Heelys Narrows Loss

The economy affected sales in the fourth quarter.

Heelys Inc. said Tuesday it narrowed its loss for the fourth quarter, but the economy continues to take a toll on results.

For the quarter, the company reported a net loss of $5.2 million, or 19 cents a diluted share, compared with $5.9 million, or 22 cents a share in the fourth quarter of 2007.
Net sales were $15.6 million, up from $9.8 million in the year-ago period.

“The deteriorating macroeconomic conditions created an extremely difficult selling environment during the fourth quarter,” said Mike Hessong, interim CEO. “While we had made progress improving sales and gross margins through the first nine months of 2008, we were unable to sustain this trend as a result of lower-than-expected consumer demand both domestically and abroad over the last three months of the year.”

For the full year, the company reported a loss of $5.9 million, or 22 cents a share, compared with net income of $21.9 million, or 78 cents per diluted share, in the year-ago period. Net sales were $70.7 million, compared with sales of $183.5 million in 2007.

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