Quiksilver, Inc. reported sales dipped 2% in its first quarter ended Jan. 31, to $432.7 million from $443.3 million a year ago. The pro-forma consolidated loss from continuing operations for the first quarter of fiscal 2010 was $2.5 million, or 2 cents per share, an improvement over a deficit of $9.0 million, or 7 cents per share, for the first quarter of fiscal 2009.
The pro-forma loss for the first quarter of fiscal 2010 excludes a $3.0 million severance charge, primarily in the Americas. Including this charge, the loss from continuing operations was $5.4 million, or 4 cents per share, compared to $65.9 million, or 52 cents, a year ago. Net revenues and the loss 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, “Were pleased to deliver first quarter financial results that exceed our prior expectations. We have taken bold steps over the past several quarters to improve our operations and with continuing hopes for economic stabilization and improvement, we are poised to benefit from any upturn in discretionary consumer spending. While we recognize that U.S. retail trends in general are improving, it appears that the pace of global recovery will not be uniform. That being said, we are well-positioned to deliver improved financial performance in the future.”
Net revenues in the Americas decreased 8% during the first quarter of fiscal 2010 to $187.0 million from $203.4 million in the first quarter of fiscal 2009. As measured in U.S. dollars and reported in the financial statements, European net revenues decreased 2% during the first quarter of fiscal 2010 to $177.9 million from $181.7 million in the first quarter of fiscal 2009. In constant currency, European segment net revenues decreased 12% compared to the prior year.
As measured in U.S. dollars and reported in the financial statements, Asia/Pacific net revenues increased 16% to $67.1 million in the first quarter of fiscal 2010 from $57.6 million in the first quarter of fiscal 2009. In constant currency, Asia/Pacific segment net revenues decreased 15% compared to the prior year.
Consolidated inventories decreased 21% to $301.2 million at January 31, 2010 from $380.5 million at January 31, 2009. Consolidated trade accounts receivable decreased 13% to $323.0 million at January 31, 2010 from $373.4 million at January 31, 2009.
Addressing its outlook for continuing operations, the company stated that based on current trends, second quarter revenues are expected to be down in the high single-digits on a percentage basis compared to the same quarter a year ago and that it expects to generate earnings per share on a diluted basis in the low-single-digit range. The company indicated that longer term visibility into revenues and earnings remains somewhat limited at the present time.
The company had approximately $148 million of availability under its credit lines in addition to approximately $150 million of unrestricted cash at the end of the first quarter.
Quiksilver’s brands include Quiksilver, Roxy, DC, Lib Tech and Hawk.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||
| Three Months Ended January 31, | ||||||||||
| In thousands, except per share amounts | 2010 | 2009 | ||||||||
| Revenues, net | $ | 432,737 | $ | 443,278 | ||||||
| Cost of goods sold | 210,588 | 236,115 | ||||||||
| Gross profit | 222,149 | 207,163 | ||||||||
| Selling, general and administrative expense | 203,160 | 206,818 | ||||||||
| Operating income | 18,989 | 345 | ||||||||
| Interest expense | 21,873 | 14,154 | ||||||||
| Foreign currency (gain) loss | (1,979 | ) | 1,430 | |||||||
| Other expense (income) | 5 | (574 | ) | |||||||
| Loss before provision for income taxes | (910 | ) | (14,665 | ) | ||||||
| Provision for income taxes | 3,674 | 50,581 | ||||||||
| Loss from continuing operations | (4,584 | ) | (65,246 | ) | ||||||
| Income (loss) from discontinued operations | 76 | (128,564 | ) | |||||||
| Net loss | (4,508 | ) | (193,810 | ) | ||||||
| Less: net income attributable to non-controlling interest | (846 | ) | (616 | ) | ||||||
| Net loss attributable to Quiksilver, Inc. | $ | (5,354 | ) | $ | (194,426 | ) | ||||
| Basic and diluted EPS: | ||||||||||
| Loss per share from continuing operations attributable to Quiksilver, Inc. | $ | (0.04 | ) | $ | (0.52 | ) | ||||
| Income (loss) per share from discontinued operations attributable to Quiksilver Inc. | $ | 0.00 | $ | (1.01 | ) | |||||
| Net loss per share attributable to Quiksilver, Inc. | $ | (0.04 | ) | $ | (1.53 | ) | ||||
| Weighted average common shares outstanding | 127,648 | 127,039 | ||||||||
| Amounts attributable to Quiksilver, Inc.: | ||||||||||
| Loss from continuing operations | $ | (5,430 | ) | $ | (65,862 | ) | ||||
| Income (loss) from discontinued operations | 76 | (128,564 | ) | |||||||
| Net loss | $ | (5,354 | ) | $ | (194,426 | ) | ||||
