Variflex Reports Decline in Sales, Loss for Quarter

Variflex Inc. in Moorpark reported a net loss of $2.78 million or 46 cents per share for the second quarter ended Jan. 31.

The loss comes on net sales of $10.64 million and compares with a net loss of $269,000 or 4 cents per share on sales of $13.84 million for the same period a year earlier.

Company officials said the second-quarter results included the effect of three noncash expenses that accounted for approximately $2.5 million of the loss. These included a write-off of the value of certain long-term assets relating to the company’s snowboard operations and expenses for warrants issued in connection with the stock acquisition in November by REMY Capital Partners IV, L.P.

Officials said the drop in sales for the second quarter was principally due to decreases in in-line skate sales, the result of an industrywide decline in consumer demand, as well as smaller decreases in sales of protective equipment and safety helmets.

Variflex said its sales benefited from the introduction over the past year of a range of new products, including children’s scooters, mass market snowboards and the Quik Shade instant canopy.

Variflex is a supplier of in-line skates, skateboards, skating protective equipment and bicycle and recreational safety helmets to the mass market. In addition, its Static brand of action sports products, including snowboards and skateboards, are marketed to the sporting goods and specialty dealer markets.