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Skullcandy Announces Record Fourth Quarter and 2012 Net Sales
PARK CITY, UTAH March 7, 2013 Skullcandy, Inc. (NASDAQ: SKUL) today announced financial results for the fourth quarter and full year ended December 31, 2012.
Fourth quarter net sales increased 21.0% to $101.0 million
Fourth quarter GAAP net income was $11.5 million, or $0.41 per diluted share
Fourth quarter non-GAAP adjusted net income was $13.2 million, or $0.47 per diluted share
Annual net sales increased 28.1% to $297.7 million
Annual GAAP net income increased 39.1% to $25.9 million, or $0.92 per diluted share
Annual non-GAAP adjusted net income increased 19.3% to $28.0 million, or $1.00 per diluted share
We are pleased with our overall fourth quarter results during what was a challenging environment, said Rick Alden, Skullcandys Interim Chief Executive Officer. Our intention in 2013 is to tighten our original distribution strategy and make key investments in product development and demand creation while endeavoring to reengage the consumer at the point of sale. I am confident that, with the solid foundation already in place and the talented group of people working here, we can accomplish our near-term objectives while creating a stronger, more efficient company for the future.
Fourth Quarter Results
Net sales in the fourth quarter of 2012 increased 21.0% to $101.0 million from $83.4 million in the same quarter of the prior year. North America net sales in the fourth quarter increased 12.0% to $82.7 million from $73.8 million in the same quarter of the prior year. International net sales in the fourth quarter increased 90.2% to $18.3 million from $9.6 million in the same quarter of the prior year. The increase in North America net sales was primarily driven by increased Astro Gaming sales of $13.6 million. The increase in international net sales was primarily driven by increased sales in Europe.
Gross profit in the fourth quarter of 2012 increased 8.5% to $45.2 million from $41.6 million in the same quarter of the prior year. Gross profit as a percentage of net sales, or gross margin, was 44.7% in the fourth quarter of 2012 compared to 49.9% in the same quarter of the prior year. The decrease in gross margin is due to increased sales of lower margin products, increased sales in lower margin channels and discounting.
Selling, general and administrative expenses in the fourth quarter 2012 increased 29.8% to $27.5 million and included $1.5 million of bad debt expense due to the bankruptcy filing of a major retail customer and $0.7 million of expenses associated with the settlement of a patent litigation matter. As a percentage of net sales, selling, general and administrative expenses increased to 27.2% from 25.4% in the same quarter of the prior year.
Net income attributable to Skullcandy, Inc. in the fourth quarter of 2012 was $11.5 million, or $0.41 per diluted share, based on 27.8 million diluted weighted average common shares outstanding. Net income attributable to Skullcandy, Inc. in the same quarter of the prior year was $12.3 million, or $0.44 per diluted share, based on 28.0 million diluted weighted average common shares outstanding. Excluding certain expenses related to the bankruptcy filing of a major retail customer in Europe and expenses associated with the settlement of a patent
The following information was filed by Skullcandy, Inc. (SKUL) on Thursday, March 7, 2013 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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