Boston, MA 03/07/2014 (wallstreetpr) –Skullcandy Inc. (NASDAQ:SKUL) a designer and distributor of gaming headphones reported its fourth quarter results for the period ending December 31, 2013. The year saw the company employ a turnaround strategy that saw it launch innovative brands causing a fourth quarter strong performance.
Fourth quarter results
Skullcandy net sales
Net sales for the fourth quarter dropped by 28.4% coming in at $72.2 million against $101 million reported for the same quarter the prior year. The drop in sales for the quarter was as a result of the company’s decision to cut sales at the off price channel. North America sales consequently dropped from highs of $82.7 million reported in the same quarter the prior year to lows of $57.6 million, a drop of 30.3%.
International net sales also plummeted by 19.9% from highs of $18.3 million reported in 2012 same quarter to lows of $14.7 million
Gross profit for the fourth quarter came in at $31.4 million a drop of 30% from the high of $44.9 million reported in F2012 same quarter. Gross margin also dropped slightly in the fourth quarter, coming in at 43.5% compared to the prior year’s highof 44.9 million. The decrease in gross margin was as a result of increased sales returns and allowance expense as well.
Skullcandy Selling, General and Administrative expenditure for the quarter dropped by 4.8% for the quarter, coming in at $26 million against highs of $27.3 million reported for the same quarter the prior year. These expenses included $1.5 million worth of marketing costs; these costs were later offset by a decrease in bad debts worth the same amount of $1.5 million.
Skullcandy net income for the fourth quarter trickled in at $3.6 million a drop from a high of $11.5 million reported for the same quarter the prior year
Skullcandy cash balance
Skullcandy cash and cash equivalent as of December 31, 2013 stood at an impressive $38.8 million against lows of $19.3 million as of December 31, 2012. Skullcandy accounts receivables dropped to $57.5 million as of December 31, 2013, from a high of $76.3 million as of December 31, 2012
Q1 2014 Guidance
Skullcandy expects net sales for the first quarter to increase by between 5% and 7% with a net loss on GAAP fully diluted basis of between $0.16 and $0.18 per share.