Heelys Still In Red

Losses continued at Heelys Inc. in the first quarter.
 
For the period ended March 31, the firm lost $1.18 million, or 4 cents a share — the same amount it lost a year ago.
 
Revenue decreased by 1 percent to $6.1 million, from $6.6 million, as both domestic and international sales lost ground.

In the U.S., roughly $500,000 worth of orders were pushed to the second quarter as a result of short-term delays from one of the firm’s sourced third-party factories, the company said.

“Positive momentum from improved sell-through at retail during the holidays was countered by extreme delays in getting new product out of China and shipped to our retailers. Delays pushed some sales back and caused us to take a different direction in our sourcing operations,” Tom Hansen, the firm’s CEO, said in a statement.
 
“The events in Japan also had a major impact on our sales and operations there, though things seem to be settling somewhat now. We continue to find new efficiencies in operations, and we are excited about the new programs we have put in place for back-to-school and holiday ’11,” he added.
 
However, the company managed to reduce expenses slightly and improve consolidated gross margin by 140 basis points.
 
As of the end of March, Heely’s had combined cash and cash equivalents of $25.5 million, down from $35.5 million a year earlier, and no long-term debt.