Net income up at Hancock Fabrics

12 Mar '10

4 min read

Hancock Fabrics, Inc. announced financial results for its 2009 fiscal year and fourth quarter ended January 30, 2010.

Fiscal 2009 financial highlights include:

Net sales for the year were $274.1 million compared with $276.4 million in the previous year, and comparable same store sales increased 0.2% compared with a 2.1% increase in the previous year.

Operating income for the year increased by $4.6 million as a result of the $7.7 million of income in 2009 compared to $3.1 million of income in 2008. The previous year's fourth quarter included a retirement plan curtailment gain of $6.2 million. Excluding this gain in the prior year, operating income increased $10.8 million.

Net income was $1.8 million, or $0.09 per basic share, for fiscal 2009, compared to a net loss of $12.4 million, or $0.65 per share for fiscal 2008.

Adjusted EBITDA, which excludes the $6.2 million retirement plan curtailment gain recorded in the prior year, for fiscal 2009 was $13.8 million, an increase of $10.3 million over fiscal 2008.
Inventories have been reduced by $12.7 million compared to the same period last year, ending the year at $91.5 million.

At year end, the Company had outstanding borrowings under its revolving line of credit of $13.6 million and outstanding letters of credit of $6.0 million. The Company paid down $18.4 million of gross debt in fiscal 2009. The Note balance was $21.6 million and the warrant discount on the Notes was $8.3 million. Additional amounts available to borrow under its revolving line of credit at fiscal year-end were $42.9 million.

Financial highlights for the fourth quarter include:

Net sales for the quarter were $77.7 million compared with $78.2 million in the fourth quarter last year, and comparable same store sales decreased 1.3%, compared with a 0.1% increase in the previous year.

Operating income for the quarter decreased by $3.3 million as a result of a $3.3 million profit in this quarter compared to a $6.6 million profit in the previous year's fourth quarter. Excluding the retirement plan curtailment gain of $6.2 million in the prior year, operating income increased $2.9 million over the previous year.

Net income was $1.9 million, or $0.10 basic earnings per share, in the fourth quarter of fiscal 2009, compared to income of $4.2 million, or $0.22 basic earnings per share in the fourth quarter of fiscal 2008.
Adjusted EBITDA for the quarter was $4.6 million, an increase of $2.5 million over the same period last fiscal year.

Jane Aggers, President and Chief Executive Officer commented, "While our top line results are indicative of the challenging environment in which we operate, the significant improvements that have been made in earnings is evidence that our operational plan is gaining traction. We will continue to deleverage the balance sheet as we look at various alternatives for growth."

Operating Results

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