Skateboard Maker Variflex Predicts Profit Resurgence

Variflex Inc. of Moorpark, which manufactures sporting goods such as skateboards and in-line skates, reported net income of $707,000, or 12 cents a share, on net sales of $21.7 million for the third fiscal quarter that ended April 30.

These figures are down from the net income of $1.4 million, or 24 cents per share, on net sales of $23.8 million reported in the comparable period a year earlier.

For the nine months that ended April 30, the company reported net income of $1.75 million, or 29 cents a share, on net sales of $59.5 million. This compares with net income of $6.37 million, or $1.05 per share, on net sales of $81.8 million posted in the comparable period a year earlier.

The company’s gross profit margin declined to 19.8% for the third quarter, from 23.3% a year earlier; and to 19.9% for the nine months, from 24.4% a year earlier.

“On a year-to-year basis, results were impacted by severe weather,” said Jay Losi, president and chief operating officer. “Additionally, we are continuing to feel the pinch of a relatively tight retail environment left over from a year ago. This is evidenced by stores continuing to work down inventories from last year.”

Looking ahead, Losi said an increase in demand for skateboards should lead to improved showings.

“It is very clear that the skateboard market is hot, and Variflex is the leading U.S. supplier of these products,” he said. “In the third quarter, skateboard sales increased to $3.4 million, up more than 800%.”