Hampshire completes restructuring plan
Hampshire Group Limited announced its results for the fiscal year ended December 31, 2009 and filed its annual report on Form 10-K.
Commenting on the results, Heath L. Golden, President and CEO of Hampshire Group, remarked, “In the face of a continued downturn in the retail sector, we remained focused on several key objectives intended to turnaround our business. While our results reflect the difficult economic environment, we are extremely pleased with the progress we have made to strengthen our balance sheet, streamline our cost structure, realign our operations and reduce our cost of goods. Beyond the quantifiable progress reflected in our financial results, we have made fundamental changes to our business including our design, sourcing, marketing, and merchandising functions, which we believe have better positioned us for the future. Our focus remains on returning our core businesses to profitability and expanding into new growth categories and sales channels to maximize value for all of our shareholders.”
“We look forward to strengthening our relationships with our shareholders at our upcoming annual meeting,” Golden added.
Fiscal Year 2009 Accomplishments
• Reduced selling, general and administrative expenses by 31.1% from $57.6 million in 2008 to $39.7 million in 2009, primarily as the result of the Company's 2008 and 2009 restructuring and cost reduction plans, which will generate over $14.2 million in savings on an annualized basis;
• Finished 2009 with a strong balance sheet that reflects over $33 million in cash and no borrowings under the Company's credit facility;
• Strengthened working capital by the recognition of a $6.7 million income tax refund receivable and the release of a $5.1 million reserve related to a supplier dispute for an aggregate improvement of $11.8 million;
• Improved cash flow, primarily due to better terms with vendors;
• Launched the JOE Joseph Abboud® and Alexander Julian Colours lines, a part of our growth initiatives;
• Reorganized the women's businesses, including the hiring of Howard L. Zwilling as President of Women's Apparel, in tandem with a corporate-wide revamping and upgrading of talent in our sourcing, design, marketing and merchandising functions;
• Restructured sourcing operations by reducing the Company's China-based organizational structure and shifting the structure from a corporate function to a divisional one, which is expected to drive more effective collaboration;
• Strengthened senior management team, comprised of Heath L. Golden as President and CEO, Jonathan W. Norwood as CFO, Mark W. Lepine as President of Men's Apparel and Howard L. Zwilling as President of Women's Apparel.
Net sales decreased 26.3% to $64.3 million for the three months ended December 31, 2009 from $87.3 million for the same period last year. For the year ended December 31, 2009, net sales decreased by 31.4% to $165.2 million from $240.9 million for the same period last year. The decrease in net sales resulted from a decline in volume, principally in the Company's women's businesses and lower average selling prices due to larger customer allowances, both reflective of the weak retail market and the impact of customers that filed for bankruptcy during 2008.