Disabled List: Luke Stedman Injury Update

COOLANGATTA, Queensland (Wednesday, June 3, 2009) – The world’s best surfers, the gents of the ASP Top 45 and the ladies of the ASP Top 17, make their collective livings by pitting themselves against the elements. Forever pushing the boundaries of high-performance athleticism as well as risking life and limb in some of the most exotic locations on the planet, our surfers are not impervious to injury. Australian style master Luke Stedman, 32, had a banner year in 2008, finishing an impressive 11th on the prestigious ASP World Tour and looking poised to make a dent in 2009. In fact, since his return to the ASP Dream Tour in 2005, the Sydney-sider has improved each season (36th, 25th, 16th and 11th respectively), with a good chance of a Top 10 finish this year. However, a late season injury in Hawaii has put Stedman on the disabled list thus far in 2009, and only recently has the journeyman campaigner been making rehabilitation progress. ASP caught up with Stedman to get the scoop on what happened, how he’s coping and what lies ahead. This…is our story…

ASP International: Hey Luke, hope you’re well. Could you please provide us with a bit of background on how you were injured? When? Where? The specific diagnosis?

Luke Stedman: This injury has been a recurring one for me. It’s happened both times in Hawaii while surfing. This recent time I did it has been way more serious and painful, but I initially thought I could do a similar rehab to last time to get back to 100%. Unfortunately, I was wrong. After five weeks of pretty intensive physio and rehab, I got an MRI scan because I wasn’t healing and felt there was a more serious underlying problem. So I spoke with Dr. Warren Kramer (the surgeon that did Richie Lovett’s prosthetic leg). He assessed the injury and spoke with a colleague of his, Dr. Smith – an orthopedic surgeon, and both agreed that without going under the knife, the injury would never heal and keep breaking down like an old car. So my surgery was to treat a plantar plate disruption with the medial sesamoid proximally displaced. This is the bone under your foot that connects to your big toe.

ASP: What has the rehabilitation process been like? Where have you been recovering? Specific exercises? Current health level?

L.S.: I have only been able to start rehab last week because of the surgery. I have been in an air boot for the last two months, which is such a pain as I feel like I’m a Stormtrooper, but it keeps my foot fully protected. I saw Chris Prosser last week (ASP pyhsio) and he set me up with some exercises. My trainer Jan Carton has also set me up with a program. I have a million different exercises, but it’s not anything I’m not used to. I’m super rested and so amped to get back in the water. I really had to stop doing everything so I have all this energy now and just want to get back in the water ASAP. This has been, by far, the longest time I have ever spent out of the water.

ASP: When not rehabbing, how have you been spending your time?

L.S.: I’ve been watching so many movies – haha. I have to keep my foot elevated as much as possible and the boot just makes you not want to walk around. I have been eating heaps, but I still can’t put on weight – haha.

ASP: Have you been watching the events via web this season? What are your general impressions of the surfing, the rookies and the ASP World Title race thus far in 2009? What do you think of the new ASP format?

L.S.: To tell you the truth, I can’t watch the events. I get really frustrated that I’m not there and it gets me in a little bit of a bad mood. I had such a good year last season so I really wanted to build on that. I decided that while I’m out, I would really take a break from the tour and just work on getting myself back on track. I now feel really rested and super pumped. I know that when I come back I’ll be 100% and want to surf as well as I can again.

ASP: When do you expect to return to competition? Have you been surfing yet? How has it felt?

L.S.: I hope to be in the water in about three weeks. I can start to paddleboard hopefully in two weeks. I can’t wait to just ride a wave. I hope I can still do it – haha.

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Quiksilver, Inc. Announces Financial Restructuring Plans

International Private Equity Firm Rhône to Provide $150 million 5-Year Term Loan

Bank of America and GE Capital to Provide New $200 million Line of Credit in the Americas

Company Anticipates New Committed Multi-Year Facility in Europe to Follow

HUNTINGTON BEACH, Calif.–(BUSINESS WIRE)–Quiksilver, Inc. (NYSE: ZQK – News) today announced that it has entered into an agreement with Rhône, an international private equity firm with offices in New York, London and Paris, for a 5-year senior secured term loan of approximately $150 million. This new capital from Rhône will significantly improve the Company’s liquidity position and is expected to provide the cornerstone to solidify Quiksilver’s regional banking relationships around the world. The new financing will enable the Company to refocus its attention on its industry-leading boardsport and outdoor lifestyle brands, Quiksilver, Roxy and DC, and on improving the operating profitability of its business worldwide.

In addition, Quiksilver has entered into a written commitment with Bank of America and GE Capital, as joint lead arrangers, to refinance its existing Americas facility in the form of a new 3-year $200 million asset-based credit facility. The Company is also in discussions with its French banking partners to consolidate its European debts into a new committed multi-year facility and expects a positive resolution in the near term.

Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “Rhône is a strong strategic partner with an international presence and extensive experience investing in globally diversified businesses across a number of sectors. Our agreement with Rhône not only provides the financial stability necessary to complete our new Americas and European financing efforts, but it also allows us to improve our global business and increase the efficiency of our worldwide operations. We are pleased to have addressed our liquidity concerns so that we can now sharpen our focus on streamlining the business and making great product within our three great brands – Quiksilver, Roxy and DC.”

M. Steven Langman, Managing Director and Co-Founder of Rhône, stated, “Rhône is enthusiastic about this opportunity to partner with Quiksilver in the continued development of its leading brands. Bob has assembled a first-rate management team, and we are confident that the liquidity and support provided by Rhône will allow the company to implement its dynamic strategy.”

The senior secured term loan will bear a coupon rate of interest of 15% of which up to 7.5% is payable in-kind (PIK) with the remainder payable in cash. Rhône will also receive detachable warrants providing the right to acquire approximately 20% of the then-outstanding shares of Quiksilver’s common stock at a strike price of $1.86, which is the volume weighted average closing price over the 60-day period ended June 2, 2009. The warrants expire seven years from issue.

Concurrent with the extension of the term loan, Quiksilver will appoint two new directors designated by Rhône to its board of directors.

Quiksilver intends to use the proceeds from the term loan to pay down existing indebtedness.

Rhône’s commitment to fund the term loan is subject to the satisfaction of certain terms and conditions, including completion of the refinancing of Quiksilver’s multi-year facility in Europe and other customary closing conditions and is expected to close before the end of July.

Peter J. Solomon Company served as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Quiksilver in this transaction. Lazard Frères & Co. LLC served as financial advisor and Sullivan & Cromwell LLP served as legal advisor to Rhône.

About Quiksilver:

Quiksilver, Inc. (NYSE:ZQK – News) is the world’s leading outdoor sports lifestyle company, which designs, produces and distributes a diversified mix of branded apparel, footwear, accessories and related products. The Company’s apparel and footwear brands represent a casual lifestyle for young-minded people that connect with its boardriding culture and heritage.

The reputation of Quiksilver’s brands is based on different outdoor sports. The Company’s Quiksilver, Roxy, DC and Hawk brands are synonymous with the heritage and culture of surfing, skateboarding and snowboarding, and its beach and water oriented swimwear brands include Raisins, Radio Fiji and Leilani.

The Company’s products are sold in over 90 countries in a wide range of distribution, including surf shops, skate shops, snow shops, its proprietary Boardriders Club shops and other company-owned retail stores, other specialty stores and select department stores. Quiksilver’s corporate and Americas’ headquarters are in Huntington Beach, California, while its European headquarters are in St. Jean de Luz, France, and its Asia/Pacific headquarters are in Torquay, Australia.

About Rhône:

Rhône was founded in 1996 and has offices in New York, London and Paris. Rhône focuses on middle-market private equity investments in businesses with pan-European or trans-Atlantic presence or growth prospects. Rhône’s investment philosophy includes the development of strong, strategic partnerships with the management of portfolio companies in which it is investing. Rhône currently has investments in a diversified portfolio of companies.

HUNTINGTON BEACH, Calif.–(BUSINESS WIRE)–Quiksilver, Inc. (NYSE:ZQK – News) today announced that it has signed legendary 9-time ASP (Association of Surfing Professionals) World Champion Kelly Slater to a 5-year endorsement contract, extending his sponsorship arrangement with the company and ensuring that the greatest surfer of all time will be sponsored by Quiksilver for his entire competitive career.

Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “We couldn’t be more pleased than to continue our long-standing relationship with the greatest surfer the sport has ever known. Kelly has been a fantastic spokesman for Quiksilver, a terrific ambassador and promoter for the sport of surfing and a true friend of the company. Kelly continues to work toward broadening the exposure of surfing through projects such as his upcoming IMAX movie and he’s got some great ideas that we will work on together to enhance the marketability of surfing and bring surf competitions to a broader audience in new and innovative ways. Kelly’s agreement to accept a significant portion of his compensation in the form of Quiksilver stock demonstrates his confidence in Quiksilver and our future prospects. We are absolutely delighted to continue our partnership with Kelly.”

Kelly Slater added, “Quiksilver’s been family to me for so long it’s hard to remember a time before them. It might not come as a surprise to many people that I’ve re-signed with them but there have been major transitions in my life and many changes within Quiksilver. It’s a long relationship and things often alter over the course of time. In our case, we’ve got exciting projects that coincide and are still stoked working and surfing together. These next 5 years and beyond will end up being our best together. As we put our minds and efforts together capturing our lifestyle and creating product that reflects this, I see Quiksilver remaining the industry leader. Revisiting what got us there and breaking new ground into some unforeseen areas, it seems things are on the upswing and it’s a fresh time again.”

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