Phoenix Footwear Group, Inc., the parent of Trotters and SoftWalk, reported first-quarter sales grew 16.7 percent to to $6.7 million from $5.7 million a year ago.
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 percent.
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 percent, 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 percent 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 percent, 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 percent compared to 36.9 percent 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 percent for the first quarter of fiscal 2014 compared to 31.0 percent for the first quarter of fiscal 2014. The 18.4 percent 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 1 cent per share, for the first quarter ended April 4, 2015, compared to earnings from continuing operations of $171,000, or 2 cents 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.
