Hampshire Group, Limited announced its results for the fiscal year ended December 31, 2012 and filed its annual report on Form 10-K.
Paul Buxbaum was named CEO of Hampshire Group on January 15, 2013. Commenting on year-end results, Mr. Buxbaum stated, "Prior management began the transition of our business. Throughout 2012, we completed the wind down of two legacy licenses and focused our resources towards the Dockers and Panama Jack licenses as well as our Rio Garment business.
"As a result of this transition, we operate a very different business today than we have in recent years, and must organize accordingly. In 2013, we will focus our efforts on reorganizing internal operations to more efficiently support our current business and create a stable operating platform to best enable future growth. As a result of this re-engineering, the Company is not able to provide details about future performance to shareholders at this time.”
Buxbaum continued, “Moving forward, while we complete the necessary improvements to our internal systems, we will continue to identify additional growth opportunities that leverage our operating platform and drive incremental profitability.”
Results of Continuing Operations
Net sales were $40.5 million for the three months ended December 31, 2012 as compared to $45.7 million for the same period last year. The decline in net sales was due to lower sales at Rio and the final quarter of two legacy licenses at Hampshire Brands. For the year ended December 31, 2012, net sales increased by 36.5% to $117.6 million from $86.1 million last year. The increase in net sales for the full year primarily resulted from the inclusion of Rio’s sales for a full year.
Gross profit for the three months ended December 31, 2012 decreased 0.7% over same period last year and increased 13.2% sequentially from the third quarter of 2012. The gross margin for the fourth quarter was 20.1% and an increase over the 18.0% in the fourth quarter of 2011 and the 19.9% in the sequential third quarter.
Gross profit for the year ended December 31, 2012 was $23.5 million compared with $14.6 million for the same period last year, which reflected a full year of operations for Rio in 2012. Cost of goods sold increased to $94.1 million for the year ended December 31, 2012 from $71.6 million for the year ended December 31, 2011, primarily due to the inclusion of Rio for the full year partially offset by a volume driven decrease in cost of goods sold for Hampshire Brands.
SG&A declined to $8.4 million for the fourth quarter of 2012 from $9.2 million in the previous year. For fiscal 2012 SG&A was $34.0 million or 28.9% of sales versus $28.0 million or 32.5% of sales. The full year decline of SG&A as a percentage of sales is due to the leverage effect from increased sales on a fixed expense base in addition to cost savings measures implemented by the Company during the year.