Phoenix Footwear, the parent of the SoftWalk and Trotters brands, earned $437,000 or 6 cents per share, in its year ended Dec. 29, rebounding from a loss from continuing operations of $1.7 million, or 21 cents a share, in 2011.
Revenues rose 5.2 percent to $16.7 million. Sales of SoftWalk and Trotters were ahead 11.6 percent and 2.0 percent, respectively.
Gross margins improved 240 basis points to 37.5 percent, reflecting greater sales of full priced goods due to an increase in the average unit wholesale of 9.7 percent and a decrease in closeout sales.
SG&A expenses were reduced to 34.4 percent of sales from 41.4 percent a year ago. The improvement was due to the reduction in legal, rent and other public company costs incurred during the first quarter of fiscal 2011 associated with the completion of a restructuring plan initiated during the previous year, as well as an overall lower operating cost structure.
As of Dec. 29, the companys rolling 12 month EBITDA of $771,000 was not in compliance with the minimum EBITDA covenant of $850,000 required under its loan agreements. On Feb. 27 and Mar. 4, the company entered amendments with its lenders, Gibraltar and AloStar, respectively, waiving the companys non-compliance. Minimum EBITDA covenants were also amended for each of the first, second and third quarters of fiscal 2013.
