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Huntington Beach, Calif. — Neither an acquirer or an acquiree be.
That was among the messages delivered by Bob McKnight, Quiksilver chairman and chief executive officer, at the firm’s annual meeting here Friday.
The business of surf, skate, snowboard and other youth lifestyle apparel has been strong enough that the firm has been approached by others as an acquisition target, but the company hasn’t yet heard the offer that would pull it off its course to become a $1 billion firm.
“I believe we’re on the radar screen,” McKnight said in response to a question from the audience. I’ve had conversations with other ceo’s, but nothing’s gotten serious.”
At the same time, Quiksilver isn’t seeking to buy more companies after coming off its buying binge in 2002 that included the purchase of Beach Street Inc., operator of 26 Quiksilver outlet stores, and its Asia-Pacific license in 2002. Those developments and the rapid growth of its Roxy brand helped the company, in the year ended Oct. 31, expand sales 13.7 percent to $705.5 million, with European revenues growing 26.3 percent to $282.7 million. Net income outpaced topline growth, expanding 34.3 percent to $37.6 million. Its stock in the past year has appreciated 42 percent while the Standard & Poor’s 500 has gone down 24 percent.
On Friday, shareholders approved a 2-for-1 stock split, effective May 8 for holders of record April 30, while shares closed up 49 cents, or 1.6 percent, at $31.39 in New York Stock Exchange trading.
Since beginning the new year, Quiksilver’s seen first-quarter earnings more than double, up 112.8 percent to $6.6 million, while sales rose 30.7 percent to $192.1 million. Additionally, the firm has dipped its toe in more deeply to the western Pacific, partnering with Hong Kong-based Glorious Sun Enterprises to open five to 10 stores in the area by early 2004 and also focus its Asian sourcing activities.
“We’re able to move forward with one voice with worldwide control of our brand, distribution and image,” McKnight said. “The tone of our business is excellent and that’s patently gratifying as a number of our competitors are struggling.”
Chief financial officer Steve Brink expects the Asia-Pacific region to represent 9 percent of business in 2003, a new sales source replacing royalty income from the region.