8-K/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) July 9, 2007 (July 2, 2007)

PHOENIX FOOTWEAR GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	001-31309	15-0327010
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5840 El Camino Real, Suite 106, Carlsbad, California	92008
(Address of Principal Executive Offices)	(Zip Code)

(760) 602-9688

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory note: This amendment No. 1 to Form 8-K is being filed solely to file the pro forma consolidated condensed balance sheet and statements of operations of Phoenix Footwear Group, Inc., reflecting the disposition of assets described in this report.

Section 2 Financial Information

Item 2.01 Completion of Acquisition or Disposition of Assets

On July 2, 2007, Phoenix Footwear sold all of the outstanding capital stock of its wholly-owned subsidiary, Royal Robbins, to Kellwood, a leading marketer of apparel and consumer soft goods headquartered in St. Louis, Missouri and, concurrently, PXG Canada sold certain assets and assigned certain obligations of PXG Canada that related solely to PXG Canada’s business devoted to the purchasing, marketing, distribution and sale of Royal Robbins branded products to Canadian Recreation.

At closing, the aggregate cash consideration of U.S. $38.0 million anticipated to be paid under the stock purchase agreement and the asset purchase agreement was reduced by $132,529, resulting from the preliminary closing date working capital being less than $6.5 million pursuant to the working capital collar formula. The final closing date working capital adjustment remains subject to post-closing review by Kellwood and Phoenix Footwear. As a result, the closing date working capital adjustment may be further adjusted up or down. The purchase price was determined through arms-length negotiations between the parties. In addition to the aggregate cash consideration, Canadian Recreation assumed certain accounts payable owed by PXG Canada to Phoenix Footwear in an amount not to exceed $750,000. The accounts payable required to be paid by Canadian Recreation within 45 days of the closing was zero.

The Registrant hereby amends its Report on Form 8-K, filed with the Securities and Exchange Commission on July 9, 2007 to update its report of this transaction and file the financial statements and pro forma financial information required by Item 9.01 of Form 8-K.

Section 9 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(b) Pro Forma Financial Information

The Pro Forma Financial Information with respect to the transaction described under Item 2.01 is filed herewith as Exhibit 99.1 and incorporated herein by reference.

(d) Exhibits

Exhibit Number	Description
99.1	Unaudited Pro Forma Condensed Consolidated Balance Sheet and Statements of Operations
	Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2007
	Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2007
	Unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2007 and fiscal year ended December 30, 2006
	Notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2007 and fiscal year ended December 30, 2006

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PHOENIX FOOTWEAR GROUP, INC.
Date: September 17, 2007	By:	/s/ Kenneth E. Wolf
	Name:	Kenneth E. Wolf
	Title:	Chief Financial Officer

3

EXHIBIT INDEX

Exhibit Number	Description
99.1	Unaudited Pro Forma Condensed Consolidated Balance Sheet and Statements of Operations
	Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2007
	Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2007
	Unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2007 and fiscal year ended December 30, 2006
	Notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2007 and fiscal year ended December 30, 2006

4

EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AND

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

The following tables present the unaudited condensed consolidated pro forma financial data for Phoenix Footwear Group, Inc. (“Phoenix Footwear” or “the Company”) for the fiscal year ended December 30, 2006 and for the six month period ended June 30, 2007, and the Company’s condensed consolidated balance sheet as of June 30, 2007 as reported in the Company’s quarterly report on form 10-Q for the six month period ended June 30, 2007 as filed on August 14, 2007 with the Securities and Exchange Commission. On July 2, 2007, the Company sold its Royal Robbins, Inc. (“Royal Robbins”) subsidiary and assets of PXG Canada, Inc., related to the Royal Robbins business, to Kellwood Company. Under the sale, the Company received aggregate cash consideration of approximately $37.9 million, which is subject to a final closing date working capital adjustment currently under review by the parties.

Historical financial information for the Company as of and for the six months ended June 30, 2007 has been derived from unaudited historical consolidated condensed financial statements included in the Company’s Quarterly Report on Form 10-Q. Historical financial information for the fiscal year ended December 30, 2006 has been derived from audited historical consolidated financial statements included in Phoenix Footwear’s 2006 Annual Report on Form 10-K.

The unaudited condensed consolidated pro forma balance sheet gives effect to the disposition of Royal Robbins as if it had occurred on June 30, 2007. The unaudited pro forma condensed consolidated statements of operations are presented for the year-ended December 30, 2006 and for the six month period ended June 30, 2007 and give effect to the disposition as if the disposition had been completed as of December 31, 2005. The unaudited pro forma condensed consolidated balance sheet and condensed consolidated statements of operations are provided for informational purposes only and should not be construed to be indicative of the Company’s consolidated financial position or results of operations had the transaction been consummated on the date assumed and do not project the Company’s consolidated financial position or results of operations for any future period or date.

The unaudited pro forma consolidated balance sheet and unaudited pro forma consolidated statements of operations were derived by adjusting the Company’s historical consolidated financial statements for the assets sold. The unaudited pro forma condensed combined statements of operations do not include the impact of any potential cost savings or one-time costs that may result from the disposition.

PHOENIX FOOTWEAR GROUP, INC.

UNAUDITED PRO FORMA

CONSOLIDATED BALANCE SHEET

JUNE 30, 2007

(in thousands)

	6/30/07			Pro Forma Adjustments			Pro Forma Results
ASSETS
Current assets
Cash and cash equivalents	$	1,053		$	202	(a)	$	1,255
Accounts receivable, less allowances of $1,802		17,080						17,080
Inventories, less provision of $1,246		24,284						24,284
Other current assets		3,126						3,126
Income tax receivable		2,865						2,865
Deferred income tax asset		1,591						1,591
Assets of discontinued operations		8,563			(8,563	)(b)		—
Total current assets		58,562			(8,361	)		50,201
Property and equipment, net		3,777						3,777
Goodwill		14,466						14,466
Unamortizable intangibles		11,393						11,393
Intangible assets, net		7,963						7,963
Other assets, met		50						50
Long-term assets of discontinued operations		8,359			(8,359	)(b)		—
Total assets	$	104,570		$	(16,720	)	$	87,850
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Notes payable	$	51,166			(35,200	)(c)		15,966
Accounts payable		6,929						6,929
Accrued expenses		4,521			(1,182	)(d)		3,339
Other current liabilities		1,065						1,065
Income taxes payable		215						215
Liabilities of discontinued operations		3,208			(3,208	)(b)		—
Total current liabilities		67,104			(39,590	)		27,514
Other Liabilities
Other long-term liabilities		1,381						1,381
Deferred income tax liability		4,159						4,159
Total other liabilities		5,540			—			5,540
Total liabilities		72,644			(39,590	)		33,054
Commitments and Contingencies
Stockholders’ equity
Common stock, $0.01 par value – 50,000,000 shares authorized, 8,383,000 shares issued		84						84
Additional paid-in capital		46,204						46,204
Accumulated (deficit); retained earnings		(11,551	)		22,870	(e)		11,319
Accumulated other comprehensive gain		135						135
		34,872			22,870			57,742
Less: Treasury stock at cost		(2,946	)					(2,946	)
Total stockholders’ equity		31,926			22,870			54,796
Total liabilities and stockholders’ equity	$	104,570		$	(16,720	)	$	87,850

The accompanying notes are an integral part of this unaudited pro forma consolidated balance sheet.

PHOENIX FOOTWEAR GROUP, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF JUNE 30, 2007

PRO FORMA ADJUSTMENTS

The unaudited pro forma condensed consolidated financial statements of the Company include the following pro forma adjustments related to the disposition of the Company’s wholly owned subsidiary, Royal Robbins, Inc. and assets of its PXG Canada, Inc., subsidiary related to the Royal Robbins business.

(a) Represents the net cash consideration at closing pursuant to the Agreement.

(b) Represents the following assets and liabilities held by Phoenix Footwear as a discontinued operation:

	June 30, 2007
	(In thousands)
Assets
Cash	$	2
Accounts receivable, net		3,333
Inventories, net		4,474
Other current assets		624
Deferred income tax asset		130
Total Current Assets	$	8,563
Plant and equipment, net		255
Goodwill and Intangible Assets		8,104
Total Long-Term Assets	$	8,359
Liabilities
Accounts Payable		1,941
Accrued Liabilities		447
Income Taxes Payable		820
Total Liabilities	$	3,208

(c) Represents the reduction in outstanding debt of Phoenix Footwear through the use of cash proceeds from the sale of Royal Robbins.

(d) Represents an accrued liability of $326,000 resulting from the final closing date working capital being less than the preliminary closing date working capital. Pursuant to the agreement, the closing date working capital adjustment is due to Kellwood. Also included is a reduction of Accrued Interest through the use of cash proceeds from the sale of Royal Robbins of $1,508,000.

(e) Represents the resulting gain on the sale of the assets pursuant to the Agreement.

PHOENIX FOOTWEAR GROUP, INC.

UNAUDITED PRO FORMA

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

JUNE 30, 2007

(in thousands, except per share data)

	Six Months Ended 6/30/07			Pro Forma Adjustments			Pro Forma Results
Net sales	$	57,563					$	57,563
Cost of goods sold		39,898						39,898
Gross profit		17,665			—			17,665
Operating expenses
Selling, general and administrative expense		18,916						18,916
Other expenses (income), net		6						6
Total operating expenses		18,922			—			18,922
Operating loss		(1,257	)		—			(1,257	)
Interest expense		1,220						1,220
Loss before income taxes and discontinued operations		(2,477	)		—			(2,477	)
Income tax benefit		(1,188	)					(1,188	)
Net loss before discontinued operations	$	(1,289	)	$	—		$	(1,289	)
Net income from discontinued operations, net of tax		774			(774	)(a)		—
Net loss	$	(515	)	$	(774	)	$	(1,289	)
Net (loss) earnings per common share — Basic
Loss from continuing operations	$	(.16	)				$	(.16	)
Earnings from discontinued operations		.10						—
Loss per common share — Basic	$	(.06	)				$	(.16	)
Net (loss) earnings per common share — Diluted
Loss from continuing operations	$	(.16	)				$	(.16	)
Earnings from discontinued operations		.10						—
Loss per common share — Diluted	$	(.06	)				$	(.16	)
Weighted average shares outstanding
Basic		8,016,207						8,016,207
Diluted		8,016,207						8,016,207

The accompanying notes are an integral part of this unaudited pro forma consolidated statement of operations.

PHOENIX FOOTWEAR GROUP, INC.

UNAUDITED PRO FORMA

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

DECEMBER 30, 2006

(in thousands, except per share data)

	Year Ended 12/30/06			Pro Forma Adjustments			Pro Forma Results
Net sales	$	140,589			31,153		$	109,436
Cost of goods sold		92,100			16,158			75,942
Gross profit		48,489			14,995			33,494
Operating expenses
Selling, general and administrative expense		45,418			9,978			35,440
Non-cash impairment charge		23,499			—			23,499
Other expenses (income), net		(539	)		—			(539	)
Total operating expenses		68,378			9,978			58,400
Operating (loss) income		(19,889	)		5,017			(24,906	)
Interest expense		5,968			3,513	(b)		2,455
(Loss) earnings before income taxes		(25,857	)		1,504			(27,361	)
Income tax (benefit) provision		(5,479	)		831			(6,310	)
Net (loss) earnings	$	(20,378	)	$	673	(a)	$	(21,051	)
Net loss per common share
Basic	$	(2.58	)				$	(2.66	)
Diluted	$	(2.58	)				$	(2.66	)
Weighted average shares outstanding
Basic		7,911,050						7,911,050
Diluted		7,911,050						7,911,050

The accompanying notes are an integral part of this unaudited pro forma consolidated statement of operations.

PHOENIX FOOTWEAR GROUP, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED

JUNE 30, 2007

AND FISCAL YEAR ENDED DECEMBER 30, 2006

PRO FORMA ADJUSTMENTS

(a) Represents the income from discontinued operations attributable to the Company assuming that the assets of Royal Robbins were sold as of December 31, 2005 and no business activity was conducted over the course of the period presented.

The adjusted net loss does not include the gain on sale of the assets as a result of the transaction.

(b) In accordance with EITF 87-24, Allocation of Interest to Discontinued Operations (“EITF 87-24”), interest expense incurred on the debt that was required to be repaid as a result of the sale was allocated to discontinued operations.