Variflex Inc. Reports a Net Loss for 3rd Quarter

Variflex Inc. in Moorpark reported a net loss of $380,000 or 6 cents per share for the third quarter ended April 30, compared with net income in the comparable period a year ago of $707,000 or 12 cents per share.

The loss came on net sales of $14.56 million. Sales for the year-ago quarter were $21.7 million. Company officials said the loss is due to a decrease both in the sales volume and average selling price for in-line skates and skateboards.

For the nine months ended April 30, the company reported a net loss of $909,000 or 15 cents per share on net sales of $40.68 million, compared with net income a year earlier of $1.75 million or 29 cents per share, on net sales of $59.51 million.

In the third quarter, skates sales were off 35% from a year ago and unit volume declined 21%. Skateboard sales in the third quarter fell 25%, with unit volume off 19%.

“We are continuing to experience excess inventory challenges in the in-line skate category at the retail levels, and downward pressure on prices because of competitive influences,” said Jay Losi, president and chief operating officer.

“However, we are also continuing to close out inventory and our orders for the summer remain strong. While these issues are likely to continue for what we hope will be a short period, we do believe that we are well positioned today because of our strategy to close out older merchandise and clear the way for new models.”

Besides skates and skateboards, Variflex manufactures snowboards and sports protective equipment.