HUNTINGTON BEACH, Calif.–Dec. 16, 1999–RobertB. McKnight Jr., chairman of the board and chief executive officer ofQuiksilver Inc. (NYSE:ZQK), today announced operating results for thefourth quarter and 12 months ended Oct. 31, 1999.
Consolidated net sales for the fourth quarter of fiscal 1999increased 19.2% to $124,499,000 as compared with fiscal 1998fourth-quarter consolidated net sales of $104,407,000. Consolidatednet income for the fourth quarter of fiscal 1999 increased 24.6% to$7,865,000, or $0.34 per share on a diluted basis, as compared with$6,314,000, or $0.29 per share on a diluted basis, for the fourthquarter of fiscal 1998.
Basic earnings per share was $0.35 for the current quarter,compared with $0.30 per share for the fourth quarter of fiscal 1998.Domestic net sales during the fourth quarter of fiscal 1999 increased21.4% to $85,714,000 as compared with fiscal 1998 fourth-quarterdomestic net sales of $70,615,000. European net sales during thefourth quarter of fiscal 1999 as measured in French Francs increased23.8% compared with the fiscal 1998 fourth quarter.
As a result of a weaker French Franc vs. the U.S. dollar in thefourth quarter of fiscal 1999 compared with fiscal 1998, European netsales during the fourth quarter of fiscal 1999 increased 14.8% to$38,785,000 as compared with fiscal 1998 fourth-quarter European netsales of $33,792,000.
Consolidated net sales for the 12 months ended Oct. 31, 1999,increased 40.4% to $443,734,000 as compared with the 12 months endedOct. 31, 1998, consolidated net sales of $316,115,000. Consolidatednet income for the 12 months ended Oct. 31, 1999, increased 48.0% to$26,584,000, or $1.14 per share on a diluted basis, as compared with$17,963,000, or $0.82 per share on a diluted basis, for the 12 monthsended Oct. 31, 1998.
Basic earnings per share was $1.20 per share for the fiscal yearcompared with $0.85 for fiscal 1998. Domestic net sales during the 12months ended Oct. 31, 1999, increased 43.2% to $290,363,000, ascompared with 12 months ended Oct. 31, 1998, domestic net sales of$202,807,000.
European net sales during the 12 months ended Oct. 31, 1999, asmeasured in French Francs increased 37.6% compared with the 12 monthsended Oct. 31, 1998. European net sales during the 12 months endedOct. 31, 1999, in U.S. dollar terms increased 35.4% to $153,371,000 ascompared with 12 months ended Oct. 31, 1998, European net sales of$113,308,000.
Consolidated inventories increased 2.3% to $72,207,000 at Oct.31, 1999, from $70,575,000 at Oct. 31, 1998. Inventories increasedsomewhat from 1998 levels primarily to support increased sales for theholiday and spring seasons of the current year. Inventory turnoverimproved both domestically and in Europe.
Consolidated trade accounts receivable increased 37.3% to$107,619,000 at Oct. 31, 1999, from $78,390,000 at Oct. 31, 1998,which is consistent with the growth in net sales in the latter portionof the fourth quarter.
McKnight said: “Fiscal 1999 was a banner year for Quiksilver. I’mvery pleased with 40% sales and 48% earnings growth and thewell-rounded nature of our growth. It came both domestically and inEurope and across all of our men’s and women’s divisions. I’mparticularly proud of the great performance and hard work of ourpeople in 1999, especially considering we moved both our domestic andEuropean headquarters this year.
“During the year, the company opened 25 Boardriders Clubs,including our store on the Champs Elysees, and we just opened ourlatest flagship locations in Boston and London in the past two weeks.
McKnight continued: “I’m very proud of the development and growthin our two, strong Generation Y brands, Quiksilver and Roxy. Theopportunities before us are excellent, and the company’s in greatshape to take advantage of those opportunities going into the newmillennium.”
Quiksilver Inc. designs, produces and distributes clothing,accessories and relateproducts for active-minded people and developsbrands that represent a casual lifestyle — driven from a boardridingheritage. Quiksilver’s authenticity is evident in its innovativeproducts, events and retail environments across the globe.
Quiksilver’s primary focus is apparel for young men and youngwomen under the Quiksilver, Quiksilver Roxy, Raisins and Radio Fijilabels. Quiksilver also manufactures apparel for boys (QuiksilverBoys), girls (Teenie Wahini and Raisins Girls), men (QS SilverEdition) and women (Leilani), as well as snowboards, snowboard bootsand bindings under the Lib Technologies, Gnu and Bent Metal labels.
Distribution is primarily in the United States and Europe and isbased in surf shops and specialty stores that endeavor to provide anoutstanding retail experience for their customers.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended
Net sales $ 124,499,000 $ 104,407,000Cost of goods sold 75,676,000 61,502,000
Gross profit 48,823,000 42,905,000Operating expenses: Selling, general and
administrative expense 34,804,000 30,817,000
Royalty income (615,000) (378,000) Royalty expense 1,432,000 1,132,000Total operating expenses 35,621,000 31,571,000Operating income 13,202,000 11,334,000Interest expense 801,000 799,000Foreign currency gain (734,000) (631,000)Other expense 194,000 102,000Income before provision for income taxes 12,941,000 11,064,000Provision for income taxes 5,076,000 4,750,000Net income $ 7,865,000 $ 6,314,000Net income per share (a) $ 0.35 $ 0.30Net income per share, assuming dilution (a) $ 0.34 $ 0.29Weighted average common shares outstanding (a) 22,317,000 21,351,000Weighted average common shares outstanding, assuming dilution (a) 23,286,000 22,080,000
Twelve Months Ended
Net sales $ 443,734,000 $ 316,115,000Cost of goods sold 268,184,000 189,399,000
Gross profit 175,550,000 126,716,000Operating expenses: Selling, general and
administrative expense 124,479,000 91,508,000
Royalty income (2,123,000) (1,514,000) Royalty expense 5,266,000 3,851,000Total operating expenses 127,622,000 93,845,000Operating income 47,928,000 32,871,000Interest expense 3,476,000 2,734,000Foreign currency gain (960,000) (946,000)Other expense 545,000 315,000Income before provision for income taxes 44,867,000 30,768,000Provision for income taxes 18,283,000 12,805,000Net income $ 26,584,000 $ 17,963,000Net income per share (a) $ 1.20 $ 0.85Net income per share, assuming dilution (a) $ 1.14 $ 0.82Weighted average common shares outstanding (a) 22,096,000 21,144,000Weighted average common shares outstanding, assuming dilution (a) 23,284,000 21,820,000
(a) Per share amounts and shares outstanding have been adjusted to
reflect a three-for-two stock split effected on April 23, 1999. 23,284,000 21,820,000
(a) Per share amounts and shares outstanding have been adjusted to
reflect a three-for-two stock split effected on April 23, 1999.