Standard&Poor's Ratings Services' ratings on Huntington Beach, Calif.-based Quiksilver reflect our view that the company has a vulnerable business risk profile because of the company's exposure to the cyclical apparel industry, its relatively narrow niche focus, the fashion risk inherent in its target market and continued restrained retail consumer spending. We characterize Quiksilver's financial risk profile as aggressive based on the company's highly leveraged capital structure, weak cash flow measures and aggressive financial policies. Leverage measures (including our standard adjustments) remain high but have generally improved over the last 12 months, primarily as a result of debt reduction. For the 12 months ended July 31, 2010, we estimate lease-adjusted total debt to EBITDA was about 5.3x and funds
