10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2004

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-15131

QUIKSILVER, INC.

(Exact name of registrant as specified in its charter)

Delaware	33-0199426
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

15202 Graham Street
Huntington Beach, California
92649
(Address of principal executive offices)
(Zip Code)

(714) 889-2200
(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [   ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [X] No [   ]

The number of shares outstanding of Registrant’s Common Stock,
par value $0.01 per share, at
September 10, 2004 was
58,452,134

QUIKSILVER, INC.

FORM 10-Q
INDEX

	Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets July 31, 2004 and October 31, 2003		2
Condensed Consolidated Statements of Income Three Months Ended July 31, 2004 and 2003		3
Condensed Consolidated Statements of Income Nine Months Ended July 31, 2004 and 2003		4
Condensed Consolidated Statements of Comprehensive Income Nine Months Ended July 31, 2004 and 2003		4
Condensed Consolidated Statements of Cash Flows Nine Months Ended July 31, 2004 and 2003		5
Notes to Condensed Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
Results of Operations		13
Three Months Ended July 31, 2004 Compared to Three Months Ended July 31, 2003		14
Nine Months Ended July 31, 2004 Compared to Nine Months Ended July 31, 2003		15
Financial Position, Capital Resources and Liquidity		16
Critical Accounting Policies		17
New Accounting Pronouncements		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		20
Item 4. Controls and Procedures		20
Part II - OTHER INFORMATION
Item 6. Exhibits		21
SIGNATURE		22
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 10.5
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

QUIKSILVER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	July 31,			October 31,
In thousands, except share amounts	2004			2003
ASSETS
Current assets:
Cash and cash equivalents	$	45,389		$	27,866
Trade accounts receivable, less allowance for doubtful accounts of $11,248 (2004) and $8,700 (2003)		271,399			224,418
Other receivables		11,086			7,617
Inventories		171,639			146,440
Deferred income taxes		22,350			17,472
Prepaid expenses and other current assets		13,871			9,732
Total current assets		535,734			433,545
Fixed assets, less accumulated depreciation and amortization of $86,680 (2004) and $69,771 (2003)		111,690			99,299
Intangible assets, net		114,962			65,577
Goodwill		131,328			98,833
Deferred income taxes		3,381			1,984
Other assets		11,793			8,732
Total assets	$	908,888		$	707,970
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Lines of credit	$	5,190		$	20,951
Accounts payable		97,818			64,537
Accrued liabilities		54,069			41,759
Current portion of long-term debt		9,880			8,877
Income taxes payable		14,443			10,796
Total current liabilities		181,400			146,920
Long-term debt, net of current portion		176,716			114,542
Total liabilities		358,116			261,462
Stockholders’ equity
Preferred stock, $.01 par value, authorized shares - 5,000,000; issued and outstanding shares - none		—			—
Common stock, $.01 par value, authorized shares - 85,000,000; issued and outstanding shares – 59,894,734 (2004) and 57,020,517 (2003)		599			570
Additional paid-in-capital		197,335			155,310
Treasury stock, 1,442,600 shares		(6,778	)		(6,778	)
Retained earnings		334,048			277,554
Accumulated other comprehensive income		25,568			19,852
Total stockholders’ equity		550,772			446,508
Total liabilities and stockholders’ equity	$	908,888		$	707,970

See notes to condensed consolidated financial statements.

2

QUIKSILVER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three months ended July 31,
In thousands, except per share amounts	2004			2003
Revenues	$	337,930		$	251,498
Cost of goods sold		187,523			144,369
Gross profit		150,407			107,129
Selling, general and administrative expense		118,864			85,684
Operating income		31,543			21,445
Interest expense		1,498			2,232
Foreign currency (gain) loss		(28	)		801
Other expense		392			146
Income before provision for income taxes		29,681			18,266
Provision for income taxes		10,151			6,348
Net income	$	19,530		$	11,918
Net income per share	$	0.33		$	0.22
Net income per share, assuming dilution	$	0.32		$	0.21
Weighted average common shares outstanding		58,386			55,077
Weighted average common shares outstanding, assuming dilution		60,813			57,567

See notes to condensed consolidated financial statements.

3

QUIKSILVER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Nine months ended July 31,
In thousands, except per share amounts	2004		2003
Revenues	$	916,651	$	705,788
Cost of goods sold		505,532		398,568
Gross profit		411,119		307,220
Selling, general and administrative expense		318,246		235,483
Operating income		92,873		71,737
Interest expense		4,563		6,455
Foreign currency loss		2,059		1,616
Other expense		901		410
Income before provision for income taxes		85,350		63,256
Provision for income taxes		28,856		22,140
Net income	$	56,494	$	41,116
Net income per share	$	1.00	$	0.76
Net income per share, assuming dilution	$	0.95	$	0.73
Weighted average common shares outstanding		56,730		53,827
Weighted average common shares outstanding, assuming dilution		59,168		56,244

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Nine months ended July 31,
In thousands	2004		2003
Net income	$	56,494	$	41,116
Other comprehensive income:
Foreign currency translation adjustment		3,977		16,986
Net unrealized gain on derivative instruments, net of tax of $(1,138) (2004) and $(878) (2003)		1,739		1,119
Comprehensive income	$	62,210	$	59,221

See notes to condensed consolidated financial statements.

4

QUIKSILVER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended July 31,
In thousands	2004			2003
Cash flows from operating activities:
Net income	$	56,494		$	41,116
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		19,546			15,206
Provision for doubtful accounts		5,796			4,565
Loss on sale of fixed assets		668			332
Foreign currency (gain) loss		(488	)		42
Interest accretion		884			586
Changes in operating assets and liabilities:
Trade accounts receivable		(32,666	)		(16,036	)
Other receivables		(240	)		(3,099	)
Inventories		(10,104	)		(45,097	)
Prepaid expenses and other current assets		(957	)		(3,765	)
Other assets		(2,058	)		(1,807	)
Accounts payable		18,964			25,028
Accrued liabilities		11,507			(2,360	)
Income taxes payable		7,523			7,921
Net cash provided by operating activities		74,869			22,632
Cash flows from investing activities:
Capital expenditures		(33,364	)		(23,382	)
Business acquisitions, net of cash acquired		(55,767	)		(27,790	)
Net cash used in investing activities		(89,131	)		(51,172	)
Cash flows from financing activities:
Borrowings on lines of credit		80,801			108,025
Payments on lines of credit		(52,259	)		(34,609	)
Borrowings on long-term debt		4,916			12,298
Payments on long-term debt		(11,216	)		(22,848	)
Proceeds from stock option exercises		7,904			10,395
Net cash provided by financing activities		30,146			73,261
Effect of exchange rate changes on cash		1,639			2,045
Net increase in cash and cash equivalents		17,523			46,766
Cash and cash equivalents, beginning of period		27,866			2,597
Cash and cash equivalents, end of period	$	45,389		$	49,363
Supplementary cash flow information -
Cash paid during the period for:
Interest	$	4,021		$	4,763
Income taxes	$	17,989		$	13,139
Non-cash investing and financing activities:
Common stock issued for business acquisition	$	27,312		$	71,252
Deferred purchase price obligation	$	6,460		$	4,535

See notes to condensed consolidated financial statements.

5

QUIKSILVER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	Basis of Presentation
	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statement presentation.
	The Company, in its opinion, has included all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results of operations for the three and nine months ended July 31, 2004 and 2003. The condensed consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements and notes for the year ended October 31, 2003 included in the Company’s Annual Report on Form 10-K. Interim results are not necessarily indicative of results for the full year due to seasonal and other factors.
2.	New Accounting Pronouncements
	In January 2003, the FASB issued FIN 46, “Consolidation of Variable Interest Entities” and issued FIN 46 (R) in December 2003, which amended FIN 46. FIN 46 requires certain variable interest entities to be consolidated in certain circumstances by the primary beneficiary even if it lacks a controlling financial interest. Adopting FIN 46 and FIN 46 (R) will not have a material impact on the Company’s operational results or financial position since it does not have any variable interest entities.
	In March 2004, the Emerging Issues Task Force (“EITF”) ratified EITF Issue No. 03-1 (“EITF 03-1”), “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments”. EITF 03-1 provides a three-step process for determining whether investments, including debt securities, are other than temporarily impaired and requires additional disclosures in annual financial statements. This provision would be effective with the Company’s fourth fiscal quarter ending July 31, 2004. The Company does not expect the adoption of EITF 03-1 to have a material impact on its financial position or results of operations because the Company does not hold any applicable investments.
3.	Stock Based Compensation
	The Company applies Accounting Principles Board Opinion 25 and related interpretations in accounting for its stock option plans. No stock-based employee compensation expense is reflected in net income, as all options granted under the Company’s stock option plans had exercise prices equal to the market value of the underlying common stock on the grant dates. The following table contains the pro forma disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation”.

6

	Three Months				Nine Months
	Ended				Ended
	July 31,				July 31,
In thousands	2004		2003		2004		2003
Actual net income	$	19,530	$	11,918	$	56,494	$	41,116
Less: stock-based employee compensation expense determined under the fair value based method, net of tax		2,032		1,443		6,127		3,767
Pro forma net income	$	17,498	$	10,475	$	50,367	$	37,349
Actual net income per share	$	0.33	$	0.22	$	1.00	$	0.76
Pro forma net income per share	$	0.30	$	0.19	$	0.89	$	0.69
Actual net income per share, assuming dilution	$	0.32	$	0.21	$	0.95	$	0.73
Pro forma net income per share, assuming dilution	$	0.29	$	0.18	$	0.86	$	0.67

4.	Inventories
	Inventories consist of the following:

	July 31,		October 31,
In thousands	2004		2003
Raw Materials	$	14,349	$	10,708
Work-In-Process		5,837		8,426
Finished Goods		151,453		127,306
	$	171,639	$	146,440

5.	Intangible Assets and Goodwill
	A summary of intangible assets is as follows:

	July 31, 2004							October 31, 2003
	Gross		Amorti-			Net Book		Gross		Amorti-			Net Book
In thousands	Amount		zation			Value		Amount		zation			Value
Amortizable trademarks	$	3,348	$	(648	)	$	2,700	$	2,453	$	(489	)	$	1,964
Amortizable licenses		10,105		(1,684	)		8,421		10,105		(926	)		9,179
Amortizable non-compete agreements		2,100		(150	)		1,950		—		—			—
Amortizable patents and other		1,733		(54	)		1,679		—		—			—
Amortizable customer relationships		1,800		(45	)		1,755		—		—			—
Non-amortizable trademarks		98,457		—			98,457		54,434		—			54,434
	$	117,543	$	(2,581	)	$	114,962	$	66,992	$	(1,415	)	$	65,577

Certain trademarks are amortized by the Company using estimated useful lives of 10 to 25 years with no residual values. Licenses, non-compete agreements, patents and customer relationships are amortized by the Company using estimated useful lives of 42 months to 18 years. Intangible amortization expense for the nine months ended July 31, 2004 was $1.2 million. Annual amortization expense is estimated to be approximately $2.2 million in each of the fiscal years ending October 31, 2005 through 2007 and approximately $1.6 million in fiscal years ending October 31, 2008 and 2009. Goodwill related to the Company’s geographic segments is as follows:

7

	July 31,		October 31,
In thousands	2004		2003
Americas	$	66,523	$	50,670
Europe		55,093		41,592
Asia/Pacific		9,712		6,571
	$	131,328	$	98,833

Goodwill arose primarily from the acquisitions of Quiksilver Europe, The Raisin Company, Inc., Mervin, Freestyle SA, Beach Street, Quiksilver Asia/Pacific and DC Shoes, Inc. Goodwill increased during the nine months ended July 31, 2004 as a result of the Company’s acquisition of its Swiss distributor, Sunshine Diffusion SA, from the contingent purchase price payment recorded related to the acquisition of Quiksilver Asia/Pacific, as a result of the Company’s acquisition of DC Shoes, Inc. as described in Note 9 to these financial statements, and also due to foreign exchange fluctuations.

6.	Accumulated Other Comprehensive Income
	The components of accumulated other comprehensive income include net income, changes in fair value of derivative instruments qualifying as cash flow hedges, the fair value of interest rate swaps and foreign currency translation adjustments. The components of accumulated other comprehensive income, net of tax, are as follows:

	July 31,			October 31,
In thousands	2004			2003
Foreign currency translation adjustment	$	27,847		$	23,870
Loss on cash flow hedges and interest rate swaps		(2,279	)		(4,018	)
	$	25,568		$	19,852

7.

Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Company’s management in deciding how to allocate resources and in assessing performance. The Company operates exclusively in the consumer products industry in which the Company designs, produces and distributes clothing, accessories and related products. Operating results of the Company’s various product lines have been aggregated because of their common characteristics and their reliance on shared operating functions. Within the consumer products industry, the Company has historically operated in the Americas (primarily the U.S.) and Europe. Effective with its acquisition of Quiksilver Asia/Pacific on December 1, 2002, the Company has added operations in Australia, Japan, New Zealand and other Southeast Asian countries and territories. Accordingly, the Company has revised its geographic segments to include Asia/Pacific and corporate operations. Costs that support all three geographic segments, including trademark protection and maintenance, finance and accounting, the Hong Kong sourcing office, licensing functions and related royalty income are part of corporate operations. No single customer accounts for more than 10% of the Company’s revenues.

8

Information related to the Company’s geographical segments is as follows:

	Three Months Ended July 31,
In thousands	2004			2003
Revenues:
Americas	$	187,880		$	137,366
Europe		115,436			93,852
Asia/Pacific		33,108			19,775
Corporate Operations		1,506			505
	$	337,930		$	251,498
Gross Profit:
Americas	$	75,286		$	52,048
Europe		58,194			45,612
Asia/Pacific		16,254			8,964
Corporate Operations		673			505
	$	150,407		$	107,129
Operating Income:
Americas	$	22,610		$	13,694
Europe		13,296			11,749
Asia/Pacific		3,812			624
Corporate Operations		(8,175	)		(4,622	)
	$	31,543		$	21,445

	Nine Months Ended July 31,
In thousands	2004			2003
Revenues:
Americas	$	459,615		$	366,870
Europe		361,905			279,562
Asia/Pacific		92,594			57,434
Corporate Operations		2,537			1,922
	$	916,651		$	705,788
Gross Profit:
Americas	$	186,164		$	146,123
Europe		178,532			132,582
Asia/Pacific		44,968			26,593
Corporate Operations		1,455			1,922
	$	411,119		$	307,220
Operating Income:
Americas	$	51,708		$	37,075
Europe		52,440			42,023
Asia/Pacific		8,861			6,196
Corporate Operations		(20,136	)		(13,557	)
	$	92,873		$	71,737
Identifiable assets:
Americas	$	417,894		$	289,697
Europe		382,691			292,919
Asia Pacific		96,120			139,732
Corporate Operations		12,183			8,576
	$	908,888		$	730,924

9

8.	Derivative Financial Instruments
	The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates relating to certain sales, royalty income, and product purchases of its international subsidiaries that are denominated in currencies other than their functional currencies. The Company is also exposed to foreign currency gains and losses resulting from domestic transactions that are not denominated in U.S. dollars, and to fluctuations in interest rates related to its variable rate debt. Furthermore, the Company is exposed to gains and losses resulting from the effect that fluctuations in foreign currency exchange rates have on the reported results in the Company’s consolidated financial statements due to the translation of the operating results and financial position of the Company’s international subsidiaries. As part of its overall strategy to manage the level of exposure to the risk of fluctuations in foreign currency exchange rates, the Company uses various foreign currency exchange contracts and intercompany loans. In addition, interest rate swaps are used to manage the Company’s exposure to the risk of fluctuations in interest rates.
	Derivatives that do not qualify for hedge accounting but are used by management to mitigate exposure to currency risks are marked to fair value with corresponding gains or losses recorded in earnings. A loss of $1.9 million was recognized related to these types of derivatives during the nine months ended July 31, 2004. For all qualifying cash flow hedges, the changes in the fair value of the derivatives are recorded in other comprehensive income. As of July 31, 2004, the Company was hedging forecasted transactions expected to occur in the following 14 months. Assuming exchange rates at July 31, 2004 remain constant, $0.3 million of losses, net of tax, related to hedges of these transactions are expected to be reclassified into earnings over the next 14 months. Also included in accumulated other comprehensive income at July 31, 2004 is a $1.9 million loss, net of tax, related to cash flow hedges of the Company’s long-term debt, which is denominated in Australian dollars and matures through fiscal 2005, and the fair value of interest rate swaps, totaling a loss of $0.1 million, net of tax, which is related to the Company’s U.S. dollar denominated long-term debt that matures through fiscal 2007.
	On the date the Company enters into a derivative contract, management designates the derivative as a hedge of the identified exposure. The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for entering into various hedge transactions. In this documentation, the Company identifies the asset, liability, firm commitment, or forecasted transaction that has been designated as a hedged item and indicates how the hedging instrument is expected to hedge the risks related to the hedged item. The Company formally measures effectiveness of its hedging relationships both at the hedge inception and on an ongoing basis in accordance with its risk management policy. The Company would discontinue hedge accounting prospectively (i) if it is determined that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item, (ii) when the derivative expires or is sold, terminated, or exercised, (iii) if it becomes probable that the forecasted transaction being hedged by the derivative will not occur, (iv) because a hedged firm commitment no longer meets the definition of a firm commitment, or (v) if management determines that designation of the derivative as a hedge instrument is no longer appropriate. During the nine months ended July 31, 2004, the Company reclassified into earnings a net loss of $3.4 million resulting from the expiration, sale, termination, or exercise of derivative contracts.
	The Company enters into forward exchange and other derivative contracts with major banks and is exposed to credit losses in the event of nonperformance by these banks. The Company anticipates, however, that these banks will be able to fully satisfy their obligations under the contracts. Accordingly, the Company does not obtain collateral or other security to support the contracts.

10

A summary of derivative contracts at July 31, 2004 is as follows:

	Notional			Fair
In thousands	Amount		Maturity	Value
U.S. dollars	$	109,291	Aug 2004 – Sept 2005	$	(575	)
Australian dollars		15,821	Sept 2005		2,911
New Zealand dollars		1,148	Aug 2004 – Sept 2004		44
Euro		18,000	Aug 2004 – Oct 2004		10
Interest rate swaps		1,563	Oct 2004		(15	)
Interest rate swaps		6,765	Jan 2007		(480	)
	$	152,588		$	1,895

9.	Business Acquisitions
	Effective December 1, 2003, the Company acquired the operations of its Swiss distributor, Sunshine Diffusion SA. The initial purchase price was $1.6 million. The acquisition has been recorded using the purchase method of accounting and resulted in goodwill of $0.7 million at the acquisition date, which is not expected to be deductible for tax purposes. The sellers are entitled to future payments denominated in Euros ranging from zero to $1.4 million if certain sales targets are achieved.
	Effective December 1, 2002, the Company acquired its licenses in Australia and Japan to unify its global operating platform. This group of companies is referred to herein as “Quiksilver Asia/Pacific” and comprises two Australian companies, Ug Manufacturing Co. Pty Ltd. and QSJ Holding Pty Ltd., and one Japanese company, Quiksilver Japan KK. The initial purchases price, excluding transaction costs, included cash of $25.3 million and 5.6 million shares of the Company’s common stock valued at $71.3 million. The sellers are entitled to future payments denominated in Australian dollars ranging from zero to $23.1 million if certain sales and earnings targets are achieved during the three years ending October 31, 2005. The amount of goodwill initially recorded for the transaction would increase if such contingent payments are made. Goodwill was increased by $4.0 million in the nine months ended July 31, 2004, as a result of contingent consideration related to the transaction that was paid during the period.
	Effective May 1, 2004, the Company acquired DC Shoes, Inc. (“DC”), a premier designer, producer and distributor of action sports inspired footwear, apparel and related accessories in the U.S. and internationally. The operations of DC have been included in the Company’s results since May 1, 2004.
	The initial purchase price, excluding transaction costs, includes cash of approximately $48.0 million, 1.6 million restricted shares of the Company’s common stock valued at $27.3 million and the assumption of approximately $15.3 million in funded indebtedness. Transaction costs are estimated to total $2.4 million. The valuation of the common stock issued in connection with the acquisition was based on its quoted market price for 5 days before and after the announcement date, discounted to reflect the estimated effect of its trading restrictions. The initial purchase price is subject to adjustment based on working capital at the date of acquisition. The Company anticipates finalizing the initial purchase price with the sellers during fiscal 2004. Additionally, the Company’s final purchase price allocation is subject to adjustment based on completion of the integration plan for DC into the Company’s operations, which includes assessments of acquired facilities, personnel and systems. The sellers are entitled to future payments ranging from zero to $57 million if certain performance targets are achieved during the four years ending October 31, 2007. The amount of goodwill initially recorded for the transaction would increase if such contingent payments are made. Goodwill arises from synergies the Company believes can be achieved integrating DC’s product lines and operations with the Company’s, and is not expected to be deductible for income tax purposes.

11

The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition:

In thousands
Current assets	$	37,000
Fixed assets		1,500
Deferred income taxes		2,000
Intangible assets		42,000
Goodwill		27,000
Total assets acquired		109,500
Liabilities		16,500
Net assets acquired	$	93,000

The results of operations for each of the acquisitions are included in the Condensed Consolidated Statements of Income from their respective acquisition dates. Assuming these acquisitions had occurred as of November 1, 2002, consolidated net sales would have been $964.5 million and $786.8 million for the nine months ended July 31, 2004 and 2003, respectively. Net income would have been $54.4 million and $42.5 million, respectively, for those same periods, and diluted earnings per share would have been $0.90 and $0.72, respectively.

10.   Other Contingent Contractual Obligations

During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These include (i) intellectual property indemnities to the Company’s customers and licensees in connection with the use, sale and/or license of Company products, (ii) indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, (iii) indemnities to vendors and service providers pertaining to claims based on the negligence or willful misconduct of the Company, and (iv) indemnities involving the accuracy of representations and warranties in certain contracts. The duration of these indemnities, commitments and guarantees varies, and in certain cases, may be indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential for future payments the Company could be obligated to make. The Company has not recorded any liability for these indemnities, commitments and guarantees in the accompanying consolidated balance sheets.

12

PART I - FINANCIAL INFORMATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context indicates otherwise, when we refer to “Quiksilver”, “we”, “us”, “our”, or the “Company” in this Form 10-Q, we are referring to Quiksilver, Inc. and its subsidiaries on a consolidated basis. Quiksilver, Inc. was incorporated in 1976 and was reincorporated in Delaware in 1986.

We are a globally integrated company that designs, produces and distributes branded clothing, accessories and related products for young-minded people. Our brands represent a casual lifestyle–driven from our authentic boardriding heritage. We generate revenues primarily in the United States, Europe and Asia/Pacific markets. Our products are sold primarily in surf shops, specialty stores, and our proprietary retail concept Boardriders Club stores where we can best carry our authentic brand message to the consumer. We believe our 35-year history of continuing commitment to board sports and our development of innovative products that relate to and reflect this fast growing global lifestyle give our company and our brands a credibility and authenticity that is truly unique in our industry.

We operate in markets that are highly competitive, and our ability to evaluate and respond to changing consumer demands and tastes is critical to our success. Shifts in consumer preferences could have a negative effect on companies that misjudge these preferences. We believe that our historical success is due to the development of an experienced team of designers, artists, sponsored athletes, merchandisers, pattern makers, and cutting and sewing contractors. It’s this team and the heritage and current strength of our brands that has helped us remain in the forefront of design in our markets. Our success in the future will depend on our ability to continue to design products that are acceptable to the marketplace. There can be no assurance that we can do this. The consumer products industry is fragmented, and in order to retain and/or grow our market share, we must continue to be competitive in the areas of quality, brand image, distribution methods, price, customer service and intellectual property protection.

Results of Operations

The table below shows the components in our statements of income as a percentage of revenues:

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
	2004			2003			2004			2003
Revenues		100.0	%		100.0	%		100.0	%		100.0	%
Gross profit		44.5			42.6			44.8			43.5
Selling, general and administrative expense		35.2			34.1			34.7			33.3
Operating income		9.3			8.5			10.1			10.2
Interest Expense		0.4			0.9			0.5			0.9
Foreign currency and other expenses		0.1			0.3			0.3			0.3
Income before provision for income taxes		8.8	%		7.3	%		9.3	%		9.0	%

We completed the acquisition of DC Shoes, Inc. effective May 1, 2004, which marks the beginning of our third fiscal quarter. DC Shoes, Inc. designs, produces and distributes action sports inspired footwear, apparel and related accessories. This new division, which operates in all three of our business segments, is referred to in this report as “DC” and accounted for approximately half of our consolidated revenue growth during the three months ended July 31, 2004.

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Three Months Ended July 31, 2004 Compared to Three Months Ended July 31, 2003

Revenues for the three months ended July 31, 2004 increased 34% to $337.9 million from $251.5 million in the comparable period of the prior year. Revenues in the Americas increased 37% to $187.9 million for the three months ended July 31, 2004 from $137.4 million in the comparable period of the prior year, and European revenues increased 23% to $115.4 million from $93.9 million for those same periods. As measured in euros, Quiksilver Europe’s functional currency, revenues in the current year’s quarter increased 17% compared to the prior year. Asia/Pacific revenues increased 67% to $33.1 million in the three months ended July 31, 2004 from $19.7 million in the comparable period of the prior year. In Australian dollars, Asia/Pacific’s primary currency, revenues increased 56% compared to the prior year. In the Americas, men’s revenues increased 41% to $101.6 million from $72.2 million in the comparable period of the prior year, while women’s revenues increased 34% to $83.3 million from $62.4 million. Revenues from snowboards, boots and bindings amounted to $3.0 million for the current year’s quarter compared to $2.8 million in the prior year. The increase in Americas’ men’s revenues came primarily from the newly acquired DC division. The increase in Americas’ women’s revenues came primarily from the Roxy division and, to a lesser extent, the newly acquired DC division. In Europe, men’s revenues increased 24% to $86.1 million from $69.6 million, while women’s revenues increased 21% to $29.3 million from $24.3 million. The European men’s revenue increase came primarily from the Quiksilver Young Men’s division and, to a lesser extent, the newly acquired DC division. The European women’s revenue increase primarily reflects growth in the Roxy division. These comparisons of revenues in Europe were impacted by the strong euro in comparison to the prior year. In euros, mens revenues increased 18% and womens revenues increased 15%. The increase in Asia/Pacific revenues came primarily from the Quiksilver Young Men’s, DC and Roxy divisions.

Our consolidated gross profit margin for the three months ended July 31, 2004 increased to 44.5% from 42.6% in the comparable period of the prior year. The Americas’ gross profit margin increased to 40.1% from 37.9%, while the European gross profit margin increased to 50.4% from 48.6%, and the Asia/Pacific gross profit margin increased to 49.1% from 45.3% for those same periods. The gross margin in all regions is increasing as we generate a higher percentage of sales through company-owned retail stores. While we earn higher gross margins on sales in company-owned stores, these higher gross margins are generally offset by store operating costs, which are included in selling, general and administrative expense. The gross margin in the Americas also improved because of better profit margins on sales of end-of-season inventories. In Europe and Asia/Pacific, the gross profit margin also increased due to lower production costs resulting from a stronger euro and Australian dollar in comparison to the prior year.

Selling, general and administrative expense (“SG&A”) for the three months ended July 31, 2004 increased 39% to $118.9 million from $85.7 million in the comparable period of the prior year. Americas’ SG&A increased 37% to $52.7 million from $38.4 million in the comparable period of the prior year, while European SG&A increased 32% to $44.9 million from $33.9 million, and Asia/Pacific SG&A increased 49% to $12.4 million from $8.3 million for those same periods. The increase across all three divisions was primarily due to the addition of DC, additional company-owned retail stores, higher personnel and other costs related to increased sales volume and additional marketing. The stronger euro and Australian dollar in relation to the previous year also contributed to higher SG&A. In the Americas, SG&A as a percentage of revenues was 28.0%, which was up slightly from the previous year. In Europe, this ratio increased to 38.9% from 36.1% due to the increase in company-owned retail stores and increased marketing. Conversely, in Asia/Pacific, this ratio decreased to 37.6% from 42.2% as higher revenues during the quarter resulted in additional SG&A leverage. Corporate operations SG&A increased to $8.9 million in the three months ended July 31, 2004 from $5.1 million in the comparable period of the prior year primarily due to higher expenses to support our trademarks and brands around the world.

Interest expense for the three months ended July 31, 2004 decreased 32% to $1.5 million from $2.2 million in the comparable period of the prior year. This decrease was primarily due to lower average debt balances in the Americas and Europe compared to the prior year, despite the effect of borrowings to fund the DC acquisition.

The effective income tax rate for the three months ended July 31, 2004, which is based on current estimates of the annual effective income tax rate adjusted for the impact of DC, decreased to 34.2% from 34.8% in the comparable period of the prior year as the effect of foreign income taxes continues to reduce our effective income tax rate.

As a result of the above factors, net income for the three months ended July 31, 2004 increased 64% to $19.5 million or $0.32 per share on a diluted basis from $11.9 million or $0.21 per share on a diluted basis

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in the comparable period of the prior year. Basic net income per share increased to $0.33 per share for the three months ended July 31, 2004 from $0.22 in the comparable period of the prior year.

Nine Months Ended July 31, 2004 Compared to Nine Months Ended July 31, 2003

Revenues for the nine months ended July 31, 2004 increased 30% to $916.7 million from $705.8 million in the comparable period of the prior year. Revenues in the Americas increased 25% to $459.6 million for the nine months ended July 31, 2004 from $366.9 million in the comparable period of the prior year, and European revenues increased 29% to $361.9 million from $279.6 million for those same periods. As measured in euros, Quiksilver Europe’s net sales in the first nine months of the current year increased 15% compared to the prior year. Asia/Pacific revenues totaled $92.6 million in the nine months ended July 31, 2004 compared to $57.4 million in the comparable period of the prior year, which includes eight months of results since the effective date of the acquisition on December 1, 2002. In the Americas, mens revenues increased 22% to $223.5 million from $183.7 million in the comparable period of the prior year, while womens revenues increased 30% to $231.3 million from $178.5 million. Revenues from snowboards, boots and bindings amounted to $4.8 million in the current year’s nine-month period compared to $4.6 million in the prior year. The increase in Americas’ mens revenues came primarily from the acquisition of DC in the three months ended July 31, 2004, and, to a lesser extent, from the Quiksilver Young Men’s and Quiksilveredition divisions. The increase in Americas’ womens revenues came primarily from the Roxy division. In Europe and as reported in dollars, mens revenues increased 28% to $266.9 million from $208.5 million, while women’s revenues increased 34% to $95.0 million from $71.1 million. The European men’s revenue increase came primarily from the Quiksilver Young Mens division, and the women’s revenue increase primarily reflects growth in the Roxy division. These comparisons of revenues in Europe were impacted by the strong euro in comparison to the prior year. In euros, mens revenues increased 11% and womens revenues increased 16%. The increase in Asia/Pacific revenues came primarily from the Roxy and Quiksilver Young Men’s divisions, and to a lesser extent, the DC division.

Our consolidated gross profit margin for the nine months ended July 31, 2004 increased to 44.8% from 43.5% in the comparable period of the prior year. The Americas’ gross profit margin increased to 40.5% from 39.8%, while the European gross profit margin increased to 49.3% from 47.4%, and the Asia/Pacific gross profit margin increased to 48.6% versus 46.3% for those same periods. The gross margin in all regions is increasing as we generate a higher percentage of sales through company-owned retail stores. Additionally, in Europe and Asia/Pacific, the gross profit margin increased due to lower production costs resulting from a stronger euro and Australian dollar in comparison to the prior year.

SG&A for the nine months ended July 31, 2004 increased 35% to $318.2 million from $235.5 million in the comparable period of the prior year. Americas’ SG&A increased 23% to $134.5 million from $109.0 million in the comparable period of the prior year, and European SG&A increased 39% to $126.1 from $90.6 for those same periods. Asia/Pacific SG&A totaled $36.1 million compared to $20.4 million in the comparable period of the prior year, which includes eight months of results since the effective date of the acquisition on December 1, 2002. The increase across all three divisions was primarily due to additional company-owned retail stores, the addition of DC effective the beginning of our third quarter, additional marketing, and expenses related to increased sales volume. The stronger euro and Australian dollar in relation to the previous year also contributed to higher SG&A in Europe and Asia/Pacific. In the Americas, SG&A decreased as a percentage of revenues to 29.3% from 29.7% as the impact of additional company-owned retail stores was more than offset by general leverage on growth. This ratio increased to 34.8% from 32.4% in Europe, and to 39.0% from 35.5% in Asia/Pacific, primarily due to additional company-owned retail stores and from increased marketing activities. Corporate operations SG&A increased to $21.6 million in the nine months ended July 31, 2004 from $15.5 million in the comparable period of the prior year primarily due to higher expenses to support our trademarks and brands around the world.

Interest expense for the nine months ended July 31, 2004 decreased 29% to $4.6 million from $6.5 million in the comparable period of the prior year. This decrease was due primarily to lower average debt balances in as the Americas and Europe compared to the previous year, despite the effect of borrowings to fund the DC acquisition.

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The effective income tax rate for the nine months ended July 31, 2004, which is based on current estimates of the annual effective income tax rate adjusted for the impact of DC, decreased to 33.8% from 35.0% in the comparable period of the prior year as the effect of foreign income taxes continues to reduce our effective income tax rate.

As a result of the above factors, net income for the nine months ended July 31, 2004 increased 37% to $56.5 million or $0.95 per share on a diluted basis from $41.1 million or $0.73 per share on a diluted basis in the comparable period of the prior year. Basic net income per share increased to $1.00 for the nine months ended July 31, 2004 from $0.76 in the comparable period of the prior year.

Financial Position, Capital Resources and Liquidity

We finance our working capital needs and capital investments with operating cash flows and bank revolving lines of credit. Multiple banks in the U.S., Europe and Australia make these lines of credit available. Term loans are also used to supplement these lines of credit and are typically used to finance long-term assets.

Cash Flows

We generated $74.9 million of cash from operating activities in the nine months ended July 31, 2004 compared to $22.6 in the comparable period of the prior year. This $52.3 million increase in cash provided was primarily due to changes in inventories net of accounts payable and the increase in earnings. During the nine months ended July 31, 2004, the change in inventories net of accounts payable generated cash of $8.9 million. This is a $29.0 million improvement compared to using cash of $20.1 million in the comparable period of the prior year. The increase in net income adjusted for non-cash expenses provided cash of $82.9 million in the nine months ended July 31, 2004 compared to $61.8 million in the comparable period of the prior year, an increase of $21.1 million.

Capital expenditures totaled $33.4 million for the nine months ended July 31, 2004, compared to the $23.4 million in the comparable period of the prior year. These investments include company-owned stores and ongoing investments in computer and warehouse equipment. During the nine months ended July 31, 2004, we used $55.8 million of cash, net of cash acquired, to purchase DC Shoes, Inc., our Swiss distributor in Europe and to make a contingent purchase price payment to the former shareholders of our Asia/Pacific division. In the comparable period of the prior year, we used $27.8 million of cash, net of cash acquired, to purchase Quiksilver Asia/Pacific, our wetsuit and eyewear licensee in Europe and our eyewear licensee in the Americas. See Note 9 - Business Acquisitions.

The operations of DC have been included in the Company’s results since its acquisition as of May 1, 2004. The initial purchase price, excluding transaction costs, includes cash of approximately $48.0 million, 1.6 million restricted shares of our common stock valued at $27.3 million and the assumption of approximately $15.3 million in funded indebtedness. Transaction costs are estimated to total $2.4 million. The valuation of the common stock issued in connection with the acquisition was based on its quoted market price for 5 days before and after the announcement date, discounted to reflect the estimated effect of its trading restrictions. The initial purchase price is subject to adjustment based on working capital at the date of acquisition. The Company anticipates finalizing the initial purchase price with the sellers during fiscal 2004. Additionally, the Company’s final purchase price allocation is subject to adjustment based on completion of the integration plan for DC into the Company’s operations, which includes assessments of acquired facilities, personnel and systems. The sellers are entitled to future payments ranging from zero to $57 million if certain performance targets are achieved during the four years ending October 31, 2007. The amount of goodwill initially recorded for the transaction would increase if such contingent payments are made. In connection with the purchase, the size of our existing line of credit was increased from $170 million to $200 million and we funded the cash portion of the purchase price with borrowings under the expanded line of credit.

During the nine months ended July 31, 2004, net cash provided by financing activities totaled $30.1 million compared to $73.3 million in the comparable period of the prior year. Borrowings were increased in both years to fund the investments described above but increased substantially less in the nine months ended

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July 31, 2004 primarily as a result of the higher level of cash provided by operations in comparison to the prior year.

The net increase in cash and cash equivalents for the nine months ended July 31, 2004 was $17.5 million compared to $46.8 million in the comparable period of the prior year. Cash and cash equivalents totaled $45.4 million at July 31, 2004 compared to $27.9 million at October 31, 2003, while working capital was $354.3 million at July 31, 2004 compared to $286.6 million at October 31, 2003. We believe our current cash balance and current lines of credit are adequate to cover our seasonal working capital and other requirements for the foreseeable future and that increases in our lines of credit can be obtained as needed to fund future growth.

Trade Accounts Receivable and Inventories

Accounts receivable increased 21% to $271.4 million at July 31, 2004 from $224.4 million at October 31, 2003. Accounts receivable in the Americas increased 69% to $138.5 million at July 31, 2004 from $81.9 million at October 31, 2003, while European accounts receivable increased 4% to $114.1 million from $109.9 million, and Asia/Pacific accounts receivable decreased 42% to $18.8 million at July 31, 2004 from $32.6 million at October 31, 2003. Accounts receivable in the Americas increased 48% compared to July 31, 2003, while European accounts receivables increased 8% and Asia/Pacific accounts receivables were basically unchanged compared to July 31, 2003. In euros, the European accounts receivable increase was only 2%, and in Australian dollars, the Asia/Pacific accounts receivable decreased 7%. The growth in Americas receivables was primarily due to the addition of accounts receivable from DC. Excluding DC, the growth in accounts receivable across the regions was less than the related increases in revenues.

Consolidated inventories increased 17% to $171.6 million at July 31, 2004 from $146.4 million at October 31, 2003. Inventories in the Americas increased 2% to $88.1 million from $86.4 million at October 31, 2003, while European inventories increased 48% to $64.7 million from $43.8 million, and Asia/Pacific inventories increased 16% to $18.8 million from $16.2 million at October 31, 2003.

Consolidated inventories increased 8% compared to July 31, 2003. Inventories in the Americas were basically unchanged overall, while inventories in Europe increased 17%, and Asia/Pacific inventories increased 21% compared to July 31, 2003. Excluding the effects of DC, consolidated inventories decreased 1% in reporting currencies, and Americas inventories decreased 17%. The stronger euro and Australian dollar in relation to the U.S. dollar increased the value of the inventories by approximately $4.0 million over the prior year. Adjusting for these foreign exchange effects, consolidated inventories increased 5%. Average inventory turnover increased to approximately 4.2 for the period ended July 31, 2004 compared to approximately 3.8 for the comparable period of the prior year.

Contractual Obligations and Commitments

Our deferred purchase price obligation related to our acquisition of Quiksilver International increased by $6.5 million during the three months ended July 31, 2004 as a result of computed earnings of Quiksilver International through June 2004.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. To prepare these financial statements, we must make estimates and assumptions that affect the reported amounts of assets and liabilities. These estimates also affect our reported revenues and expenses. Judgments must also be made about the disclosure of contingent liabilities. Actual results could be significantly different from these estimates. We believe that the following discussion addresses the significant accounting policies that are the most critical to help fully understand and evaluate our reported financial results.

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Revenue Recognition

Revenues are recognized when the risk of ownership and title passes to our customers. Generally, we extend credit to our customers and do not require collateral. Our payment terms range from net-30 to net-90, depending on the country or whether we sell directly to retailers in the country or to a distributor. None of our sales agreements with any of our customers provide for any rights of return. However, we do approve returns on a case-by-case basis at our sole discretion to protect our brands and our image. We provide allowances for estimated returns when revenues are recorded, and related losses have historically been within our expectations. If returns are higher than our estimates, our earnings would be adversely affected.

Accounts Receivable

It is not uncommon for some of our customers to have financial difficulties from time to time. This is normal given the wide variety of our account base, which includes small surf shops, medium-sized retail chains, and some large department store chains. Throughout the year, we perform credit evaluations of our customers, and we adjust credit limits based on payment history and the customer’s current creditworthiness. We continuously monitor our collections and maintain a reserve for estimated credit losses based on our historical experience and any specific customer collection issues that have been identified. Historically, our losses have been consistent with our estimates, but there can be no assurance that we will continue to experience the same credit loss rates that we have experienced in the past. Unforeseen, material financial difficulties of our customers could have an adverse impact on our profits.

Inventories

We value inventories at the cost to purchase and/or manufacture the product or the current estimated market value of the inventory, whichever is lower. We regularly review our inventory quantities on hand, and we record a provision for excess and obsolete inventory based primarily on estimated forecasts of product demand and market value. Demand for our products could fluctuate significantly, which was evident in the aftermath of September 11^th. The demand for our products could be negatively affected by many factors, including the following:

• weakening economic conditions,

• terrorist acts or threats,

• unanticipated changes in consumer preferences,

• reduced customer confidence in the retail market, and

• unseasonable weather.

Some of these factors could also interrupt the production and/or importation of our products or otherwise increase the cost of our products. As a result, our operations and financial performance could be negatively affected. Additionally, our estimates of product demand and/or market value could be inaccurate, which could result in an understated or overstated provision required for excess and obsolete inventory.

Long-Lived Assets

We acquire tangible and intangible assets in the normal course of our business. We evaluate the recoverability of the carrying amount of these long-lived assets (including fixed assets and trademarks) at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. An impairment is assessed when the undiscounted expected future cash flows derived from an asset are less than its carrying amount. Impairments, if any, would be recognized in operating earnings. We continually use judgment when applying these impairment rules to determine the timing of the impairment tests, the undiscounted cash flows used to assess impairments, and the fair value of a potentially impaired asset. The reasonableness of our judgment could significantly affect the carrying value of our long-lived assets.

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Goodwill

We evaluate the recoverability of goodwill at least annually based on a two-step impairment test. The first step compares the fair value of each reporting unit with its carrying amount including goodwill. If the carrying amount exceeds fair value, then the second step of the impairment test is performed to measure the amount of any impairment loss. Fair value is computed based on estimated future cash flows discounted at a rate that approximates our cost of capital. Such estimates are subject to change, and we may be required to recognize impairments losses in the future.

Income Taxes

Current income tax expense is the amount of income taxes expected to be payable for the current year. A deferred income tax asset or liability is established for the expected future consequences of temporary differences in the financial reporting and tax bases of assets and liabilities. We consider future taxable income and ongoing prudent and feasible tax planning strategies in assessing the value of our deferred tax assets. If we determine that it is more likely than not that these assets will not be realized, we would reduce the value of these assets to their expected realizable value, thereby decreasing net income. Evaluating the value of these assets is necessarily based on our judgment. If we subsequently determined that the deferred tax assets, which had been written down would, in our judgment, be realized in the future, the value of the deferred tax assets would be increased, thereby increasing net income in the period when that determination was made.

Foreign Currency Translation

A significant portion of our revenues are generated by our European and Asia/Pacific divisions, where we operate with the euro, Australian dollar and Japanese yen as our functional currencies. Our European revenues in the United Kingdom are denominated in British pounds, and some European and Asia/Pacific product is sourced in U.S. dollars, both of which result in exposure to gains and losses that could occur from fluctuations in foreign exchange rates. We also have other foreign currency obligations related to our acquisitions of Quiksilver International and Quiksilver Asia/Pacific. Our assets and liabilities that are denominated in foreign currencies are translated at the rate of exchange on the balance sheet date. Revenues and expenses are translated using the average exchange rate for the period. Gains and losses from translation of foreign subsidiary financial statements are included in accumulated other comprehensive income or loss.

As part of our overall strategy to manage our level of exposure to the risk of fluctuations in foreign currency exchange rates, we enter into various foreign exchange contracts generally in the form of forward contracts. For all contracts that qualify as cash flow hedges, we record the changes in the fair value of the derivatives in other comprehensive income. We also use other derivatives that do not qualify for hedge accounting to mitigate our exposure to currency risks related to the translation of the foreign currency financial statements of certain of our international subsidiaries from their functional currencies into U.S. dollars. These derivatives are marked to fair value with corresponding gains or losses recorded in earnings.

New Accounting Pronouncements

See Note 2 – New Accounting Pronouncements for a discussion of newly adopted accounting standards and future pronouncements that affect our financial reporting.

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PART I – FINANCIAL INFORMATION

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency

Our foreign currency and interest rate risks are discussed in the our Annual Report on Form 10-K for the year ended October 31, 2003 in Item 7a.

Quiksilver Europe’s statements of income are translated from euros into U.S. dollars at average exchange rates in effect during the reporting period. When the euro strengthens compared to the U.S. dollar there is a positive effect on Quiksilver Europe’s results as reported in the Company’s Consolidated Financial Statements. Conversely, when the U.S. dollar strengthens, there is a negative effect. Likewise, the statements of income of Quiksilver Asia/Pacific are translated from Australian dollars and Japanese yen into U.S. dollars, and there is a positive effect on our results from a stronger Australian dollar or Japanese yen in comparison to the U.S. dollar.

European revenues increased 15% in euros during the nine months ended July 31, 2004 compared to the nine months ended July 31, 2003. As measured in U.S. dollars and reported in the Company’s Consolidated Statements of Income, European revenue growth increased to 29% as a result of a stronger euro versus the U.S. dollar in comparison to the prior year. Thus far in the Company’s fourth quarter, the euro continues to be stronger relative to the U.S. dollar in comparison to the prior year.

Asia/Pacific revenues increased 35% in Australian dollars during the nine months ended July 31, 2004 compared to the nine months ended July 31, 2003. As measured in U.S. dollars and reported in the Company’s Consolidated Statements of Income, Asia/Pacific revenue growth increased to 61% as a result of a stronger Australian dollar versus the U.S. dollar in comparison to the prior year. Thus far in the Company’s fourth quarter, the Australian dollar continues to be stronger relative to the U.S. dollar in comparison to the prior year.

PART I – FINANCIAL INFORMATION

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2004, the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of July 31, 2004.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended July 31, 2004 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 6. Exhibits

(a) Exhibits

10.1	Employment Agreement dated August 1, 2004 between Quiksilver, Inc. and Robert B. McKnight, Jr.
10.2	Employment Agreement dated August 1, 2004 between Quiksilver, Inc. and Bernard Mariette
10.3	Employment Agreement dated August 1, 2004 between Quiksilver, Inc. and Charles S. Exon
10.4	Employment Agreement dated August 1, 2004 between Quiksilver, Inc. and Steven L. Brink
10.5	Form of Stock Option Agreement used in connection with the Quiksilver, Inc. 2000 Stock Incentive Plan
31.1	Rule 13a-14(a)/15d-14(a) Certifications – Principal Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certifications – Principal Financial Officer
32.1	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2003 – Chief Executive Officer
32.2	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2003 – Chief Financial Officer

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	QUIKSILVER, INC., a Delaware corporation
September 14, 2004	/s/ Steven L. Brink
	Steven L. Brink
	Chief Financial Officer and Treasurer (Principal Accounting Officer)

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EXHIBIT INDEX

10.1	Employment Agreement dated August 1, 2004 between Quiksilver, Inc. and Robert B. McKnight, Jr.
10.2	Employment Agreement dated August 1, 2004 between Quiksilver, Inc. and Bernard Mariette
10.3	Employment Agreement dated August 1, 2004 between Quiksilver, Inc. and Charles S. Exon
10.4	Employment Agreement dated August 1, 2004 between Quiksilver, Inc. and Steven L. Brink
10.5	Form of Stock Option Agreement used in connection with the Quiksilver, Inc. 2000 Stock Incentive Plan
31.1	Rule 13a-14(a)/15d-14(a) Certifications – Principal Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certifications – Principal Financial Officer
32.1	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2003 - - Chief Executive Officer
32.2	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2003 - - Chief Financial Officer

EX-10.1

                                                                    EXHIBIT 10.1

                               [QUIKSILVER LOGO]

                                 August 1, 2004

PERSONAL AND CONFIDENTIAL

Robert B. McKnight, Jr.
Quiksilver, Inc.
15202 Graham Street
Huntington Beach, CA  92649

Re:   Employment at Quiksilver

Dear Bob:

            This letter ("Agreement") will confirm our understanding and
agreement regarding your continued employment with Quiksilver, Inc.
("Quiksilver" or the "Company"). This Agreement is effective August 1, 2004 and
completely supersedes and replaces any existing or previous oral or written
understandings or agreements, express or implied, between you and the Company
regarding your employment.

            1.    Position; Exclusivity. The Company hereby agrees to employ you
                  as its Chief Executive Officer. During your employment with
                  Quiksilver, you will devote your full professional and
                  business time, interest, abilities and energies to the Company
                  and will not render any services to any other person or
                  entity, whether for compensation or otherwise, or engage in
                  any business activities competitive with or adverse to the
                  Company's business or welfare, whether alone, as an employee,
                  as a partner, as a member, or as a shareholder, officer or
                  director of any other corporation, or as a trustee, fiduciary
                  or in any other similar representative capacity of any other
                  entity.

            2.    Base Salary. Your base salary will be $66,667 per month
                  ($800,000 on an annualized basis), less applicable
                  withholdings and deductions, paid on the Company's regular
                  payroll dates. Your salary will be reviewed at the time
                  management salaries are reviewed periodically and may be
                  adjusted (but not below $66,667 per month) at the Company's
                  discretion in light of the Company's performance, your
                  performance, market conditions and other factors deemed
                  relevant by the Company.

            3.    Bonus. For the fiscal year ending October 31, 2004 and each
                  fiscal year thereafter so long as such plans remain in effect
                  and the requisite stockholder approval of such plans under
                  Section 162(m) of the Internal Revenue Code has been obtained
                  to ensure the deductibility of payments made pursuant thereto,
                  you shall be eligible to receive a bonus under the Company's
                  stockholder approved Annual Incentive Plan and/or Long-Term
                  Incentive Plan of up to 300% of your original base salary

                                      ~1~


                        hereunder based on achievement of certain incentive
                        goals established by the Compensation Committee of the
                        Board of Directors. Any bonus earned pursuant to the
                        Annual Incentive Plan shall be paid within ten (10) days
                        following the date the Company publicly releases its
                        annual audited financial statements (the "Bonus Payment
                        Date"). In the event that your employment with the
                        Company terminates prior to the end of the applicable
                        fiscal year for any reason other than termination for
                        Cause (as defined in Paragraph 9(b), but excluding
                        subparagraphs (i) and (ii) thereof), you shall be
                        entitled to receive a pro rata portion of the bonus
                        otherwise payable to you under the Annual Incentive Plan
                        based upon the actual number of days which you were
                        actively employed by the Company during the applicable
                        fiscal year, which shall be paid on the Bonus Payment
                        Date. Payment of any bonus earned under the Long-Term
                        Incentive Plan and proration thereof on termination of
                        your employment shall be governed by the terms of the
                        Long-Term Incentive Plan. Any bonus payments shall be
                        less applicable withholdings and deductions.

                  4.    Vacation. You will accrue 20 days of vacation each year
                        up to a maximum of 35 days. Once the maximum is reached,
                        additional vacation accrual will cease until you have
                        used some vacation to fall below the maximum accrual
                        allowed.

                  5.    Health and Disability Insurance. You (and any eligible
                        dependents you elect) will be covered by the Company's
                        group health insurance programs on the same terms and
                        conditions applicable to comparable employees. You will
                        also be covered by the long-term disability plan for
                        senior executives on the same terms and conditions
                        applicable to comparable employees. The Company reserves
                        the right to change, modify, or eliminate such coverages
                        in its discretion.

                  6.    Clothing Allowance. You will be provided a clothing
                        allowance of $2,000 per year at the Company's wholesale
                        prices.

                  7.    Stock Options. You shall continue to be a participant in
                        Quiksilver's Stock Incentive Plan, or any successor
                        equity plan. The amount and terms of any restricted
                        stock, stock options, stock appreciation rights or other
                        interests to be granted to you will be determined by the
                        Board of Directors in its discretion and covered in
                        separate agreements, but shall be substantially similar
                        to those granted to other senior executives of
                        Quiksilver of equivalent level. Stock options granted to
                        you after the date hereof through the termination of
                        your employment shall provide that if you are terminated
                        by the Company without Cause (as hereinafter defined) or
                        you terminate your employment for Good Reason (as
                        hereinafter defined) within twelve (12) months following
                        a Change of Control (as defined in Addendum "A"), any
                        such options outstanding will automatically vest in full
                        on an accelerated basis so that the options will
                        immediately prior to such termination become exercisable
                        for all option shares.

                  8.    Life Insurance. The Company will pay the premium on a
                        term life insurance policy on your life with a company
                        and policy of our choice, and a beneficiary of your
                        choice, in the face amount determined by the Company of
                        not less than $2,000,000. Our obligation to obtain and
                        maintain this insurance is contingent upon your

                                      ~2~


                        establishing and maintaining insurability, and we are
                        not required to pay premiums for such a policy in excess
                        of $5,000 annually.

                  9.    Unspecified Term; At Will Employment; Termination.

                        (a)   Notwithstanding anything to the contrary in this
                        Agreement or in your prior employment relationship with
                        the Company, express or implied, your employment is for
                        an unspecified term and either you or Quiksilver may
                        terminate your employment at will and with or without
                        Cause (as defined below) or notice at any time for any
                        reason; provided, however, that you agree to provide the
                        Company with thirty (30) days advance written notice of
                        your resignation (during which time the Company may
                        elect, in its discretion, to relieve you of all duties
                        and responsibilities). This at-will aspect of your
                        employment relationship can only be changed by an
                        individualized written agreement signed by both you and
                        an authorized officer of the Company.

                        (b)   The Company may also terminate your employment
                        immediately, without notice, for Cause, which shall
                        include, but not be limited to, (i) your death, (ii)
                        your permanent disability which renders you unable to
                        perform your duties and responsibilities for a period in
                        excess of three consecutive months, (iii) willful
                        misconduct in the performance of your duties, (iv)
                        commission of a felony or violation of law involving
                        moral turpitude or dishonesty, (v) self-dealing, (vi)
                        willful breach of duty, (vii) habitual neglect of duty,
                        or (viii) a material breach by you of your obligations
                        under this Agreement. If the Company terminates your
                        employment for Cause, or you terminate your employment
                        other than for Good Reason (as defined below), you (or
                        your estate or beneficiaries in the case of your death)
                        shall receive your base salary and other benefits earned
                        and accrued prior to the termination of your employment
                        and, in the case of a termination pursuant to
                        subparagraphs (i) or (ii) only, a pro rata portion of
                        your bonus, if any, as provided in Paragraph 3 for the
                        fiscal year in which such termination occurs, less
                        applicable withholdings and deductions, and you shall
                        have no further rights to any other compensation or
                        benefits hereunder on or after the termination of your
                        employment.

                        (c)   If Quiksilver elects to terminate your employment
                        without Cause, or if you terminate your employment with
                        the Company for Good Reason within six (6) months of the
                        action constituting Good Reason, the Company will (i)
                        continue to pay your base salary (but not any employment
                        benefits) on its regular payroll dates for a period of
                        twenty-four (24) months, (ii) pay you a pro rata portion
                        of your bonus, if any, as provided by Paragraph 3 for
                        the fiscal year in which such termination occurs, less
                        applicable withholdings and deductions and (iii) pay you
                        an amount equal to two (2) times the average annual
                        bonus earned by you pursuant to Paragraph 3 during the
                        two (2) most recently completed fiscal years of the
                        Company payable over a two-year period following
                        termination in equal installments on the Company's
                        regular payroll dates, less applicable withholdings and
                        deductions. Notwithstanding the foregoing, if such
                        termination without Cause or for Good Reason occurs
                        within twelve (12) months immediately following a Change
                        of Control (as defined in Addendum "A") the Company will

                                      ~3~


                        instead (i) continue to pay your base salary (but not
                        any employment benefits) on its regular payroll dates
                        for a period of thirty-six (36) months, (ii) pay you a
                        pro rata portion of your bonus, if any, as provided by
                        Paragraph 3 for the fiscal year in which such
                        termination occurs, less applicable withholdings and
                        deductions, and (iii) pay you an amount equal to three
                        (3) times the average annual bonus earned by you
                        pursuant to Paragraph 3 during the two (2) most recently
                        completed fiscal years of the Company payable over a
                        three year period following termination in equal
                        installments on the Company's regular payroll dates,
                        less applicable withholdings and deductions. In order
                        for you to be eligible to receive the payments specified
                        in this Paragraph 9(c), you must execute a general
                        release of claims in a form reasonably acceptable to the
                        Company. You shall have no further rights to any other
                        compensation or benefits hereunder on or after the
                        termination of your employment. You shall not have a
                        duty to seek substitute employment and the Company shall
                        not have the right to offset any compensation due you
                        against any compensation or income received by you after
                        the date of such termination.

                        "Good Reason" for you to terminate employment means a
                        voluntary termination as a result of (i) the assignment
                        to you of duties materially inconsistent with your
                        position as set forth above without your consent, (ii) a
                        material change in your reporting level from that set
                        forth in this Agreement without your consent, (iii) a
                        material diminution of your authority without your
                        consent, (iv) a material breach by the Company of its
                        obligations under this Agreement, (v) a failure by the
                        Company to obtain from any successor, before the
                        succession takes place, an agreement to assume and
                        perform the obligations contained in this Agreement, or
                        (vi) the Company requiring you to be based (other than
                        temporarily) at any office or location outside of the
                        Southern California area without your consent.
                        Notwithstanding the foregoing, Good Reason shall not
                        exist unless you provide the Company notice of
                        termination on account thereof and, if such event or
                        condition is curable, the Company fails to cure such
                        event or condition within thirty (30) days of such
                        notice.

                        (d)   In the event that any payment or benefit received
                        or to be received by you (collectively, the "Payments")
                        would constitute a parachute payment within the meaning
                        of Section 280G of the Internal Revenue Code of 1986, as
                        amended (the "Code"), then the following limitation
                        shall apply:

                        The aggregate present value of those Payments shall be
                        limited in amount to the greater of the following dollar
                        amounts (the "Benefit Limit"):

                        (i)   2.99 times your Average Compensation (as defined
                        below), or

                        (ii)  the amount which yields you the greatest after-tax
                        amount of Payments under this Agreement after taking
                        into account any excise tax imposed under Code Section
                        4999 on those Payments.

                        The present value of the Payments will be measured as of
                        the date of the Change in Control and determined in
                        accordance with the provisions of Code Section
                        280G(d)(4).

                                      ~4~


                        Average Compensation means the average of your W-2 wages
                        from the Company for the five (5) calendar years
                        completed immediately prior to the calendar year in
                        which the Change in Control is effected. Any W-2 wages
                        for a partial year of employment will be annualized, in
                        accordance with the frequency which such wages are paid
                        during such partial year, before inclusion in Average
                        Compensation.

                  10.   Trade Secrets; Confidential and/or Proprietary
                        Information. The Company owns certain trade secrets and
                        other confidential and/or proprietary information which
                        constitute valuable property rights, which it has
                        developed through a substantial expenditure of time and
                        money, which are and will continue to be utilized in the
                        Company's business and which are not generally known in
                        the trade. This proprietary information includes the
                        list of names of the customers and suppliers of
                        Quiksilver, and other particularized information
                        concerning the products, finances, processes, material
                        preferences, fabrics, designs, material sources, pricing
                        information, production schedules, sales and marketing
                        strategies, sales commission formulae, merchandising
                        strategies, order forms and other types of proprietary
                        information relating to our products, customers and
                        suppliers. You agree that you will not disclose and will
                        keep strictly secret and confidential all trade secrets
                        and proprietary information of the Company, including,
                        but not limited to, those items specifically mentioned
                        above.

                  11.   Expense Reimbursement. The Company will reimburse you
                        for documented reasonable and necessary business
                        expenses incurred by you while engaged in business
                        activities for the Company's benefit on such terms and
                        conditions as shall be generally available to other
                        executives of the Company.

                  12.   Compliance With Business Policies. You will devote your
                        full business time and attention to Quiksilver and will
                        not be involved in other business ventures without
                        written authorization from the Company's Board of
                        Directors. You will be required to observe the Company's
                        personnel and business policies and procedures as they
                        are in effect from time to time. In the event of any
                        conflicts, the terms of this Agreement will control.

                  13.   Entire Agreement. This Agreement, its addenda, and any
                        stock option agreements the Company may enter into with
                        you contain the entire integrated agreement between us
                        regarding these issues, and no modification or amendment
                        to this Agreement will be valid unless set forth in
                        writing and signed by both you and an authorized officer
                        of the Company.

                  14.   Arbitration as Exclusive Remedy. To the fullest extent
                        allowed by law, any controversy, claim or dispute
                        between you and the Company (and/or any of its
                        affiliates, owners, shareholders, directors, officers,
                        employees, volunteers or agents) relating to or arising
                        out of your employment or the cessation of that
                        employment will be submitted to final and binding
                        arbitration in Orange County, California, for
                        determination in accordance with the American
                        Arbitration Association's ("AAA") National Rules for the
                        Resolution of Employment Disputes, as the exclusive
                        remedy for such controversy, claim or dispute. In any
                        such arbitration, the parties may

                                      ~5~


                        conduct discovery to the same extent as would be
                        permitted in a court of law. The arbitrator shall issue
                        a written decision, and shall have full authority to
                        award all remedies which would be available in court.
                        The Company shall pay the arbitrator's fees and any AAA
                        administrative expenses. Any judgment upon the award
                        rendered by the arbitrator(s) may be entered in any
                        court having jurisdiction thereof. Possible disputes
                        covered by the above include (but are not limited to)
                        unpaid wages, breach of contract, torts, violation of
                        public policy, discrimination, harassment, or any other
                        employment-related claims under laws including but not
                        limited to, Title VII of the Civil Rights Act of 1964,
                        the Americans With Disabilities Act, the Age
                        Discrimination in Employment Act, the California Fair
                        Employment and Housing Act, the California Labor Code
                        and any other statutes or laws relating to an employee's
                        relationship with his/her employer, regardless of
                        whether such dispute is initiated by the employee or the
                        Company. Thus, this bilateral arbitration agreement
                        fully applies to any and all claims that the Company may
                        have against you, including (but not limited to) claims
                        for misappropriation of Company property, disclosure of
                        proprietary information or trade secrets, interference
                        with contract, trade libel, gross negligence, or any
                        other claim for alleged wrongful conduct or breach of
                        the duty of loyalty. Nevertheless, claims for workers'
                        compensation benefits or unemployment insurance, those
                        arising under the National Labor Relations Act, and any
                        other claims where mandatory arbitration is prohibited
                        by law, are not covered by this arbitration agreement,
                        and such claims may be presented by either the Company
                        or you to the appropriate court or government agency. BY
                        AGREEING TO THIS BINDING ARBITRATION PROVISION, BOTH YOU
                        AND THE COMPANY GIVE UP ALL RIGHTS TO TRIAL BY JURY.
                        This mutual arbitration agreement is to be construed as
                        broadly as is permissible under applicable law.

                  15.   Successors and Assigns. This Agreement will be
                        assignable by the Company to any successor or to any
                        other company owned or controlled by the Company, and
                        will be binding upon any successor to the business of
                        the Company, whether direct or indirect, by purchase of
                        securities, merger, consolidation, purchase of all or
                        substantially all of the assets of the Company or
                        otherwise.

                                      ~6~


Please sign, date and return the enclosed copy of this letter to me for our
files to acknowledge your agreement with the above.

                                          Very truly yours,

                                          ______________________________________
                                          Bernard Mariette
                                          President

Enclosure

ACKNOWLEDGED AND AGREED:

_________________________________
Robert B. McKnight, Jr.

Date Effective: ________, 2004

                                      ~7~


                                   ADDENDUM A

                         DEFINITION OF CHANGE IN CONTROL

            "Change in Control" means the occurrence of one or more of the
following events: (i) any corporation, partnership, person, other entity, or
group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) (collectively, a "Person") acquires shares of capital stock of the
Company representing more than 50% of the total number of shares of capital
stock that may be voted for the election of directors of the Company, (ii) a
merger, consolidation, or other business combination of the Company with or into
another Person is consummated, or all or substantially all of the assets of the
Company are acquired by another Person, as a result of which the stockholders of
the Company immediately prior to the consummation of such transaction own,
immediately after consummation of such transaction equity securities possessing
less than 50% of the voting power of the surviving or acquiring Person (or any
Person in control of the surviving or acquiring Person, the equity securities of
which are issued or transferred in such transaction), or (iii) the stockholders
of the Company approve a plan of complete liquidation, dissolution or winding up
of the Company.

                                  ~Addendum A~

EX-10.2

                                                                    EXHIBIT 10.2

                               [QUICKSILVER LOGO]

                                 August 1, 2004

PERSONAL AND CONFIDENTIAL

Bernard Mariette
Quiksilver, Inc.
15202 Graham Street

Huntington Beach, CA 92649

Re:   Employment at Quiksilver

Dear Bernard:

            This letter ("Agreement") will confirm our understanding and
agreement regarding your continued employment with Quiksilver, Inc.
("Quiksilver" or the "Company"). This Agreement is effective August 1, 2004 and
completely supersedes and replaces any existing or previous oral or written
understandings or agreements, express or implied, between you and the Company
regarding your employment.

            1.    Position; Exclusivity. The Company hereby agrees to employ you
                  as its President, currently reporting to the Chief Executive
                  Officer. During your employment with Quiksilver, you will
                  devote your full professional and business time, interest,
                  abilities and energies to the Company and will not render any
                  services to any other person or entity, whether for
                  compensation or otherwise, or engage in any business
                  activities competitive with or adverse to the Company's
                  business or welfare, whether alone, as an employee, as a
                  partner, as a member, or as a shareholder, officer or director
                  of any other corporation, or as a trustee, fiduciary or in any
                  other similar representative capacity of any other entity.

            2.    Base Salary. Your base salary will be $45,833 per month
                  ($550,000 on an annualized basis), less applicable
                  withholdings and deductions, paid on the Company's regular
                  payroll dates. Your salary will be reviewed at the time
                  management salaries are reviewed periodically and may be
                  adjusted (but not below $45,833 per month) at the Company's
                  discretion in light of the Company's performance, your
                  performance, market conditions and other factors deemed
                  relevant by the Company.

            3.    Bonus. For the fiscal year ending October 31, 2004 and each
                  fiscal year thereafter so long as such plans remain in effect
                  and the requisite stockholder approval of such plans under
                  Section 162(m) of the Internal Revenue Code has been obtained
                  to ensure the deductibility of payments made pursuant thereto,
                  you shall be eligible to receive a bonus under the Company's
                  stockholder approved Annual Incentive Plan and/or Long-Term
                  Incentive Plan of up to 300% of your original base salary

                                      ~1~


                  hereunder based on achievement of certain incentive goals
                  established by the Compensation Committee of the Board of
                  Directors. Any bonus earned pursuant to the Annual Incentive
                  Plan shall be paid within ten (10) days following the date the
                  Company publicly releases its annual audited financial
                  statements (the "Bonus Payment Date"). In the event that your
                  employment with the Company terminates prior to the end of the
                  applicable fiscal year for any reason other than termination
                  for Cause (as defined in Paragraph 9(b), but excluding
                  subparagraphs (i) and (ii) thereof), you shall be entitled to
                  receive a pro rata portion of the bonus otherwise payable to
                  you under the Annual Incentive Plan based upon the actual
                  number of days which you were actively employed by the Company
                  during the applicable fiscal year, which shall be paid on the
                  Bonus Payment Date. Payment of any bonus earned under the
                  Long-Term Incentive Plan and proration thereof on termination
                  of your employment shall be governed by the terms of the
                  Long-Term Incentive Plan. Any bonus payments shall be less
                  applicable withholdings and deductions.

            4.    Vacation. You will accrue 20 days of vacation each year up to
                  a maximum of 35 days. Once the maximum is reached, additional
                  vacation accrual will cease until you have used some vacation
                  to fall below the maximum accrual allowed.

            5.    Health and Disability Insurance. You (and any eligible
                  dependents you elect) will be covered by the Company's group
                  health insurance programs on the same terms and conditions
                  applicable to comparable employees. You will also be covered
                  by the long-term disability plan for senior executives on the
                  same terms and conditions applicable to comparable employees.
                  The Company reserves the right to change, modify, or eliminate
                  such coverages in its discretion.

            6.    Clothing Allowance. You will be provided a clothing allowance
                  of $2,000 per year at the Company's wholesale prices.

            7.    Stock Options. You shall continue to be a participant in
                  Quiksilver's Stock Incentive Plan, or any successor equity
                  plan. The amount and terms of any restricted stock, stock
                  options, stock appreciation rights or other interests to be
                  granted to you will be determined by the Board of Directors in
                  its discretion and covered in separate agreements, but shall
                  be substantially similar to those granted to other senior
                  executives of Quiksilver of equivalent level. Stock options
                  granted to you after the date hereof through the termination
                  of your employment shall provide that if you are terminated by
                  the Company without Cause (as hereinafter defined) or you
                  terminate your employment for Good Reason (as hereinafter
                  defined) within twelve (12) months following a Change of
                  Control (as defined in Addendum "A"), any such options
                  outstanding will automatically vest in full on an accelerated
                  basis so that the options will immediately prior to such
                  termination become exercisable for all option shares.

            8.    Life Insurance. The Company will pay the premium on a term
                  life insurance policy on your life with a company and policy
                  of our choice, and a beneficiary of your choice, in the face
                  amount determined by the Company of not less than $1,000,000.
                  Our obligation to obtain and maintain this insurance is
                  contingent upon your

                                      ~2~


                  establishing and maintaining insurability, and we are not
                  required to pay premiums for such a policy in excess of $2,500
                  annually.

            9.    Unspecified Term; At Will Employment; Termination.

                  (a)   Notwithstanding anything to the contrary in this
                  Agreement or in your prior employment relationship with the
                  Company, express or implied, your employment is for an
                  unspecified term and either you or Quiksilver may terminate
                  your employment at will and with or without Cause (as defined
                  below) or notice at any time for any reason; provided,
                  however, that you agree to provide the Company with thirty
                  (30) days advance written notice of your resignation (during
                  which time the Company may elect, in its discretion, to
                  relieve you of all duties and responsibilities). This at-will
                  aspect of your employment relationship can only be changed by
                  an individualized written agreement signed by both you and an
                  authorized officer of the Company.

                  (b)   The Company may also terminate your employment
                  immediately, without notice, for Cause, which shall include,
                  but not be limited to, (i) your death, (ii) your permanent
                  disability which renders you unable to perform your duties and
                  responsibilities for a period in excess of three consecutive
                  months, (iii) willful misconduct in the performance of your
                  duties, (iv) commission of a felony or violation of law
                  involving moral turpitude or dishonesty, (v) self-dealing,
                  (vi) willful breach of duty, (vii) habitual neglect of duty,
                  or (viii) a material breach by you of your obligations under
                  this Agreement. If the Company terminates your employment for
                  Cause, or you terminate your employment other than for Good
                  Reason (as defined below), you (or your estate or
                  beneficiaries in the case of your death) shall receive your
                  base salary and other benefits earned and accrued prior to the
                  termination of your employment and, in the case of a
                  termination pursuant to subparagraphs (i) or (ii) only, a pro
                  rata portion of your bonus, if any, as provided in Paragraph 3
                  for the fiscal year in which such termination occurs, less
                  applicable withholdings and deductions, and you shall have no
                  further rights to any other compensation or benefits hereunder
                  on or after the termination of your employment.

                  (c)   If Quiksilver elects to terminate your employment
                  without Cause, or if you terminate your employment with the
                  Company for Good Reason within six (6) months of the action
                  constituting Good Reason, the Company will (i) continue to pay
                  your base salary (but not any employment benefits) on its
                  regular payroll dates for a period of eighteen (18) months,
                  (ii) pay you a pro rata portion of your bonus, if any, as
                  provided by Paragraph 3 for the fiscal year in which such
                  termination occurs, less applicable withholdings and
                  deductions and (iii) pay you an amount equal to one and
                  one-half (1-1/2) times the average annual bonus earned by you
                  pursuant to Paragraph 3 during the two (2) most recently
                  completed fiscal years of the Company payable over an eighteen
                  (18) month period following termination in equal installments
                  on the Company's regular payroll dates, less applicable
                  withholdings and deductions. Notwithstanding the foregoing, if
                  such termination without Cause or for Good Reason occurs
                  within twelve (12) months immediately following a Change of
                  Control (as defined in Addendum "A") the

                                      ~3~


                  Company will instead (i) continue to pay your base salary (but
                  not any employment benefits) on its regular payroll dates for
                  a period of thirty (30) months, (ii) pay you a pro rata
                  portion of your bonus, if any, as provided by Paragraph 3 for
                  the fiscal year in which such termination occurs, less
                  applicable withholdings and deductions, and (iii) pay you an
                  amount equal to two and one-half (2-1/2) times the average
                  annual bonus earned by you pursuant to Paragraph 3 during the
                  two (2) most recently completed fiscal years of the Company
                  payable over a thirty (30) month period following termination
                  in equal installments on the Company's regular payroll dates,
                  less applicable withholdings and deductions. In order for you
                  to be eligible to receive the payments specified in this
                  Paragraph 9(c), you must execute a general release of claims
                  in a form reasonably acceptable to the Company. You shall have
                  no further rights to any other compensation or benefits
                  hereunder on or after the termination of your employment. You
                  shall not have a duty to seek substitute employment and the
                  Company shall not have the right to offset any compensation
                  due you against any compensation or income received by you
                  after the date of such termination.

                  "Good Reason" for you to terminate employment means a
                  voluntary termination as a result of (i) the assignment to you
                  of duties materially inconsistent with your position as set
                  forth above without your consent, (ii) a material change in
                  your reporting level from that set forth in this Agreement
                  without your consent, (iii) a material diminution of your
                  authority without your consent, (iv) a material breach by the
                  Company of its obligations under this Agreement, (v) a failure
                  by the Company to obtain from any successor, before the
                  succession takes place, an agreement to assume and perform the
                  obligations contained in this Agreement, or (vi) the Company
                  requiring you to be based (other than temporarily) at any
                  office or location outside of France or the Southern
                  California area without your consent. Notwithstanding the
                  foregoing, Good Reason shall not exist unless you provide the
                  Company notice of termination on account thereof and, if such
                  event or condition is curable, the Company fails to cure such
                  event or condition within thirty (30) days of such notice.

                  (d)   In the event that any payment or benefit received or to
                  be received by you (collectively, the "Payments") would
                  constitute a parachute payment within the meaning of Section
                  280G of the Internal Revenue Code of 1986, as amended (the
                  "Code"), then the following limitation shall apply:

                  The aggregate present value of those Payments shall be limited
                  in amount to the greater of the following dollar amounts (the
                  "Benefit Limit"):

                  (i)   2.99 times your Average Compensation (as defined below),
                  or

                  (ii)  the amount which yields you the greatest after-tax
                  amount of Payments under this Agreement after taking into
                  account any excise tax imposed under Code Section 4999 on
                  those Payments.

                  The present value of the Payments will be measured as of the
                  date of the Change in Control and determined in accordance
                  with the provisions of Code Section 280G(d)(4).

                                      ~4~


                  Average Compensation means the average of your W-2 wages from
                  the Company for the five (5) calendar years completed
                  immediately prior to the calendar year in which the Change in
                  Control is effected. Any W-2 wages for a partial year of
                  employment will be annualized, in accordance with the
                  frequency which such wages are paid during such partial year,
                  before inclusion in Average Compensation.

            10.   Trade Secrets; Confidential and/or Proprietary Information.
                  The Company owns certain trade secrets and other confidential
                  and/or proprietary information which constitute valuable
                  property rights, which it has developed through a substantial
                  expenditure of time and money, which are and will continue to
                  be utilized in the Company's business and which are not
                  generally known in the trade. This proprietary information
                  includes the list of names of the customers and suppliers of
                  Quiksilver, and other particularized information concerning
                  the products, finances, processes, material preferences,
                  fabrics, designs, material sources, pricing information,
                  production schedules, sales and marketing strategies, sales
                  commission formulae, merchandising strategies, order forms and
                  other types of proprietary information relating to our
                  products, customers and suppliers. You agree that you will not
                  disclose and will keep strictly secret and confidential all
                  trade secrets and proprietary information of the Company,
                  including, but not limited to, those items specifically
                  mentioned above.

            11.   Expense Reimbursement. The Company will reimburse you for
                  documented reasonable and necessary business expenses incurred
                  by you while engaged in business activities for the Company's
                  benefit on such terms and conditions as shall be generally
                  available to other executives of the Company.

            12.   Compliance With Business Policies. You will devote your full
                  business time and attention to Quiksilver and will not be
                  involved in other business ventures without written
                  authorization from the Company's Board of Directors. You will
                  be required to observe the Company's personnel and business
                  policies and procedures as they are in effect from time to
                  time. In the event of any conflicts, the terms of this
                  Agreement will control.

            13.   Entire Agreement. This Agreement, its addenda, and any stock
                  option agreements the Company may enter into with you contain
                  the entire integrated agreement between us regarding these
                  issues, and no modification or amendment to this Agreement
                  will be valid unless set forth in writing and signed by both
                  you and an authorized officer of the Company.

            14.   Arbitration as Exclusive Remedy. To the fullest extent allowed
                  by law, any controversy, claim or dispute between you and the
                  Company (and/or any of its affiliates, owners, shareholders,
                  directors, officers, employees, volunteers or agents) relating
                  to or arising out of your employment or the cessation of that
                  employment will be submitted to final and binding arbitration
                  in Orange County, California, for determination in accordance
                  with the American Arbitration Association's ("AAA") National
                  Rules for the Resolution of Employment Disputes, as the
                  exclusive remedy

                                      ~5~


                  for such controversy, claim or dispute. In any such
                  arbitration, the parties may conduct discovery to the same
                  extent as would be permitted in a court of law. The arbitrator
                  shall issue a written decision, and shall have full authority
                  to award all remedies which would be available in court. The
                  Company shall pay the arbitrator's fees and any AAA
                  administrative expenses. Any judgment upon the award rendered
                  by the arbitrator(s) may be entered in any court having
                  jurisdiction thereof. Possible disputes covered by the above
                  include (but are not limited to) unpaid wages, breach of
                  contract, torts, violation of public policy, discrimination,
                  harassment, or any other employment-related claims under laws
                  including but not limited to, Title VII of the Civil Rights
                  Act of 1964, the Americans With Disabilities Act, the Age
                  Discrimination in Employment Act, the California Fair
                  Employment and Housing Act, the California Labor Code and any
                  other statutes or laws relating to an employee's relationship
                  with his/her employer, regardless of whether such dispute is
                  initiated by the employee or the Company. Thus, this bilateral
                  arbitration agreement fully applies to any and all claims that
                  the Company may have against you, including (but not limited
                  to) claims for misappropriation of Company property,
                  disclosure of proprietary information or trade secrets,
                  interference with contract, trade libel, gross negligence, or
                  any other claim for alleged wrongful conduct or breach of the
                  duty of loyalty. Nevertheless, claims for workers'
                  compensation benefits or unemployment insurance, those arising
                  under the National Labor Relations Act, and any other claims
                  where mandatory arbitration is prohibited by law, are not
                  covered by this arbitration agreement, and such claims may be
                  presented by either the Company or you to the appropriate
                  court or government agency. BY AGREEING TO THIS BINDING
                  ARBITRATION PROVISION, BOTH YOU AND THE COMPANY GIVE UP ALL
                  RIGHTS TO TRIAL BY JURY. This mutual arbitration agreement is
                  to be construed as broadly as is permissible under applicable
                  law.

            15.   Successors and Assigns. This Agreement will be assignable by
                  the Company to any successor or to any other company owned or
                  controlled by the Company, and will be binding upon any
                  successor to the business of the Company, whether direct or
                  indirect, by purchase of securities, merger, consolidation,
                  purchase of all or substantially all of the assets of the
                  Company or otherwise.

                                      ~6~


Please sign, date and return the enclosed copy of this letter to me for our
files to acknowledge your agreement with the above.

                                              Very truly yours,

                                              __________________________________
                                              Robert B. McKnight, Jr.
                                              Chief Executive Officer
Enclosure

ACKNOWLEDGED AND AGREED:

_______________________________
Bernard Mariette

Date Effective: _________, 2004

                                      ~7~


                                   ADDENDUM A

                         DEFINITION OF CHANGE IN CONTROL

            "Change in Control" means the occurrence of one or more of the
following events: (i) any corporation, partnership, person, other entity, or
group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) (collectively, a "Person") acquires shares of capital stock of the
Company representing more than 50% of the total number of shares of capital
stock that may be voted for the election of directors of the Company, (ii) a
merger, consolidation, or other business combination of the Company with or into
another Person is consummated, or all or substantially all of the assets of the
Company are acquired by another Person, as a result of which the stockholders of
the Company immediately prior to the consummation of such transaction own,
immediately after consummation of such transaction equity securities possessing
less than 50% of the voting power of the surviving or acquiring Person (or any
Person in control of the surviving or acquiring Person, the equity securities of
which are issued or transferred in such transaction), or (iii) the stockholders
of the Company approve a plan of complete liquidation, dissolution or winding up
of the Company.

                                  ~Addendum A~

EX-10.3

                                                                    EXHIBIT 10.3

                               [QUICKSILVER LOGO]

                                 August 1, 2004

PERSONAL AND CONFIDENTIAL

Charles S. Exon, Esq.
c/o Quiksilver, Inc.
15202 Graham Street

Huntington Beach, California  92649

Re:   Employment at Quiksilver, Inc.

Dear Charlie:

            This letter ("Agreement") will confirm our understanding and
agreement regarding your continued employment with Quiksilver, Inc.
("Quiksilver" or the "Company"). This Agreement is effective August 1, 2004, and
completely supersedes and replaces any existing or previous oral or written
understandings or agreements, express or implied, between you and the Company
regarding your employment, including, without limitation, our August 1, 2000,
letter.

            1.    Position; Exclusivity. The Company hereby agrees to employ you
                  as its Executive Vice President, Business and Legal
                  Affairs-International, reporting to the President or Chief
                  Executive Officer. During your employment with Quiksilver, you
                  will devote your full professional and business time,
                  interest, abilities and energies to the Company and will not
                  render any services to any other person or entity, whether for
                  compensation or otherwise, or engage in any business
                  activities competitive with or adverse to the Company's
                  business or welfare, whether alone, as an employee, as an
                  attorney, as a partner, as a member, or as a shareholder,
                  officer or director of any other corporation, or as a trustee,
                  fiduciary or in any other similar representative capacity of
                  any other entity. The Company agrees that you will be insured
                  against, indemnified or otherwise covered for legal
                  malpractice or similar claims that may arise out of your
                  carrying out your duties and responsibilities hereunder.

            2.    Base Salary. Your base salary will be $29,166.66 per month
                  ($350,000 on an annualized basis), less applicable
                  withholdings and deductions, paid on the Company's regular
                  payroll dates. Your salary will be reviewed at the time
                  management salaries are reviewed periodically and may be
                  adjusted (but not below $29,166.66 per month) at the Company's
                  discretion in light of the Company's performance, your
                  performance, market conditions and other factors deemed
                  relevant by the Company.

            3.    Bonus. For the fiscal year ending October 31, 2004 and each
                  fiscal year thereafter, you shall be eligible to receive a
                  discretionary bonus under the terms approved by

                                       ~1~


                  the Board of Directors for such bonus. Any such bonus shall be
                  paid within ten (10) days following the date the Company
                  publicly releases its annual audited financial statements (the
                  "Bonus Payment Date"). In the event that your employment with
                  the Company terminates prior to the end of the applicable
                  fiscal year, your eligibility to receive a pro rata portion of
                  the bonus is governed by Paragraph 9 below. Any bonus payments
                  shall be less applicable withholdings and deductions.

            4.    Vacation. You will accrue 20 days of vacation each year up to
                  a maximum of 35 days. Once the maximum is reached, additional
                  vacation accrual will cease until you have used some vacation
                  to fall below the maximum accrual allowed.

            5.    Health and Disability Insurance. You (and any eligible
                  dependents you elect) will be covered by the Company's group
                  health insurance programs on the same terms and conditions
                  applicable to comparable employees. You will also be covered
                  by the long-term disability plan for senior executives on the
                  same terms and conditions applicable to comparable employees.
                  The Company reserves the right to change, modify, or eliminate
                  such coverages in its discretion.

            6.    Clothing Allowance. You will be provided a clothing allowance
                  of $2,000 per year at the Company's wholesale prices.

            7.    Stock Options. You shall continue to be a participant in
                  Quiksilver's Stock Incentive Plan, or any successor equity
                  plan. The amount and terms of any restricted stock, stock
                  options, stock appreciation rights or other interests to be
                  granted to you will be determined by the Board of Directors in
                  its discretion and covered in separate agreements, but shall
                  be substantially similar to those granted to other senior
                  executives of Quiksilver of equivalent level. Stock options
                  granted to you after the date hereof through the termination
                  of your employment shall provide that if you are terminated by
                  the Company without Cause (as hereinafter defined) or you
                  terminate your employment for Good Reason (as hereinafter
                  defined) within twelve (12) months following a Change of
                  Control (as defined in Addendum "A"), any such options
                  outstanding will automatically vest in full on an accelerated
                  basis so that the options will immediately prior to such
                  termination become exercisable for all option shares.

            8.    Life Insurance. The Company will pay the premium on a term
                  life insurance policy on your life with a company and policy
                  of our choice, and a beneficiary of your choice, in the face
                  amount determined by the Company of not less than $1,000,000.
                  Our obligation to obtain and maintain this insurance is
                  contingent upon your establishing and maintaining
                  insurability, and we are not required to pay premiums for such
                  a policy in excess of $2,500 annually.

            9.    Unspecified Term; At Will Employment; Termination.

                  (a)   Notwithstanding anything to the contrary in this
                  Agreement or in your prior employment relationship with the
                  Company, express or implied, your employment is for an
                  unspecified term and either you or Quiksilver may terminate
                  your employment at will and with or without Cause (as defined
                  below) or notice at any time for any reason; provided,
                  however, that you agree to provide the Company with

                                      ~2~


                  thirty (30) days advance written notice of your resignation
                  (during which time the Company may elect, in its discretion,
                  to relieve you of all duties and responsibilities). This
                  at-will aspect of your employment relationship can only be
                  changed by an individualized written agreement signed by both
                  you and an authorized officer of the Company.

                  (b)   The Company may also terminate your employment
                  immediately, without notice, for Cause, which shall include,
                  but not be limited to, (i) your death, (ii) your permanent
                  disability which renders you unable to perform your duties and
                  responsibilities for a period in excess of three consecutive
                  months, (iii) willful misconduct in the performance of your
                  duties, (iv) commission of a felony or violation of law
                  involving moral turpitude or dishonesty, (v) self-dealing,
                  (vi) willful breach of duty, (vii) habitual neglect of duty,
                  or (viii) a material breach by you of your obligations under
                  this Agreement. If the Company terminates your employment for
                  Cause, or you terminate your employment other than for Good
                  Reason (as defined below), you (or your estate or
                  beneficiaries in the case of your death) shall receive your
                  base salary and other benefits earned and accrued prior to the
                  termination of your employment and, in the case of a
                  termination pursuant to subparagraphs (i) or (ii) only, a pro
                  rata portion of your bonus, if any, as provided in Paragraph 3
                  for the fiscal year in which such termination occurs, less
                  applicable withholdings and deductions, and you shall have no
                  further rights to any other compensation or benefits hereunder
                  on or after the termination of your employment.

                  (c)   If Quiksilver elects to terminate your employment
                  without Cause, or if you terminate your employment with the
                  Company for Good Reason within six (6) months of the action
                  constituting Good Reason, the Company will (i) continue to pay
                  your base salary (but not any employment benefits) on its
                  regular payroll dates for a period of twelve (12) months, (ii)
                  pay you a pro rata portion of a bonus adopted pursuant to
                  Paragraph 3, if any, for the fiscal year in which such
                  termination occurs, less applicable withholdings and
                  deductions, and (iii) pay you an amount equal to one times the
                  average annual bonus earned by you pursuant to Paragraph 3
                  during the two (2) most recently completed fiscal years of the
                  Company, payable over a twelve (12) month period following
                  termination in equal installments on the Company's regular
                  payroll dates, less applicable withholdings and deductions.
                  Notwithstanding the foregoing, if such termination without
                  Cause or for Good Reason occurs within twelve (12) months
                  immediately following a Change of Control (as defined in
                  Addendum "A"), the Company will instead (i) continue to pay
                  your base salary (but not any employment benefits) on its
                  regular payroll dates for a period of twenty-four (24) months,
                  (ii) pay you a pro rata portion of a bonus, if any, for the
                  fiscal year in which such termination occurs, less applicable
                  withholdings and deductions, and (iii) pay you an amount equal
                  to two (2) times the average annual bonus earned by you
                  pursuant to Paragraph 3 during the two (2) most recently
                  completed fiscal years of the Company, payable over a
                  twenty-four (24) month period following termination in equal
                  installments on the Company's regular payroll dates, less
                  applicable withholdings and deductions. In order for you to be
                  eligible to receive the payments specified in this Paragraph
                  9(c), you must execute a general release of claims in a form
                  reasonably acceptable to the Company. You shall have no

                                      ~3~


                  further rights to any other compensation or benefits hereunder
                  on or after the termination of your employment. You shall not
                  have a duty to seek substitute employment, and the Company
                  shall not have the right to offset any compensation due you
                  against any compensation or income received by you after the
                  date of such termination.

                  "Good Reason" for you to terminate employment means a
                  voluntary termination as a result of (i) the assignment to you
                  of duties materially inconsistent with your position as set
                  forth above without your consent, (ii) a material change in
                  your reporting level from that set forth in this Agreement
                  without your consent, (iii) a material diminution of your
                  authority without your consent, (iv) a material breach by the
                  Company of its obligations under this Agreement, (v) a failure
                  by the Company to obtain from any successor, before the
                  succession takes place, an agreement to assume and perform the
                  obligations contained in this Agreement, or (vi) the Company
                  requiring you to be based (other than temporarily) at any
                  office or location outside of the Southern California area
                  without your consent. Notwithstanding the foregoing, Good
                  Reason shall not exist unless you provide the Company notice
                  of termination on account thereof and, if such event or
                  condition is curable, the Company fails to cure such event or
                  condition within thirty (30) days of such notice.

                        (d)   In the event that any payment or benefit received
                  or to be received by you (collectively, the "Payments") would
                  constitute a parachute payment within the meaning of Section
                  280G of the Internal Revenue Code of 1986, as amended (the
                  "Code"), then the following limitation shall apply:

                  The aggregate present value of those Payments shall be limited
                  in amount to the greater of the following dollar amounts (the
                  "Benefit Limit"):

                  (i)   2.99 times your Average Compensation (as defined below),
                  or

                  (ii)  the amount which yields you the greatest after-tax
                  amount of Payments under this Agreement after taking into
                  account any excise tax imposed under Code Section 4999 on
                  those Payments.

                  The present value of the Payments will be measured as of the
                  date of the Change in Control and determined in accordance
                  with the provisions of Code Section 280G(d)(4).

                  Average Compensation means the average of your W-2 wages from
                  the Company for the five (5) calendar years completed
                  immediately prior to the calendar year in which the Change in
                  Control is effected. Any W-2 wages for a partial year of
                  employment will be annualized, in accordance with the
                  frequency which such wages are paid during such partial year,
                  before inclusion in Average Compensation.

            10.   Trade Secrets; Confidential and/or Proprietary Information.
                  The Company owns certain trade secrets and other confidential
                  and/or proprietary information which constitute valuable
                  property rights, which it has developed through a substantial
                  expenditure of time and money, which are and will continue to
                  be utilized in the

                                      ~4~


                  Company's business and which are not generally known in the
                  trade. This proprietary information includes the list of names
                  of the customers and suppliers of Quiksilver, and other
                  particularized information concerning the products, finances,
                  processes, material preferences, fabrics, designs, material
                  sources, pricing information, production schedules, sales and
                  marketing strategies, sales commission formulae, merchandising
                  strategies, order forms and other types of proprietary
                  information relating to our products, customers and suppliers.
                  You agree that you will not disclose and will keep strictly
                  secret and confidential all trade secrets and proprietary
                  information of the Company, including, but not limited to,
                  those items specifically mentioned above.

            11.   Expense Reimbursement. The Company will reimburse you for
                  documented reasonable and necessary business expenses incurred
                  by you while engaged in business activities for the Company's
                  benefit on such terms and conditions as shall be generally
                  available to other executives of the Company.

            12.   Compliance With Business Policies. You will devote your full
                  business time and attention to Quiksilver and will not be
                  involved in other business ventures without written
                  authorization from the Company's Board of Directors. You will
                  be required to observe the Company's personnel and business
                  policies and procedures as they are in effect from time to
                  time. In the event of any conflicts, the terms of this
                  Agreement will control.

            13.   Entire Agreement. This Agreement, its addenda, and any stock
                  option agreements the Company may enter into with you contain
                  the entire integrated agreement between us regarding these
                  issues, and no modification or amendment to this Agreement
                  will be valid unless set forth in writing and signed by both
                  you and an authorized officer of the Company.

            14.   Arbitration as Exclusive Remedy. To the fullest extent allowed
                  by law, any controversy, claim or dispute between you and the
                  Company (and/or any of its affiliates, owners, shareholders,
                  directors, officers, employees, volunteers or agents) relating
                  to or arising out of your employment or the cessation of that
                  employment will be submitted to final and binding arbitration
                  in Orange County, California, for determination in accordance
                  with the American Arbitration Association's ("AAA") National
                  Rules for the Resolution of Employment Disputes, as the
                  exclusive remedy for such controversy, claim or dispute. In
                  any such arbitration, the parties may conduct discovery to the
                  same extent as would be permitted in a court of law. The
                  arbitrator shall issue a written decision, and shall have full
                  authority to award all remedies which would be available in
                  court. The Company shall pay the arbitrator's fees and any AAA
                  administrative expenses. Any judgment upon the award rendered
                  by the arbitrator(s) may be entered in any court having
                  jurisdiction thereof. Possible disputes covered by the above
                  include (but are not limited to) unpaid wages, breach of
                  contract, torts, violation of public policy, discrimination,
                  harassment, or any other employment-related claims under laws
                  including but not limited to, Title VII of the Civil Rights
                  Act of 1964, the Americans With Disabilities Act, the Age
                  Discrimination in Employment Act, the California Fair
                  Employment and Housing Act, the California Labor Code and any
                  other statutes or laws relating to an employee's relationship
                  with his/her employer, regardless of whether such dispute is

                                      ~5~


                  initiated by the employee or the Company. Thus, this bilateral
                  arbitration agreement fully applies to any and all claims that
                  the Company may have against you, including (but not limited
                  to) claims for misappropriation of Company property,
                  disclosure of proprietary information or trade secrets,
                  interference with contract, trade libel, gross negligence, or
                  any other claim for alleged wrongful conduct or breach of the
                  duty of loyalty. Nevertheless, claims for workers'
                  compensation benefits or unemployment insurance, those arising
                  under the National Labor Relations Act, and any other claims
                  where mandatory arbitration is prohibited by law, are not
                  covered by this arbitration agreement, and such claims may be
                  presented by either the Company or you to the appropriate
                  court or government agency. BY AGREEING TO THIS BINDING
                  ARBITRATION PROVISION, BOTH YOU AND THE COMPANY GIVE UP ALL
                  RIGHTS TO TRIAL BY JURY. This mutual arbitration agreement is
                  to be construed as broadly as is permissible under applicable
                  law.

            15.   Successors and Assigns. This Agreement will be assignable by
                  the Company to any successor or to any other company owned or
                  controlled by the Company, and will be binding upon any
                  successor to the business of the Company, whether direct or
                  indirect, by purchase of securities, merger, consolidation,
                  purchase of all or substantially all of the assets of the
                  Company or otherwise.

                                      ~6~


Please sign, date and return the enclosed copy of this letter to me for our
files to acknowledge your agreement with the above.

                                              Very truly yours,

                                              __________________________________
                                              Robert B. McKnight, Jr.
                                              Chief Executive Officer

Enclosure

ACKNOWLEDGED AND AGREED:

_______________________________
Charles S. Exon

Date Effective: _________, 2004

                                      ~7~


                                   ADDENDUM A

                         DEFINITION OF CHANGE IN CONTROL

            "Change in Control" means the occurrence of one or more of the
following events: (i) any corporation, partnership, person, other entity, or
group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) (collectively, a "Person") acquires shares of capital stock of the
Company representing more than 50% of the total number of shares of capital
stock that may be voted for the election of directors of the Company, (ii) a
merger, consolidation, or other business combination of the Company with or into
another Person is consummated, or all or substantially all of the assets of the
Company are acquired by another Person, as a result of which the stockholders of
the Company immediately prior to the consummation of such transaction own,
immediately after consummation of such transaction equity securities possessing
less than 50% of the voting power of the surviving or acquiring Person (or any
Person in control of the surviving or acquiring Person, the equity securities of
which are issued or transferred in such transaction), or (iii) the stockholders
of the Company approve a plan of complete liquidation, dissolution or winding up
of the Company.

                                  ~ADDENDUM A~

EX-10.4

                                                                    EXHIBIT 10.4

                               [QUICKSILVER LOGO]

                                 August 1, 2004

PERSONAL AND CONFIDENTIAL

Steven L. Brink
c/o Quiksilver, Inc.
15202 Graham Street

Huntington Beach, California 92649

Re:   Employment at Quiksilver, Inc.

Dear Steve:

            This letter ("Agreement") will confirm our understanding and
agreement regarding your continued employment with Quiksilver, Inc.
("Quiksilver" or the "Company"). This Agreement is effective August 1, 2004, and
completely supersedes and replaces any existing or previous oral or written
understandings or agreements, express or implied, between you and the Company
regarding your employment, including, without limitation, the [date], Agreement.

            1.    Position; Exclusivity. The Company hereby agrees to employ you
                  as its Chief Financial Officer, reporting to the President or
                  Chief Executive Officer. During your employment with
                  Quiksilver, you will devote your full professional and
                  business time, interest, abilities and energies to the Company
                  and will not render any services to any other person or
                  entity, whether for compensation or otherwise, or engage in
                  any business activities competitive with or adverse to the
                  Company's business or welfare, whether alone, as an employee,
                  as a partner, as a member, or as a shareholder, officer or
                  director of any other corporation, or as a trustee, fiduciary
                  or in any other similar representative capacity of any other
                  entity.

            2.    Base Salary. Your base salary will be $22,500 per month
                  ($270,000 on an annualized basis), less applicable
                  withholdings and deductions, paid on the Company's regular
                  payroll dates. Your salary will be reviewed at the time
                  management salaries are reviewed periodically and may be
                  adjusted (but not below $22,500 per month) at the Company's
                  discretion in light of the Company's performance, your
                  performance, market conditions and other factors deemed
                  relevant by the Company.

            3.    Bonus. For the fiscal year ending October 31, 2004 and each
                  fiscal year thereafter, you shall be eligible to receive a
                  discretionary bonus under the terms approved by the Board of
                  Directors for such bonus. Any such bonus shall be paid within
                  ten (10) days following the date the Company publicly releases
                  its annual audited financial statements (the "Bonus Payment
                  Date"). In the event that your employment with the Company
                  terminates prior to the end of the applicable fiscal year,
                  your eligibility to

                                      ~1~


                  receive a pro rata portion of the bonus is governed by
                  Paragraph 9 below. Any bonus payments shall be less applicable
                  withholdings and deductions.

            4.    Vacation. You will accrue 20 days of vacation each year up to
                  a maximum of 35 days. Once the maximum is reached, additional
                  vacation accrual will cease until you have used some vacation
                  to fall below the maximum accrual allowed.

            5.    Health and Disability Insurance. You (and any eligible
                  dependents you elect) will be covered by the Company's group
                  health insurance programs on the same terms and conditions
                  applicable to comparable employees. You will also be covered
                  by the long-term disability plan for senior executives on the
                  same terms and conditions applicable to comparable employees.
                  The Company reserves the right to change, modify, or eliminate
                  such coverages in its discretion.

            6.    Clothing Allowance. You will be provided a clothing allowance
                  of $2,000 per year at the Company's wholesale prices.

            7.    Stock Options. You shall continue to be a participant in
                  Quiksilver's Stock Incentive Plan, or any successor equity
                  plan. The amount and terms of any restricted stock, stock
                  options, stock appreciation rights or other interests to be
                  granted to you will be determined by the Board of Directors in
                  its discretion and covered in separate agreements, but shall
                  be substantially similar to those granted to other senior
                  executives of Quiksilver of equivalent level. Stock options
                  granted to you after the date hereof through the termination
                  of your employment shall provide that if you are terminated by
                  the Company without Cause (as hereinafter defined) or you
                  terminate your employment for Good Reason (as hereinafter
                  defined) within twelve (12) months following a Change of
                  Control (as defined in Addendum "A"), any such options
                  outstanding will automatically vest in full on an accelerated
                  basis so that the options will immediately prior to such
                  termination become exercisable for all option shares.

            8.    Life Insurance. The Company will pay the premium on a term
                  life insurance policy on your life with a company and policy
                  of our choice, and a beneficiary of your choice, in the face
                  amount determined by the Company of not less than $1,000,000.
                  Our obligation to obtain and maintain this insurance is
                  contingent upon your establishing and maintaining
                  insurability, and we are not required to pay premiums for such
                  a policy in excess of $2,500 annually.

            9.    Unspecified Term; At Will Employment; Termination.

                  (a)   Notwithstanding anything to the contrary in this
                  Agreement or in your prior employment relationship with the
                  Company, express or implied, your employment is for an
                  unspecified term and either you or Quiksilver may terminate
                  your employment at will and with or without Cause (as defined
                  below) or notice at any time for any reason; provided,
                  however, that you agree to provide the Company with thirty
                  (30) days advance written notice of your resignation (during
                  which time the Company may elect, in its discretion, to
                  relieve you of all duties and responsibilities). This at-will
                  aspect of your employment relationship can only be

                                      ~2~


                  changed by an individualized written agreement signed by both
                  you and an authorized officer of the Company.

                  (b)   The Company may also terminate your employment
                  immediately, without notice, for Cause, which shall include,
                  but not be limited to, (i) your death, (ii) your permanent
                  disability which renders you unable to perform your duties and
                  responsibilities for a period in excess of three consecutive
                  months, (iii) willful misconduct in the performance of your
                  duties, (iv) commission of a felony or violation of law
                  involving moral turpitude or dishonesty, (v) self-dealing,
                  (vi) willful breach of duty, (vii) habitual neglect of duty,
                  or (viii) a material breach by you of your obligations under
                  this Agreement. If the Company terminates your employment for
                  Cause, or you terminate your employment other than for Good
                  Reason (as defined below), you (or your estate or
                  beneficiaries in the case of your death) shall receive your
                  base salary and other benefits earned and accrued prior to the
                  termination of your employment and, in the case of a
                  termination pursuant to subparagraphs (i) or (ii) only, a pro
                  rata portion of your bonus, if any, as provided in Paragraph 3
                  for the fiscal year in which such termination occurs, less
                  applicable withholdings and deductions, and you shall have no
                  further rights to any other compensation or benefits hereunder
                  on or after the termination of your employment.

                  (c)   If Quiksilver elects to terminate your employment
                  without Cause, or if you terminate your employment with the
                  Company for Good Reason within six (6) months of the action
                  constituting Good Reason, the Company will (i) continue to pay
                  your base salary (but not any employment benefits) on its
                  regular payroll dates for a period of twelve (12) months, (ii)
                  pay you a pro rata portion of a bonus adopted pursuant to
                  Paragraph 3, if any, for the fiscal year in which such
                  termination occurs, less applicable withholdings and
                  deductions, and (iii) pay you an amount equal to one times the
                  average annual bonus earned by you pursuant to Paragraph 3
                  during the two (2) most recently completed fiscal years of the
                  Company, payable over a twelve (12) month period following
                  termination in equal installments on the Company's regular
                  payroll dates, less applicable withholdings and deductions.
                  Notwithstanding the foregoing, if such termination without
                  Cause or for Good Reason occurs within twelve (12) months
                  immediately following a Change of Control (as defined in
                  Addendum "A"), the Company will instead (i) continue to pay
                  your base salary (but not any employment benefits) on its
                  regular payroll dates for a period of twenty-four (24) months,
                  (ii) pay you a pro rata portion of a bonus, if any, for the
                  fiscal year in which such termination occurs, less applicable
                  withholdings and deductions, and (iii) pay you an amount equal
                  to two (2) times the average annual bonus earned by you
                  pursuant to Paragraph 3 during the two (2) most recently
                  completed fiscal years of the Company, payable over a
                  twenty-four (24) month period following termination in equal
                  installments on the Company's regular payroll dates, less
                  applicable withholdings and deductions. In order for you to be
                  eligible to receive the payments specified in this Paragraph
                  9(c), you must execute a general release of claims in a form
                  reasonably acceptable to the Company. You shall have no
                  further rights to any other compensation or benefits hereunder
                  on or after the termination of your employment. You shall not
                  have a duty to seek substitute

                                      ~3~


                  employment, and the Company shall not have the right to offset
                  any compensation due you against any compensation or income
                  received by you after the date of such termination.

                  "Good Reason" for you to terminate employment means a
                  voluntary termination as a result of (i) the assignment to you
                  of duties materially inconsistent with your position as set
                  forth above without your consent, (ii) a material change in
                  your reporting level from that set forth in this Agreement
                  without your consent, (iii) a material diminution of your
                  authority without your consent, (iv) a material breach by the
                  Company of its obligations under this Agreement, (v) a failure
                  by the Company to obtain from any successor, before the
                  succession takes place, an agreement to assume and perform the
                  obligations contained in this Agreement, or (vi) the Company
                  requiring you to be based (other than temporarily) at any
                  office or location outside of the Southern California area
                  without your consent. Notwithstanding the foregoing, Good
                  Reason shall not exist unless you provide the Company notice
                  of termination on account thereof and, if such event or
                  condition is curable, the Company fails to cure such event or
                  condition within thirty (30) days of such notice.

                  (d)   In the event that any payment or benefit received or to
                  be received by you (collectively, the "Payments") would
                  constitute a parachute payment within the meaning of Section
                  280G of the Internal Revenue Code of 1986, as amended (the
                  "Code"), then the following limitation shall apply:

                  The aggregate present value of those Payments shall be limited
                  in amount to the greater of the following dollar amounts (the
                  "Benefit Limit"):

                  (i)   2.99 times your Average Compensation (as defined below),
                  or

                  (ii)  the amount which yields you the greatest after-tax
                  amount of Payments under this Agreement after taking into
                  account any excise tax imposed under Code Section 4999 on
                  those Payments.

                  The present value of the Payments will be measured as of the
                  date of the Change in Control and determined in accordance
                  with the provisions of Code Section 280G(d)(4).

                  Average Compensation means the average of your W-2 wages from
                  the Company for the five (5) calendar years completed
                  immediately prior to the calendar year in which the Change in
                  Control is effected. Any W-2 wages for a partial year of
                  employment will be annualized, in accordance with the
                  frequency which such wages are paid during such partial year,
                  before inclusion in Average Compensation.

            10.   Trade Secrets; Confidential and/or Proprietary Information.
                  The Company owns certain trade secrets and other confidential
                  and/or proprietary information which constitute valuable
                  property rights, which it has developed through a substantial
                  expenditure of time and money, which are and will continue to
                  be utilized in the Company's business and which are not
                  generally known in the trade. This proprietary information
                  includes the list of names of the customers and suppliers of

                                      ~4~


                  Quiksilver, and other particularized information concerning
                  the products, finances, processes, material preferences,
                  fabrics, designs, material sources, pricing information,
                  production schedules, sales and marketing strategies, sales
                  commission formulae, merchandising strategies, order forms and
                  other types of proprietary information relating to our
                  products, customers and suppliers. You agree that you will not
                  disclose and will keep strictly secret and confidential all
                  trade secrets and proprietary information of the Company,
                  including, but not limited to, those items specifically
                  mentioned above.

            11.   Expense Reimbursement. The Company will reimburse you for
                  documented reasonable and necessary business expenses incurred
                  by you while engaged in business activities for the Company's
                  benefit on such terms and conditions as shall be generally
                  available to other executives of the Company.

            12.   Compliance With Business Policies. You will devote your full
                  business time and attention to Quiksilver and will not be
                  involved in other business ventures without written
                  authorization from the Company's Board of Directors. You will
                  be required to observe the Company's personnel and business
                  policies and procedures as they are in effect from time to
                  time. In the event of any conflicts, the terms of this
                  Agreement will control.

            13.   Entire Agreement. This Agreement, its addenda, and any stock
                  option agreements the Company may enter into with you contain
                  the entire integrated agreement between us regarding these
                  issues, and no modification or amendment to this Agreement
                  will be valid unless set forth in writing and signed by both
                  you and an authorized officer of the Company.

            14.   Arbitration as Exclusive Remedy. To the fullest extent allowed
                  by law, any controversy, claim or dispute between you and the
                  Company (and/or any of its affiliates, owners, shareholders,
                  directors, officers, employees, volunteers or agents) relating
                  to or arising out of your employment or the cessation of that
                  employment will be submitted to final and binding arbitration
                  in Orange County, California, for determination in accordance
                  with the American Arbitration Association's ("AAA") National
                  Rules for the Resolution of Employment Disputes, as the
                  exclusive remedy for such controversy, claim or dispute. In
                  any such arbitration, the parties may conduct discovery to the
                  same extent as would be permitted in a court of law. The
                  arbitrator shall issue a written decision, and shall have full
                  authority to award all remedies which would be available in
                  court. The Company shall pay the arbitrator's fees and any AAA
                  administrative expenses. Any judgment upon the award rendered
                  by the arbitrator(s) may be entered in any court having
                  jurisdiction thereof. Possible disputes covered by the above
                  include (but are not limited to) unpaid wages, breach of
                  contract, torts, violation of public policy, discrimination,
                  harassment, or any other employment-related claims under laws
                  including but not limited to, Title VII of the Civil Rights
                  Act of 1964, the Americans With Disabilities Act, the Age
                  Discrimination in Employment Act, the California Fair
                  Employment and Housing Act, the California Labor Code and any
                  other statutes or laws relating to an employee's relationship
                  with his/her employer, regardless of whether such dispute is
                  initiated by the employee or the Company. Thus, this bilateral
                  arbitration agreement

                                      ~5~


                  fully applies to any and all claims that the Company may have
                  against you, including (but not limited to) claims for
                  misappropriation of Company property, disclosure of
                  proprietary information or trade secrets, interference with
                  contract, trade libel, gross negligence, or any other claim
                  for alleged wrongful conduct or breach of the duty of loyalty.
                  Nevertheless, claims for workers' compensation benefits or
                  unemployment insurance, those arising under the National Labor
                  Relations Act, and any other claims where mandatory
                  arbitration is prohibited by law, are not covered by this
                  arbitration agreement, and such claims may be presented by
                  either the Company or you to the appropriate court or
                  government agency. BY AGREEING TO THIS BINDING ARBITRATION
                  PROVISION, BOTH YOU AND THE COMPANY GIVE UP ALL RIGHTS TO
                  TRIAL BY JURY. This mutual arbitration agreement is to be
                  construed as broadly as is permissible under applicable law.

            15.   Successors and Assigns. This Agreement will be assignable by
                  the Company to any successor or to any other company owned or
                  controlled by the Company, and will be binding upon any
                  successor to the business of the Company, whether direct or
                  indirect, by purchase of securities, merger, consolidation,
                  purchase of all or substantially all of the assets of the
                  Company or otherwise.

                                      ~6~


Please sign, date and return the enclosed copy of this letter to me for our
files to acknowledge your agreement with the above.

                                              Very truly yours,

                                              __________________________________
                                              Robert B. McKnight, Jr.
                                              Chief Executive Officer

Enclosure

ACKNOWLEDGED AND AGREED:

_______________________________
Steven L. Brink

Date Effective: _________, 2004

                                      ~7~


                                   ADDENDUM A

                         DEFINITION OF CHANGE IN CONTROL

            "Change in Control" means the occurrence of one or more of the
following events: (i) any corporation, partnership, person, other entity, or
group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) (collectively, a "Person") acquires shares of capital stock of the
Company representing more than 50% of the total number of shares of capital
stock that may be voted for the election of directors of the Company, (ii) a
merger, consolidation, or other business combination of the Company with or into
another Person is consummated, or all or substantially all of the assets of the
Company are acquired by another Person, as a result of which the stockholders of
the Company immediately prior to the consummation of such transaction own,
immediately after consummation of such transaction equity securities possessing
less than 50% of the voting power of the surviving or acquiring Person (or any
Person in control of the surviving or acquiring Person, the equity securities of
which are issued or transferred in such transaction), or (iii) the stockholders
of the Company approve a plan of complete liquidation, dissolution or winding up
of the Company.

                                  ~Addendum A~

EX-10.5

                                                                    EXHIBIT 10.5

                               [QUICKSILVER LOGO]

                         NOTICE OF GRANT OF STOCK OPTION

      Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Quiksilver, Inc. (the "Corporation"):

                                                     
                 Optionee:                                          Grant Date:
Vesting Commencement Date:                                      Exercise Price:
 Number of Options Shares:                                     Expiration Date:
           Type of Option:     __Incentive Stock Option    [X] Non-Statutory Stock Option



      Exercise Schedule: Subject to the limitations contained in this Option and
the Plan, this Option shall become exercisable in installments as follows:



Number of Shares                                Date of Earliest Exercise
  (Installment)                                         (Vesting)
  -------------                                         ---------
                                         
     SHARE 1                                DATE 1 [1ST ANNIVERSARY OF GRANT]
     SHARE 2                                DATE 2 [2ND ANNIVERSARY OF GRANT]
     SHARE 3                                DATE 3 [3RD ANNIVERSARY OF GRANT]


      In no event shall the Option become exercisable for any additional Option
Shares after Optionee's cessation of Service.

      Optionee understands and agrees that the Option is granted subject to and
in accordance with the terms of the Quiksilver, Inc. 2000 Stock Incentive Plan
(the "Plan"). Optionee further agrees to be bound by the terms of the Plan and
the terms of the Option as set forth in the Stock Option Agreement attached
hereto as Exhibit A. Optionee hereby acknowledges the receipt of a copy of the
official prospectus for the Plan in the form attached hereto as Exhibit B. A
copy of the Plan is available upon request made to the Corporate Secretary at
the Corporation's principal offices.

      Employment at Will. Nothing in this Notice or in the attached Stock Option
Agreement or in the Plan shall confer upon Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.

      Definitions. All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the attached Stock Option Agreement.

                                      QUIKSILVER, INC.

                                      By:
_______________________________           ______________________________________
OPTIONEE                                     Robert B. McKnight, Jr.

                                      Title:  Chief Executive Officer
                                              __________________________________

Address: ______________________       ATTACHMENTS
_______________________________       Exhibit A - Stock Option Agreement
_______________________________       Exhibit B - Plan Summary and Prospectus



                                    EXHIBIT A

                                QUIKSILVER, INC.
                             STOCK OPTION AGREEMENT

                                 R E C I T A L S

            A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board (or the board
of directors of any Parent or Subsidiary) and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).

            B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.

            C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.

            NOW, THEREFORE, it is hereby agreed as follows:

            1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.

            2. OPTION TERM. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.

            3. LIMITED TRANSFERABILITY.

                  (a)   This option shall be neither transferable nor assignable
by Optionee other than by will or the laws of inheritance following Optionee's
death and may be exercised, during Optionee's lifetime, only by Optionee.
However, Optionee may designate one or more persons as the beneficiary or
beneficiaries of this option, and this option shall, in accordance with such
designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee's death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be exercised
following Optionee's death.

                  (b)   If this option is designated a Non-Statutory Option in
the Grant Notice, then this option may be assigned in whole or in part during
Optionee's lifetime to one or more members of Optionee's family or to a trust
established for the exclusive benefit of one or more such family members or to
Optionee's former spouse, to the extent such assignment is in

                                       2


connection with the Optionee's estate plan or pursuant to a domestic relations
order. The assigned portion shall be exercisable only by the person or persons
who acquire a proprietary interest in the option pursuant to such assignment.
The terms applicable to the assigned portion shall be the same as those in
effect for this option immediately prior to such assignment.

            4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.

            5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

                  (a)   Should Optionee cease to remain in Service for any
reason (other than death, Permanent Disability or Misconduct) while holding this
option, then Optionee shall have a period of three (3) months (commencing with
the date of such cessation of Service) during which to exercise this option, but
in no event shall this option be exercisable at any time after the Expiration
Date.

                  (b)   Should Optionee die while holding this option, then the
personal representative of Optionee's estate or the person or persons to whom
the option is transferred pursuant to Optionee's will or the laws of inheritance
shall have the right to exercise this option. However, if Optionee has
designated one or more beneficiaries of this option, then those persons shall
have the exclusive right to exercise this option following Optionee's death. Any
such right to exercise this option shall lapse, and this option shall cease to
be outstanding, upon the earlier of (i) the expiration of the twelve (12)-month
period measured from the date of Optionee's death or (ii) the Expiration Date.

                  (c)   Should Optionee cease Service by reason of Permanent
Disability while holding this option, then Optionee shall have a period of
twelve (12) months (commencing with the date of such cessation of Service)
during which to exercise this option. In no event shall this option be
exercisable at any time after the Expiration Date.

                  (d)   During the limited period of post-Service
exercisability, this option may not be exercised in the aggregate for more than
the number of Option Shares for which the option is exercisable at the time of
Optionee's cessation of Service. Upon the expiration of such limited exercise
period or (if earlier) upon the Expiration Date, this option shall terminate and
cease to be outstanding for any exercisable Option Shares for which the option
has not been exercised. However, this option shall, immediately upon Optionee's
cessation of Service for any reason, terminate and cease to be outstanding with
respect to any Option Shares for which this option is not otherwise at that time
exercisable.

                  (e)   Should Optionee's Service be terminated for Misconduct
or should Optionee otherwise engage in any Misconduct while this option is
outstanding, then this option shall terminate immediately and cease to remain
outstanding.

                                       3


            6. SPECIAL ACCELERATION OF OPTION.

                  (a)   This option, to the extent outstanding at the time of a
Corporate Transaction but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the effective date of
such Corporate Transaction, become exercisable for all of the Option Shares at
the time subject to this option and may be exercised for any or all of those
Option Shares as fully vested shares of Common Stock. No such acceleration of
this option shall occur, however, if and to the extent: (i) this option is, in
connection with the Corporate Transaction, to be assumed by the successor
corporation (or parent thereof) or (ii) this option is to be replaced with a
cash incentive program of the successor corporation which preserves the spread
existing at the time of the Corporate Transaction on any Option Shares for which
this option is not otherwise at that time exercisable (the excess of the Fair
Market Value of those Option Shares over the aggregate Exercise Price payable
for such shares) and provides for subsequent payout in accordance with the same
option exercise/vesting schedule for those Option Shares set forth in the Grant
Notice.

                  (b)   Immediately following the Corporate Transaction, this
option shall terminate and cease to be outstanding, except to the extent assumed
by the successor corporation (or parent thereof) in connection with the
Corporate Transaction.

                  (c)   If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same. To the
extent the actual holders of the Corporation's outstanding Common Stock receive
cash consideration for their Common Stock in consummation of the Corporate
Transaction, the successor corporation may, in connection with the assumption of
this option, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common Stock
in such Corporate Transaction.

                  (d)   This Agreement shall not in any way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.

            7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
      Common Stock by reason of any stock split, stock dividend,
      recapitalization, combination of shares, exchange of shares or other
      change affecting the outstanding Common Stock as a class without the
      Corporation's receipt of consideration, appropriate adjustments shall be
      made to (i) the total number and/or class of securities subject to this
      option and (ii) the Exercise Price in order to reflect such change and
      thereby preclude a dilution or enlargement of benefits hereunder.

            8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
      stockholder rights with respect to the Option Shares until such person
      shall have exercised the option, paid the Exercise Price and become a
      holder of record of the purchased shares.

                                       4


            9. MANNER OF EXERCISING OPTION.

                  (a)   In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:

                        (i)   Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.

                        (ii)  Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:

                              (A)   cash or check made payable to the
Corporation;

                              (B)   a promissory note payable to the
Corporation, but only to the extent authorized by the Plan Administrator in
accordance with Paragraph 13;

                              (C)   shares of Common Stock held by Optionee (or
any other person or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or

                              (D)   through a special sale and remittance
procedure pursuant to which Optionee (or any other person or persons exercising
the option) shall concurrently provide irrevocable instructions (i) to a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (ii) to the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale.

                  Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise Price
must accompany the Notice of Exercise delivered to the Corporation in connection
with the option exercise.

                        (iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if other than
Optionee) have the right to exercise this option.

                        (iv)  Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the satisfaction
of all Federal, state and local income and employment tax withholding
requirements applicable to the option exercise.

                  (b)   As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.

                                       5


                  (c)   In no event may this option be exercised for any
fractional shares.

            10. COMPLIANCE WITH LAWS AND REGULATIONs.

                  (a)   The exercise of this option and the issuance of the
Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market, if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.

                  (b)   The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be necessary
to the lawful issuance and sale of any Common Stock pursuant to this option
shall relieve the Corporation of any liability with respect to the non-issuance
or sale of the Common Stock as to which such approval shall not have been
obtained. The Corporation, however, shall use its best efforts to obtain all
such approvals.

            11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee, Optionee's assigns, the legal representatives, heirs and legatees
of Optionee's estate and any beneficiaries of this option designated by
Optionee.

            12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

            13. FINANCING. The Plan Administrator may, in its absolute
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased Option Shares by delivering a full-recourse
promissory note payable to the Corporation. The terms of any such promissory
note (including the interest rate, the requirements for collateral and the terms
of repayment) shall be established by the Plan Administrator in its sole
discretion.

            14. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.

            15. GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.

            16. EXCESS SHARES. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval

                                       6


be issued under the Plan, then this option shall be void with respect to those
excess shares, unless stockholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of the Plan.

            17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:

                  (a)   This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is exercised
for one or more Option Shares: (A) more than three (3) months after the date
Optionee ceases to be an Employee for any reason other than death or Permanent
Disability or (B) more than twelve (12) months after the date Optionee ceases to
be an Employee by reason of Permanent Disability.

                  (b)   No installment under this option shall qualify for
favorable tax treatment as an Incentive Option if (and to the extent) the
aggregate Fair Market Value (determined at the Grant Date) of the Common Stock
for which such installment first becomes exercisable hereunder would, when added
to the aggregate value (determined as of the respective date or dates of grant)
of the Common Stock or other securities for which this option or any other
Incentive Options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any Parent or Subsidiary)
first become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should such One Hundred Thousand
Dollar ($100,000) limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.

                  (c)   Should the exercisability of this option be accelerated
upon a Corporate Transaction, then this option shall qualify for favorable tax
treatment as an Incentive Option only to the extent the aggregate Fair Market
Value (determined at the Grant Date) of the Common Stock for which this option
first becomes exercisable in the calendar year in which the Corporate
Transaction occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other securities
for which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Corporate Transaction, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.

                  (d)   Should Optionee hold, in addition to this option, one or
more other options to purchase Common Stock which become exercisable for the
first time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.

                                       7


                                   EXHIBIT A-1

                               NOTICE OF EXERCISE

            I hereby notify Quiksilver, Inc. (the "Corporation") that I elect to
purchase ______________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $__________ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's 2000 Stock Incentive Plan on _______________, _____

            Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.

__________________, ________
Date

                                    ____________________________________________
                                    Optionee

                                    Address: ___________________________________
                                             ___________________________________
                                             ___________________________________

Print name in exact manner
it is to appear on the stock
certificate:                        ____________________________________________

Address to which certificate
is to be sent, if different         ____________________________________________
from address above:                 ____________________________________________
                                    ____________________________________________

Social Security Number:             ____________________________________________

                                       8


                                    APPENDIX

            The following definitions shall be in effect under the Agreement:

      A.    AGREEMENT shall mean this Stock Option Agreement.

      B.    BOARD shall mean the Corporation's Board of Directors.

      C.    COMMON STOCK shall mean shares of the Corporation's common stock.

      D.    CODE shall mean the Internal Revenue Code of 1986, as amended.

      E.    CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:

            (i)   a merger or consolidation in which securities possessing more
      than fifty percent (50%) of the total combined voting power of the
      Corporation's outstanding securities are transferred to a person or
      persons different from the persons holding those securities immediately
      prior to such transaction, or

            (ii)  the sale, transfer or other disposition of all or
      substantially all of the Corporation's assets in complete liquidation or
      dissolution of the Corporation.

      F.    CORPORATION shall mean Quiksilver, Inc., a Delaware corporation, and
any successor corporation to all or substantially all of the assets or voting
stock of Quiksilver, Inc. which shall by appropriate action adopt the Plan.

      G.    EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

      H.    EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

      I.    EXERCISE PRICE shall mean the exercise price per Option Share as
specified in the Grant Notice.

      J.    EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.

      K.    FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

            (i)   If the Common Stock is at the time traded on the Nasdaq
      National Market, then the Fair Market Value shall be deemed equal to the
      closing selling price per share of Common Stock on the date in question,
      as the price is reported by the National Association of Securities Dealers
      on the Nasdaq National Market. If there is no closing selling price for
      the Common Stock on the date in question, then the Fair Market Value

                                       9


      shall be the closing selling price on the last preceding date for which
      such quotation exists, or

            (ii)  If the Common Stock is at the time listed on any Stock
      Exchange, then the Fair Market Value shall be deemed equal to the closing
      selling price per share of Common Stock on the date in question on the
      Stock Exchange determined by the Plan Administrator to be the primary
      market for the Common Stock, as such price is officially quoted in the
      composite tape of transactions on such exchange. If there is no closing
      selling price for the Common Stock on the date in question, then the Fair
      Market Value shall be the closing selling price on the last preceding date
      for which such quotation exists.

      L.    GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.

      M.    GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.

      N.    INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

      O.    MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
Optionee or any other individual in the Service of the Corporation (or any
Parent or Subsidiary).

      P.    NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.

      Q.    NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.

      R.    OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.

      S.    OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.

      T.    PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

                                       10


      U.    PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.

      V.    PLAN shall mean the Corporation's 2000 Stock Incentive Plan.

      W.    PLAN ADMINISTRATOR shall mean either the Board or a committee of the
Board acting in its capacity as administrator of the Plan.

      X.    SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.

      Y.    STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.

SUBSIDIARY shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

                                       11

EX-31.1

Exhibit 31.1

§ 302 CERTIFICATION

          I, Robert B. McKnight, Jr., certify that:

          1. I have reviewed this quarterly report on Form 10-Q of Quiksilver, Inc.;

          2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

               (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

               (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

               (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

          5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

               (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

               (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 14, 2004	/s/ Robert B. McKnight, Jr.
	Robert B. McKnight, Jr.
	Chief Executive Officer

EX-31.2

Exhibit 31.2

§ 302 CERTIFICATION

          I, Steven L. Brink, certify that:

          1. I have reviewed this quarterly report on Form 10-Q of Quiksilver, Inc.;

          2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

               (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

               (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

               (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

          5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

               (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

               (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 14, 2004	/s/ Steven L. Brink
	Steven L. Brink
	Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2003

In connection with the Quarterly Report of Quiksilver, Inc. (the “Company”) on Form 10-Q for the period ending July 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert B. McKnight, Jr., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2003, that:

          (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Robert B. McKnight, Jr.

Robert B. McKnight, Jr.
Chief Executive Officer
September 14, 2004

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EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2003

In connection with the Quarterly Report of Quiksilver, Inc. (the “Company”) on Form 10-Q for the period ending July 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven L. Brink, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2003, that:

          (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Steven L. Brink

Steven L. Brink
Chief Financial Officer
September 14, 2004

26