Quiksilver, Inc. announced that consolidated net revenues for the third quarter ended July 31 increased 17% to $612.8 million, from $525.9 million in the third quarter of fiscal 2006. The company incurred a net loss for the third quarter of fiscal 2007 of $7.9 million, or 6 cents per share, compared to net income of $5.3 million, or 4 cents per share, the year before.
Net revenues in the Americas increased 21% during the third quarter of fiscal 2007 to $335.0 million from $277.4 million in the third quarter of fiscal 2006. As measured in U.S. dollars and reported in the financial statements, European net revenues increased 11% during the third quarter of fiscal 2007 to $212.7 million from $191.0 million in the third quarter of fiscal 2006. As measured in euros, European net revenues increased 4% for those same periods. Asia/Pacific net revenues increased 13% to $63.9 million in the third quarter of fiscal 2007 from $56.3 million in the third quarter of fiscal 2006. As measured in Australian dollars, Asia/Pacific net revenues increased 1% for those same periods.
Consolidated inventories increased 6% to $545.5 million at July 31, 2007 from $516.4 million at July 31, 2006. Consolidated trade accounts receivable increased 24% to $611.0 million at July 31, 2007 from $492.4 million at July 31, 2006.
Bernard Mariette, President of Quiksilver, Inc., commented, “Our over-arching goal is to transform our business from a well-diversified multi-national company into a truly global organization. We have solidified the Quiksilver, Roxy and DC brands under global brand managers who we believe can now develop the kind of consistency and coordination, in terms of marketing, retail presentation and product development necessary to maximize their potential both in terms of sales and profitability. We have also begun a process of consolidating our sourcing operations on a global scale that we believe will ultimately provide significant margin benefits. This quarter we introduced our first Roxy fragrance worldwide, in keeping with the global approach to our business. And we'll do the same with our launch of Quiksilver Womens in the Fall.”
Mr. Mariette continued, “Of course all of our initiatives depend upon people and we feel confident in our team. This includes the recent hiring of several key people and the repositioning of other veteran employees in important global positions. All in all, we are very excited about the groundwork we have laid to transform our business.”
Mr. McKnight concluded, “The power of the brands within our organization is undeniably compelling. Quiksilver, Roxy, DC, Rossignol and Cleveland are leaders in their respective markets and each of them has an opportunity to grow in stature, diversify their product mix, expand their reach, and cement their position in the hearts and minds of consumers around the world.”
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended
July 31,
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In thousands, except per share amounts 2007 2006
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Revenues, net $612,756 $525,854
Cost of goods sold 331,540 277,079
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Gross profit 281,216 248,775
Selling, general and administrative expense 262,232 228,843
Intangible asset impairment and related charges (1) 13,175 --
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Operating income 5,809 19,932
Interest expense 15,332 11,877
Foreign currency loss 65 377
Minority interest and other (income) expense (18) 484
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(Loss) income before (benefit) provision for income
taxes (9,570) 7,194
(Benefit) provision for income taxes (1,703) 1,858
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Net (loss) income $ (7,867) $ 5,336
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Net (loss) income per share $ (0.06) $ 0.04
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Net (loss) income per share, assuming dilution $ (0.06) $ 0.04
