Mr. Riedman continued, “During the quarter we also made significant enhancements to our management team. We are thrilled to welcome Cathy Taylor as the Company's new Chief Executive Officer. Cathy brings to Phoenix Footwear over 25 years of executive and consulting experience in developing and managing top-tier consumer lifestyle brands."
"As an industry veteran who spent two decades with Cole Haan and Nike, we believe Cathy is the right person to bring Phoenix Footwear to the next level of its success in 2007 and beyond. We are also pleased with the addition of Michael Crosno as Vice President of Sales for our Trotters and SoftWalk divisions as we continue to foresee a strong future for both of these brands.”
Cathy Taylor, Phoenix Footwear's CEO, said, “I'm honored to join Phoenix Footwear's talented executive team. I believe the Company has a strong portfolio of brands and each has significant growth potential. We plan to stay focused on leveraging the brands' strengths, expanding their market presence and building value for our shareholders. I am excited by the opportunities ahead for the Company and its brands.”
Gross margin in the first quarter of fiscal 2007 was 35.5%, compared to 38.9% in the first quarter of 2006. The decrease in gross margin was due to a decrease in sales of Royal Robbins and SoftWalk, which represent high margin brands, as well as an increase in sales of military boot and accessories which both generate relatively lower margins.
Operating costs increased 22.9% to $12.7 million, compared to $10.3 million in the first quarter of fiscal 2006. The increase in operating expenses in the first quarter of fiscal 2007 is primarily attributable to the $1.5 million net gain related to the Altama purchase price reduction settlement recognized during the first quarter of fiscal 2006 which reduced operating expenses, in addition to increased spending on legal, tax and auditing fees and initiatives addressing Sarbanes-Oxley compliance and FIN 48 implementation.
Operating expenses as a percentage of sales were 30.1% in the first quarter of fiscal 2007, as compared to 25.5% in the first quarter of fiscal 2006.
Operating income for the first quarter of 2007 was $2.3 million, compared to operating income of $5.4 million in the first quarter of fiscal 2006.
During the first quarter of 2007, interest expense totaled $1.6 million, compared to $1.4 million in the comparable prior fiscal year period. This increase is primarily related to higher interest rates.
Phoenix Footwear Group Inc
marketing@alchempro.com
