Variflex had another tough quarter, with sales declining 4.0% from $12.6 million in fiscal Q1 2003 to 12.1 million in fiscal Q1 2004 ended October 31. VFLX swung to a loss of $477,000. or 10 cents per share, compared to $11,000, or $0 per share LY.
VFLX saw a 29% decline in the Action Sport category and 34% drop in the Protective Gear category, offset in part by a 47% increase in Outdoor Products.
While the Outdoor Products category continues to show revenue growth, the company said margins for the category have been impacted by competitive pricing pressures and an increase in “direct” shipments from overseas suppliers, which typically carry lower margins.
The company expects a turnaround in Q3 and Q4, the result of their acquisition of the Shrek and World Industries licenses.
