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Billabong USA Recovery Plays Out in Parent’s Annual Results

Sales and profits stabilized at Irvine-based Billabong USA in the past 12 months with signs of a turnaround since January, Australian parent company Billabong International Ltd. reported Friday.

Billabong USA, which sells clothes inspired by surfing, skateboarding and snowboarding, reported sales of $627 million for the 12 months through June.

That was down 15% from a year earlier with the effect of exchange rates between the Australian and U.S. dollars.

The company’s sales were flat—down 1.2%—after factoring out exchange rates.

In the past six months, sales were up 3%.

Billabong USA’s 12-month earnings before interest, taxes, depreciation and amortization were $81 million, down 7.6% including currency and up 5.4% factoring out exchange rates.

EBITDA in the past six months rose nearly 12%.

“The influential U.S. market showed steady improvement throughout the year,” Billabong International said in its annual report.

Still, the U.S. market remains choppy in pockets, it said.

For the 12 months through June, Billabong USA made up 48% of Billabong International’s $1.3 billion in sales, which were flat factoring out exchange rates.

Along with Europe, the Irvine operation—which oversees U.S., Canadian and South American operations—helped shore up Billabong International’s results, which were hurt by sluggish sales in Australia.

Like other action sports clothing companies, Billabong USA slumped during the recession as shoppers cut back and tastes shifted toward other styles.

The company, the second largest action sports clothing company here after Huntington Beach-based Quiksilver Inc., has seen signs of a turnaround this year.

“The industry is fairly satisfied with the little turnaround that we’ve seen (this year) compared to last year,” Paul Naude, president of Irvine-based Billabong USA and an executive director of Billabong International, said at an industry gathering last month.

Billabong USA has been on a buying spree.

In July, the company bought Costa Mesa-based Rvca Clothing in a deal analysts estimate at about $30 million. The move put the action sports industry’s top buzz brand into Billabong’s fold.

Billabong USA also is in the process of buying Canadian retailer West 49 for about $85 million after fending off a potential bidding war with Everett, Wash.-based Zumiez.

The West 49 deal continues a push into retail by Billabong and stands to more than double its North American stores to 230. Worldwide, Billabong is set to have some 500 stores with the deal.

In May, Billabong bought Torrance-based Becker Surf & Sport, which runs four Orange County stores.

In November, it bought San Clemente’s Swell.com, an online retailer.

The company also runs stores under the Beach Works and Honolua Surf Co. names from earlier acquisitions.

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