Phoenix Footwear, the parent of Trotters and SoftWalk, reported
net income for the third quarter improved to $267,000, or 3 cents per share, compared to earnings of $73,000, or 1 cent, per share during the third quarter of fiscal 2011.
Operating earnings for the quarter improved to $619,000, a 156 percent improvement from Operating earnings of $242,000 for third quarter of fiscal 2011.
As Phoenix previously announced, during the quarter the Company entered into a new senior credit facility with Alostar Bank of Commerce and subordinated notes with Gibraltar Business Capital and MGPLA LP. The new credit facilities expand the Company's working capital while substantially lowering its borrowing costs.
For the quarter the Company incurred $379,000 of interest expense, of which $221,000, or $0.02 per share, resulted from the early termination of its prior credit facility.
Net sales from continuing operations for the first nine months increased 7.1% to $13.6 million compared to $12.7 million for the first nine months of 2011.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first nine months improved to $913,400 compared to $181,000 for the first nine months of 2011.
For the quarter ended September 29, 2012, net sales increased to $4.74 million or 1.6% from $4.66 million when compared to the third quarter of fiscal 2011. Net sales for the first nine months of fiscal 2012 increased $945,000 or 7.1% to $13.6 million compared to $12.7 million for the first nine months of fiscal 2011. For the first nine months of fiscal 2012, the Company experienced improving unit sales volumes in most all of its channels of distribution, as well as an increase in the average net unit selling price.
Gross margin for the third quarter of 2012 increased to 39.7% compared to 38.2% for the third quarter of fiscal 2011. For the first nine months of fiscal 2012, gross margins improved 130 basis points to 38.0% compared to 36.7% in 2011. The improved gross margin for the period resulted from an increase in the average net unit selling price on a higher unit volume during the first nine months of fiscal 2012 that was partly offset by an increase in the average net cost per unit.
Operating expenses continued to decrease in the third quarter and first nine months of fiscal 2012 when compared to the same periods of the prior year, primarily due to reductions in legal, public company, rent and other operating expenses associated with the restructuring of the Company's operations that was largely completed during the first quarter of fiscal 2011.
Selling, general and administrative expenses or SG&A, totaled $1.3 million and $4.4 million for the third quarter and first nine months of fiscal 2012, compared to $1.5 million and $5.1 million for the third quarter and first nine months of fiscal 2011. SG&A as a percentage of net sales for the third quarter and first nine months of fiscal 2012 was 26.5% and 32.1% compared to 32.8% and 40.0% for the third quarter and first nine months of fiscal 2011.
The Company reported earnings from continuing operations of $240,000 or $0.03 per share for the third quarter, compared to earnings from continuing operations of $65,000 or $0.01 per share for the same period of the prior year.
For the first nine months of fiscal 2012, the Company reported earnings from continuing operations of $31,000 or $0.01 per share, compared to a net operating loss from continuing operations of $945,000 or $0.12 per share for the first nine months of fiscal 2011.
Earnings before interest, taxes, depreciation and amortization (or “EBITDA”) from continuing operations for the first nine months of fiscal 2012 improved to $913,400 compared to $181,000 for the first nine months of fiscal 2011.
