Quiksilver Consolidated Sales Increase 18%

HUNTINGTON BEACH, Calif.–(BUSINESS WIRE)–June 6, 2001–Quiksilver, Inc. (NYSE:ZQK), announced operating results for the second quarter and six months ended April 30, 2001.

Consolidated net sales for the second quarter of fiscal 2001 increased 18.3% to $168,198,000 as compared to fiscal 2000 second quarter consolidated net sales of $142,139,000. Consolidated net income for the second quarter of fiscal 2001 increased 23.6% to $13,981,000 or $0.58 per share on a diluted basis as compared to $11,309,000 or $0.49 per share on a diluted basis for the second quarter of fiscal 2000.

Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “Our ability to meet expectations in a challenging retail environment underscores our strong portfolio of brands and our continued popularity among the fast growing youth demographic. Our high degree of diversification and leadership position in the market affords us significant growth opportunities while mitigating the operating risks.”

Domestic net sales during the second quarter of fiscal 2001 increased 18.0% to $110,392,000 as compared to fiscal 2000 second quarter domestic net sales of $93,529,000. As measured in French francs, European net sales increased 26.6% for those same periods. As measured in U.S. dollars and reported in the financial statements, European net sales increased 18.9% during the second quarter of fiscal 2001 to $57,806,000 as compared to fiscal 2000 second quarter European net sales of $48,610,000.

The gross margin for the second quarter decreased to 40.1% versus 41.0% in the year-ago quarter, while operating expenses as a percentage of sales improved 100 basis points to 25.5% versus 26.5% for the same period last year. As a result, the Company’s operating margin rose during the second quarter to 14.6% from 14.4% in the comparable period of fiscal 2000.

Consolidated net sales for the first six months of fiscal 2001 increased 19.8% to $290,031,000 as compared to fiscal 2000 first six months consolidated net sales of $242,068,000. Consolidated net income for the first six months of fiscal 2001 increased 14.9% to $17,687,000 or $0.74 per share on a diluted basis as compared to $15,388,000 or $0.66 per share on a diluted basis for the first six months of fiscal 2000. Domestic net sales during the first six months of fiscal 2001 increased 21.0% to $188,967,000 as compared to fiscal 2000 first six months domestic net sales of $156,179,000. As measured in French Francs, European net sales increased 28.9% for those same periods. As measured in U.S. dollars and reported in the financial statements, European net sales increased 17.7% during the first six months of fiscal 2001 to $101,064,000 as compared to fiscal 2000 first six months European net sales of $85,889,000.

Consolidated inventories increased 9.1% to $98,241,000 at April 30, 2001 from $90,034,000 at October 31, 2000, and increased 35.8% compared to April 30, 2000. Consolidated trade accounts receivable increased 9.6% to $149,442,000 at April 30, 2001 from $136,394,000 at October 31, 2000, and increased 21.8% compared to April 30, 2000.

Mr. McKnight concluded, “The strength of our product, merchandising and design is shown in the pace of our backlog growth and our solid performance during the quarter. We are committed to expanding our dominant market position, and we remain enthusiastic about our future prospects and opportunities.”

About Quiksilver:

Quiksilver designs, produces and distributes clothing, accessories and related products for active-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, Radio Fiji and Hawk Clothing labels. Quiksilver also manufactures apparel for boys (Quiksilver Boys and Hawk Clothing), girls (Teenie Wahine and Raisins Girls), men (Quiksilver Silver Edition and Fidra) and women (Leilani and Alex Goes), 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 outstanding retail experience for their customers.