• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • About Strata-gee
  • Contact Us
  • Free Newsletter
  • Sponsor Strata-gee
  • Privacy Policy

Strata-gee.com

Strategy in TECH...

Crestron Infra-Bass
AudioControl Single Zone Amps
What Savant Can Do
Sonance James Small Aperture Series
  • Latest Posts
  • Strategy
  • Technology
  • Products
  • People
  • Statistics
  • Financial
  • Legal
  • Economic Data
  • Shows & Events
You are here: Home / Financial / Snap One Sees Q3 Revenues Increase Thanks to Price Increase & More Dealers

Snap One Sees Q3 Revenues Increase Thanks to Price Increase & More Dealers

November 11, 2021 by Ted Leave a Comment

But a 57% Increase in SG&A Expenses Swung the Quarter to a Net Loss

Snap One Holdings Corp. (NASDAQ: SNPO) announced the results for its fiscal 2021 third quarter last week and said that thanks in part to an August 2021 price increase and continued expansion of its dealer base, the company booked a substantial revenue increase to $260.7 million, or 15% higher than the same quarter the year before. However, the company additionally reported a net loss of -$21.5 million, way below the net income of $1.4 million in the quarter last year, due to a significant increase in SG&A expenses.

See more on the Snap One 3rd quarter results

Clearly a company to watch as one of the leading manufacturers/distributors in the custom integration channel, Snap One continues to see strong results as the world rebounds from two years of COVID impact and supply chain business disruptions. And even though supply chain issues continue to haunt it – as well as all of us – the company crowed about its strong results both now, and anticipated for the upcoming fourth quarter…and even into 2022.

CEO John Heyman was positively ebullient as he ticked off all of the company’s key milestones achieved during the quarter, saying:

AudioControl Single Zone Amps
Crestron Infra-Bass
Sonance James Small Aperture
Savant

During the fiscal third quarter, we continued to execute against our long-term growth strategy in several key areas: we expanded our omnichannel distribution presence through the opening of three additional local branches, released a major upgrade to our Control4 OS 3 software, updated our OvrC remote management platform, launched several new product offerings, and on a year-over-year basis increased our domestic transacting integrator count and spend per integrator in the residential, security and commercial markets.”

John Heyman, Snap One CEO

Key Snap One Results in the Third Quarter

So as mentioned above, revenues had a solid 15% gain in the quarter, coming in at $260.7 million versus $226.3 million in the third quarter of 2020. The company said that this increase was the result of strong demand for all product categories across all geographies and markets. They also noted that they expanded their dealer base without specifying just exactly how many new integrators were added in the quarter.

However, they did say that their products are now being sold through 16,000 integrators. Snap One also said that they are gaining “wallet share” with greater “spend per integrator,” a trend that they believe will continue for the foreseeable future.

Snap One fiscal 2021 3rd quarter statement of operations
Snap One’s fiscal 2021 3rd quarter results showed a 15% increase in net sales, but due to a 57% increase in SG&A expenses had an operating loss of -$9.8 million and a net loss of -$21.5 million. See text to find out why SG&A expenses were so high [Click to enlarge]

Contributions from Access Networks, ‘Store’ Expansion, & Price Increase

The company also noted that they benefitted from the fact that this was the first full quarter of contribution from the recently acquired Access Networks business. Also, the company has added a total of eight new local “stores,” as they like to call their warehouses, since this quarter in 2020 which helps drive their sales. This brings their total physical locations to 30. The company says that by the end of this year, they believe they will have added a total of 10 new locations in 2021. Next year, they are planning on adding another 6 locations…at a minimum.

Finally, the company notes that a 5% price increase they instituted in August on their in-house brands also contributed to their sales gain. Snap One’s CFO also said that he calculates that supply chain issues probably robbed them of another 5% in potential gains.

AudioControl Single Zone Amps
Crestron Infra-bass
Sonance James Small Aperture
Savant

An ‘Unwanted Guest’ at the Party – A Net Loss of -$21.5 Million

There were a couple of other bright spots in their numbers as well. For example, cost of sales as a percentage of revenues actually dropped from 58.8% last year to 58.0%, helping a little. And contribution margin as a percent of net sales also improved slightly, from 41.2% of net sales last year to 42.0% this year.

But the unwanted guest at the party this year was a massive 57% jump in selling, general & administrative expenses from $67.0 last year to an impressive $109.5 million this year. Thanks to this big hit, the company generated a loss from operations of -$9.8 million…and a bottom-line net loss of -$21.5 million. For the first nine months of the year, the company has seen its net losses drop to -$28.6 million or 37% greater than the -$20.8 million loss in the same period in 2020.

What Drove an Increase in SG&A Expenses? A Lot…

So why did SG&A expenses get so out of control? The company says that there were multiple variables that contributed to that result. First, they booked a $14.4 million hit to earnings to account for equity-based compensation expenses, with another $10.6 million in compensation costs “paid to certain pre-IPO owners for their interests in lieu of their participation in the tax receivable agreement entered into in connection with the IPO.”

And that’s not all. The company noted that there were also increases in variable operating expenses, including outbound shipping, credit card processing fees, and warranty. Also, there were increased “…costs associated with becoming and operating as a public company, ongoing investments to support strategic growth initiatives, and a return to normalized spending levels when compared to cost reduction actions taken to mitigate the impacts of COVID-19 in 2020.” That seems like a lot of cost increases in what is looking a little like a “catch-all” category.

Snap One also offered an updated look at their guidance for anticipated 2021 full-year results. They remain “confident” in what they believe will be “continued demand” for their products. As such, they believe revenues for the year – a 53-week year ending December 31, 2021 – will be between $990 million – to – $1 billion or an increase of between 21.6% – 22.8% compared to 2020.

Snap One Shared Fascinating Data on Conference Call with Analysts

Perhaps the most interesting part of the whole presentation was a conference call the company held with investment company analysts where they shared much more data, as well as their outlook on the business. The call started with Heyman giving an overview of the Snap One business, as well as information on the market and how the company intends to continue to grow its business.

Heyman said strong market dynamics will drive industry growth as more and more Americans adopt the smart home life. He noted that Statista data shows that right now, 35% of homes in America are smart homes. In five years, this number is expected to grow to at least 60% of all homes. And Heyman added that Snap One believes that within a decade “every home will be smart…and those homes will have 10s if not hundreds of connected devices.”

Today we built an enterprise that serves hundreds of thousands of home and business owners through our integrators. We aspire to serve millions…

John Heyman, Snap One’s CEO

He says the company believes this increased consumer adoption will be a key driver of growth, but not the only driver. In fact, he names three key trends that will continue to power the company’s growth – the adoption trend mentioned above, along with end-consumer demand for new experiences, and residential and commercial development.

Snap One’s Five Key Pillars of Growth

In addition to these market forces, the company has set what Heyman calls its five key pillars for driving growth:

  1. Innovate with new products
  2. Increase our wallet share with existing integrators, which includes continuing to execute our omnichannel distribution strategy
  3. Expanding our global integrator network with professionals focused on residential, security, and commercial applications
  4. Developing new software solutions and revenue models
  5. Mergers and acquisitions
SnapAV booth at CEDIA 2019
Pre-Snap One days during the CEDIA Expo 2019

Major Brokerages Following the Company

One interesting indicator that tells you just how hot a company is are the brokerage firms following their developments. In this conference call, there were some definite Who’s Who among investment companies present, such as Morgan Stanley, Jefferies Group, UBS, BMO Capital Markets, Raymond James, William Blair, and more. It was an impressive group asking interesting questions.

Unsurprisingly, many of the analysts were asking questions about a top problem of the day – supply chain issues. Snap One says their supply chain team continues to do great work and the company typically has 90+% of the products they need at any one time to fill orders. They do have spot shortages from time to time, but these are typically temporary.

All-in-all a good showing for Snap One…assuming they can address their selling, general, and administrative costs to help pull up their bottom line.

See more on Snap One by visiting: snapone.com.

Share this post:

  • Tweet
  • Click to share on Reddit (Opens in new window) Reddit
  • More
  • Click to email a link to a friend (Opens in new window) Email
  • Click to print (Opens in new window) Print

Like this:

Like Loading...

Related

Filed Under: Financial, Management, Manufacturers, News, Strategy Tagged With: Snap One, SnapAV

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *


The reCAPTCHA verification period has expired. Please reload the page.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Search

Sign-Up for Our FREE Newsletter

loader

Latest Posts

T-Day+1: Tariffs…And So It Begins…

STORY UPDATED 4/30/25 - See a Selection of Tariff Increases from Around the … [Read More...] about T-Day+1: Tariffs…And So It Begins…

Masimo Tells SEC It Was the Victim of a Cyberattack

I recently reported that I had discovered that the primary website for Masimo … [Read More...] about Masimo Tells SEC It Was the Victim of a Cyberattack

  • T-Day+1: Tariffs…And So It Begins…
  • Masimo Sells Sound United to Harman; Excited? Temper Your Enthusiasm
  • Strata-gee Founder Hospitalized After Suffering Injuries in Accident on Monday
  • Masimo.com Has Been Down for ‘A Few Days’

Categories

Sponsors

Crestron Infra-Bass
AudioControl Single Zone Amps
Sonance James Small Aperture
Savant
Oasys Residential Technology Group

Tag Cloud

acquisition Amazon Apple AudioControl B&W Bowers & Wilkins CEDIA CEDIA Expo CES Control4 Core Brands COVID-19 Crestron D&M Holdings Denon Emerald Expositions Foxconn Gibson Brands Gibson Guitar Google Henry Juszkiewicz Hon Hai Precision Industry Co. housing starts Integra Joe Kiani LG Marantz Masimo Nortek OLED Onkyo Panasonic patent infringement Pioneer Samsung Savant Sharp smart home SnapAV Snap One Sonos Sony Sound United SpeakerCraft Toshiba

Footer

Got News?

HEY PR & Marketing Pros: Have NEWS for Strata-gee readers?

Send it to: HotNews@strata-gee.com

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org

Sponsor Strata-gee

Strata-gee Ads

Archives

Translate

Ted Green Bio

A former dealer, manufacturer, distributor & more. Focusing on business strategy, my goal is to help you make better decisions for greater success.

Follow Ted Green

  • Facebook
  • X
  • LinkedIn
  • Instagram

Copyright © 2025 Strata-gee.com · The Stratecon Group, Inc. All Rights Reserved · Log in

%d