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Quiksilver Reports Fiscal 2012 Full-Year, Fourth Quarter Financial Results

Quiksilver, Inc. (NYSE:ZQK) today announced operating results for the fiscal 2012 full year and fourth quarter ended October 31, 2012.

“We are pleased, despite economic headwinds in certain markets, especially Europe and Australia, that revenues for fiscal 2012 increased across all three regions, all three major brands and all three distribution channels, in constant currency,” said Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc.

“We remain focused on our three core long-term initiatives, which are strengthening our brands, increasing global sales and driving operational efficiencies. Our brands received excellent exposure this year due to the success of our key athletes, who continue to dominate in our core sports. Our focus on sales resulted in continued growth for the Quiksilver and Roxy brands, as well as strong growth in our DC brand, our e-commerce business and our emerging markets. And, we made measurable progress in operating efficiency by controlling expenses, as seen in the reduction in fourth quarter SG&A as a percentage of sales.”

Please refer to the accompanying tables for a reconciliation of GAAP results to certain non-GAAP results for the full year and fourth quarter, net revenues in historical and constant currency, and a definition of our emerging markets.

Fiscal 2012 Full Year Review:

The following comparisons refer to fiscal 2012 versus fiscal 2011.

Net revenues grew 3% to $2.01 billion compared with $1.95 billion, and grew 7%, or $125 million, in constant currency.

  • Americas net revenues increased 8% to $992 million from $914 million, and were up 10% in constant currency.
  • Europe net revenues decreased 7% to $711 million from $761 million, and were up 1% in constant currency.
  • Asia Pacific net revenues increased 13% to $307 million from $272 million, and were up 12% in constant currency.

Gross margin was 49% of net revenues compared with 52%, primarily driven by increased clearance sales within our wholesale channel, higher levels of discounting in our retail channel, changes in the geographical composition of net revenues, higher input costs, and unfavorable foreign exchange rate comparisons.

SG&A expense increased 2% to $916 million compared with $896 million, primarily due to increased e-commerce expenses and higher non-cash stock compensation expenses, partially offset by reduced marketing expenses and other expense reductions implemented during fiscal 2012. SG&A expenses decreased as a percentage of net revenues by 40 basis points to 46% of net revenues.

Net loss attributable to Quiksilver, Inc. was $11 million, or $0.07 per share, compared with $21 million, or $0.13 per share.

Pro-forma income, which excludes $18 million and $47 million of net after-tax charges, was $7 million and $25 million, or $0.04 and $0.14 per diluted share, respectively.

Pro-forma Adjusted EBITDA was $153 million compared with $192 million.

Fiscal 2012 Net Revenue Highlights:

Net revenues increased (in constant currency) across all three major brands, all three regions, and all three distribution channels compared with fiscal 2011. In addition, emerging markets generated net revenue growth of 28%.

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