Hancock Fabrics Q4'FY14 net sales drop marginally

28 Apr '14

3 min read

Hancock Fabrics, Inc. announced financial results for its fourth quarter and 2013 fiscal year ended January 25, 2014.

Financial results for the fourth quarter include:

-Net sales for the quarter were $81.3 million compared to $81.7 million in the prior year. Comparable store sales declined by only 0.3% despite unusually severe winter weather, which impacted numerous markets.

-Gross profit for the fourth quarter increased by 190 basis points to 41.0% as compared to 39.1% for the fourth quarter of the prior year. This follows a 330 basis point improvement in the fourth quarter of 2012 compared to the same period of 2011.

-Selling, general and administrative expenses for the quarter, including depreciation and amortization, increased to 37.1% of net sales from 35.6% due to additional store labor, to ensure service levels during the Christmas season, and additional advertising, partially offset by a reduction in professional fees.

-Operating income for the quarter was $3.1 million compared to $2.8 million in the fourth quarter last year.

-EBITDA, a non-GAAP measure, which is defined as earnings (loss) before interest, taxes, depreciation and amortization, improved slightly to $4.3 million for the quarter from $4.2 million for the same period last year.

-Net income improved $2.3 million to income of $1.7 million, or $0.07 per diluted share, in the fourth quarter of fiscal 2013 compared to a net loss of $0.6 million, or $0.03 per basic share in the fourth quarter of fiscal 2012.

-At quarter end, the Company had outstanding borrowings under its revolving line of credit of $55.5 million, a term loan balance of $15.0 million and outstanding letters of credit of $6.4 million. Additional amounts available to borrow under its revolving line of credit at the end of the quarter were $16.6 million. The balance of the Company’s subordinated debt was $8.2 million at quarter end.

Fiscal 2013 financial results include:

-Net sales for fiscal year 2013 were $276.0 million compared to $278.0 million last year and comparable store sales declined by 0.1% following a 2.9% increase in the previous year.

-Gross profit for fiscal 2013 improved by 270 basis points to 43.0% as compared to 40.3% for the prior year. A majority of the savings came from improvements to our pricing strategy, with some savings in freight and warehousing.

-Selling, general and administrative expenses for fiscal 2013, including depreciation and amortization increased to 41.5% of sales from 40.7% from the prior year. This increase was driven by marketing costs, increased store and corporate payroll and incentive compensation partially offset by commission income and reductions in professional fees.

-Operating income improved by $5.2 million for fiscal 2013 to income of $4.0 million from a loss of $1.2 million for fiscal 2012.

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Hancock Fabrics

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