Quiksilver Sees 34% Revenue Increase; Income Jumps 55%

Quiksilver's net revenues for the first quarter of fiscal 2005 increased 34% to $342.9 million as compared to fiscal 2004 first quarter consolidated revenues of $256.1 million. Consolidated net income increased 55% to $14.2 million as compared to $9.2 million. First quarter fully diluted earnings per share was 23 cents versus 16 cents for the first quarter of fiscal 2004.

Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “I am incredibly proud of our company and our ability to consistently execute at the highest level. Financially, our strong results reflect the global demand for our entire portfolio of brands along with the continued improvements in our operating efficiencies. From a merchandise perspective, the tremendous feedback we received at the recent tradeshows speaks to the creativity of our team and our ongoing commitment to bringing the best product to market. Strategically, we are effectively integrating our businesses around the world and creating a superior platform for growth.”

Net revenues in the Americas increased 29% during the first quarter of fiscal 2005 to $159.3 million as compared to fiscal 2004 first quarter revenues of $123.2 million. As measured in U.S. dollars and reported in the financial statements, European net revenues increased 25% during the first quarter of fiscal 2005 to $132.6 million as compared to fiscal 2004 first quarter European net revenues of $106.2 million. As measured in euros, European net revenues increased 16% for those same periods. Asia/Pacific net revenues increased 92% to $50.5 million in the first quarter of fiscal 2005 compared to $26.3 million in the first quarter of fiscal 2004.

Consolidated inventories increased 32% to $236.8 million at January 31, 2005 from $179.3 million at January 31, 2004. Inventories grew 29% in constant dollars. Consolidated trade accounts receivable increased 26% to $252.1 million at January 31, 2005 from $200.6 million at January 31, 2004. Trade account receivable growth was modest compared to the increase in revenues as average days sales outstanding decreased about four days.

Bernard Mariette, President of Quiksilver, Inc., commented, “We are very happy to post strong results for another quarter. The clarity in our mission and the consistency in our execution continue to guide our investments in people and businesses. We are confident that the strength of our brands, our leadership status and our well-defined growth strategy will allow us to continue to deliver excellent financial performance into the future.”

The Company also raised its net revenues and earnings per share guidance for fiscal 2005. The Company now expects fiscal 2005 net revenues to range from $1.48 billion to $1.50 billion and earnings per share to range from $1.62 to $1.65.

Mr. McKnight concluded, “We are extremely pleased with the vibrancy of our brands and the pace of our businesses. We begin the new fiscal year with solid momentum and a heightened level of enthusiasm about our future prospects. Quiksilver has evolved into the premier lifestyle company for the youth culture around the globe and we are committed to further building on our powerful position in the market.”

 

             CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

                                                Three Months Ended
                                                     January 31,
                                             -------------------------
In thousands, except per share amounts            2005         2004
                                             ------------ ------------

Revenues, net                               $    342,860 $    256,142
Cost of goods sold                               189,954      142,473
                                             ------------ ------------
   Gross profit                                  152,906      113,669

Selling, general and administrative expense      129,483       94,735
                                             ------------ ------------

Operating income                                  23,423       18,934

Interest expense                                   1,789        1,589
Foreign currency loss                                463        3,267
Other expense                                        206          282
                                             ------------ ------------
Income before provision for income taxes          20,965       13,796

Provision for income taxes                         6,751        4,622
                                             ------------ ------------

Net income                                  $     14,214 $      9,174
                                             ============ ============

Net income per share                        $       0.24 $       0.16
                                             ============ ============

Net income per share, assuming dilution     $       0.23 $       0.16
                                             ============ ============

Weighted average common shares outstanding        58,796       55,622
                                             ============ ============

Weighted average common shares outstanding,
   assuming dilution                              61,577       57,927
                                             ============ ============