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Quiksilver Management Discusses Q2 2012 Results - Earnings Call Transcript

Before we begin, I'd like to briefly review the company's Safe Harbor statement. Throughout our call today, items may be discussed that are not based on historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements regarding Quiksilver's business outlook and future performance constitute forward-looking statements, and results could differ materially from those stated or implied by these forward-looking statements as a result of risks, uncertainties and other factors, including those identified in our filings with the Securities and Exchange Commission, specifically under the section titled Risk Factors in our most recent annual report on Form 10-K and in our quarterly reports on Form 10-Q.

All forward-looking statements made on this call speak only as of today's date, and the company undertakes no duty to update any forward-looking statements. In addition, this presentation may contain references to non-GAAP financial information. A reconciliation of non-GAAP financial information to the most directly comparable GAAP financial information is included in our press release, which can be found in electronic form on our website at www.quiksilverinc.com.

With that out of the way, I'd like to turn the call over to Bob McKnight.

Robert B. McKnight

Thanks, Bruce, and good afternoon, everyone, and thank for joining us today for our Second Quarter Conference Call. I'd like to begin by welcoming our newest member of our senior management team, our new Chief Financial Officer, Richard Shields. We're delighted that Rich has joined the Quiksilver family. And even though he's only been with us less than a month, he hit the ground running, and we're looking forward to the many valuable contributions that Rich will make to the future success of Quiksilver. So welcome.

Turning now to our business in Q2. I'm proud of the Quiksilver team's performance in the second quarter amidst inconsistent economic conditions around the world. While some of our emerging markets have shown strong progress, some established markets, particularly in Europe, have been impacted by regional economic uncertainty. Despite the pressure on our business caused by this uncertainty, our brands have held up well, and we're pleased to have grown our revenues across all 3 brands in all 3 regions and in each of our channels of distribution. This was, however, a challenging quarter for our business from a margin perspective. As we communicated back in March, we entered Q2 knowing that a number of factors would negatively impact margins in the quarter. And as the quarter progressed, a few of those dynamics became more impactful than we expected. Importantly, some of those headwinds diminished as we move into the second half of our fiscal year.

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