Skullcandy, Inc. which is in the midst of a $125 million IPO, filed a report with the SEC confirming that net sales for the third quarter ended March 31 increased $14.3 million, or 65.9 percent, to $36.0 million from $21.7 million for the three months ended March 31, 2010. The company said the increase includes a $4.9 million increase in international net sales and a $4.0 million increase in net sales to large national retailers, including Best Buy and Target, driven by increased volumes to existing retailers and the addition of new retailers.
Online net sales increased $2.0 million compared to the prior period.
Domestic net sales increased $9.5 million, or 50.3 percent, to $28.4 million, or 78.9 percent of net sales for the three months ended March 31, 2011 from $18.9 million, or 87.1 percent of net sales for the three months ended March 31, 2010. This company said the increase primarily reflects a $4.0 million increase in net sales to large national retailers as noted above.


International net sales, which consist primarily of net sales in Europe and Canada, increased $4.9 million, or 175.0 percent, to $7.6 million, or 21.1 percent of net sales for the quarter from $2.8 million, or 12.9 percent of net sales in the year-ago period. The company said the increase was primarily attributable to a 312 percent increase in net sales to Skullcandys exclusive European distributor. Moreover, the company said an arbitration hearing with its exclusive European distributor resulted in a decrease in net sales in Europe in 2010. The arbitration was resolved in the third quarter of 2010.


Following the arbitration proceeding, the companys agreement with this distributor will continue until 2013. The company said it is currently working aggressively with this distributor to expand European sales resulting in increases as noted above.