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Skullcandy Announces Second Quarter 2013 Financial Results

Stocks in this article: SKUL

PARK CITY, Utah, Aug. 1, 2013 (GLOBE NEWSWIRE) -- Skullcandy, Inc. (Nasdaq:SKUL) today announced financial results for the second quarter ended June 30, 2013.

Second Quarter Results

  • Net sales were $50.8 million
  • Net loss was $(0.02) per diluted share
  • Non-GAAP adjusted net income was break even

"The second quarter was about taking the initial steps toward getting our house in order to drive positive, long-term transformation at Skullcandy," stated Hoby Darling, President and Chief Executive Officer. "We had to reduce expenses and recalibrate our operating platform to better align with our current sales trajectory. Our decisive actions during the quarter allowed us to break even on the bottom line despite ongoing sales headwinds. With our product, marketing and sales teams now consolidated in Park City we are in a much better position to build momentum and establish Skullcandy as the world's leading lifestyle and performance audio company driven by the creativity and irreverence of youth culture. I am excited about the future and I am confident that we are assembling the right team to successfully execute our strategic plan and deliver significant shareholder value."

Net sales in the second quarter of 2013 decreased 29.9% to $50.8 million from $72.4 million in the same quarter of the prior year. North America net sales decreased 39.1% to $39.0 million from $64.1 million in the same quarter of the prior year. The Company experienced lower sell-in at a key customer and a decline in sales to several of its specialty retailers. Consistent with its strategy, the Company purposefully scaled back its sales to the off-price channel which were down approximately 52% compared with the second quarter of 2012. In addition, the second quarter of 2012 included increased sales from a significant packaging change. International net sales increased 40.6% to $11.8 million from $8.4 million in the same quarter of the prior year. Included in the North America segment in second quarter 2013 and second quarter 2012 are net sales of $1.8 million and $7.8 million, respectively, of products that were sold from the United States to customers with a "ship to" location outside of the United States. Including these sales in the international segment, international net sales decreased 15.9%, and North America net sales decreased 33.9%, compared to the same quarter in the prior year. The decrease in adjusted international net sales is primarily due to a $2.4 million negative impact of winding down the Company's relationship with its former Canadian distributor in anticipation of going to a direct model in that country.

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