MOORPARK, Calif.--(BUSINESS WIRE)--Nov. 30, 1995--Variflex Inc. 
(NASDAQ:VFLX) Thursday reported results for the three months 
ended Oct. 31, 1995, the company's first quarter of fiscal 1996, and 
announced that the company has begun to ship its Static brand 
in-line skates, snowboards and skateboards.


    Net sales for the first quarter were $23,525,000 compared with 
net sales of $31,828,000 for the fist quarter last year.  The 
decrease is primarily attributed to a general weakness in retail 
sales, particularly in the mass merchandise market segment, and to 
higher inventory levels of the company's products at its major 
customers going into the holiday season this year in comparison to 
last year.  Net income was $937,000, or 16 cents per share compared 
with $2,786,000, or 46 cents per share for the first quarter of 
fiscal 1995.  Net income was lower primarily due to the decrease in 
net sales, increases in marketing expenses, and costs incurred in 
connection with product development and new product 
introductions.


    "Our strategy, which has proven successful since our inception 
in 1977, is to identify youth-oriented action sporting goods 
products with mass appeal and to offer products in those categories 
at affordable prices," stated Variflex's president and chief 
operating officer, Raymond H. Losi II.  "We again are employing this 
strategy both to meet current market demands and, more 
importantly, support our long-term growth.  We have identified 
some shifts in the market and, with our flexibility, experience and 
financial strength, we are positioning to respond to these shifts."

Multi-faceted Approach to Meet Market Needs

    "We are addressing market demands through a multi-faceted 
approach," explained Losi.  "First, with the introduction of the 
Static brand, which is aimed toward the sporting goods and 
specialty retailer distribution channel, we have an opportunity to 
expand and diversify our customer base.

   "In addition, we are focusing on high-growth product categories, 
including snowboards, which had worldwide sales of more than $200 
million last year, and skateboards, which are demonstrating an 
impressive resurgence in demand.  Finally, we are improving and 
diversifying our product selection in existing Variflex categories, 
providing our customers with more inventory options.  We are taking 
this approach while continuing to build Variflex's value and remain 
financially strong." 

    At the end of the first quarter of 1996, Variflex reported 
stockholders' equity of $45.3 million, a 14 percent increase over 
$39.8 million reported for the year-ago period, and up from $44.4 
million reported at the end of fiscal 1995.  The company completed 
the first quarter of fiscal 1996 with working capital of $29.1 
million.

Variflex Begins Shipping its Static In-line Skates, Skateboards and 
Snowboards

    "We announced in early 1995 that we would have our new Static 
products on the market by late this year," said Losi.  "We are 
pleased to report that we have met this schedule and are currently 
shipping our Static in-line skates, snowboards and skateboards.  To 
date, we have achieved modest sales form their introduction.

   "Retailer response to our Static in-line skates, which feature a 
patent pending integrated chassis design and futuristic colors, has 
been very positive.  We look forward to an increase in sales early 
next year, as retailers begin stocking their spring inventory.

    "We believe that we have distinct advantages in the snowboard 
market by manufacturing our own board," said Losi.  "We are able to 
produce snowboards with structural composition and performance 
characteristics equal to those offered at much higher price points. 
Additionally, we expect the in-season advantage of being able to 
supply upon demand.  We are ramping up production at our new, 
state-of-the-art Static snowboard facility, and we believe that we 
will reach full operational capacity by the beginning of calendar 
1996.  Our plan is to introduce six new series of snowboards in 
1996, and we're currently working on an agreement to license new 
binding technology that will further strengthen our price/value 
advantage.

   "In the skateboard category, we have increased our production 
and product assortment to take advantage of the recent explosion in 
demand," Losi added.  "We see a couple of new driving forces that 
are fueling the resurgence of skateboards.  For instance, the 
nostalgic return to longboards in surfing is sparking a demand for 
longboards in skateboarding.  We also notice a strong crossover 
influence from snowboarding, as snowboarders turn to skateboarding 
in the off season.  Many of our customers recognize the growing 
demand and are allocating shelf space for our Static and Variflex 
brand skateboards."

    Variflex Inc. is a leading U.S. supplier of in-line skates, 
skating protective equipment and bicycle and recreational safety 
helmets to the mass market.  The company also markets traditional 
quad roller skates and skateboards to its established mass 
merchandise customer base.  Variflex recently introduced its Static 
brand of high quality action sports products, including in-line 
skates, snowboards and skateboards, to the sporting goods and 
specialty dealer market.

   For information on Variflex Inc. via facsimile at no cost, 
simply call 800/PRO-INFO and dial client code 069.
-0-
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                         Variflex Inc.


                   Condensed Statements of Income


                (In thousands, except per share data)


                                        Three Months Ended


                                             Oct. 31,
                                            (unaudited)
                                        1995           1994
Net sales                             $ 23,525      $ 31,828
Gross profit                             4,903         8,309
Selling and marketing expenses           2,274         2,443
General and administrative expenses      1,309         1,322
Income from operations                   1,321         4,534
Other income (expenses)                    160           151
Net income                            $    937      $  2,786
Net income per share of common stock  $   0.16      $   0.46
Weighted average number of 
 shares of common stock
 and equivalents outstanding             6,039         6,064



                          Variflex Inc.


                     Condensed Balance Sheet


                           (unaudited)


                                   Oct. 31, 1995   July 31, 1995


Working capital                       $ 29,136        $ 31,022
Total assets                            57,448          51,221
Total long-term debt, excluding 
 current maturities                         93             103
Stockholders' equity                    45,259          44,359
*T



CONTACT: 

Variflex Inc.

William B. Ogden, 805/523-0322

or

Financial Relations Board

General Information

Jody Martin, 310/442-0599

or

Analyst Contact

Moira Conlon, 310/442-0599

or

Media Contact

Margie Baigh, 312/266-7800

KEYWORD:  CALIFORNIA

INDUSTRY KEYWORD:  SPORTS EARNINGS