Exhibit 99.2
Company Contact: | Robert B. McKnight, Jr. Chairman & CEO Steven L. Brink Chief Financial Officer Quiksilver, Inc. (714) 889-2200 | |
FOR IMMEDIATE RELEASE | ||
Investor Relations: | James Palczynski/Chad A. Jacobs Integrated Corporate Relations (203) 222-9013 |
QUIKSILVER, INC. REPORTS 2004 FIRST QUARTER FINANCIAL RESULTS
— Consolidated Revenues Increase 33% —
— Earnings Per Share of $0.16 Exceeds Consensus Estimate of $0.15 —
— Raising Fiscal 2004 Sales and Earnings Per Share Guidance —
HUNTINGTON BEACH, CALIFORNIA, MARCH 10, 2004 — - — Quiksilver, Inc. (NYSE:ZQK), today announced operating results for the first quarter ended January 31, 2004.
Consolidated revenues for the first quarter of fiscal 2004 increased 33% to $256.1 million as compared to fiscal 2003 first quarter consolidated revenues of $192.1 million. Consolidated net income for the first quarter of fiscal 2004 increased 40% to $9.2 million as compared to $6.6 million the year before. First quarter fully diluted earnings per share was $0.16 versus $0.12 for the first quarter of fiscal 2003.
Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “Our strong performance during the quarter, which once again exceeded expectations, is a great way to start the new fiscal year. These results were primarily driven by strong sales across all divisions, and better than expected operating margins, particularly in the Americas.”
Revenues in the Americas increased 21% during the first quarter of fiscal 2004 to $123.2 million as compared to fiscal 2003 first quarter revenues of $102.0 million. As measured in U.S. dollars and reported in the financial statements, European revenues increased 37% during the first quarter of fiscal 2004 to $106.2 million as compared to fiscal 2003 first quarter European revenues of $77.2 million. As measured in euros, European net sales increased 16% for those same periods. Asia/Pacific revenues were $26.3 million in the first quarter of fiscal 2004
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2004 First Quarter Results
March 10, 2004 — Page 2
compared to $12.1 million in the first quarter of fiscal 2003, which included only two months of Asia/Pacific operations since being acquired.
Mr. McKnight continued, “We recently returned from the MAGIC apparel trade show in Las Vegas, and the feedback from retailers regarding our fall lines was extremely positive across the board. Our retail stores continue to perform well both here and abroad. We recently promoted Carol Christopherson to Americas President of Retail, and we believe she will have a meaningful and immediate impact on our business.”
Consolidated inventories increased 24% to $179.3 million at January 31, 2004 from $144.2 million at January 31, 2003. Consolidated trade accounts receivable increased 16% to $200.6 million at January 31, 2004 from $173.5 million at January 31, 2003. Trade account receivable growth was modest compared to the increase in sales as average days sales outstanding decreased about nine days. Inventories grew 16% in constant dollars.
Bernard Mariette, President of Quiksilver, Inc. commented, “In addition to strong financial performance during the quarter, we continued to make progress on the development of our global operating platform. This was particularly true for our Asia/Pacific division. Our operations in Indonesia are performing very well, and we are excited to have hired David Toda as President of Quiksilver Japan. We continue to believe that Japan represents our best source of growth for this division in the near and intermediate term.”
Also, today the Company increased its guidance to new ranges of $1.10 billion to $1.12 billion for revenues and $1.22 to $1.25 for earnings per share.
Mr. McKnight concluded, “Our multi-brand, multi-channel, global approach to our business continues to afford us significant growth prospects into the future. Our momentum remains strong, our financials are sound, and we remain committed to fully capitalizing on our leadership position in the market.”
2004 First Quarter Results
March 10, 2004 – Page 3
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 for young men and young women under the Quiksilver, Roxy, Raisins, and Radio Fiji labels. Quiksilver also manufactures apparel 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 and Bent Metal labels. Quiksilver’s products are sold throughout the world, primarily in surf shops and 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.
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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, and http://www.fidragolf.com
2004 First Quarter Results
March 10, 2004 — Page 4
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended January 31, | |||||||||
In thousands, except per share amounts | 2004 | 2003 | |||||||
Revenues | $ | 256,142 | $ | 192,080 | |||||
Cost of goods sold | 142,473 | 110,572 | |||||||
Gross profit | 113,669 | 81,508 | |||||||
Selling, general and administrative expense | 94,735 | 68,425 | |||||||
Operating income | 18,934 | 13,083 | |||||||
Interest expense | 1,589 | 2,116 | |||||||
Foreign currency loss | 3,267 | 551 | |||||||
Other expense | 282 | 167 | |||||||
Income before provision for income taxes | 13,796 | 10,249 | |||||||
Provision for income taxes | 4,622 | 3,681 | |||||||
Net income | $ | 9,174 | $ | 6,568 | |||||
Net income per share | $ | 0.16 | $ | 0.13 | |||||
Net income per share, assuming dilution | $ | 0.16 | $ | 0.12 | |||||
Weighted average common shares outstanding | 55,622 | 51,920 | |||||||
Weighted average common shares outstanding, assuming dilution | 57,927 | 54,320 | |||||||
2004 First Quarter Results
March 10, 2004 — Page 5
CONSOLIDATED BALANCE SHEETS (Unaudited)
January 31, 2004 | October 31, 2003 | ||||||||||
Amounts in thousands | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 33,344 | $ | 27,866 | |||||||
Trade accounts receivable, less allowance for doubtful accounts of $8,830 (2004) and $8,700 (2003) | 200,558 | 224,418 | |||||||||
Other receivables | 7,395 | 7,617 | |||||||||
Inventories | 179,282 | 146,440 | |||||||||
Deferred income taxes | 18,909 | 17,472 | |||||||||
Prepaid expenses and other current assets | 14,999 | 9,732 | |||||||||
Total current assets | 454,487 | 433,545 | |||||||||
Fixed assets, net | 104,273 | 99,299 | |||||||||
Intangibles, net | 66,143 | 65,577 | |||||||||
Goodwill | 104,005 | 98,833 | |||||||||
Deferred income taxes | 2,425 | 1,984 | |||||||||
Other assets | 7,687 | 8,732 | |||||||||
Total assets | $ | 739,020 | $ | 707,970 | |||||||
LIABILITIES & STOCKHOLDERS’ EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Lines of credit | $ | 10,217 | $ | 20,951 | |||||||
Accounts payable | 85,228 | 64,537 | |||||||||
Accrued liabilities | 40,600 | 41,759 | |||||||||
Current portion of long-term debt | 14,067 | 8,877 | |||||||||
Income taxes payable | 11,636 | 10,796 | |||||||||
Total current liabilities | 161,748 | 146,920 | |||||||||
Long-term debt | 108,445 | 114,542 | |||||||||
Total liabilities | 270,193 | 261,462 | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | 570 | 570 | |||||||||
Additional paid-in capital | 156,470 | 155,310 | |||||||||
Treasury stock | (6,778 | ) | (6,778 | ) | |||||||
Retained earnings | 286,728 | 277,554 | |||||||||
Accumulated other comprehensive gain | 31,837 | 19,852 | |||||||||
Total stockholders’ equity | 468,827 | 446,508 | |||||||||
Total liabilities & stockholders’ equity | $ | 739,020 | $ | 707,970 | |||||||
2004 First Quarter Results
March 10, 2004 — Page 6
Information related to geographic segments is as follows:
Three Months Ended January 31, | |||||||||
2004 | 2003 | ||||||||
Amounts in thousands | |||||||||
Revenues: | |||||||||
Americas | $ | 123,199 | $ | 101,967 | |||||
Europe | 106,183 | 77,246 | |||||||
Asia/Pacific | 26,281 | 12,102 | |||||||
Corporate Operations | 479 | 765 | |||||||
$ | 256,142 | $ | 192,080 | ||||||
Gross Profit: | |||||||||
Americas | $ | 49,834 | $ | 39,150 | |||||
Europe | 51,285 | 35,380 | |||||||
Asia/Pacific | 12,485 | 6,213 | |||||||
Corporate Operations | 65 | 765 | |||||||
$ | 113,669 | $ | 81,508 | ||||||
SG&A Expense: | |||||||||
Americas | $ | 39,665 | $ | 33,396 | |||||
Europe | 38,399 | 26,287 | |||||||
Asia/Pacific | 11,268 | 4,454 | |||||||
Corporate Operations | 5,403 | 4,288 | |||||||
$ | 94,735 | $ | 68,425 | ||||||
Operating Income: | |||||||||
Americas | $ | 10,169 | $ | 5,754 | |||||
Europe | 12,886 | 9,093 | |||||||
Asia/Pacific | 1,217 | 1,759 | |||||||
Corporate Operations | (5,338 | ) | (3,523 | ) | |||||
$ | 18,934 | $ | 13,083 | ||||||