US: Heelys reports widened Q1 loss, staying independent
Wheeled footwear firm Heelys has posted a net loss of US$1.3m for the first quarter, versus a net loss of $1.0m in the first quarter of 2008, and has decided to stay as as independent business after a board review.
Net sales for the first quarter were $9.2m compared to net sales of $13.1m in the corresponding period a year ago.
Gross profit was $2.9m, or 30.8% of net sales, compared to gross profit of $2.8m, or 21.5% of net sales in the first quarter of 2008.
Total selling, general and administrative expenses were $5.3m compared to $6.1m in the first quarter of last year.
Mike Hessong, interim chief executive officer of Heelys, said: "In the current difficult environment, we continue to focus on managing inventory, reducing expenses, and preserving our strong cash and balance sheet position.
"While we expected continued pressure on our top line, we were able to increase our gross margin and reduce certain operating expenses, which is reflected in our improved operating performance versus a year ago.
"During the quarter, we also developed a new web site, sold our one millionth pair of Heelys in Japan and launched a new grass roots driven marketing campaign. While we are not assuming an improvement in the overall retail environment during the near-term, we are encouraged by the early reaction to our new styles and we believe that we are in a better position from both a product and inventory standpoint as we head towards the summer and back-to-school selling seasons."
The company announced that its board of directors has completed a previously announced review of strategic alternatives, deciding to continue operating and building Heelys as an independent company.
Gary Martin, chairman of the board, said: "The board will continue to evaluate the company's opportunities in order to maximise the long-term growth potential of this business and increase shareholder value. At the same time, the management team will remain focused on executing our current business plan and navigating through this challenging economic environment."
Wheeled footwear firm Heelys has swung to a third quarter loss, as sales more than halved in the period....
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