Quiksilver, Inc. consolidated net revenues for the second quarter of fiscal 2007 increased 17% to $603.8 million from $516.9 million in the second quarter of fiscal 2006. Consolidated net loss for the second quarter of fiscal 2007 was $4.8 million compared to net income of $3.7 million the year before. Second quarter fully diluted loss per share was four cents versus earnings per share of three cents for the second quarter of fiscal 2006.
Robert B. McKnight, Jr., chairman of the board and CEO of Quiksilver, Inc., commented, “We finished the quarter in line with our revised plan and we are very confident with the direction of our business over the longer term. While clearly our opportunity, to some degree, is dependent on a normal winter season, we have positioned ourselves for improved results in our Rossignol and Cleveland Golf businesses. We have rationalized our infrastructure, streamlined our industrial base, and strengthened our organization. At the same time, we are extremely pleased with the strength that continues to be evident in our apparel and footwear operations.”
Net revenues in the Americas increased 12% during the second quarter of fiscal 2007 to $279.8 million from $250.0 million in the second quarter of fiscal 2006. As measured in U.S. dollars and reported in the financial statements, European net revenues increased 24% during the second quarter of fiscal 2007 to $268.8 million from $217.1 million in the second quarter of fiscal 2006. As measured in euros, European net revenues increased 13% for those same periods. Asia/Pacific net revenues increased 12% to $54.0 million in the second quarter of fiscal 2007 from $48.2 million in the second quarter of fiscal 2006. As measured in Australian dollars, Asia/Pacific net revenues increased 3% for those same periods.
Consolidated inventories increased 15% to $463.3 million at April 30, 2007 from $402.0 million at April 30, 2006. Consolidated trade accounts receivable increased 25% to $603.7 million at April 30, 2007 from $483.0 million at April 30, 2006.
Bernard Mariette, the company's president, commented, “We are tremendously pleased with the performance from our core apparel business in each of our territories. Quiksilver, Roxy, and DC continue to experience healthy growth and profitability. In order to maximize the financial opportunity associated with the performance of these marquis lifestyle brands, we are working hard to improve our sourcing efficiencies and to implement other cost synergies. Over the next few years, our focus will be to complete our transformation from a multi-national company to a truly global organization and to unlock the associated financial benefits.”
The Company said it continues to expect fiscal 2007 annual revenues of approximately $2.5 billion and fiscal 2007 annual diluted earnings per share of 53 cents. The Company noted, however, that it expects a change to its previous quarterly estimates, in which earnings per share of three cents would shift from the third to the fourth fiscal quarter.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
April 30,
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In thousands, except per share amounts 2007 2006
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Revenues, net $603,799 $516,928
Cost of goods sold 332,936 282,438
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Gross profit 270,863 234,490
Selling, general and administrative expense 262,082 215,838
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Operating income 8,781 18,652
Interest expense 14,789 11,949
Foreign currency loss (gain) 1,473 (496)
Minority interest and other expense (457) 1,637
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(Loss) income before (benefit) provision for
income taxes (7,024) 5,562
(Benefit) provision for income taxes (2,224) 1,833
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Net (loss) income $ (4,800) $ 3,729
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Net (loss) income per share $ (0.04) $ 0.03
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Net (loss) income per share, assuming dilution $ (0.04) $ 0.03
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Weighted average common shares outstanding 123,596 122,018
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Weighted average common shares outstanding,
assuming dilution 123,596 127,790
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