Divestiture Charge Pulls Down Phoenix Profits

A charge related to a business divestiture led to weaker-than-anticipated third-quarter profits for Phoenix Footwear Group Inc.

The firm said Monday at the close of the markets that it earned $60,000, or 1 cent a share, due to an additional charge from the divestiture of discontinued operations. During the quarter, Phoenix closed on the sale of Chambers Belt Co. to Tandy Brands Accessories Inc.

The quarter’s earnings compared with a loss of $2.1 million, or 26 cents, the prior year.

However, the company in mid-October had announced preliminary third-quarter earnings of $310,000, or 4 cents.

On a continuing operations basis, the firm earned $1 million, or 12 cents, including $303,000 in exiting fees, $180,000 in payroll for terminated employees and $115,000 worth of consulting fees. That compared with a loss of $1.3 million a year ago.

Net sales from continuing operations fell 32 percent to $5.5 million.

Phoenix, which on Oct. 9 received a de-listing notice from the New York Stock Exchange, said that on Nov. 9 it submitted a plan to regain compliance with the exchange by April 11, 2011. The NYSE’s policy is to make a determination within 45 days, Phoenix said.

The firm’s stock is currently trading at around 35 cents, about flat with a year ago.

The company added that it is in discussions with several financing sources to refinance a revolving line of credit on or before Nov. 30.

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