UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

December 11, 2014

 

 

Quiksilver, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-14229		33-0199426
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification Number)

 

15202 Graham Street, Huntington Beach, CA		92649
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:

(714) 889-2200

 

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02

Results of Operations and Financial Condition.

On December 11, 2014, Quiksilver, Inc. (the “Company”) issued a press release announcing its financial results for the three months and full fiscal year ended October 31, 2014. The press release is attached hereto as Exhibit 99.1.

Also on December 11, 2014, the Company posted to its investor relations website supplemental quarterly and annual financial information for the fiscal year ended October 31, 2014 reflecting: (a) the impact on the Company’s reported fiscal 2014 net revenues (i) of October 2014 average foreign currency exchange rates, and (ii) from removing wholesale net revenues associated with product categories that have since been licensed to third parties; and (b) the Company’s results of operations from continuing operations excluding the Company’s Surfdome business as though it was a discontinued operation for all periods presented. The financial information is attached hereto as Exhibit 99.2 and Exhibit 99.3, respectively.

In addition to Quiksilver’s GAAP financial information, the press release and other financial information furnished with this report reports adjusted EBITDA from continuing operations, pro forma adjusted EBITDA from continuing operations, and constant currency continuing category measures, all of which are considered non-GAAP financial measures. The Company believes these non-GAAP financial measures are useful to investors as they provide consistency and comparability with its past financial reports, as well as useful information to enable investors to perform additional analyses of past, present and future operating performance and as a supplemental means to evaluate the Company’s operations. These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP or other pro forma measures used by other companies.

The information in this Form 8-K and Exhibits shall not be deemed filed for purposes of Section 18 of Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liability of that section, and, shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is being furnished herewith:

 

Exhibit No.		Exhibit Title or Description
99.1		Press Release dated December 11, 2014, issued by Quiksilver, Inc.
99.2		Quiksilver, Inc. and Subsidiaries Fiscal 2014 Net Revenues on a Constant Currency Continuing Category Basis (unaudited)
99.3		Quiksilver, Inc. and Subsidiaries Fiscal 2014 Consolidated Statements of Continuing Operations by Quarter (unaudited)

 

2

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SIGNATURES

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 hereunto duly authorized.

 

Dated: December 11, 2014				Quiksilver, Inc. (Registrant)
				By:		/s/ Richard Shields
						Richard Shields
						Chief Financial Officer

 

3

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INDEX TO EXHIBITS

 

Exhibit No.		Exhibit Title or Description
99.1		Press Release dated December 11, 2014, issued by Quiksilver, Inc.
99.2		Quiksilver, Inc. and Subsidiaries Fiscal 2014 Net Revenues on a Constant Currency Continuing Category Basis (unaudited)
99.3		Quiksilver, Inc. and Subsidiaries Fiscal 2014 Consolidated Statements of Continuing Operations by Quarter (unaudited)

 

4

Exhibit 99.1

 

 

 

		Contact:		Robert Jaffe
				Investor Relations
				424-288-4098
				zqk@quiksilver.com

Quiksilver Reports Fiscal 2014 Fourth-Quarter, Full-Year Financial Results

—Company Provides Outlook for Fiscal 2015—

Huntington Beach, California, December 11, 2014—Quiksilver, Inc. (NYSE:ZQK) today announced financial results for the fiscal 2014 fourth quarter and full year ended October 31, 2014.

“We have successfully completed the organizational restructuring of the company, with every employee now singularly focused on execution,” said Andy Mooney, Chairman and Chief Executive Officer of Quiksilver, Inc. “Despite a challenging year, we significantly reduced costs and inventory levels, and are excited about our 2015 product offerings. Retail response to our Spring ‘15 product lines across all brands has been encouraging, with feedback on Fall ’15 even more positive. Along with more than $160 million of liquidity at year end, we have a strong foundation in place and anticipate revenue stabilization and significant pro-forma adjusted EBITDA growth in the coming year.”

As recently announced, the Company has reached a definitive agreement to sell its majority ownership interest in Surfdome for net proceeds of approximately $16 million. As a result, the Company has reclassified the current and prior year operating results of Surfdome, along with its previously divested Mervin and Hawk businesses, as discontinued operations. All of the results presented below represent the Company’s continuing operations.

Please refer to the accompanying tables for a reconciliation of GAAP results from continuing operations to certain non-GAAP results from continuing operations, including adjusted EBITDA and pro-forma adjusted EBITDA; a definition of the Company’s emerging markets; and changes in net revenue on a constant currency continuing category basis, which adjusts prior period net revenues for changes in currency exchange rates and excludes prior period wholesale net revenues for product categories now licensed, as well as removes current period licensing net revenues for the same licensed product categories, in order to provide comparability of net revenues between periods.

Fourth Quarter Review:

The following comparisons refer to results of continuing operations for the fourth quarter of fiscal 2014 versus the fourth quarter of fiscal 2013.

Net revenues, as reported, were $401 million compared with $476 million. Net revenues were down 11%, or $50 million, on a constant currency continuing category basis.

 

•

Americas net revenues, as reported, were $172 million compared with $223 million. Americas net revenues were down 18%, or $37 million, on constant currency continuing category basis.

 

•

EMEA net revenues, as reported, were $156 million compared with $168 million. EMEA net revenues were down 3%, or $4 million, on constant currency continuing category basis.

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Quiksilver, Inc. Reports Fiscal 2014 Fourth Quarter Financial Results

December 11, 2014

Page 2 of 9

 

 

•

APAC net revenues, as reported, were $71 million compared with $83 million. APAC net revenues were down 10%, or $8 million, on constant currency continuing category basis.

Gross margin decreased to 46.7% from 47.0%. The 30 basis point decline in gross margin reflects higher discounting, partially offset by higher sales mix in direct to consumer channels.

SG&A expense decreased $10 million to $210 million from $220 million. The decrease was primarily driven by reduced employee compensation.

Asset impairments totaled $5 million compared with $2 million.

Pro-forma Adjusted EBITDA was $11 million compared with $35 million.

Net loss from continuing operations attributable to Quiksilver, Inc. was $49 million, or $0.29 per share, compared with $175 million, or $1.04 per share. The prior year period included a $157 million income tax charge related to recording valuation allowances against certain deferred tax assets in the company’s EMEA segment.

Q4 Net Revenue Highlights:

Net revenues from continuing operations by brand, sales channel and product group for the fourth quarter of fiscal 2014 compared with the fourth quarter of fiscal 2013 were as follows.

Brands:

 

•

Quiksilver net revenues, as reported, were $156 million compared with $190 million. Quiksilver net revenues were down 12%, or $21 million, on a constant currency continuing category basis;

 

•

Roxy net revenues, as reported, were $124 million compared with $137 million. Roxy net revenues were down 6%, or $9 million, on a constant currency continuing category basis; and

 

•

DC net revenues, as reported, were $112 million compared with $139 million. DC net revenues were down 14%, or $18 million, on a constant currency continuing category basis.

Distribution channels:

 

•

Wholesale net revenues, as reported, were $280 million compared with $348 million. Wholesale net revenues were down 14%, or $44 million, on a constant currency continuing category basis;

 

•

Retail net revenues, as reported, were $102 million compared with $107 million. Retail net revenues were down 1%, or $1 million, on a constant currency continuing category basis. Same-store sales in company-owned retail stores decreased 3%. Company-owned retail stores totaled 683 at the end of fiscal 2014 compared with 631 at the end of fiscal 2013; and

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Quiksilver, Inc. Reports Fiscal 2014 Fourth Quarter Financial Results

December 11, 2014

Page 3 of 9

 

 

•

E-commerce net revenues, as reported, were $15 million compared with $16 million. E-commerce net revenues were down 3%, or $1 million, on a constant currency continuing category basis.

Product groups:

 

•

Apparel and accessories net revenues, as reported, were $317 million compared with $371 million. Apparel and accessories net revenues were down 9%, or $31 million, on a constant currency continuing category basis; and

 

•

Footwear net revenues were $84 million compared with $104 million. Footwear net revenues were down 18%, or $18 million, on a constant currency continuing category basis.

Net revenues from emerging markets, as reported, were $54 million compared with $61 million. Net revenues from emerging markets were down 6%, or $3 million, on a constant currency continuing category basis.

Fiscal 2014 Full Year Review:

The following comparisons refer to results of continuing operations for the full year of fiscal 2014 versus the full year of fiscal 2013.

Net revenues, as reported, were $1.57 billion compared with $1.81 billion. Net revenues were down 11%, or $189 million, on constant currency continuing category basis.

 

•

Americas net revenues, as reported, were $723 million compared with $893 million. Americas net revenues were down 16%, or $135 million, on constant currency continuing category basis.

 

•

EMEA net revenues, as reported, were $584 million compared with $632 million. EMEA net revenues were down 8%, or $53 million, on constant currency continuing category basis.

 

•

APAC net revenues, as reported, were $262 million compared with $282 million. APAC net revenues were up 1%, or $2 million, on constant currency continuing category basis.

Gross margin increased to 48.6% from 48.2%. The increase was primarily driven by the sales mix shift into higher gross margin direct to consumer channels and regional segments.

SG&A expense decreased $31 million to $827 million from $858 million, primarily due to reduced expenses related to sponsored athletes and events, employee compensation, facility expenses and consulting fees, partially offset by increased bad debt expense.

Asset impairments totaled $189 million compared with $12 million, primarily reflecting a non-cash charge of $178 million in the third quarter of fiscal 2014 to write-off the carrying value of goodwill attributable to the Company’s EMEA reporting segment.

Pro-forma Adjusted EBITDA decreased to $39 million from $118 million.

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Quiksilver, Inc. Reports Fiscal 2014 Fourth Quarter Financial Results

December 11, 2014

Page 4 of 9

 

Net loss from continuing operations attributable to Quiksilver, Inc. was $327 million, or $1.92 per share, compared with $239 million, or $1.43 per share.

Fiscal 2014 Net Revenue Highlights:

Net revenues from continuing operations by brand, sales channel and product group for the full year of fiscal 2014 compared with the full year of fiscal 2013 were as follows.

Brands:

 

•

Quiksilver net revenues, as reported, were $628 million compared with $721 million. Quiksilver net revenues were down 10%, or $68 million, on a constant currency continuing category basis;

 

•

Roxy net revenues, as reported, were $480 million compared with $511 million. Roxy net revenues were down 4%, or $22 million, on a constant currency continuing category basis; and,

 

•

DC net revenues, as reported, were $427 million compared with $542 million. DC net revenues were down 19%, or $99 million, on a constant currency continuing category basis.

Distribution channels:

 

•

Wholesale net revenues, as reported, were $1.04 billion compared with $1.29 billion. Wholesale net revenues were down 16%, or $199 million, on a constant currency continuing category basis;

 

•

Retail net revenues, as reported, were $445 million compared with $447 million. Retail net revenues were up 1%, or $5 million, on a constant currency continuing category basis. Same-store sales in company-owned retail stores were flat; and,

 

•

E-commerce net revenues, as reported, were $77 million compared with $69 million. E-commerce net revenues were up 12%, or $8 million, on a constant currency continuing category basis.

Product groups:

 

•

Apparel and accessories net revenues, as reported, were $1.17 billion compared with $1.35 billion. Apparel and accessories net revenues were down 10%, or $134 million, on a constant currency continuing category basis; and

 

•

Footwear net revenues, as reported, were $397 million compared with $457 million. Footwear net revenues were down 12%, or $55 million, on a constant currency continuing category basis.

Net revenues from emerging markets, as reported, were $201 million compared with $191 million. Net revenues from emerging markets increased 14%, or $25 million, on a constant currency continuing category basis.

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Quiksilver, Inc. Reports Fiscal 2014 Fourth Quarter Financial Results

December 11, 2014

Page 5 of 9

 

Outlook:

The Company provided the following guidance for continuing operations assuming October 31, 2014 currency exchange rates.

Fiscal year 2015 net revenues are expected in the range of $1.48 billion to $1.55 billion, an increase of 1% to 5% on a constant currency continuing category basis versus the prior period. Gross margins are expected in the range of 49.5% to 51%. SG&A, excluding any restructuring and special charges, is expected within the range of $750M to $765M. Pro-forma Adjusted EBITDA is expected in the range of $80 million to $90 million. Capital expenditures are expected to be below $25 million.

First quarter 2015 net revenues are expected to be approximately $340 million, which is a reduction of approximately 7% on a constant currency continuing category basis versus the prior period. Gross margins are expected to be approximately 51.3%. SG&A, excluding any restructuring and special charges, is expected to be approximately $187 million. Pro-forma Adjusted EBITDA is expected to be approximately $6 million.

The foregoing outlook updates and supersedes all previous guidance provided by the Company.

About Quiksilver:

Quiksilver, Inc., one of the world’s leading outdoor sports lifestyle companies, designs, produces and distributes branded apparel, footwear and accessories. The Company’s apparel and footwear brands, inspired by a passion for outdoor action sports, represent a casual lifestyle for young-minded people who connect with its boardriding culture and heritage. The Company’s Quiksilver, Roxy, and DC brands have authentic roots and heritage in surf, snow and skate. The Company’s products are sold in more than 100 countries in a wide range of distribution, including surf shops, skate shops, snow shops, its proprietary Boardriders Club shops and other Company-owned retail stores, other specialty stores, select department stores and through various e-commerce channels. The Company’s corporate headquarters are in Huntington Beach, California.

Forward-looking statements:

This press release contains forward-looking statements including, but not limited to, statements regarding management’s expectations regarding the pending sale of the Company’s stake in Surfdome and for the Company’s net revenues, gross margins, SG&A expense, pro-forma adjusted EBITDA and capital expenditures in fiscal year 2015. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. The Company undertakes no obligation to update these statements, which are made only as of the date of this press release. For the factors that could cause actual results to differ materially from expectations, please refer to the Company’s SEC filings and specifically the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Forward-Looking Statements” in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

* * * * *

NOTE: For further information about Quiksilver, Inc., please visit our website at www.quiksilverinc.com. We also invite you to explore our brand sites, www.quiksilver.com, www.roxy.com and www.dcshoes.com.

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Quiksilver, Inc. Reports Fiscal 2014 Fourth Quarter Financial Results

December 11, 2014

Page 6 of 9

 

FINANCIAL TABLES FOLLOW

QUIKSILVER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

		Three months ended								Twelve months ended
In thousands, except per share amounts		October 31,								October 31,
		2014				2013				2014				2013
Revenues, net		$	400,650			$	475,913			$	1,570,399			$	1,810,570
Cost of goods sold			213,699				252,241				807,558				938,139
Gross profit			186,951				223,672				762,841				872,431
Selling, general and administrative expense			210,102				220,404				827,181				857,557
Goodwill Impairments			—				—				178,197				—
Asset impairments			5,287				1,675				10,934				12,327
Operating income			(28,438	)			1,593				(253,471	)			2,547
Interest expense			18,632				20,000				75,991				71,049
Foreign currency loss			1,272				319				2,658				4,689
Loss before provision/(benefit) for income taxes			(48,342	)			(18,726	)			(332,120	)			(73,191	)
Provision/(Benefit) for income taxes			1,140				157,496				(4,325	)			166,220
Loss from continuing operations			(49,482	)			(176,222	)			(327,795	)			(239,411	)
(Loss)/Income from discontinued operations, net of tax			(2,611	)			3,715				7,649				5,886
Net loss			(52,093	)			(172,507	)			(320,146	)			(233,525	)
Less: net loss attributable to non-controlling interest			475				1,395				10,769				960
Net loss attributable to Quiksilver, Inc.		$	(51,618	)		$	(171,112	)		$	(309,377	)		$	(232,565	)
Loss per share from continuing operations attributable to Quiksilver, Inc.:
Basic		$	(0.29	)		$	(1.04	)		$	(1.92	)		$	(1.43	)
Diluted		$	(0.29	)		$	(1.04	)		$	(1.92	)		$	(1.43	)
(Loss)/Income per share from discontinued operations attributable to Quiksilver, Inc.:
Basic		$	(0.01	)		$	0.02			$	0.11			$	0.04
Diluted		$	(0.01	)		$	0.02			$	0.11			$	0.04
Weighted average common shares outstanding:
Basic			170,990				168,796				170,492				167,255
Diluted			170,990				168,796				170,492				167,255
Amounts attributable to Quiksilver, Inc.:
Loss from continuing operations		$	(49,482	)		$	(174,759	)		$	(327,434	)		$	(238,766	)
(Loss)/Income from discontinued operations, net of tax			(2,136	)			3,647				18,057				6,201
Net loss		$	(51,618	)		$	(171,112	)		$	(309,377	)		$	(232,565	)

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Quiksilver, Inc. Reports Fiscal 2014 Fourth Quarter Financial Results

December 11, 2014

Page 7 of 9

 

QUIKSILVER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

		October 31, 2014				October 31, 2013
In thousands
ASSETS
Current Assets
Cash and cash equivalents		$	46,664			$	57,280
Restricted cash			21,201				—
Trade accounts receivable (net of allowance of $63,991 and $60,912, respectively)			319,840				411,638
Other receivables			40,847				23,306
Inventories			278,780				337,715
Deferred income taxes - short-term			4,926				9,997
Prepaid expenses and other current assets			28,080				24,124
Current assets held for sale			20,265				51,196
Total Current Assets			760,603				915,256
Fixed assets, net			213,768				231,261
Intangible assets, net			135,510				134,596
Goodwill			80,622				261,625
Other assets			47,086				53,287
Deferred income taxes - long-term			16,088				—
Non-current assets held for sale			2,987				24,445
TOTAL ASSETS		$	1,256,664			$	1,620,470
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable		$	168,307			$	201,675
Accrued liabilities			112,701				121,545
Current portion of long-term debt			35,361				23,488
Income taxes payable			1,156				3,912
Deferred income taxes - short-term			19,628				—
Liabilities related to assets held for sale			12,640				16,420
Total Current Liabilities			349,793				367,040
Long-term debt, net of current portion			793,229				807,812
Other long-term liabilities			39,342				36,345
Deferred income taxes - long-term			16,790				19,896
Non-current liabilities related to assets held for sale			—				1,719
Total Liabilities			1,199,154				1,232,812
Equity
Common stock			1,741				1,726
Additional paid-in capital			589,032				576,726
Treasury stock			(6,778	)			(6,778	)
Accumulated deficit			(585,263	)			(275,886	)
Accumulated other comprehensive income			57,298				73,918
Total Quiksilver, Inc. Stockholders’ Equity			56,030				369,706
Non-controlling interest			1,480				17,952
Total Equity			57,510				387,658
TOTAL LIABILITIES AND EQUITY		$	1,256,664			$	1,620,470

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Quiksilver, Inc. Reports Fiscal 2014 Fourth Quarter Financial Results

December 11, 2014

Page 8 of 9

 

QUIKSILVER, INC. AND SUBSIDIARIES

ADJUSTED EBITDA & PRO-FORMA ADJUSTED EBITDA RECONCILIATION (UNAUDITED)

 

		Three months ended								Twelve months ended
In thousands		October 31,								October 31,
		2014				2013				2014				2013
Net loss from continuing operations attributable to Quiksilver, Inc.		$	(49,482	)		$	(174,759	)		$	(327,434	)		$	(238,766	)
Provision/(Benefit) for income taxes			1,140				157,496				(4,325	)			166,220
Interest expense			18,632				20,000				75,991				71,049
Depreciation and amortization			12,074				12,977				51,938				49,958
Non-cash stock-based compensation expense			1,450				5,361				17,260				21,556
Non-cash asset impairments			5,287				1,675				189,131				12,327
Adjusted EBITDA			(10,899	)			22,750				2,561				82,344
Restructuring and other special charges			21,666				12,518				36,118				35,649
Pro-forma Adjusted EBITDA			10,767				35,268				38,679				117,993

Definition of Adjusted EBITDA and Pro-forma Adjusted EBITDA:

Adjusted EBITDA is defined as net loss from continuing operations attributable to Quiksilver, Inc. before (i) interest expense, (ii) (benefit)/provision for income taxes, (iii) depreciation and amortization, (iv) non-cash stock-based compensation expense and (v) non-cash asset impairments. Pro-forma Adjusted EBITDA is defined as Adjusted EBITDA excluding restructuring and other special charges (including, but not limited to, reserves and other charges associated with restructuring activities, non-operating charges for gains and losses on lease exit activities, as well as severance and other employee termination costs as a result of downsizing and reorganization). Adjusted EBITDA and Pro-forma Adjusted EBITDA are not defined under generally accepted accounting principles (“GAAP”), and may not be comparable to similarly titled measures reported by other companies. We use Adjusted EBITDA and Pro-forma Adjusted EBITDA, along with other GAAP measures, as measures of profitability because Adjusted EBITDA and Pro-forma Adjusted EBITDA compare our performance on a consistent basis by removing from our operating results the impact of our capital structure, the effect of operating in different tax jurisdictions, the impact of our asset base, which can differ depending on the book value of assets, the accounting methods used to compute depreciation and amortization, the existence or timing of asset impairments, the effect of non-cash stock-based compensation expense and restructuring and other special charges. We believe EBITDA is useful to investors as it is a widely used measure of performance and the adjustments we make to EBITDA provide further clarity on our profitability. We remove the effect of non-cash stock-based compensation from our earnings which can vary based on share price, share price volatility and the expected life of the equity instruments we grant. In addition, this stock-based compensation expense does not result in cash payments by us. We remove the effect of asset impairments from Adjusted EBITDA for the same reason that we remove depreciation and amortization as it is part of the non-cash impact of our asset base. We also remove from Pro-forma Adjusted EBITDA the impact of certain reserves and charges associated with restructuring activities, non-operating charges for gains and losses on lease exit activities, as well as severance and other employee termination costs as these costs are not typically part of normal, day-to-day operations. Adjusted EBITDA and Pro-forma Adjusted EBITDA have limitations as profitability measures in that they do not include the interest expense on our debts, our provisions for income taxes, the effect of our expenditures for capital assets and certain intangible assets, the effect of non-cash stock-based compensation expense, the effect of asset impairments and the effect of restructuring and other special charges.

Definition of Emerging Markets:

The Company’s references to emerging markets in this press release refer to net revenues generated in Brazil, Mexico, Korea, China, Indonesia, Taiwan and Russia, collectively.

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Quiksilver, Inc. Reports Fiscal 2014 Fourth Quarter Financial Results

December 11, 2014

Page 9 of 9

 

CONSTANT CURRENCY CONTINUING CATEGORY NET REVENUE RECONCILIATION

We make reference to net revenues on a “constant currency continuing category” basis in order to provide additional comparable information with regard to changes in net revenues. Constant currency continuing category reporting provides valuable comparisons of net revenues as it adjusts for the effect of changes in foreign currency exchange rates and for the impact on our wholesale channel of transitioning certain product categories to a third-party licensing model. Constant currency is calculated by taking the average foreign currency exchange rate for the current period and applying that same rate to the comparable prior year period. Continuing category impacts are determined by removing the comparable prior period net revenues generated from product categories which are now licensed as well as removing current period licensing net revenues generated from those same licensed product categories.

The following table presents net revenues from continuing operations by segment, brand, channel and product group on both an as reported basis and a comparable constant currency continuing category basis for the fourth quarters ended October 31, 2014 and 2013 (in thousands):

 

		Fiscal 2014 Net Revenues As Reported (GAAP)				Less Fiscal 2014 Licensing Revenue from Licensed Product Categories				Fiscal 2014 Comparable Net Revenues (Non-GAAP)				Fiscal 2013 Net Revenues As Reported (GAAP)				Impact of Fiscal 2014 Foreign Exchange Rates on Fiscal 2013 Net Revenues				Less Fiscal 2013 Net Revenues from Licensed Product Categories				Fiscal 2013 Constant Currency Continuing Category Net Revenues (Non-GAAP)				%D Fiscal 2014 GAAP Net Revenues vs Fiscal 2013 GAAP Net Revenues				%D Fiscal  2014 Non-GAAP Net Revenues vs Fiscal 2013 Non-GAAP Net Revenues
By Region:
Americas			172,478				(1,444	)			171,034				223,204				(3,123	)			(12,333	)			207,748				-23	%			-18	%
EMEA			156,457				—				156,457				168,317				(7,699	)			—				160,618				-7	%			-3	%
APAC			71,239				—				71,239				83,025				(3,893	)			—				79,132				-14	%			-10	%
Corporate			476				—				476				1,367				(12	)			—				1,355				-65	%			-65	%
			400,650				(1,444	)			399,206				475,913				(14,727	)			(12,333	)			448,853				-16	%			-11	%
By Brand:
Quiksilver			156,132				(866	)			155,266				190,158				(5,704	)			(7,973	)			176,481				-18	%			-12	%
Roxy			124,153				—				124,153				137,134				(4,479	)			—				132,655				-9	%			-6	%
DC			112,480				(578	)			111,902				138,697				(4,120	)			(4,361	)			130,216				-19	%			-14	%
Other			7,885				—				7,885				9,924				(424	)			—				9,500				-21	%			-17	%
			400,650				(1,444	)			399,206				475,913				(14,727	)			(12,333	)			448,853				-16	%			-11	%
By Channel:
Wholesale			279,940				—				279,940				347,825				(11,623	)			(12,333	)			323,869				-20	%			-14	%
Retail			102,308				—				102,308				106,580				(2,956	)			—				103,624				-4	%			-1	%
E-commerce			15,442				—				15,442				16,128				(148	)			—				15,980				-4	%			-3	%
Licensing/Royalties			2,960				(1,444	)			1,516				5,380				—				—				5,380				-45	%			-72	%
			400,650				(1,444	)			399,206				475,913				(14,727	)			(12,333	)			448,853				-16	%			-11	%
By Product Group:
Apparel & Accessories			316,941				(1,444	)			315,497				371,452				(12,262	)			(12,333	)			346,857				-15	%			-9	%
Footwear			83,709				—				83,709				104,461				(2,465	)			—				101,996				-20	%			-18	%
			400,650				(1,444	)			399,206				475,913				(14,727	)			(12,333	)			448,853				-16	%			-11	%

The following table presents net revenues from continuing operations by segment, brand, channel and product group on both an as reported basis and a comparable constant currency continuing category basis for the fiscal years ended October 31, 2014 and 2013 (in thousands):

 

		Fiscal 2014 Net Revenues As Reported (GAAP)				Less Fiscal 2014 Licensing Revenue from Licensed Product Categories				Fiscal 2014 Comparable Net Revenues (Non-GAAP)				Fiscal 2013 Net Revenues As Reported (GAAP)				Impact of Fiscal 2014 Foreign Exchange Rates on Fiscal 2013 Net Revenues				Less Fiscal 2013 Net Revenues from Licensed Product Categories				Fiscal 2013 Constant Currency Continuing Category Net Revenues (Non- GAAP)				%D Fiscal 2014 GAAP Net Revenues vs Fiscal 2013 GAAP Net Revenues				%D Fiscal  2014 Non-GAAP Net Revenues vs Fiscal 2013 Non-GAAP Net Revenues
By Region:
Americas			723,427				(5,537	)			717,890				893,333				(13,002	)			(27,408	)			852,923				-19	%			-16	%
EMEA			583,650				—				583,650				631,546				4,949				—				636,495				-8	%			-8	%
APAC			262,494				—				262,494				282,070				(21,377	)			—				260,693				-7	%			1	%
Corporate			828				—				828				3,621				32				—				3,653				-77	%			-77	%
			1,570,399				(5,537	)			1,564,862				1,810,570				(29,398	)			(27,408	)			1,753,764				-13	%			-11	%
By Brand:
Quiksilver			627,962				(3,322	)			624,640				721,370				(12,090	)			(16,579	)			692,701				-13	%			-10	%
Roxy			480,111				—				480,111				510,793				(8,642	)			—				502,151				-6	%			-4	%
DC			426,515				(2,215	)			424,300				541,969				(8,251	)			(10,829	)			522,889				-21	%			-19	%
Other			35,811				—				35,811				36,438				(415	)			—				36,023				-2	%			-1	%
			1,570,399				(5,537	)			1,564,862				1,810,570				(29,398	)			(27,408	)			1,753,764				-13	%			-11	%
By Channel:
Wholesale			1,037,972				—				1,037,972				1,286,351				(22,458	)			(27,408	)			1,236,485				-19	%			-16	%
Retail			444,999				—				444,999				447,105				(6,808	)			—				440,297				0	%			1	%
E-commerce			77,325				—				77,325				69,287				(132	)			—				69,155				12	%			12	%
Licensing/Royalties			10,103				(5,537	)			4,566				7,827				(0	)			—				7,827				29	%			-42	%
			1,570,399				(5,537	)			1,564,862				1,810,570				(29,398	)			(27,408	)			1,753,764				-13	%			-11	%
By Product Group:
Apparel & Accessories			1,173,551				(5,537	)			1,168,014				1,353,803				(24,129	)			(27,408	)			1,302,266				-13	%			-10	%
Footwear			396,848				—				396,848				456,767				(5,269	)			—				451,498				-13	%			-12	%
			1,570,399				(5,537	)			1,564,862				1,810,570				(29,398	)			(27,408	)			1,753,764				-13	%			-11	%

Exhibit 99.2

Quiksilver, Inc. and Subsidiaries

Fiscal 2014 Net Revenues on Constant Currency Continuing Category Basis (unaudited) _1,2

 

		Fiscal Year 2014 Quarterly Net Revenues - Continuing Categories
in $millions		Q1				Q2				Q3				Q4				FY
Americas Region, as reported			173.2				186.4				191.4				172.5				723.4
Adjusted to October 2014 Average FX Rates			-1.9				-1.5				-2.2				-0.9				-6.4
Less: Licensing Impact			-11.9				-14.0				-17.7				-7.7				-51.4
Americas Region - Constant Currency Continuing Category			159.4				171.0				171.4				163.8				665.6
Total Wholesale Channel, as reported			236.4				286.4				235.2				279.9				1,038.0
Adjusted to October 2014 Average FX Rates			-8.8				-11.4				-8.0				-4.2				-32.4
Less: Licensing Impact			-11.9				-14.0				-17.7				-7.7				-51.4
Total Wholesale Channel - Constant Currency Continuing Category			215.7				261.0				209.5				268.0				954.2
Quiksilver Brand, as reported			163.1				166.7				142.0				156.1				628.0
Adjusted to October 2014 Average FX Rates			-6.9				-7.1				-6.1				-2.8				-22.9
Less: Licensing Impact			-5.6				-6.1				-4.4				-1.0				-17.1
Quiksilver Brand - Constant Currency Continuing Category			150.6				153.5				131.5				152.4				587.9
Roxy Brand, as reported			117.3				120.2				118.5				124.2				480.1
Adjusted to October 2014 Average FX Rates			-4.4				-4.3				-4.1				-1.8				-14.6
Less: Licensing Impact			-2.8				-5.2				-7.9				-3.0				-19.0
Roxy Brand - Constant Currency Continuing Category			110.0				110.6				106.6				119.3				446.5
DC Brand, as reported			102.2				103.0				108.8				112.5				426.5
Adjusted to October 2014 Average FX Rates			-3.8				-3.9				-3.7				-1.7				-13.1
Less: Licensing Impact			-3.5				-2.6				-5.5				-3.7				-15.3
DC Brand - Constant Currency Continuing Category			94.9				96.5				99.7				107.1				398.2
Quiksilver Consolidated, as reported			392.6				397.1				380.0				400.6				1,570.4
Adjusted to October 2014 Average FX Rates			-15.8				-15.6				-14.5				-6.3				-52.3
Less: Licensing Impact			-11.9				-14.0				-17.7				-7.7				-51.4
Quiksilver Consolidated - Constant Currency Continuing Category			364.9				367.5				347.8				386.6				1,466.7

Notes:

 

1.		All licensing impact calculations are based on the fiscal 2014 wholesale net revenues generated from product categories that have been licensed as of December 1, 2014, and assuming that the timing of all product transitions with our licensing partners occurs as currently expected. All amounts are subject to change for any additional licensing activities subsequent to December 1, 2014.
2.		Net revenues denominated in foreign currencies are translated herein at October 2014 average exchange rates. Actual constant currency impacts for comparisons with fiscal 2015 quarterly results will be determined at each quarter’s applicable average exchange rates.

Exhibit 99.3

QUIKSILVER, INC. AND SUBSIDIARIES

FISCAL 2014 CONSOLIDATED STATEMENTS OF CONTINUING OPERATIONS BY QUARTER (UNAUDITED)

 

In thousands, except per share amounts		Q1 2014				Q2 2014				Q3 2014				Q4 2014				2014 YTD
Revenues, net		$	392,612			$	397,121			$	380,016			$	400,650			$	1,570,399
Cost of goods sold			192,776				202,767				198,316				213,699				807,558
Gross profit			199,836				194,354				181,700				186,951				762,841
Selling, general and administrative expense			203,784				207,922				205,373				210,102				827,181
Asset impairments			883				4,584				178,377				5,287				189,131
Operating loss			(4,831	)			(18,152	)			(202,050	)			(28,438	)			(253,471	)
Interest expense			19,420				19,222				18,717				18,632				75,991
Foreign currency loss/(gain)			2,828				887				(2,329	)			1,272				2,658
Loss before (benefit)/provision for income taxes			(27,079	)			(38,261	)			(218,438	)			(48,342	)			(332,120	)
(Benefit)/Provision for income taxes			(4,385	)			(444	)			(636	)			1,140				(4,325	)
Net loss from continuing operations			(22,694	)			(37,817	)			(217,802	)			(49,482	)			(327,795	)
Less net loss attributable to non-controlling interest			361				—				—				—				361
Net loss attributable to Quiksilver, Inc.		$	(22,333	)		$	(37,817	)		$	(217,802	)		$	(49,482	)		$	(327,434	)
Net loss per share attributable to Quiksilver, Inc., basic and diluted:		$	(0.13	)		$	(0.22	)		$	(1.28	)		$	(0.29	)		$	(1.92	)
Weighted average common shares outstanding, basic and diluted:			169,747				170,475				170,794				170,990				170,492

Note:

All amounts above exclude the operations of Surfdome as though it was a discontinued operation for all periods presented.