HUNTINGTON BEACH, Calif.–Sept. 12, 2002– Company Reports EPS of $0.36, Exceeding First Call Earnings per Share Consensus of $0.32 — Consolidated Sales Increase 12% — Consolidated Holiday Bookings Increase 18% —
Quiksilver, Inc. (NYSE:ZQK), today announced operating results for the third quarter and nine months ended July 31, 2002.
Consolidated net sales for the third quarter of fiscal 2002 increased 12.0% to $173,962,000 as compared to fiscal 2001 third quarter consolidated net sales of $155,259,000. Consolidated net income for the third quarter of fiscal 2002 totaled $8,845,000 or $0.36 per share on a diluted basis as compared to $7,955,000 or $0.33 per share on a diluted basis for the third quarter of fiscal 2001.
Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “These results represent our third consecutive quarter of sales and earnings out-performance. The ongoing strength of our brands, the consistency of our product and our heightened level of execution, has allowed us to once again exceed our goals despite challenges in the retail market both here and abroad. Furthermore, the growing popularity of the boardsports lifestyle around the world and our leadership position in the market provide us with significant growth opportunities into the future.”
Domestic net sales during the third quarter of fiscal 2002 increased 5.7% to $107,316,000 as compared to fiscal 2001 third quarter domestic net sales of $101,510,000. As measured in euros, European net sales increased 12.0% for those same periods. As measured in U.S. dollars and reported in the financial statements, European net sales increased 24.0% during the third quarter of fiscal 2002 to $66,646,000 as compared to fiscal 2001 third quarter European net sales of $53,749,000.
Consolidated net sales for the first nine months of fiscal 2002 increased 13.6% to $505,737,000 as compared to fiscal 2001 first nine months consolidated net sales of $445,290,000. Consolidated net income for the first nine months of fiscal 2002 was $25,394,000 or $1.04 per share on a diluted basis as compared to $25,642,000 or $1.06 per share on a diluted basis for the first nine months of fiscal 2001. Domestic net sales during the first nine months of fiscal 2002 increased 6.2% to $308,358,000 as compared to fiscal 2001 first nine months domestic net sales of $290,477,000. As measured in euros, European net sales increased 25.1% for those same periods. As measured in U.S. dollars and reported in the financial statements, European net sales increased 27.5% during the first nine months of fiscal 2002 to $197,379,000 as compared to fiscal 2001 first nine months European net sales of $154,813,000.
Mr. McKnight continued, “Our continued strong bookings trend for the Holiday season coupled with the solid pace of our sell-through in all channels of distribution bodes well for our business. In addition, the overwhelmingly positive response we received at recent tradeshows gives us confidence that this trend will continue into the Spring season. Even so, we are well aware that retail remains challenging and we are planning our business with an appropriate level of conservatism, particularly with respect to inventories.”
Consolidated inventories decreased 13.2% to $93,316,000 at July 31, 2002 from $107,562,000 at October 31, 2001, and decreased 25.6% compared to July 31, 2001. Consolidated trade accounts receivable increased 6.3% to $165,675,000 at July 31, 2002 from $155,879,000 at October 31, 2001, and increased 11.0% compared to July 31, 2001.
Bernard Mariette, President of Quiksilver, Inc., added, “We are delighted to report consolidated sales up 12% and net income up 11%. Additionally, our efforts to manage working capital and inventories have been highly successful and resulted in a $35 million improvement in operating cash flows in the third quarter alone. This performance underscores the commitment and capability of our ppeople and the strength of our operating model.”
Mr. McKnight added, “Our business in the international markets continues to benefit from the growing appeal of the lifestyle that our brands represent. We believe that not only are we currently under-penetrated in many territories, but that the size of the market for the lifestyle will continue to grow at a strong pace. We have an exceptionally well-developed global infrastructure, particularly for a company of our size.”
Mr. McKnight concluded, “We continue to expand our reach worldwide and further build our recognition as a dominant global lifestyle company. By staying true to our roots and our lifestyle, we have created a powerful platform on which to grow. Our momentum is strong, our team is focused, and we look forward to capitalizing on the many opportunities that lie ahead.”
Quiksilver designs, produces and distributes clothing, accessories and related products for active-minded people and develops brands that represent a casual lifestyle — driven from a boardriding heritage. Quiksilver’s authenticity is evident in its innovative products, events and retail environments across the globe.
Quiksilver’s primary focus is apparel for young men and young women under the Quiksilver, Roxy, Raisins, and Radio Fiji labels. Quiksilver also manufactures apparel for boys (Quiksilver Boys and Hawk Clothing), girls (Roxy Girl, Teenie Wahine and Raisins Girls), men (Quiksilveredition and Fidra) and women (Leilani swimwear), as well as snowboards, snowboard boots and bindings under the Lib Technologies, Gnu, Supernatural Manufacturing and Bent Metal labels. Quiksilver’s products are sold throughout the world, primarily in surf shops and specialty stores that provide an outstanding retail experience for their customers.