Financial results for the first quarter include:
- Net sales for the quarter were $63.7 million compared to $63.9 million for the first quarter of last year. Comparable store sales for the quarter were flat after a 3.5% increase for the first quarter of last year.
- Gross profit for the quarter increased by 470 basis points to 45.5% compared to 40.8% in the first quarter of last year. This equates to an improvement of $2.9 million.
- Selling, general and administrative expenses for the quarter, including depreciation and amortization, increased this quarter by 80 basis points to 43.5% of sales from 42.7% of sales in the prior year first quarter. The increase is due to a one-time insurance settlement gain in the first quarter last year and increasing benefit costs in the current quarter. These impacts have been partially offset by expense controls that have been implemented.
- Operating income increased 209% to $1.3 million compared to an operating loss of $1.2 million in the first quarter last year; this is an increase of $2.5 million and represents an increase of 390 basis points as a percentage of sales.
- EBITDA, which is earnings before interest, taxes, depreciation and amortization, a non-GAAP measure, increased $2.3 million to $2.5 million this quarter compared to $207 thousand for the first quarter of last year.
- Net loss was $0.5 million, or $0.02 per basic share, in the first quarter of fiscal 2013 an improvement of $1.9 million compared to a net loss of $2.4 million, or $0.12 per basic share in the first quarter of fiscal 2012.
- At quarter end, the Company had outstanding borrowings under its revolving line of credit of $46.1 million, term loans 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 $19.8 million. The balance of the Company’s subordinated debt was $8.2 million at quarter end.
Commenting on the results, Steve Morgan, President and Chief Executive Officer said, “We are glad to report the ongoing improvement in operating income. This quarter saw a 209% increase in operating income and for the first time since 2010, we have had positive operating income in the first quarter.
"This is an encouraging accomplishment, even as top line sales were hurt from the unusual weather losses we had this spring, we were able to drive gross profit improvements. These gains continue the trend from the fourth quarter last year and we continue to strive to enhance this as we move forward in 2013.”
Store Openings, Closings and Remodels
During the first quarter 2013, the Company opened one store, closed one store and relocated one unit, ending the quarter with 261 stores.
Hancock Fabrics, Inc. is committed to being the inspirational authority in fabric and sewing, serving creative enthusiasts with a complete selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. The Company currently operates 261 retail stores in 37 states and an Internet store
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