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

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.

SOURCE Consac, LLC