Heelys, Inc. reported sales for the second quarter fell 32.0% to $12.4 million from $18.2 million a year ago as the troubled wheeled footwear manufacturer continues to see fallout from a market is losing interest in a fizzling product segment. Net loss for the Dallas, TX-based company widened to $1.6 million, or 6 cents per share, from a loss of $394,000, or 1 penny, a year ago. Management noted litigation settlements and related costs of $3.1 million in the quarter.
The costs were related to lawsuits filed in the latter part of 2007 and 2008 in connection with the companys initial public offering (IPO). The company said it has reached proposed settlements with regards to the lawsuits and has accrued approximately $3.6 million as of June 30. Pursuant to the proposed settlements, if approved by the court, the company said its insurance policies will fund the majority of the settlement amounts and related costs.
In a written release, Tom Hansen, CEO, said “We continue to evaluate every aspect of our business to make sure that were operating as efficiently as possible. While things on a macro level seem to be stabilizing, we believe that we must be more precise than ever in our inventory management and hyper aware of our retail partners needs going forward.”
