Quiksilver Posts 2nd-Quarter Profit, Announces $150 Million Loan
Huntington Beach, Calif.–based surf giant Quiksilver posted a modest profit in its second quarter, marking the second time it has done so in the past two years. With earnings at $2.8 million for the quarter (a significant improvement over the same period last year, which saw a loss of $206.2 million), revenue was down 17 percent to $494.2 million for the quarter. All regions of Quiksilver’s business suffered, with a drop of 26 percent in revenue and 37 percent in earnings in Europe and a 7 percent drop in revenue in the Americas to $230 million.
Quiksilver announced a deal that gives it $150 million in financing from Rhone, an international private equity firm. A release from the surfwear maker said the five-year secured term loan would “significantly improve [Quiksilver’s] liquidity position and is expected to provide the cornerstone to solidify Quiksilver’s regional banking relationships around the world.” The company also announced a written commitment with Bank of America and GE Capital to refinance its existing Americas facility in the form of a new three-year $200 million asset-based credit facility. Quiksilver said it is in talks with its French banking partners to consolidate its European debts.
In a statement, Bob McKnight—Quiksilver’s chairman of the board, chief executive and president—said the Rhone deal would help improve the company’s global business and increase the efficiency of its worldwide operations.
One day after Quiksilver announced its second-quarter results and financial maneuvers, Nick Adcock, president of its DC Shoes brand, announced his resignation to pursue “other interests.” DC Shoes has proven to be a strong asset for Quiksilver, and rumors have swirled that bigwigs such as Nike and VF Corp. have been angling to buy it. Quiksilver has denied the rumors. —Erin Barajas
