Variflex seems to be capitalizing on the improving U.S. skateboard market, and posted a solid fiscal third quarter. Sales increased 7.9%, from 21.3 million a year ago, to $23.0 million in the most recent quarter ended April 30. Net income outpaced sales by 10 percentage points, increasing 17.9% from $1.3 million last year to $1.6 million this year.
Margins for the third quarter were reported at 17.8% of sales, 110 basis points below last years 18.9% GM. SG&A was 10.8% of sales, 40 basis points higher than the 10.4% reported last year. This brought income from operations down 12.1% to $1.6 million, compared to $1.8 million last year.
These numbers would usually add up to a decline in net income, but VFLX reduced its provision for income taxes to just $45k from $505k last year, leading to the nice jump in earnings.
