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Skullcandy, Inc. Message Board

  • charlesmoscoe charlesmoscoe Mar 7, 2013 9:41 PM Flag

    My takeaway from today...

    After taking in all of what just transpired in a roller coaster after hours, here are my positive thoughts:

    1) Cash position is solid, $28m credit line and nothing drawn on it. New CFO is smart and has hedged international receivables so they don't lose like they just did with the HMV bankruptcy in Europe. Alot of risk out of the picture here.

    2) Massive international growth story, still in its infancy. 100% sales growth YOY. Huge opportunity.

    3) Alden mentions a 'major retail partner' who is begging the company to expand outside the headphone market and that is where the company is headed. Look for speakers and mobility devices. Should dramatically increase revenues with little to no marketing expense being complimentary. Leverage the strong brand.

    4) Andrus, despite making terrible management decisions through his tenure, brought on a huge winner in Astro Gaming. This is probably why he scored the private equity job that specifically has him looking for small startups with $5m+ annual sales. Just like Astro. Gaming accessories will grow to be a $7B market in the near term and Skullcandy already has their foot in the door.

    5) Abandoning Andrus' idea of staying 'authentic' by staying in small retailers like skate and surf shops. Sales in all channels have improved with big box exposure. Pretty clear that a Walmart deal is in the cards for this year. End of the day, much more sales, which is what its all about.

    6) Consolidation in retail to 4 major headphone players, with Skullcandy being one of them. Retailers not carrying the 10+ brands anymore as consumers are getting confused and not buying any.

    7) Margins will improve steadily throughout 2013.

    8) Better optimization and streamlining of endorsements. Got the right stars, but not using them effectively.

    9) Share price spiked initially over 10% with a mediocre release, shows that any slight average to good news can rocket this stock.

    Don't be surprised to see the panic sell bought heavily tomorrow.

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