Phoenix Footwear Group, Inc., the parent of Trotters and SoftWalk, reported consolidated earnings from continuing operations for the third quarter improved to $362,000 or 4 cents per share compared to earnings of $240,000 or 3 cents per share, during the third quarter of fiscal 2012. Net sales from continuing operations increased $828,000 or 17.5 percent to $5.6 million compared to $4.7 million for the third quarter of fiscal 2012.

Consolidated earnings from continuing operations for the first nine months of fiscal 2013 improved to $272,000 or $0.03 per share compared to earnings of $31,000 or $0.01 per share for the first nine months of fiscal 2012.
Net sales from continuing operations for the first nine months increased $1.2 million or 8.9 percent to $14.8 million compared to $13.6 million for the first nine months of 2012.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first nine months improved to $1.03 million compared to $913,400 for the first nine months of 2012. Excluding the reversal of $160,000 tax accrual during the third quarter of 2012, EBITDA for the first nine months of fiscal 2013 improved by 30.8 percent
Trotters Signature

During the third quarter, Phoenix launched a new collection of footwear under the Trotters Signature® label. Featuring unique leathers, ageless fashion and quality crafted footwear; this collection is now available in over 100 retail locations across the country including fine independent and department retail stores. Like Trotters, the Signature line is offered in a broad range of size and widths. Trotters Signature retails for $130 and was a significant contributor to the growth of Trotters in the company’s most recent quarter.

Expanded Retail Distribution

During the third quarter, the company continued to expand its network of Trotters® and SoftWalk® retail partners, including the addition of more than 120 new accounts carrying the company’s new Grey’s Anatomy by SoftWalk® footwear line. The Grey’s Anatomy line will be available in retail for purchase in late December of 2013. Also during the quarter, the company reestablished a retail presence at 20 Nordstrom retail locations with its Trotters brand. The company believes the expansion of its retail distribution for its product offerings will continue to facilitate growth in future quarters.

Third Quarter and First Nine Months of Fiscal 2013

For the quarter ended September 28, 2013, net sales increased $828,000 or $17.5 percent to $5.6 million from $4.7 million when compared to the third quarter of fiscal 2012. Net sales for the first nine months of fiscal 2013 increased $1.2 million or 8.9 percent to $14.8 million compared to $13.6 million for the first nine months of fiscal 2012. The increase in net sales for the three and first nine months of fiscal 2013 was primarily driven by new product introductions designed to appeal to the broader customer demographic of the company’s internet based accounts, the on-time delivery of spring and fall goods, together with an improvement in the in season customer reorder volume of the company's fall product offering.

Gross margin for the third quarter of 2013 decreased to 39.3 percent compared to 39.7 percent for the third quarter of fiscal 2012. For the first nine months of fiscal 2013, gross margin was 37.8 percent compared to 37.9 percent for the first nine months of fiscal 2012. The decrease in the gross margin percentage was affected by increased discounting of returned goods processed back into inventory at a cost below standard.

Selling, general and administrative expenses or SG&A, totaled $1.6 million and $4.7 million for the third quarter and first nine months of fiscal 2013, compared to $1.3 million and $4.4 million for the third quarter and first nine months of fiscal 2012. SG&A as a percentage of net sales for the third quarter and first nine months of fiscal 2013 was 28.9 percent and 32.0 percent compared to 26.6 percent and 32.3 percent for the third quarter and first nine months of fiscal 2012.

Included in SG&A for the third quarter of fiscal 2012 is a non-cash benefit of $160,000 arising from a reduction in the company’s state sales tax accrual. Excluding this onetime benefit, SG&A for the third quarter and first nine months of fiscal 2012 was $1.4 million and $4.5 million, representing an increase in SG&A of $188,000 and $193,000 for the third quarter and first nine months of fiscal 2013 when compared to 2012.

The increase in SG&A is primarily associated with increases in commissions, sales and marketing expenses, including the addition of a sales consultant managing the Grey’s Anatomy rollout.

The company reported earnings from continuing operations of $362,000 or $0.04 per share for the third quarter, compared to earnings from continuing operations of $240,000 or $0.03 per share for the same period of the prior year.

For the first nine months of fiscal 2013, the company reported earnings from continuing operations of $272,000 or $0.03 per share, compared to net operating earnings from continuing operations of $31,000 or $0.01 per share for the first nine months of fiscal 2012.

Earnings before interest, taxes, depreciation and amortization (or “EBITDA”) from continuing operations for the first nine months of fiscal 2013 improved to $1.03 million compared to $913,400 for the first nine months of fiscal 2012. Excluding the non-cash adjustment of the sales tax accrual during the third quarter of fiscal 2012, EBITDA improved by 30.8 percent