Shares of Sport-Haley, Inc. jumped nearly 21% for the week to close at $4.83 on Friday after the company’s Board of Directors authorized chairman Ron Norick to start negotiations with potential investment banking partners to explore the potential strategic alternatives, including the possibility of taking the company private.

Sport-Haley is the latest in a string of companies that have found themselves overly burdened by the requirements of the Sarbanes-Oxley Act. Many in the financial sector see the threshold for public companies to be $200 million in annual sales due to the costs involved with adhering to the regulations. SPOR’s annual sales in the most recent fiscal year ended June 30 were reported at $20.8 million.

In other SPOR news, the company reported that net sales for the fiscal first quarter ended September 30 increased 29.2% to $5.6 million from $4.3 million in the year-ago quarter. Gross margin fell 620 basis points to 31.8% of sales versus 38.0% of sales in fiscal Q1 last year. Gross margin was impacted by the company’s decision to take a $543,000 write-down of inventories. SG&A expenses increased due primarily to a lump sum payment paid to the estate of the company’s former chairman, Robert Tomlinson, upon his death.

SPOR reported a loss of $1.28 million, or a loss of 52 cents per share, for its first fiscal quarter ended September 30, 2004, compared with a loss of $161,000, or a loss of 7 cents per share, in the year-ago period. The company said they expect that losses will “continue at least into the next quarter.” The company will pay out approximately $480,000 to $550,000 in severance and other compensation in Q2 to former president and CEO Kevin Tomlinson who was axed in October.