Hancock Fabrics net income increases by $3.4 mn
Hancock Fabrics Inc announced financial results for its third quarter ended October 31, 2009, and year-to-date for fiscal 2009.
Financial highlights for the third quarter include:
Net sales for the quarter were $72.7 million compared with $70.6 million in the third quarter last year, and comparable same store sales increased 4.0%, compared with a 2.1% increase in the previous year.
Operating income for the quarter increased by $3.6 million as a result of a $4.5 million profit in this quarter compared to a $0.9 million profit in the previous year's third quarter.
Net income was $3.0 million, or $0.16 basic earnings per share, in the third quarter of fiscal 2009, compared to a net loss of $0.3 million, or $0.02 loss per share in the third quarter of fiscal 2008.
EBITDA for the quarter was $6.1 million, an increase of $3.5 million over the same period last fiscal year.
Inventories have been reduced by $10.0 million compared to the same period last year.
At quarter end, the Company had outstanding borrowings under its Revolver of $25.0 million and outstanding letters of credit of $6.0 million. The Note balance was $21.6 million and the warrant discount on the Notes was $8.8 million. Additional amounts available to borrow at that time were $43.1 million.
Year-to-date financial highlights include:
Net sales year-to-date were $196.4 million compared with $198.2 million in the year-to-date last year, and comparable same store sales increased 0.9%, compared with a 2.9% increase in the previous year.
Operating income year-to-date increased by $8.0 million as a result of the $4.4 million of income in 2009 compared to a $3.6 million loss in 2008.
Net loss was $0.1 million, or $0.01 per share, in year-to-date for fiscal 2009, compared to a net loss of $16.5 million, or $0.87 per share for fiscal 2008 year-to-date.
EBITDA for year-to-date fiscal 2009 was $9.2 million, an increase of $7.8 million over the same period last fiscal year.
Jane Aggers, President and Chief Executive Officer commented, “We are beginning to experience meaningful top line improvement in combination with significant operating cost reductions. Our strong quarter and year to date results are a testament to the hard work of all of our associates and management team. We are cautiously optimistic that we can continue to execute our business plan throughout the remainder of the year and into 2010.”
Gross margin for the third quarter of 46.5% was a 350 basis point improvement over the 43.0% of the prior year. This increase reflects a 220 basis point reduction in merchandise cost, a 50 basis point reduction in freight costs, and an 80 basis point reduction in sourcing and warehousing. Year-to-date, gross margin improved by 210 basis points to 45.8%. This improvement was driven by the same fundamentals that drove third quarter improvements.