Phoenix Footwear Reports First Quarter 2013 Results

Phoenix Footwear

Reports first Quarter 2013 results

CARLSBAD, Calif., May 09, 2013 -- Phoenix Footwear Group, Inc. (OTCMarkets.com: PXFG) today reported results for the First quarter ended March 30, 2013.

First Quarter 2013

Ø  Gross sales increased $496,500 or 7.9% to $6.7 million compared to $6.3 million for the first quarter of fiscal 2012

Ø  Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first three months of fiscal 2013 improved to $510,000 compared to $484,000 for the first three months of fiscal 2012.

Ø  Net sales from continuing operations for the first quarter increased $92,000 or 1.6% to $5.8 million compared to $5.7 million for the first quarter of fiscal 2012.

Ø  Consolidated net earnings from continuing operations for the first quarter was $268,000 compared to net earnings of $261,000 in the first quarter of fiscal 2012.

For the quarter ended March 30, 2013, net sales increased to $5.8 million or 1.6% from $5.7 million when compared to the first quarter of fiscal 2012. Gross sales for the first quarter of fiscal 2013 increased $496,500 or 7.9% to $6.7 million compared to $6.3 million for the first quarter of fiscal 2012.

The increase in gross sales for the period was largely driven by a 34.3% increase in pairs sold to internet based retailers when compared to the first quarter of 2012. Similar to the Company’s own direct to consumer e-commerce sales, the rate of product returns for these internet based customers is significantly higher than for its other customers. As a result, the Company has substantially increased its provision for returns as sales to these internet customers continues to grow.

Gross profit margin for the first quarter of 2013 declined to 36.9% compared to 37.5% for the first quarter of fiscal 2012. The decrease is the gross profit margin for the quarter was mostly associated with the clearance of discontinued and closed-out styles during the period and a 2.1% increase in the standard unit cost that was partly offset by a 2.2% increase in the average unit wholesale and 5.2% increase in the volume of full-priced pairs sold.

Selling, general and administrative expenses or SG&A, totaled $1.68 million for the first quarter of fiscal 2013, compared to $1.70 for the first quarter of fiscal 2012. SG&A as a percentage of net sales for the first quarter of fiscal 2013 was 28.9% compared to 29.0% for the first quarter of fiscal 2012.

The Company reported net earnings from continuing operations of $268,000 compared to net earnings from continuing operations of $261,000 for the first quarter of fiscal 2012. Basic and diluted earnings’ per share for the first quarter of fiscal 2013 and 2012 was $0.03 and $0.02, respectively.

Earnings before interest, taxes, depreciation and amortization (or “EBITDA”) from continuing operations for the first three months of fiscal 2013 improved to  $510,000 compared to $484,000 in the year ago period.

About Phoenix Footwear Group, Inc.

Phoenix Footwear Group, Inc., headquartered in Carlsbad, California, specializes in quality comfort women’s and men’s footwear with a design focus on fitting features. Phoenix Footwear designs, develops, markets and sells footwear in a wide range of sizes and widths under the brands Trotters® and SoftWalk®, These brands are primarily sold through department stores, leading specialty and independent retail stores, mail order catalogues and internet retailers and are carried by approximately 659 customers in over 997 retail locations throughout the U.S. Phoenix Footwear has been engaged in the manufacture or importation and sale of quality footwear since 1882.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. These forward-looking statements include, but are not limited to, statements regarding Phoenix Footwear’s ability to repay its bank debt in a timely manner, future growth and performance of its individual brands, expected financial performance and condition for fiscal 2013 and/or statements preceded by, followed by or that include the words “believes,” “could,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “seeks,” “exploring,” or similar expressions. Although Phoenix Footwear believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by Phoenix Footwear or any other person that the objectives and plans of Phoenix Footwear will be achieved. All forward-looking statements included in this press release speak only as of the date of this press release and are based on Phoenix Footwear's current expectations and projections about future events, based on information available at the time of the release, and Phoenix Footwear expressly disclaims any obligation to release publicly any update or revision to any forward-looking statement contained herein if there are changes in Phoenix Footwear’s expectations or if any events, conditions or circumstances on which any such forward-looking statement is based.

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