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PR: Quiksilver Inc. Reports 1998 Fourth Quarter and Twelve Months Operating Results
12/16/98
COSTA MESA, Calif.--(BUSINESS WIRE)--Dec. 16, 1998--Robert B.
McKnight Jr., chairman of the board and CEO of Quiksilver
Inc. (NYSE:ZQK), Wednesday announced operating results for the fourth
quarter and twelve months ended Oct. 31, 1998.
Consolidated net sales for the fourth quarter of fiscal 1998
increased 57.0% to $104,407,000 as compared with fiscal 1997 fourth
quarter consolidated net sales of $66,517,000. Consolidated net income
for the fourth quarter of fiscal 1998 increased 99.0% to $6,314,000,
or $0.43 per share on a diluted basis, as compared with $3,173,000, or
$0.22 per share on a diluted basis, for the fourth quarter of fiscal
1997.
Basic earnings per share were $0.44 for the current quarter
compared with $0.23 per share for the fourth quarter of fiscal 1997.
Domestic net sales during the fourth quarter of fiscal 1998 increased
61.2% to $70,615,000 as compared with fiscal 1997 fourth quarter
domestic net sales of $43,813,000.
European net sales during the fourth quarter of fiscal 1998, as
measured in French francs, increased 41.5% compared with the fiscal
1997 fourth quarter.
As a result of a weaker U.S. dollar vs. the French franc in the
fourth quarter of fiscal 1998 compared with fiscal 1997, and in
contrast to the first three quarters of the year, European net sales
during the fourth quarter of fiscal 1998 rose faster in U.S. dollar
terms, increasing 48.8% to $33,792,000, as compared with fiscal 1997
fourth quarter European net sales of $22,704,000.
Consolidated net sales for the twelve months ended Oct. 31, 1998,
increased 36.4% to $316,115,000 as compared with the twelve months
ended Oct. 31, 1997, consolidated net sales of $231,783,000.
Consolidated net income for the twelve months ended Oct. 31,
1998, increased 42.1% to $17,963,000, or $1.23 per share on a diluted
basis, as compared with $12,644,000, or $0.90 per share on a diluted
basis, for the twelve months ended Oct. 31, 1997.
Basic earnings per share were $1.27 for the fiscal year compared
with $0.92 for fiscal 1997. Domestic net sales during the twelve
months ended Oct. 31, 1998, increased 34.6% to $202,807,000 as
compared with twelve months ended Oct. 31, 1997, domestic net sales of
$150,628,000.
European net sales during the twelve months ended Oct. 31, 1998,
as measured in French francs, increased 44.8% compared with the
twelve months ended Oct. 31, 1997. European net sales during the
twelve months ended Oct. 31, 1998, in U.S. dollar terms increased
39.6% to $113,308,000 as compared with twelve months ended Oct. 31,
1997, European net sales of $81,155,000.
Consolidated inventories increased 7.3% to $70,575,000 at
Oct. 31, 1998, from $65,797,000 at July 31, 1998, and increased 45.9%
from $48,372,000 at Oct. 31, 1997. Inventories increased from 1997
levels primarily to support increased sales for the Holiday and Spring
seasons of the current year and from accelerated finished goods
production in Europe.
Consolidated trade accounts receivable increased 29.0% to
$78,390,000 at Oct. 31, 1998, from $60,752,000 at July 31, 1998, and
increased 43.4% from $54,668,000 at Oct. 31, 1997.
McKnight said: "We are extremely pleased with our results for the
fourth quarter and the full fiscal year. We continue to outperform the
market with very strong sell-throughs both here and in Europe, and our
momentum should continue considering our excellent future bookings.
The New York City Boardriders Club in SoHo is performing above
expectations, and our Paris store on the Champs Elysees opened with
very strong sales in its first weeks."
McKnight continued: "We continue to see more interest and demand
from our national accounts as our expanded national marketing presence
is gaining us more exposure. There is tremendous interest in our
Maverick's Men Who Ride Mountains' Big Wave Event, which has been
featured in our national print campaign.
"This core event, along with others such as the Quiksilver Air
and Style contest in Innsbruck and the Quiksilver Eddie Aikau and Roxy
Pro contests in Hawaii, continues to solidify our image as the
authentic brand in the beach-inspired youth apparel market," McKnight
explained. "This very large Generation Y (12-20 years old) demographic
and its spending power is driving this active youth market, and we're
the recognized clothing brand of choice," he concluded.
Quiksilver Inc. and its wholly owned subsidiaries design, arrange
for the manufacture of, and distribute casual sportswear,
snowboardwear and swimwear primarily for young men, boys and young
women under the Quiksilver, Quiksilver Roxy, Raisins, Radio Fiji,
Leilani, and QS Silver Edition labels, and manufacture snowboards,
snowboard boots and bindings under the Lib Tech, Gnu, Arcane, and Bent
Metal labels.
The company selectively distributes its products in surf shops,
snowboard shops, specialty stores and department stores in the United
States, Europe and Japan.
Consolidated Statements of Income
(Unaudited)
Three Months Ended
Oct. 31, 1998 Oct. 31, 1997
Net sales $104,407,000 $ 66,517,000
Cost of goods sold 61,502,000 40,099,000
Gross profit 42,905,000 26,418,000
Operating expenses:
Selling, general and
administrative expense 30,817,000 19,857,000
Royalty income (378,000) (276,000)
Royalty expense 1,132,000 821,000
Total operating expenses 31,571,000 20,402,000
Operating income 11,334,000 6,016,000
Interest expense 799,000 578,000
Foreign currency (gain) loss (631,000) 5,000
Other expense 102,000 48,000
Income before provision for
income taxes 11,064,000 5,385,000
Provision for income taxes 4,750,000 2,212,000
Net Income $ 6,314,000 $ 3,173,000
Net income per share(a) $0.44 $0.23
Net income per share, assuming
dilution(a) $0.43 $0.22
Weighted average common shares
outstanding(a) 14,234,000 13,929,000
Weighted average common shares
outstanding, assuming
dilution(a) 14,720,000 14,405,000
Consolidated Statements of Income
(Unaudited)
Twelve Months Ended
Oct. 31, 1998 Oct. 31, 1997
Net sales $316,115,000 $231,783,000
Cost of goods sold 189,399,000 141,487,000
Gross profit 126,716,000 90,296,000
Operating expenses:
Selling, general and
administrative expense 91,508,000 65,424,000
Royalty income (1,514,000) (1,379,000)
Royalty expense 3,851,000 2,872,000
Total operating expenses 93,845,000 66,917,000
Operating income 32,871,000 23,379,000
Interest expense 2,734,000 1,818,000
Foreign currency (gain) loss (946,000) 80,000
Other expense 315,000 198,000
Income before provision for income
taxes 30,768,000 21,283,000
Provision for income taxes 12,805,000 8,639,000
Net income $ 17,963,000 $ 12,644,000
Net income per share(a) $1.27 $0.92
Net income per share, assuming
dilution(a) $1.23 $0.90
Weighted average common shares
outstanding(a) 14,096,000 13,815,000
Weighted average common shares 14,547,000 14,074,000
outstanding, assuming
dilation(a)
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