Snap One, the custom install business that also sells Control 4 systems in Australia, is still bleeding losses, with net sales also a problem for the business, along with slim margins and high debt levels.

In the last quarter 2022, sales decreased 1.9 per cent to US$268.2 million from US$273.5 million.

The business also reported another loss of A$6.13M (US$4.1 million). The good news was this was down from the loss in the fourth quarter ’21 of -A$11.6 million. Analysts had been hoping for a profit, with the Company facing serious headwinds in the US market.

Snap One CEO John Heyman has said the future looks grim for the business due to “global uncertainty”.

One issue that has impacted the Company both in Australia and overseas is integrators stocking up in early 2022 to beat price increases and to protect themselves from component outages due to supply chain issues, now it’s a slowdown in sales due to inflation pressures affecting the industry.

As for 2023, the custom install business does not expect to see results begin to normalise until the third quarter at the earliest, with analysts claiming the business will struggle all this year due to a major softening of the market.

Hayman said, “After a resilient fourth quarter, we closed 2022 with $1.124 billion in net sales, $8.7 million of net losses… During the year our team successfully navigated inflationary and supply chain challenges, made significant investments into our product offerings and services capabilities, expanded our distribution presence both domestically and internationally, and continued to position the company for sustained long-term growth.”

Currently, the business has A$745M in debt to service, with management claiming both profits and revenues “will decline” in 2023.

The company say they do business with 20 thousand domestic integrators, each of whom purchased an average of US$41,500 in the past year.

This year, the Company says it is now doing business with 20,100 integrators, each of whom purchases an average of $45,500 in gear from the Company. This means the Company increased its number of customers by a slim 0.5% and their “spend” by 9.6%.

Heymann said, “Our growth algorithm is simple – continue to attract more integrator partners and capture more of their spend by building new products and driving adoption of our ecosystems. This formula will drive our growth over the next decade, and we will remain focused on executing this strategy while managing through the near-term uncertainty.”