Exhibit 99.1
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Company Contact: | Bruce Thomas | |||
Vice President, Investor Relations | ||||
Quiksilver, Inc. | ||||
+1 (714) 889-4425 |
—Quiksilver, Inc. Reports Fiscal 2008 Second Quarter Financial Results —
—Company Classifies Rossignol Group as Discontinued Operations —
—Rossignol Impairment Charge Drives Net Loss of $(1.59) per share —
—Net Revenues from Continuing Operations Increase 15% to $596 million —
—Income from Continuing Operations Increases 20% to $0.30 per share —
—Company Classifies Rossignol Group as Discontinued Operations —
—Rossignol Impairment Charge Drives Net Loss of $(1.59) per share —
—Net Revenues from Continuing Operations Increase 15% to $596 million —
—Income from Continuing Operations Increases 20% to $0.30 per share —
Huntington Beach, California, June 5, 2008—Quiksilver, Inc. (NYSE:ZQK) today announced results for the second quarter ended April 30, 2008. Consolidated net revenues from continuing operations for the second quarter of fiscal 2008 increased 15% to $596.3 million, from $520.4 million in the second quarter of fiscal 2007. Consolidated income from continuing operations for the second quarter of fiscal 2008 was $38.7 million, or $0.30 per share, compared to $32.4 million, or $0.25 per share, for the second quarter of fiscal 2007. Net revenues and income from continuing operations for all periods exclude the results of the Rossignol wintersports equipment and apparel business as well as the golf equipment business which are reported as discontinued operations. The company sold its golf equipment operations in December 2007 and has begun a process to sell its Rossignol wintersports equipment and apparel business.
The company classified its Rossignol wintersports equipment and apparel business as discontinued operations and took a non-cash pre-tax charge in the second quarter of $240.2 million. The non-cash charge is not expected to effect the company’s operations or financial covenants. The revision to the recorded value of the Rossignol Group was triggered by the sale process. The planned sale of the Rossignol Group is an objective which the company disclosed previously.
Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “We are pleased with the strong second quarter financial performance delivered by the Quiksilver team. As we separate the results of the Rossignol Group from those of our continuing core businesses, it becomes increasingly clear that our broadly diversified mix of brands, products, geographies and distribution channels positions us well in challenging economic climates, such as the one we all face today. As the boardsport lifestyle continues to expand around the world, our results demonstrate that the quality, style and authenticity of our brands have more influence than ever on the buying decisions of our customers.”
All segments have been adjusted to reflect the discontinued operations classification of the Rossignol wintersports equipment and apparel business. The Americas, Europe and Asia/Pacific segments include operations of the Quiksilver, Roxy, DC and other apparel brand businesses. Net revenues in the Americas segment increased 5% during the second quarter of fiscal 2008 to $247.6 million from $236.3 million in the second quarter of fiscal 2007. European segment net revenues increased 23% during the second quarter of fiscal 2008 to $284.5 million from $231.9 million in the second quarter of fiscal 2007. Approximately $36.0 million of Europe’s increase was attributable to the positive effect of foreign currency exchange rates. Asia/Pacific segment net revenues increased 23% to $62.5 million in the second quarter of fiscal 2008 from $51.0 million in the second quarter of fiscal 2007. Approximately $7.7 million of Asia/Pacific’s increase was attributable to the positive effect of foreign currency exchange rates.
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Quiksilver, Inc. 2008 Second Quarter Results
June 5, 2008
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Consolidated inventories increased 11% to $304.1 million at April 30, 2008 from $274.6 million at April 30, 2007. Changes in foreign currency exchange rates accounted for approximately $18.3 million of the increase in inventories compared to April 30, 2007. Consolidated trade accounts receivable increased 12% to $473.0 million at April 30, 2008 from $421.3 million at April 30, 2007. Changes in foreign currency exchange rates accounted for approximately $23.0 million of the increase in accounts receivable compared to April 30, 2007.
The company indicated that visibility into revenues and earnings remains limited for the remainder of the fiscal year. For continuing operations, the company indicated it expects to generate annual revenue growth for the full fiscal year of approximately 10% and expects to generate EPS that is slightly below the result generated in fiscal year 2007 of $0.90 per share.
Note:
Attachments to this press release include unaudited consolidated quarterly statements of income for the quarter and year-to-date period ended April 30, 2008 and each quarter for the year ended October 31, 2007, reflecting the Rossignol and golf equipment businesses as discontinued operations. Additionally, segment information has been provided for each quarter of fiscal 2007 adjusted for discontinued operations. Rossignol, Dynastar, Lange, Look and Kerma branded products are all included in the Rossignol Group, which has been classified as discontinued operations. The Cleveland and Fidra golf brands were previously included in discontinued operations.
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 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.
The reputation of Quiksilver’s brands is based on different outdoor sports. The Company’s Quiksilver, Roxy, DC and Hawk brands are synonymous with the heritage and culture of surfing, skateboarding and snowboarding, and its beach and water oriented swimwear brands include Raisins, Radio Fiji and Leilani. The Company continues to make snowboarding equipment under its DC, Roxy, Lib Technologies, Gnu and Bent Metal labels.
The Company’s products are sold in over 90 countries in a wide range of distribution, including surf shops, skate shops, snow shops, its proprietary Boardriders Club shops and other company-owned retail stores, 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, France, and its Asia/Pacific headquarters are in Torquay, Australia.
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Quiksilver, Inc. 2008 Second Quarter Results
June 5, 2008
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Forward looking statements:
This press release contains forward-looking statements including but not limited to statements regarding the Company’s 2008 annual revenue guidance, 2008 annual diluted earnings per share guidance and other future activities. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. Please refer to Quiksilver’s SEC filings for more information on the risk factors that could cause actual results to differ materially from expectations, specifically the sections titled “Risk Factors” and “Forward-Looking Statements” in Quiksilver’s Annual Report onForm 10-K and Quarterly Reports onForm 10-Q.
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NOTE: | For further information about Quiksilver, Inc., you are invited to take a look at our world atwww.quiksilver.com, www.roxy.com, www.dcshoecousa.com, www.quiksilveredition.com, www.hawkclothing.com. |
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Quiksilver, Inc. 2008 Second Quarter Results
June 5, 2008
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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended April 30, | ||||||||
In thousands, except per share amounts | 2008 | 2007 | ||||||
Revenues, net | $ | 596,280 | $ | 520,359 | ||||
Cost of goods sold | 295,938 | 270,977 | ||||||
Gross profit | 300,342 | 249,382 | ||||||
Selling, general and administrative expense | 230,800 | 194,826 | ||||||
Asset impairment | 350 | — | ||||||
Operating income | 69,192 | 54,556 | ||||||
Interest expense | 12,996 | 11,671 | ||||||
Foreign currency loss | 1,384 | 1,066 | ||||||
Minority interest and other income | (471 | ) | (74 | ) | ||||
Income before provision for income taxes | 55,283 | 41,893 | ||||||
Provision for income taxes | 16,558 | 9,474 | ||||||
Income from continuing operations | $ | 38,725 | $ | 32,419 | ||||
Loss from discontinued operations | (244,949 | ) | (37,219 | ) | ||||
Net loss | $ | (206,224 | ) | $ | (4,800 | ) | ||
Income per share from continuing operations | $ | 0.31 | $ | 0.26 | ||||
Loss per share from discontinued operations | $ | (1.95 | ) | $ | (0.30 | ) | ||
Net loss per share | $ | (1.64 | ) | $ | (0.04 | ) | ||
Income per share from continuing operations, assuming dilution | $ | 0.30 | $ | 0.25 | ||||
Loss per share from discontinued operations, assuming dilution | $ | (1.88 | ) | $ | (0.29 | ) | ||
Net loss per share, assuming dilution | $ | (1.59 | ) | $ | (0.04 | ) | ||
Weighted average common shares outstanding | 125,741 | 123,596 | ||||||
Weighted average common shares outstanding, assuming dilution | 130,052 | 128,771 | ||||||
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Quiksilver, Inc. 2008 Second Quarter Results
June 5, 2008
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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended April 30, | ||||||||
In thousands, except per share amounts | 2008 | 2007 | ||||||
Revenues, net | $ | 1,092,861 | $ | 931,213 | ||||
Cost of goods sold | 548,995 | 486,751 | ||||||
Gross profit | 543,866 | 444,462 | ||||||
Selling, general and administrative expense | 452,210 | 371,364 | ||||||
Asset impairment | 350 | — | ||||||
Operating income | 91,306 | 73,098 | ||||||
Interest expense | 24,044 | 23,539 | ||||||
Foreign currency loss | 768 | 1,422 | ||||||
Minority interest and other income | (397 | ) | (41 | ) | ||||
Income before provision for income taxes | 66,891 | 48,178 | ||||||
Provision for income taxes | 20,596 | 11,087 | ||||||
Income from continuing operations | $ | 46,295 | $ | 37,091 | ||||
Loss from discontinued operations | (274,459 | ) | (39,416 | ) | ||||
Net loss | $ | (228,164 | ) | $ | (2,325 | ) | ||
Income per share from continuing operations | $ | 0.37 | $ | 0.30 | ||||
Loss per share from discontinued operations | $ | (2.19 | ) | $ | (0.32 | ) | ||
Net loss per share | $ | (1.82 | ) | $ | (0.02 | ) | ||
Income per share from continuing operations, assuming dilution | $ | 0.36 | $ | 0.29 | ||||
Loss per share from discontinued operations, assuming dilution | $ | (2.12 | ) | $ | (0.31 | ) | ||
Net loss per share, assuming dilution | $ | (1.76 | ) | $ | (0.02 | ) | ||
Weighted average common shares outstanding | 125,133 | 123,323 | ||||||
Weighted average common shares outstanding, assuming dilution | 129,606 | 128,851 | ||||||
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Quiksilver, Inc. 2008 Second Quarter Results
June 5, 2008
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CONSOLIDATED BALANCE SHEETS (Unaudited)
April 30, | April 30, | |||||||
In thousands | 2008 | 2007 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 91,334 | $ | 64,455 | ||||
Trade accounts receivable, less allowance for doubtful accounts of $24,226 (2008) and $18,849 (2007) | 473,032 | 421,280 | ||||||
Other receivables | 32,931 | 22,241 | ||||||
Inventories | 304,059 | 274,580 | ||||||
Deferred income taxes | 102,735 | 38,532 | ||||||
Prepaid expenses and other current assets | 29,204 | 26,186 | ||||||
Current assets held for sale | 290,236 | 454,769 | ||||||
Total current assets | 1,323,531 | 1,302,043 | ||||||
Fixed assets, net | 256,395 | 189,626 | ||||||
Intangibles, net | 144,013 | 131,195 | ||||||
Goodwill | 416,337 | 378,769 | ||||||
Other assets | 45,056 | 27,067 | ||||||
Deferred taxes-long term | 13,711 | — | ||||||
Non-current assets held for sale | — | 452,240 | ||||||
Total assets | $ | 2,199,043 | $ | 2,480,940 | ||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Lines of credit | $ | 245,877 | $ | 97,450 | ||||
Accounts payable | 191,106 | 144,876 | ||||||
Accrued liabilities | 116,892 | 83,150 | ||||||
Current portion of long-term debt | 35,740 | 25,517 | ||||||
Income taxes payable | 14,833 | 2,906 | ||||||
Liabilities related to assets held for sale | 212,303 | 332,165 | ||||||
Total current liabilities | 816,751 | 686,064 | ||||||
Long-term debt | 656,607 | 618,461 | ||||||
Deferred taxes and other long-term liabilities | 33,783 | 29,291 | ||||||
Non-current liabilities of assets held for sale | 6,953 | 196,568 | ||||||
Total liabilities | 1,514,094 | 1,530,384 | ||||||
Minority interest | — | 10,072 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock | — | — | ||||||
Common stock | 1,295 | 1,274 | ||||||
Additional paid-in capital | 319,350 | 290,627 | ||||||
Treasury stock | (6,778 | ) | (6,778 | ) | ||||
Retained earnings | 188,520 | 556,734 | ||||||
Accumulated other comprehensive income | 182,562 | 98,627 | ||||||
Total stockholders’ equity | 684,949 | 940,484 | ||||||
Total liabilities & stockholders’ equity | $ | 2,199,043 | $ | 2,480,940 | ||||
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Quiksilver, Inc. 2008 Second Quarter Results
June 5, 2008
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Information related to operating segments is as follows:
Three Months Ended April 30, | ||||||||
In thousands | 2008 | 2007 | ||||||
Revenues, net: | ||||||||
Americas | $ | 247,615 | $ | 236,264 | ||||
Europe | 284,500 | 231,919 | ||||||
Asia/Pacific | 62,484 | 50,974 | ||||||
Corporate operations | 1,681 | 1,202 | ||||||
$ | 596,280 | $ | 520,359 | |||||
Gross Profit: | ||||||||
Americas | $ | 105,779 | $ | 97,828 | ||||
Europe | 161,730 | 125,190 | ||||||
Asia/Pacific | 31,690 | 25,316 | ||||||
Corporate operations | 1,143 | 1,048 | ||||||
$ | 300,342 | $ | 249,382 | |||||
SG&A Expense: | ||||||||
Americas | $ | 89,697 | $ | 76,712 | ||||
Europe | 98,058 | 77,358 | ||||||
Asia/Pacific | 32,167 | 25,382 | ||||||
Corporate operations | 10,878 | 15,374 | ||||||
$ | 230,800 | $ | 194,826 | |||||
Asset Impairment: | ||||||||
Americas | $ | 350 | $ | — | ||||
Europe | — | — | ||||||
Asia/Pacific | — | — | ||||||
Corporate operations | — | — | ||||||
$ | 350 | $ | — | |||||
Operating Income: | ||||||||
Americas | $ | 15,732 | $ | 21,116 | ||||
Europe | 63,672 | 47,832 | ||||||
Asia/Pacific | (477 | ) | (66 | ) | ||||
Corporate operations | (9,735 | ) | (14,326 | ) | ||||
$ | 69,192 | $ | 54,556 | |||||
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Six Months Ended April 30, | ||||||||
In thousands | 2008 | 2007 | ||||||
Revenues, net: | ||||||||
Americas | $ | 482,550 | $ | 434,074 | ||||
Europe | 484,783 | 393,076 | ||||||
Asia/Pacific | 122,860 | 102,087 | ||||||
Corporate operations | 2,668 | 1,976 | ||||||
$ | 1,092,861 | $ | 931,213 | |||||
Gross Profit: | ||||||||
Americas | $ | 207,535 | $ | 182,136 | ||||
Europe | 271,427 | 211,440 | ||||||
Asia/Pacific | 63,425 | 49,328 | ||||||
Corporate operations | 1,479 | 1,558 | ||||||
$ | 543,866 | $ | 444,462 | |||||
SG&A Expense: | ||||||||
Americas | $ | 184,307 | $ | 151,207 | ||||
Europe | 186,137 | 143,974 | ||||||
Asia/Pacific | 60,081 | 49,020 | ||||||
Corporate operations | 21,685 | 27,163 | ||||||
$ | 452,210 | $ | 371,364 | |||||
Asset Impairment: | ||||||||
Americas | $ | 350 | $ | — | ||||
Europe | — | — | ||||||
Asia/Pacific | — | — | ||||||
Corporate operations | — | — | ||||||
$ | 350 | $ | — | |||||
Operating Income: | ||||||||
Americas | $ | 22,878 | $ | 30,929 | ||||
Europe | 85,290 | 67,466 | ||||||
Asia/Pacific | 3,344 | 308 | ||||||
Corporate operations | (20,206 | ) | (25,605 | ) | ||||
$ | 91,306 | $ | 73,098 | |||||
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Quiksilver, Inc. 2008 Second Quarter Results
June 5, 2008
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CONSOLIDATED QUARTERLY STATEMENTS OF INCOME (Unaudited)
Three Months Ended | Year Ended | |||||||||||||||||||
In thousands, except | January 31, | April 30, | July 31, | October 31, | October 31, | |||||||||||||||
per share amounts | 2007 | 2007 | 2007 | 2007 | 2007 | |||||||||||||||
Revenues, net | $ | 410,854 | $ | 520,359 | $ | 528,591 | $ | 587,268 | $ | 2,047,072 | ||||||||||
Cost of goods sold | 215,774 | 270,977 | 276,512 | 298,764 | 1,062,027 | |||||||||||||||
Gross profit | 195,080 | 249,382 | 252,079 | 288,504 | 985,045 | |||||||||||||||
Selling, general and administrative expense | 176,538 | 194,826 | 194,323 | 216,576 | 782,263 | |||||||||||||||
Operating income | 18,542 | 54,556 | 57,756 | 71,928 | 202,782 | |||||||||||||||
Interest expense | 11,868 | 11,671 | 11,881 | 11,151 | 46,571 | |||||||||||||||
Foreign currency loss | 356 | 1,066 | 310 | 3,125 | 4,857 | |||||||||||||||
Minority interest and other expense | 33 | (74 | ) | 80 | 82 | 121 | ||||||||||||||
Income before provision for income taxes | 6,285 | 41,893 | 45,485 | 57,570 | 151,233 | |||||||||||||||
Provision for income taxes | 1,613 | 9,474 | 9,783 | 13,636 | 34,506 | |||||||||||||||
Net income from continuing operations | $ | 4,672 | $ | 32,419 | $ | 35,702 | $ | 43,934 | $ | 116,727 | ||||||||||
Income per share from continuing operations | $ | 0.04 | $ | 0.26 | $ | 0.29 | $ | 0.35 | $ | 0.94 | ||||||||||
Income per share from continuing operations, assuming dilution | $ | 0.04 | $ | 0.25 | $ | 0.28 | $ | 0.34 | $ | 0.90 | ||||||||||
Weighted average common shares outstanding | 123,049 | 123,596 | 124,013 | 124,492 | 123,770 | |||||||||||||||
Weighted average common shares outstanding, assuming dilution | 129,234 | 128,771 | 129,163 | 130,127 | 129,706 | |||||||||||||||
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Quiksilver, Inc. 2008 Second Quarter Results
June 5, 2008
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Quarterly information related to 2007 operating segments, adjusted below to reflect the Rossignol Group and golf equipment operations as discontinued, is as follows:
Quarter Ended | Year Ended | |||||||||||||||||||
January 31, | April 30, | July 31, | October 31, | October 31, | ||||||||||||||||
In thousands | 2007 | 2007 | 2007 | 2007 | 2007 | |||||||||||||||
Revenues, net: | ||||||||||||||||||||
Americas | $ | 197,810 | $ | 236,264 | $ | 281,891 | $ | 279,836 | $ | 995,801 | ||||||||||
Europe | 161,157 | 231,919 | 185,616 | 224,703 | 803,395 | |||||||||||||||
Asia/Pacific | 51,113 | 50,974 | 59,897 | 81,080 | 243,064 | |||||||||||||||
Corporate operations | 774 | 1,202 | 1,187 | 1,649 | 4,812 | |||||||||||||||
$ | 410,854 | $ | 520,359 | $ | 528,591 | $ | 587,268 | $ | 2,047,072 | |||||||||||
Gross Profit: | ||||||||||||||||||||
Americas | $ | 84,308 | $ | 97,828 | $ | 117,951 | $ | 117,934 | $ | 418,021 | ||||||||||
Europe | 86,250 | 125,190 | 103,770 | 127,713 | 442,923 | |||||||||||||||
Asia/Pacific | 24,012 | 25,316 | 29,263 | 41,820 | 120,411 | |||||||||||||||
Corporate operations | 510 | 1,048 | 1,095 | 1,037 | 3,690 | |||||||||||||||
$ | 195,080 | $ | 249,382 | $ | 252,079 | $ | 288,504 | $ | 985,045 | |||||||||||
SG&A Expense: | ||||||||||||||||||||
Americas | $ | 74,495 | $ | 76,712 | $ | 78,340 | $ | 82,210 | $ | 311,757 | ||||||||||
Europe | 66,616 | 77,358 | 76,437 | 96,456 | 316,867 | |||||||||||||||
Asia/Pacific | 23,638 | 25,382 | 24,327 | 27,575 | 100,922 | |||||||||||||||
Corporate operations | 11,789 | 15,374 | 15,219 | 10,335 | 52,717 | |||||||||||||||
$ | 176,538 | $ | 194,826 | $ | 194,323 | $ | 216,576 | $ | 782,263 | |||||||||||
Operating Income: | ||||||||||||||||||||
Americas | $ | 9,813 | $ | 21,116 | $ | 39,611 | $ | 35,724 | $ | 106,264 | ||||||||||
Europe | 19,634 | 47,832 | 27,333 | 31,257 | 126,056 | |||||||||||||||
Asia/Pacific | 374 | (66 | ) | 4,936 | 14,245 | 19,489 | ||||||||||||||
Corporate operations | (11,279 | ) | (14,326 | ) | (14,124 | ) | (9,298 | ) | (49,027 | ) | ||||||||||
$ | 18,542 | $ | 54,556 | $ | 57,756 | $ | 71,928 | $ | 202,782 | |||||||||||