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Hancock Fabrics Q2 FY'13 losses narrow
11
Sep '13
Hancock Fabrics, Inc. announced financial results for its second quarter ended July 27, 2013 and first half of fiscal 2013.
 
Financial results for the second quarter include:
Net sales for the quarter were $59.1 million compared to $60.5 million for second quarter of last year, and comparable store sales declined by 1.7% following a 5.0% increase for the same period of the prior year.
 
Gross profit for the second quarter improved by 200 basis points to 44.9% as compared to 42.9% for the second quarter of the prior year. Excluding fluctuations in the inventory valuation reserve from both years the gross profit improved by 420 basis points.
 
Selling, general and administrative expenses for the quarter, including depreciation and amortization, decreased by $148,000 but due to top line sales pressure increased as a percentage of sales to 47.0% from 46.3% in the same period of the prior year. The second quarter of fiscal 2012 also includes the one-time benefit of a real estate settlement gain of $156,000.
 
Operating loss for the quarter was reduced to $1.3 million compared to a loss of $2.0 million in the second quarter last year.
 
EBITDA, a non-GAAP measure, which is defined as earnings (loss) before interest, taxes, depreciation and amortization improved by 91% or $0.7 million this quarter compared to the second quarter of last year.
 
Net loss was $2.6 million, or $0.13 per basic share, in the second quarter of fiscal 2013 compared to a net loss of $3.3 million, or $0.17 per basic share in the second quarter of fiscal 2012.
 
At quarter end, the Company had outstanding borrowings under its revolving line of credit of $51.8 million, a term loan balance of $15.0 million and outstanding letters of credit of $8.3 million. Additional amounts available to borrow under its revolving line of credit at the end of the quarter were $19.6 million. The balance of the Company’s subordinated debt was $8.2 million at quarter end.
 
First half financial results include:
Net sales for the first half of fiscal 2013 were $122.9 million compared to $124.4 million in the first half of last year, and comparable store sales declined by 0.8% following a 4.3% increase in the first half of the previous year.
 
Gross profit for the first half of fiscal 2013 improved by 340 basis points to 45.2% as compared to 41.8% for the prior year. Excluding the fluctuations in the inventory valuation reserve from both years, the gross profit improved 440 basis points.
 
 

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