Home / Knowledge / News / Fashion / Phoenix Footwear sales impacted by difficult retail environment
Phoenix Footwear sales impacted by difficult retail environment
16
Oct '09
Phoenix Footwear Group, Inc. reported its preliminary results of operations for the third quarter of fiscal 2009.

• Net profit of $310,000, or $0.04 per share, compared to a net loss of $2.1 million for the third quarter of fiscal 2008.
• A loss from continuing operations during the third quarter of $1.0 million, or $0.12 per share. Included in this loss is $303,000 in amortized financing exit fees, $180,000 of payroll related expenses for terminated employees, and $115,000 of financial consulting and other fees. This loss compares to a loss from continuing operations of $1.3 million for the third quarter of fiscal 2008.
• Net sales from continuing operations during the third quarter of $5.5 million, down 32% compared to net sales from continuing operations of $8.0 million during the third quarter of fiscal 2008.
• Funded bank debt balance of $2.6 million at the close of the third quarter, which is a reduction of $5.4 million from the close of the second fiscal quarter of 2009.

Commenting on the quarter, Rusty Hall, CEO, said, "We are pleased to report a net profit for the quarter and to have begun rebuilding our capital base and balance sheet. During the quarter we closed the divestiture of our belt accessories business that was operated by our wholly-owned subsidiary, Chambers Belt Company, reduced bank debt by 68%, improved our gross margin by 22 percentage points from the second quarter of fiscal 2009, and further reduced SG&A to $2.3 million for the quarter after eliminating certain nonrecurring items.

While our net sales for the quarter continued to be impacted by the difficult retail environment, we believe we have made considerable progress on the sales front. Our order backlog for future shipments is 65% above orders at the same time last year and our products are performing well at retail. Given the foundation our team has rebuilt, and based on this backlog, we expect to begin generating profitable organic growth beginning with the upcoming quarter."

As previously reported on July 9, 2009, we closed the Chambers' asset sale transaction with Tandy Brands Accessories, Inc. The transaction was completed pursuant to an Amended and Restated Asset Purchase Agreement dated July 7, 2009. As part of the purchase price, at closing, Tandy paid $2.6 million for inventory and $500,000 for equipment. In addition to the closing payments, during the 12 months following closing, Tandy is obligated to pay Chambers an earn-out based on a percentage of Tandy's revenues generated from the sale of products formerly sold by the Chambers business.

This earn-out is not capped and provides for $2,000,000 in minimum aggregate payments. These payments are to be paid on a monthly basis, except for an initial $430,000 advance payment that was made to Chambers at closing.

Banking Update
On October 15, 2009 the Company and Wells Fargo Bank, National Association entered into a Third Amendment to Forbearance Agreement and Fourth Amendment to Credit and Security Agreement. Under the terms of this Amendment, the existing credit agreement and forbearance agreements were changed by, among other things, decreasing the inventory sublimit in the borrowing base to $2.3 million and providing for daily 1% decreases in the 46% advance rate on eligible inventory after October 26, 2009 and extending the maturity date for the revolving line of credit and the expiration of the forbearance period to November 30, 2009.


Must ReadView All

Courtesy: Andritz

Textiles | On 24th Sep 2018

'Strength of economy, demographics drive nonwovens demand'

The strength of the economy and demographic trends are the main...

ITC helps bolster Chinese investment in Ethiopian textile

Textiles | On 24th Sep 2018

ITC helps bolster Chinese investment in Ethiopian textile

Major Chinese textile firms are stepping up sourcing and investment...

No-deal Brexit to entail 'substantial costs' for UK: IMF

Textiles | On 24th Sep 2018

No-deal Brexit to entail 'substantial costs' for UK: IMF

A ‘no-deal’ Brexit on World Trade Organisation terms would entail...

Interviews View All

Shawn Honeycutt, Bolger & O'Hearn

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

DK Sharma, Velocity Apparelz

DK Sharma
Velocity Apparelz

We constantly communicate with employees at all levels

Top executives, Textile industry, India

Top executives
Textile industry, India

Such fairs are a must for industry to showcase new innovations

Karen Lou,

Karen Lou

Australia-based Sunseeker has been creating swimwear since 1970. Sunseeker ...

Tejas N Patel, Navin D Patel,

Tejas N Patel, Navin D Patel

Founded in 1999 by Navin Patel in the name of Tejas Fabrics with 100...

Himanshu Jariwala,

Himanshu Jariwala

J Korin started as a partnership firm with four powerlooms in the textiles ...

Justin Gutierrez, INDA

Justin Gutierrez
INDA

The Association of the Nonwoven Fabrics Industry (INDA) has created a new...

Kevin Nelson, TissueGen

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Kai Poehler, Voith Paper GmbH & Co. KG

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Adriano Goldschmied, AG Jeans

Adriano Goldschmied
AG Jeans

The hype around 'designer jeans' was created by him. And the new wave of...

Sanjukta Dutta, Sanjukta's Studio

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Varsha Wadhwa, VW

Varsha Wadhwa
VW

Coming from a family that ran a business of jute and linen mills since...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


September 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search