<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, 1999
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)
(949) 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, 1999 was
22,261,709
<PAGE> 2
QUIKSILVER, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
April 30, 1999 and October 31, 1998................................. 2
Condensed Consolidated Statements of Income
Three Months Ended April 30, 1999 and 1998.......................... 3
Condensed Consolidated Statements of Income
Six Months Ended April 30, 1999 and 1998............................ 4
Condensed Consolidated Statements of Cash Flows
Six Months Ended April 30, 1999 and 1998............................ 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,
1999 1998
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................... $ 57,000 $ 3,029,000
Trade accounts receivable, less allowance
for doubtful accounts of $5,201,000 (1999)
and $3,738,000 (1998) ................................ 101,205,000 78,390,000
Other receivable ....................................... 2,379,000 3,720,000
Inventories - Note 2 ................................... 67,110,000 70,575,000
Prepaid expenses and other current assets .............. 5,052,000 4,350,000
------------- -------------
Total current assets .............................. 175,803,000 160,064,000
Property and equipment, less accumulated depreciation and
amortization of $16,699,000 (1999) and $14,557,000 (1998) 40,462,000 31,996,000
Trademark, less accumulated amortization of
$1,941,000 (1999) and $1,845,000 (1998) ................. 1,493,000 1,589,000
Goodwill, less accumulated amortization of
$4,865,000 (1999) and $4,484,000 (1998) ................. 17,000,000 17,381,000
Other assets ............................................... 1,856,000 2,041,000
------------- -------------
Total assets ...................................... $ 236,614,000 $ 213,071,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit ......................................... $ 27,798,000 $ 17,465,000
Accounts payable ........................................ 24,155,000 26,340,000
Accrued liabilities ..................................... 15,986,000 17,269,000
Current portion of notes payable ........................ 3,315,000 3,293,000
Income taxes payable .................................... 4,467,000 3,376,000
------------- -------------
Total current liabilities ......................... 75,721,000 67,743,000
Notes payable .............................................. 26,502,000 27,669,000
------------- -------------
Total liabilities ................................. 102,223,000 95,412,000
------------- -------------
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 - 22,651,709 (1999) and 21,828,447 (1998) .... 223,000 219,000
Additional paid-in-capital .............................. 32,876,000 25,847,000
Retained earnings ....................................... 108,102,000 95,006,000
Treasury stock, 390,000 shares .......................... (3,054,000) (3,054,000)
Cumulative foreign currency translation adjustment ...... (3,756,000) (359,000)
------------- -------------
Total stockholders' equity ........................ 134,391,000 117,659,000
------------- -------------
Total liabilities and stockholders' equity ........ $ 236,614,000 $ 213,071,000
============= =============
</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,
---------------------------------
1999 1998
------------- -------------
<S> <C> <C>
Net sales .................................... $ 128,128,000 $ 78,192,000
Cost of goods sold ........................... 75,789,000 46,136,000
------------- -------------
Gross profit .............................. 52,339,000 32,056,000
------------- -------------
Operating expenses:
Selling, general and administrative expense 33,957,000 21,392,000
Royalty income ............................ (572,000) (314,000)
Royalty expense ........................... 1,541,000 973,000
------------- -------------
Total operating expenses ............... 34,926,000 22,051,000
------------- -------------
Operating income ............................. 17,413,000 10,005,000
Interest expense ............................. 908,000 691,000
Foreign currency gain ........................ (295,000) (19,000)
Other expense ................................ 114,000 71,000
------------- -------------
Income before provision for income taxes ..... 16,686,000 9,262,000
Provision for income taxes ................... 6,944,000 3,806,000
------------- -------------
Net income ................................... $ 9,742,000 $ 5,456,000
============= =============
Basic net income per share ................... $ 0.44 $ 0.26
============= =============
Diluted net income per share ................. $ 0.41 $ 0.25
============= =============
Weighted average shares outstanding .......... 22,113,000 21,054,000
============= =============
Diluted weighted average shares outstanding .. 23,504,000 21,760,000
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 5
QUIKSILVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED APRIL 30,
---------------------------------
1999 1998
------------- -------------
<S> <C> <C>
Net sales .................................... $ 214,075,000 $ 133,443,000
Cost of goods sold ........................... 128,315,000 79,459,000
------------- -------------
Gross profit .............................. 85,760,000 53,984,000
------------- -------------
Operating expenses:
Selling, general and administrative expense 59,948,000 38,787,000
Royalty income ............................ (970,000) (771,000)
Royalty expense ........................... 2,620,000 1,747,000
------------- -------------
Total operating expenses ............... 61,598,000 39,763,000
------------- -------------
Operating income ............................. 24,162,000 14,221,000
Interest expense ............................. 1,756,000 1,263,000
Foreign currency gain ........................ (275,000) (35,000)
Other expense ................................ 241,000 144,000
------------- -------------
Income before provision for income taxes ..... 22,440,000 12,849,000
Provision for income taxes ................... 9,344,000 5,278,000
------------- -------------
Net income ................................... $ 13,096,000 $ 7,571,000
============= =============
Basic net income per share ................... $ 0.60 $ 0.36
============= =============
Diluted net income per share ................. $ 0.56 $ 0.35
============= =============
Weighted average shares outstanding .......... 21,891,000 21,041,000
============= =============
Diluted weighted average shares outstanding .. 23,200,000 21,594,000
============= =============
</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,
-----------------------------
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income ...................................................... $ 13,096,000 $ 7,571,000
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization ............................. 3,554,000 2,734,000
Provision for doubtful accounts ........................... 1,392,000 1,139,000
(Gain) loss on sale of fixed assets ....................... (132,000) 12,000
Changes in operating assets and liabilities:
Trade accounts receivable .............................. (26,217,000) (14,190,000)
Other receivable ....................................... 978,000 (1,277,000)
Inventories ............................................ 550,000 (6,793,000)
Prepaid expenses and other current assets .............. (798,000) (480,000)
Other assets ........................................... (130,000) (268,000)
Accounts payable ....................................... (832,000) 1,212,000
Accrued liabilities .................................... (350,000) (1,109,000)
Income taxes payable ................................... 1,205,000 2,205,000
------------ ------------
Net cash used in operating activities ............... (7,684,000) (9,244,000)
Cash flows from investing activities:
Proceeds from sales of fixed assets ............................. 296,000 45,000
Capital expenditures ............................................ (13,638,000) (7,456,000)
Acquisition of Mervin Manufacturing, Inc. ....................... -- (500,000)
------------ ------------
Net cash used in investing activities ................. (13,342,000) (7,911,000)
Cash flows from financing activities:
Borrowings on lines of credit ................................... 29,896,000 26,270,000
Payments on lines of credit ..................................... (19,225,000) (14,956,000)
Borrowings on long-term debt .................................... 2,938,000 4,529,000
Payments on long-term debt ...................................... (2,379,000) (976,000)
Proceeds from stock option exercises ............................ 7,033,000 367,000
------------ ------------
Net cash provided by financing activities ............. 18,263,000 15,234,000
Effect of exchange rate changes on cash ............................ (209,000) (224,000)
------------ ------------
Net decrease in cash and cash equivalents .......................... (2,972,000) (2,145,000)
Cash and cash equivalents, beginning of period ..................... 3,029,000 4,103,000
------------ ------------
Cash and cash equivalents, end of period ........................... $ 57,000 $ 1,958,000
============ ============
Supplementary cash flow information Cash paid during the period for:
Interest ..................................................... $ 1,448,000 $ 1,221,000
============ ============
Income taxes ................................................. $ 8,049,000 $ 3,163,000
============ ============
</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,
1999 and 1998. 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, 1998 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,
1999 1998
----------- -----------
<S> <C> <C>
Raw Materials............ $15,831,000 $18,531,000
Work-In-Process.......... 7,759,000 9,323,000
Finished Goods.......... 43,520,000 42,721,000
----------- -----------
$67,110,000 $70,575,000
=========== ===========
</TABLE>
3. During the three months ended April 30, 1999, the Company's Board of
Directors approved a three-for-two split of the Company's Common Stock.
The split was effected in the form of a dividend on April 23, 1999 to
shareholders of record on April 15, 1999. All share and per-share
information has been restated to reflect the stock split.
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, 1999 COMPARED TO THREE MONTHS ENDED APRIL 30, 1998
Net sales for the three months ended April 30, 1999 increased 63.9% to
$128,128,000 from $78,192,000 in the comparable period of the prior year.
Domestic net sales for the three months ended April 30, 1999 increased 67.5% to
$83,093,000 from $49,608,000 in the comparable period of the prior year, and
European net sales increased 57.6% to $45,035,000 from $28,584,000 for those
same periods. As measured in French Francs, Quiksilver Europe's functional
currency, net sales in the current year's quarter increased 55% compared to the
prior year. Domestic men's sales increased 53.3% to $43,016,000 from $28,062,000
in the comparable period of the prior year, while domestic women's sales
increased 95.2% to $38,764,000 from $19,856,000. In the domestic division, sales
of snowboards, boots and bindings amounted to $1,313,000 in the current year's
quarter compared to $1,690,000 in the prior year. The domestic men's sales
increase came from the Quiksilver Young Men's, Boys and Accessories divisions
and QS Silver Edition. The domestic women's sales increase came from both the
Quiksilver Roxy and Raisins divisions. In Europe, men's sales increased 47.4% to
$37,855,000 from $25,687,000, while women's sales increased 147.8% to $7,180,000
from $2,897,000. The European sales increase came from all divisions.
The gross profit margin for the three months ended April 30, 1999 decreased to
40.8% from 41.0% in the comparable period of the prior year. The domestic gross
profit margin increased somewhat to 37.2% from 37.0% in the comparable period of
the prior year, and the European gross profit margin decreased to 47.6% from
48.0% for those same periods. The domestic gross profit margin was relatively
steady across all divisions. In Europe, the gross profit margin decreased
primarily from higher sampling costs. Sample expenses increased in Europe as
additional samples were produced to support expanded sales efforts in the Boys
and Roxy divisions.
Selling, general and administrative expense ("SG&A") for the three months ended
April 30, 1999 increased 58.7% to $33,957,000 from $21,392,000 in the comparable
period of the prior year. Domestic SG&A increased 62.1% to $21,097,000 from
$13,014,000 in the comparable period of the prior year, and European SG&A
increased 53.5% to $12,860,000 from $8,378,000 for those same periods. The
increase in both domestic and European SG&A was primarily due to higher
personnel costs related to increased sales volume. Primarily as a result of
sales growth in excess of plans that was supported without additional
infrastructure growth, SG&A decreased as a percentage of sales to 26.5% from
27.4%.
Net royalty expense for the three months ended April 30, 1999 increased 47.0% to
$969,000 from $659,000 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, 1999 increased 31.4% to
$908,000 from $691,000 in the comparable period of the prior year. This increase
was primarily due to (i) higher outstanding balances on the Company's domestic
line of credit to provide working capital to support the Company's growth, and
(ii) increased long-term debt in Europe to fund the opening of two company-owned
Boardriders Club stores in Paris.
The effective income tax rate for the three months ended April 30, 1999, which
is based on current estimates of the annual effective income tax rate, increased
to 41.6% from 41.1% in the comparable period of the prior year.
As a result of the above factors, net income for the three months ended April
30, 1999 increased 78.6% to $9,742,000 or $0.41 per share on a diluted basis
from $5,456,000 or $0.25 per share on a diluted basis in the comparable period
of the prior year. Basic net income per share increased to $0.44 for the three
months ended April 30, 1999 from $0.26 in the comparable period of the prior
year.
7
<PAGE> 9
SIX MONTHS ENDED APRIL 30, 1999 COMPARED TO SIX MONTHS ENDED APRIL 30, 1998
Net sales for the six months ended April 30, 1998 increased 60.4% to
$214,075,000 from $133,443,000 in the comparable period of the prior year.
Domestic net sales for the six months ended April 30, 1999 increased 64.5% to
$135,238,000 from $82,211,000 in the comparable period of the prior year, and
European net sales increased 53.9% to $78,837,000 from $51,232,000 for those
same periods. As measured in French Francs, Quiksilver Europe's net sales in the
first six months of the current year increased 49.0% compared to the prior year.
Domestic men's sales increased 45.5% to $71,231,000 from $48,965,000 in the
comparable period of the prior year, while domestic women's sales increased
101.6% to $60,764,000 from $30,144,000. In the domestic division, sales of
snowboards, boots and bindings amounted to $3,243,000 in the current year's six
month period compared to $3,102,000 in the prior year. The domestic men's sales
increase came from Quiksilver young men's, boys' and accessories and QS Silver
Edition divisions. The domestic women's sales increase came from both the
Quiksilver Roxy and Raisins divisions. In Europe, men's sales increased 46.8% to
$69,124,000 from $47,097,000, while women's sales increased 134.9% to $9,713,000
from $4,135,000. The European sales increase came from all divisions.
The gross profit margin for the six months ended April 30, 1999 decreased to
40.1% from 40.5% in the comparable period of the prior year. The domestic gross
profit margin decreased somewhat to 36.9% from 37.1% in the comparable period of
the prior year, and the European gross profit margin decreased to 45.5% from
45.9% for those same periods. The decrease in the domestic gross profit margin
resulted primarily from an increase in the sale of clearance goods in the first
quarter of the current fiscal year. In Europe, the gross profit margin decreased
primarily from higher sampling costs and markdowns taken in the first quarter of
the current year to sell excess current fall/winter product. Sample expenses
increased in Europe as additional samples were produced to support expanded
sales efforts in the Boys and Roxy divisions.
Selling, general and administrative expense ("SG&A") for the six months ended
April 30, 1999 increased 54.6% to $59,948,000 from $38,787,000 in the comparable
period of the prior year. Domestic SG&A increased 57.8% to $36,731,000 from
$23,273,000 in the comparable period of the prior year, and European SG&A
increased 49.7% to $23,217,000 from $15,514,000 for those same periods. The
increase in both domestic and European SG&A was primarily due to higher
personnel costs related to increased sales volume. Primarily as a result of
sales growth in excess of plans that was supported without additional
infrastructure growth, SG&A decreased as a percentage of sales to 28.0% from
29.1%.
Net royalty expense for the six months ended April 30, 1999 increased 69.1% to
$1,650,000 from $976,000 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, 1999 increased 39.0% to
$1,756,000 from $1,263,000 in the comparable period of the prior year. This
increase was primarily due to (i) higher outstanding balances on the Company's
domestic line of credit to provide working capital to support the Company's
growth, and (ii) increased long-term debt in Europe to fund the opening of two
company-owned Boardriders Club stores in Paris.
The effective income tax rate for the six months ended April 30, 1999, which is
based on current estimates of the annual effective income tax rate, increased to
41.6% from 41.1% in the comparable period of the prior year.
As a result of the above factors, net income for the six months ended April 30,
1999 increased 73.0% to $13,096,000 or $0.56 per share on a diluted basis from
$7,571,000 or $0.35 per share on a diluted basis in the comparable period of the
prior year. Basic net income per share increased to $0.60 for the six months
ended April 30, 1999 from $0.36 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, 1999
was $7,684,000 compared to $9,244,000 in the comparable period of the prior
year. The $1,560,000 decrease in cash used in operating activities was due to a
combination of factors. Net income and noncash expenses increased $6,454,000
during the six months ended April 30, 1999 compared to the six months ended
April 30, 1998, while cash used for inventories, net of the increase in accounts
payable decreased $5,299,000. Offsetting these two factors was an increase of
$9,772,000 of cash used to support higher levels of trade and other accounts
receivable.
For the six months ended April 30, 1999, capital expenditures increased 82.9% to
$13,638,000 from $7,456,000 in the comparable period of the prior year. This
increase resulted from spending on leasehold improvements for the new domestic
headquarters and to a lesser extent, increased investments in Quiksvilles and
company-owned Boardriders clubs in comparison to the prior year.
During the six months ended April 30, 1999, net cash provided by financing
activities totaled $18,263,000 compared to $15,234,000 in the comparable period
of the prior year. Borrowings were higher during the first six months of fiscal
1999 primarily as a result of the increase in cash used in investing activities
as discussed above.
The net decrease in cash and cash equivalents for the six months ended April 30,
1999 was $2,972,000 compared to $2,145,000 in the comparable period of the prior
year. Cash and cash equivalents decreased to $57,000 at April 30, 1999 from
$1,958,000 at October 31, 1998, while working capital increased $7,761,000 or
8.4% to $100,082,000 from $92,321,000 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 29.1% to $101,205,000 at April 30, 1999 from
$78,390,000 at October 31, 1998. Domestic accounts receivable increased 23.7% to
$67,216,000 at April 30, 1999 from $54,327,000 at October 31, 1998, and European
accounts receivable increased 41.3% to $33,989,000 from $24,063,000 for that
same period. Both domestically and in Europe, these increases in accounts
receivable are generally consistent with the increases in net sales.
Consolidated inventories decreased 4.9% to $67,110,000 at April 30, 1999 from
$70,575,000 at October 31, 1998. Domestic inventories decreased 0.4% to
$53,079,000 from $53,295,000 at October 31, 1998, and European inventories
decreased 18.8% to $14,031,000 from $17,280,000 for that same period.
In recent years, certain customers of the Company have experienced financial
difficulties, 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.
While management believes that allowances for doubtful accounts at April 30,
1999 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.
9
<PAGE> 11
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 49.0% in French Francs during the six months ended
April 30, 1999 compared to the six months ended April 30, 1998. As measured and
reported in the Company's Condensed Consolidated Statements Income, European net
sales increased 53.9%.
YEAR 2000 READINESS DISCLOSURE
The Company is continuing with its Year 2000 Compliance Project ("Y2K Project")
as outlined in the Company's Annual Report on Form 10-K for the year ended
October 31, 1998. Original estimates that the Company's accounts payable and
general ledger systems would be upgraded by the third quarter of fiscal 1999
have been revised. Currently, it is estimated that this phase of the Y2K Project
will be completed in the fourth quarter of fiscal 1999. Other estimates
regarding time of completion and the total cost of the Y2K Project generally
remain unchanged.
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 19, 1999. 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:
Votes Votes
For Withheld
---------- --------
Robert B. McKnight, Jr. 13,572,491 7,821
William M. Barnum, Jr. 13,572,791 7,721
Charles E. Crowe 13,572,791 7,721
Michael H. Gray 13,572,491 8,021
Harry Hodge 13,572,791 7,721
Robert G. Kirby 13,572,491 8,021
Tom Roach 13,572,491 8,021
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,
1999.
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 11, 1999 /s/ Steven L. Brink
----------------------------------------
Steven L. Brink
Chief Financial Officer, Secretary and
Treasurer (Principal Accounting Officer)
13
<PAGE> 15
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
27.0 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUIKSILVER, INC. APRIL 30, 1999 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> APR-30-1999
<CASH> 57,000
<SECURITIES> 0
<RECEIVABLES> 106,406,000
<ALLOWANCES> 5,201,000
<INVENTORY> 67,110,000
<CURRENT-ASSETS> 175,803,000
<PP&E> 57,161,000
<DEPRECIATION> 16,699,000
<TOTAL-ASSETS> 236,614,000
<CURRENT-LIABILITIES> 75,721,000
<BONDS> 26,502,000
0
0
<COMMON> 223,000
<OTHER-SE> 134,168,000
<TOTAL-LIABILITY-AND-EQUITY> 236,614,000
<SALES> 214,075,000
<TOTAL-REVENUES> 214,075,000
<CGS> 128,315,000
<TOTAL-COSTS> 128,315,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,392,000
<INTEREST-EXPENSE> 1,756,000
<INCOME-PRETAX> 22,440,000
<INCOME-TAX> 9,344,000
<INCOME-CONTINUING> 13,096,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,096,000
<EPS-BASIC> 0.60
<EPS-DILUTED> 0.56
</TABLE>
