Quicksilver (ZQK) Tops Q1 EPS by 3c

Quicksilver (NYSE: ZQK) reported Q1 EPS of ($0.11), $0.03 better than the analyst estimate of ($0.14). Revenue for the quarter came in at $341 million versus the consensus estimate of $337.4 million.

• Americas net revenues, as reported, were $148 million compared with $175 million. Americas net revenues were down 8%, or $13 million, on constant currency continuing category basis.
• EMEA net revenues, as reported, were $126 million compared with $149 million. EMEA net revenues were down 3%, or $3 million, on constant currency continuing category basis.
• APAC net revenues, as reported, were $67 million compared with $70 million. APAC net revenues were up 4%, or $2 million, on constant currency continuing category basis.

Audit Committee Investigation:

As previously announced, the release of our first quarter financial results was postponed due to an Audit Committee investigation of a revenue cut-off issue.

In late February, the Company's management discovered a deficiency in the Company's internal controls related to quarter end revenue cut-off, whereby accurate information regarding actual shipment routing and customer delivery was not consistently maintained in the Company's ERP system in accordance with its procedures. As a result, certain net revenues recorded in the prior period did not meet the criteria for revenue recognition at that time but instead should have been recognized in the following quarter.

Management brought the issue to the attention of the Audit Committee of the Company's Board of Directors, which then commenced an investigation, with the assistance of independent legal counsel engaged by the Audit Committee and outside forensic accountants, into the scope and causes of this revenue cut-off issue and reported the results of that investigation to the full Board and management. The Company analyzed the impact of this revenue cut-off issue and concluded that it did not have a material impact on its previously issued financial statements.

As a result of the investigation, in presenting the Company's first quarter 2015 financial results, net revenues for the first quarter of fiscal 2014 have been revised to reflect a $2 million increase.

Quicksilver sees FY2015 revenue of $1.38-1.45 billion, versus the consensus of $1.49 billion.

Quicksilver sees Q2 2015 revenue of $340 million, versus the consensus of $368.6 million.

For earnings history and earnings-related data on Quicksilver (ZQK) click here.

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