QUIK CONSOLIDATED NET REVENUE UP 15%

09 Jun 2008

Quiksilver, Inc. said consolidated net revenues from continuing operations for the second quarter ended April 30 increased 15% to $596.3 million, from $520.4 million in the second quarter of fiscal 2007. Consolidated income from continuing operations for the second quarter of fiscal 2008 was $38.7 million, or $0.30 per share, compared to $32.4 million, or $0.25 per share.

Net revenues and income from continuing operations for all periods exclude the results of the Rossignol wintersports equipment and apparel business as well as the golf equipment business which are reported as discontinued operations. The company sold its golf equipment operations in December 2007 and has begun a process to sell its Rossignol wintersports equipment and apparel business.

The company classified its Rossignol wintersports equipment and apparel business as discontinued operations and took a non-cash pre-tax charge in the second quarter of $240.2 million. The non-cash charge is not expected to effect the company’s operations or financial covenants.

The revision to the recorded value of the Rossignol Group was triggered by the sale process. The planned sale of the Rossignol Group is an objective which the company disclosed previously.

"As we separate the results of the Rossignol Group from those of our continuing core businesses, it becomes increasingly clear that our broadly diversified mix of brands, products, geographies and distribution channels positions us well in challenging economic climates, such as the one we all face today," said Robert B. McKnight, Jr.,

Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc. "As the boardsport lifestyle continues to expand around the world, our results demonstrate that the quality, style and authenticity of our brands have more influence than ever on the buying decisions of our customers.” All segments have been adjusted to reflect the discontinued operations classification of the Rossignol wintersports equipment and apparel business.

The Americas, Europe and Asia/Pacific segments include operations of the Quiksilver, Roxy, DC and other apparel brand businesses. Net revenues in the Americas segment increased 5% during the second quarter of fiscal 2008 to $247.6 million from $236.3 million in the second quarter of fiscal 2007. European segment net revenues increased 23% during the second quarter of fiscal 2008 to $284.5 million from $231.9 million in the second quarter of fiscal 2007.

Approximately $36.0 million of Europe’s increase was attributable to the positive effect of foreign currency exchange rates. Asia/Pacific segment net revenues increased 23% to $62.5 million in the second quarter of fiscal 2008 from $51.0 million in the second quarter of fiscal 2007. Approximately $7.7 million of Asia/Pacific’s increase was attributable to the positive effect of foreign currency exchange rates.

Consolidated inventories increased 11% to $304.1 million at April 30, 2008 from $274.6 million at April 30, 2007. Changes in foreign currency exchange rates accounted for approximately $18.3 million of the increase in inventories compared to April 30, 2007. Consolidated trade accounts receivable increased 12% to $473.0 million at April 30, 2008 from $421.3 million at April 30, 2007.

Changes in foreign currency exchange rates accounted for approximately $23.0 million of the increase in accounts receivable compared to April 30, 2007.

The company indicated that visibility into revenues and earnings remains limited for the remainder of the fiscal year. For continuing operations, the company indicated it expects to generate annual revenue growth for the full fiscal year of approximately 10% and expects to generate EPS that is slightly below the result generated in fiscal year 2007 of $0.90 per share.

For more information check out www.quiksilver.com