Quiksilver Inc. Reports 2000 First-Quarter Operating Results

HUNTINGTON BEACH, Calif.–March 8, 2000–Robert B. McKnight Jr., chairman of the board and chief executive officer of Quiksilver Inc. (NYSE:ZQK), today announced operating results for thefirst quarter ended Jan. 31, 2000.

Consolidated net sales for the first quarter of fiscal 2000increased 16.3% to $99,929,000 as compared with fiscal 1999first-quarter consolidated net sales of $85,947,000.

Consolidated net income for the first quarter of fiscal 2000increased 21.6% to $4,079,000, or $0.18 per share on a diluted basis,as compared with $3,354,000 or $0.15 per share on a diluted basis forthe first quarter of fiscal 1999.

Basic earnings per share was also $0.18 for the current quartercompared with $0.15 per share for the first quarter of fiscal 1999.Domestic net sales during the first quarter of fiscal 2000 increased20.1% to $62,650,000 as compared with fiscal 1999 first-quarterdomestic net sales of $52,145,000.

European net sales during the first quarter of fiscal 2000 asmeasured in French francs increased 25.7% compared with the fiscal1999 first quarter.

As a result of a weaker Euro vs. the U.S. dollar in the firstquarter of fiscal 2000 compared with fiscal 1999, European net salesduring the first quarter of fiscal 2000 increased 10.3% in dollars to$37,279,000 as compared with fiscal 1999 first-quarter European netsales of $33,802,000.

Consolidated inventories increased 25.2% to $90,376,000 at Jan.31, 2000, from $72,207,000 at Oct. 31, 1999. In comparison with Jan.31, 1999, consolidated inventories increased 6.3%.

Inventories increased somewhat from 1999 levels primarily tosupport increased sales for the spring and summer seasons of thecurrent year.

Inventory turnover improved both domestically and in Europecompared with the first quarter of fiscal 1999. Consolidated tradeaccounts receivable decreased 12.0% to $94,739,000 at Jan. 31, 2000,from $107,619,000 at Oct. 31, 1999, and increased 29.4% compared withJan. 31, 1999, which is consistent with the growth in net sales in thelatter portion of the first quarter.

McKnight said: “Our first quarter was another solid quarter ofgrowth, with net income up 23%. It’s also important to note that ourEuropean business continues to be very strong. Sales were up 26% inFrench francs vs. last year, and we beat our plan by enough toovercome the weakness of the Euro.

“During the quarter, we opened three Boardriders Clubs, includingcompany-owned stores in Boston and London. Just two weeks ago weopened our store in South Beach, Miami, which is doing very well.”

McKnight continued: “We’re thrilled with the way our Roxy team hascome together under the direction of Carol Christopherson, senior vicepresident of Roxy Merchandising; Lissa Zwahlen, vice president ofwomen’s design; and Dana Dartez, design director. We now have the basethat we believe will take Roxy to a new level.

“Also, we held our Mavericks big wave surfing event last Friday,March 3. It was the first time I had seen Mavericks break first-hand.It is a gladiator pit of surfing. … It’s huge, it’s cold, it’sgnarly, it’s rocky and it’s scary. In surfing, Mavericks is the realdeal,” McKnight said.

Quiksilver designs, produces and distributes clothing, accessoriesand related products for active-minded people and develops brands thatrepresent a casual lifestyle — driven from a boardriding heritage.Quiksilver’s authenticity is evident in its innovative products,events and retail environments across the globe.

Quiksilver’s primary focus is apparel for young men and youngwomen under the Quiksilver, Quiksilver Roxy, Raisins and Radio Fijilabels. Quiksilver also manufactures apparel for boys (QuiksilverBoys), girls (Teenie Wahine and Raisins Girls), men (QS SilverEdition) and women (Leilani), as well as snowboards, snowboard bootsand bindings under the Lib Technologies, Gnu and Bent Metal labels.

Distribution is primarily in the United States and Europe and iased in surf shops and specialty stores that endeavor to provide anoutstanding retail experience for their customers.

NOTE: For further information about Quiksilver Inc., you areinvited to take a look at our world at http://www.quiksilver.com andhttp://www.mervin.com.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Three Months Ended Jan. 31,

2000 1999
Net sales $ 99,929,000 $ 85,947,000
Cost of goods sold 61,061,000 52,526,000
Gross profit 38,868,000 33,421,000
Operating expenses:
Selling, general and
administrative expense 30,059,000 25,991,000
Royalty income (613,000) (398,000)
Royalty expense 1,260,000 1,079,000
Total operating
expenses 30,706,000 26,672,000
Operating income 8,162,000 6,749,000
Interest expense 1,023,000 848,000
Foreign currency loss 60,000 20,000
Other expense 160,000 127,000
Income before
provision for
income taxes 6,919,000 5,754,000
Provision for income
taxes 2,840,000 2,400,000
Net income $ 4,079,000 $ 3,354,000
Net income per
share (a) $0.18 $0.15
Net income per share,
assuming
dilution (a) $0.18 $0.15
Weighted average
common shares
outstanding (a) 22,362,000 21,677,000
Weighted average
common shares
outstanding,
assuming dilution (a) 23,154,000 22,847,000

(a) Per-share amounts and shares outstanding have been adjusted toreflect a three-for-two stock split effected on April 23, 1999.-0-

CONSOLIDATED BALANCE SHEETS (Unaudited)

Jan. 31, 2000 Oct. 31, 1999

ASSETS

LIABILITIES & STOCKHOLDERS’ EQUITY

Current assets:
Cash and cash equivalents $ 2,947,000 $ 1,449,000
Trade accounts receivable,
less allowance
for doubtful accounts
of $4,318,000 (2000)
and $5,518,000 (1999) 94,739,000 107,619,000
Other receivables 3,791,000 4,074,000
Inventories 90,376,000 72,207,000
Prepaid expenses and

other current assets 8,557,000 7,825,000
Total current assets 200,410,000 193,174,000
Property and equipment, net 47,303,000 45,153,000
Trademark & consulting, net 1,345,000 1,393,000
Goodwill, net 16,826,000 17,055,000
Other assets 2,611,000 2,898,000
Total assets $ 268,495,000 $ 259,673,000
Current Liabilities:
Lines of credit $ 32,044,000 $ 28,619,000
Accounts payable 37,845,000 31,325,000
Accrued liabilities 17,087,000 19,792,000
Current portion of long-term debt 3,539,000 3,615,000
Income taxes payable 1,468,000
Total current liabilities 91,983,000 83,351,000
Long-term debt 23,366,000 24,569,000
Total liabilities 115,349,000 107,920,000
Stockholders’ equity:
Preferred stock
Common stock 227,000 227,000
Additional paid-in capital 37,146,000 36,780,000
Treasury stock (3,054,000) (3,054,000)
Retained earnings 125,669,000 121,590,000
Accumulated other

comprehensive loss (6,842,000) (3,790,000)
Total stockholders’ equity 153,146,000 151,753,000
Total liabilities &
stockholders’ equity $ 268,495,000 $ 259,673,000
107,619,000

Other receivables 3,791,000 4,074,000Inventories 90,376,000 72,207,000Prepaid expenses and

other current assets 8,557,000 7,825,000

Total current assets 200,410,000 193,174,000

Property and equipment, net 47,303,000 45,153,000Trademark & consulting, net 1,345,000 1,393,000Goodwill, net 16,826,000 17,055,000Other assets 2,611,000 2,898,000

Total assets $ 268,495,000 $ 259,673,000

LIABILITIES & STOCKHOLDERS’ EQUITYCurrent Liabilities:Lines of credit $ 32,044,000 $ 28,619,000Accounts payable 37,845,000 31,325,000Accrued liabilities 17,087,000 19,792,000Current portion of long-term debt 3,539,000 3,615,000Income taxes payable 1,468,000 –

Total current liabilities 91,983,000 83,351,000Long-term debt 23,366,000 24,569,000Total liabilities 115,349,000 107,920,000

Stockholders’ equity:Preferred stock — –Common stock 227,000 227,000Additional paid-in capital 37,146,000 36,780,000Treasury stock (3,054,000) (3,054,000)Retained earnings 125,669,000 121,590,000Accumulated other

comprehensive loss (6,842,000) (3,790,000)Total stockholders’ equity 153,146,000 151,753,000

Total liabilities & stockholders’ equity $ 268,495,000 $ 259,673,000

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