Skullcandy, Inc. Reports Fourth Quarter and 2015 Results
PARK CITY, UTAH – March 2, 2016 – Skullcandy, Inc. (NASDAQ: SKUL), which creates world-class audio experiences through its Skullcandy® and Astro Gaming® brands, today announced financial results for the fourth quarter and year ended December 31, 2015.
Fourth quarter 2015 reported results versus the same quarter a year ago
Net sales: $96.1 million vs. $96.8 million, (up 2% currency neutral)
Gross margin: 40.3% vs. 43.3%, down 300 basis points (down 180 basis points currency neutral)
SG&A: $30.2 million vs. $31.1 million, down 3%, as a percent of net sales: 31% vs. 32%
Operating income: $8.5 million vs. $10.8 million, down $2.3 million (down 7% currency neutral)
Diluted earnings per share $0.21 vs $0.26 (down 7% currency neutral)
Twelve months ended 2015 reported results versus twelve months ended 2014
Net sales: $266.3 million vs. $247.8 million, up 7% (up 10% currency neutral)
Gross margin: 41.3% vs. 44.6%, down 330 basis points (down 220 basis points currency neutral)
SG&A: $100.9 million vs. $98.8 million, up 2%, as a percent of net sales: 38% vs. 40%
Operating income: $9.0 million vs. $11.8 million, down $2.8 million (up 4% currency neutral)
Diluted earnings per share $0.20 vs $0.27 (up 9% currency neutral)
“We delivered another year of solid growth fueled by our successful product innovation, demand creation and distribution strategies. Importantly, retail sell-through of both the Skullcandy and Astro brands, which is the truest measure of consumer demand, exceeded sell-in and outpaced the rest of their respective markets according to NPD. Skullcandy’s performance highlights were strong sales of our new wireless headphones, proving that we can be a leader in this burgeoning category, and the fact that the brand was #1 in terms of units sold for the second consecutive year according to NPD. Astro had an explosive fourth quarter to cap a great year for the brand. Astro has quickly emerged as a more significant piece of our business with a long runway for growth thanks to the brand’s authentic positioning with elite gamers and strong industry fundamentals,” said Skullcandy President and CEO, Hoby Darling.
“We are certainly disappointed that our strong sell-through performances didn’t translate into better top and bottom line results in the fourth quarter,” continued Darling. “While the U.S. audio headphone market was unexpectedly down in the fourth quarter, and we are still working to improve certain international markets, we remain cautiously optimistic about our near-term growth prospects and feel very good about our long-term growth, particularly for our gaming and wireless businesses based on recent market share gains and a strong pipeline of innovative new products.”
Fourth Quarter 2015 Review
Net sales in the fourth quarter of 2015 decreased 0.8% to $96.1 million from $96.8 million in the same quarter a year ago, or an increase of 2% on a currency neutral basis. Domestic (U.S.) net sales increased 3% to $72.7 million from $70.6 million in the same quarter a year ago, due to increased sales of gaming products, partially offset by declines in wired audio products as the result of challenging market conditions. International (Non U.S.) net sales decreased 11% to $23.3 million from $26.3 million in the same quarter a year ago, or flat on a currency neutral basis, primarily due to decreased sales of gaming and audio products in Australia and China, offset by increased sales of gaming products in Europe.
Gross profit in the fourth quarter of 2015 decreased 8% to $38.7 million from $41.9 million in the same quarter a year ago, or a decrease of 2% on a currency neutral basis. Gross margin decreased to 40.3% in the fourth quarter of 2015 from 43.3% in the same quarter a year ago primarily due to a product mix shift towards lower margin wireless and gaming products and approximately 120 basis points of negative foreign currency effects.
SG&A expenses in the fourth quarter of 2015 decreased 3% to $30.2 million from $31.1 million in the same quarter a year ago. The decrease in SG&A expenses is primarily due to decreases in personnel related expenses, partially offset by increases in demand creation spend, research and innovation investments, and increased bad debt expense, primarily associated with our
The following information was filed by Skullcandy, Inc. (SKUL) on Wednesday, March 2, 2016 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.