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Wednesday, September 06, 2006

IPO Filing Alert: Heely's

Have you ever seen kids sort of just floating forward on the sidewalk? If not, you probably will soon. If you have, you are likely to see more and more of this.

Heely's Inc. has filed to come public. This is the company that makes the removable wheel in the heel athletic shoes. HEELYS-wheeled footwear, is patented, dual-purpose footwear that incorporates a stealth, removable wheel in the heel. The marketing slogan is "Freedom is a wheel in your sole."

The company sells through distribution agreements with the following: The Sports Authority, Modell's and Dick's Sporting Goods; specialty apparel and footwear retailers such as Journeys and Bob's Stores; select department stores such as Nordstrom and Mervyn's. Its products can also be purchased from select online retailers such as Zappos.com.

Exact terms were not yet set, but it looks like it will raise up to $115 million in proceeds as far as the first look at an IPO. Bear Stearns and Wachovia were listed as the lead underwriters, with J.P.Morgan and CIBC World Markets listed as co-managers. Heely's stock will trade under ticker "HLYS." Capital Southwest Ventures was one of the backers of the company. It appears as though the company is profitable, and they have not really gone hogwild on advertising at this point.

The company will repay $4.0 million of the $5.0 million credit with J.P.Morgan and it will repay any outstanding amounts outstanding under its existing $25 million credit line. The rest is for infrastructure improvements, including expanding and upgrading our information technology systems; hiring new employees; marketing and advertising; product development; working capital; and other general corporate purposes. Insiders and shareholders appear as though they will be authorized to sell shares at the IPO offering.

The company had net 2005 revenues of $43.95 million and posted net income of $4.3+ million after income taxes. The first half of 2005 showed revenues of $16.08 million and net income afetr income taxes of $1.6+ million, and the first half of this fiscal 2006 showed over $44.5 million in revenues and net income after taxes at $5.88 million.

Jon C. Ogg
September 6, 2006
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