CARLSBAD, Calif.--(BUSINESS WIRE)--Phoenix Footwear Group, Inc. (OTCMarkets.com: PXFG) today reported results for the first quarter ended April 4, 2015.
First Quarter 2015
- Net Sales increased $1.0 million, or 16.7%, to $6.7 million for the first quarter of fiscal 2015. This compares to $5.7 million in Net Sales for the first quarter of fiscal 2014.
- The Company saw growth in both its Trotters and Softwalk brands during the quarter. Net Sales of the Company’s occupational footwear increased by 143%.
- Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first quarter of fiscal 2015 were $392,000 compared to $382,000 for first quarter of fiscal 2014.
- Operating income totaled $278,000 for the first quarter of 2015 compared to $341,000 for the comparable period a year ago. During the current quarter, the Company added to its sales, customer service and distribution staff in order to support current and projected growth. In addition, during the quarter, the Company incurred a non-cash charge of $66,000 related to the full vesting of previously granted stock options.
- Net loss of $39,000, or $0.01 per share, for the first quarter of fiscal 2015 compared to net income of $171,000 or $0.02 per share, for the first quarter of fiscal 2014. Interest expense for the first quarter of 2015 included nonrecurring prepayment and other refinancing costs of $167,000 incurred with the entry into a new loan and security agreement.
First Quarter 2015
For the first quarter of fiscal 2015 ended March 29, 2015, net sales increased 16.7%, or $954,000, to $6.7 million from $5.7 million when compared to the first quarter of fiscal 2014 ended March 29, 2014. The increase in net sales for the first three months of fiscal 2015 was the result of a 143% increase in the sales of licensed footwear sold into the medical uniform channel of distribution and an increase in customer demand of Trotters and Softwalk’s Spring product offering.
Gross profit for the first quarter of fiscal 2015 increased $262,000, or 12.4%, to $2.4 million from $2.1 million when compared to the first quarter of fiscal 2014. Gross profit as a percentage of net sales for the first quarter of fiscal 2015 declined to 35.6% compared to 36.9% for the first quarter of fiscal 2014. The 130 basis point decline in the gross profit as a percentage of net sales was primarily associated with the clearance of phased out and discontinued fall styles and increased sales volume of lower margin licensed footwear when compared to the same period of the prior year.
Selling, general and administrative expenses or SG&A increased to $2.1 million during the first quarter of fiscal 2015 compared to $1.8 million for first quarter of fiscal 2014. SG&A as a percentage of net sales increased to 31.4% for the first quarter of fiscal 2014 compared to 31.0% for the first quarter of fiscal 2014. The 18.4% increase in SG&A was primarily attributable to additional sales, customer service and warehouse distribution staff necessary to support current and anticipated future growth. In addition, during the quarter the Company incurred a non-cash charge of $66,000 related to the full vesting of previously granted stock options.
Interest expense from continuing operations was $317,000 compared to $170,000 for the first quarter of fiscal 2014. The increase in interest expense is primarily associated with the accelerated expensing of deferred financing costs and early termination fees of $167,000 with the termination of the AloStar Bank of Commerce and Gibraltar Business Capital loan and security agreements on February 2, 2015.
The Company reported a loss from continuing operations of $39,000, or $0.01 per share, for the first quarter ended April 4, 2015, compared to earnings from continuing operations of $171,000, or $0.02 per share, for the first quarter ended March 29, 2014.
Earnings before interest, taxes, depreciation and amortization (or “EBITDA”) from continuing operations for the first quarter of fiscal 2015 were $392,000 compared to $382,000 for first quarter of fiscal 2014.
About Phoenix Footwear Group, Inc.
Phoenix Footwear Group, Inc., headquartered in Carlsbad, California, specializes in quality comfort women’s and men’s footwear with a design focus on fitting features. Phoenix Footwear designs, develops, markets and sells footwear in a wide range of sizes and widths under the brands Trotters® and SoftWalk®. These brands are primarily sold through department stores, leading specialty and independent retail stores, mail order catalogues and internet retailers, and are carried by approximately 588 customers in over 1,417 retail locations throughout the U.S. Phoenix Footwear has been engaged in the manufacture or importation and sale of quality footwear since 1882.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. These forward-looking statements include, but are not limited to, statements regarding Phoenix Footwear’s ability to repay its bank debt in a timely manner, future growth and performance of its individual brands, expected financial performance and condition for fiscal 2015 and/or statements preceded by, followed by or that include the words “believes,” “could,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “seeks,” “exploring,” or similar expressions. Although Phoenix Footwear believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by Phoenix Footwear or any other person that the objectives and plans of Phoenix Footwear will be achieved. All forward-looking statements included in this press release speak only as of the date of this press release and are based on Phoenix Footwear's current expectations and projections about future events, based on information available at the time of the release, and Phoenix Footwear expressly disclaims any obligation to release publicly any update or revision to any forward-looking statement contained herein if there are changes in Phoenix Footwear’s expectations or if any events, conditions or circumstances on which any such forward-looking statement is based.
|Phoenix Footwear Group, Inc.|
|Condensed Consolidated Balance Sheets|
|April 4, 2014||January 3, 2015|
|Cash and cash equivalents||$||191||$||328|
|Accounts receivable, net||5,166||2,449|
|Other current assets||433||514|
|Total current assets||14,430||11,441|
|Property, plant and equipment, net||66||71|
|Capital leased assets||573||527|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Notes payable, current||$||6,737||$||3,831|
|Current portion of long term debt||440||534|
|Total current liabilities||10,604||8,103|
|Notes payable, net of current portion||726||124|
|Capital lease obligation, net of current portion||558||543|
|Convertible notes payable||1,350||1,350|
|Other non-current liabilities||224||230|
|TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY||$||15,270||$||12,089|
|Phoenix Footwear Group, Inc.|
|Consolidated Statements of Operations|
|(In thousands, except per share data)|
|Three Months Ended|
|April 4, 2015||March 29, 2014|
|Cost of goods sold||4,298||64||%||3,606||63||%|
|Selling, general and administrative expenses||2,095||31||%||1,770||31||%|
|Total operating expenses||2,095||31||%||1,770||31||%|
|Other (income)/expense, net||-||0||%||-||0||%|
|Interest expense, net||317||5||%||170||3||%|
|(Loss) earnings before income taxes and discontinued operations||(39||)||-1||%||171||3||%|
|Income tax expense||-||0||%||-||-||%|
|(Loss) earnings from continuing operations||(39||)||-1||%||171||3||%|
|Loss from discontinued operations, net of tax||-||0||%||-||0||%|
|Net (loss) earnings||$||(39||)||-1||%||$||171||3||%|
|(Loss) earnings per share:|
|Weighted-average shares outstanding:|