Quiksilver posts fiscal 2010 Q2 financial results
Quiksilver, Inc. announced operating results for the second fiscal quarter ended April 30, 2010. Consolidated net revenues from continuing operations for the second quarter of fiscal 2010 decreased 5% to $468.3 million from $494.2 million in the second quarter of fiscal 2009. Pro-forma consolidated income from continuing operations for the second quarter of fiscal 2010 was $15.7 million, or $0.11 per share, compared to $6.6 million, or $0.05 per share, for the second quarter of fiscal 2009. Pro-forma income for the second quarter of fiscal 2010 excludes $2.9 million in restructuring charges, consisting primarily of severance pay, as well as a non-cash charge of $5.2 million for incremental stock compensation expense related to the appreciation in value of shares of company stock granted to Kelly Slater during the quarter following stockholder approval.
These charges were partially offset by a gain of $1.3 million on the sale of the Raisins swimwear trademarks. Including these amounts, income from continuing operations was $8.8 million, or $0.06 per share, compared to $4.9 million, or $0.04 per share, for the second quarter of fiscal 2009. A reconciliation of GAAP results to pro-forma results is included in the accompanying tables. Net revenues and the income 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.
Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “We're very pleased to again deliver financial results that exceeded our prior expectations. Even as the global economies exhibit inconsistent signs of recovery, it's clear that the bold steps we've taken over the past several quarters to improve our operations and to stabilize our financial structure have made us a much stronger company. With inventories well-managed and great products in the market, we are well positioned to deliver improved financial performance in the future.”
Second Quarter Financial Highlights:
• Pro-forma Adjusted EBITDA was $62.4 million compared to $45.4 million in the second quarter of fiscal 2009 despite a 5% revenue decline.
• Gross margin improved 600 basis points to 53.2% compared to 47.2% in the second quarter of fiscal 2009 led by a 970 basis point improvement in the Americas.
• Operating income in Europe, the company's most profitable region, was 18.8% of revenues as gross margin improved 320 basis points to 59.9% from 56.7% in the second quarter of fiscal 2009.
• Net debt at April 30, 2010, was $733 million, reduced by $201 million compared to $934 million at April 30, 2009.
Net revenues in the Americas decreased 13% during the second quarter of fiscal 2010 to $199.7 million from $230.0 million in the second quarter of fiscal 2009. As measured in U.S. dollars and reported in the financial statements, European net revenues decreased 1% during the second quarter of fiscal 2010 to $208.7 million from $210.5 million in the second quarter of fiscal 2009. In constant currency, European segment net revenues decreased 5% compared to the prior year. As measured in U.S. dollars and reported in the financial statements, Asia/Pacific net revenues increased 12% to $58.6 million in the second quarter of fiscal 2010 from $52.3 million in the second quarter of fiscal 2009. In constant currency, Asia/Pacific segment net revenues decreased 17% 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.