EXHIBIT 99.1
FOR IMMEDIATE RELEASE | Company Contact: | Robert B. McKnight, Jr. Chairman & CEO Steven L. Brink Chief Financial Officer Quiksilver, Inc. (714) 889-2200 | ||
Investor Relations: | James Palczynski/Chad A. Jacobs Integrated Corporate Relations (203) 222-9013 |
QUIKSILVER, INC. REPORTS 2004 SECOND QUARTER FINANCIAL RESULTS
— Consolidated Revenues Increase 23% —
— Earnings Per Share of $0.47 Exceeds Consensus Estimate of $0.46 —
— Raising Fiscal 2004 Sales and Earnings Per Share Guidance —
HUNTINGTON BEACH, CALIFORNIA, JUNE 14, 2004 — Quiksilver, Inc. (NYSE:ZQK), today announced operating results for the second quarter ended April 30, 2004.
Consolidated revenues for the second quarter of fiscal 2004 increased 23% to $322.6 million as compared to fiscal 2003 second quarter consolidated revenues of $262.2 million. Consolidated net income for the second quarter of fiscal 2004 increased 23% to $27.8 million as compared to $22.6 million the year before. Second quarter fully diluted earnings per share was $0.47 versus $0.40 for the second quarter of fiscal 2003.
Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “We are pleased to continue our strong track record, with the second quarter representing our 10th consecutive quarter of out-performance. The keys to our ongoing success continue to be our clear vision for our brands, an ability to translate our lifestyle position into compelling marketing, a commitment to building a responsive global operating platform, and most importantly, the ability to design and distribute product that resonates with our consumers.”
Revenues in the Americas increased 16% during the second quarter of fiscal 2004 to $148.5 million as compared to fiscal 2003 second quarter revenues of $127.5 million. As measured in U.S. dollars and reported in the financial statements, European revenues increased 29% during the second quarter of fiscal 2004 to $140.3 million as compared to fiscal 2003 second quarter European revenues of $108.5 million. As measured in euros, European revenues
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increased 14% for those same periods. Asia/Pacific revenues increased 30% to $33.2 million in the second quarter of fiscal 2004 compared to $25.6 million in the second quarter of fiscal 2003. As measured in Australian dollars, Asia/Pacific revenues increased 3%.
Mr. McKnight continued, “We are incredibly pleased with our recent acquisition of DC Shoes. In addition to giving us a strong new brand capable of significant growth on a global scale, the infusion of talent and dedication into our management team and operations is of tremendous benefit to our culture and capabilities. We continue to regard DC Shoes as a significant catalyst for our business, and we are looking forward to demonstrating its potential to our shareholders.”
The Company also announced today that it has increased its guidance for the third and fourth fiscal quarters. Quiksilver now expects to generate third quarter revenues and diluted earnings per share of between $300 million and $305 million, and $0.28 to $0.29, respectively. For the fourth quarter, the company now believes that revenues and diluted earnings per share will range between $315 million and $320 million and between $0.36 and $0.37, respectively. Including this upward revision and the quarterly out-performance reported today, the Company now expects annual revenues for fiscal 2004 to range between $1.19 billion and $1.20 billion and for diluted earnings per share to range between $1.27 and $1.29.
Consolidated inventories increased 5% to $127.3 million at April 30, 2004 from $120.8 million at April 30, 2003. Consolidated trade accounts receivable growth was modest compared to the increase in sales, increasing 13% to $257.1 million at April 30, 2004 from $227.0 million at April 30, 2003. Average days sales outstanding decreased about six days. Inventories grew 2% in constant dollars.
Bernard Mariette, President of Quiksilver, Inc. commented, “The benefits of a unified strategic and operational structure for our Company are clear and compelling. We continue to make progress in globalizing our markets and management. In addition to creating opportunities for synergy and revealing incremental opportunities for growth, our efforts have also fostered a tremendous esprit de corps across our entire organization.”
Mr. McKnight concluded, “Even as we achieve record results and reach important milestones in our financial and strategic development, we believe that we are still, in many
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categories and markets, just scratching the surface of our potential. Our brands continue to reach new levels of recognition and acceptance, our operational efficiency continues to improve, and our strategic position has never been stronger. Despite the challenging character of the global apparel market, we are prospering and expect to continue to do so as we move forward.”
About Quiksilver:
Quiksilver designs, produces and distributes clothing, accessories and related products for young-minded people and develops brands that represent a casual lifestyle–driven from a boardriding heritage. Quiksilver’s authenticity is evident in its innovative products, events and retail environments across the globe.
Quiksilver’s primary focus is apparel, footwear and related accessories for young men and young women under the Quiksilver, Roxy, DC Shoes, Raisins, and Radio Fiji labels. Quiksilver also manufactures apparel, footwear and related accessories for boys (Quiksilver Boys and Hawk Clothing), girls (Roxy Girl, Teenie Wahine and Raisins Girls), men (Quiksilveredition and Fidra) and women (Leilani swimwear), as well as snowboards, snowboard boots and bindings under the Lib Technologies, Gnu, DC Shoes, Roxy and Bent Metal labels. Quiksilver’s products are sold throughout the world, primarily in surf shops, skate shops and other specialty stores that provide an authentic retail experience for our customers.
Safe Harbor Language
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 http://www.quiksilver.com, http://www.roxy.com,
http://www.dcshoecousa.com and http://www.fidragolf.com
June 14, 2004 – Page 4
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended April 30, | ||||||||
2004 | 2003 | |||||||
In thousands, except per share amounts | ||||||||
Revenues | $ | 322,579 | $ | 262,210 | ||||
Cost of goods sold | 175,536 | 143,627 | ||||||
Gross profit | 147,043 | 118,583 | ||||||
Selling, general and administrative expense | 104,647 | 81,374 | ||||||
Operating income | 42,396 | 37,209 | ||||||
Interest expense | 1,476 | 2,107 | ||||||
Foreign currency (gain) loss | (1,180 | ) | 264 | |||||
Other expense | 227 | 97 | ||||||
Income before provision for income taxes | 41,873 | 34,741 | ||||||
Provision for income taxes | 14,083 | 12,111 | ||||||
Net income | $ | 27,790 | $ | 22,630 | ||||
Net income per share | $ | 0.49 | $ | 0.42 | ||||
Net income per share, assuming dilution | $ | 0.47 | $ | 0.40 | ||||
Weighted average common shares outstanding | 56,170 | 54,514 | ||||||
Weighted average common shares outstanding, assuming dilution | 58,685 | 56,846 | ||||||
June 14, 2004 – Page 5
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Six Months Ended April 30, | ||||||||
2004 | 2003 | |||||||
In thousands, except per share amounts | ||||||||
Revenues | $ | 578,721 | $ | 454,290 | ||||
Cost of goods sold | 318,009 | 254,199 | ||||||
Gross profit | 260,712 | 200,091 | ||||||
Selling, general and administrative expense | 199,382 | 149,799 | ||||||
Operating income | 61,330 | 50,292 | ||||||
Interest expense | 3,065 | 4,223 | ||||||
Foreign currency loss | 2,087 | 815 | ||||||
Other expense | 509 | 264 | ||||||
Income before provision for income taxes | 55,669 | 44,990 | ||||||
Provision for income taxes | 18,705 | 15,792 | ||||||
Net income | $ | 36,964 | $ | 29,198 | ||||
Net income per share | $ | 0.66 | $ | 0.55 | ||||
Net income per share, assuming dilution | $ | 0.63 | $ | 0.53 | ||||
Weighted average common shares outstanding | 55,893 | 53,196 | ||||||
Weighted average common shares outstanding, assuming dilution | 58,317 | 55,558 | ||||||
June 14, 2004 – Page 6
CONSOLIDATED BALANCE SHEETS (Unaudited)
April 30, 2004 | October 31, 2003 | |||||||
Amounts in thousands | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 42,335 | $ | 27,866 | ||||
Trade accounts receivable, less allowance for doubtful accounts of $9,669 (2004) and $8,700 (2003) | 257,122 | 224,418 | ||||||
Other receivables | 6,615 | 7,617 | ||||||
Inventories | 127,318 | 146,440 | ||||||
Deferred income taxes | 17,996 | 17,472 | ||||||
Prepaid expenses and other current assets | 15,440 | 9,732 | ||||||
Total current assets | 466,826 | 433,545 | ||||||
Fixed assets, net | 104,238 | 99,299 | ||||||
Intangibles, net | 66,834 | 65,577 | ||||||
Goodwill | 103,739 | 98,833 | ||||||
Deferred income taxes | 1,055 | 1,984 | ||||||
Other assets | 11,103 | 8,732 | ||||||
Total assets | $ | 753,795 | $ | 707,970 | ||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Lines of credit | $ | 19,182 | $ | 20,951 | ||||
Accounts payable | 64,354 | 64,537 | ||||||
Accrued liabilities | 38,289 | 41,759 | ||||||
Current portion of long-term debt | 10,079 | 8,877 | ||||||
Income taxes payable | 9,705 | 10,796 | ||||||
Total current liabilities | 141,609 | 146,920 | ||||||
Long-term debt | 109,048 | 114,542 | ||||||
Total liabilities | 250,657 | 261,462 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock | — | — | ||||||
Common stock | 582 | 570 | ||||||
Additional paid-in capital | 168,744 | 155,310 | ||||||
Treasury stock | (6,778 | ) | (6,778 | ) | ||||
Retained earnings | 314,518 | 277,554 | ||||||
Accumulated other comprehensive gain | 26,072 | 19,852 | ||||||
Total stockholders’ equity | 503,138 | 446,508 | ||||||
Total liabilities & stockholders’ equity | $ | 753,795 | $ | 707,970 |
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Information related to geographic segments is as follows:
Three Months Ended April 30, | ||||||||
2004 | 2003 | |||||||
Amounts in thousands | ||||||||
Revenues: | ||||||||
Americas | $ | 148,536 | $ | 127,537 | ||||
Europe | 140,286 | 108,464 | ||||||
Asia/Pacific | 33,205 | 25,557 | ||||||
Corporate Operations | 552 | 652 | ||||||
$ | 322,579 | $ | 262,210 | |||||
Gross Profit: | ||||||||
Americas | $ | 61,044 | $ | 54,925 | ||||
Europe | 69,053 | 51,590 | ||||||
Asia/Pacific | 16,229 | 11,416 | ||||||
Corporate Operations | 717 | 652 | ||||||
$ | 147,043 | $ | 118,583 | |||||
SG&A Expense: | ||||||||
Americas | $ | 42,115 | $ | 37,298 | ||||
Europe | 42,795 | 30,409 | ||||||
Asia/Pacific | 12,397 | 7,603 | ||||||
Corporate Operations | 7,340 | 6,064 | ||||||
$ | 104,647 | $ | 81,374 | |||||
Operating Income: | ||||||||
Americas | $ | 18,929 | $ | 17,627 | ||||
Europe | 26,258 | 21,181 | ||||||
Asia/Pacific | 3,832 | 3,813 | ||||||
Corporate Operations | (6,623 | ) | (5,412 | ) | ||||
$ | 42,396 | $ | 37,209 | |||||