Quiksilver, Inc. net revenues for the second quarter of fiscal 2006 increased 21% to $516.9 from $426.9 million in the second quarter of fiscal 2005. Consolidated net income for the second quarter of fiscal 2006 was $3.7 million compared to $34.7 million the year before.

The Company’s fiscal 2006 quarterly results include Rossignol and Cleveland Golf, which were acquired in July 2005. Rossignol’s business is seasonal and has a positive effect on the Company’s first and fourth quarters when it generates profits but has a negative effect in the second and third quarters during its seasonally low shipping periods. Consolidated net income for the second quarter of fiscal 2006 includes $3.8 million in stock compensation required to be expensed by current accounting standards. No stock compensation expense was recorded in the second quarter of fiscal 2005.

Second quarter fully diluted earnings per share was 3 cents versus 28 cents for the second quarter of fiscal 2005. Earnings per share on a fully diluted basis, excluding stock compensation expense and the related tax effect, was 6 cents for the second quarter of fiscal 2006, in line with the company’s previous guidance. The 3 cents difference between 6 cents per share, excluding stock compensation expense, and actual earnings per share of $0.03 per share is determined by dividing $3.8 million, which is the tax-effected stock compensation expense, by 127.8 million weighted average common shares outstanding, assuming dilution.

Net revenues from the company’s newly acquired Rossignol and Cleveland Golf businesses totaled $86.2 million during the second quarter ended April 30, 2006.

Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “We were pleased to meet our profitability targets for the quarter and we remain confident in our ability to do so for the remainder of the year. Our core business is strong, despite some short-term challenges in the Asia-Pacific region. Even with this softness, our diversified business model enabled us to achieve our overall objectives. Additionally, we are excited that our Rossignol business performed above expectations in the second quarter and that the integration is proceeding smoothly.”

Net revenues in the Americas increased 26% during the second quarter of fiscal 2006 to $250.0 million from $199.2 million in the second quarter of fiscal 2005. As measured in U.S. dollars and reported in the financial statements, European net revenues increased 23% during the second quarter of fiscal 2006 to $217.1 million from $176.3 million in the second quarter of fiscal 2005. As measured in euros, European net revenues increased 33% for those same periods. Asia/Pacific net revenues decreased 4% to $48.2 million in the second quarter of fiscal 2006 from $50.3 million in the second quarter of fiscal 2005. As measured in Australian dollars, Asia/Pacific net revenues increased 2% for those same periods.

Inventories totaled $402.0 million at April 30, 2006, which includes $191.0 million from the newly acquired Rossignol and Cleveland Golf businesses. Inventories related to the company’s other businesses grew 19% to $211.0 million at April 30, 2006 from $177.8 million at April 30, 2005. Excluding Rossignol and on a like-for-like basis, average turnover was 3.9x at April 30, 2006 versus 4.1x at April 30, 2005. Accounts receivable totaled $483.0 million at April 30, 2006, which includes $123.0 million from the newly acquired Rossignol and Cleveland Golf businesses. Accounts receivable related to the company’s other businesses increased 5% to $360.0 million at April 30, 2006 from $342.0 million at April 30, 2005.

Bernard Mariette, President of Quiksilver, Inc., commented, “During the quarter we developed a clear focus on priorities, executed well, completed a large portion of our restructuring and integration for Rossignol, and positioned the company to achieve both its short term and long-term objectives. The combination of our powerful brands, our world-class team, and our comprehensive strategic vision for the business will enable us to continue to create a wide variety of compelling growth opportunities, including the creation of a full line of lifestyle apparel products under the Rossignol brand to be launched in 2007.”

Mr. Mariette continued, “We recently returned from our global management meeting with all of our senior managers in Hawaii, and the commitment and ambition of this team is tremendous. Our vision is clear, our brands have great potential and we remain dedicated to further building our position as the world’s leader in the outdoor market.”

The Company reiterated its fiscal 2006 annual revenue guidance of $2.25 to $2.27 billion and its fiscal 2006 annual diluted earnings per share guidance of $0.87 to $0.88, before stock compensation expense and the related tax effect. Stock compensation expense is expected to reduce fiscal 2006 annual diluted earnings per share by $0.11.

Mr. McKnight concluded, “The restructuring of the management team and back office for Rossignol is largely completed. Weve eliminated redundancy, done away with the operational silos that limited growth and profitability, streamlined our infrastructure, and consolidated our warehousing and distribution operations. The integration is on plan, our core business remains strong and we are excited to demonstrate the power of our brands to our shareholders over the quarters and years to come.”

             CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

                                                    Three Months Ended
                                                         April 30,
                                                    ------------------
In thousands, except per share amounts                 2006     2005
                                                    -------- ---------

Revenues, net                                       $516,928 $426,853
Cost of goods sold                                   282,438  233,488
                                                    -------- ---------
   Gross profit                                      234,490  193,365

Selling, general and administrative expense          215,838  139,314
                                                    -------- ---------

Operating income                                      18,652   54,051

Interest expense                                      11,949    3,269
Foreign currency gain                                   (496)    (288)
Minority interest and other expense (income)           1,637      (61)
                                                    -------- ---------
Income before provision for income taxes               5,562   51,131

Provision for income taxes                             1,833   16,464
                                                    -------- ---------

Net income                                          $  3,729 $ 34,667
                                                    ======== =========

Net income per share                                   $0.03    $0.29
                                                    ======== =========

Net income per share, assuming dilution                $0.03    $0.28
                                                    ======== =========

Weighted average common shares outstanding           122,018  118,169
                                                    ======== =========

Weighted average common shares outstanding,
   assuming dilution                                 127,790  123,791
                                                    ======== =========