Quiksilver Reports Fiscal 2012 Third Quarter Financial Results

Forward looking statements:

This press release contains forward-looking statements including but not limited to statements regarding the company’s anticipated growth initiatives, expense reductions and other future activities. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. Please refer to Quiksilver’s SEC filings for more information on the risk factors that could cause actual results to differ materially from expectations, and specifically the sections titled “Risk Factors” and “Forward-Looking Statements” in Quiksilver’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

NOTE: For further information about Quiksilver, Inc., please visit our website at www.quiksilverinc.com . We also invite you to explore our brand sites, www.roxy.com , www.dcshoes.com , www.lib-tech.com and www.hawkclothing.com .

QUIKSILVER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
		Three months ended								Nine months ended
In thousands, except per share amounts		July 31,								July 31,
			2012				2011				2012				2011
Revenues, net		$	512,439			$	503,317			$	1,454,273			$	1,407,860
Cost of goods sold			258,951				248,199				730,686				667,103
Gross profit			253,488				255,118				723,587				740,757
Selling, general and administrative expense			225,788				221,172				680,213				648,356
Asset impairments			141				-				556				74,610
Operating income			27,559				33,946				42,818				17,791
Interest expense			14,834				15,663				45,464				59,727
Foreign currency gain			(2,242	)			(1,456	)			(4,701	)			(5,886	)
Income (loss) before provision for income taxes			14,967				19,739				2,055				(36,050	)
Provision for income taxes			2,508				8,996				14,913				49,937
Net income (loss)			12,459				10,743				(12,858	)			(85,987	)
Less: net loss (income) attributable to non-controlling interest			151				(306	)			(2,257	)			(3,169	)
Net income (loss) attributable to Quiksilver, Inc.		$	12,610			$	10,437			$	(15,115	)		$	(89,156	)
Net income (loss) per share attributable to Quiksilver, Inc.:
Basic		$	0.08			$	0.06			$	(0.09	)		$	(0.55	)
Diluted		$	0.07			$	0.06			$	(0.09	)		$	(0.55	)
Weighted average common shares outstanding:
Basic			164,518				162,822				163,930				162,198
Diluted			173,899				183,488				163,930				162,198

			QUIKSILVER, INC. AND SUBSIDIARIES
			CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In thousands				July 31, 2012				July 31, 2011
ASSETS
Current Assets
	Cash and cash equivalents			$	81,903			$	126,210
	Trade accounts receivable (net of allowance of $43,468 and $54,381, respectively)				398,522				385,927
	Other receivables				31,444				16,657
	Income taxes receivable				-				4,674
	Inventories				391,052				364,833
	Deferred income taxes - short-term				14,691				18,134
	Prepaid expenses and other current assets				32,678				31,787
		Total Current Assets			950,290				948,222
Fixed assets, net					233,842				237,138
Intangible assets, net					136,745				138,934
Goodwill					258,815				273,549
Other assets					48,267				56,868
Deferred income taxes - long-term					99,125				72,855
		Total Assets		$	1,727,084			$	1,727,566
LIABILITIES AND EQUITY
Current Liabilities
	Lines of credit			$	15,032			$	8,928
	Accounts payable				233,523				238,866
	Accrued liabilities				111,140				134,365
	Current portion of long-term debt				44,640				4,820
	Income taxes payable				3,652				-
		Total Current Liabilities			407,987				386,979
Long-term debt, net of current portion					723,772				733,415
Other long-term liabilities					32,249				56,056
		Total Liabilities			1,164,008				1,176,450
Equity
	Common stock				1,687				1,680
	Additional paid-in capital				539,124				527,122
	Treasury stock				(6,778	)			(6,778	)
	Accumulated deficit				(47,680	)			(100,463	)
	Accumulated other comprehensive income				66,976				117,318
		Total Quiksilver, Inc. Stockholders' Equity			553,329				538,879
	Non-controlling interest				9,747				12,237
		Total Equity			563,076				551,116
		Total Liabilities and Equity		$	1,727,084			$	1,727,566

QUIKSILVER, INC. AND SUBSIDIARIES
INFORMATION RELATED TO OPERATING SEGMENTS (UNAUDITED)
		Three months ended				Nine months ended
In thousands		July 31,				July 31,
		2012		2011		2012		2011
Revenues, net:
Americas		$ 286,136		$ 260,159		$ 712,519		$ 664,618
Europe		154,076		176,438		518,504		548,578
Asia/Pacific		71,623		65,495		220,242		190,636
Corporate operations		604		1,225		3,008		4,028
		512,439		503,317		1,454,273		1,407,860
Gross Profit:
Americas		$ 126,101		$ 115,065		$ 311,738		$ 308,032
Europe		88,136		106,451		298,905		332,083
Asia/Pacific		39,258		34,347		113,361		101,842
Corporate operations		(7)		(745)		(417)		(1,200)
		253,488		255,118		723,587		740,757
SG&A Expense:
Americas		$ 92,781		$ 87,984		$ 270,669		$ 256,117
Europe		80,862		85,402		250,160		250,388
Asia/Pacific		37,747		36,314		114,988		108,961
Corporate operations		14,398		11,472		44,396		32,890
		225,788		221,172		680,213		648,356
Asset Impairments:
Americas		$ 141		$ -		$ 556		$ 465
Europe		-		-		-		-
Asia/Pacific		-		-		-		74,145
Corporate operations		-		-		-		-
		141		-		556		74,610
Operating Income (Loss):
Americas		$ 33,179		$ 27,081		$ 40,513		$ 51,450
Europe		7,274		21,049		48,745		81,695
Asia/Pacific		1,511		(1,967)		(1,627)		(81,264)
Corporate operations		(14,405)		(12,217)		(44,813)		(34,090)
		27,559		33,946		42,818		17,791

QUIKSILVER, INC. AND SUBSIDIARIES
GAAP TO PRO-FORMA RECONCILIATION (UNAUDITED)
		Three months ended						Nine months ended
In thousands, except per share amounts		July 31,						July 31,
			2012			2011			2012				2011
Net income (loss) attributable to Quiksilver, Inc.		$	12,610		$	10,437		$	(15,115	)		$	(89,156	)
Restructuring charges (credits), net of tax of $204, $0, $204, and $0, respectively			3,688			-			7,307				(2,118	)
Non-cash asset impairments, net of tax of $0, $0, $32, and $0, respectively			141			-			524				74,610
Effect of APAC tax valuation allowance			-			-			-				25,980
Non-cash interest charges, net of tax of $0, $0, $0, and $4,618, respectively			-			-			-				10,691
Pro-forma income (loss)			16,439			10,437			(7,284	)			20,007
Pro-forma income (loss) per share attributable to Quiksilver, Inc.:
Basic		$	0.10		$	0.06		$	(0.04	)		$	0.12
Diluted		$	0.09		$	0.06		$	(0.04	)		$	0.11
Weighted average common shares outstanding:
Basic			164,518			162,822			163,930				162,198
Diluted			173,899			183,488			163,930				182,688

QUIKSILVER, INC. AND SUBSIDIARIES
ADJUSTED EBITDA & PRO-FORMA ADJUSTED EBITDA RECONCILIATION (UNAUDITED)
		Three months ended						Nine months ended
In thousands		July 31,						July 31,
			2012			2011			2012				2011
Net income (loss) attributable to Quiksilver, Inc.		$	12,610		$	10,437		$	(15,115	)		$	(89,156	)
Provision for income taxes			2,508			8,996			14,913				49,937
Interest expense			14,834			15,663			45,464				59,727
Depreciation and amortization			12,312			12,684			39,437				40,154
Non-cash stock-based compensation expense			4,872			4,935			17,272				9,916
Non-cash asset impairments			141			-			556				74,610
Adjusted EBITDA			47,277			52,715			102,527				145,188
Restructuring charges (credits)			3,892			-			7,511				(2,118	)
Pro-forma Adjusted EBITDA			51,169			52,715			110,038				143,070

Definition of Adjusted EBITDA:

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