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Skullcandy, Inc. Message Board

  • washington9942 washington9942 Mar 8, 2013 5:26 PM Flag

    1st Quarter Guidance

    I read through the press release and did not see anything related to the first quarter. I went back and printed out Conference Call transcript and found the information there. It would seem that information of this magnitude should be included in a press release. Or was it included and I just missed it. Thanks.

    Good luck to all

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    • redheadinvestor Mar 11, 2013 11:35 PM Flag

      Wanted to offer a consolidated reply to all posts here: 1) Everyone should read the CC transcript, Google it. 2) SKUL has never managed cash well, but it is likelier than not that it will have adequate cash including its $28 M credit line. 3) Correct 1Q guidance (CC) is negative EPS of $0.25 to $0.30 or about negative $8 M give or take. 4) Analyst opinion for 2Q / later Qs is 100% dartboard as there is zero guidance. 5) It is correct to assume nonzero risk to receivables and inventory. Overall, the net B/S will shrink before it grows. 6) The short position has declined but it's still large (it's gone from "whale short" to merely "large"). While $5.40 might not be bottom by any means, shorty might be nearing the point of diminishing returns here. SKUL lacks the cash for a meaningful buyback. 7) Gross margins are not the problem at SKUL. Topline is a new main problem with HMV = BK. Net margins (SG&A) are a second major problem. Rising inventory is a third problem. Cash flow / management is a fourth. Brand overhaul is a fifth. Losing money is a sixth. Management has many balls in the air and scarce resources - fixing these will consume cash. 8) I don't think insider ownership is a big deal here. GLTA I believe YMB will soon terminate altogether.

    • Given the Company expects to lose $(0.25) to$(.30) per share in the first quarter, I hope the Company holds onto their cash.

      It is good to have no debt and some cash on hand just in case fixing their problems takes longer than expected.

      • 1 Reply to tomhouse2468
      • On Yahoo the first quarter earnings estimates range from a loss of -$0.25 to -$0.30 per share with an average loss of $-0.27 per share.

        The second quarter shows a range from a loss of $-0.14 to a profit of $0.08 with average profit of $0.01. With such a wide range for 2Q, I prefer to wait until the 1Q earnings release and conference call before taking a position here.

        Good luck to all who are willing to get in now.

        Sentiment: Buy

    • I have used the press release guidance and come up with the following projected 1st Quarter Income Statement

      Revenue $37,296,000 -- 30% decline from Q1 of Last Year

      Cost of Goods Sold 20,512,800 -- 55% of Sales
      Gross Margin 16,783,200 45% of Sales

      SG & A 28,866,600 5% increase from 4th Qtr $ amount
      Operating Loss (12,083,400)

      Income Tax Benefit (4,229,190 ) 35% Tax Rate
      Net Loss $ (7,854,210)

      Shares Outstanding 27,593,290 Same as 4th Quarter Basic Count

      Net Loss Per Share $(-0.28)

      I have used the guidance the Company gave in the Conference Call. There is no inventory write down
      as a 30% revenue decline has a huge negative impact on profitability.

    • On the Nasdaq website, short interest for SKUL was 4,399,699 shares as of 2/15/2013. Short Interest is announced on a delayed basis. Another good source to check for those that track short interest is Baron's.

      For SKUL, the Nasdaq website indicates short interest was 11,779,471 at 7/31/2012 which appears to be the high point.. I personally do not short stocks. However, I would like to see what short interest is af 3/15/2013 as that will include activity after the conference call. This information will not be updated on the Nasdaq website until sometime in April. Timing is fine for me as I do not intend to buy until after 1st Qtr Earnings and Conference Call.

    • Yahoo appears to have new analysts numbers in their average of analyst estimates. First Quarter Revenue of $37.27 million or a 30% decline and a net loss of $-0.27 per share. Total year revenue of $255.37 million or a 14% decline from last year.

      Only 5 analyst estimates are included for 2014 where a profit $0.40 per share is forecast. The range of these 5 estimates goes from $0.25 to $0.57. I am guessing most analysts will not put out a 2014 number until after the 1st Quarter Conference in early May.

      • 1 Reply to fenning456
      • For insider ownership, I asume that shares held by Jeremy Andrus or entities affliated with him should no longer be included as part of insider ownership.

        The Company website still lists him as the CEO on the Investor Relations page under the Management section of Corporate Governance.

        I am new to SKUL so just wondering if anyone knows why he is getting severence when he left to go to another Company.

    • On yahoo, the average analyst estimate for 2013 revenue is now $255.4 milllion or a 14% decline from 2012.
      The average analyst estimate for first quarter revenue is $58.4 million or a 19% decline from last year. It is possible that not all of the analysts have updated their estimates. If all the new estimates are in both the first quarter and full year numbers will fall below what others on this board are projecting. If alll the new analyst numbers are into yahoo the Company likely will disappoint again when they report the first quarter

    • Will changing the packaging really significantly increase sales? If SkullCandy continues to command significant brand strength wouldn't that overcome less attractive packaging?

      I am interested in buying the stock but I am going to wait until they announce first quarter as the CFO said " we'll have better visability aound the full year and be further along with our strategic plan when we report 1Q results in early May." Since that is only 2 mobnths away, I think it pays to get a little more clarity as to what the company expects for the full year.

    • The last thing the CEO said was "we are available for any more detailed questions on a direct one-on-one basis." If any of us small investors who are trying to put together a 2013 projection call them will they discuss 2013 in more detail? just wondering as I do not have access to analyst reports

      • 2 Replies to candyman7890
      • At this point there are only 3 weeks left in the quarter so it would seem that the Company has to come in close to the first quarter guidance for a loss of $.25 to $.30 per share.

        The guidance for the rest of the year was a bit more cryptic. When a Company has a record year with revenues up 21% in the fourth quarter and then guides to revenues down 30% for the first quarter I worry that the wheels have completely come off and it may take a number of quarters to fix.

        I agree that the best approach here is to wait and see what they say in the first quarter conference call. Unless the Company provided more detailed information to the analysts in the follow up calls to the Conference Call it would seem that there is no reason for any large institution to buy until the Company provides more information about their future prospects for the remainder of the year.

        It just is not a good idea to try to catch a falling knife.

        I plan on reading the 10K so see if they disclose any additional information when that is filed.

      • You have hit on the very reason why following the fundamentals is a complete waste of time. I knew that one on one conversations with the big investors occurs but I was shocked that Alden admitted to it, in a CC no least he's honest about being unethical........pass the Wild Turkey Rick.

    • There was no guidance in the press release. Thus the upshot after release. The onslaught began when it was announced in the earnings call. They haven't given guidance since September AT ALL for 2013. Thus part of the drama. IMO