8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

November 7, 2013

Quiksilver, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)	001-14229 (Commission File Number)	33-0199426 (IRS Employer Identification Number)
15202 Graham Street, Huntington Beach, CA		92649
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:

(714) 889-2200

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets

On November 7, 2013, Quiksilver, Inc. (“Quiksilver”) and QS Wholesale, Inc., a wholly-owned subsidiary of Quiksilver (“QS Wholesale”), completed the transaction contemplated by the previously announced Stock Purchase Agreement, dated October 22, 2013 (the “Purchase Agreement”), with Mervin Holdings, Inc. (f/k/a Extreme Holdings, Inc.) (“Buyer”), an entity advised by Altamont Capital Partners. Pursuant to the terms of the Purchase Agreement, upon completion of the transaction, Buyer acquired all of the shares of QS Wholesale’s wholly-owned subsidiary, Mervin Manufacturing, Inc. (“Mervin”), for cash equal to $58,060,403, consisting of the initially agreed upon purchase price of $51,500,000 and a working capital adjustment thereto of $6,560,403. The working capital adjustment, which is subject to future revision pursuant to the terms of the Purchase Agreement, was due to the seasonal nature of Mervin’s business, with estimated working capital at the time of completion of the transaction significantly above average working capital.

The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the Purchase Agreement, a copy of which is attached as Exhibit 2.1 to Quiksilver’s Current Report of Form 8-K filed with the Securities and Exchange Commission on October 28, 2013 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The Unaudited Pro Forma Consolidated Statements of Operations of Quiksilver for the nine months ended July 31, 2013 and for the fiscal year ended October 31, 2012, assuming the disposition of Mervin occurred at the beginning of those periods, the Unaudited Pro Forma Consolidated Balance Sheet of Quiksilver as of July 31, 2013, assuming that the disposition of Mervin occurred as of that date, and the related Notes to the Unaudited Pro Forma Consolidated Financial Information are being filed as Exhibit 99.1 to this Current Report on Form 8-K and are incorporated by reference herein.

(d) Exhibits:

Exhibit No.	Description
99.1	Unaudited Pro Forma Consolidated Financial Information for Quiksilver, Inc.

SIGNATURES

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 hereunto duly authorized.

Date: November 13, 2013	Quiksilver, Inc.
	(Registrant)
	By:	/s/ Richard Shields
		Richard Shields
		Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Unaudited Pro Forma Consolidated Financial Information for Quiksilver, Inc.

EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

QUIKSILVER, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The following pro forma consolidated financial information is based on the historical financial statements of Quiksilver, Inc. and its subsidiaries (the “Company”), including certain pro forma adjustments, and has been prepared to illustrate the pro forma effect of the disposition of Mervin Manufacturing, Inc. (“Mervin”).

The unaudited pro forma consolidated statements of operations for the nine months ended July 31, 2013 and for the fiscal year ended October 31, 2012, assume that the disposition of Mervin occurred at the beginning of those periods. The statements of operations do not include any gain or loss on the sale or costs associated with the sale of the business. The unaudited pro forma consolidated balance sheet as of July 31, 2013 is presented as if the disposition of Mervin had occurred as of that date.

The unaudited pro forma consolidated financial information has been prepared based upon available information and management estimates; actual amounts may differ from these estimated amounts. The unaudited pro forma consolidated financial statements are not necessarily indicative of the financial position or results of operations that might have occurred had the disposition occurred as of the dates stated above. The pro forma adjustments are described in the notes to the pro forma financial statements.

The unaudited pro forma consolidated financial information should be read in conjunction with the audited financial statements and notes and related Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2012 and unaudited interim financial statements and the related MD&A included in the July 31, 2013 Form 10-Q.

QUIKSILVER, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED JULY 31, 2013

(In thousands, except per share amounts)

				Unaudited			Unaudited
				Pro Forma			Pro Forma
	Unaudited			Adjustments			Statement
	Historical			Mervin			of Operations
Revenues, net	$	1,385,530		$	(11,462	)  a	$	1,374,068
Cost of goods sold		709,912			(5,038	)  a		704,874
Gross profit		675,618			(6,424	)		669,194
Sellling, general and administrative expense		660,042			(4,760	)  a		655,282
Asset impairment		10,652			—			10,652
Operating income		4,924			(1,664	)		3,260
Interest expense		50,991			8	a		50,999
Foreign currency loss		4,629			(192	)  a		4,437
Loss/income before provision for income taxes		(50,696	)		(1,480	)		(52,176	)
Provision for income taxes		10,322			(84	)  b		10,238
Loss/income from continuing operations		(61,018	)		(1,396	)		(62,414	)
Less: net income attributable to non-controlling interest		(435	)		—			(435	)
Net loss/income attributable to Quiksilver, Inc.	$	(61,453	)	$	(1,396	)	$	(62,849	)
Loss/income per share attributable to Quiksilver Inc.	$	(0.37	)	$	(0.01	)	$	(0.38	)
Loss/income per share attributable to Quiksilver Inc., assuming dilution	$	(0.37	)	$	(0.01	)	$	(0.38	)
Weighted average common shares outstanding		166,735			—			166,735
Weighted average common shares outstanding, assuming dilution		166,735			—			166,735

QUIKSILVER, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE FISCAL YEAR ENDED OCTOBER 31, 2012

(In thousands, except per share amounts)

				Unaudited			Unaudited
				Pro Forma			Pro Forma
				Adjustments			Statement
	Historical			Mervin			of Operations
Revenues, net	$	2,013,239		$	(33,489	)  a	$	1,979,750
Cost of goods sold		1,032,893			(15,826	)  a		1,017,067
Gross profit		980,346			(17,663	)		962,683
Sellling, general and administrative expense		916,144			(10,464	)  a		905,680
Asset impairment		7,234			—			7,234
Operating income		56,968			(7,199	)		49,769
Interest expense		60,823			2	a		60,825
Foreign currency gain		(1,669	)		(17	)  a		(1,686	)
Loss/income before provision for income taxes		(2,186	)		(7,184	)		(9,370	)
Provision for income taxes		7,557			(396	)  b		7,161
Loss/income from continuing operations		(9,743	)		(6,788	)		(16,531	)
Less: net income attributable to non-controlling interest		(1,013	)		—			(1,013	)
Net loss/income attributable to Quiksilver, Inc.	$	(10,756	)	$	(6,788	)	$	(17,544	)
Loss/income per share attributable to Quiksilver Inc.	$	(0.07	)	$	(0.04	)	$	(0.11	)
Loss/income per share attributable to Quiksilver Inc., assuming dilution	$	(0.07	)	$	(0.04	)	$	(0.11	)
Weighted average common shares outstanding		164,245			—			164,245
Weighted average common shares outstanding, assuming dilution		164,245			—			164,245

QUIKSILVER, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF JULY 31, 2013

(In thousands)

				Unaudited
				Pro Forma			Unaudited
	Unaudited			Adjustments			Pro Forma
	Historical			Mervin			Balance Sheet
ASSETS
Current assets:
Cash and cash equivalents	$	62,383		$	51,499	c	$	113,882
Restricted cash		409,167			—			409,167
Trade accounts receivable, net		418,189			(7,211	)  d		410,978
Other receivables		24,980			—			24,980
Income taxes receivable		2,779			480	d		3,259
Inventories		399,162			(13,768	)  d		385,394
Deferred income taxes		28,086			—			28,086
Prepaid expenses and other current assets		35,819			(790	)  d		35,029
Total current assets		1,380,565			30,210			1,410,775
Fixed assets, net		227,997			(641	)  d		227,356
Intangible assets, net		138,384			(269	)  d		138,115
Goodwill		272,417			—			272,417
Other assets		54,561			(92	)  d		54,469
Deferred income taxes long-term		118,603			—			118,603
Total assets	$	2,192,527		$	29,208		$	2,221,735
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	238,311		$	(846	)  d	$	237,465
Accrued liabilities		107,001			198	e		107,199
Current portion of long-term debt		43,153			—			43,153
Debt to be redeemed		409,167			—			409,167
Total current liabilities		797,632			(648	)		796,984
Long-term debt, net of current portion		807,094			—			807,094
Other long-term liabilities		34,976			(176	)  d		34,800
Total liabilities		1,639,702			(824	)		1,638,878
Stockholders’ equity
Preferred stock, $.01 par value, authorized shares - 5,000,000; issued and outstanding shares - none		—			—			—
Common stock, $.01 par value, authorized shares - 285,000,000; issued shares - 171,247,866		1,712			—			1,712
Additional paid-in capital		567,601			—			567,601
Treasury stock, 2,885,200 shares		(6,778	)		—			(6,778	)
Accumulated deficit		(104,774	)		29,965	f		(74,809	)
Accumulated other comprehensive income		75,659			67	g		75,726
Total stockholders’ equity		533,420			30,032			563,452
Non-controlling interest		19,405			—			19,405
Total liabilities and stockholders’ equity	$	2,192,527		$	29,208		$	2,221,735

QUIKSILVER, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited pro forma consolidated financial statements give effect to the pro forma adjustments necessary to reflect the disposition of Mervin as if the disposition occurred at the beginning of the periods presented in the pro forma statements of operations and as of July 31, 2013 in the pro forma balance sheet.

2. PRO FORMA ADJUSTMENTS

The unaudited pro forma consolidated statements of operations and balance sheet reflect the effect of the following pro forma adjustments:

a) Reduction of revenue and expenses associated with Mervin included in the Company’s historical consolidated financial statements.

b) Provision for income taxes based on the statutory rates in effect for the Mervin business in certain tax jurisdictions. No provision for income taxes was provided for the Mervin business in other tax jurisdictions as the Company recorded losses in those jurisdictions and did not record a tax benefit against those losses.

c) Cash proceeds received for sale of Mervin of $51.5 million, which exclude a working capital adjustment of $6.6 million, which is subject to future revision.

d) Elimination of assets and liabilities associated with Mervin included in the Company’s historical consolidated financial statements.

e) Elimination of accrued liabilities associated with Mervin of $1.4 million, offset by the Company’s estimate of the total costs before taxes to be incurred in connection with the sale of Mervin yet to be paid of approximately $1.6 million. The net amount is reflected as an increase to accrued liabilities.

f) Estimated net gain on sale of Mervin, reflected as a reduction of the Company’s accumulated deficit as of July 31, 2013.

g) Foreign currency translation losses from Mervin of approximately $0.1 million, included as an increase to accumulated other comprehensive income as of July 31, 2013.