Quicksilver 2011Q1

Robert McKnight at Quicksilver 2011Q1 earnings call:

As we planned, pro forma adjusted EBITDA was $28 million in Q1 as we invested in new business initiatives such as our new Quiksilver Girls line, ahead of revenues generation. This result keeps us on track to deliver full year pro forma adjusted EBITDA roughly in line with fiscal 2010. And finally, our net debt at January 31 was $541 million, representing 2.7x pro forma adjusted EBITDA. That’s down $237 million over the last 12 months and an improvement on more than one and a half turns of pro forma adjusted EBITDA, reflecting the enormous progress we’ve made in improving our balance sheet.

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Buffett on pro-forma in 2002 LtS:

If you’ve been a reader of financial reports in recent years, you’ve seen a flood of “pro-forma” earnings statements – tabulations in which managers invariably show “earnings” far in excess of those allowed by their auditors. In these presentations, the CEO tells his owners “don’t count this, don’t count that – just count what makes earnings fat.” Often, a forget-all-this-bad-stuff message is delivered year after year without management so much as
blushing.

We’ve yet to see a pro-forma presentation disclosing that audited earnings were somewhat high.

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