EX-99.1 2 a15495exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
 

Exhibit 99.1
(Quiksilver logo)
     
Company Contact:
  Steven L. Brink
Chief Financial Officer
Quiksilver, Inc.
(714) 889-2200
 
    
Investor Relations:
  Chad A. Jacobs, James Palczynski
Integrated Corporate Relations
(203) 682-8200
— Quiksilver, Inc. Reports 2005 Fourth Quarter and Full Year Results —
- Quarterly Net Revenues Increase 82% to $637 million -
- Quarterly Net Income per Share Increases 35% to $0.27 -
- Fiscal Year Net Revenues Total $1.78 billion -
Huntington Beach, California, December 16, 2005—Quiksilver, Inc. (NYSE: ZQK) today announced operating results for the fourth quarter and full year ended October 31, 2005. Consolidated net revenues for the fourth quarter of fiscal 2005 increased 82% to $637.4 million from $350.3 million in the fourth quarter of fiscal 2004. Consolidated net income for the fourth quarter of fiscal 2005 increased 35% to $33.6 million from $24.9 million the year before. Fourth quarter fully diluted earnings per share was $0.27 versus $0.20 for the fourth quarter of fiscal 2004, both amounts as adjusted for the two-for-one stock split that took effect in May 2005.
Consolidated net revenues for the full year of fiscal 2005 increased 41% to $1.78 billion from $1.27 billion in fiscal 2004. Net income for fiscal 2005 increased 32% to $107.1 million from $81.4 million in fiscal 2004, and diluted net income per share for fiscal 2005 increased 26% to $0.86 from $0.68 in fiscal 2004.
Net revenues from the company’s newly acquired Rossignol and Cleveland Golf businesses totaled $214.5 million during the fourth quarter of fiscal 2005 since the effective date of the acquisition on July 31, 2005.
Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “We are pleased to have completed another landmark year in our company’s development with record-breaking sales and earnings, and more importantly, tremendous strategic advances. We are confident that our acquisition of Rossignol is transforming Quiksilver from a dominant player in the global action sports market into the world’s leading outdoor sports lifestyle company. Our long-term growth prospects, across a number of new brands and product categories, are incredibly compelling, and we remain committed to fully capitalizing on the many opportunities that lie ahead.”
Bernard Mariette, President of Quiksilver, Inc., commented, “Fiscal 2005 marks another strong year for Quiksilver. We have accomplished a great deal over the past year. However, we believe that we have only scratched the surface in terms of our true potential. The integration of Rossignol is proceeding purposefully and smoothly, and we expect to drive profitability and enhance the market position of the Rossignol, Dynastar, Look, Lange and Cleveland Golf brands. We are also moving toward leveraging our brands into new categories, as the new capabilities of our platform allow. We have many opportunities to organically grow our business and increase our efficiencies and look forward to further demonstrating that our ability to identify and execute strategic prospects is a major part of what sets us apart as a leader in our industry.”

 

 

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Quiksilver, Inc. Fourth Quarter and Full Year 2005 Results
December 16, 2005
Page 2 of 8
Net revenues in the Americas increased 84% during the fourth quarter of fiscal 2005 to $288.9 million from $157.2 million in the fourth quarter of fiscal 2004. As measured in U.S. dollars and reported in the financial statements, European net revenues increased 101% during the fourth quarter of fiscal 2005 to $269.9 million from $134.4 million in the fourth quarter of fiscal 2004. As measured in euros, European net revenues increased 103% for those same periods. Asia/Pacific net revenues increased 37% to $77.0 million in the fourth quarter of fiscal 2005 from $56.1 million in the fourth quarter of fiscal 2004. As measured in Australian dollars, Asia/Pacific net revenues increased 29% for those same periods.
Net revenues in the Americas for the full year of fiscal 2005 increased 37% to $843.7 million from $616.8 million in fiscal 2004. As measured in U.S. dollars and reported in the financial statements, European net revenues increased 44% during the full year of fiscal 2005 to $712.3 million from $496.3 million in fiscal 2004. As measured in euros, European net revenues increased 39% for the year. Asia/Pacific net revenues increased 49% to $220.9 million from $148.7 million in fiscal 2004. As measured in Australian dollars, Asia/Pacific net revenues increased 41% for the year.
Inventories totaled $386.4 million at October 31, 2005, which includes $197.9 million from the newly acquired Rossignol and Cleveland Golf businesses. Inventories related to the company’s other businesses grew 5% to $188.5 million at October 31, 2005 from $179.6 million at October 31, 2004. Accounts receivable totaled $599.5 million at October 31, 2005, which includes $247.2 million from the newly acquired Rossignol and Cleveland Golf businesses. Accounts receivable related to the company’s other businesses increased 25% to $352.3 million at October 31, 2005 from $281.3 million at October 31, 2004.
Mr. Mariette continued, “I’d like to thank our entire global team for another outstanding year. We believe that we have the best people in the industry, and we continue to grow in our depth and capabilities. In addition to having streamlined our structure in order to more effectively manage by region and by brand, we are pleased and proud to welcome several new additions to our organization. Among them, and there are many, we are especially excited to have retained Nick Adcock as President of DC Shoes and Andrea Mainardi as Design Director for Rossignol Apparel. We expect great things from each of them.”
Mr. McKnight concluded, “We believe that we are poised to begin a new, dynamic and rewarding stage in our history. Never has the range and depth of our growth prospects been so clear and so compelling. We are all eager to demonstrate that we can take this opportunity to further enhance our business and bring significant value to all of the many stakeholders in Quiksilver.”
About Quiksilver:
Quiksilver, Inc. (NYSE:ZQK) is the world’s leading outdoor sports lifestyle company, which designs, produces and distributes a diversified mix of branded apparel, wintersports and golf equipment, footwear, accessories and related products. The Company’s apparel and footwear brands represent a casual lifestyle for young-minded people that connect with its boardriding culture and heritage, while its wintersports and golf brands symbolize a long standing commitment to technical expertise and competitive success on the mountains and on the links.
The reputation of Quiksilver’s brands is based on different outdoor sports. The Company’s Quiksilver, Roxy, DC Shoes and Hawk brands are synonymous with the heritage and culture of

 

 

(Quiksilver logo)
Quiksilver, Inc. Fourth Quarter and Full Year 2005 Results
December 16, 2005
Page 3 of 8
surfing, skateboarding and snowboarding, and its beach and water oriented swimwear brands include Raisins, Radio Fiji and Leilani. The Rossignol, Dynastar, Lange, Look and Kerma brands are leaders in the alpine ski market, and the Company makes snowboarding equipment under its Rossignol, Dynastar, DC Shoes, Roxy, Lib Technologies, Gnu and Bent Metal labels. The Company’s golf business includes Cleveland Golf, as well as Never Compromise putters and Fidra apparel. Gotcha is the Company’s surf-based European brand addressing street fashion.
The Company’s products are sold in over 90 countries in a wide range of distribution, including surf shops, ski shops, skateboard shops, snowboard shops, its proprietary Boardriders Club shops, other specialty stores and select department stores. Quiksilver’s corporate and Americas’ headquarters are in Huntington Beach, California, while its European headquarters are in St. Jean de Luz and Voiron, France, and its Asia/Pacific headquarters are in Torquay, Australia.
Forward looking statements:
This press release contains forward-looking statements. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. Please refer to Quiksilver’s SEC filings for more information on the risk factors that could cause actual results to differ materially from expectations, specifically the section titled “Forward-Looking Statements” in Quiksilver’s Annual Report on Form 10-K.
* * * * *
NOTE: For further information about Quiksilver, Inc., you are invited to take a look at our world at www.quiksilver.com,
www.roxy.com, www.dcshoecousa.com, www.quiksilveredition.com, www.hawkclothing.com,
www.rossignol.com, www.dynastar.com,
www.clevelandgolf.com, and www.fidragolf.com.

 

 

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Quiksilver, Inc. Fourth Quarter and Full Year 2005 Results
December 16, 2005
Page 4 of 8
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                 
    Three Months Ended October 31,  
In thousands, except per share amounts   2005     2004  
Revenues, net
   $ 637,405     $ 350,288  
Cost of goods sold
     350,067       183,248  
 
            
Gross profit
     287,338       167,040  
 
                
Selling, general and administrative expense
     224,956       127,975  
 
            
 
                
Operating income
     62,382       39,065  
 
                
Interest expense
     11,402       1,827  
Foreign currency loss
     107       802  
Minority interest and other expense
     640       (206 )
 
            
Income before provision for income taxes
     50,233       36,642  
 
                
Provision for income taxes
     16,629       11,767  
 
            
 
                
Net income
   $ 33,604     $ 24,875  
 
            
 
                
Net income per share
   $ 0.28     $ 0.21  
 
            
 
                
Net income per share, assuming dilution
   $ 0.27     $ 0.20  
 
            
 
                
Weighted average common shares outstanding
     121,130       117,164  
 
            
 
                
Weighted average common shares outstanding, assuming dilution
     126,103       122,140  
 
            

 

 

(Quiksilver logo)
Quiksilver, Inc. Fourth Quarter and Full Year 2005 Results
December 16, 2005
Page 5 of 8
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                 
    Fiscal Year Ended October 31,  
In thousands, except per share amounts   2005     2004  
Revenues, net
   $ 1,780,869     $ 1,266,939  
Cost of goods sold
     972,345       688,780  
 
            
Gross profit
     808,524       578,159  
 
                
Selling, general and administrative expense
     627,342       446,221  
 
            
 
                
Operating income
     181,182       131,938  
 
                
Interest expense
     21,950       6,390  
Foreign currency (gain) loss
     (106 )     2,861  
Minority interest and other expense
     992       695  
 
            
Income before provision for income taxes
     158,346       121,992  
 
                
Provision for income taxes
     51,226       40,623  
 
            
 
                
Net income
   $ 107,120     $ 81,369  
 
            
 
                
Net income per share
   $ 0.90     $ 0.71  
 
            
 
                
Net income per share, assuming dilution
   $ 0.86     $ 0.68  
 
            
 
                
Weighted average common shares outstanding
     118,920       114,388  
 
            
 
                
Weighted average common shares outstanding, assuming dilution
     124,335       119,288  
 
            

 

 

(Quiksilver logo)
Quiksilver, Inc. Fourth Quarter and Full Year 2005 Results
December 16, 2005
Page 6 of 8
CONSOLIDATED BALANCE SHEETS (Unaudited)
                 
    October 31,     October 31,  
Amounts in thousands   2005     2004  
ASSETS
Current assets:
                
Cash and cash equivalents
   $ 75,598     $ 55,197  
Trade accounts receivable, less allowance for doubtful accounts of $10,727 (2005) and $11,367 (2004)
     599,486       281,263  
Other receivables
     27,414       16,165  
Inventories
     386,396       179,605  
Deferred income taxes
     41,646       22,299  
Prepaid expenses and other current assets
     21,819       12,267  
 
            
Total current assets
     1,152,359       566,796  
 
                
Fixed assets, net
     265,208       122,787  
Intangibles, net
     247,702       121,116  
Goodwill
     442,148       169,785  
Other assets
     43,955       10,506  
 
            
Total assets
   $ 2,151,372     $ 990,990  
 
            
 
                
LIABILITIES & STOCKHOLDERS’ EQUITY
 
                
Current Liabilities:
                
Lines of credit
   $ 220,113     $ 10,801  
Accounts payable
     212,407       105,054  
Accrued liabilities
     182,973       79,095  
Current portion of long-term debt
     50,833       10,304  
Income taxes payable
     19,947       18,442  
 
            
Total current liabilities
     686,273       223,696  
 
                
Long-term debt
     640,348       163,209  
Deferred income taxes
     81,628       15,841  
 
            
Total liabilities
     1,408,249       402,746  
 
                
Minority interest
     10,241       —  
 
                
Stockholders’ equity:
                
Common stock
     1,241       1,203  
Additional paid-in capital
     242,284       200,118  
Treasury stock
     (6,778 )     (6,778 )
Retained earnings
     466,043       358,923  
Accumulated other comprehensive income
     30,092       34,778  
 
            
Total stockholders’ equity
     732,882       588,244  
 
            
 
                
Total liabilities & stockholders’ equity
   $ 2,151,372     $ 990,990  
 
            

 

 

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Quiksilver, Inc. Fourth Quarter and Full Year 2005 Results
December 16, 2005
Page 7 of 8
Information related to geographic segments is as follows:
                 
    Three Months Ended October 31,  
Amounts in thousands   2005     2004  
Revenues, net:
                
Americas
   $ 288,950     $ 157,203  
Europe
     269,875       134,371  
Asia/Pacific
     77,015       56,139  
Corporate operations
     1,565       2,575  
 
            
 
   $ 637,405     $ 350,288  
 
            
 
                
Gross Profit:
                
Americas
   $ 117,444     $ 65,193  
Europe
     132,530       73,160  
Asia/Pacific
     37,577       28,184  
Corporate operations
     (213 )     503  
 
            
 
   $ 287,338     $ 167,040  
 
            
 
                
SG&A Expense:
                
Americas
   $ 87,144     $ 53,090  
Europe
     96,999       52,083  
Asia/Pacific
     27,471       15,881  
Corporate operations
     13,342       6,921  
 
            
 
   $ 224,956     $ 127,975  
 
            
 
                
Operating Income:
                
Americas
   $ 30,300     $ 12,103  
Europe
     35,531       21,077  
Asia/Pacific
     10,106       12,303  
Corporate operations
     (13,555 )     (6,418 )
 
            
 
   $ 62,382     $ 39,065  
 
            

 

 

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Quiksilver, Inc. Fourth Quarter and Full Year 2005 Results
December 16, 2005
Page 8 of 8
Information related to geographic segments (continued):
                 
    Fiscal Year Ended October 31,  
Amounts in thousands   2005     2004  
Revenues, net:
                
Americas
   $ 843,677     $ 616,818  
Europe
     712,310       496,276  
Asia/Pacific
     220,941       148,733  
Corporate operations
     3,941       5,112  
 
            
 
   $ 1,780,869     $ 1,266,939  
 
            
 
                
Gross Profit:
                
Americas
   $ 335,356     $ 251,357  
Europe
     362,172       251,692  
Asia/Pacific
     109,698       73,152  
Corporate operations
     1,298       1,958  
 
            
 
   $ 808,524     $ 578,159  
 
            
 
                
SG&A Expense:
                
Americas
   $ 250,021     $ 187,546  
Europe
     258,864       178,175  
Asia/Pacific
     80,098       51,988  
Corporate operations
     38,359       28,512  
 
            
 
   $ 627,342     $ 446,221  
 
            
 
                
Operating Income:
                
Americas
   $ 85,335     $ 63,811  
Europe
     103,308       73,517  
Asia/Pacific
     29,600       21,164  
Corporate operations
     (37,061 )     (26,554 )
 
            
 
   $ 181,182     $ 131,938