Quiksilver Reports Fourth Quarter And Full Year Results

HUNTINGTON BEACH, Calif.–(BUSINESS WIRE)–Dec. 19, 2001– Quiksilver, Inc. (NYSE:ZQK), today announced operating results for the fourth quarter and full year ended October 31, 2001. Consolidated net sales for the fourth quarter of fiscal 2001 increased 12.2% to $170,162,000 as compared to fiscal 2000 fourth quarter consolidated net sales of $151,610,000. Consolidated net income for the fourth quarter of fiscal 2001 was $2,379,000 as compared to $9,778,000, and diluted earnings per share totaled $0.10 versus $0.42 for the fourth quarter of fiscal 2000.

Consolidated net sales for the full year of fiscal 2001 increased 19.3% to $615,452,000 as compared to fiscal 2000 full year consolidated net sales of $515,689,000. Consolidated net income for the full year of fiscal 2001 amounted to $28,021,000 as compared to 31,836,000 in fiscal 2000, and diluted earnings per share for the full year equaled $1.17 versus $1.37 for the full year of fiscal 2000.

Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “Fiscal 2001 was a year that held tremendous challenge for the retail industry and for Quiksilver. While our strong history of earnings growth was interrupted, our organization performed admirably in the face of the retail slowdown that began in third quarter and was hastened by the events of early September. We have ended the year on a good note, with bookings up at a double digit pace and inventories at a manageable level.”

Domestic net sales during the fourth quarter of fiscal 2001 increased 4.3% to $101,099,000 as compared to fiscal 2000 fourth quarter domestic net sales of $96,925,000. As measured in French Francs, European net sales increased 21.7% for those same periods. As measured in U.S. dollars and reported in the financial statements, European net sales increased 26.3% during the fourth quarter of fiscal 2001 to $69,063,000 as compared to fiscal 2000 fourth quarter European net sales of $54,685,000.

Mr. McKnight continued, “We could not be more pleased with the strength and resilience of Quiksilver Europe, led by Bernard Mariette and Harry Hodge. European sales and operating income both grew over 20% in fiscal 2001. Even with its strong growth, we continue to be highly under-penetrated in Europe. This is particularly true for Roxy, which is only now hitting its stride in that market. Throughout the year, we have adopted a truly global mindset with respect to our brands and our business. We are also pleased to announce that Bernard has been added to our Board of Directors. We have every confidence that his counsel and opinions in this role will be invaluable. Further, we are convinced that Quiksilver Europe can serve as a template for growth to our partners around the globe and are looking forward to helping them develop their businesses as we move forward.”

Domestic net sales for the full year of fiscal 2001 increased 17.6% to $391,575,000 as compared to fiscal 2000 domestic net sales of 333,075,000. As measured in French Francs, European net sales increased 28.8% for the full year. As measured in U.S. dollars and reported in the financial statements, European net sales increased 22.6% during the full year of fiscal 2001 to $223,877,000 as compared to fiscal 2000 results of $182,614,000. Consolidated inventories increased 19.5% to $107,562,000 at October 31, 2001 from $90,034,000 at October 31, 2000, while decreasing 14.3% from July 31, 2001. Consolidated trade accounts receivable increased 14.3% to $155,879,000 at October 31, 2001 from 136,394,000 at October 31, 2000, while increasing 4.5% compared to July 31, 2001. Total inventories are expected to remain above optimum levels through the first half of next year. These increases in accounts receivable are generally consistent with the increases in sales in the fourth quarter.

If the domestic retail environment remains challenging, as the Company believes it will, the Company anticipates that consolidated net sales will range from $630 million to $650 million.

Also today, Quiksilver raised its guidance for diluted earnings per share to a range of $1.27 to $1.32 versus previous guidance of $1.20 to $1.25, to reflect the adoption of the new accounting rules regarding intangible assets, which reduce the Company’s amortization expense. The company believes that its intangible assets are conservatively valued.

Mr. McKnight further commented, “We will enter fiscal 2002 with relatively clean inventories, a good order book, and continued strong prospects for growth. Quiksilver and Roxy are two of the most powerful brands in our market, and we remain confident that consumers will continue to seek out these brands. It is our our diversification, organizational flexibility, market-leading competitive position, and most of all our innovative and authentic products, that will enable Quiksilver’s highly motivated management team to capitalize on our growth opportunities and generate strong returns for shareholders.”