Heelys, Inc. reported net sales for the second quarter ended June 30 were $18.2 million compared to net sales of $74.3 million in the corresponding period a year ago. Gross profit was $4.2 million, or 23.0% of net sales, compared to $26.3 million, or 35.4% of net sales for the second quarter of 2007. Total selling, general and administrative expenses were $5.4 million, or 29.5% of net sales, compared to $7.2 million, or 9.7% of net sales in the second quarter of last year. The company reported net loss for the quarter of $0.4 million, or a penny per diluted share compared to net income of $12.8 million, or 45 cents per diluted share in the second quarter of 2007.
Don Carroll Chief Executive Officer of Heelys, Inc. commented, “Strategically, we continued to work successfully with our account base to reduce the level of inventory on select merchandise in the channel while at the same time increase retail price points and margins on more recent product introductions. We also introduced a new advertising campaign and more compelling merchandise in order to heighten awareness of our brand and demand for our products.
Financially, we witnessed sequential improvements in the areas of sales, gross margin and diluted earnings per share and ended the quarter with more than $96 million cash on our balance sheet and no debt.”
