{"id":14672,"date":"2010-03-11T14:00:28","date_gmt":"2010-03-11T22:00:28","guid":{"rendered":"http:\/\/www.boardistan.com\/?p=14672"},"modified":"2010-03-11T14:11:53","modified_gmt":"2010-03-11T22:11:53","slug":"quiksilver-loses-only-3-million-in-q1","status":"publish","type":"post","link":"http:\/\/www.boardistan.com\/?p=14672","title":{"rendered":"Quiksilver Loses Only $3 Million In Q1"},"content":{"rendered":"

\"Quik<\/a>Quiksilver<\/a><\/strong> only lost $3 million in the first quarter of 2010 compared to a $9 million loss in the same quarter of 2009. And for this, the market is apparently happy. So is Bob McKnight because it’s so much better than losing $9 million like they did in Q1 of 2009.<\/p>\n

Robert B. McKnight, Jr.<\/strong>, Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “We’re pleased to deliver first quarter financial results that exceed our prior expectations. We have taken bold steps over the past several quarters to improve our operations and with continuing hopes for economic stabilization and improvement, we are poised to benefit from any upturn in discretionary consumer spending. While we recognize that U.S. retail trends in general are improving, it appears that the pace of global recovery will not be uniform. That being said, we are well-positioned to deliver improved financial performance in the future.”<\/p><\/blockquote>\n

During the conference call this afternoon Bob McKnight<\/strong> said he and the company where extremely proud of Torah Bright<\/strong> for winning a gold medal in the 2010 Vancouver Olympics and that DC Shoes<\/strong> “has begun a focused effort to return to its heritage.”<\/p>\n

During the questions Quik CEO Joe Scirocco<\/strong> also mentioned that Quiksilver’s marketing budget for 2010, was “$100 million, down from $120 million in 2009.” He also said the company would be repaying debt at a rate of approximately $100 million a year for the next three years.<\/p>\n

For the rest of the release, follow the jump.
\nHUNTINGTON BEACH, Calif., Mar 11, 2010 (BUSINESS WIRE) — –Pro-Forma Loss from Continuing Operations of $0.02 per share versus Pro-Forma Loss of $0.07 per share in prior year<\/p>\n

–Loss from Continuing Operations of $0.04 per share versus Loss of $0.52 per share in prior year<\/p>\n

Quiksilver, Inc. (ZQK 3.15, +0.04, +1.29%) today announced operating results for the first quarter ended January 31, 2010. Consolidated net revenues from continuing operations for the first quarter of fiscal 2010 decreased 2% to $432.7 million from $443.3 million in the first quarter of fiscal 2009. The pro-forma consolidated loss from continuing operations for the first quarter of fiscal 2010 was $2.5 million, or $0.02 per share, compared to $9.0 million, or $0.07 per share, for the first quarter of fiscal 2009. The pro-forma loss for the first quarter of fiscal 2010 excludes a $3.0 million severance charge, primarily in the Americas. Including this charge, the loss from continuing operations was $5.4 million, or $0.04 per share, compared to $65.9 million, or $0.52 per share, for the first quarter of fiscal 2009. A reconciliation of GAAP results to pro-forma results is included in the accompanying tables. Net revenues and the loss from continuing operations for all periods exclude the results of the Rossignol wintersports business, which was sold in November 2008 and is reported as discontinued operations.<\/p>\n

Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “We’re pleased to deliver first quarter financial results that exceed our prior expectations. We have taken bold steps over the past several quarters to improve our operations and with continuing hopes for economic stabilization and improvement, we are poised to benefit from any upturn in discretionary consumer spending. While we recognize that U.S. retail trends in general are improving, it appears that the pace of global recovery will not be uniform. That being said, we are well-positioned to deliver improved financial performance in the future.”<\/p>\n

Net revenues in the Americas decreased 8% during the first quarter of fiscal 2010 to $187.0 million from $203.4 million in the first quarter of fiscal 2009. As measured in U.S. dollars and reported in the financial statements, European net revenues decreased 2% during the first quarter of fiscal 2010 to $177.9 million from $181.7 million in the first quarter of fiscal 2009. In constant currency, European segment net revenues decreased 12% compared to the prior year. As measured in U.S. dollars and reported in the financial statements, Asia\/Pacific net revenues increased 16% to $67.1 million in the first quarter of fiscal 2010 from $57.6 million in the first quarter of fiscal 2009. In constant currency, Asia\/Pacific segment net revenues decreased 15% compared to the prior year. Please refer to the accompanying tables in order to better understand the impact of foreign currency on revenue trends in our Europe and Asia\/Pacific segments.<\/p>\n

Consolidated inventories decreased 21% to $301.2 million at January 31, 2010 from $380.5 million at January 31, 2009. Consolidated trade accounts receivable decreased 13% to $323.0 million at January 31, 2010 from $373.4 million at January 31, 2009.<\/p>\n

Addressing its outlook for continuing operations, the Company stated that based on current trends, second quarter revenues are expected to be down in the high single-digits on a percentage basis compared to the same quarter a year ago and that it expects to generate earnings per share on a diluted basis in the low-single-digit range. The Company indicated that longer term visibility into revenues and earnings remains somewhat limited at the present time.<\/p>\n

The Company had approximately $148 million of availability under its credit lines in addition to approximately $150 million of unrestricted cash at the end of the first quarter.<\/p>\n

About Quiksilver:<\/p>\n

Quiksilver, Inc. (ZQK 3.15, +0.04, +1.29%) is the world’s leading outdoor sports lifestyle company, which designs, produces and distributes a diversified mix of branded apparel, footwear, accessories, snowboards 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.<\/p>\n

The reputation of Quiksilver’s brands is based on outdoor action sports. The Company’s Quiksilver, Roxy, DC, Lib Tech 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.<\/p>\n

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.<\/p>\n

Forward looking statements:<\/p>\n

This press release contains forward-looking statements including but not limited to statements regarding the Company’s revenue guidance, 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 on Form 10-K and Quarterly Reports on Form 10-Q.<\/p>\n

NOTE: For further information about Quiksilver, Inc., you are invited to take a look at our world at www.quiksilver.com, www.roxy.com, www.dcshoes.com, www.lib-tech.com and www.hawkclothing.com.<\/p>\n

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)\n                                                                       Three Months Ended January 31,\nIn thousands, except per share amounts                                 2010                2009\nRevenues, net                                                          $    432,737        $    443,278\nCost of goods sold                                                          210,588             236,115\nGross profit                                                                222,149             207,163\nSelling, general and administrative expense                                 203,160             206,818\nOperating income                                                            18,989              345\nInterest expense                                                            21,873              14,154\nForeign currency (gain) loss                                                (1,979  )           1,430\nOther expense (income)                                                      5                   (574     )\nLoss before provision for income taxes                                      (910    )           (14,665  )\nProvision for income taxes                                                  3,674               50,581\nLoss from continuing operations                                             (4,584  )           (65,246  )\nIncome (loss) from discontinued operations                                  76                  (128,564 )\nNet loss                                                                    (4,508  )           (193,810 )\nLess: net income attributable to non-controlling interest                   (846    )           (616     )\nNet loss attributable to Quiksilver, Inc.                              $    (5,354  )      $    (194,426 )\nBasic and diluted EPS:\nLoss per share from continuing operations attributable                 $    (0.04   )      $    (0.52    )\nto Quiksilver, Inc.\nIncome (loss) per share from discontinued operations attributable to   $    0.00           $    (1.01    )\nQuiksilver Inc.\nNet loss per share attributable to Quiksilver, Inc.                    $    (0.04   )      $    (1.53    )\nWeighted average common shares outstanding                                  127,648             127,039\nAmounts attributable to Quiksilver, Inc.:\nLoss from continuing operations                                        $    (5,430  )      $    (65,862  )\nIncome (loss) from discontinued operations                                  76                  (128,564 )\nNet loss                                                               $    (5,354  )      $    (194,426 )\n\n\n\n\nCONSOLIDATED BALANCE SHEETS (Unaudited)\nIn thousands                                  January 31,         January 31,\n                                              2010                2009\nASSETS\nCurrent assets:\nCash and cash equivalents                     $   149,561         $   42,089\nRestricted cash                                   49,352              --\nTrade accounts receivable, less allowance         322,959             373,357\nfor doubtful accounts\nof $48,156 (2010)\nand $30,899 (2009)\nOther receivables                                 28,832              65,650\nInventories                                       301,216             380,502\nDeferred income taxes - short-term                63,220              88,284\nPrepaid expenses and other current assets         40,698              37,337\nCurrent assets held for sale                      86                  18,043\nTotal current assets                              955,924             1,005,262\nRestricted cash                                   --                  45,824\nFixed assets, net                                 225,320             229,152\nIntangibles, net                                  141,995             143,683\nGoodwill                                          324,431             295,406\nOther assets                                      76,017              39,844\nDeferred income taxes - long-term                 58,586              647\nTotal assets                                  $   1,782,273       $   1,759,818\nLIABILITIES & STOCKHOLDERS' EQUITY\nCurrent liabilities:\nLines of credit                               $   24,927          $   237,299\nAccounts payable                                  203,232             252,557\nAccrued liabilities                               91,222              84,730\nCurrent portion of long-term debt                 93,314              33,051\nIncome taxes payable                              14,202              3,763\nCurrent liabilities of assets held for sale       324                 3,925\nTotal current liabilities                         427,221             615,325\nLong-term debt                                    858,324             742,976\nOther long-term liabilities                       40,573              30,689\nTotal liabilities                                 1,326,118           1,388,990\nStockholders' equity:\nCommon stock                                      1,318               1,310\nAdditional paid-in capital                        370,878             337,870\nTreasury stock                                    (6,778    )         (6,778    )\nAccumulated deficit                               (6,977    )         (4,007    )\nAccumulated other comprehensive income            89,424              37,487\nTotal Quiksilver, Inc. stockholders' equity       447,865             365,882\nNon-controlling interest                          8,290               4,946\nTotal stockholders' equity                        456,155             370,828\nTotal liabilities & stockholders' equity      $   1,782,273       $   1,759,818\n\n\n\n\nInformation related to operating segments is as follows\n(unaudited):\n                           Three Months Ended January 31,\nIn thousands               2010              2009\nRevenues, net:\nAmericas                   $     186,961     $     203,413\nEurope                           177,877           181,698\nAsia\/Pacific                     67,052            57,590\nCorporate operations             847               577\n                           $     432,737     $     443,278\nGross Profit:\nAmericas                   $     81,015      $     75,666\nEurope                           104,253           100,766\nAsia\/Pacific                     37,043            30,701\nCorporate operations             (162    )         30\n                           $     222,149     $     207,163\nSG&A Expense:\nAmericas                   $     76,361      $     92,006\nEurope                           85,804            78,765\nAsia\/Pacific                     31,377            26,916\nCorporate operations             9,618             9,131\n                           $     203,160     $     206,818\nOperating Income (Loss):\nAmericas                   $     4,654       $     (16,340 )\nEurope                           18,449            22,001\nAsia\/Pacific                     5,666             3,785\nCorporate operations             (9,780  )         (9,101  )\n                           $     18,989      $     345\n\n\n\n\nGAAP TO PRO-FORMA RECONCILIATION (UNAUDITED)\n                                                                Three Months Ended\n                                                                January 31,\n                                                                2010                2009\nLoss from continuing operations                                 $    (5,430  )      $    (65,862 )\nSeverance charges, net of tax of $87 (2010)                          2,977               6,103\nEffect of U.S. tax valuation allowance                          --                       50,778\nPro-forma loss from continuing operations                       $    (2,453  )      $    (8,981  )\nPro-forma loss per share from continuing operations             $    (0.02   )      $    (0.07   )\nPro-forma loss per share from continuing operations, assuming   $    (0.02   )      $    (0.07   )\ndilution\nWeighted average common shares outstanding                           127,648             127,039\nWeighted average common shares outstanding, assuming dilution        127,648             127,039\n\n\n\n\nADJUSTED EBITDA and PRO-FORMA ADJUSTED EBITDA RECONCILIATION\n                                            Three Months Ended\n                                            January 31,\n                                            2010             2009\nLoss from continuing operations             $     (5,430 )   $     (65,862 )\nProvision for income taxes                        3,674            50,581\nInterest expense                                  21,873           14,154\nDepreciation and amortization                     13,570           13,303\nNon-cash stock-based compensation expense         2,132            2,707\nAdjusted EBITDA                             $     35,819     $     14,883\nSeverance charges                                 3,064            6,103\nPro-forma Adjusted EBITDA                   $     38,883     $     20,986\n<\/pre>\n
Definition of Adjusted EBITDA:<\/p>\n
Adjusted EBITDA is defined as income 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. 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.<\/p>\n
SUPPLEMENTAL EXCHANGE RATE INFORMATION (UNAUDITED)<\/p>\n
In order to better understand growth rates in our foreign operating segments, we make reference to constant currency. Constant currency reporting generally improves visibility into actual growth rates as it adjusts for the effect of changing foreign currency exchange rates from period to period. For income statement items, constant currency is calculated by taking the average foreign currency exchange rate used in translation for the current period and applying that same rate to the prior period. Our European segment is translated into constant currency using euros and our Asia\/Pacific segment is translated into constant currency using Australian dollars, as these are the primary functional currencies of each reporting segment. As such, this methodology does not account for movements in individual currencies within an operating segment (for example, non-euro currencies within our European segment). A constant currency translation methodology that accounts for movements in each individual currency could yield a different result compared to using only euros and Australian dollars. The following table presents revenues by segment in both historical currency and constant currency for the three months ended January 31, 2009 and 2010:<\/p>\n
Historical currency (as reported)                 Americas         Europe          Asia\/Pacific      Corporate     Total
\nJanuary 31, 2009                                  203,413          181,698         57,590            577           443,278
\nJanuary 31, 2010                                  186,961          177,877         67,052            847           432,737
\nPercentage (decrease) increase                    (8      %)       (2      %)      16     %                        (2      %)
\nConstant currency (current year exchange rates)
\nJanuary 31, 2009                                  203,413          201,230         78,431            577           483,651
\nJanuary 31, 2010                                  186,961          177,877         67,052            847           432,737
\nPercentage decrease                               (8      %)       (12     %)      (15    %)                       (11     %)<\/p>\n","protected":false},"excerpt":{"rendered":"
Quiksilver only lost $3 million in the first quarter of 2010 compared to a $9 million loss in the same quarter of 2009. And for this, the market is apparently happy. So is Bob McKnight because it’s so much better than losing $9 million like they did in Q1 of 2009. Robert B. McKnight, Jr., […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[10,12],"tags":[],"_links":{"self":[{"href":"http:\/\/www.boardistan.com\/index.php?rest_route=\/wp\/v2\/posts\/14672"}],"collection":[{"href":"http:\/\/www.boardistan.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.boardistan.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.boardistan.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/www.boardistan.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14672"}],"version-history":[{"count":4,"href":"http:\/\/www.boardistan.com\/index.php?rest_route=\/wp\/v2\/posts\/14672\/revisions"}],"predecessor-version":[{"id":14676,"href":"http:\/\/www.boardistan.com\/index.php?rest_route=\/wp\/v2\/posts\/14672\/revisions\/14676"}],"wp:attachment":[{"href":"http:\/\/www.boardistan.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.boardistan.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14672"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.boardistan.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}