##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended October 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 1-14229
 QUIKSILVER, INC.
  Delaware
    
    33-0199426(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)
 15202 Graham Street
Huntington Beach, California
92649
 
 (714) 889-2200
   Title of
    
    Name of each exchangeeach class
    
    on which registeredCommon Stock
    
    New York Stock Exchange
 None
 Yes o Noþ
 Yeso Noþ
 Yesþ No o
 Yeso No o
 þ
  Large accelerated filero   
    Accelerated filer þ
    Non-accelerated filero
    Smaller reporting companyo(Do not check if a smaller reporting company)
 Yeso No þ
   DOCUMENTS INCORPORATED BY REFERENCE




---



##### 



TABLE OF CONTENTS
 PagePART IItem 1. BUSINESSIntroduction
    
    
    1Segment Information
    
    
    1Products and Brands
    
    
    2Product Categories
    
    
    2Product Design
    
    
    3Promotion and Advertising
    
    
    3Customers and Sales
    
    
    4Retail Concepts
    
    
    5Seasonality
    
    
    6Production and Raw Materials
    
    
    6Imports and Import Restrictions
    
    
    7Trademarks, Licensing Agreements and Patents
    
    
    7Competition
    
    
    8Future Season Orders
    
    
    8Employees
    
    
    8Environmental Matters
    
    
    8Recent Dispositions
    
    
    9Available Information
    
    
    9Item 1A. RISK FACTORS
    
    
    9Item 1B. UNRESOLVED STAFF COMMENTS
    
    
    16Item 2. PROPERTIES
    
    
    16Item 3. LEGAL PROCEEDINGS
    
    
    16Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    16PART II
    
    
    17Item 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    17Item 6. SELECTED FINANCIAL DATA
    
    
    17Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    19Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    33Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    34Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    34Item 9A. CONTROLS AND PROCEDURES
    
    
    35Item 9B. OTHER INFORMATION
    
    
    38PART III
    
    
    39Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    39Item 11. EXECUTIVE COMPENSATION
    
    
    39Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    39Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    
    39Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    39PART IV
    
    
    40Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    40INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    41SIGNATURES
    
    
    81EX-10.5EX-10.14EX-10.15EX-10.43EX-10.47EX-10.49EX-10.53EX-10.54EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



PART I
 
 Item 1.
    
    BUSINESS
  
 Introduction
    Rossignol, Dynastar, Look Lange
 
 Segment Information
  1




---



##### Table of Contents



Products and Brands
 Quiksilver Roxy DCs
 Quiksilver
 Quiksilver Quiksilver Quiksilver
 Roxy
 Roxy Teenie Wahine Roxy Girl Roxy Roxy
 DC
 DC DCs DC
 Other Brands
  
    
    Raisins, Radio Fiji, LeilaniRaisinsand Radio Fijiare swimwear labels for the juniors
market, while Leilaniis our contemporary swimwear label.
 
    
    HawkTony Hawk, the world-famous skateboarder, is the inspiration for our Hawkbrand. Our
Hawkbrand targets boys and young men who identify with the skateboarding lifestyle and
recognize Tony Hawk from his broad media and video game exposure.
 
    
    Lib Technologies, Gnu, Bent MetalWe address the core snowboard market through our Lib
Technologiesand Gnubrands of snowboards and accessories and Bent Metalsnowboard bindings.
 
 Product Categories
  Percentage of Revenues2009
    
    2008
    
    2007Apparel
    
    
    66
    %
    
    
    65
    %
    
    
    66
    %Footwear
    
    
    20
    
    
    
    20
    
    
    
    18Accessories
    
    
    14
    
    
    
    15
    
    
    
    16100
    %
    
    
    100
    %
    
    
    100
    %
  2




---



##### Table of Contents



Product Design
  
 Promotion and Advertising
   Quiksilver Pro Quiksilver In Memory of Eddie Aikau Quiksilver DC Roxy X-Games
 Surfer Surfing Transworld Skateboarding
 3




---



##### Table of Contents



Customers and Sales
    Quiksilver Roxy Roxy Quiksilver DC Raisins Leilani Radio Fiji
   Percentage of RevenuesDistribution Channel
    
    Americas
    
    Europe
    
    Asia/Pacific
    
    ConsolidatedCore market shops
    
    
    27
    %
    
    
    41
    %
    
    
    75
    %
    
    
    39
    %Specialty stores
    
    
    36
    
    
    
    41
    
    
    
    24
    
    
    
    37Department stores
    
    
    17
    
    
    
    6
    
    
    
    1
    
    
    
    10U.S. exports
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    9Distributors
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    5Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Geographic segment
    
    
    47
    %
    
    
    40
    %
    
    
    13
    %
    
    
    100
    %
   4




---



##### Table of Contents



Percentage of RevenuesGeographic Region
    
    2009
    
    2008
    
    2007United States
    
    
    38
    %
    
    
    39
    %
    
    
    42
    %Other Americas
    
    
    9
    
    
    
    8
    
    
    
    7France
    
    
    11
    
    
    
    13
    
    
    
    13United Kingdom and Spain
    
    
    11
    
    
    
    13
    
    
    
    14Other European countries
    
    
    18
    
    
    
    15
    
    
    
    12Asia/Pacific
    
    
    13
    
    
    
    12
    
    
    
    12Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
   
 Retail Concepts
 Quiksilver Quiksilver Roxy Roxy Quiksilver Youth DC Quiksilver Roxy
  Number of StoresAmericas
    
    Europe
    
    Asia/Pacific
    
    CombinedStore Concept
    
    Company Owned
    
    Licensed
    
    Company Owned
    
    Licensed
    
    Company Owned
    
    Licensed
    
    Company Owned
    
    LicensedQuiksilverstores
    
    
    60
    
    
    
    15
    
    
    
    122
    
    
    
    155
    
    
    
    37
    
    
    
    13
    
    
    
    219
    
    
    
    183Shop-in-shops
    
    
    
    
    
    
    
    
    
    
    65
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    125
    
    
    
    Roxystores
    
    
    3
    
    
    
    2
    
    
    
    19
    
    
    
    14
    
    
    
    10
    
    
    
    5
    
    
    
    32
    
    
    
    21Outlet stores
    
    
    48
    
    
    
    
    
    
    
    36
    
    
    
    2
    
    
    
    32
    
    
    
    2
    
    
    
    116
    
    
    
    4Other stores
    
    
    6
    
    
    
    2
    
    
    
    20
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    5117
    
    
    
    19
    
    
    
    262
    
    
    
    174
    
    
    
    139
    
    
    
    20
    
    
    
    518
    
    
    
    213
 5




---



##### Table of Contents



Seasonality
  Consolidated RevenuesDollar amounts in thousands
    
    2009
    
    
    2008
    
    
    2007Quarter ended January 31
    
    $
    443,278
    
    
    
    23
    %
    
    $
    496,581
    
    
    
    22
    %
    
    $
    410,854
    
    
    
    20
    %Quarter ended April 30
    
    
    494,173
    
    
    
    25
    
    
    
    596,280
    
    
    
    26
    
    
    
    520,359
    
    
    
    25Quarter ended July 31
    
    
    501,394
    
    
    
    25
    
    
    
    564,876
    
    
    
    25
    
    
    
    528,591
    
    
    
    26Quarter ended October 31
    
    
    538,681
    
    
    
    27
    
    
    
    606,899
    
    
    
    27
    
    
    
    587,268
    
    
    
    29$
    1,977,526
    
    
    
    100
    %
    
    $
    2,264,636
    
    
    
    100
    %
    
    $
    2,047,072
    
    
    
    100
    %
 
 Production and Raw Materials
     6




---



##### Table of Contents



Imports and Import Restrictions
     
 Trademarks, Licensing Agreements and Patents
 Trademarks
 Quiksilver Roxy Raisins Radio Fiji Leilani Hawk Lib Tech Gnu Bent Metal DCSHOECOUSA DC Star
  Licensing Agreements and Patents
 Quiksilver Roxy DC Quiksilver Roxy Roxy
 Hawk Hawk Hawk Hawk Hawk
  7




---



##### Table of Contents



Competition
   
    
    maintain our reputation for authenticity in the core boardriding and outdoor sports
lifestyle demographics;
 
    
    continue to develop and respond to global fashion and lifestyle trends in our core markets;
 
    
    create innovative, high quality and stylish products at appropriate price points; and
 
    
    convey our outdoor sports lifestyle messages to consumers worldwide.
 
 Future Season Orders
  
 Employees
  
 Environmental Matters
  8




---



##### Table of Contents



Recent Dispositions
  Rossignol, Dynastar, Look Lange
 Rossignol
 
 Available Information
   
 Item 1A.
    
    RISK FACTORS
  9




---



##### Table of Contents



Our significant debt obligations could limit our flexibility in managing our business and expose us
to certain risks.
  
    
    we may have difficulty satisfying our obligations under our senior notes or other
indebtedness and, if we fail to comply with these requirements, an event of default could
result;
 
    
    we may be required to dedicate a substantial portion of our cash flow from operations to
required payments on indebtedness, thereby reducing the availability of cash flow for working
capital, capital expenditures and other general corporate activities;
 
    
    covenants relating to our indebtedness may limit our ability to obtain additional financing
for working capital, capital expenditures and other general corporate activities;
 
    
    covenants relating to our indebtedness may limit our flexibility in planning for, or
reacting to, changes in our business and the industry in which we operate;
 
    
    we may be subject to credit reductions and other changes in our business relationships with
our suppliers, vendors and customers if they perceive that we would be unable to pay our debts
to them in a timely manner;
 
    
    we may be more vulnerable to the impact of economic downturns, including the current
recessionary global economy, and adverse developments in our business;
 
    
    we have certain short term and uncommitted lines of credit that could be difficult to
replace if not renewed, or that could otherwise be canceled on very short notice to us; and
 
    
    we may be placed at a competitive disadvantage against any less leveraged competitors.
 Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow
from our business to pay our substantial debt.
  Continuing unfavorable economic conditions could have a material adverse effect on our results of
operations.
   10




---



##### Table of Contents



The apparel and footwear industries are each highly competitive, and if we fail to compete
effectively, we could lose our market position.
   If we are unable to develop innovative and stylish products in response to rapid changes in
consumer demands and fashion trends, we may suffer a decline in our revenues and market share.
    Our business could be harmed if we fail to maintain proper inventory levels.
  Changes in foreign currency exchange or interest rates could affect our revenues and costs.
  11




---



##### Table of Contents



Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt
service obligations to increase significantly.
  War, acts of terrorism, or the threat of either could have an adverse effect on our ability to
procure our products and on the United States and/or international economies.
  Our success is dependent on our ability to protect our worldwide intellectual property rights, and
our inability to enforce these rights could harm our business.
   12




---



##### Table of Contents



We may be subject to claims that our products have infringed upon the intellectual property rights
of others, which may cause us to incur unexpected costs or prevent us from selling our products.
  If we are unable to maintain and expand our endorsements by professional athletes, our ability to
market and sell our products may be harmed.
   The demand for our products is seasonal and sales are dependent upon the weather.
  Future sales of our common stock in the public market, or the issuance of other equity securities,
may adversely affect the market price of our common stock and the value of our senior notes.
  13




---



##### Table of Contents



Factors affecting international commerce and our international operations may seriously harm our
financial condition.
  
    
    recessions in foreign economies;
 
    
    fluctuations in foreign currency exchange rates;
 
    
    the adoption and expansion of trade restrictions;
 
    
    limitations on repatriation of earnings;
 
    
    difficulties in protecting our intellectual property or enforcing our intellectual property
rights under the laws of other countries;
 
    
    longer receivables collection periods and greater difficulty in collecting accounts
receivable;
 
    
    difficulties in managing foreign operations;
 
    
    social, political and economic instability;
 
    
    unexpected changes in regulatory requirements;
 
    
    our ability to finance foreign operations;
 
    
    tariffs and other trade barriers; and
 
    
    U.S. government licensing requirements for exports.
  Quiksilver Roxy, DC
 If the popularity of the sports associated with our brands were to decrease, our revenues could be
adversely affected and our results of operations could be impaired.
  Our industry is subject to pricing pressures that may adversely impact our financial performance.
  
    
    we are forced to reduce our prices and we cannot reduce our production costs; or
 
    
    our production costs increase and we cannot increase our prices.
 Changing international trade regulations and the elimination of quotas on imports of textiles and
apparel may increase competition in the apparel industry.
 14




---



##### Table of Contents




    
    quotas imposed by bilateral textile agreements between the countries where our
apparel-producing facilities are located and foreign countries; and
 
    
    customs duties imposed by the governments where our apparel-producing facilities are
located on imported products, including raw materials.
  We rely on third-party manufacturers and problems with, or loss of, our suppliers or raw materials
could harm our business and results of operations.
   Employment related matters may affect our profitability.
  Our failure to comply with, or the imposition of liability under, environmental laws and
regulations could result in significant costs.
  15




---



##### Table of Contents



Item 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 Item 2.
    
    PROPERTIES
  Approximate
    
    Current LeaseLocation
    
    Principal Use
    
    Sq. Ft.
    
    ExpirationHuntington Beach, California
    
    Americas/corporate headquarters
    
    
    120,000
    
    
    
    2023
    *Huntington Beach, California
    
    Americas/corporate headquarters
    
    
    100,000
    
    
    
    2023
    *Mira Loma, California
    
    Americas distribution center
    
    
    683,000
    
    
    
    2027
    *Vista, California
    
    Americas/corporate headquarters
    
    
    100,000
    
    
    
    2011St. Jean de Luz, France
    
    European headquarters
    
    
    80,000
    
    
    
    N/A
    **St. Jean de Luz, France
    
    European distribution center
    
    
    100,000
    
    
    
    N/A
    **Rives, France
    
    European distribution center
    
    
    206,000
    
    
    
    2016Torquay, Australia
    
    Asia/Pacific headquarters
    
    
    54,000
    
    
    
    2024
    *Geelong, Australia
    
    Asia/Pacific distribution center
    
    
    81,000
    
    
    
    2018
    *Geelong, Australia
    
    Asia/Pacific distribution center
    
    
    134,000
    
    
    
    2039
    *
 
 *
    
    Includes extension periods exercisable at our option.**
    
    These locations are owned.  
 Item 3.
    
    LEGAL PROCEEDINGS
  
 Item 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  16




---



##### Table of Contents



PART II
 
 Item 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
  High
    
    LowFiscal 20094th quarter ended October 31, 2009
    
    $
    3.03
    
    
    $
    1.923rd quarter ended July 31, 2009
    
    
    3.83
    
    
    
    1.492nd quarter ended April 30, 2009
    
    
    2.10
    
    
    
    0.911st quarter ended January 31, 2009
    
    
    3.09
    
    
    
    0.80Fiscal 20084th quarter ended October 31, 2008
    
    $
    8.64
    
    
    $
    1.773rd quarter ended July 31, 2008
    
    
    10.21
    
    
    
    7.352nd quarter ended April 30, 2008
    
    
    10.49
    
    
    
    8.061st quarter ended January 31, 2008
    
    
    12.78
    
    
    
    7.04
   
 Item 6.
    
    SELECTED FINANCIAL DATA
  17




---



##### Table of Contents



Year Ended October 31,Amounts in thousands, except ratios and per share data
    
    2009(1)(2)(6)
    
    2008(1)(2)(6)
    
    2007(1)(2)
    
    2006(1)(2)
    
    2005(2)Statements of Operations DataRevenues, net
    
    $
    1,977,526
    
    
    $
    2,264,636
    
    
    $
    2,047,072
    
    
    $
    1,722,150
    
    
    $
    1,562,417(Loss) income before provision
for income taxes
    
    
    (6,548
    )
    
    
    98,571
    
    
    
    151,233
    
    
    
    122,557
    
    
    
    142,743(Loss) income from continuing
operations
    
    
    (73,215
    )
    
    
    65,544
    
    
    
    116,727
    
    
    
    89,376
    
    
    
    96,155(Loss) income from
discontinued operations
    
    
    (118,827
    )
    
    
    (291,809
    )
    
    
    (237,846
    )
    
    
    3,640
    
    
    
    10,965Net (loss) income
    
    
    (192,042
    )
    
    
    (226,265
    )
    
    
    (121,119
    )
    
    
    93,016
    
    
    
    107,120(Loss) income per share from
continuing operations (3)
    
    
    (0.58
    )
    
    
    0.52
    
    
    
    0.94
    
    
    
    0.73
    
    
    
    0.81(Loss) income per share from
discontinued operations (3)
    
    
    (0.94
    )
    
    
    (2.32
    )
    
    
    (1.92
    )
    
    
    0.03
    
    
    
    0.09Net (loss) income per share (3)
    
    
    (1.51
    )
    
    
    (1.80
    )
    
    
    (0.98
    )
    
    
    0.76
    
    
    
    0.90(Loss) income per share from
continuing operations, assuming dilution (3)
    
    
    (0.58
    )
    
    
    0.51
    
    
    
    0.90
    
    
    
    0.70
    
    
    
    0.77(Loss) income per share from
discontinued operations, assuming dilution (3)
    
    
    (0.94
    )
    
    
    (2.25
    )
    
    
    (1.83
    )
    
    
    0.03
    
    
    
    0.09Net (loss) income per share,
assuming dilution (3)
    
    
    (1.51
    )
    
    
    (1.75
    )
    
    
    (0.93
    )
    
    
    0.73
    
    
    
    0.86Weighted average common
shares (3)
    
    
    127,042
    
    
    
    125,975
    
    
    
    123,770
    
    
    
    122,074
    
    
    
    118,920Weighted average common
shares outstanding, assuming
dilution (3)
    
    
    127,042
    
    
    
    129,485
    
    
    
    129,706
    
    
    
    127,744
    
    
    
    124,335Balance Sheet DataTotal assets
    
    $
    1,852,608
    
    
    $
    2,170,265
    
    
    $
    2,662,064
    
    
    $
    2,447,378
    
    
    $
    2,158,601Working capital
    
    
    561,697
    
    
    
    631,315
    
    
    
    631,857
    
    
    
    598,714
    
    
    
    458,857Lines of credit
    
    
    32,592
    
    
    
    238,317
    
    
    
    124,634
    
    
    
    61,106
    
    
    
    35,158Long-term debt
    
    
    1,006,661
    
    
    
    822,001
    
    
    
    732,812
    
    
    
    598,434
    
    
    
    536,436Stockholders equity
    
    
    456,595
    
    
    
    599,966
    
    
    
    886,613
    
    
    
    881,127
    
    
    
    732,882Other DataAdjusted EBITDA(4)
    
    $
    131,532
    
    
    $
    278,945
    
    
    $
    260,786
    
    
    $
    221,687
    
    
    $
    194,331Current ratio
    
    
    2.3
    
    
    
    1.9
    
    
    
    1.7
    
    
    
    1.8
    
    
    
    1.7Return on average stockholders
equity(5)
    
    
    (13.9
    )%
    
    
    8.8
    %
    
    
    13.2
    %
    
    
    11.1
    %
    
    
    14.6
    %
 
 (1)
    
    Fiscal 2009, 2008, 2007 and 2006 include stock compensation expense related to
the adoption of ASC 718, Stock Compensation. See footnote (4) to the table below.(2)
    
    Fiscal 2009, 2008, 2007, 2006 and 2005 reflect the operations of Rossignol and
Cleveland Golf, which were acquired in 2005, as discontinued operations. See note 18 of our
consolidated financial statements.(3)
    
    Per share amounts and shares outstanding have been adjusted to reflect a two-for-one
stock split effected on May 11, 2005.(4)
    
    Adjusted EBITDA is defined as income or loss from continuing operations before (i)
interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) non-cash
stock-based compensation expense and (v) asset impairments. Adjusted EBITDA is not defined
under generally accepted accounting principles (GAAP), and it may not be comparable to
similarly titled measures reported by other companies. We use Adjusted EBITDA, along with
GAAP measures, as a measure of profitability because Adjusted EBITDA helps us to compare our
performance on a consistent basis by removing from our operating results the impact of our
capital structure, the 18




---



##### Table of Contents



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 and the effect of non-cash stock-based compensation
expense. 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 results of operations. We
remove the effect of non-cash stock-based compensation from our earnings which can vary based on
share price, share price volatility and 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 impact of our asset base. Adjusted EBITDA
has limitations as a profitability measure in that it does 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 and the
effect of asset impairments. The following is a reconciliation of our (loss) income from
continuing operations to Adjusted EBITDA: Year Ended October 31,Amounts in thousands
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Loss) income from continuing
operations
    
    $
    (73,215
    )
    
    $
    65,544
    
    
    $
    116,727
    
    
    $
    89,376
    
    
    $
    96,155Income taxes
    
    
    66,667
    
    
    
    33,027
    
    
    
    34,506
    
    
    
    33,181
    
    
    
    46,588Interest
    
    
    63,924
    
    
    
    45,327
    
    
    
    46,571
    
    
    
    41,317
    
    
    
    16,945Depreciation and amortization
    
    
    55,004
    
    
    
    57,231
    
    
    
    46,852
    
    
    
    37,851
    
    
    
    34,643Non-cash stock-based
compensation expense
    
    
    8,415
    
    
    
    12,019
    
    
    
    16,130
    
    
    
    19,962
    
    
    
    Non-cash asset impairments
    
    
    10,737
    
    
    
    65,797
    
    
    
    
    
    
    
    
    
    
    
    Adjusted EBITDA
    
    $
    131,532
    
    
    $
    278,945
    
    
    $
    260,786
    
    
    $
    221,687
    
    
    $
    194,331
 
 (5)
    
    Computed based on (loss) income from continuing operations divided by the average of
beginning and ending stockholders equity.(6)
    
    Fiscal 2009 includes fixed asset impairments of $10.7 million and fiscal 2008
includes goodwill and fixed asset impairments of $65.8 million. 
 Item 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
 Quiksilver Quiksilver Quiksilver Roxy Quiksilver Roxy Quiksilver Roxy
 Rossignol, Dynastar, Look Lange
 19




---



##### Table of Contents



Year Ended October 31,In thousands
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Americas
    
    $
    929,691
    
    
    $
    1,061,370
    
    
    $
    995,801
    
    
    $
    831,583
    
    
    $
    752,797Europe
    
    
    792,627
    
    
    
    933,119
    
    
    
    803,395
    
    
    
    660,127
    
    
    
    591,228Asia/Pacific
    
    
    251,596
    
    
    
    265,067
    
    
    
    243,064
    
    
    
    225,128
    
    
    
    213,277Corporate operations
    
    
    3,612
    
    
    
    5,080
    
    
    
    4,812
    
    
    
    5,312
    
    
    
    5,115Total revenues, net
    
    $
    1,977,526
    
    
    $
    2,264,636
    
    
    $
    2,047,072
    
    
    $
    1,722,150
    
    
    $
    1,562,417
  Results of Operations
  Year Ended October 31,2009
    
    2008
    
    2007Statements of Operations dataRevenues, net
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Gross profit
    
    
    47.1
    
    
    
    49.5
    
    
    
    48.1Selling, general and administrative expense
    
    
    43.1
    
    
    
    40.4
    
    
    
    38.2Asset impairments
    
    
    0.5
    
    
    
    2.9
    
    
    
    0.0Operating income
    
    
    3.5
    
    
    
    6.2
    
    
    
    9.9Interest expense
    
    
    3.2
    
    
    
    2.0
    
    
    
    2.3Foreign currency, minority interest and other expense
    
    
    0.6
    
    
    
    (0.2
    )
    
    
    0.2(Loss) income before provision for income taxes
    
    
    (0.3
    )%
    
    
    4.4
    %
    
    
    7.4
    %Other dataAdjusted EBITDA (1)
    
    
    6.7
    %
    
    
    12.3
    %
    
    
    12.7
    %
 
 (1)
    
    For a definition of Adjusted EBITDA and a reconciliation of income from
continuing operations to Adjusted EBITDA, see footnote (4) to the table under Item 6. Selected
Financial Data. 20




---



##### Table of Contents



Fiscal 2009 Compared to Fiscal 2008
 Revenues
 Quiksilver Roxy DC Hawk Raisins Leilani Radio Fiji, Lib Technologies, Gnu Bent Metal
  In thousandsHistorical currency (as reported)
    
    Americas
    
    Europe
    
    Asia/Pacific
    
    Corporate
    
    TotalOctober 31, 2008
    
    $
    1,061,370
    
    
    $
    933,119
    
    
    $
    265,067
    
    
    $
    5,080
    
    
    $
    2,264,636October 31, 2009
    
    
    929,691
    
    
    
    792,627
    
    
    
    251,596
    
    
    
    3,612
    
    
    
    1,977,526Percentage decrease
    
    
    (12%
    )
    
    
    (15%
    )
    
    
    (5%
    )
    
    
    
    
    
    
    (13%
    )Constant currency (current year
exchange rates)October 31, 2008
    
    $
    1,061,370
    
    
    $
    849,423
    
    
    $
    231,137
    
    
    $
    5,080
    
    
    $
    2,147,010October 31, 2009
    
    
    929,691
    
    
    
    792,627
    
    
    
    251,596
    
    
    
    3,612
    
    
    
    1,977,526Percentage (decrease) increase
    
    
    (12%
    )
    
    
    (7%
    )
    
    
    9%
    
    
    
    
    
    
    
    (8%
    )
 Roxy Quiksilver DC Roxy Quiksilver DC Roxy Quiksilver DC Roxy Quiksilver DC
 21




---



##### Table of Contents



Gross Profit
  Selling, General and Administrative Expense
  Asset Impairments
  Non-operating Expenses
  22




---



##### Table of Contents



Loss / income from continuing operations and Adjusted EBITDA
  Fiscal 2008 Compared to Fiscal 2007
 Revenues
 Quiksilver Roxy DC Hawk Raisins Leilani Radio Fiji, Lib
Technologies, Gnu Bent Metal DC Quiksilver Roxy DC Quiksilver Roxy Quiksilver Roxy DC Roxy Quiksilver DC Roxy DC Quiksilver Roxy
 Gross Profit
  Selling, General and Administrative Expense
  23




---



##### Table of Contents



Asset Impairments
  Non-operating Expenses
    Income from continuing operations and Adjusted EBITDA
  Financial Position, Capital Resources and Liquidity
  
 24




---



##### Table of Contents



Operating Cash Flows
  Capital Expenditures
    Acquisitions and Dispositions
 Rossignol Dynastar Look Lange
 Debt Structure
  In thousands
    
    U.S. Dollar
    
    
    Non U.S. Dollar
    
    
    TotalEuropean short-term credit arrangements
    
    $
    
    
    
    $
    14
    
    
    $
    14Asia/Pacific short-term credit arrangements
    
    
    
    
    
    
    32,578
    
    
    
    32,578Short-term lines of credit
    
    
    
    
    
    
    32,592
    
    
    
    32,592Americas credit facility
    
    
    
    
    
    
    
    
    
    
    European long-term debt
    
    
    
    
    
    
    325,685
    
    
    
    325,685European credit facilities
    
    
    
    
    
    
    75,252
    
    
    
    75,252Rhône term loan
    
    
    109,329
    
    
    
    26,335
    
    
    
    135,664Senior Notes
    
    
    400,000
    
    
    
    
    
    
    
    400,000Deferred purchase price obligation
    
    
    
    
    
    
    49,144
    
    
    
    49,144Capital lease obligations and other borrowings
    
    
    2,639
    
    
    
    18,277
    
    
    
    20,916Long-term debt
    
    
    511,968
    
    
    
    494,693
    
    
    
    1,006,661Total
    
    $
    511,968
    
    
    $
    527,285
    
    
    $
    1,039,253
 25




---



##### Table of Contents




   26




---



##### Table of Contents



     
     
  
    27




---



##### Table of Contents



Contractual Obligations and Commitments
  Payments Due by PeriodTwo to
    
    
    Four to
    
    
    AfterOne
    
    
    Three
    
    
    Five
    
    
    FiveIn thousands
    
    Year
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    TotalOperating lease obligations
    
    $
    107,900
    
    
    $
    184,455
    
    
    $
    135,007
    
    
    $
    144,669
    
    
    $
    572,031Long-term debt obligations(1)
    
    
    95,231
    
    
    
    207,080
    
    
    
    304,350
    
    
    
    400,000
    
    
    
    1,006,661Professional athlete sponsorships(2)
    
    
    18,649
    
    
    
    19,049
    
    
    
    7,132
    
    
    
    500
    
    
    
    45,330Certain other obligations(3)
    
    
    64,753
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,753$
    286,533
    
    
    $
    410,584
    
    
    $
    446,489
    
    
    $
    545,169
    
    
    $
    1,688,775
 
 (1)
    
    Excludes required interest payments. See note 7 of our consolidated financial
statements for interest terms.(2)
    
    We establish relationships with professional athletes in order to promote our
products and brands. We have entered into endorsement agreements with professional athletes
in sports such as surfing, skateboarding, snowboarding, bmx and motocross. Many of these
contracts provide incentives for magazine exposure and competitive victories while wearing or
using our products. It is not possible to determine the amounts we may be required to pay
under these agreements as they are subject to many variables. The amounts listed are the
approximate amounts of minimum obligations required to be paid under these contracts. The
estimated maximum amount that could be paid under existing contracts is approximately
$61.9 million and would assume that all bonuses, victories, etc. are achieved
during a five-year period. The actual amounts paid under these agreements may be higher or
lower than the amounts listed as a result of the variable nature of these obligations. Under
our current sponsorship agreement with Kelly Slater, in addition to the cash payment
obligations included in the above table, we have agreed to propose to
our shareholders a grant to Mr. Slater of 3
million shares of restricted stock. This restricted stock grant is subject to shareholder
approval and would vest over a four year period. Should the grant not be approved by our
shareholders, we may be required to compensate Mr. Slater with additional cash payments, which
are not included in the table above.(3)
    
    Certain other obligations include approximately $64.8 million of
contractual letters of credit with maturity dates of less than one year. We also enter into
unconditional purchase obligations with various vendors and suppliers of
goods and services in the normal course of operations through purchase orders or other
documentation or that are undocumented except for an invoice. Such unconditional purchase
obligations are generally outstanding for periods less than a year and are settled by cash
payments upon delivery of goods and services and are not reflected in this line item. In
addition, in certain circumstances we are required to acquire additional equity interests from
our minority interest partners in Brazil and Mexico. These purchase requirements are generally
based on revenue targets in U.S. dollars which can be significantly impacted by currency
fluctuations. The purchase price applicable to these obligations is typically based on formulas
that will be used to value the subsidiaries operations at the time of purchase. We do not
expect any payments related to these commitments in





fiscal 2010 and these potential purchase
amounts generally cannot be determined beyond one year and are not included in this line item.
We have approximately $54.4 million of tax contingencies related to ASC 740, Income
Taxes, as disclosed in note 12 of our consolidated financial statements. Based on the
uncertainly of the timing of these contingencies, these amounts have not been included in this
line item. 28




---



##### Table of Contents



Off Balance Sheet Arrangements
  Trade Accounts Receivable and Inventories
   Inflation
  New Accounting Pronouncements
    29




---



##### Table of Contents



30




---



##### Table of Contents



Critical Accounting Policies
  Revenue Recognition
  Accounts Receivable
  Inventories
  
    
    weakening economic conditions;
    
    terrorist acts or threats;
    
    unanticipated changes in consumer preferences;
    
    reduced customer confidence; and
    
    unseasonable weather.
  Long-Lived Assets
  Goodwill
  31




---



##### Table of Contents



Income Taxes
   Stock-Based Compensation Expense
  Foreign Currency Translation
   Forward-Looking Statements
  32




---



##### Table of Contents




    
    continuing deterioration of global economic conditions and credit and capital markets;
 
    
    our ability to remain compliant with our debt covenants;
 
    
    our ability to achieve the financial results that we anticipate;
 
    
    payments due on contractual commitments and other debt obligations;
 
    
    future expenditures for capital projects;
 
    
    our ability to continue to maintain our brand image and reputation;
 
    
    foreign currency exchange rate fluctuations; and
 
    
    changes in political, social and economic conditions and local regulations, particularly in
Europe and Asia.
  
 Item 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Foreign Currency and Derivatives
   
    
    if we determine that the derivative is no longer effective in offsetting changes in the
cash flows of a hedged item;
 
    
    when the derivative expires or is sold, terminated or exercised;
 
    
    if it becomes probable that the forecasted transaction being hedged by the derivative will
not occur;
 
    
    because a hedged firm commitment no longer meets the definition of a firm commitment; or
    
    if we determine that designation of the derivative as a hedge instrument is no longer
appropriate.
 33




---



##### Table of Contents



Translation of Results of International Subsidiaries
    Interest Rates
  
 Item 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 Item 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  34




---



##### Table of Contents



Item 9A.
    
    CONTROLS AND PROCEDURES
    35




---



##### Table of Contents



Managements Annual Report on Internal Control Over Financial Reporting
  
    
    pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of our assets;
 
    
    provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that our receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and
 
    
    provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on the
consolidated financial statements.
    36




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
        
 37




---



##### Table of Contents



Item 9B.
    
    OTHER INFORMATION
  38




---



##### Table of Contents



PART III
 
 Item 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   
 Item 11.
    
    EXECUTIVE COMPENSATION
  
 Item 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  
 Item 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 Item 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  39




---



##### Table of Contents



PART IV
 
 Item 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  1.
    
    Consolidated Financial Statements
See Index to Consolidated Financial Statements on page 41.2.
    
    ExhibitsThe Exhibits listed in the Exhibit Index, which appears immediately following the signature
page and is incorporated herein by reference, are filed as part of this Annual Report on Form 10-K.
 40




---



##### Table of Contents



QUIKSILVER, INC.
 
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageAudited consolidated financial statements of Quiksilver,
Inc. as of October 31, 2009 and 2008
and for each of the three years in the period
ended October 31, 2009Report of Independent Registered Public Accounting Firm
    
    
    42Consolidated Statements of Operations
Years Ended October 31, 2009, 2008 and 2007
    
    
    43Consolidated Statements of Comprehensive Loss
Years Ended October 31, 2009, 2008 and 2007
    
    
    43Consolidated Balance Sheets
October 31, 2009 and 2008
    
    
    44Consolidated Statements of Stockholders Equity
Years Ended October 31, 2009, 2008 and 2007
    
    
    45Consolidated Statements of Cash Flows
Years Ended October 31, 2009, 2008 and 2007
    
    
    46Notes to Consolidated Financial Statements
    
    
    47
 41




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
 42




---



##### Table of Contents



QUIKSILVER, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended October 31, 2009, 2008 and 2007
 In thousands, except per share amounts
    
    2009
    
    
    2008
    
    
    2007Revenues, net
    
    $
    1,977,526
    
    
    $
    2,264,636
    
    
    $
    2,047,072Cost of goods sold
    
    
    1,046,495
    
    
    
    1,144,050
    
    
    
    1,062,027Gross profit
    
    
    931,031
    
    
    
    1,120,586
    
    
    
    985,045Selling, general and administrative expense
    
    
    851,746
    
    
    
    915,933
    
    
    
    782,263Asset impairments
    
    
    10,737
    
    
    
    65,797
    
    
    
    Operating income
    
    
    68,548
    
    
    
    138,856
    
    
    
    202,782Interest expense, net
    
    
    63,924
    
    
    
    45,327
    
    
    
    46,571Foreign currency loss (gain)
    
    
    8,633
    
    
    
    (5,761
    )
    
    
    4,857Minority interest and other expense
    
    
    2,539
    
    
    
    719
    
    
    
    121(Loss) income before provision for income taxes
    
    
    (6,548
    )
    
    
    98,571
    
    
    
    151,233Provision for income taxes
    
    
    66,667
    
    
    
    33,027
    
    
    
    34,506(Loss) income from continuing operations
    
    
    (73,215
    )
    
    
    65,544
    
    
    
    116,727Loss from discontinued operations
    
    
    (118,827
    )
    
    
    (291,809
    )
    
    
    (237,846
    )Net loss
    
    $
    (192,042
    )
    
    $
    (226,265
    )
    
    $
    (121,119
    )(Loss) income per share from continuing operations
    
    $
    (0.58
    )
    
    $
    0.52
    
    
    $
    0.94Loss per share from discontinued operations
    
    
    (0.94
    )
    
    
    (2.32
    )
    
    
    (1.92
    )Net loss per share
    
    $
    (1.51
    )
    
    $
    (1.80
    )
    
    $
    (0.98
    )(Loss) income per share from continuing operations, assuming dilution
    
    $
    (0.58
    )
    
    $
    0.51
    
    
    $
    0.90Loss per share from discontinued operations, assuming dilution
    
    
    (0.94
    )
    
    
    (2.25
    )
    
    
    (1.83
    )Net loss per share, assuming dilution
    
    $
    (1.51
    )
    
    $
    (1.75
    )
    
    $
    (0.93
    )Weighted average common shares outstanding
    
    
    127,042
    
    
    
    125,975
    
    
    
    123,770Weighted average common shares outstanding, assuming dilution
    
    
    127,042
    
    
    
    129,485
    
    
    
    129,706
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Years Ended October 31, 2009, 2008 and 2007
 In thousands
    
    2009
    
    
    2008
    
    
    2007Net loss
    
    $
    (192,042
    )
    
    $
    (226,265
    )
    
    $
    (121,119
    )Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    99,798
    
    
    
    (111,920
    )
    
    
    116,882Reclassification adjustment for
foreign currency translation included
in current period loss from
discontinued operations
    
    
    (47,850
    )
    
    
    
    
    
    
    Net (loss) gain on derivative
instruments, net of tax (benefit)
provision of $(19,965) (2009), $26,322
(2008) and $(10,368) (2007) (2002)
    
    
    (37,062
    )
    
    
    44,313
    
    
    
    (21,859
    )Comprehensive loss
    
    $
    (177,156
    )
    
    $
    (293,872
    )
    
    $
    (26,096
    )
  43




---



##### Table of Contents



QUIKSILVER, INC.
 
 CONSOLIDATED BALANCE SHEETS
October 31, 2009 and 2008
 In thousands, except share amounts
    
    2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    99,516
    
    
    $
    53,042Restricted cash
    
    
    52,706
    
    
    
    Trade accounts receivable, net
    
    
    430,884
    
    
    
    470,059Other receivables
    
    
    25,615
    
    
    
    70,376Income taxes receivable
    
    
    
    
    
    
    10,738Inventories
    
    
    267,730
    
    
    
    312,138Deferred income taxes
    
    
    76,638
    
    
    
    12,220Prepaid expenses and other current assets
    
    
    37,333
    
    
    
    25,869Current assets held for sale
    
    
    1,777
    
    
    
    411,442Total current assets
    
    
    992,199
    
    
    
    1,365,884Restricted cash
    
    
    
    
    
    
    46,475Fixed assets, net
    
    
    239,333
    
    
    
    235,528Intangible assets, net
    
    
    142,954
    
    
    
    144,434Goodwill
    
    
    333,758
    
    
    
    299,350Other assets
    
    
    75,353
    
    
    
    39,594Deferred income taxes long-term
    
    
    69,011
    
    
    
    39,000Total assets
    
    $
    1,852,608
    
    
    $
    2,170,265LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Lines of credit
    
    $
    32,592
    
    
    $
    238,317Accounts payable
    
    
    162,373
    
    
    
    235,729Accrued liabilities
    
    
    116,274
    
    
    
    93,548Current portion of long-term debt
    
    
    95,231
    
    
    
    31,904Income taxes payable
    
    
    23,574
    
    
    
    Liabilities related to assets held for sale
    
    
    458
    
    
    
    135,071Total current liabilities
    
    
    430,502
    
    
    
    734,569Long-term debt, net of current portion
    
    
    911,430
    
    
    
    790,097Other long-term liabilities
    
    
    54,081
    
    
    
    39,607Non-current liabilities related to assets held for sale
    
    
    
    
    
    
    6,026Total liabilities
    
    
    1,396,013
    
    
    
    1,570,299Commitments and contingencies  Note 9Stockholders equity:Preferred stock, $.01 par value, authorized shares - 5,000,000;
issued and outstanding shares  none
    
    
    
    
    
    
    Common stock, $.01 par value, authorized shares - 185,000,000;
issued shares - 131,484,363 (2009) and 130,622,566 (2008)
    
    
    1,315
    
    
    
    1,306Additional paid-in capital
    
    
    368,285
    
    
    
    334,509Treasury stock, 2,885,200 shares
    
    
    (6,778
    )
    
    
    (6,778
    )(Accumulated deficit) retained earnings
    
    
    (1,623
    )
    
    
    190,419Accumulated other comprehensive income
    
    
    95,396
    
    
    
    80,510Total stockholders equity
    
    
    456,595
    
    
    
    599,966Total liabilities and stockholders equity
    
    $
    1,852,608
    
    
    $
    2,170,265
  44




---



##### Table of Contents



QUIKSILVER, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
Years Ended October 31, 2009, 2008 and 2007
 Retained
    
    
    AccumulatedAdditional
    
    
    
    
    
    
    Earnings
    
    
    Other
    
    
    TotalIn thousands,except
    
    Common Stock
    
    
    Paid-in
    
    
    Treasury
    
    
    (Accumulated
    
    
    Comprehensive
    
    
    Stockholdersshare amounts
    
    Shares
    
    
    Amounts
    
    
    Capital
    
    
    Stock
    
    
    Deficit)
    
    
    Income (Loss)
    
    
    EquityBalance, October
31, 2006
    
    
    126,401,836
    
    
    $
    1,264
    
    
    $
    274,488
    
    
    $
    (6,778
    )
    
    $
    559,059
    
    
    $
    53,094
    
    
    $
    881,127Exercise of stock
options
    
    
    1,804,515
    
    
    
    18
    
    
    
    10,351
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,369Tax benefit from
exercise of stock
options
    
    
    
    
    
    
    
    
    
    
    2,896
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,896Stock compensation
expense
    
    
    
    
    
    
    
    
    
    
    17,210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,210Restricted stock
    
    
    42,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Employee stock
purchase plan
    
    
    92,187
    
    
    
    1
    
    
    
    1,106
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,107Net income and
other comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (121,119
    )
    
    
    95,023
    
    
    
    (26,096
    )Balance, October
31, 2007
    
    
    128,340,538
    
    
    
    1,283
    
    
    
    306,051
    
    
    
    (6,778
    )
    
    
    437,940
    
    
    
    148,117
    
    
    
    886,613Exercise of stock
options
    
    
    1,828,338
    
    
    
    18
    
    
    
    6,719
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,737Tax benefit from
exercise of stock
options
    
    
    
    
    
    
    
    
    
    
    2,994
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,994Stock compensation
expense
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    13,002
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    13,002Restricted stock
    
    
    (103,668
    )
    
    
    (1
    )
    
    
    1
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4Employee stock
purchase plan
    
    
    257,178
    
    
    
    3
    
    
    
    1,867
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    1,870Business
acquisitions
    
    
    300,180
    
    
    
    3
    
    
    
    3,875
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3,878Adjustment due to
adoption of
uncertain tax
position guidance
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (21,256
    )
    
    
    3⁄4
    
    
    
    (21,256
    )Net loss and other
comprehensive loss
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (226,265
    )
    
    
    (67,607
    )
    
    
    (293,872
    )Balance, October
31, 2008
    
    
    130,622,566
    
    
    
    1,306
    
    
    
    334,509
    
    
    
    (6,778
    )
    
    
    190,419
    
    
    
    80,510
    
    
    
    599,966Tax benefit from
exercise of stock
options
    
    
    
    
    
    
    
    
    
    
    439
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    439Stock compensation
expense
    
    
    
    
    
    
    
    
    
    
    8,884
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,884Restricted stock
    
    
    310,999
    
    
    
    3
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Employee stock
purchase plan
    
    
    550,798
    
    
    
    6
    
    
    
    855
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    861Stock warrants
issued
    
    
    
    
    
    
    
    
    
    
    23,601
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,601Net loss and other
comprehensive loss
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (192,042
    )
    
    
    14,886
    
    
    
    (177,156
    )Balance, October
31, 2009
    
    
    131,484,363
    
    
    $
    1,315
    
    
    $
    368,285
    
    
    $
    (6,778
    )
    
    $
    (1,623
    )
    
    $
    95,396
    
    
    $
    456,595
  45




---



##### Table of Contents



QUIKSILVER, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended October 31, 2009, 2008 and 2007
 In thousands
    
    2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (192,042
    )
    
    $
    (226,265
    )
    
    $
    (121,119
    )Adjustments to reconcile net loss to net cash provided by operating activities:Loss from discontinued operations
    
    
    118,827
    
    
    
    291,809
    
    
    
    237,846Depreciation and amortization
    
    
    55,004
    
    
    
    57,231
    
    
    
    46,852Stock-based compensation and tax benefit on option exercises
    
    
    8,415
    
    
    
    9,588
    
    
    
    13,234Provision for doubtful accounts
    
    
    16,235
    
    
    
    15,948
    
    
    
    7,790Loss on disposal of fixed assets
    
    
    4,194
    
    
    
    350
    
    
    
    2,479Foreign currency (gain) loss
    
    
    (103
    )
    
    
    (2,618
    )
    
    
    1,266Asset impairments
    
    
    10,737
    
    
    
    65,797
    
    
    
    Non-cash interest
    
    
    3,441
    
    
    
    
    
    
    
    Equity in earnings and minority interest
    
    
    2,924
    
    
    
    1,811
    
    
    
    (210
    )Deferred income taxes
    
    
    43,234
    
    
    
    (10,445
    )
    
    
    (15,412
    )Changes in operating assets and liabilities, net of effects from business
acquisitions:Trade accounts receivable
    
    
    60,783
    
    
    
    (16,179
    )
    
    
    (57,217
    )Other receivables
    
    
    14,914
    
    
    
    (7,446
    )
    
    
    (13,030
    )Inventories
    
    
    78,039
    
    
    
    (32,786
    )
    
    
    (19,563
    )Prepaid expenses and other current assets
    
    
    (157
    )
    
    
    (1,333
    )
    
    
    988Other assets
    
    
    5,422
    
    
    
    (1,776
    )
    
    
    (3,426
    )Accounts payable
    
    
    (79,026
    )
    
    
    36,961
    
    
    
    21,650Accrued liabilities and other long-term liabilities
    
    
    5,421
    
    
    
    (14,871
    )
    
    
    43,064Income taxes payable
    
    
    36,091
    
    
    
    13,688
    
    
    
    36,657Cash provided by operating activities of continuing operations
    
    
    192,353
    
    
    
    179,464
    
    
    
    181,849Cash provided by (used in) operating activities of discontinued operations
    
    
    13,815
    
    
    
    (107,302
    )
    
    
    (57,597
    )Net cash provided by operating activities
    
    
    206,168
    
    
    
    72,162
    
    
    
    124,252Cash flows from investing activities:Capital expenditures
    
    
    (54,564
    )
    
    
    (90,948
    )
    
    
    (78,276
    )Business acquisitions, net of acquired cash
    
    
    
    
    
    
    (31,127
    )
    
    
    (41,257
    )Changes in restricted cash
    
    
    
    
    
    
    (46,475
    )
    
    
    Cash used in investing activities of continuing operations
    
    
    (54,564
    )
    
    
    (168,550
    )
    
    
    (119,533
    )Cash provided by (used in) investing activities of discontinued operations
    
    
    21,848
    
    
    
    103,811
    
    
    
    (40,957
    )Net cash used in investing activities
    
    
    (32,716
    )
    
    
    (64,739
    )
    
    
    (160,490
    )Cash flows from financing activities:Borrowings on lines of credit
    
    
    10,346
    
    
    
    185,777
    
    
    
    71,846Payments on lines of credit
    
    
    (237,025
    )
    
    
    (47,161
    )
    
    
    (17,247
    )Borrowings on long-term debt
    
    
    895,268
    
    
    
    240,389
    
    
    
    209,311Payments on long-term debt
    
    
    (726,852
    )
    
    
    (198,793
    )
    
    
    (101,611
    )Payments of debt issuance costs
    
    
    (47,478
    )
    
    
    
    
    
    
    Stock option exercises, employee stock purchases and tax benefit on option exercises
    
    
    862
    
    
    
    11,602
    
    
    
    14,253Cash (used in) provided by financing activities of continuing operations
    
    
    (104,879
    )
    
    
    191,814
    
    
    
    176,552Cash used in financing activities of discontinued operations
    
    
    (11,136
    )
    
    
    (224,794
    )
    
    
    (96,735
    )Net cash (used in) provided by financing activities
    
    
    (116,015
    )
    
    
    (32,980
    )
    
    
    79,817Effect of exchange rate changes on cash
    
    
    (10,963
    )
    
    
    4,251
    
    
    
    (6,065
    )Net increase (decrease) in cash and cash equivalents
    
    
    46,474
    
    
    
    (21,306
    )
    
    
    37,514Cash and cash equivalents, beginning of year
    
    
    53,042
    
    
    
    74,348
    
    
    
    36,834Cash and cash equivalents, end of year
    
    $
    99,516
    
    
    $
    53,042
    
    
    $
    74,348Supplementary cash flow information:Cash paid (received) during the year for:Interest
    
    $
    58,094
    
    
    $
    70,023
    
    
    $
    62,894Income taxes
    
    $
    (5,794
    )
    
    $
    31,049
    
    
    $
    17,454Non-cash investing and financing activities:Deferred purchase price obligation
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    $
    26,356Common stock issued for business acquisitions
    
    $
    3⁄4
    
    
    $
    3,878
    
    
    $
    3⁄4Transfer of Rossignol debt to continuing operations
    
    $
    3⁄4
    
    
    $
    78,322
    
    
    $
    3⁄4Stock warrants issued
    
    $
    23,601
    
    
    $
    3⁄4
    
    
    $
    3⁄4
  46




---



##### Table of Contents



QUIKSILVER, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended October 31, 2009, 2008 and 2007
 Note 1  Significant Accounting Policies
 Company Business
 Quiksilve Roxy DC Hawk Raisins Radio Fiji Leilani DC, Roxy, Lib Technologies, Gnu Bent Metal
 Rossignol Dynastar Look Lange
 
 Principles of Consolidation
  Basis of Presentation
  Cash Equivalents
  Inventories
  47




---



##### Table of Contents



Fixed Assets
  Long-Lived Assets
  Goodwill and Intangible Assets
  Revenue Recognition
   Year Ended October 31,In thousands
    
    2009
    
    
    2008
    
    
    2007Product shipments, net
    
    $
    1,961,389
    
    
    $
    2,254,245
    
    
    $
    2,040,289Royalty income
    
    
    16,137
    
    
    
    10,391
    
    
    
    6,783$
    1,977,526
    
    
    $
    2,264,636
    
    
    $
    2,047,072
 Promotion and Advertising
  Income Taxes
  48




---



##### Table of Contents



Stock-Based Compensation Expense
  Net (Loss) Income per Share
  Foreign Currency and Derivatives
   Comprehensive Loss
  49




---



##### Table of Contents



Use of Estimates
  Fair Value of Financial Instruments
  Subsequent Events
  New Accounting Pronouncements
     50




---



##### Table of Contents



Subsequent Events
 Note 2  Business Acquisitions
  51




---



##### Table of Contents



Note 3  Allowance for Doubtful Accounts
  Year Ended October 31,In thousands
    
    2009
    
    
    2008
    
    
    2007Balance, beginning of year
    
    $
    31,331
    
    
    $
    21,100
    
    
    $
    15,758Provision for doubtful accounts
    
    
    16,235
    
    
    
    15,948
    
    
    
    7,790Deductions
    
    
    (355
    )
    
    
    (5,717
    )
    
    
    (2,448
    )Balance, end of year
    
    $
    47,211
    
    
    $
    31,331
    
    
    $
    21,100
  Note 4  Inventories
  October 31,In thousands
    
    2009
    
    
    2008Raw materials
    
    $
    6,904
    
    
    $
    9,156Work in process
    
    
    5,230
    
    
    
    7,743Finished goods
    
    
    255,596
    
    
    
    295,239$
    267,730
    
    
    $
    312,138
 Note 5  Fixed Assets
  October 31,In thousands
    
    2009
    
    
    2008Furniture and other equipment
    
    $
    199,380
    
    
    $
    178,200Computer equipment
    
    
    101,505
    
    
    
    103,472Leasehold improvements
    
    
    137,966
    
    
    
    134,320Land use rights
    
    
    42,671
    
    
    
    38,508Land and buildings
    
    
    6,368
    
    
    
    4,600487,890
    
    
    
    459,100Accumulated depreciation and amortization
    
    
    (248,557
    )
    
    
    (223,572
    )$
    239,333
    
    
    $
    235,528
  52




---



##### Table of Contents



Note 6  Intangible Assets and Goodwill
  October 31,2009
    
    
    2008Gross
    
    
    Amorti-
    
    
    Net Book
    
    
    Gross
    
    
    Amorti-
    
    
    Net BookIn thousands
    
    Amount
    
    
    zation
    
    
    Value
    
    
    Amount
    
    
    zation
    
    
    ValueAmortizable trademarks
    
    $
    19,472
    
    
    $
    (6,745
    )
    
    $
    12,727
    
    
    $
    18,976
    
    
    $
    (5,559
    )
    
    $
    13,417Amortizable licenses
    
    
    12,237
    
    
    
    (8,464
    )
    
    
    3,773
    
    
    
    9,103
    
    
    
    (5,386
    )
    
    
    3,717Other amortizable intangibles
    
    
    8,318
    
    
    
    (4,695
    )
    
    
    3,623
    
    
    
    8,103
    
    
    
    (3,942
    )
    
    
    4,161Non-amortizable trademarks
    
    
    122,831
    
    
    
    
    
    
    
    122,831
    
    
    
    123,139
    
    
    
    
    
    
    
    123,139$
    162,858
    
    
    $
    (19,904
    )
    
    $
    142,954
    
    
    $
    159,321
    
    
    $
    (14,887
    )
    
    $
    144,434
    53




---



##### Table of Contents



Note 7  Lines of Credit and Long-term Debt
  October 31,In thousands
    
    2009
    
    
    2008European short-term credit arrangements
    
    $
    14
    
    
    $
    187,309Asia/Pacific short-term lines of credit
    
    
    32,578
    
    
    
    51,008Americas Credit Facility
    
    
    
    
    
    
    142,500Americas long-term debt
    
    
    109,329
    
    
    
    European long-term debt
    
    
    389,029
    
    
    
    172,907European Credit Facility
    
    
    38,243
    
    
    
    47,218Senior Notes
    
    
    400,000
    
    
    
    400,000Deferred purchase price obligation
    
    
    49,144
    
    
    
    41,922Capital lease obligations and other borrowings
    
    
    20,916
    
    
    
    17,454$
    1,039,253
    
    
    $
    1,060,318
   
 54




---



##### Table of Contents



     
     
  
 55




---



##### Table of Contents



2010
    
    $
    95,2312011
    
    
    105,7592012
    
    
    101,3212013
    
    
    164,0002014
    
    
    140,350Thereafter
    
    
    400,000$
    1,006,661
  October 31, 2009CarryingAmount
    
    
    Fair ValueLines of credit
    
    $
    32,592
    
    
    $
    32,592Long-term debt
    
    
    1,006,661
    
    
    
    915,861$
    1,039,253
    
    
    $
    948,453
  56




---



##### Table of Contents



Note 8  Accrued Liabilities
  October 31,2009
    
    
    2008Accrued employee compensation and benefits
    
    $
    48,040
    
    
    $
    44,405Accrued sales and payroll taxes
    
    
    12,620
    
    
    
    8,658Derivative liability
    
    
    20,611
    
    
    
    Accrued interest
    
    
    2,088
    
    
    
    2,784Other liabilities
    
    
    32,915
    
    
    
    37,701$
    116,274
    
    
    $
    93,548
 Note 9  Commitments and Contingencies
 Operating Leases
  2010
    
    $
    107,9002011
    
    
    98,3822012
    
    
    86,0732013
    
    
    76,0522014
    
    
    58,955Thereafter
    
    
    144,669$
    572,031
  Professional Athlete Sponsorships
  2010
    
    $
    18,6492011
    
    
    12,5982012
    
    
    6,4512013
    
    
    4,3452014
    
    
    2,787Thereafter
    
    
    500$
    45,330
  57




---



##### Table of Contents



Litigation
  Indemnities and Guarantees
  Note 10  Stockholders Equity
   Year Ended October 31,2009
    
    2008
    
    2007Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    Average
    
    
    
    
    
    AverageIn thousands
    
    Shares
    
    Price
    
    Shares
    
    Price
    
    Shares
    
    PriceOutstanding, beginning of year
    
    
    15,902,575
    
    
    $
    9.97
    
    
    
    17,311,049
    
    
    $
    9.30
    
    
    
    18,135,699
    
    
    $
    8.61Granted
    
    
    4,563,250
    
    
    
    1.97
    
    
    
    1,310,000
    
    
    
    8.99
    
    
    
    1,247,051
    
    
    
    15.19Exercised
    
    
    
    
    
    
    
    
    
    
    (1,828,338
    )
    
    
    3.69
    
    
    
    (1,804,515
    )
    
    
    5.74Canceled
    
    
    (4,556,724
    )
    
    
    11.21
    
    
    
    (890,136
    )
    
    
    8.55
    
    
    
    (267,186
    )
    
    
    13.48Outstanding, end of year
    
    
    15,909,101
    
    
    
    7.32
    
    
    
    15,902,575
    
    
    
    9.97
    
    
    
    17,311,049
    
    
    
    9.30Options exercisable, end of year
    
    
    10,211,031
    
    
    
    9.15
    
    
    
    12,251,796
    
    
    
    9.19
    
    
    
    12,395,513
    
    
    
    7.56
  58




---



##### Table of Contents



Options Outstanding
    
    Options ExercisableWeighted
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    Average
    
    
    
    
    
    AverageRemaining
    
    Exercise
    
    
    
    
    
    ExerciseRange of Exercise Prices
    
    Shares
    
    Life
    
    Price
    
    Shares
    
    Price(Years)$1.04 - $2.56
    
    
    4,412,250
    
    
    
    9.5
    
    
    $
    1.97
    
    
    
    45,000
    
    
    $
    1.56$2.57 - $4.47
    
    
    1,989,068
    
    
    
    1.6
    
    
    
    3.49
    
    
    
    1,914,818
    
    
    
    3.52$4.48 - $5.96
    
    
    686,676
    
    
    
    1.3
    
    
    
    4.78
    
    
    
    686,676
    
    
    
    4.78$5.97 - $7.44
    
    
    1,292,005
    
    
    
    3.1
    
    
    
    6.66
    
    
    
    1,292,005
    
    
    
    6.66$7.45 - $8.93
    
    
    2,035,500
    
    
    
    4.1
    
    
    
    8.57
    
    
    
    2,002,165
    
    
    
    8.57$8.94 - $10.42
    
    
    1,047,000
    
    
    
    8.1
    
    
    
    9.02
    
    
    
    310,633
    
    
    
    9.07$10.43 - $11.90
    
    
    616,001
    
    
    
    4.5
    
    
    
    11.08
    
    
    
    616,001
    
    
    
    11.08$11.91 - $14.87
    
    
    3,010,601
    
    
    
    5.7
    
    
    
    14.04
    
    
    
    2,802,414
    
    
    
    14.06$14.88 - $16.36
    
    
    820,000
    
    
    
    6.7
    
    
    
    15.75
    
    
    
    541,319
    
    
    
    15.8615,909,101
    
    
    
    5.8
    
    
    
    7.32
    
    
    
    10,211,031
    
    
    
    9.15
  WeightedAverageGrant DateShares
    
    
    Fair ValueNon-vested, beginning of year
    
    
    3,650,779
    
    
    $
    5.88Granted
    
    
    4,563,250
    
    
    
    1.00Vested
    
    
    (2,017,785
    )
    
    
    6.06Canceled
    
    
    (498,174
    )
    
    
    6.40Non-vested, end of year
    
    
    5,698,070
    
    
    
    1.90
    59




---



##### Table of Contents



In March 2006, the Companys shareholders approved the 2006 Restricted Stock Plan and in March
2007, the Companys shareholders approved an amendment to the 2000 Stock Incentive Plan whereby
restricted shares and restricted stock units can be issued from such plan. Restricted stock issued
under these plans vests over a period of time, generally three to five years, and may have certain
performance based acceleration features which allow for earlier vesting.
 Changes in restricted stock are as follows:
 Year Ended October 31,2009
    
    
    2008
    
    
    2007Outstanding, beginning of year
    
    
    721,003
    
    
    
    842,000
    
    
    
    800,000Granted
    
    
    590,000
    
    
    
    330,000
    
    
    
    87,000Vested
    
    
    (9,999
    )
    
    
    (17,329
    )
    
    
    Forfeited
    
    
    (279,001
    )
    
    
    (433,668
    )
    
    
    (45,000
    )Outstanding, end of year
    
    
    1,022,003
    
    
    
    721,003
    
    
    
    842,000
     Note 11  Accumulated Other Comprehensive Income
  October 31,In thousands
    
    2009
    
    
    2008Foreign currency translation adjustment
    
    $
    111,951
    
    
    $
    60,003(Loss) gain on cash flow hedges
    
    
    (16,555
    )
    
    
    20,507$
    95,396
    
    
    $
    80,510
 60




---



##### Table of Contents



Note 12  Income Taxes
  Year Ended October 31,In thousands
    
    2009
    
    
    2008
    
    
    2007Current:Federal
    
    $
    3,221
    
    
    $
    4,403
    
    
    $
    (597
    )State
    
    
    
    
    
    
    (572
    )
    
    
    399Foreign
    
    
    34,448
    
    
    
    39,641
    
    
    
    49,78937,669
    
    
    
    43,472
    
    
    
    49,591Deferred:Federal
    
    
    24,699
    
    
    
    (8,070
    )
    
    
    (5,103
    )State
    
    
    8,166
    
    
    
    (1,980
    )
    
    
    (770
    )Foreign
    
    
    (3,867
    )
    
    
    (395
    )
    
    
    (9,212
    )28,998
    
    
    
    (10,445
    )
    
    
    (15,085
    )Provision for income taxes
    
    $
    66,667
    
    
    $
    33,027
    
    
    $
    34,506
  Year Ended October 31,2009
    
    2008
    
    2007Computed expected statutory federal income
tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes, net of federal income
tax benefit
    
    
    83.0
    
    
    
    (1.2
    )
    
    
    0.2Foreign tax rate differential
    
    
    264.0
    
    
    
    (10.3
    )
    
    
    (8.7
    )Foreign tax exempt income
    
    
    (96.4
    )
    
    
    (9.0
    )
    
    
    (5.3
    )Repatriation of foreign earnings, net of credits
    
    
    
    
    
    
    0.7
    
    
    
    0.4Goodwill impairment
    
    
    
    
    
    
    19.7
    
    
    
    Stock-based compensation
    
    
    (11.6
    )
    
    
    1.6
    
    
    
    1.2Uncertain tax positions
    
    
    (64.4
    )
    
    
    (5.7
    )
    
    
    1.3Valuation allowance
    
    
    (1,115.6
    )
    
    
    2.2
    
    
    
    Other
    
    
    (112.0
    )
    
    
    0.5
    
    
    
    (1.3
    )Effective income tax rate
    
    
    (1,018.0
    )%
    
    
    33.5
    %
    
    
    22.8
    %
 61




---



##### Table of Contents



Year Ended October 31,In thousands
    
    2009
    
    
    2008Deferred income tax assets:Allowance for doubtful accounts
    
    $
    8,509
    
    
    $
    13,176Depreciation and amortization
    
    
    869
    
    
    
    6,467Unrealized gains and losses
    
    
    13,349
    
    
    
    Tax loss carryforwards
    
    
    177,134
    
    
    
    113,655Accruals and other
    
    
    66,780
    
    
    
    55,133Basis difference in Rossignol investment
    
    
    
    
    
    
    147,621266,641
    
    
    
    336,052Deferred income tax liabilities:Unrealized gains and losses
    
    
    
    
    
    
    (8,689
    )Basis difference in receivables due from Rossignol
    
    
    
    
    
    
    (111,845
    )Intangibles
    
    
    (27,354
    )
    
    
    (25,633
    )(27,354
    )
    
    
    (146,167
    )Deferred income taxes
    
    
    239,287
    
    
    
    189,885Valuation allowance
    
    
    (93,638
    )
    
    
    (138,665
    )Net deferred income taxes
    
    $
    145,649
    
    
    $
    51,220
      62




---



##### Table of Contents



Year ended October 31,In thousands
    
    2009
    
    
    2008Balance, beginning of year
    
    $
    25,495
    
    
    $
    29,552Gross increases related to prior year tax positions
    
    
    7,134
    
    
    
    2,759Gross increases related to current year tax positions
    
    
    6,461
    
    
    
    7,888Settlements
    
    
    
    
    
    
    (6,770
    )Lapse in statute of limitation
    
    
    (13
    )
    
    
    (4,700
    )Foreign exchange and other
    
    
    3,026
    
    
    
    (3,234
    )Balance, end of year
    
    $
    42,103
    
    
    $
    25,495
     63




---



##### Table of Contents



Note 13  Employee Plans
   Note 14  Segment and Geographic Information
   Percentage of Revenues2009
    
    2008
    
    2007Apparel
    
    
    66
    %
    
    
    65
    %
    
    
    66
    %Footwear
    
    
    20
    
    
    
    20
    
    
    
    18Accessories
    
    
    14
    
    
    
    15
    
    
    
    16100
    %
    
    
    100
    %
    
    
    100
    %
 64




---



##### Table of Contents



Year Ended October 31,In thousands
    
    2009
    
    
    2008
    
    
    2007Revenues, net:Americas
    
    $
    929,691
    
    
    $
    1,061,370
    
    
    $
    995,801Europe
    
    
    792,627
    
    
    
    933,119
    
    
    
    803,395Asia/Pacific
    
    
    251,596
    
    
    
    265,067
    
    
    
    243,064Corporate operations
    
    
    3,612
    
    
    
    5,080
    
    
    
    4,812Consolidated
    
    $
    1,977,526
    
    
    $
    2,264,636
    
    
    $
    2,047,072Gross profit (loss):Americas
    
    $
    349,526
    
    
    $
    445,381
    
    
    $
    418,021Europe
    
    
    446,801
    
    
    
    532,034
    
    
    
    442,923Asia/Pacific
    
    
    135,591
    
    
    
    140,168
    
    
    
    120,411Corporate operations
    
    
    (887
    )
    
    
    3,003
    
    
    
    3,690Consolidated
    
    $
    931,031
    
    
    $
    1,120,586
    
    
    $
    985,045SG&A expense:Americas
    
    $
    364,727
    
    
    $
    371,958
    
    
    $
    311,757Europe
    
    
    341,780
    
    
    
    380,374
    
    
    
    316,867Asia/Pacific
    
    
    112,418
    
    
    
    117,219
    
    
    
    100,922Corporate operations
    
    
    32,821
    
    
    
    46,382
    
    
    
    52,717Consolidated
    
    $
    851,746
    
    
    $
    915,933
    
    
    $
    782,263Asset impairments:Americas
    
    $
    10,092
    
    
    $
    9,317
    
    
    $
    Europe
    
    
    645
    
    
    
    692
    
    
    
    Asia/Pacific
    
    
    
    
    
    
    55,788
    
    
    
    Corporate operations
    
    
    
    
    
    
    
    
    
    
    Consolidated
    
    $
    10,737
    
    
    $
    65,797
    
    
    $
    Operating (loss) income:Americas
    
    $
    (25,293
    )
    
    $
    64,106
    
    
    $
    106,264Europe
    
    
    104,376
    
    
    
    150,968
    
    
    
    126,056Asia/Pacific
    
    
    23,173
    
    
    
    (32,839
    )
    
    
    19,489Corporate operations
    
    
    (33,708
    )
    
    
    (43,379
    )
    
    
    (49,027
    )Consolidated
    
    $
    68,548
    
    
    $
    138,856
    
    
    $
    202,782Identifiable assets:Americas
    
    $
    538,533
    
    
    $
    841,318
    
    
    $
    908,435Europe
    
    
    923,494
    
    
    
    1,026,268
    
    
    
    1,307,738Asia/Pacific
    
    
    296,806
    
    
    
    247,480
    
    
    
    390,338Corporate operations
    
    
    93,775
    
    
    
    55,199
    
    
    
    55,553Consolidated
    
    $
    1,852,608
    
    
    $
    2,170,265
    
    
    $
    2,662,064Goodwill:Americas
    
    $
    77,891
    
    
    $
    76,124
    
    
    $
    73,709Europe
    
    
    184,802
    
    
    
    167,814
    
    
    
    179,012Asia/Pacific
    
    
    71,065
    
    
    
    55,412
    
    
    
    146,178Consolidated
    
    $
    333,758
    
    
    $
    299,350
    
    
    $
    398,899
  65




---



##### Table of Contents



Note 15  Derivative Financial Instruments
      Year Ended October 31, 2009In thousands
    
    Amount
    
    LocationLoss recognized in OCI on derivatives
    
    $
    (41,036)
    
    
    Other comprehensive incomeLoss reclassified from accumulated OCI into income
    
    $
    (14,343)
    
    
    Cost of goods soldLoss reclassified from accumulated OCI into income
    
    $
    (17)
    
    
    Foreign currency gain (loss)Loss recognized in income on derivatives
    
    $
    (691)
    
    
    Foreign currency gain (loss)
  66




---



##### Table of Contents



NotionalIn thousands
    
    Hedged Item

    
    Amount
    
    
    Maturity

    
    Fair ValueUnited States dollar
    
    Inventory
    
    $
    425,352
    
    
    Nov 2009  Oct 2011
    
    $
    (23,138
    )British pounds
    
    Accounts receivable
    
    
    9,914
    
    
    Nov 2009  Jan 2010
    
    
    (53
    )$
    435,266
    
    
    
    
    
    
    $
    (23,191
    )
  
    
    Level 1  Valuation is based upon quoted prices for identical instruments traded in
active markets. Level 1 assets and liabilities include debt and equity securities
traded in an active exchange market, as well as U.S. Treasury securities.
    
    Level 2  Valuation is based upon quoted prices for similar instruments in active
markets, quoted prices for identical or similar instruments in markets that are not
active, and model based valuation techniques for which all significant assumptions are
observable in the market or can be corroborated by observable market data for
substantially the full term of the assets or liabilities.
    
    Level 3  Valuation is determined using model-based techniques with significant
assumptions not observable in the market. These unobservable assumptions reflect the
Companys own estimates of assumptions that market participants would use in pricing
the asset or liability. Valuation techniques include the use of third party pricing
services, option pricing models, discounted cash flow models and similar techniques.
 67




---



##### Table of Contents



October 31, 2009Fair Value Measurements Using
    
    
    Assets (Liabilities)In thousands
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
at Fair ValueDerivative assets:Other receivables
    
    $
    
    
    
    $
    936
    
    
    $
    
    
    
    $
    936Other assets
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7Derivative liabilities:Accrued liabilities
    
    
    
    
    
    
    (20,611
    )
    
    
    
    
    
    
    (20,611
    )Other long-term liabilities
    
    
    
    
    
    
    (3,523
    )
    
    
    
    
    
    
    (3,523
    )Total fair value
    
    $
    
    
    
    $
    (23,191
    )
    
    $
    
    
    
    $
    (23,191
    )
 Note 16  Quarterly Financial Data (Unaudited)
  Quarter EndedIn thousands, except per share amounts
    
    January 31
    
    April 30
    
    July 31
    
    October 31Year ended October 31, 2009Revenues, net
    
    $
    443,278
    
    
    $
    494,173
    
    
    $
    501,394
    
    
    $
    538,681Gross profit
    
    
    207,163
    
    
    
    233,118
    
    
    
    234,364
    
    
    
    256,386(Loss) income from continuing
operations
    
    
    (65,862
    )
    
    
    4,945
    
    
    
    3,413
    
    
    
    (15,711
    )(Loss) income from discontinued
operations
    
    
    (128,564
    )
    
    
    (2,132
    )
    
    
    (2,067
    )
    
    
    13,936Net (loss) income
    
    
    (194,426
    )
    
    
    2,813
    
    
    
    1,346
    
    
    
    (1,775
    )(Loss) income per share from continuing
operations, assuming dilution
    
    
    (0.52
    )
    
    
    0.04
    
    
    
    0.03
    
    
    
    (0.12
    )(Loss) income per share from discontinued
operations, assuming dilution
    
    
    (1.01
    )
    
    
    (0.02
    )
    
    
    (0.02
    )
    
    
    0.11Net (loss) income per share, assuming
dilution
    
    
    (1.53
    )
    
    
    0.02
    
    
    
    0.01
    
    
    
    (0.01
    )Trade accounts receivable
    
    
    373,357
    
    
    
    410,971
    
    
    
    424,191
    
    
    
    430,884Inventories
    
    
    380,502
    
    
    
    307,735
    
    
    
    334,233
    
    
    
    267,730Year ended October 31, 2008Revenues, net
    
    $
    496,581
    
    
    $
    596,280
    
    
    $
    564,876
    
    
    $
    606,899Gross profit
    
    
    243,524
    
    
    
    300,342
    
    
    
    284,829
    
    
    
    291,891Income (loss) from continuing operations
    
    
    7,570
    
    
    
    38,725
    
    
    
    33,073
    
    
    
    (13,824
    )(Loss) income from discontinued
operations
    
    
    (29,510
    )
    
    
    (244,949
    )
    
    
    (30,219
    )
    
    
    12,869Net (loss) income
    
    
    (21,940
    )
    
    
    (206,224
    )
    
    
    2,854
    
    
    
    (955
    )Income (loss) per share from continuing
operations, assuming dilution
    
    
    0.06
    
    
    
    0.30
    
    
    
    0.25
    
    
    
    (0.11
    )(Loss) income per share from discontinued
operations, assuming dilution
    
    
    (0.24
    )
    
    
    (1.88
    )
    
    
    (0.23
    )
    
    
    0.10Net (loss) income per share, assuming
dilution
    
    
    (0.18
    )
    
    
    (1.59
    )
    
    
    0.02
    
    
    
    (0.01
    )Trade accounts receivable
    
    
    402,536
    
    
    
    473,032
    
    
    
    491,369
    
    
    
    470,059Inventories
    
    
    364,362
    
    
    
    304,059
    
    
    
    358,646
    
    
    
    312,138
 68




---



##### Table of Contents



Note 17  Condensed Consolidating Financial Information
   69




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
 Year Ended October 31, 2009
 Non-Quiksilver,
    
    
    Guarantor
    
    
    GuarantorIn thousands
    
    Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues, net
    
    $
    301
    
    
    $
    796,924
    
    
    $
    1,218,860
    
    
    $
    (38,559
    )
    
    $
    1,977,526Cost of goods sold
    
    
    
    
    
    
    502,643
    
    
    
    556,666
    
    
    
    (12,814
    )
    
    
    1,046,495Gross profit
    
    
    301
    
    
    
    294,281
    
    
    
    662,194
    
    
    
    (25,745
    )
    
    
    931,031Selling, general and administrative
expense
    
    
    3,733
    
    
    
    348,228
    
    
    
    526,170
    
    
    
    (26,385
    )
    
    
    851,746Asset impairments
    
    
    
    
    
    
    10,092
    
    
    
    645
    
    
    
    
    
    
    
    10,737Operating (loss) income
    
    
    (3,432
    )
    
    
    (64,039
    )
    
    
    135,379
    
    
    
    640
    
    
    
    68,548Interest expense, net
    
    
    39,097
    
    
    
    8,700
    
    
    
    16,127
    
    
    
    
    
    
    
    63,924Foreign currency loss
    
    
    61
    
    
    
    47
    
    
    
    8,525
    
    
    
    
    
    
    
    8,633Minority interest, equity in earnings and
other expense
    
    
    147,848
    
    
    
    2,359
    
    
    
    180
    
    
    
    (147,848
    )
    
    
    2,539(Loss) income before (benefit)
provision for income taxes
    
    
    (190,438
    )
    
    
    (75,145
    )
    
    
    110,547
    
    
    
    148,488
    
    
    
    (6,548
    )(Benefit) provision for income taxes
    
    
    (2,823
    )
    
    
    42,937
    
    
    
    26,553
    
    
    
    
    
    
    
    66,667(Loss) income from continuing
operations
    
    
    (187,615
    )
    
    
    (118,082
    )
    
    
    83,994
    
    
    
    148,488
    
    
    
    (73,215
    )(Loss) income from discontinued
operations
    
    
    (4,427
    )
    
    
    13,303
    
    
    
    (128,367
    )
    
    
    664
    
    
    
    (118,827
    )Net loss
    
    $
    (192,042
    )
    
    $
    (104,779
    )
    
    $
    (44,373
    )
    
    $
    149,152
    
    
    $
    (192,042
    )
 70




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
 Year Ended October 31, 2008
 Non-Quiksilver,
    
    
    Guarantor
    
    
    GuarantorIn thousands
    
    Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues, net
    
    $
    116
    
    
    $
    927,971
    
    
    $
    1,382,879
    
    
    $
    (46,330
    )
    
    $
    2,264,636Cost of goods sold
    
    
    
    
    
    
    521,833
    
    
    
    636,627
    
    
    
    (14,410
    )
    
    
    1,144,050Gross profit
    
    
    116
    
    
    
    406,138
    
    
    
    746,252
    
    
    
    (31,920
    )
    
    
    1,120,586Selling, general and administrative
expense
    
    
    59,739
    
    
    
    345,451
    
    
    
    553,608
    
    
    
    (42,865
    )
    
    
    915,933Asset impairments
    
    
    
    
    
    
    9,317
    
    
    
    56,480
    
    
    
    
    
    
    
    65,797Operating (loss) income
    
    
    (59,623
    )
    
    
    51,370
    
    
    
    136,164
    
    
    
    10,945
    
    
    
    138,856Interest expense (income), net
    
    
    47,512
    
    
    
    377
    
    
    
    (2,562
    )
    
    
    
    
    
    
    45,327Foreign currency (gain) loss
    
    
    (1,505
    )
    
    
    (5,674
    )
    
    
    1,418
    
    
    
    
    
    
    
    (5,761
    )Minority interest, equity in earnings and
other expense
    
    
    134,831
    
    
    
    350
    
    
    
    369
    
    
    
    (134,831
    )
    
    
    719(Loss) income before (benefit)
provision for income taxes
    
    
    (240,461
    )
    
    
    56,317
    
    
    
    136,939
    
    
    
    145,776
    
    
    
    98,571(Benefit) provision for income taxes
    
    
    (14,986
    )
    
    
    2,488
    
    
    
    45,525
    
    
    
    
    
    
    
    33,027(Loss) income from continuing
operations
    
    
    (225,475
    )
    
    
    53,829
    
    
    
    91,414
    
    
    
    145,776
    
    
    
    65,544Loss from discontinued operations
    
    
    (790
    )
    
    
    (22,723
    )
    
    
    (255,976
    )
    
    
    (12,320
    )
    
    
    (291,809
    )Net (loss) income
    
    $
    (226,265
    )
    
    $
    31,106
    
    
    $
    (164,562
    )
    
    $
    133,456
    
    
    $
    (226,265
    )
 71




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
 Year Ended October 31, 2007
 Non-Guarantor
    
    
    GuarantorIn thousands
    
    Quiksilver, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenues, net
    
    $
    19
    
    
    $
    893,969
    
    
    $
    1,196,874
    
    
    $
    (43,790
    )
    
    $
    2,047,072Cost of goods sold
    
    
    
    
    
    
    525,839
    
    
    
    550,977
    
    
    
    (14,789
    )
    
    
    1,062,027Gross profit
    
    
    19
    
    
    
    368,130
    
    
    
    645,897
    
    
    
    (29,001
    )
    
    
    985,045Selling, general and administrative
expense
    
    
    52,955
    
    
    
    260,140
    
    
    
    497,158
    
    
    
    (27,990
    )
    
    
    782,263Operating (loss) income
    
    
    (52,936
    )
    
    
    107,990
    
    
    
    148,739
    
    
    
    (1,011
    )
    
    
    202,782Interest expense, net
    
    
    43,480
    
    
    
    2,202
    
    
    
    889
    
    
    
    
    
    
    
    46,571Foreign currency loss
    
    
    3,008
    
    
    
    1,579
    
    
    
    270
    
    
    
    
    
    
    
    4,857Minority interest, equity in earnings
and other expense (income)
    
    
    33,388
    
    
    
    (73
    )
    
    
    194
    
    
    
    (33,388
    )
    
    
    121(Loss) income before (benefit)
provision for income taxes
    
    
    (132,812
    )
    
    
    104,282
    
    
    
    147,386
    
    
    
    32,377
    
    
    
    151,233(Benefit) provision for income taxes
    
    
    (16,066
    )
    
    
    9,996
    
    
    
    40,576
    
    
    
    
    
    
    
    34,506(Loss) income from continuing
operations
    
    
    (116,746
    )
    
    
    94,286
    
    
    
    106,810
    
    
    
    32,377
    
    
    
    116,727(Loss) income from discontinued
operations
    
    
    (4,373
    )
    
    
    (61,578
    )
    
    
    (172,222
    )
    
    
    327
    
    
    
    (237,846
    )Net (loss) income
    
    $
    (121,119
    )
    
    $
    32,708
    
    
    $
    (65,412
    )
    
    $
    32,704
    
    
    $
    (121,119
    )
 72




---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEET
 OCTOBER 31, 2009
 Non-Quiksilver,
    
    
    Guarantor
    
    
    GuarantorIn thousands
    
    Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    321
    
    
    $
    1,135
    
    
    $
    98,060
    
    
    $
    
    
    
    $
    99,516Restricted cash
    
    
    
    
    
    
    
    
    
    
    52,706
    
    
    
    
    
    
    
    52,706Trade accounts receivable, net
    
    
    
    
    
    
    150,540
    
    
    
    280,344
    
    
    
    
    
    
    
    430,884Other receivables
    
    
    854
    
    
    
    4,869
    
    
    
    19,892
    
    
    
    
    
    
    
    25,615Inventories
    
    
    
    
    
    
    86,501
    
    
    
    182,006
    
    
    
    (777
    )
    
    
    267,730Deferred income taxes
    
    
    
    
    
    
    8,658
    
    
    
    67,980
    
    
    
    
    
    
    
    76,638Prepaid expenses and other
current assets
    
    
    12,981
    
    
    
    11,039
    
    
    
    13,313
    
    
    
    
    
    
    
    37,333Current assets held for sale
    
    
    
    
    
    
    
    
    
    
    1,777
    
    
    
    
    
    
    
    1,777Total current assets
    
    
    14,156
    
    
    
    262,742
    
    
    
    716,078
    
    
    
    (777
    )
    
    
    992,199Fixed assets, net
    
    
    4,323
    
    
    
    71,265
    
    
    
    163,745
    
    
    
    
    
    
    
    239,333Intangible assets, net
    
    
    2,886
    
    
    
    50,426
    
    
    
    89,642
    
    
    
    
    
    
    
    142,954Goodwill
    
    
    
    
    
    
    118,111
    
    
    
    215,647
    
    
    
    
    
    
    
    333,758Investment in subsidiaries
    
    
    952,358
    
    
    
    
    
    
    
    
    
    
    
    (952,358
    )
    
    
    Other assets
    
    
    7,522
    
    
    
    18,947
    
    
    
    48,884
    
    
    
    
    
    
    
    75,353Deferred income taxes long-term
    
    
    
    
    
    
    (28,017
    )
    
    
    97,028
    
    
    
    
    
    
    
    69,011Total assets
    
    $
    981,245
    
    
    $
    493,474
    
    
    $
    1,331,024
    
    
    $
    (953,135
    )
    
    $
    1,852,608LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Lines of credit
    
    $
    
    
    
    $
    
    
    
    $
    32,592
    
    
    $
    
    
    
    $
    32,592Accounts payable
    
    
    1,594
    
    
    
    60,003
    
    
    
    100,776
    
    
    
    
    
    
    
    162,373Accrued liabilities
    
    
    7,357
    
    
    
    27,084
    
    
    
    81,833
    
    
    
    
    
    
    
    116,274Current portion of long-term debt
    
    
    
    
    
    
    1,140
    
    
    
    94,091
    
    
    
    
    
    
    
    95,231Income taxes payable
    
    
    
    
    
    
    9,174
    
    
    
    14,400
    
    
    
    
    
    
    
    23,574Intercompany balances
    
    
    115,699
    
    
    
    (129,624
    )
    
    
    13,925
    
    
    
    
    
    
    
    Current liabilities related to assets
held for sale
    
    
    
    
    
    
    15
    
    
    
    443
    
    
    
    
    
    
    
    458Total current liabilities
    
    
    124,650
    
    
    
    (32,208
    )
    
    
    338,060
    
    
    
    
    
    
    
    430,502Long-term debt, net of current portion
    
    
    400,000
    
    
    
    110,829
    
    
    
    400,601
    
    
    
    
    
    
    
    911,430Other long-term liabilities
    
    
    
    
    
    
    43,931
    
    
    
    10,150
    
    
    
    
    
    
    
    54,081Total liabilities
    
    
    524,650
    
    
    
    122,552
    
    
    
    748,811
    
    
    
    
    
    
    
    1,396,013Stockholders/invested equity
    
    
    456,595
    
    
    
    370,922
    
    
    
    582,213
    
    
    
    (953,135
    )
    
    
    456,595Total liabilities and
stockholders equity
    
    $
    981,245
    
    
    $
    493,474
    
    
    $
    1,331,024
    
    
    $
    (953,135
    )
    
    $
    1,852,608
 73




---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEET
 OCTOBER 31, 2008
 Non-Quiksilver,
    
    
    Guarantor
    
    
    GuarantorIn thousands
    
    Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    18
    
    
    $
    2,666
    
    
    $
    50,358
    
    
    $
    
    
    
    $
    53,042Trade accounts receivable, net
    
    
    
    
    
    
    214,033
    
    
    
    256,026
    
    
    
    
    
    
    
    470,059Other receivables
    
    
    866
    
    
    
    9,824
    
    
    
    59,686
    
    
    
    
    
    
    
    70,376Income taxes receivable
    
    
    
    
    
    
    2,859
    
    
    
    7,879
    
    
    
    
    
    
    
    10,738Inventories
    
    
    
    
    
    
    134,812
    
    
    
    178,738
    
    
    
    (1,412
    )
    
    
    312,138Deferred income taxes
    
    
    
    
    
    
    21,560
    
    
    
    (9,340
    )
    
    
    
    
    
    
    12,220Prepaid expenses and other
current assets
    
    
    6,019
    
    
    
    8,773
    
    
    
    11,077
    
    
    
    
    
    
    
    25,869Current assets held for sale
    
    
    
    
    
    
    70,367
    
    
    
    341,075
    
    
    
    
    
    
    
    411,442Total current assets
    
    
    6,903
    
    
    
    464,894
    
    
    
    895,499
    
    
    
    (1,412
    )
    
    
    1,365,884Restricted cash
    
    
    
    
    
    
    
    
    
    
    46,475
    
    
    
    
    
    
    
    46,475Fixed assets, net
    
    
    5,775
    
    
    
    96,686
    
    
    
    133,067
    
    
    
    
    
    
    
    235,528Intangible assets, net
    
    
    2,754
    
    
    
    51,113
    
    
    
    90,567
    
    
    
    
    
    
    
    144,434Goodwill
    
    
    
    
    
    
    117,235
    
    
    
    182,115
    
    
    
    
    
    
    
    299,350Investment in subsidiaries
    
    
    1,185,761
    
    
    
    
    
    
    
    
    
    
    
    (1,185,761
    )
    
    
    Other assets
    
    
    9,300
    
    
    
    3,387
    
    
    
    26,907
    
    
    
    
    
    
    
    39,594Deferred income taxes long-term
    
    
    
    
    
    
    3,992
    
    
    
    35,008
    
    
    
    
    
    
    
    39,000Total assets
    
    $
    1,210,493
    
    
    $
    737,307
    
    
    $
    1,409,638
    
    
    $
    (1,187,173
    )
    
    $
    2,170,265LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Lines of credit
    
    $
    
    
    
    $
    
    
    
    $
    238,317
    
    
    $
    
    
    
    $
    238,317Accounts payable
    
    
    5,121
    
    
    
    102,987
    
    
    
    127,621
    
    
    
    
    
    
    
    235,729Accrued liabilities
    
    
    18,436
    
    
    
    17,455
    
    
    
    57,657
    
    
    
    
    
    
    
    93,548Current portion of long-term debt
    
    
    
    
    
    
    2,061
    
    
    
    29,843
    
    
    
    
    
    
    
    31,904Intercompany balances
    
    
    186,970
    
    
    
    (122,584
    )
    
    
    (64,386
    )
    
    
    
    
    
    
    Current liabilities related to assets
held for sale
    
    
    
    
    
    
    35,398
    
    
    
    99,673
    
    
    
    
    
    
    
    135,071Total current liabilities
    
    
    210,527
    
    
    
    35,317
    
    
    
    488,725
    
    
    
    
    
    
    
    734,569Long-term debt, net of current portion
    
    
    400,000
    
    
    
    143,501
    
    
    
    246,596
    
    
    
    
    
    
    
    790,097Other long-term liabilities
    
    
    
    
    
    
    29,882
    
    
    
    9,725
    
    
    
    
    
    
    
    39,607Non-current liabilities related to
assets held for sale
    
    
    
    
    
    
    
    
    
    
    6,026
    
    
    
    
    
    
    
    6,026Total liabilities
    
    
    610,527
    
    
    
    208,700
    
    
    
    751,072
    
    
    
    
    
    
    
    1,570,299Stockholders/invested equity
    
    
    599,966
    
    
    
    528,607
    
    
    
    658,566
    
    
    
    (1,187,173
    )
    
    
    599,966Total liabilities and
stockholders equity
    
    $
    1,210,493
    
    
    $
    737,307
    
    
    $
    1,409,638
    
    
    $
    (1,187,173
    )
    
    $
    2,170,265
 74




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
 Year Ended October 31, 2009
 Non-Quiksilver,
    
    
    Guarantor
    
    
    GuarantorIn thousands
    
    Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net loss
    
    $
    (192,042
    )
    
    $
    (104,779
    )
    
    $
    (44,373
    )
    
    $
    149,152
    
    
    $
    (192,042
    )Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:Loss (income) from discontinued operations
    
    
    4,427
    
    
    
    (13,303
    )
    
    
    128,367
    
    
    
    (664
    )
    
    
    118,827Depreciation and amortization
    
    
    1,525
    
    
    
    24,174
    
    
    
    29,305
    
    
    
    
    
    
    
    55,004Stock-based compensation and tax
benefit on option exercises
    
    
    8,415
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,415Provision for doubtful accounts
    
    
    
    
    
    
    10,059
    
    
    
    6,176
    
    
    
    
    
    
    
    16,235Equity in earnings
    
    
    147,848
    
    
    
    
    
    
    
    
    
    
    
    (147,848
    )
    
    
    Asset impairments
    
    
    
    
    
    
    9,570
    
    
    
    1,167
    
    
    
    
    
    
    
    10,737Deferred taxes
    
    
    
    
    
    
    47,482
    
    
    
    (4,248
    )
    
    
    
    
    
    
    43,234Other adjustments to reconcile net loss
    
    
    334
    
    
    
    5,417
    
    
    
    4,705
    
    
    
    
    
    
    
    10,456Changes in operating assets and liabilities:Trade accounts receivable
    
    
    
    
    
    
    53,272
    
    
    
    7,511
    
    
    
    
    
    
    
    60,783Inventories
    
    
    
    
    
    
    48,293
    
    
    
    31,050
    
    
    
    (1,304
    )
    
    
    78,039Other operating assets and liabilities
    
    
    (8,929
    )
    
    
    (4,245
    )
    
    
    (4,161
    )
    
    
    
    
    
    
    (17,335
    )Cash (used in) provided by operating
activities of continuing operations
    
    
    (38,422
    )
    
    
    75,940
    
    
    
    155,499
    
    
    
    (664
    )
    
    
    192,353Cash (used in) provided by operating
activities of discontinued operations
    
    
    (19,423
    )
    
    
    36,806
    
    
    
    (4,232
    )
    
    
    664
    
    
    
    13,815Net cash (used in) provided by
operating activities
    
    
    (57,845
    )
    
    
    112,746
    
    
    
    151,267
    
    
    
    
    
    
    
    206,168Cash flows from investing activities:Capital expenditures
    
    
    (3,793
    )
    
    
    (7,214
    )
    
    
    (43,557
    )
    
    
    
    
    
    
    (54,564
    )Cash used in investing activities
of continuing operations
    
    
    (3,793
    )
    
    
    (7,214
    )
    
    
    (43,557
    )
    
    
    
    
    
    
    (54,564
    )Cash provided by investing activities of
discontinued operations
    
    
    
    
    
    
    
    
    
    
    21,848
    
    
    
    
    
    
    
    21,848Net cash used in investing activities
    
    
    (3,793
    )
    
    
    (7,214
    )
    
    
    (21,709
    )
    
    
    
    
    
    
    (32,716
    )Cash flows from financing activities:Borrowings on lines of credit
    
    
    
    
    
    
    
    
    
    
    10,346
    
    
    
    
    
    
    
    10,346Payments on lines of credit
    
    
    
    
    
    
    
    
    
    
    (237,025
    )
    
    
    
    
    
    
    (237,025
    )Borrowings on long-term debt
    
    
    
    
    
    
    547,093
    
    
    
    348,175
    
    
    
    
    
    
    
    895,268Payments on long-term debt
    
    
    
    
    
    
    (561,113
    )
    
    
    (165,739
    )
    
    
    
    
    
    
    (726,852
    )Payments of debt issuance costs
    
    
    
    
    
    
    (27,494
    )
    
    
    (19,984
    )
    
    
    
    
    
    
    (47,478
    )Proceeds from stock option exercises
    
    
    862
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    862Intercompany
    
    
    61,079
    
    
    
    (65,549
    )
    
    
    4,470
    
    
    
    
    
    
    
    Cash provided by (used in) financing
activities of continuing operations
    
    
    61,941
    
    
    
    (107,063
    )
    
    
    (59,757
    )
    
    
    
    
    
    
    (104,879
    )Cash used in financing activities of
discontinued operations
    
    
    
    
    
    
    
    
    
    
    (11,136
    )
    
    
    
    
    
    
    (11,136
    )Net cash provided by (used in)
financing activities
    
    
    61,941
    
    
    
    (107,063
    )
    
    
    (70,893
    )
    
    
    
    
    
    
    (116,015
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (10,963
    )
    
    
    
    
    
    
    (10,963
    )Net increase (decrease) in cash and cash
equivalents
    
    
    303
    
    
    
    (1,531
    )
    
    
    47,702
    
    
    
    
    
    
    
    46,474Cash and cash equivalents, beginning of period
    
    
    18
    
    
    
    2,666
    
    
    
    50,358
    
    
    
    
    
    
    
    53,042Cash and cash equivalents, end of period
    
    $
    321
    
    
    $
    1,135
    
    
    $
    98,060
    
    
    
    
    
    
    $
    99,516
 75




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
 Year Ended October 31, 2008
 Non-Quiksilver,
    
    
    Guarantor
    
    
    GuarantorIn thousands
    
    Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (226,265
    )
    
    $
    31,106
    
    
    $
    (164,562
    )
    
    $
    133,456
    
    
    $
    (226,265
    )Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating activities:Loss from discontinued operations
    
    
    790
    
    
    
    22,723
    
    
    
    255,976
    
    
    
    12,320
    
    
    
    291,809Depreciation and amortization
    
    
    2,074
    
    
    
    25,785
    
    
    
    29,372
    
    
    
    
    
    
    
    57,231Stock-based compensation and tax benefit on
option exercises
    
    
    9,588
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,588Provision for doubtful accounts
    
    
    330
    
    
    
    7,213
    
    
    
    8,405
    
    
    
    
    
    
    
    15,948Equity in earnings
    
    
    134,831
    
    
    
    
    
    
    
    
    
    
    
    (134,831
    )
    
    
    Asset impairments
    
    
    
    
    
    
    9,317
    
    
    
    56,480
    
    
    
    
    
    
    
    65,797Other adjustments to reconcile net (loss) income
    
    
    (1,478
    )
    
    
    4,242
    
    
    
    (13,666
    )
    
    
    
    
    
    
    (10,902
    )Changes in operating assets and liabilities:Trade accounts receivable
    
    
    
    
    
    
    (21,640
    )
    
    
    5,461
    
    
    
    
    
    
    
    (16,179
    )Inventories
    
    
    
    
    
    
    (5,215
    )
    
    
    (28,946
    )
    
    
    1,375
    
    
    
    (32,786
    )Other operating assets and liabilities
    
    
    (3,395
    )
    
    
    19,531
    
    
    
    9,087
    
    
    
    
    
    
    
    25,223Cash (used in) provided by operating
activities of continuing operations
    
    
    (83,525
    )
    
    
    93,062
    
    
    
    157,607
    
    
    
    12,320
    
    
    
    179,464Cash provided by (used in) operating
activities of discontinued operations
    
    
    12,203
    
    
    
    (27,429
    )
    
    
    (79,756
    )
    
    
    (12,320
    )
    
    
    (107,302
    )Net cash (used in) provided by
operating activities
    
    
    (71,322
    )
    
    
    65,633
    
    
    
    77,851
    
    
    
    
    
    
    
    72,162Cash flows from investing activities:Capital expenditures
    
    
    284
    
    
    
    (38,525
    )
    
    
    (52,707
    )
    
    
    
    
    
    
    (90,948
    )Business acquisitions, net of cash acquired
    
    
    
    
    
    
    (24,174
    )
    
    
    (6,953
    )
    
    
    
    
    
    
    (31,127
    )Changes in restricted cash
    
    
    
    
    
    
    
    
    
    
    (46,475
    )
    
    
    
    
    
    
    (46,475
    )Cash provided by (used in) investing
activities of continuing operations
    
    
    284
    
    
    
    (62,699
    )
    
    
    (106,135
    )
    
    
    
    
    
    
    (168,550
    )Cash provided by investing activities of
discontinued operations
    
    
    
    
    
    
    94,631
    
    
    
    9,180
    
    
    
    
    
    
    
    103,811Net cash provided by (used in)
investing activities
    
    
    284
    
    
    
    31,932
    
    
    
    (96,955
    )
    
    
    
    
    
    
    (64,739
    )Cash flows from financing activities:Borrowings on lines of credit
    
    
    
    
    
    
    
    
    
    
    185,777
    
    
    
    
    
    
    
    185,777Payments on lines of credit
    
    
    
    
    
    
    
    
    
    
    (47,161
    )
    
    
    
    
    
    
    (47,161
    )Borrowings on long-term debt
    
    
    
    
    
    
    173,216
    
    
    
    67,173
    
    
    
    
    
    
    
    240,389Payments on long-term debt
    
    
    
    
    
    
    (159,201
    )
    
    
    (39,592
    )
    
    
    
    
    
    
    (198,793
    )Proceeds from stock option exercises
    
    
    11,602
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,602Intercompany
    
    
    59,442
    
    
    
    (87,168
    )
    
    
    27,726
    
    
    
    
    
    
    
    Cash provided by (used in) financing
activities of continuing operations
    
    
    71,044
    
    
    
    (73,153
    )
    
    
    193,923
    
    
    
    
    
    
    
    191,814Cash used in financing activities of
discontinued operations
    
    
    
    
    
    
    (35,000
    )
    
    
    (189,794
    )
    
    
    
    
    
    
    (224,794
    )Net cash provided by (used in)
financing activities
    
    
    71,044
    
    
    
    (108,153
    )
    
    
    4,129
    
    
    
    
    
    
    
    (32,980
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    4,251
    
    
    
    
    
    
    
    4,251Net increase (decrease) in cash and cash equivalents
    
    
    6
    
    
    
    (10,588
    )
    
    
    (10,724
    )
    
    
    
    
    
    
    (21,306
    )Cash and cash equivalents, beginning of period
    
    
    12
    
    
    
    13,254
    
    
    
    61,082
    
    
    
    
    
    
    
    74,348Cash and cash equivalents, end of period
    
    $
    18
    
    
    $
    2,666
    
    
    $
    50,358
    
    
    
    
    
    
    $
    53,042
 76




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
 Year Ended October 31, 2007
 Non-Guarantor
    
    
    GuarantorIn thousands
    
    Quiksilver, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (121,119
    )
    
    $
    32,708
    
    
    $
    (65,412
    )
    
    $
    32,704
    
    
    $
    (121,119
    )Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating
activities:Loss from discontinued operations
    
    
    4,373
    
    
    
    61,578
    
    
    
    172,222
    
    
    
    (327
    )
    
    
    237,846Depreciation and amortization
    
    
    629
    
    
    
    20,402
    
    
    
    25,821
    
    
    
    
    
    
    
    46,852Stock-based compensation and tax
benefit on option exercises
    
    
    13,234
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,234Provision for doubtful accounts
    
    
    
    
    
    
    3,978
    
    
    
    3,812
    
    
    
    
    
    
    
    7,790Equity in earnings
    
    
    33,388
    
    
    
    
    
    
    
    
    
    
    
    (33,388
    )
    
    
    Other adjustments to reconcile net
(loss) income
    
    
    903
    
    
    
    (6,518
    )
    
    
    (6,262
    )
    
    
    
    
    
    
    (11,877
    )Changes in operating assets and liabilities:Trade accounts receivable
    
    
    
    
    
    
    (47,237
    )
    
    
    (9,980
    )
    
    
    
    
    
    
    (57,217
    )Inventories
    
    
    
    
    
    
    (7,972
    )
    
    
    (12,275
    )
    
    
    684
    
    
    
    (19,563
    )Other operating assets and liabilities
    
    
    16,534
    
    
    
    20,672
    
    
    
    48,697
    
    
    
    
    
    
    
    85,903Cash (used in) provided by operating
activities of continuing operations
    
    
    (52,058
    )
    
    
    77,611
    
    
    
    156,623
    
    
    
    (327
    )
    
    
    181,849Cash provided by (used in) operating
activities of discontinued operations
    
    
    386
    
    
    
    (4,973
    )
    
    
    (53,337
    )
    
    
    327
    
    
    
    (57,597
    )Net cash (used in) provided by
operating activities
    
    
    (51,672
    )
    
    
    72,638
    
    
    
    103,286
    
    
    
    
    
    
    
    124,252Cash flows from investing activities:Capital expenditures
    
    
    (1,419
    )
    
    
    (35,993
    )
    
    
    (40,864
    )
    
    
    
    
    
    
    (78,276
    )Business acquisitions, net of cash acquired
    
    
    (1,297
    )
    
    
    (38,353
    )
    
    
    (1,607
    )
    
    
    
    
    
    
    (41,257
    )Cash used in investing activities of
continuing operations
    
    
    (2,716
    )
    
    
    (74,346
    )
    
    
    (42,471
    )
    
    
    
    
    
    
    (119,533
    )Cash used in investing activities of
discontinued operations
    
    
    
    
    
    
    (2,656
    )
    
    
    (38,301
    )
    
    
    
    
    
    
    (40,957
    )Net cash used in investing activities
    
    
    (2,716
    )
    
    
    (77,002
    )
    
    
    (80,772
    )
    
    
    
    
    
    
    (160,490
    )Cash flows from financing activities:Borrowings on lines of credit
    
    
    
    
    
    
    
    
    
    
    71,846
    
    
    
    
    
    
    
    71,846Payments on lines of credit
    
    
    
    
    
    
    
    
    
    
    (17,247
    )
    
    
    
    
    
    
    (17,247
    )Borrowings on long-term debt
    
    
    
    
    
    
    123,250
    
    
    
    86,061
    
    
    
    
    
    
    
    209,311Payments on long-term debt
    
    
    
    
    
    
    (74,375
    )
    
    
    (27,236
    )
    
    
    
    
    
    
    (101,611
    )Proceeds from stock option exercises
    
    
    14,253
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,253Intercompany
    
    
    40,139
    
    
    
    (25,646
    )
    
    
    (14,493
    )
    
    
    
    
    
    
    Cash provided by financing activities
of continuing operations
    
    
    54,392
    
    
    
    23,229
    
    
    
    98,931
    
    
    
    
    
    
    
    176,552Cash used in financing activities of
discontinued operations
    
    
    
    
    
    
    (9,003
    )
    
    
    (87,732
    )
    
    
    
    
    
    
    (96,735
    )Net cash provided by financing
activities
    
    
    54,392
    
    
    
    14,226
    
    
    
    11,199
    
    
    
    
    
    
    
    79,817Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (6,065
    )
    
    
    
    
    
    
    (6,065
    )Net increase in cash and cash equivalents
    
    
    4
    
    
    
    9,862
    
    
    
    27,648
    
    
    
    
    
    
    
    37,514Cash and cash equivalents, beginning of period
    
    
    8
    
    
    
    3,392
    
    
    
    33,434
    
    
    
    
    
    
    
    36,834Cash and cash equivalents, end of period
    
    $
    12
    
    
    $
    13,254
    
    
    $
    61,082
    
    
    
    
    
    
    $
    74,348
 77




---



##### Table of Contents



Note 18 3⁄4 Discontinued Operations
     Rossignol Dynastar Look Lange
 78




---



##### Table of Contents



Year Ended October 31,In thousands
    
    2009
    
    
    2008
    
    
    2007Revenues, net
    
    $
    18,171
    
    
    $
    374,149
    
    
    $
    541,136Loss before income taxes
    
    
    (221,201
    )
    
    
    (365,917
    )
    
    
    (246,163
    )Benefit for income taxes
    
    
    (102,374
    )
    
    
    (74,108
    )
    
    
    (8,317
    )Loss from discontinued operations
    
    $
    (118,827
    )
    
    $
    (291,809
    )
    
    $
    (237,846
    )
  Rossignol
  In thousands
    
    October 31, 2009Current assets:Receivables, net
    
    $
    669Inventories
    
    
    Other current assets
    
    
    1,108$
    1,777Current liabilities:Accounts payable
    
    $
    309Other current liabilities
    
    
    149$
    458
 79




---



##### Table of Contents



Note 19 3⁄4 Restructuring Charges
   FacilityIn thousands
    
    Workforce
    
    
    & Other
    
    
    TotalBalance, November 1, 2008
    
    $
    
    
    
    $
    
    
    
    $
    Charged to expense
    
    
    19,769
    
    
    
    4,590
    
    
    
    24,359Cash payments
    
    
    (9,768
    )
    
    
    (639
    )
    
    
    (10,407
    )Adjustments to accrual
    
    
    (178
    )
    
    
    
    
    
    
    (178
    )Foreign currency translation
    
    
    135
    
    
    
    
    
    
    
    135Balance, October 31, 2009
    
    $
    9,958
    
    
    $
    3,951
    
    
    $
    13,909
 80




---



##### Table of Contents



SIGNATURES
   QUIKSILVER, INC.
(Registrant)
 By:
    
    /s/ Robert B. McKnight, Jr.
    
    
    
    By:
    
    /s/ Brad L. HolmanRobert B. McKnight, Jr.
    
    
    
    
    
    Brad L. HolmanChairman of the Board,
    
    
    
    
    
    Senior Vice President andChief Executive Officer and President
    
    
    
    
    
    Corporate Controller(Principal Executive Officer)
    
    
    
    
    
    (Principal Accounting Officer)
   Signatures
    
    Title
    
    Date Signed/s/ Robert B. McKnight, Jr.

Robert B. McKnight, Jr.
    
    Chairman of the Board,
Chief Executive Officer
and President
(Principal Executive Officer)
    
    January 12, 2010/s/ Joseph Scirocco

Joseph Scirocco
    
    Chief Financial Officer 
(Principal Financial Officer)
    
    January 12, 2010/s/ Brad L. Holman

Brad L. Holman
    
    Senior Vice President
and Corporate Controller
(Principal Accounting Officer)
    
    January 12, 2010/s/ Charles S. Exon

Charles S. Exon
    
    Chief Administrative Officer,
General Counsel and Director
    
    January 12, 2010/s/ Douglas K. Ammerman

Douglas K. Ammerman
    
    Director
    
    January 12, 2010
 81




---



##### Table of Contents



Signatures
    
    Title
    
    Date Signed/s/ William M. Barnum, Jr.

William M. Barnum, Jr.
    
    Director
    
    January 12, 2010/s/ Charles E. Crowe

Charles E. Crowe
    
    Director
    
    January 12, 2010/s/ James G. Ellis

James G. Ellis
    
    Director
    
    January 12, 2010/s/ Andrew W. Sweet

Andrew W. Sweet
    
    Director
    
    January 12, 2010/s/ M. Steven Langman

M. Steven Langman
    
    Director
    
    January 12, 2010
 82




---



##### Table of Contents



EXHIBIT INDEX
 DESCRIPTION
 ExhibitNumber2.1
    
    
    Stock Purchase Agreement between the Roger Cleveland Golf Company, Inc.,
Rossignol Ski Company, Incorporated, Quiksilver, Inc. and SRI Sports
Limited dated October 30, 2007 (incorporated by reference to Exhibit 2.3
of the Companys Annual Report on Form 10-K for the year ended October 31,
2007).2.2
    
    
    Amendment No. 1 to the Stock Purchase Agreement between the Roger
Cleveland Golf Company, Inc., Rossignol Ski Company, Incorporated,
Quiksilver, Inc. and SRI Sports Limited dated December 7, 2007
(incorporated by reference to Exhibit 2.4 of the Companys Annual Report
on Form 10-K for the year ended October 31, 2007).2.3
    
    
    Offer Letter dated August 25, 2008, by and among Quiksilver, Inc., Pilot
S.A.S., Meribel S.A.S., Quiksilver Americas, Inc. and Chartreuse et Mont
Blanc LLC (incorporated by reference to Exhibit 10.1 of the Companys
Current Report on Form 8-K filed on August 27, 2008).2.4
    
    
    Amended and Restated Offer Letter dated October 31, 2008, by and among
Quiksilver, Inc., Pilot S.A.S., Meribel S.A.S., Quiksilver Americas, Inc.
and Chartreuse et Mont Blanc LLC (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on Form 8-K filed on October
31, 2008).2.5
    
    
    Stock Purchase Agreement dated November 12, 2008, by and among Quiksilver,
Inc., Pilot S.A.S., Meribel S.A.S., Quiksilver Americas, Inc., Chartreuse
et Mont Blanc LLC, Chartreuse et Mont Blanc SAS, Chartreuse et Mont Blanc
Global Holdings S.C.A., Macquarie Asset Finance Limited and Mavilia SAS
(incorporated by reference to Exhibit 2.1 of the Companys Current Report
on Form 8-K filed on November 18, 2008).2.6
    
    
    Amendment No. 1 to Stock Purchase Agreement dated October 29, 2009, by and
among Quiksilver, Inc., Pilot S.A.S., Meribel S.A.S., Quiksilver Americas,
Inc., Chartreuse et Mont Blanc LLC, Chartreuse et Mont Blanc SAS,
Chartreuse et Mont Blanc Global Holdings S.C.A., Macquarie Asset Finance
Limited and Mavilia SAS (incorporate by reference to Exhibit 2.1 of the
Companys Current Report on Form 8-K filed on October 30, 2009).3.1
    
    
    Restated Certificate of Incorporation of Quiksilver, Inc., as amended
(incorporated by reference to Exhibit 3.1 of the Companys Annual Report
on Form 10-K for the year ended October 31, 2004).3.2
    
    
    Certificate of Amendment of Restated Certificate of Incorporation of
Quiksilver, Inc. (incorporated by reference to Exhibit 10.1 of the
Companys Quarterly Report on Form 10-Q for the quarter ended April 30,
2005).3.3
    
    
    Certificate of Designation of the Series A Convertible Preferred Stock of
Quiksilver, Inc. (incorporated by reference to Exhibit 3.1 of the
Companys Current Report on Form 8-K filed on August 4, 2009).3.4
    
    
    Amended and Restated Bylaws of Quiksilver, Inc. (incorporated by reference
to Exhibit 3.1 of the Companys Current Report on Form 8-K filed on
December 7, 2007).4.1
    
    
    Indenture for the 6 7/8% Senior Notes due 2015 dated July 22, 2005, among
Quiksilver, Inc., the subsidiary guarantors set forth therein and
Wilmington Trust Company, as trustee, including the form of Global Note
attached thereto (incorporated by reference to Exhibit 4.1 of the
Companys Current Report on Form 8-K filed July 25, 2005).
 83




---



##### Table of Contents



ExhibitNumber10.1
    
    
    Registration Rights Agreement for the 6 7/8% Senior Notes due 2015 dated
as of July 22, 2005, among Quiksilver, Inc., certain subsidiaries of
Quiksilver, Inc. and the purchasers listed therein (incorporated by
reference to Exhibit 10.1 of the Companys Current Report on Form 8-K
filed July 25, 2005)10.2
    
    
    Purchase Agreement for the 6 7/8% Senior Notes due 2015 dated
July 14, 2005, among Quiksilver, Inc., certain subsidiaries of Quiksilver,
Inc. and the purchasers listed therein (incorporated by reference to
Exhibit 10.2 of the Companys Quarterly Report on Form 10-Q for the
quarter ended July 31, 2005).10.3
    
    
    English translation of Subscription Agreement for the 3.231%
EUR 50,000,000 notes due July 2010 dated July 11, 2005 among Skis
Rossignol S.A. and certain subsidiaries and Societe Generale Bank & Trust
(incorporated by reference to Exhibit 10.3 of the Companys Quarterly
Report on Form 10-Q for the quarter ended July 31, 2005).10.4
    
    
    English translation of Supplementary Agreement No. 1 dated July 31, 2008
among Quiksilver, Inc., Skis Rossignol Finance Luxembourg S.A., Skis
Rossignol S.A. and Societe Generale Bank & Trust (incorporated by
reference to Exhibit 10.1 of the Companys Current Report on Form 8-K
filed on August 5, 2008).10.5
    
    
    English translation of Supplementary Agreement No. 2 dated September 25,
2009 among Quiksilver, Inc., Skis Rossignol Finance Luxembourg S.A., Skis
Rossignol S.A. and Societe Generale Bank & Trust.10.6
    
    
    Commitment Letter by and among Quiksilver, Inc., Quiksilver Americas,
Inc., Bank of America, N.A., Banc of America Securities LLC, General
Electric Capital Corporation and GE Capital Markets, Inc. dated June 8,
2009 (incorporated by reference to Exhibit 10.2 of the Companys Current
Report on Form 8-K filed on June 9, 2009).10.7
    
    
    First Amendment to Commitment Letter by and among Quiksilver, Inc.,
Quiksilver Americas, Inc., Bank of America, N.A., Banc of America
Securities LLC, General Electric Capital Corporation and GE Capital
Markets, Inc. dated June 24, 2009 (incorporated by reference to Exhibit
10.1 of the Companys Current Report on Form 8-K filed on June 25, 2009).10.8
    
    
    Commitment Letter by and among Quiksilver, Inc., Quiksilver Americas, Inc.
and Rhône Capital III L.P. dated June 8, 2009 (incorporated by reference
to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on June
9, 2009).10.9
    
    
    Credit Agreement by and among Quiksilver, Inc., Quiksilver Americas, Inc.,
as borrower, Rhône Group L.L.C., as administrative agent, and Romolo
Holdings C.V., Triton SPV L.P., Triton Onshore SPV L.P., Triton Offshore
SPV L.P. and Triton Coinvestment SPV L.P., as the lenders party thereto,
dated July 31, 2009 (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K filed on August 4, 2009).10.10
    
    
    Credit Agreement by and among Quiksilver, Inc., Mountain & Wave S.a.r.l.,
as borrower, Rhône Group L.L.C., as administrative agent, and Romolo
Holdings C.V., Triton SPV L.P., Triton Onshore SPV L.P., Triton Offshore
SPV L.P. and Triton Coinvestment SPV L.P., as the lenders party thereto,
dated July 31, 2009 (incorporated by reference to Exhibit 10.2 of the
Companys Current Report on Form 8-K filed on August 4, 2009).10.11
    
    
    Warrant and Registration Rights Agreement by and among Quiksilver, Inc.,
Rhône Capital III L.P. and Romolo Holdings C.V., Triton SPV L.P., Triton
Onshore SPV L.P., Triton Offshore SPV L.P. and Triton Coinvestment SPV
L.P., as the initial warrant holders, dated July 31, 2009 (incorporated by
reference to Exhibit 10.3 of the Companys Current Report on Form 8-K
filed on August 4, 2009).
 84




---



##### Table of Contents



ExhibitNumber10.12
    
    
    Credit Agreement by and among Quiksilver Americas, Inc., Bank of America,
N.A., Banc of America Securities LLC, General Electric Capital Corporation
and GE Capital Markets, Inc. dated July 31, 2009 (incorporated by
reference to Exhibit 10.4 of the Companys Current Report on Form 8-K
filed on August 4, 2009).10.13
    
    
    English Translation of Facilities Agreement by and among Pilot S.A.S. and
Na Pali S.A.S. as borrowers, Quiksilver, Inc., as guarantor, BNP Paribas,
Crédit Lyonnais and Société Générale Corporate & Investment Banking as
mandated lead arrangers, BNP Paribas as agent, Société Générale as
security agent, Caisse Régionale de Crédit Agricole Mutuel Pyrénées
Gascogne as issuing bank, and BNP Paribas, Crédit Lyonnais, Société
Générale, Natixis, Caisse Régionale de Crédit Agricole Mutuel
Pyrénées-Gascogne, Banque Populaire du Sud Ouest, CIC  Société
Bordelaise, and HSBC France as original lenders dated July 31, 2009
(French Facility) (incorporated by reference to Exhibit 10.5 of the
Companys Current Report on Form 8-K filed on August 4, 2009).10.14
    
    
    First Amendment to the French Facility dated September 25, 2009.10.15
    
    
    Global Amendment Agreement to the French Facility dated September 29, 2009.10.16
    
    
    Term Loan Agreement dated September 29, 2009 among QS Finance Luxembourg
S.A., Quiksilver, Inc., Biarritz Holdings S.à r.l. and Société Générale
(incorporated by reference to Exhibit 10.1 of the Companys Current Report
on Form 8-K filed on September 30, 2009).10.17
    
    
    Form of Indemnity Agreement between Quiksilver, Inc. and individual
directors and officers of Quiksilver, Inc. (incorporated by reference to
Exhibit 10.8 of the Companys Annual Report on Form 10-K for the year
ended October 31, 2006). (1)10.18
    
    
    Quiksilver, Inc. Annual Incentive Plan, as restated (incorporated by
reference to Exhibit 10.2 of the Companys Quarterly Report on Form 10-Q
for the quarter ended April 30, 2005). (1)10.19
    
    
    Quiksilver, Inc. 2000 Stock Incentive Plan, as amended and restated,
together with form Stock Option and Restricted Stock Agreements
(incorporated by reference to Exhibit 10.3 of the Companys Quarterly
Report on Form 10-Q for the quarter ended April 30, 2009). (1)10.20
    
    
    Restricted Stock Agreement by and between Quiksilver, Inc. and Douglas
Ammerman dated June 7, 2007 (incorporated by reference to Exhibit 10.1 to
the Companys Quarterly Report on Form 10-Q for the quarter ended July 31,
2007). (1)10.21
    
    
    Quiksilver, Inc. 1996 Stock Option Plan, together with form Stock Option
Agreements (incorporated by reference to Exhibit 10.11 of the Companys
Annual Report on Form 10-K for the year ended October 31, 2006). (1)10.22
    
    
    Quiksilver, Inc. 2000 Employee Stock Purchase Plan (incorporated by
reference to Exhibit 10.4 of the Companys Quarterly Report on Form 10-Q
for the quarter ended April 30, 2009). (1)10.23
    
    
    Quiksilver, Inc. Written Description of Nonemployee Director Compensation
(incorporated by reference to Exhibit 10.22 of the Companys Annual Report
on Form 10-K for the year ended October 31, 2008). (1)10.24
    
    
    Quiksilver, Inc. Long Term Incentive Plan (incorporated by reference to
Exhibit 10.20 of the Companys Annual Report on Form 10-K for the year
ended October 31, 2004).(1)10.25
    
    
    Award grant under Quiksilver, Inc. Long-Term Incentive Plan dated January
29, 2008 (incorporated by reference to Exhibit 10.4 of the Companys
Quarterly Report on Form 10-Q for the quarter ended January 31, 2008).
(1)10.26
    
    
    Quiksilver, Inc. 2006 Restricted Stock Plan (incorporated by reference to
Exhibit 10.2 of the Companys Current Report on Form 8-K filed on March
28, 2006). (1)
 85




---



##### Table of Contents



ExhibitNumber10.27
    
    
    Standard Form of Restricted Stock Issuance Agreement under the Quiksilver,
Inc. 2006 Restricted Stock Plan (incorporated by reference to Exhibit 10.1
to the Companys Current Report on Form 8-K filed on October 4, 2006). (1)10.28
    
    
    Separation and Transition Agreement between David H. Morgan and
Quiksilver, Inc. dated August 24, 2008 (incorporated by reference to
Exhibit 10.3 of the Companys Current Report on Form 8-K filed on August
27, 2008). (1)10.29
    
    
    Separation and Transition Agreement between Bernard Mariette and
Quiksilver, Inc. dated February 11, 2008 (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on Form 8-K filed on February
13, 2008). (1)10.30
    
    
    Employment Agreement between Robert B. McKnight, Jr. and Quiksilver, Inc.
dated May 25, 2005 (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K filed on May 27, 2005). (1)10.31
    
    
    Amendment to Employment Agreement between Robert B. McKnight, Jr. and
Quiksilver, Inc. dated December 21, 2006 (incorporated by reference to
Exhibit 10.15 of the Companys Annual Report on Form 10-K for the year
ended October 31, 2006). (1)10.32
    
    
    Stock Option Cancellation Agreement by and between Quiksilver, Inc. and
Robert B. McKnight, Jr. dated June 23, 2009 (incorporated by reference to
Exhibit 10.11 of the Companys Quarterly Report on Form 10-Q for the
quarter ended July 31, 2009). (1)10.33
    
    
    Employment Agreement between Charles S. Exon and Quiksilver, Inc. dated
May 25, 2005 (incorporated by reference to Exhibit 10.3 of the Companys
Current Report on Form 8-K filed on May 27, 2005). (1)10.34
    
    
    Amendment to Employment Agreement between Charles S. Exon and Quiksilver,
Inc. dated December 21, 2006 (incorporated by reference to Exhibit 10.19
of the Companys Annual Report on Form 10-K for the year ended October 31,
2006). (1)10.35
    
    
    Stock Option Cancellation Agreement by and between Quiksilver, Inc. and
Charles S. Exon dated June 23, 2009 (incorporated by reference to Exhibit
10.13 of the Companys Quarterly Report on Form 10-Q for the quarter ended
July 31, 2009). (1)10.36
    
    
    Employment Agreement between Joseph Scirocco and Quiksilver, Inc. dated
April 12, 2007 (incorporated by reference to Exhibit 10.1 of the Companys
Form 8-K filed on April 17, 2007). (1)10.37
    
    
    Amendment to Employment Agreement between Joseph Scirocco and Quiksilver,
Inc. dated June 13, 2008 (incorporated by reference to Exhibit 10.5 of the
Companys Quarterly Report on Form 10-Q for the quarter ended July 31,
2008). (1)10.38
    
    
    Stock Option Cancellation Agreement by and between Quiksilver, Inc. and
Joseph Scirocco dated June 23, 2009 (incorporated by reference to Exhibit
10.12 of the Companys Quarterly Report on Form 10-Q for the quarter ended
July 31, 2009). (1)10.39
    
    
    Separation and Transition Agreement between Martin J. Samuels and
Quiksilver, Inc. dated January 12, 2009 (incorporated by reference to
Exhibit 10.4 of the Companys Quarterly Report on Form 10-Q for the
quarter ended January 31, 2009). (1)10.40
    
    
    Form of Employment Agreement between Pierre Agnes and Quiksilver, Inc.
(incorporated by reference to Exhibit 10.38 of the Companys Annual Report
on Form 10-K for the year ended October 31, 2008). (1)10.41
    
    
    Stock Option Cancellation Agreement by and between Quiksilver, Inc. and
Pierre Agnes dated June 23, 2009 (incorporated by reference to Exhibit
10.14 of the Companys Quarterly Report on Form 10-Q for the quarter ended
July 31, 2009). (1)
 86




---



##### Table of Contents



ExhibitNumber10.42
    
    
    Employment Agreement between Craig Stevenson and Quiksilver, Inc. dated
January 19, 2009, as amended (incorporated by reference to Exhibit 10.5 of
the Companys Quarterly Report on Form 10-Q for the quarter ended January
31, 2009) (1)10.43
    
    
    Amendment to Employment Agreement between Craig Stevenson and Quiksilver,
Inc. dated December 16, 2009. (1)10.44
    
    
    Stock Option Cancellation Agreement by and between Quiksilver, Inc. and
Craig Stevenson dated June 23, 2009 (incorporated by reference to Exhibit
10.15 of the Companys Quarterly Report on Form 10-Q for the quarter ended
July 31, 2009). (1)10.45
    
    
    Amendments to executive officer base salaries effective as of February 1,
2008 (incorporated by reference to Exhibit 10.6 of the Companys Quarterly
Report on Form 10-Q for the quarter ended January 31, 2008). (1)10.46
    
    
    Amendments to executive officer base salaries effective as of February 1,
2009. (incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the quarter ended January 31, 2009). (1)10.47
    
    
    Amendments to executive officer base salaries effective as of November 1,
2009. (1)10.48
    
    
    AR Financing Facility Contract dated August 22, 2008 between Na Pali
S.A.S. and GE Factofrance SNC (incorporated by reference to Exhibit 10.2
of the Companys Current Report on Form 8-K filed on August 27, 2008).10.49
    
    
    Cash Collateral Agreement dated December 9, 2008, by and among Na Pali,
S.A.S. and J.P. Morgan Europe Limited.10.50
    
    
    English translation for the Roger Cleveland Shareholders Agreement
between Quiksilver, Rossignol Ski Company, Inc., Skis Rossignol, S.A.,
Laurent Boix-Vives, Jeannine Boix-Vives, Christine Simon, Sylvie Bernard
and SDI Société Service et Development dated April 12, 2005
(incorporated by reference to Exhibit 2.7 of Exhibit 10.1 to the Companys
Current Report of Form 8-K filed on April 18, 2005).10.51
    
    
    Indemnity Agreement by and between Quiksilver, Inc. and Andrew Sweet dated
July 31, 2009 (incorporated by reference to Exhibit 10.16 of the Companys
Quarterly Report on Form 10-Q for the quarter ended July 31, 2009). (1)10.52
    
    
    Indemnity Agreement by and between Quiksilver, Inc. and M. Steven Langman
dated July 31, 2009 (incorporated by reference to Exhibit 10.17 of the
Companys Quarterly Report on Form 10-Q for the quarter ended July 31,
2009). (1)10.53
    
    
    Amendment to Credit Agreement dated January 11, 2010 by and between Quiksilver, Inc., Quiksilver Americas, Inc., as borrower, Rhône Group L.L.C., as
administrative agent, and Romolo Holdings C.V., Triton SPV L.P., Triton
Onshore SPV L.P., Triton Offshore SPV L.P. and Triton Coinvestment SPV
L.P., as the lenders party thereto.10.54
    
    
    Amendment to Euro Credit Agreement dated January 11, 2010 by and between Quiksilver, Inc., Mountain & Wave S.a.r.l., as borrower, Rhône Group L.L.C., as administrative agent, and
Romolo
Holdings C.V., Triton SPV L.P., Triton Onshore SPV L.P.,
Triton Offshore SPV L.P. and Triton Coinvestment SPV L.P., as the lenders party thereto.21.1
    
    
    Subsidiaries of Quiksilver, Inc.23.1
    
    
    Consent of Deloitte & Touche LLP24.1
    
    
    Power of Attorney (included on signature page).31.1
    
    
    Rule 13a-14(a)/15d-14(a) Certifications  Principal Executive Officer31.2
    
    
    Rule 13a-14(a)/15d-14(a) Certifications  Principal Financial Officer32.1
    
    
    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 of The Sarbanes-Oxley Act of 200232.2
    
    
    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002
 
 (1)
    
    Management contract or compensatory plan. 87