It appears that they did the same thing back in Jan/Feb - look at the bottom of the company events. It also appears that they may have renegotiated right after the Fed dropped rates, which was probably a savvy move. And since interest on debt or borrowed money can be written off, they probably get a better return-on-capital and better cash-flow by using a little bit of borrowed money instead of their own cash. Because they are in a cyclical industry, their CFO probably knows that it is not good to load up on debt, especially when the overall economy is looking a bit grim, but a little bit of borrowed money is probably a good thing. Lots of youg companies sell stock to raise cash for working capital, but I would suspect at $8/share, Heelys would rather buy back a little stock. Still, at their stage, I am guessing they need the cash for working capital and cannot afford to buy the stock back, no matter how cheap it looks. They also probably want to keep some cash on their books so that they get good rates on their line of credit. Your thoughts?
They reported $734k in interest in June Q but not sure whether that number is net of any misc expenses. But if not, that's still more than 5% annual rate of return on their cash investments. So maybe they do need a cheap line for working capital to keep their cash in investment vehicles at 6 or 12 month periods at higher rates of return.