Heelys, Inc.'s sales for the third quarter were $23.8 million compared to $49.9 million a year ago, a 52.3% decline. Net income for the quarter was $755,000, or 3 cents a share, versus $6.6 million, or 24 cents, in the third quarter of 2007.
Gross profit was $7.9 million, or 33.3% of net sales, compared to $15.9 million, or 31.9% of net sales for the third quarter of 2007. Total selling, general and administrative expenses were $6.8 million, or 28.6% of net sales, compared to $6.3 million, or 12.7% of net sales in the third quarter of last year.
Commenting on the results, CEO Don Carroll said, “While many of our business trends have improved since the start of the year, the recent events in the global economy and their impact on consumer confidence levels have created a challenging selling environment and made the outlook for holiday more uncertain. Therefore, with retailers in general becoming even more cautious with their level of future orders, we will closely monitor inventories and price points as well as our expenses and look to capitalize on at-once opportunities that maintain our brand equity and enhance our market position.”
CFO Lisa Peterson commented, “In the third quarter of 2008 we have seen a return to more full-price selling at our retail partners, which helped our gross margins improve over the prior year period and a sequential quarterly basis. Importantly, our balance sheet at Sept. 30, 2008 remains very strong with over $90 million in cash and no debt.”
