Quiksilver performs well in Q3

07 Sep '10

4 min read

Quiksilver, Inc. announced operating results for the third fiscal quarter ended July 31, 2010. Consolidated net revenues from continuing operations for the third quarter of fiscal 2010 were $441.5 million compared to $501.4 million in the third quarter of fiscal 2009.

Pro-forma consolidated income from continuing operations for the third quarter of fiscal 2010 was $12.5 million, or $0.08 per share, compared to $3.7 million, or $0.03 per share, for the third quarter of fiscal 2009. Pro-forma income for the third quarter of fiscal 2010 excludes $2.6 million of asset impairment charges and $1.8 million in restructuring charges, consisting primarily of lease loss accruals. Including these amounts, income from continuing operations was $8.2 million, or $0.05 per share, compared to $3.4 million, or $0.03 per share, for the third quarter of fiscal 2009.

A reconciliation of GAAP results to pro-forma results is included in the accompanying tables. Net revenues and 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. Our team executed well in an economic environment that continues to present significant challenges around the world. We're also delighted to report substantial continued improvement to our capital structure, especially after completing the debt-for-equity exchange with Rhône in early August.”

Third Quarter Financial Highlights:

• Pro-forma Adjusted EBITDA increased 22% to $53.5 million compared to $44.0 million in the third quarter of fiscal 2009 despite a 12% revenue decline.
• Gross margin improved 560 basis points to 52.3% compared to 46.7% in the third quarter of fiscal 2009.
• Operating income in the Americas region was 11.8% of revenues as gross margin improved 900 basis points to 46.7% from 37.7% in the third quarter of fiscal 2009.
• Net debt at July 31, 2010, was $687 million, reduced by $183 million compared to $870 million at July 31, 2009.

Net revenues in the Americas decreased 9% during the third quarter of fiscal 2010 to $234.6 million from $256.8 million in the third quarter of fiscal 2009. As measured in U.S. dollars and reported in the financial statements, European net revenues decreased 20% during the third quarter of fiscal 2010 to $151.7 million from $189.0 million in the third quarter of fiscal 2009.

In constant currency, European segment net revenues decreased 11% compared to the prior year. As measured in U.S. dollars and reported in the financial statements, Asia/Pacific net revenues decreased 1% to $54.5 million in the third quarter of fiscal 2010 from $55.1 million in the third quarter of fiscal 2009.

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