Even though Huffy reported that sales are in-line with its previously issued guidance, the company will post a larger-than-expected net loss for the first quarter of 2004. Huffy said this quarters net loss will be “significantly higher” than last years Q1 net loss of $1.4 million or a 9¢ loss per share.
Paul R. D'Aloia, Huffy president and CEO, said the company does not currently have the final results from all business units, but the increased net loss appears to be “primarily related to the Canadian business, including significantly higher than normal charges to income related to customer returns and deductions together with higher than anticipated expenses related to the transition of the Canadian operations as we move to a single sporting goods platform.”
In a second and even more surprising release, Huffy announced that it had sold its service business. While Huffy has stated that it is looking to become more focused, the service sector was regularly lauded as one of the most profitable sectors of the company.
D'Aloia said that the service arm was an “integral part of our business,” however, “In our on-going review of our business and product lines, we concluded that Huffy Service Solutions is not a key strategic component as we move to a single sporting goods platform ”
Robert Lafferty, VP and CFO, said that more detailed information regarding the sale of the service business and the recent sale of the Gen-X opportunity business will be disclosed when Huffy files its quarterly report later in the month. “ We do not have sufficient information today to identify the losses as they relate to continuing operations, discontinued operations and the full extent of charges related to the reconfiguration of the Company,” said Lafferty.
>>>Dumping a profitable arm doesnt seem like a great idea when your net loss is skyrocketing, but still, focus can bring about new opportunities
