Results for the Second Quarter Ended July 2, 2005
Net sales for the second quarter ended July 2, 2005 increased 10.6% to $15.4 million compared to $13.9 million for the second quarter of 2004. This increase includes $3.5 million of new revenue associated with the Altama brand acquisition, completed during the third quarter of 2004, partially offset by a decline in other footwear brand sales.
Gross margin in the second quarter of 2005 was 38% of net sales, compared to 45% in the second quarter of 2004. The decrease in the gross margin percentage was due to the addition of the Altama brand gross margins, which generate lower gross margins than the Company's other branded products and a higher level of footwear close-out sales as compared to the prior year quarter.
Operating expenses for the second quarter of 2005 were $7.1 million or 46% of net sales, versus $5.0 million, or 36% of net sales for the second quarter of 2004. This increase is related to increased legal, acquisition, marketing and employee compensation costs along with operating costs associated with the recently acquired Altama brand.
During the second quarter of 2005, interest expense totaled $533,000, compared to $134,000 in the comparable prior year period. This increase is primarily related to increased acquisition and working capital debt associated with prior years brand acquisitions and higher interest rates.
Results for the Six Months Ended July 2, 2005
Net sales for the six months ended July 2, 2005 increased 28.4% to $41.8 million compared to $32.5 million for the comparable prior year period. This increase includes $10.3 million of new revenue associated with the Altama brand acquisition, completed during the third quarter of 2004, partially offset by a decline in other footwear brand sales.
Phoenix Footwear Group Inc
marketing@alchempro.com
