A 19.7 percent sales increase to $10.0 million outside North America allowed Skullcandy to resume its growth in the first quarter ended March 31, and the trend is expected to continue for the balance of the year. The American supplier of creative headphones and other audio accessories raised its sales by only 1.3 percent in North America, resulting in overall growth of 5.5 percent to $39.1 million for the period. The gross margin improved to 46.5 percent and the company ended up with a net loss of $3.5 million, half the loss of $7.0 million of the year-ago period. Raising its guidance, the management expects Skullcandy to post a net profit of around $5 million for the full year. The company's president and chief executive, Hoby Darling, expressed optimism for the balance of the year due to the release in the summer of a new line of sport performance ear buds whose proprietary stick gel technology should allow them to stay in place during heavy aerobic exercise.

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