Skullcandy Inc. (SKUL) shares opened up 15% at $23, on its IPO debut this morning. The company priced an upsized offering of 9.4m shares at $20.00, above the indicated range of $17.00-$19.00. Of the original 8.33M shares offered, half were company or primary shares and half were from selling shareholders. At the $20 price the market capitalization will be approximately 536M (assuming the additional shares are from selling stockholders). The company plans to use the proceeds to repay debt and for general corporate purposes. Lead underwriters for the offering are BofA Merrill Lynch (BAC) and Morgan Stanley (MS).
Skullcandy launched the brand through the specialty channel, including such retailers as Zumies, Jacks and Tilly’s. It has grown distribution into consumer electronics (Best Buy, Apple, Radio Shack and FYE), mass retailers [Target (TGT), Meijer (OTC:MEJHF), Fred Meyer, and Staples (SPLS)], sporting goods (Dicks, Sports Authority, Sport Chalet, and MC Sports), mobile [Verizon (V), ATT (T), T-Mobile, and Cricket], as well as online through skullcandy.com. Today the company has products sold in more than 70 countries around the world.
Revenue has grown from $9 million in 2006 to $161 million in 2010. Adjusted EBITDA has grown from $1million to $39 million over the same period. For Q1 2011 revenue was up 64% year over year to $36 million, while the adjusted EBITDA remained relatively flat at $4 million (due to an increased investment in infrastructure). All of the international sales to date have been through distributors, and the company believes it can increase sales and brand recognition internationally by expanding direct sales efforts (or through Joint ventures) in select international markets).
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.