Fender’s 1st Quarter Results
One of the benefits of Fender (FMIC) planning to go public is that they now have to publish their quarterly results. This is new and for years guitar players have wondered just how many guitars Fender is selling. We will have to wait for Fender’s first Annual Report to get a glimpse of actual unit sales but for the first time we have Fender’s 1st Quarter Results for 2012.
According to an updated regulatory filing today. Fender Musical Instruments Corp.’s first quarter net sales rose slightly and its net income declined on higher operating expenses. Fender saw its net sales rise 2.2% to $174 million in the first quarter, and its net income decline 73% to $1.9 million in the first quarter.
The filing indicates that the primary drag on its bottom line came from higher labor costs, as well as increased advertising and promotional expenses. Higher labor costs came from an increase in employees and salaries; in addition, stock options issued in the second and third quarters of 2011 resulted in an increase in stock-based compensation expenses. Higher advertising and promotional expenses were primarily related to costs associated with the Musikmesse tradeshow in Germany, which was held in the company’s first quarter this year; in 2011, it was held in the second quarter.
Fender hasn’t set a specific date or price yet for its IPO. The planned IPO comes during a nascent recovery in domestic guitar sales, which have ticked higher since plummeting between 2006 and 2009, according to the Music Trades, a magazine that covers the musical-instrument industry.