Increase in shipments of Hampshire Men's business
Hampshire Group, Limited announced its results for the three and six months ended July 3, 2010 and filed its quarterly report on Form 10-Q.
Commenting on the results, Heath L. Golden, President and CEO of Hampshire Group, stated, “We continued to see the benefits from the cost reduction plan and operational changes we have instituted to drive improved performance of the business. Our reduced cost structure will continue to benefit us during the second half of the year, which is historically our stronger half. While we still see weakness in the retail marketplace, we do expect to see a narrowing in the percentage decrease of our net sales on a year-over-year basis during the second half of 2010.”
“We remain focused on our strategy to turnaround the business and the strategic initiatives now in place to drive sales growth and shareholder value in 2011 and beyond. To this end, we resolved the litigation that resulted from our 2006 Audit Committee Investigation and consummated the acquisition of Scott James, a men's specialty retailer and wholesale provider. The elimination of the expense and distraction caused by the litigation and the enhanced product mix and broader customer base provided by the acquisition will serve us well as we continue to execute our plan.”
Second Quarter 2010 Highlights
• Reduced selling, general, and administrative expenses by 15.3% from $8.7 million in the second quarter of 2009 to $7.4 million in the second quarter of 2010;
• Settled all remaining litigation associated with our 2006 Audit Committee Investigation; and
• Acquired and integrated the Scott James business.
Results for the Three Months Ended July 3, 2010
Net sales decreased 29.6% to $14.8 million for the three months ended July 3, 2010 from $21.0 million for the same period last year. The decrease in net sales resulted from a decline in volume in the Company's Women's businesses and lower average selling prices due to larger customer allowances, which were somewhat offset by an increase in shipments from the Company's Men's business.
For the three months ended July 3, 2010, the Company had a loss from continuing operations of $7.9 million compared to a loss from operations of $8.4 million for the same period last year. The reduction in the loss from continuing operations was primarily due to a $3.4 million reduction in restructuring charges, partially offset by a $2.8 million increase in special costs.
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 $3.2 million for both the quarter ended July 3, 2010 and the same period last year.