PR: Quiksilver Reports Sales Increase For Second-Quarter And Six-Month Results
(6-10-98)

(Press Release, June 10)—Robert B. McKnight Jr., chairman of the board and chief executive officer of Quiksilver Inc. (Nasdaq:QUIK), has announced operating results for the second quarter and six months ended April 30, 1998.

Consolidated net sales for the second quarter of fiscal 1998 increased 28.6 percent to 78.2-million dollars as compared with fiscal 1997 second-quarter consolidated net sales of 60.8-million dollars. Consolidated net income for the second quarter of fiscal 1998 increased 14.9 percent to 5.5-million dollars, or 38 cents per share on a diluted basis, as compared with 4.8-million dollars or 34 cents per share on a diluted basis, for the second quarter of fiscal 1997.

Basic earnings per share was 39 cents for the current quarter, compared with 34 cents for the second quarter of fiscal 1997. Domestic net sales during the second quarter of fiscal 1998 increased 22.7 percent to 49.6-million dollars as compared with fiscal 1997 second-quarter domestic net sales of 40.4-million dollars.

European net sales during the second quarter of fiscal 1998 increased 40.5 percent to 28.6-million dollars, as compared with fiscal 1997 second-quarter European net sales of 20.3-million dollars. European net sales as measured in French francs for those same periods increased 50.1 percent. (All references to shares and per-share amounts reflect a two-for-one stock split effected April 24, 1998.)

Consolidated net sales for the first six months of fiscal 1998 increased 25 percent to 133.4-million dollars, as compared with fiscal 1997 first-six-months consolidated net sales of 106.7-million dollars. Consolidated net income for the first six months of fiscal 1998 increased 16.5 percent to 7.7-million dollars, or 53 cents per share on a diluted basis, as compared with 6.5-million dollars, or 46 cents per share on a diluted basis, for the first six months of fiscal 1997.

Basic earnings per share was 54 cents for the first six months, compared with 47 cents for the first six months of fiscal 1997. Domestic net sales during the first six months of fiscal 1998 increased 19.8 percent to 82.2-million dollars, as compared with fiscal 1997 first-six-months domestic net sales of 68.6-million dollars.

European net sales during the first six months of fiscal 1998 increased 34.4 percent to 51.2-million dollars, as compared with fiscal 1997 first-six-months European net sales of 38.1-million dollars. European net sales as measured in French francs for those same periods increased 48.0 percent.

Consolidated inventories increased 13.3 percent to 54.8-million dollars at April 30, 1998, from 48.4-million dollars at October 31, 1997, while decreasing 10.6 percent compared with January 31, 1998. These changes in inventory levels are a result of seasonal factors and sales growth.

Consolidated trade accounts receivable increased 22.6 percent to 67-million dollars at April 30, 1998, from 54.7-million dollars at October 31, 1997. This increase in accounts receivable is generally consistent with the increase in net sales.

McKnight said he was extremely pleased with the positive results of the second quarter: "It's great that both the European and the domestic businesses are showing strong growth and earnings. Gross profit margins have improved and expenses are on target. The reception of our spring and summer lines was tremendous, and it is translating into current successful sell-throughs and strong reorders."

"The momentum continues as domestic fall bookings are well ahead of last year," he said, "and European bookings for the fall/winter season are also up strongly versus last year. Quiksilver is sharing in the revolution happening in the market as Generation Y consumers, with their passion for the active-sports lifestyle, are making their impact felt."

McKnight also said the company is excited about three more company-owned Boardriders Clubs that will be opening over the next several months. "We attribute much of our recent success to our emphasis and commitment to building our image through advertising, Boardriders Clubs, and other promotions," he said. "These programs are continuing. We are breaking new ground with our upcoming store in Paris on the Champs Elysees and a store in the Rivoli District in Paris. Along with our upcoming store in the Soho district of New York, these flagship stores add to our image and credibility as an international brand."

Quiksilver 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 Que 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.

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