Quiksilver hasn’t wrapped up their final 2010 numbers, but wanted to let everyone know that things aren’t as bad as they thought they were going to be back in September 2010, according to documents filed today with the SEC.
Based on preliminary data, the company estimates that fourth quarter fiscal 2010 net revenues were between $492 million and $497 million, compared to net revenues of $538.7 million for the fourth quarter ended October 31, 2009, and that fourth quarter fiscal 2010 pro-forma Adjusted EBITDA was between 10% and 20% higher than pro-forma Adjusted EBITDA of $49.9 million for the fourth quarter ended October 31, 2009. . . These preliminary estimated results are higher than the most recent outlook provided in September, at which time the company had expected fourth quarter revenues to be down in the mid-teens on a percentage basis compared to the same quarter a year ago and anticipated that full-year fiscal 2010 pro-forma Adjusted EBITDA would be up approximately 25% when compared to fiscal 2009.
And that’s good considering that 2009’s loss from continuing ops was about $73 million. In other news, Quik is rounding up another €200 million in a private offering in Europe.
Follow the jump for all the details.
Quiksilver, Inc. Announces Preliminary Estimated Results for Q4 and Full-Year Fiscal 2010 and Preliminary Outlook for Fiscal 2011
— Q4 Net Revenues expected to be higher than company’s outlook provided in September
— Pro-forma Adjusted EBITDA for fiscal 2010 expected to be up at least 30% from fiscal 2009
— Fiscal 2011 pro-forma Adjusted EBITDA expected to be approximately in line with that of fiscal 2010
Huntington Beach, California, November 29, 2010—Quiksilver, Inc. (NYSE:ZQK) today announced preliminary estimated financial results for the fourth quarter of fiscal 2010 and the full fiscal year ended October 31, 2010. Based on preliminary data, the company estimates that fourth quarter fiscal 2010 net revenues were between $492 million and $497 million, compared to net revenues of $538.7 million for the fourth quarter ended October 31, 2009, and that fourth quarter fiscal 2010 pro-forma Adjusted EBITDA was between 10% and 20% higher than pro-forma Adjusted EBITDA of $49.9 million for the fourth quarter ended October 31, 2009. Loss from continuing operations for the fourth quarter ended October 31, 2009 was $15.7 million. A reconciliation of GAAP results to pro-forma Adjusted EBITDA is provided in the accompanying table.
Also based on preliminary data, the company estimates that full-year net revenues for fiscal 2010 were between $1,835 million and $1,840 million, compared to net revenues of $1,977.5 million for fiscal 2009, and that full-year pro-forma Adjusted EBITDA for fiscal 2010 was up at least 30% from pro-forma Adjusted EBITDA of $160.3 million for fiscal 2009. Loss from continuing operations for fiscal 2009 was $73.2 million. A reconciliation of GAAP results to pro-forma Adjusted EBITDA is provided in the accompanying table.
These preliminary estimated results are higher than the most recent outlook provided in September, at which time the company had expected fourth quarter revenues to be down in the mid-teens on a percentage basis compared to the same quarter a year ago and anticipated that full-year fiscal 2010 pro-forma Adjusted EBITDA would be up approximately 25% when compared to fiscal 2009. However, at this time the company is maintaining its outlook for fourth quarter earnings per share on a diluted basis in the mid-single-digit cents range, pending determination of final results.
Because financial statements for the fourth quarter and full fiscal year 2010 are not yet available, these fourth quarter and full fiscal year estimates are preliminary, unaudited, subject to completion, reflective of the company’s current best estimates and may be revised as a result of management’s further review of results, including determination of the Company’s income from continuing operations for the periods presented above. During the course of the preparation of consolidated annual financial statements and related notes, the company may identify items that would require material adjustments to the preliminary financial information presented above.
With respect to fiscal 2011, the company currently expects that pro-forma Adjusted EBITDA for the full fiscal year will be approximately in line with that of fiscal 2010. However, pro-forma Adjusted EBITDA in the first quarter of fiscal 2011 is expected to be approximately $5 million to $10 million lower than in the first quarter of fiscal 2010. This anticipated near-term period-over-period decline in pro-forma Adjusted EBITDA is due primarily to increased spending in brand development, including the new Quiksilver Girls collection and higher overall marketing spend, as well as the effects of selling a few minor brands last year and the effects of foreign currency translation. The company expects capital expenditures during fiscal 2011 could be approximately $15 million to $20 million higher than that of fiscal 2010, the difference driven principally by the company’s investments in retail stores and its initial investment in a global Enterprise Resource Planning system. These trends are based only on estimates of what management currently believes is accurate and realizable. Actual results will vary and the variations may be material. In addition, visibility into fiscal 2011 revenues and earnings remains limited due to global economic conditions.
The company plans to issue a press release disclosing fiscal 2010 fourth quarter financial results soon after the close of market on Thursday, December 16, 2010, and will conduct a conference call to review its results on that same day. Details concerning the earnings conference call will be forthcoming.
PRO FORMA ADJUSTED EBITDA RECONCILIATION
Three Months
Ended Fiscal Year Ended
October 31, 2009 October 31, 2009
Amounts in thousands:
Loss from continuing operations
$ (15,711 ) $ (73,215 )
Income taxes
6,162 66,667
Interest
20,871 63,924
Depreciation and amortization
14,616 55,004
Non-cash stock-based compensation expense
996 8,415
Non-cash asset impairments
10,737 10,737
Adjusted EBITDA
$ 37,671 $ 131,532
Restructuring charges
12,254 28,775
Pro-forma Adjusted EBITDA
$ 49,925 $ 160,307
Definition of Adjusted EBITDA and pro-forma Adjusted EBITDA:
Adjusted EBITDA is defined as income or loss from continuing operations before (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) non-cash stock-based compensation expense and (v) asset impairments. Adjusted EBITDA is not defined under generally accepted accounting principles (“GAAP”), and it may not be comparable to similarly titled measures reported by other companies. Pro-forma Adjusted EBITDA is defined as income or loss from continuing operations before (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) non-cash stock-based compensation expenses, (v) non-cash asset impairments and (vi) restructuring charges. We use Adjusted EBITDA, along with other GAAP measures, as a measure of profitability because Adjusted EBITDA helps us to compare our performance on a consistent basis by removing from our operating results the impact of our capital structure, the effect of operating in different tax jurisdictions, the impact of our asset base, which can differ depending on the book value of assets, the accounting methods used to compute depreciation and amortization, the existence or timing of asset impairments and the effect of non-cash stock-based compensation expense. We believe EBITDA is useful to investors as it is a widely used measure of performance and the adjustments we make to EBITDA provide further clarity on our profitability. We remove the effect of non-cash stock-based compensation from our earnings which can vary based on share price, share price volatility and expected life of the equity instruments we grant. In addition, this stock-based compensation expense does not result in cash payments by us. We remove the effect of asset impairments from Adjusted EBITDA for the same reason that we remove depreciation and amortization as it is part of the impact of our asset base. Adjusted EBITDA has limitations as a profitability measure in that it does not include the interest expense on our debts, our provisions for income taxes, the effect of our expenditures for capital assets and certain intangible assets, the effect of non-cash stock-based compensation expense and the effect of asset impairments. We remove restructuring charges from pro-forma Adjusted EBITDA because such charges are non-operating items that do not reflect our core operations.
Quiksilver, Inc. Announces €200 Million Private Offering of Senior Notes
Huntington Beach, California, November 29, 2010—Quiksilver, Inc. (“Quiksilver”) (NYSE:ZQK) today announced that its wholly-owned European subsidiary, Boardriders S.A. (the “Issuer”), subject to market and other conditions, plans to offer €200 million aggregate principal amount of Senior Notes due 2017 (the “Notes”).
The Notes will be general senior obligations of the Issuer and will be fully and unconditionally guaranteed on a senior basis by Quiksilver and certain of Quiksilver’s current and future U.S. and non-U.S. subsidiaries, subject to certain exceptions. Quiksilver intends to use the proceeds of the offering to refinance existing European term loans and to pay related fees and expenses. As a result of such refinancing, Quiksilver expects to recognize non-cash, non-operating charges during the fiscal quarter ending January 31, 2011 of approximately $13.0 million representing the write-off of debt issuance costs related to such term loans.
The Issuer plans to offer the Notes in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Issuer intends to offer the Notes within the United States only to qualified institutional buyers in accordance with Rule 144A under the Securities Act and outside the United States only to non-U.S. investors in accordance with Regulation S under the Securities Act. The Notes will not be registered under the Securities Act or the securities laws of any other jurisdiction. Unless so registered, the Notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Notes nor does it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Forward-looking statements:
Statements in this press release constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including those relating to the proposed offering and whether or not the Issuer will commence or consummate the proposed offering. Such statements are based on current expectations, and are not strictly historical statements. In some cases, you can identify forward-looking statements by terminology such as “plan,” “will,” “intend,” “expect,” “may” or the negative of such terms or comparable terminology. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on our current plans or assessments which are believed to be reasonable as of the date of this announcement. Actual results or circumstances may vary materially from such forward-looking statements or expectations. Forward-looking information is provided by Quiksilver under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. In addition, Quiksilver disclaims any intent or obligation to update these forward-looking statements.
