVER LOGO)
     
Company Contact:
  Joe Scirocco
 
  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 Second Quarter Financial Results —
Huntington Beach, California, June 7, 2007 — Quiksilver, Inc. (NYSE:ZQK) today announced operating results for the second quarter ended April 30, 2007. Consolidated net revenues for the second quarter of fiscal 2007 increased 17% to $603.8 million from $516.9 million in the second quarter of fiscal 2006. Consolidated net loss for the second quarter of fiscal 2007 was $4.8 million compared to net income of $3.7 million the year before. Second quarter fully diluted (loss) earnings per share was $(0.04) versus $0.03 for the second quarter of fiscal 2006.
Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “We finished the quarter in line with our revised plan and we are very confident with the direction of our business over the longer term. While clearly our opportunity, to some degree, is dependent on a normal winter season, we have positioned ourselves for improved results in our Rossignol and Cleveland Golf businesses. We have rationalized our infrastructure, streamlined our industrial base, and strengthened our organization. At the same time, we are extremely pleased with the strength that continues to be evident in our apparel and footwear operations.”
Net revenues in the Americas increased 12% during the second quarter of fiscal 2007 to $279.8 million from $250.0 million in the second quarter of fiscal 2006. As measured in U.S. dollars and reported in the financial statements, European net revenues increased 24% during the second quarter of fiscal 2007 to $268.8 million from $217.1 million in the second quarter of fiscal 2006. As measured in euros, European net revenues increased 13% for those same periods. Asia/Pacific net revenues increased 12% to $54.0 million in the second quarter of fiscal 2007 from $48.2 million in the second quarter of fiscal 2006. As measured in Australian dollars, Asia/Pacific net revenues increased 3% for those same periods.
Consolidated inventories increased 15% to $463.3 million at April 30, 2007 from $402.0 million at April 30, 2006. Consolidated trade accounts receivable increased 25% to $603.7 million at April 30, 2007 from $483.0 million at April 30, 2006.
Bernard Mariette, the Company’s President, commented, “We are tremendously pleased with the performance from our core apparel business in each of our territories. Quiksilver, Roxy, and DC continue to experience healthy growth and profitability. In order to maximize the financial opportunity associated with the performance of these marquis lifestyle brands, we are working hard to improve our sourcing efficiencies and to implement other cost synergies. Over the next few years, our focus will be to complete our transformation from a multi-national company to a truly global organization and to unlock the associated financial benefits.”
The Company said it continues to expect fiscal 2007 annual revenues of approximately $2.5 billion and fiscal 2007 annual diluted earnings per share of $0.53. The Company noted, however, that it expects a change to its previous quarterly estimates, in which earnings per share of $0.03 would shift from the third to the fourth fiscal quarter.

 

 

(QUIKSILVER LOGO)
Quiksilver, Inc. 2007 Second Quarter Results
June 7, 2007
Page 2 of 6
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. 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.
Forward looking statements:
This press release contains forward-looking statements including but not limited to statements regarding the company’s financial forecast, earnings and revenue guidance and the success of the Rossignol integration activities. 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 LOGO)
Quiksilver, Inc. 2007 Second Quarter Results
June 7, 2007
Page 3 of 6
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                 
    Three Months Ended April 30,  
In thousands, except per share amounts   2007     2006  
Revenues, net
   $ 603,799     $ 516,928  
Cost of goods sold
     332,936       282,438  
 
            
Gross profit
     270,863       234,490  
 
                
Selling, general and administrative expense
     262,082       215,838  
 
            
 
                
Operating income
     8,781       18,652  
 
                
Interest expense
     14,789       11,949  
Foreign currency loss (gain)
     1,473       (496 )
Minority interest and other expense
     (457 )     1,637  
 
            
(Loss) income before (benefit) provision for income taxes
     (7,024 )     5,562  
 
                
(Benefit) provision for income taxes
     (2,224 )     1,833  
 
            
 
                
Net (loss) income
   $ (4,800 )   $ 3,729  
 
            
 
                
Net (loss) income per share
   $ (0.04 )   $ 0.03  
 
            
 
                
Net (loss) income per share, assuming dilution
   $ (0.04 )   $ 0.03  
 
            
 
                
Weighted average common shares outstanding
     123,596       122,018  
 
            
 
                
Weighted average common shares outstanding, assuming dilution
     123,596       127,790  
 
            

 

 

(QUIKSILVER LOGO)
Quiksilver, Inc. 2007 Second Quarter Results
June 7, 2007
Page 4 of 6
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                 
    Six Months Ended April 30,  
In thousands, except per share amounts   2007     2006  
Revenues, net
   $ 1,156,323     $ 1,058,070  
Cost of goods sold
     627,109       575,019  
 
            
Gross profit
     529,214       483,051  
 
                
Selling, general and administrative expense
     501,301       427,143  
 
            
 
                
Operating income
     27,913       55,908  
 
                
Interest expense
     30,343       24,540  
Foreign currency loss (gain)
     3,416       (993 )
Minority interest and other expense
     (2,148 )     411  
 
            
(Loss) income before provision for income taxes
     (3,698 )     31,950  
 
                
(Benefit) provision for income taxes
     (1,373 )     9,618  
 
            
 
                
Net (loss) income
   $ (2,325 )   $ 22,332  
 
            
 
                
Net (loss) income per share
   $ (0.02 )   $ 0.18  
 
            
 
                
Net (loss) income per share, assuming dilution
   $ (0.02 )   $ 0.18  
 
            
 
                
Weighted average common shares outstanding
     123,323       121,721  
 
            
 
                
Weighted average common shares outstanding, assuming dilution
     123,323       127,479  
 
            

 

 

(QUIKSILVER LOGO)
Quiksilver, Inc. 2007 Second Quarter Results
June 7, 2007
Page 5 of 6
CONSOLIDATED BALANCE SHEETS (Unaudited)
                 
    April 30,     April 30,  
In thousands   2007     2006  
ASSETS
Current assets:
                
Cash and cash equivalents
   $ 64,455     $ 96,818  
Trade accounts receivable, less allowance for doubtful accounts of $34,339 (2007) and $31,952 (2006)
     603,650       482,978  
Other receivables
     42,885       26,633  
Inventories
     463,313       402,033  
Deferred income taxes
     93,281       44,220  
Prepaid expenses and other current assets
     34,459       26,017  
 
            
Total current assets
     1,302,043       1,078,699  
 
                
Fixed assets, net
     313,756       266,096  
Intangibles, net
     255,529       247,482  
Goodwill
     547,377       475,730  
Other assets
     42,741       45,464  
Assets held for sale
     19,494       18,944  
 
            
Total assets
   $ 2,480,940     $ 2,132,415  
 
            
 
                
LIABILITIES & STOCKHOLDERS’ EQUITY
 
                
Current Liabilities:
                
Lines of credit
   $ 268,500     $ 205,471  
Accounts payable
     226,728       197,193  
Accrued liabilities
     163,980       147,556  
Current portion of long-term debt
     26,108       16,267  
Income taxes payable
     748       —  
 
            
Total current liabilities
     686,064       566,487  
 
                
Long-term debt
     745,857       684,800  
Deferred income taxes and other long-term liabilities
     98,463       74,340  
 
            
Total liabilities
     1,530,384       1,325,627  
 
                
Minority interest
     10,072       10,353  
 
                
Stockholders’ equity:
                
Preferred stock
     —       —  
Common stock
     1,274       1,252  
Additional paid-in capital
     290,627       261,734  
Treasury stock
     (6,778 )     (6,778 )
Retained earnings
     556,734       488,375  
Accumulated other comprehensive income
     98,627       51,852  
 
            
Total stockholders’ equity
     940,484       796,435  
 
            
 
                
Total liabilities & stockholders’ equity
   $ 2,480,940     $ 2,132,415  
 
            

 

 

(QUIKSILVER LOGO)
Quiksilver, Inc. 2007 Second Quarter Results
June 7, 2007
Page 6 of 6
Information related to operating segments is as follows:
                 
    Three Months Ended April 30,  
In thousands   2007     2006  
Revenues, net:
                
Americas
   $ 279,810     $ 250,042  
Europe
     268,829       217,149  
Asia/Pacific
     53,957       48,247  
Corporate operations
     1,203       1,490  
 
            
 
   $ 603,799     $ 516,928  
 
            
 
                
Gross Profit:
                
Americas
   $ 111,274     $ 103,166  
Europe
     133,040       108,512  
Asia/Pacific
     25,501       22,045  
Corporate operations
     1,048       767  
 
            
 
   $ 270,863     $ 234,490  
 
            
 
                
SG&A Expense:
                
Americas
   $ 99,363     $ 81,509  
Europe
     118,952       96,162  
Asia/Pacific
     27,902       24,334  
Corporate operations
     15,865       13,833  
 
            
 
   $ 262,082     $ 215,838  
 
            
 
                
Operating Income:
                
Americas
   $ 11,911     $ 21,657  
Europe
     14,088       12,350  
Asia/Pacific
     (2,401 )     (2,289 )
Corporate operations
     (14,817 )     (13,066 )
 
            
 
   $ 8,781     $ 18,652  
 
            
Revenues by classification within operating segments are as follows:
                                                 
    Three Months Ended April 30,  
    2007     2006  
    Apparel     Equipment             Apparel     Equipment        
In thousands   Brands     Brands     Total     Brands     Brands     Total  
Americas
   $ 235,724     $ 44,086     $ 279,810     $ 200,242     $ 49,800     $ 250,042  
Europe
     232,587       36,242       268,829       184,149       33,000       217,149  
Asia/Pacific
     50,821       3,136       53,957       44,147       4,100       48,247  
Corporate operations
     —       —       1,203       —       —       1,490  
 
                                    
 
   $ 519,132     $ 83,464     $ 603,799     $ 428,538     $ 86,900     $ 516,928