Exciting time at Hampshire Group – Hampshire Chief
Hampshire Group, Limited announced its results for the three and six months ended July 2, 2011 and filed its quarterly report on Form 10-Q.
Commenting on the results, Heath L. Golden, President and CEO of Hampshire Group, stated, “During the quarter, we were focused on execution in our men's business and on several significant initiatives that have set a new strategic course for the Company. Most importantly, we announced the pending acquisition of Rio Garment, which will give us a manufacturing base in the western hemisphere and dramatically transform our Company by positioning us in several new avenues for growth. This acquisition is expected to close in the third quarter and we are expeditiously implementing our integration plan. Further, we completed the sale of our women's business, sharpening our focus and strengthening our balance sheet. This is an exciting time at Hampshire and we are committed to returning the business to profitability and delivering long-term shareholder value.”
Net sales increased 48.6% to $3.5 million for the three months ended July 2, 2011 from $2.3 million for the same period last year. The increase in net sales resulted primarily from an increase in average net selling prices and volume. The increase in average net selling prices was due primarily to a significant decrease in customer allowances from 2010 to 2011. The volume of total menswear units sold increased from the same period last year primarily as a result of the sale of discounted prior season goods. Due to the seasonality of the menswear business, a significant portion of our menswear net sales occur in the third and fourth quarters.
For the three months ended July 2, 2011, the Company had a loss from continuing operations of $7.3 million compared to a loss from continuing operations of $7.8 million for the same period last year. This decrease was primarily due to a $3.9 million reduction in special costs, partially offset by a $2.2 million increase in selling, general and administrative costs, primarily due to acquisition costs incurred during the current period, and a $1.2 million non-cash impairment charge recorded in the second quarter 2011.
The Company is providing earnings (loss) before income taxes, interest, depreciation and amortization (“EBITDA”) and adjusted EBITDA because its management believes that these measures provide useful information for investors concerning the Company's operating results and financial performance. The Company had negative adjusted EBITDA of $4.5 million and $3.0 million for the quarter ended July 2, 2011 and July 3, 2010, respectively.
Basic and diluted loss per share from continuing operations for the three months ended July 2, 2011 was $1.30, compared to a basic and diluted loss per share of $1.40 for the same period last year.
Results of Continuing Operations for Six Months Ended July 2, 2011
Net sales increased 42.6% to $7.0 million for the six months ended July 2, 2011 from $4.9 million for the same period last year. The increase resulted primarily from an increase in average net selling prices due to reduced customer allowances.