The American brand of wheeled shoes wants to use its remaining cash pile of $23.1 million to diversify by taking over another sporting goods firm that makes some other type of wheeled or leisure products, or protective gear, or performance apparel. It is prepared to spend up to $30 million for this strategic acquisition.

In the third quarter ended Sept. 30, Heelys' sales jumped by 78.9 percent to $2.3 million in the U.S., where its new momentum is still strong, but they fell by 37.7 percent to $4.3 million in the international market.

The biggest drop took place in Japan, down to $500,000 from $2.7 million in the same period a year ago, and the management blamed the March earthquakes, combined with the transition to a direct-distribution model. Continued declines were experienced in France and Germany, but sales went up significantly in Italy and in Russia.

Total revenues were off by 19.7 percent to $6.6 million. The destruction of unsalable products in Europe and discounting on shoes purchased from Heelys' former Japanese distributor trimmed the gross margin to 36.8 percent from 39.7 percent a year ago, causing an increase in the net loss to $1.5 million from $69,000.