LOS ANGELES, April 22, 2015 /PRNewswire/ -- For the
second time in as many months, Ryan
Drexler, president and shareholder of Consac, LLC, has
called for Quiksilver Inc. (NYSE:ZQK) to immediately explore
options to sell the company as operating income and the share price
continue to plummet. Mr. Drexler's Consac owns in excess of 3.5
million shares of Quiksilver.
In a letter today to Quiksilver co-founder and Chairman
Robert B. McKnight Jr., Mr. Drexler
called on the Board of Directors to sell the company in order to
preserve diminishing shareholder value before Quiksilver's
conditions get even worse.
Despite the company's management-created problems, Mr. Drexler
contended in the letter that there is still value in Quiksilver,
especially to a strategic buyer such as Nike Inc. or VF Corp. The
market capitalization of less than $300
million – almost a fifth of the market cap from barely two
years ago – is nowhere near a reflection of the inherent value of
the company's brands, extensive network of more than 700 stores,
and potential operating efficiencies. Mr. Drexler believes the
company could be worth at least twice its current market
capitalization, especially to a buyer who would reduce costs in the
critical category of selling, general and administrative
expenses.
Among the costs that could be cut would be the excessive
compensation of Mr. McKnight, who was paid more than $3 million in fiscal 2014 in his former role as
Executive Chairman, and more than $6
million in the prior year.
"The reality is those savings – and ultimately profits – could
be even more lucrative for a company that acquires Quiksilver,
since your SG&A at 52.7 percent of revenues is so far out of
proportion to others in the industry," Mr. Drexler said in his
letter dated April 22. "Contrast that
with Nike, where SG&A is less than 32 percent of revenues, and
with VF's less than 34 percent. Either company could pay for
the acquisition from the savings alone by rationalizing
Quiksilver's bloated SG&A."
A copy of the letter is available here.
About Consac, LLC
Consac, LLC ("Consac") invests in the securities of publicly
traded and venture-stage companies. Consac may increase, decrease,
dispose of or change the form or substance of its investment in
Quiksilver, Inc. for any or no reason, at any time. Consac also may
change its views about Quiksilver, Inc. at any time. Consac
disclaims any obligation to notify the market of any such
changes.
The information and opinions contained in this press release and
the letter attached hereto are based on publicly available
information about Quiksilver, Inc. Although Consac believes the
statements it makes in this press release and such letter are
accurate in all material respects and do not omit to state material
facts necessary to make those statements not misleading, Consac
makes no representation or warranty, express or implied, as to the
accuracy or completeness of the statements contained in this press
release or such letter and expressly disclaims any liability
relating to those statements (or any inaccuracies or omissions
herein or therein). Thus, shareholders and others should conduct
their own independent investigation and analysis of those
statements and of Quiksilver, Inc. Furthermore, some of the
statements herein and in the letter attached hereto are
forward-looking statements, estimates, projections and opinions.
Such statements, estimates, projections and opinions may prove to
be substantially inaccurate and are inherently subject to
significant risks and uncertainties beyond Consac's control.
The statements that Consac makes herein and in the letter
attached hereto are not investment advice or a recommendation or
solicitation to buy or sell any securities, nor is Consac
soliciting any proxy or other action from or by any shareholder.
Except where otherwise indicated, those statements speak as of the
date made, and Consac undertakes no obligation to correct, update
or revise those statements.
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visit:http://www.prnewswire.com/news-releases/ryan-drexler-of-consac-calls-again-for-quiksilver-management-to-explore-options-to-sell-the-company-sees-value-to-strategic-buyer-in-store-network-and-cost-savings-300070563.html
SOURCE Consac, LLC