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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549


FORM 10-Q

(Mark One)

|  |  |                                                                                        
|- |  | ---------------------------------------------------------------------------------------
|x |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 28, 2003

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to

|                       |       | 
|---------------------- | ----- | 
|Commission file number | 0-774 | 
|                       |       | 

PHOENIX FOOTWEAR GROUP, INC.

---

(Exact Name of Registrant as Specified in Its Charter)


|                                                   |  |                    
|-------------------------------------------------- |  | -------------------
|Delaware                                           |  | 15-0327010         
|                                                   |  |                    
|(State or Other Jurisdiction of                    |  | (IRS Employer      
|Incorporation or Organization)                     |  | Identification No.)
|                                                   |  |                    
|5759 Fleet Street, Suite 220, Carlsbad, California |  | 92008              
|                                                   |  |                    
|(Address of Principal Executive Offices)           |  | (Zip Code)         

|                                                    
|----------------------------------------------------
|(760) 602-9688                                      
|                                                    
|(Registrants Telephone Number, Including Area Code)

|                                                                                  
|----------------------------------------------------------------------------------
|Daniel Green Co. 450 Main Street, Old Town, ME 04468                              
|                                                                                  
|(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  x   No  o

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

Yes  o   No  o

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date.

|                        |  |                             
|----------------------- |  | ----------------------------
|CLASS                   |  | OUTSTANDING AT JULY 28, 2003
|Common, $0.01 par value |  | 4,286,532                   





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TABLE OF CONTENTS



|                              |                                                                                               |  |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I: FINANCIAL INFORMATION
|                              | Item 1. Consolidated Financial Statements                                                    
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                              | Item 4. Controls and Procedures                                                              
|Part II  Other Information  
|                              | Item 1. Legal Proceedings -                                                                  
|                              | Item 2. Changes in Securities -                                                              
|                              | Item 3. Defaults upon Senior Securities  None                                               
|                              | Item 4. Submission of matters to a vote of security holders                                  
|                              | Item 5. Other Information  None                                                             
|                              | Item 6. Exhibits and Reports on Form 8-K:                                                    
|SIGNATURES                   
|EXHIBIT 10.1                 
|EXHIBIT 10.2                 
|EXHIBIT 10.3                 
|EXHIBIT 10.4                 
|EXHIBIT 10.5                 
|EXHIBIT 31.1                 
|EXHIBIT 31.2                 
|EXHIBIT 32.1                 
|EXHIBIT 32.2                 



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##### Table of Contents



PHOENIX FOOTWEAR GROUP, INC.
QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

|           |  |    |                                                                                              |  |  |    |      |  | 
|---------- |  | -- | -------------------------------------------------------------------------------------------- |  |  | -- | ---- |  | 
|           |  |    |                                                                                              |  |  |    | Page
|           |  |    |                                                                                              |  |  |    |     
|PART I     |  |    | FINANCIAL INFORMATION                                                                        |  |  |   
|           |  |    | Item 1.Consolidated Financial Statements and Notes to Consolidated Financial Statements      |  |  | 3  |     
|           |  |    | Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations |  |  | 8  |     
|           |  |    | Item 3.Quantitative and Qualitative Disclosures About Market Risk                            |  |  | 11 |     
|           |  |    | Item 4.Controls and Procedures                                                               |  |  | 11 |     
|PART II    |  |    | OTHER INFORMATION                                                                            |  |  |    |     
|           |  |    | Item 1.Legal Proceedings                                                                     |  |  | 12 |     
|           |  |    | Item 2.Changes in Securities                                                                 |  |  | 12 |     
|           |  |    | Item 3.Defaults Upon Senior Securities                                                       |  |  | 12 |     
|           |  |    | Item 4.Submission of Matters to a Vote of Security Holders                                   |  |  | 12 |     
|           |  |    | Item 5.Other Information                                                                     |  |  | 12 |     
|           |  |    | Item 6.Exhibits and Reports on Form 8-K                                                      |  |  | 12 |     
|Signatures |  | 14 |                                                                                             

2



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##### Table of Contents






PART I: FINANCIAL INFORMATION




Item 1. Consolidated Financial Statements

PHOENIX FOOTWEAR GROUP, INC.
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |            | 
|------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | -------------------------- | ---------- | ----------- | ---------- | ------------ | ---------- | ---------- | ---------- | 
|                                                                                                                                |                                                                                         |                            |            | June 28,    |            | December 31,
|                                                                                                                                |                                                                                         |                            |            | 2003        |            | 2002        
|                                                                                                                                |                                                                                         |                            |            |             |            |             
|                                                                                                                                |                                                                                         |                            |            | (Unaudited) |            |              |            |           
|ASSETS                                                                                                                          |                                                                                         |                            |            |             |            |              |            |           
|CURRENT ASSETS:                                                                                                                 |                                                                                         |                            |            |             |            |              |            |           
|                                                                                                                                | Cash                                                                                    |                            | $          | 528,000     |            |              | $          | 1,265,000  |           
|                                                                                                                                | Accounts receivable (less allowances of $365,000 in 2003 and $479,000 in 2002)          |                            |            | 5,638,000   |            |              |            | 5,679,000  |           
|                                                                                                                                | Inventoriesnet                                                                         |                            |            | 8,488,000   |            |              |            | 6,662,000  |           
|                                                                                                                                | Other receivable                                                                        |                            |            | 544,000     |            |              |            | 316,000    |           
|                                                                                                                                | Other current assets                                                                    |                            |            | 686,000     |            |              |            | 185,000    |           
|                                                                                                                                | Deferred income tax asset                                                               |                            |            | 297,000     |            |              |            | 297,000    |           
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|                                                                                                                                |                                                                                         | Total current assets       |            |             | 16,181,000 |              |            |            | 14,404,000 | 
|PLANT
AND EQUIPMENTNet                                                                                                         |                                                                                         |                            | 1,029,000  |             |            |              | 1,499,000  |           
|OTHER ASSETS:                                                                                                                   |                                                                                         |                            |            |             |            |              |            |           
|Other assets-net                                                                                                                |                                                                                         |                            | 133,000    |             |            |              | 158,000    |           
|                                                                                                                                | Goodwill                                                                                |                            |            | 1,645,000   |            |              |            | 1,645,000  |           
|                                                                                                                                | Other receivable                                                                        |                            |            | 718,000     |            |              |            | 1,248,000  |           
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|                                                                                                                                |                                                                                         | Total other assets         |            |             | 2,496,000  |              |            |            | 3,051,000  | 
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|TOTAL ASSETS                                                                                                                    |                                                                                         | $                          | 19,706,000 |             |            | $            | 18,954,000 |           
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                            |                                                                                         |                            |            |             |            |              |            |           
|CURRENT LIABILITIES:                                                                                                            |                                                                                         |                            |            |             |            |              |            |           
|                                                                                                                                | Accounts payable                                                                        |                            | $          | 2,652,000   |            |              | $          | 1,872,000  |           
|                                                                                                                                | Accrued expenses                                                                        |                            |            | 1,084,000   |            |              |            | 1,164,000  |           
|                                                                                                                                | Note payable, line of credit                                                            |                            |            | 2,580,000   |            |              |            |           |           
|                                                                                                                                | Notes
payablecurrent                                                                   |                            |            | 750,000     |            |              |            | 750,000    |           
|                                                                                                                                | Liability to former stockholders                                                        |                            |            |            |            |              |            | 1,806,000  |           
|                                                                                                                                | Income taxes payable                                                                    |                            |            | 89,000      |            |              |            |           |           
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|                                                                                                                                |                                                                                         | Total current liabilities  |            |             | 7,155,000  |              |            |            | 5,592,000  | 
|OTHER LIABILITIES:                                                                                                              |                                                                                         |                            |            |             |            |              |            |           
|Notes
payablenoncurrent                                                                                                        |                                                                                         |                            | 1,500,000  |             |            |              | 2,250,000  |           
|                                                                                                                                | Deferred income tax liability                                                           |                            |            | 1,000,000   |            |              |            | 1,000,000  |           
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|                                                                                                                                |                                                                                         | Total other liabilities    |            |             | 2,500,000  |              |            |            | 3,250,000  | 
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|                                                                                                                                |                                                                                         | Total liabilities          |            |             | 9,655,000  |              |            |            | 8,842,000  | 
|STOCKHOLDERS EQUITY:                                                                                                           |                                                                                         |                            |            |             |            |              |            |           
|Common stock, $.01 par value-50,000,000 shares authorized; 4,284,000 and 4,588,000 shares
issued in 2003 and 2002, respectively |                                                                                         |                            | 21,000     |             |            |              | 23,000     |           
|                                                                                                                                | Additional paid-in-capital                                                              |                            |            | 7,538,000   |            |              |            | 8,104,000  |           
|                                                                                                                                | Retained earnings                                                                       |                            |            | 4,066,000   |            |              |            | 4,379,000  |           
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|                                                                                                                                |                                                                                         |                            | 11,625,000 |             |            |              | 12,506,000 |           
|                                                                                                                                | Less: Treasury stock at cost, 602,894 and 998,194 shares in 2003 and 2002, respectively |                            |            | (1,574,000  | )          |              |            | (2,394,000 | )         
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|                                                                                                                                |                                                                                         | Total stockholders
equity |            |             | 10,051,000 |              |            |            | 10,112,000 | 
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                      |                                                                                         | $                          | 19,706,000 |             |            | $            | 18,954,000 |           
|                                                                                                                                |                                                                                         |                            |            |             |            |              |            |            |           

See notes to consolidated financial statements.

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PHOENIX FOOTWEAR GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |           |           | 
|------------------------------------ | -------------------------------------------- | ------------------------ | --------- | ------------------ | --------- | ---------------- | --------- | --------- | --------- | -------- | ---------- | --------- | --------- | - | ---------- | --------- | --------- | 
|                                     |                                              |                          |           | Three Months Ended |           | Six Months Ended
|                                     |                                              |                          |           |                    |           |                 
|                                     |                                              |                          |           | June 28,           |           | June 30,         |           | June 28,  |           | June 30,
|                                     |                                              |                          |           | 2003               |           | 2002             |           | 2003      |           | 2002    
|                                     |                                              |                          |           |                    |           |                  |           |           |           |         
|NET SALES                            |                                              | $                        | 7,552,000 |                    |           | $                | 8,446,000 |           |           | $        | 16,759,000 |           |           | $ | 19,239,000 |          
|COST OF GOODS SOLD                   |                                              |                          | 4,365,000 |                    |           |                  | 5,363,000 |           |           |          | 9,552,000  |           |           |   | 12,323,000 |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|GROSS PROFIT                         |                                              |                          | 3,187,000 |                    |           |                  | 3,083,000 |           |           |          | 7,207,000  |           |           |   | 6,916,000  |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|OPERATING EXPENSES:                  |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|                                     | Selling, general and administrative expenses |                          |           | 2,601,000          |           |                  |           | 2,408,000 |           |          |            | 5,454,000 |           |   |            | 5,001,000 |          
|                                     | Other
expensesnet                           |                          |           | 939,000            |           |                  |           |          |           |          |            | 1,415,000 |           |   |            |          |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|                                     |                                              | Total operating expenses |           |                    | 3,540,000 |                  |           |           | 2,408,000 |          |            |           | 6,869,000 |   |            |           | 5,001,000 | 
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|OPERATING (LOSS) INCOME              |                                              |                          | (353,000  | )                  |           |                  | 675,000   |           |           |          | 338,000    |           |           |   | 1,915,000  |          
|INTEREST EXPENSE                     |                                              |                          | 386,000   |                    |           |                  | 103,000   |           |           |          | 452,000    |           |           |   | 335,000    |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|EARNINGS (LOSS) BEFORE INCOME TAXES  |                                              |                          | (739,000  | )                  |           |                  | 572,000   |           |           |          | (114,000   | )         |           |   | 1,580,000  |          
|INCOME TAX (BENEFIT) PROVISION       |                                              |                          | (51,000   | )                  |           |                  | 229,000   |           |           |          | 199,000    |           |           |   | 632,000    |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|NET (LOSS) INCOME                    |                                              | $                        | (688,000  | )                  |           | $                | 343,000   |           |           | $        | (313,000   | )         |           | $ | 948,000    |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|NET
(LOSS) INCOME PER SHARE (Note 2) |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|                                     | Basic                                        |                          | $         | (.19               | )         |                  | $         | .10       |           |          | $          | (.08      | )         |   | $          | .28       |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|                                     | Diluted                                      |                          | $         | (.19               | )         |                  | $         | .09       |           |          | $          | (.08      | )         |   | $          | .25       |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|SHARES OUTSTANDING:                  |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|                                     | Basic                                        |                          |           | 3,690,279          |           |                  |           | 3,540,710 |           |          |            | 3,682,387 |           |   |            | 3,336,406 |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          
|                                     | Diluted                                      |                          |           | 3,690,279          |           |                  |           | 3,952,248 |           |          |            | 3,682,387 |           |   |            | 3,865,296 |          
|                                     |                                              |                          |           |                    |           |                  |           |           |           |          |            |           |           |   |            |          

See notes to consolidated financial statements.

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PHOENIX FOOTWEAR GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |            |         |           |            |  
|-------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------------------- | ------------------------- | ------------------------------------------------ | ------- | ---------------- | ---------- | ---------- | ------- | --------- | ---------- | -
|                                                         |                                                                                                 |                                                   |                           |                                                  |         | Six Months Ended
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                 
|                                                         |                                                                                                 |                                                   |                           |                                                  |         | June 28,         |            | June 30,  
|                                                         |                                                                                                 |                                                   |                           |                                                  |         | 2003             |            | 2002      
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|CASH FLOWS FROM OPERATING ACTIVITIES:                    |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|Net (loss) / income                                      |                                                                                                 | $                                                 | (313,000                  | )                                                |         | $                | 948,000    |           
|                                                         | Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities: |                                                   |                           |                                                  |         |                  |            |            |        
|                                                         |                                                                                                 | Depreciation and amortization                     |                           |                                                  | 98,000  |                  |            |            | 143,000 |          
|                                                         |                                                                                                 | Allocation of shares in defined contribution plan |                           |                                                  | 402,000 |                  |            |            |        |          
|                                                         |                                                                                                 | Loss on sale of property and equipment            |                           |                                                  | 8,000   |                  |            |            |        |          
|                                                         |                                                                                                 | Changes in assets and liabilities:                |                           |                                                  |         |                  |            |            |         |          
|                                                         |                                                                                                 | (Increase) decrease in:                           |                           |                                                  |         |                  |            |            |         |          
|                                                         |                                                                                                 |                                                   | Accounts receivable  net |                                                  |         | 41,000           |            |            |         | 1,862,000 |           
|                                                         |                                                                                                 |                                                   |                           | Inventories  net                                |         |                  | (1,826,000 | )          |         |           | 2,895,000  |  
|                                                         |                                                                                                 |                                                   |                           | Other current receivable                         |         |                  | (228,000   | )          |         |           |           |  
|                                                         |                                                                                                 |                                                   |                           | Other current assets                             |         |                  | (501,000   | )          |         |           | (396,000   | )
|                                                         |                                                                                                 |                                                   |                           | Other noncurrent assets                          |         |                  | 554,000    |            |         |           | (346,000   | )
|                                                         |                                                                                                 |                                                   | Increase (decrease) in:   |                                                  |         |                  |            |            |         |           |           
|                                                         |                                                                                                 |                                                   |                           | Accounts payable                                 |         |                  | 780,000    |            |         |           | 1,402,000  |  
|                                                         |                                                                                                 |                                                   |                           | Accrued expenses                                 |         |                  | (80,000    | )          |         |           | (447,000   | )
|                                                         |                                                                                                 |                                                   |                           | Liability to former stockholders                 |         |                  | (1,806,000 | )          |         |           |           |  
|                                                         |                                                                                                 |                                                   |                           | Income taxes payable                             |         |                  | 89,000     |            |         |           | 594,000    |  
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|                                                         |                                                                                                 |                                                   |                           | Net cash (used) provided by operating activities |         |                  | (2,782,000 | )          |         |           | 6,655,000  |  
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                    |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|Purchases of equipment                                   |                                                                                                 |                                                   | (93,000                   | )                                                |         |                  | (102,000   | )         
|                                                         | Proceeds from disposal of property and equipment                                                |                                                   |                           | 457,000                                          |         |                  |            |           |        
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|                                                         |                                                                                                 |                                                   |                           | Net cash provided (used) by investing activities |         |                  | 364,000    |            |         |           | (102,000   | )
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                    |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|Net
borrowings (payments) on note payableline of credit |                                                                                                 |                                                   | 2,580,000                 |                                                  |         |                  | (6,341,000 | )         
|                                                         | Repayments of notes payable                                                                     |                                                   |                           | (750,000                                         | )       |                  |            | (1,378,000 | )      
|                                                         | Issuance of common stock                                                                        |                                                   |                           | 52,000                                           |         |                  |            | 5,000      |        
|                                                         | Purchases of treasury stock                                                                     |                                                   |                           | (201,000                                         | )       |                  |            |           |        
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|                                                         |                                                                                                 |                                                   |                           | Net cash provided (used) by financing activities |         |                  | 1,681,000  |            |         |           | (7,714,000 | )
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|NET DECREASE IN CASH                                     |                                                                                                 |                                                   | (737,000                  | )                                                |         |                  | (1,161,000 | )         
|CASHBeginning of period                                 |                                                                                                 |                                                   | 1,265,000                 |                                                  |         |                  | 1,161,000  |           
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           
|CASHEnd of period                                       |                                                                                                 | $                                                 | 528,000                   |                                                  |         | $                |           |           
|                                                         |                                                                                                 |                                                   |                           |                                                  |         |                  |            |           

See notes to consolidated financial statements.

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PHOENIX FOOTWEAR GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Description of Business and Summary of Significant Accounting

1.  Basis of Presentation

The accompanying unaudited
consolidated financial statements of Phoenix Footwear Group, Inc.
(the Company) have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments which are
of a normal recurring nature, necessary for fair presentation have been
included in the accompanying financial statements. These financial statements
should be read in conjunction with the consolidated financial statements and
footnotes included in the Companys Annual Report on Form 10-K filed with the
Securities and Exchange Commission for the fiscal year ended December 31, 2002.
The results of operations for the three and six months ended June 28, 2003, or
for any other interim period, are not necessarily indicative of the results
that may be expected for the full year.

On May 22, 2003, the Board of Directors authorized a two-for-one stock split
which became effective on June 12, 2003. All references in these financial
statements and notes related to numbers of shares and per share amounts have
been restated to reflect the effect of the stock split.

Principles of Consolidation

The consolidated financial statements consist of Phoenix Footwear Group, Inc.
and its wholly owned subsidiary, Penobscot Shoe Company. Intercompany accounts
and transactions have been eliminated in consolidation.

Accounting Period

Effective January 1, 2003, the Company changed its year-end to a fiscal year
that is the 52- or 53-week period ending the Saturday nearest to December 31st.

2.  Per Share Data

In addition to shares outstanding held by the public, the Companys defined
contribution 401(k) savings plan held approximately 594,000 shares as of June
28, 2003, which were issued during 2001 in connection with the termination of
the Companys defined benefit pension plan. These shares, while eligible to
vote, are classified as treasury stock and therefore are not outstanding for
purpose of determining per share earnings until the time that such shares are
allocated to employee accounts. This allocation is occurring over a seven year
period which commenced in 2002. During the first quarter of 2003 approximately
119,000 shares were allocated to the defined contribution 401(k) savings plan.
No shares were allocated during the second quarter of 2003. Basic net
(loss) income
per share is computed by dividing net (loss) income by the weighted average number of
common shares outstanding for the period. Diluted net (loss) income per share is
calculated by dividing net (loss) income and the effect of assumed conversions by the
weighted average number of common and, when applicable, potential common shares
outstanding during the period. Net (loss) income per share for prior periods has been
restated to reflect a two-for-one stock split effective May 22, 2003. A
reconciliation of the numerators and denominators of basic and
diluted (loss) income per share is presented below.

6



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##### Table of Contents



|                                     |                                                                 |                                     |       |                    |   |                  |      |               |         |               |       |           |   |   |      |           |         | 
|------------------------------------ | --------------------------------------------------------------- | ----------------------------------- | ----- | ------------------ | - | ---------------- | ---- | ------------- | ------- | ------------- | ----- | --------- | - | - | ---- | --------- | ------- | 
|                                     |                                                                 |                                     |       | Three Months Ended |   | Six Months Ended
|                                     |                                                                 |                                     |       |                    |   |                 
|                                     |                                                                 |                                     |       | June 28, 2003      |   | June 30, 2002    |      | June 28, 2003 |         | June 30, 2002
|                                     |                                                                 |                                     |       |                    |   |                  |      |               |         |              
|Basic
net (loss) income per share:   |                                                                 |                                     |       |                    |   |                  |      |               |         |               |       |           |   |   |      |          
|                                     | Net (loss) income                                               |                                     | $     | (688,000           | ) |                  | $    | 343,000       |         |               | $     | (313,000  | ) |   | $    | 948,000   |        
|                                     | Weighted average common shares outstanding                      |                                     |       | 3,690,279          |   |                  |      | 3,540,710     |         |               |       | 3,682,387 |   |   |      | 3,336,406 |        
|Basic net (loss) income per share    |                                                                 | $                                   | (0.19 | )                  |   | $                | 0.10 |               |         | $             | (0.08 | )         |   | $ | 0.28 |          
|                                     |                                                                 |                                     |       |                    |   |                  |      |               |         |               |       |           |   |   |      |           |        
|Diluted net (loss) income per share: |                                                                 |                                     |       |                    |   |                  |      |               |         |               |       |           |   |   |      |          
|                                     | Net (loss) income                                               |                                     | $     | (688,000           | ) |                  | $    | 343,000       |         |               | $     | (313,000  | ) |   | $    | 948,000   |        
|                                     | Interest on convertible debt                                    |                                     |       |                   |   |                  |      |              |         |               |       |          |   |   |      | 17,000    |        
|                                     |                                                                 |                                     |       |                    |   |                  |      |               |         |               |       |           |   |   |      |           |        
|                                     | Net (loss) income and effect of assumed conversions             |                                     |       | (688,000           | ) |                  |      | 343,000       |         |               |       | (313,000  | ) |   |      | 965,000   |        
|                                     | Weighted average common shares outstanding                      |                                     |       | 3,690,279          |   |                  |      | 3,540,710     |         |               |       | 3,682,387 |   |   |      | 3,336,406 |        
|                                     |                                                                 | Effect of stock options outstanding |       |                    |  |                  |      |               | 411,538 |               |       |           |  |   |      |           | 300,176 | 
|                                     |                                                                 | Effect of convertible debt          |       |                    |  |                  |      |               |        |               |       |           |  |   |      |           | 228,714 | 
|                                     |                                                                 |                                     |       |                    |   |                  |      |               |         |               |       |           |   |   |      |           |        
|                                     | Weighted average common and potential common
shares outstanding |                                     |       | 3,690,279          |   |                  |      | 3,952,248     |         |               |       | 3,682,387 |   |   |      | 3,865,296 |        
|Diluted net (loss) income per share  |                                                                 | $                                   | (0.19 | )                  |   | $                | 0.09 |               |         | $             | (0.08 | )         |   | $ | 0.25 |          
|                                     |                                                                 |                                     |       |                    |   |                  |      |               |         |               |       |           |   |   |      |           |        

3.  Goodwill

Effective January 1, 2002, the Company changed its method of accounting for
goodwill to conform with Statement of Financial Accounting Standards (SFAS) No.
142, Goodwill and Other Intangible Assets. SFAS No. 142 discontinues the
practice of amortizing goodwill and initiates an annual review for impairment.
Impairment would be examined more frequently if certain indicators are
encountered. The Company determined that there was no impairment of goodwill to
be recorded during the quarter ended June 28, 2003. In accordance with SFAS No.
142 no goodwill amortization was recognized in either the quarter or six month
periods ended June 28, 2003 or June 30, 2002, respectively.

4.  Liability to Former Stockholders

The accompanying consolidated balance sheets as of December 31, 2002 included
an obligation of approximately $1.8 million and accrued interest of $280,000 to
dissenting stockholders of Penobscot Shoe Company. This liability arose prior
to the acquisition of Penobscot and was assumed by the Company. On May 30,
2003 the Company received from the Superior Court in Penobscot County, Maine
its decision which stated dissenting Penobscot stockholders are entitled to
$15.87 per common share, which represents $4.12 more per share than the amount
the Company paid at the time of the acquisition. Additionally, the ruling
granted interest to the dissenting stockholders bringing the total judgment to
$3.1 million. As a result, the Company recorded in Other expenses $751,000 of
litigation related legal and settlement expenses and $346,000 of interest
expense related to this litigation during the quarter ended June 28, 2003. The
Company used $500,000 in cash and increased its note payable  line of credit
in the amount of $2.6 million to pay the settlement.

5.  Debt

The Company has a loan agreement which consists of a revolving line of credit
(revolver) and a term loan facility in the amount of $2.2 million. Under the
terms of the agreement, the borrowing base for the revolver is based on certain
balances of accounts receivable and inventory, as defined in the agreement.
The maximum credit amount under the revolver is $11.0 million. The revolver
expires on May 1, 2006 and has an interest rate of LIBOR plus 175 to 300 basis
points. The revolver is secured by accounts receivable, inventory and
equipment. The balance owed under the Companys revolving line of credit as of
June 28, 2003 totaled $2.6 million. The term loan, which is subject to similar
interest rate changes as the revolver, is payable through May 1, 2006 and is
also secured by accounts receivable, inventory and equipment.

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Long-term debt as of June 28, 2003 consisted of the following:

|                                                                                                                               |  |  |           | 
|------------------------------------------------------------------------------------------------------------------------------ |  |  | --------- | 
|Term loan payable to bank in annual installments of $750,000 through 2006, interest due monthly
at LIBOR plus 200 basis points |  |  | 2,250,000 | 
|Less: current portion                                                                                                          |  |  | 750,000   | 
|                                                                                                                               |  |  |           | 
|Noncurrent portion                                                                                                             |  |  | 1,500,000 | 

6.  Other Expenses -Net

Other expenses-net, of $939,000 for the quarter ended June 28, 2003 consists
primarily of additional costs associated with the dissenting Penobscot stockholders
settlement and with the ongoing relocation of the Companys corporate headquarters from
Old Town, Maine to Carlsbad, California. In accordance with Statement of
Financial Accounting Standards (SFAS) No. 146, Accounting for Costs Associated
with Exit or Disposal Activities, the relocation costs have been recorded as
incurred at their fair values for the quarter ended June 28, 2003.

7.  Subsequent Events

On August 8, 2003, the Company purchased all of the outstanding shares of H.S.
Trask & Co. (Trask) for approximately $2.8 million in cash and 700,000 shares
of newly issued common stock. Trask is also engaged in the import and sale of
footwear. The results of operations for the three and six month periods ended
June 28, 2003 and June 30, 2002, respectively, on a proforma basis, assuming
the Trask acquisition occurred at the beginning of the earliest period
presented, are as follows:

|                                     |  |                    |           |                  |  |               |            |               |  |   |            |   |  |   |            | 
|------------------------------------ |  | ------------------ | --------- | ---------------- |  | ------------- | ---------- | ------------- |  | - | ---------- | - |  | - | ---------- | 
|                                     |  | Three Months Ended |           | Six Months Ended
|                                     |  |                    |           |                 
|                                     |  | June 28, 2003      |           | June 30, 2002    |  | June 28, 2003 |            | June 30, 2002
|                                     |  |                    |           |                  |  |               |            |              
|Net sales                            |  | $                  | 9,636,000 |                  |  | $             | 10,170,000 |               |  | $ | 20,560,000 |   |  | $ | 22,813,000 | 
|                                     |  |                    |           |                  |  |               |            |               |  |   |            |   |  |   |            | 
|Gross profit                         |  | $                  | 4,042,000 |                  |  | $             | 3,682,000  |               |  | $ | 8,798,000  |   |  | $ | 8,178,000  | 
|                                     |  |                    |           |                  |  |               |            |               |  |   |            |   |  |   |            | 
|Net (loss) earnings                  |  | $                  | (822,000  | )                |  | $             | 250,000    |               |  | $ | (542,000   | ) |  | $ | 718,000    | 
|                                     |  |                    |           |                  |  |               |            |               |  |   |            |   |  |   |            | 
|Net (loss) earnings per common share |  | $                  | (0.19     | )                |  | $             | 0.06       |               |  | $ | (0.12      | ) |  | $ | 0.16       | 
|                                     |  |                    |           |                  |  |               |            |               |  |   |            |   |  |   |            | 




Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Comparison of the quarter ended June 28, 2003 and June 30, 2002.

Sales

Net sales for the quarter ended June 28, 2003 were $7.6 million, a decrease of
$894,000 or 10.6% as compared to $8.4 million for the prior year period. This
decrease is due primarily to a depressed economic retail environment and poor
weather conditions.

Gross Profit

Gross profit in the second quarter of 2003 was $3.2 million or 42.2% of net
sales as compared to $3.1 million or 36.5% of net sales in the second quarter
of 2002. This 3.4% improvement in gross margin as a percentage of net sales
primarily relates to an improved product sales mix and a reduction in the
volume of closeout sales. Cost of goods sold, as a percentage of net sales was
57.8% in 2003, compared to 63.5% for the prior year period. Cost of goods sold
reflects the direct costs of footwear sold, sourced variances from
pre-determined standards, and adjustments to the value of the inventory on
hand.

Expenses

Selling, general and administrative expenses as a percentage of net sales were
34.4% or $2.6 million in the second quarter of 2003 versus 28.5% or $2.4
million for the comparable prior year period. This increase was primarily
related to increased marketing and advertising expenses, increased employee
compensation and benefit costs, and occupancy costs associated with the
Companys new west coast operations.

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Other net operating expenses were $939,000 in 2003 and consisted primarily of
costs associated with the settlement of the dissenting stockholders litigation
and relocation of the Companys corporate headquarters from Old Town, Maine to
Carlsbad, California.

Interest Expense

Interest expense for the second quarter of 2003 was $386,000 and included an
interest charge of $346,000 related to the dissenting stockholders litigation.
Excluding the dissenting stockholders interest charge, interest expense
decreased $63,000 or 61.2% from the prior year quarter total of $103,000. The
decrease in interest expense during 2003 is a result of lower interest rates
and lower average outstanding indebtedness as compared to 2002.

Income Tax Provision

The Company recorded a tax benefit for the second quarter of 2003 of $51,000 as
compared to a tax expense of $229,000 in the prior year period. The Companys
effective tax rate during the three months ended June 28, 2003 and June 30,
2002 was 40%. Approximately $611,000 of the dissenting stockholders litigation
settlement was not tax deductible for the second quarter of 2003. Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities, for financial reporting purposes,
and the amounts used for income tax purposes.

Comparison of the six months ended June 28, 2003 and June 30, 2002.

Sales

Net sales for the six months ended June 28, 2003 were $16.8 million, a decrease
of $2.5 million or 12.9% as compared to $19.2 million for the prior year
period. This decrease is due primarily to a unseasonably cold weather
conditions and economic concerns.

Gross Profit

Gross profit for the six months ended June 28, 2003 was $7.2 million or 43.0%
of net sales as compared to $6.9 million or 35.9% of net sales in the same
period of 2002. This 4.2% improvement in gross margin as a percentage of net
sales primarily relates to an improved product sales mix and a reduction in the
volume of closeout sales. Cost of goods sold, as a percentage of net sales was
57.0% in 2003, compared to 64.1% for the prior year period.

Expenses

Selling, general and administrative expenses as a percentage of net sales were
32.5% or $5.5 million for the six months ended June 28, 2003 versus 26.0% or
$5.0 million for the comparable prior year period. This increase is due
primarily to increased marketing and advertising expenses, increased employee
compensation and benefit costs, and occupancy costs associated with the
Companys new west coast operations.

Other net operating expenses were $1.4 million in 2003 and consisted primarily
of costs associated with the settlement of the dissenting stockholders
litigation, relocation of the Companys corporate headquarters from Old Town,
Maine to Carlsbad, California and the discontinued Antigua Enterprises
acquisition effort.

Interest Expense

Interest expense for the six months ended June 28, 2003 was $452,000 and
included an interest charge of $376,000 related to the dissenting stockholders
litigation. Excluding the dissenting stockholders interest charge, interest
expense decreased $259,000 or 77.3% from the prior year period total of
$335,000. The decrease in interest expense during 2003 is a result of lower
interest rates and lower average outstanding indebtedness as compared to 2002.

Income Tax Provision

The Companys tax expense for the six months ended June 28, 2003 was $199,000
as compared to $632,000 in the prior year period. The Companys effective tax
rate during the six month period ended June 28, 2003 and June 30, 2002 was 40%.
Approximately

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$611,000 of the dissenting stockholders litigation settlement was not tax
deductible for the 2003 period. Deferred income taxes reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities, for financial reporting purposes, and the amounts used for income
tax purposes.

Liquidity and Capital Resources

As of June 28, 2003 the Company had working capital of approximately $9.0
million as compared to working capital of $8.8 million at December 31, 2002.
Working capital may vary from time to time as a result of seasonal
requirements, which are heightened during the first and third quarters, the
timing of factory shipments and the need to increase inventories and support an
in-stock position in anticipation of customers orders, and the timing of
accounts receivable collections.

The consolidated statement of cash flows for the second quarter of 2003 shows a
decrease of cash since December 31, 2002. Net cash used by operations was
approximately $2.8 million, due primarily to the increase in inventories and
payment of the dissenting stockholders settlement expenses. The Companys
current ratio, the relationship of current assets to current liabilities,
decreased to 2.26 in 2003 from 2.58 in 2002. Capital expenditures for the first
six months of 2003 approximated $93,000, as compared to $102,000 in the prior
year period.

As of June 28, 2003, total bank indebtedness was $4.8 million consisting of
note payable  line of credit of $2.6 million and notes payable of $2.2
million.

Management is not aware of any known demands, commitments, or events that would
materially affect its liquidity. There are no material expenditures or
commitments, which would affect capital resources in a significant way. Cash
generated by operations, supplemented by borrowings, are considered sufficient
to cover planned requirements.

Contractual Obligations

Contractual obligations as of June 28, 2003 consists of note payable, line of
credit and long-term debt, and are summarized in the following table:

|                               |                             |  |   |          
|------------------------------ | --------------------------- |  | - | ---------
|Note payable  line of credit: |                             |  |  
|                               | Total                       |  | $ | 2,580,000
|Long-term debt:                |                             |  |  
|                               | Total                       |  | $ | 2,250,000
|                               | Payments due in one year    |  |   | 750,000  
|                               | Payments due in two years   |  |   | 750,000  
|                               | Payments due in three years |  |   | 750,000  

Subsequent Events

On August 8, 2003, the Company purchased all of the outstanding shares of H.S.
Trask & Co. (Trask) for approximately $2.8 million in cash and 700,000 shares
of newly issued common stock. Trask is also engaged in the import and sale of
footwear.

Statements in this document, other than the statements of historical
information, are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements are inherently uncertain. Actual results and timing
of the events may differ materially from the future results, timing,
performance or achievements expressed or implied by such forward-looking
statements.

Forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995 (the Act), include certain written and oral
statements made, or incorporated by reference, by the Company or its
representatives in this report, other reports, filings with the Securities and
Exchange Commission (the S.E.C.), press releases, conferences or otherwise.
Such forward-looking statements include without limitation, any statement that
may predict, forecast, indicate, or imply future results, performance, or
achievements, and may contain the words believe, anticipate, expect,
estimate, intend, plan, project, will likely result, or any
variations of such words with similar meaning. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and assumptions that are difficult to predict; therefore, actual
results may differ materially from

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those expressed or forecasted in any such forward-looking statements. Investors
should carefully review the risk factors set forth in other reports or
documents the Company files with the S.E.C., including Forms 10-Q, 10-K, and
8-K. Some of the other risks and uncertainties that should be considered
include, but are not limited to, the following: international, national and
local general economic and market conditions; the inability to source the
Companys products because of adverse political and economic factors or the
imposition of trade or duty restrictions; changing consumer preferences;
changing fashion trends; intense competition amount other footwear brands;
demographic changes; popularity of particular designs and products; seasonal
and geographic demand for the Companys products; fluctuations and difficulty
in forecasting operating results, including without limitation, the ability of
the Company to continue, to manage and forecast its growth and inventories;
risk of unavailability or price increases in raw materials needed to make the
Companys products; new product development and commercialization; the ability
to secure and protect trademarks; performance and reliability of products;
customer service; adverse publicity; the loss of significant customers or
suppliers; increase cost of freight and transportation to meet delivery
deadlines; changes in business strategy or development plans; general risks of
doing business outside the United States; including without limitation, import
duties, quotas, tariffs, and political and economic instability; changes in
government regulation; liability and other claims asserted against the Company;
the ability to attract and retain qualified personnel; the risk of the
Companys customers filing bankruptcy and other factors referenced or
incorporated by reference in this report and other reports.

The Company operates in a very competitive and rapidly changing environment.
New risk factors can arise and it is not possible for management to predict all
such risk factors, nor can it assess the impact of all such risk factors on the
Companys business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements. Given these risks and uncertainties, investors
should not place undue reliance on forward-looking statements.

Investors should also be aware that while the Company does, from time to time,
communicate with securities analysts, it is against the Companys policy to
disclose to them any material non-public information or other confidential
commercial information. Accordingly, investors should not assume that the
Company agrees with any statement or report issued by any analyst irrespective
of the content of the statement or report.

Furthermore, the Company has a policy against issuing or confirming financial
forecasts or projections issued by others. Thus, to the extent that reports
issued by securities analysts contain any projections, forecasts or opinions,
such reports are not the responsibility of the Company.

The Company undertakes no obligation to release publicly the results of any
revisions to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.




Item 3.  Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business and consistent with established policies and
procedures we use the necessary financial instruments to manage the
fluctuations in interest rates. The Company does not have any foreign currency
risk. The Company does not enter into any of these transactions for speculative
purposes.




Item 4.  Controls and Procedures

Under the supervision and with the participation of our management, including
the Chief Executive Officer and Chief Financial Officer an evaluation was
performed of the effectiveness of our disclosure controls and procedures, as
such term is defined in Rule 13a-15(e) promulgated under the Securities
Exchange Act of 1934, as amended. Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective as of the end of the period covered by
the quarterly report.

11



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Part II   Other Information




Item 1.  Legal Proceedings




| |  |  | On May 30, 2003 the Superior Court in Penobscot County, Maine issued their
final settlement decision in the Penobscot Shoe Company litigation which
stated that dissenting stockholders are entitled to $15.87 per common
share, $4.12 more per share that the amount the Company paid at the time
of the acquisition, plus interest. The total settlement amount including
interest was $3.1 million and was paid by the Company during the second
quarter ended June 28, 2003.
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Item 2.  Changes in
Securities 



| |  |  | On May 22, 2003, the Board of Directors authorized a two-for-one stock
split of Common Stock for all stockholders of record as of the close of
business on May 22, 2003.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Item 3.  Defaults upon Senior Securities  None




Item 4.  Submission of matters to a vote of security holders



| |  |  | We held our Annual Meeting of Stockholders on May 22, 2003. At the
meeting, the following nominees were elected as directors to hold office
until the Annual Meeting of Stockholders to be held in 2004, and until his
successor is elected and shall qualify:
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    |  |           |           |                |  |  |        | 
|------------------- |  | --------- | --------- | -------------- |  |  | ------ | 
|Nominee             |  | Votes For |           | Votes Withheld
|                    |  |           |           |               
|Edward Bloomberg    |  |           | 2,010,796 |                |  |  | 74,551 | 
|Steven M. DePerrior |  |           | 2,057,296 |                |  |  | 28,051 | 
|Gregory M. Harden   |  |           | 2,057,064 |                |  |  | 28,283 | 
|Wilhelm Pfander     |  |           | 2,057,396 |                |  |  | 27,951 | 
|Gary E. Pflugfelder |  |           | 2,057,496 |                |  |  | 27,851 | 
|James R. Reidman    |  |           | 2,056,796 |                |  |  | 28,551 | 
|Greg A. Tunney      |  |           | 2,056,344 |                |  |  | 29,003 | 



| |  |  | The appointment of Deloitte & Touche LLP as the Companys independent
public accountants for the year 2003 was ratified. The voting for the
proposal was as follows:
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                |  |                  |  |             
|--------------- |  | ---------------- |  | ------------
|For  2,057,463 |  | Against  27,850 |  | Abstain  34



| |  |  | The proposal to amend the Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 6,000,000 to 50,000,000
and to increase the number of authorized shares of preferred stock from
1,000 to 500,000 was ratified. The voting for the proposal was as
follows:
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                |  |                   |  |                
|--------------- |  | ----------------- |  | ---------------
|For  1,474,761 |  | Against  101,395 |  | Abstain  7,906



| |  |  | Also at the meeting, the proposal to amend the 2001 Long-Term Incentive
Plan to increase the number of shares of Common Stock
which can be awarded thereunder from 300,000 to 500,000 was ratified. The
voting for the proposal was as follows:
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                |  |                  |  |                
|--------------- |  | ---------------- |  | ---------------
|For  1,476,960 |  | Against  97,721 |  | Abstain  9,381




Item 5.  Other Information  None




Item 6.  Exhibits and Reports on Form 8-K:



| | a) |  | Exhibits required by Item 601
of regulation S-K                                  
| | -- |  | ---------------------------------------------------------------------------------
|
| |    |  | Exhibit 10.1  Agreement and Plan of
Merger                                      
| |    |  | Exhibit 10.2  Letter Amendment to
the Agreement and Plan of Merger              
| |    |  | Exhibit 10.3  Escrow Agreement                                                  
| |    |  | Exhibit 10.4  Harrison Trask
Employment and Consulting Agreement                
| |    |  | Exhibit 10.5  Harrison Trask
Non-Disclosure Agreement                           
| |    |  | Exhibit 31.1  Section 302 Certification of Chief Executive Officer              
| |    |  | Exhibit 31.2  Section 302 Certification of Chief Financial Officer and Treasurer
| |    |  | Exhibit 32.1  Section 906 Certification of Chief Executive Officer              
| |    |  | Exhibit 32.2  Section 906 Certification of Chief Financial Officer and Treasurer

12



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##### Table of Contents





| | b) |  | Forms 8-K
| | -- |  | ---------



| | 1) |  | On June 16, 2003, the Company filed a report on Form 8-K
announcing the issuance of two press releases, the first press
release updated the effect of the dissenting stockholders lawsuit
ruling and the second announced the signing of a definitive merger
agreement with the H.S. Trask & Co.
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2) |  | On June 3, 2003, the Company filed a report on Form 8-K
commenting on the decision received May 30, 2003 from the Superior
Court in Penobscot County, Maine regarding the dissenting
stockholders suit associated with the Companys March 2000
acquisition of Penobscot Shoe Company.         
|
| | 3) |  | On April 29, 2003, the Company filed a report on Form 8-K
announcing the Companys first quarter 2003 results.                                                                                                                                                                                  

13



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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, thereunto, duly authorized.

PHOENIX FOOTWEAR GROUP, INC.
Registrant

|                      |                                       | 
|--------------------- | ------------------------------------- | 
|Date: August 12, 2003 | /s/ James R. Riedman                  | 
|                      |                                       | 
|                      | James R. Riedman                      | 
|                      | Chairman and Chief Executive Officer  | 
|                      |                                       | 
|Date: August 12, 2003 | /s/ Kenneth E. Wolf                   | 
|                      |                                       | 
|                      | Kenneth E. Wolf                       | 
|                      | Chief Financial Officer and Treasurer | 

14