Quiksilver, Inc. (ZQK) announced its results for the first quarter ended January 31, 2009 this afternoon. Consolidated net revenues from continuing operations for the first quarter of fiscal 2009 decreased 11% to $443.3 million from $496.6 million in the first quarter of fiscal 2008.
Bob McKnight, Chairman of the Board, CEO, and President of Quiksilver offered this comment in the release: “While our performance in the quarter was in line with our overall expectations, deteriorating macro conditions made for a very difficult operating environment. Weak consumer traffic drove lower sales and margin compression which resulted in a loss for the quarter.”
Log into the Q1 conference call HERE and stay tuned to Transworld Business for analysis of the call once it’s over.
Here’s the press release from Quiksilver:
Quiksilver, Inc. Reports Fiscal 2009 First Quarter Financial Results
Huntington Beach, California, March 11, 2009–Quiksilver, Inc. (NYSE:ZQK) today announced operating results for the first quarter ended January 31, 2009. Consolidated net revenues from continuing operations for the first quarter of fiscal 2009 decreased 11% to $443.3 million from $496.6 million in the first quarter of fiscal 2008. The pro-forma consolidated loss from continuing operations for the first quarter of fiscal 2009 was $9.0 million, or $0.07 per share, compared to income of $7.6 million, or $0.06 per share, for the first quarter of fiscal 2008. The pro-forma net loss excludes a $6.1 million severance charge in the Americas and a $50.8 million non-cash charge to write off the Company’s deferred tax assets in the United States. Including these charges, the loss from continuing operations was $65.9 million or $0.52 per share. A reconciliation of GAAP results to pro-forma results is included in the accompanying tables. Net revenues and income from continuing operations for all periods exclude the results of our Rossignol wintersports business, which was sold in November 2008 and is reported as discontinued operations.
Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “While our performance in the quarter was in line with our overall expectations, deteriorating macro conditions made for a very difficult operating environment. Weak consumer traffic drove lower sales and margin compression which resulted in a loss for the quarter.”
Net revenues in the Americas decreased 13% during the first quarter of fiscal 2009 to $203.4 million from $234.9 million in the first quarter of fiscal 2008. As measured in U.S. dollars and reported in the financial statements, European net revenues decreased 9% during the first quarter of fiscal 2009 to $181.7 million from $200.3 million in the first quarter of fiscal 2008. Changes in foreign currency exchange rates accounted for a decrease in European revenues of approximately $20.1 million for those same periods. As measured in U.S. dollars and reported in the financial statements, Asia/Pacific net revenues decreased 5% to $57.6 million in the first quarter of fiscal 2009 from $60.4 million in the first quarter of fiscal 2008. Changes in foreign currency exchange rates accounted for a decrease in Asia/Pacific’s revenues of approximately $14.7 million for those same periods.
Consolidated inventories increased 4% to $380.5 million at January 31, 2009 from $364.4 million at January 31, 2008. Consolidated trade accounts receivable decreased 7% to $373.4 million at January 31, 2009 from $402.5 million at January 31, 2008.
As previously disclosed, Quiksilver has been exploring a wide range of strategic and financing alternatives with the objective of improving its liquidity position and capital structure. To accommodate the timing of a potential transaction, the Company’s European banks extended the maturity of its €55 million line of credit from March 14 to June 30, 2009.
Mr. McKnight added, “Increasing liquidity and improving our capital structure continue to be our highest priority initiatives. Even though the credit markets remain difficult, we continue to make good progress on these objectives. And as we monitor the global retail environment, we remain committed to taking appropriate actions to adjust our business where necessary.
Addressing its outlook for continuing operations, the Company stated that based on current trends second quarter revenues will likely be down in the mid-teens on a percentage basis compared to the same quarter a year ago and that diluted earnings per share are expected to be in the mid-single-digit range. The Company indicated that longer term visibility into revenues and earnings remains limited at the present time.
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