<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-15131
QUIKSILVER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0199426
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1740 MONROVIA AVENUE
COSTA MESA, CALIFORNIA
92627
(Address of principal executive offices)
(Zip Code)
(714) 645-1395
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
The number of shares outstanding of issuer's Common Stock,
par value $0.01 per share, at
June 5, 1998 was
14,056,804
<PAGE> 2
QUIKSILVER, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
<S> <C>
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
April 30, 1998 and October 31, 1997............................. 2
Condensed Consolidated Statements of Income
Three Months Ended April 30, 1998 and 1997...................... 3
Condensed Consolidated Statements of Income
Six Months Ended April 30, 1998 and 1997........................ 4
Condensed Consolidated Statements of Cash Flows
Six Months Ended April 30, 1998 and 1997........................ 5
Notes to Condensed Consolidated Financial Statements................ 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 7
Part II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders............ 11
Item 6. Exhibits and Reports on Form 8K................................ 12
SIGNATURE............................................................... 13
</TABLE>
1
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
QUIKSILVER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ 1,958,000 $ 4,103,000
Trade accounts receivable, less allowance
for doubtful accounts of $2,792,000 (1998)
and $2,725,000 (1997)............................. 67,036,000 54,668,000
Other receivables................................... 2,976,000 1,773,000
Inventories - Note 2................................ 54,792,000 48,372,000
Prepaid expenses and other current assets........... 3,223,000 2,841,000
------------ ------------
Total current assets........................... 129,985,000 111,757,000
Property and equipment, less accumulated depreciation
and amortization of $12,045,000 (1998) and
$10,033,000 (1997) 17,997,000 16,436,000
Trademark, less accumulated amortization of
$1,745,000 (1998) and $1,646,000 (1997) 1,688,000 1,778,000
Goodwill, less accumulated amortization of
$4,104,000 (1998) and $3,807,000 (1997).............. 17,785,000 18,141,000
Other assets............................................ 5,148,000 1,538,000
------------ ------------
Total assets................................... $172,603,000 $149,650,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit...................................... $ 29,861,000 $ 18,671,000
Accounts payable..................................... 13,945,000 13,079,000
Accrued liabilities.................................. 8,880,000 10,725,000
Current portion of notes payable..................... 2,040,000 1,474,000
Income taxes payable................................. 2,695,000 515,000
------------ ------------
Total current liabilities...................... 57,421,000 44,464,000
Notes payable........................................... 13,057,000 10,178,000
------------ ------------
Total liabilities.............................. 70,478,000 54,642,000
------------ ------------
Stockholders' equity
Preferred stock, $.01 par value, authorized
shares - 5,000,000; issued and outstanding
shares - none..................................... -- --
Common stock, $.01 par value, authorized
shares - 30,000,000; issued and outstanding
shares - 14,316,804 (1998) and 14,278,940 (1997). 72,000 71,000
Additional paid-in-capital........................... 23,024,000 22,657,000
Retained earnings.................................... 84,614,000 77,043,000
Treasury stock, 260,000 shares....................... (3,054,000) (3,054,000)
Cumulative foreign currency translation adjustment... (2,531,000) (1,709,000)
------------ ------------
Total stockholders' equity..................... 102,125,000 95,008,000
------------ ------------
Total liabilities and stockholders' equity..... $172,603,000 $149,650,000
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 4
QUIKSILVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED APRIL 30,
1998 1997
------------ ------------
<S> <C> <C>
Net sales............................................... $ 78,192,000 $ 60,781,000
Cost of goods sold...................................... 46,136,000 36,620,000
------------ ------------
Gross profit......................................... 32,056,000 24,161,000
------------ ------------
Operating expenses:
Selling, general and administrative expense.......... 21,392,000 15,497,000
Royalty income....................................... (314,000) (350,000)
Royalty expense...................................... 973,000 691,000
------------ ------------
Total operating expenses.......................... 22,051,000 15,838,000
------------ ------------
Operating income........................................ 10,005,000 8,323,000
Interest expense........................................ 691,000 427,000
Foreign currency (gain)/loss............................ (19,000) 8,000
Other expense........................................... 71,000 41,000
------------ ------------
Income before provision for income taxes................ 9,262,000 7,847,000
Provision for income taxes.............................. 3,806,000 3,097,000
------------ ------------
Net income.............................................. $ 5,456,000 $ 4,750,000
============ ============
Basic net income per share.............................. $0.39 $0.34
============ ============
Diluted net income per share............................ $0.38 $0.34
============ ============
Weighted average shares outstanding..................... 14,036,000 13,790,000
============ ============
Diluted weighted average shares outstanding............. 14,507,000 14,008,000
============ ============
</TABLE>
3
<PAGE> 5
QUIKSILVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED APRIL 30,
1998 1997
------------ ------------
<S> <C> <C>
Net sales............................................... $133,443,000 $106,725,000
Cost of goods sold...................................... 79,459,000 64,956,000
------------ ------------
Gross profit......................................... 53,984,000 41,769,000
------------ ------------
Operating expenses:
Selling, general and administrative expense.......... 38,787,000 29,467,000
Royalty income....................................... (771,000) (710,000)
Royalty expense...................................... 1,747,000 1,320,000
------------ ------------
Total operating expenses.......................... 39,763,000 30,077,000
------------ ------------
Operating income........................................ 14,221,000 11,692,000
Interest expense........................................ 1,263,000 714,000
Foreign currency (gain) loss............................ (35,000) 80,000
Other expense........................................... 144,000 94,000
------------ ------------
Income before provision for income taxes................ 12,849,000 10,804,000
Provision for income taxes.............................. 5,278,000 4,305,000
------------ ------------
Net income.............................................. $ 7,571,000 $ 6,499,000
============ ============
Basic net income per share.............................. $0.54 $0.47
============ ============
Diluted net income per share............................ $0.53 $0.46
============ ============
Weighted average shares outstanding..................... 14,027,000 13,850,000
============ ============
Diluted weighted average shares outstanding............. 14,396,000 14,043,000
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 6
QUIKSILVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED APRIL 30,
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income........................................... $ 7,571,000 $ 6,499,000
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization.................. 2,734,000 1,664,000
Provision for doubtful accounts................ 1,139,000 329,000
Loss on sale of fixed assets................... 12,000 134,000
Changes in operating assets and liabilities:
Trade accounts receivable................... (14,190,000) (13,266,000)
Other receivables........................... (1,277,000) 55,000
Inventories................................. (6,793,000) (2,312,000)
Prepaid expenses and other current assets... (480,000) (405,000)
Other assets................................ (268,000) 44,000
Accounts payable............................ 1,212,000 (2,033,000)
Accrued liabilities......................... (1,109,000) (4,234,000)
Income taxes payable........................ 2,205,000 1,232,000
------------ ------------
Net cash used in operating activities.... (9,244,000) (12,293,000)
Cash flows from investing activities:
Proceeds from sales of fixed assets.................. 45,000 6,000
Capital expenditures................................. (7,456,000) (4,018,000)
Acquisition of Mervin Manufacturing, Inc............. (500,000) --
------------- ------------
Net cash used in investing activities...... (7,911,000) (4,012,000)
Cash flows from financing activities:
Borrowings on lines of credit........................ 26,270,000 16,315,000
Payments on lines of credit.......................... (14,956,000) (4,085,000)
Borrowings on long-term debt......................... 4,529,000 650,000
Payments on long-term debt........................... (976,000) (234,000)
Proceeds from stock option exercises................. 367,000 605,000
------------ ------------
Net cash provided by financing activities.. 15,234,000 13,251,000
Effect of exchange rate changes on cash................. (224,000) (71,000)
------------- -------------
Net increase (decrease) in cash and cash equivalents.... (2,145,000) (3,125,000)
Cash and cash equivalents, beginning of period.......... 4,103,000 3,429,000
------------ ------------
Cash and cash equivalents, end of period................ $ 1,958,000 $ 304,000
============ ============
Supplementary cash flow information Cash paid
during the period for:
Interest.......................................... $ 1,221,000 $ 600,000
============ ============
Income taxes...................................... $ 3,163,000 $ 2,322,000
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 7
QUIKSILVER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statement
presentation.
The Company, in its opinion, has included all adjustments, consisting
only of normal recurring accruals, necessary for a fair presentation of
the results of operations for the three and six months ended April 30,
1998 and 1997. The condensed consolidated financial statements and notes
thereto should be read in conjunction with the audited financial
statements and notes for the year ended October 31, 1997 included in the
Company's Annual Report on Form 10-K. Interim results are not
necessarily indicative of results for the full year due to seasonal and
other factors.
2. Inventories consist of the following:
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1998 1997
------------ ------------
<S> <C> <C>
Raw Materials........................ $ 15,664,000 $ 16,754,000
Work-In-Process...................... 6,665,000 5,693,000
Finished Goods....................... 32,463,000 25,925,000
------------ ------------
$ 54,792,000 $ 48,372,000
============ ============
</TABLE>
3. Net income per share - During the three months ended January 31, 1998,
the Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earnings Per Share", which requires the Company to report
basic and diluted earnings per share ("EPS"). Basic EPS is based on the
weighted average number of shares outstanding during the periods, while
diluted EPS additionally includes the dilutive effect of the Company's
outstanding stock options computed using the treasury stock method.
Prior period net income per share data were restated for consistency.
4. On March 10, 1998, the Company's Board of Directors approved a
two-for-one split of the Company's Common Stock. The split was effected
in the form of a dividend on April 24, 1998 to shareholders of record on
April 16, 1998. All share and per-share information has been restated to
reflect the stock dividend.
6
<PAGE> 8
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
THREE MONTHS ENDED APRIL 30, 1998 COMPARED TO THREE MONTHS ENDED APRIL 30, 1997
Net sales for the three months ended April 30, 1998 increased 28.6% to
$78,192,000 from $60,781,000 in the comparable period of the prior year.
Domestic net sales for the three months ended April 30, 1998 increased to 22.7%
to $49,608,000 from $40,438,000 in the comparable period of the prior year, and
European net sales increased 40.5% to $28,584,000 from $20,343,000 for those
same periods. As measured in French Francs, Quiksilver Europe's functional
currency, net sales in the current year's quarter increased 50.1% compared to
the prior year. Domestic men's sales increased 12.1% to $28,062,000 from
$25,043,000 in the comparable period of the prior year, while domestic women's
sales increased 29.0% to $19,856,000 from $15,395,000. Mervin net sales totaled
$1,690,000 for the current quarter. The domestic mens sales increase came from
the Quiksilver Young Mens, Boys and Accessories divisions. The domestic women's
sales increase came from the Quiksilver Roxy division. In Europe, men's sales
increased 35.5% to $25,687,000 from $18,954,000, while women's sales increased
108.6% to $2,897,000 from $1,389,000.
The gross profit margin for the three months ended April 30, 1998 increased to
41.0% from 39.8% in the comparable period of the prior year. The domestic gross
profit margin increased to 37.0% from 35.7% in the comparable period of the
prior year, and the European gross profit margin increased somewhat to 48.0%
from 47.8% for those same periods. The increase in the domestic gross profit
margin resulted primarily from a change in product mix and the impact of
markdowns taken in the prior year's quarter to sell Pirate Surf product, which
was removed from production plans. In the current year's quarter, there were
more sales of juniors product, which sells at higher average profit margins, and
less sales of private label product, which sells at lower average profit
margins. In Europe, the gross profit margin was relatively stable in the current
quarter compared to the previous year.
Selling, general and administrative expense ("SG&A") for the three months ended
April 30, 1998 increased 38.0% to $21,392,000 from $15,497,000 in the comparable
period of the prior year. Domestic SG&A increased 34.4% to $13,014,000 from
$9,683,000 in the comparable period of the prior year, and European SG&A
increased 44.1% to $8,378,000 from $5,814,000 for those same periods. The
increase in domestic SG&A was primarily due to higher personnel costs related to
increased sales volume, along with increased distribution center expenses. The
increase in European SG&A was primarily due to higher personnel costs related to
increased sales volume, along with increased sales and marketing expenses.
Net royalty expense for the three months ended April 30, 1998 increased 93.3% to
$659,000 from $341,000 in the comparable period of the prior year. This increase
was due primarily to increased royalty expense related to European sales. The
Company receives domestic royalty income from its Mexico, wetsuit, watch,
sunglass, and outlet store licensees as well as Raisins international licensees,
and Quiksilver Europe pays royalties on European sales under a trademark
agreement with Quiksilver International.
Interest expense for the three months ended April 30, 1998 increased 61.8% to
$691,000 from $427,000 in the comparable period of the prior year. This increase
was primarily due to higher average outstanding balances on the Company's
domestic line of credit. In addition to borrowings that provided working capital
to fund the Company's growth, funds were borrowed to acquire Mervin, upgrade the
Company's computer systems and to equip the Company's new warehouse facility in
Huntington Beach, California.
The effective income tax rate for the three months ended April 30, 1998, which
is based on current estimates of the annual effective income tax rate, increased
to 41.1% from 39.5% in the comparable period of the prior year.
As a result of the above factors, net income for the three months ended April
30, 1998 increased 14.9% to $5,456,000 or $0.38 per share on a diluted basis
from $4,750,000 or $0.34 per share on a diluted basis in
7
<PAGE> 9
the comparable period of the prior year. Basic net income per share increased to
$0.39 for the three months ended April 30, 1998 from $0.34 in the comparable
period of the prior year.
SIX MONTHS ENDED APRIL 30, 1998 COMPARED TO SIX MONTHS ENDED APRIL 30, 1997
Net sales for the six months ended April 30, 1997 increased 25.0% to
$133,443,000 from $106,725,000 in the comparable period of the prior year.
Domestic net sales for the six months ended April 30, 1998 increased 19.8% to
$82,211,000 from $68,599,000 in the comparable period of the prior year, and
European net sales increased 34.4% to $51,232,000 from $38,126,000 for those
same periods. As measured in French Francs, Quiksilver Europe's net sales in the
first six months of the current year increased 48.0% compared to the prior year.
Domestic men's sales increased 9.2% to $48,965,000 from $44,846,000 in the
comparable period of the prior year, while domestic women's sales increased
26.9% to $30,144,000 from $23,753,000. Mervin net sales totaled $3,102,000 for
the six months ended April 30, 1998. The domestic mens sales increase came from
all divisions except private label. The domestic womens sales increase came from
the Quiksilver Roxy division. In Europe, men's sales increased 29.9% to
$47,097,000 from $36,256,000, while women's sales increased 121.1% to $4,135,000
from $1,870,000.
The gross profit margin for the six months ended April 30, 1998 increased to
40.5% from 39.1% in the comparable period of the prior year. The domestic gross
profit margin increased to 37.1% from 35.4% in the comparable period of the
prior year, and the European gross profit margin was consistent at 45.9% for
those same periods. The increase in the domestic gross profit margin resulted
primarily from a change in product mix and the impact of selling excess raw
materials during the prior year's six months at margins that were less than
normal wholesale and from markdowns taken during the prior year's six months to
sell Pirate Surf product, which was removed from production plans. In the
current year's six months, there were more sales of juniors product, which sells
at higher average profit margins, and less sales of private label product, which
sells at lower average profit margins.
Selling, general and administrative expense ("SG&A") for the six months ended
April 30, 1998 increased 31.6% to $38,787,000 from $29,467,000 in the comparable
period of the prior year. Domestic SG&A increased 29.4% to $23,273,000 from
$17,992,000 in the comparable period of the prior year, and European SG&A
increased 35.2% to $15,514,000 from $11,475,000 for those same periods. The
increase in domestic SG&A was primarily due to higher personnel costs related to
increased sales volume, along with increased distribution center expenses. The
increase in European SG&A was primarily due to higher personnel costs related to
increased sales volume, along with increased sales and marketing expenses.
Net royalty expense for the six months ended April 30, 1998 increased 60.0% to
$976,000 from $610,000 in the comparable period of the prior year. This increase
was due primarily to increased royalty expense related to European sales.
Interest expense for the six months ended April 30, 1998 increased 76.9% to
$1,263,000 from $714,000 in the comparable period of the prior year. This
increase was primarily due to higher average outstanding balances on the
Company's domestic line of credit. In addition to borrowings that provided
working capital to fund the Company's growth, funds were borrowed to acquire
Mervin, upgrade the Company's computer systems and to equip the Company's new
warehouse facility in Huntington Beach, California.
The effective income tax rate for the six months ended April 30, 1998, which is
based on current estimates of the annual effective income tax rate, increased to
41.1% from 39.8% in the comparable period of the prior year.
As a result of the above factors, net income for the six months ended April 30,
1998 increased 16.5% to $7,571,000 or $0.53 per share on a diluted basis from
$6,499,000 or $0.46 per share on a diluted basis in the comparable period of the
prior year. Basic net income per share increased to $0.54 for the six months
ended April 30, 1998 from $0.47 in the comparable period of the prior year.
8
<PAGE> 10
FINANCIAL POSITION, CAPITAL RESOURCES AND LIQUIDITY
The Company finances its capital investments and seasonal working capital
requirements with funds generated by operations and its bank revolving lines of
credit.
Net cash used in operating activities for the six months ended April 30, 1998
was $9,244,000 compared to $12,293,000 in the comparable period of the prior
year. The $3,049,000 decrease in cash used in operating activities was due to a
combination of factors. Net income and noncash expenses increased $2,830,000
during the six months ended April 30, 1998 compared to the six months ended
April 30, 1997, and cash used to reduce accrued liabilities decreased $3,125,000
in the six months ended April 30, 1998 compared to the six months ended April
30, 1997, primarily as a result of lower payments during the current year for
employee benefit programs and sales taxes in Quiksilver Europe. Offsetting these
two factors was an increase of $1,236,000 in cash used for inventories, net of
the increase in accounts payable, and an increase of $2,256,000 of cash used to
support higher levels of trade and other accounts receivable.
For the six months ended April 30, 1998, capital expenditures increased 85.6% to
$7,456,000 from $4,018,000 in the comparable period of the prior year primarily
due to investments during the six months ended April 30, 1998 in retail space
in Paris and the domestic distribution center in Huntington Beach, California.
During the six months ended April 30, 1998, net cash provided by financing
activities totaled $15,234,000 compared to $13,251,000 in the comparable period
of the prior year. Borrowings were higher during the first six months of fiscal
1998 primarily as a result of the increased investments discussed above.
The net decrease in cash and cash equivalents for the six months ended April 30,
1998 was $2,145,000 compared to $3,125,000 in the comparable period of the prior
year. Cash and cash equivalents decreased to $1,958,000 at April 30, 1998 from
$4,103,000 at October 31, 1997, while working capital increased $5,271,000 or
7.8% to $72,564,000 from $67,293,000 for that same period. The Company believes
its current lines of credit are adequate to cover its seasonal working capital
and other requirements for the foreseeable future and that increases in its
lines of credit can be obtained as needed to fund future growth.
Accounts receivable increased 22.6% to $67,036,000 at April 30, 1998 from
$54,668,000 at October 31, 1997. Domestic accounts receivable increased 18.2% to
$43,616,000 at April 30, 1998 from $36,887,000 at October 31, 1997, and European
accounts receivable increased 31.7% to $23,420,000 from $17,781,000 for that
same period. These increases in accounts receivable are generally consistent
with the increase in net sales.
Consolidated inventories increased 13.3% to $54,792,000 at April 30, 1998 from
$48,372,000 at October 31, 1997. Domestic inventories increased 10.6% to
$42,859,000 from $38,758,000 at October 31, 1997, and European inventories
increased 24.1% to $11,933,000 from $9,614,000 for that same period. Inventories
increased primarily due to seasonal factors and to support higher planned sales
levels in current and future seasons.
Customers of the Company have experienced financial difficulties, from time to
time, including the filing of reorganization proceedings under bankruptcy laws.
The Company has not incurred significant losses outside the normal course of
business as a result of the financial difficulties of these customers.
9
<PAGE> 11
FINANCIAL POSITION, CAPITAL RESOURCES AND LIQUIDITY (CONTINUED)
While management believes that allowances for doubtful accounts at April 30,
1998 are adequate, the Company carefully monitors developments regarding its
major customers. Material financial difficulties encountered by these or other
significant customers could have an adverse impact on the Company's financial
position or results of operations.
FOREIGN CURRENCY
Quiksilver Europe sells in various European countries and collects at future
dates in the customers' local currencies and purchases certain raw materials or
product in currencies other than French Francs. Accordingly, the Company is
exposed to transaction gains and losses that could result from changes in
foreign currency exchange rates. When considered appropriate, management
purchases financial instruments, primarily forward exchange contracts, to reduce
its exposure to these exchange rate fluctuations.
Quiksilver Europe's statements of income are translated from French Francs into
U.S. Dollars at average exchange rates in effect during the reporting period.
When the French Franc strengthens compared to the U.S. Dollar there is a
positive effect on Quiksilver Europe's results as reported in the Company's
Consolidated Financial Statements. Conversely, when the U.S. Dollar strengthens,
there is a negative affect.
European net sales increased 48.0% in French Francs during the six months ended
April 30, 1998 compared to the six months ended April 30, 1997. As measured and
reported in the Company's Condensed Consolidated Statements Income, European net
sales increased 34.4%.
10
<PAGE> 12
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
The Company's Annual Meeting of Stockholders was held on March 20, 1998. At the
Annual Meeting, the following directors were elected to serve on the Company's
Board of Directors until the next Annual Meeting and until their respective
successors are elected and qualified:
<TABLE>
<CAPTION>
Votes Votes
For Withheld
--------- --------
<S> <C> <C>
Robert B. McKnight, Jr. 6,091,273 7,563
William M. Barnum, Jr. 6,091,173 7,663
Charles E. Crowe 6,091,273 7,563
Michael H. Gray 6,091,273 7,563
Harry Hodge 6,091,273 7,563
Robert G. Kirby 6,091,273 7,563
Tom Roach 6,091,272 7,564
</TABLE>
Also, at the Annual Meeting, the Company's stockholders approved the 1998
Nonemployee Directors' Stock Option Plan and an amendment to the Company's 1996
Stock Option Plan.
Voting results were as follows:
<TABLE>
<CAPTION>
Votes Votes
For Against Abstentions
--------- --------- -----------
<S> <C> <C> <C>
1998 Nonemployee Directors'
Stock Option Plan 3,304,882 1,526,181 11,806
Amendment to the Company's
1996 Stock Option Plan 2,525,677 2,275,401 19,077
</TABLE>
No other matters were voted on at the Annual Meeting.
11
<PAGE> 13
PART II - OTHER INFORMATION (continued)
Item 6. Exhibits and Reports on Form 8K.
(a) Exhibits
--------
27.0 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended April
30, 1998.
12
<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
QUIKSILVER, INC., a
Delaware Corporation
June 9, 1998 /s/ Steven L. Brink
------------------------------------
Steven L. Brink
Chief Financial Officer, Secretary
and Treasurer
(Principal Accounting Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUIKSILVER, INC. APRIL 30, 1998 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> FEB-01-1998
<PERIOD-END> APR-30-1998
<CASH> 1,958,000
<SECURITIES> 0
<RECEIVABLES> 69,828,000
<ALLOWANCES> 2,792,000
<INVENTORY> 54,792,000
<CURRENT-ASSETS> 129,985,000
<PP&E> 30,042,000
<DEPRECIATION> 12,045,000
<TOTAL-ASSETS> 172,603,000
<CURRENT-LIABILITIES> 57,421,000
<BONDS> 13,057,000
0
0
<COMMON> 72,000
<OTHER-SE> 102,053,000
<TOTAL-LIABILITY-AND-EQUITY> 172,603,000
<SALES> 133,443,000
<TOTAL-REVENUES> 133,443,000
<CGS> 79,459,000
<TOTAL-COSTS> 79,459,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,139,000
<INTEREST-EXPENSE> 1,263,000
<INCOME-PRETAX> 12,849,000
<INCOME-TAX> 5,278,000
<INCOME-CONTINUING> 12,849,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,571,000
<EPS-PRIMARY> 0.54
<EPS-DILUTED> 0.53
</TABLE>
