Hampshire publishes summary of restatement results for Q1 2006
10 Aug '07
5 min read
After incurring ongoing losses in the Marisa Christina division due to deteriorating sales, the Company determined in May of 2007 to discontinue domestic operations and sales of the division but plans to continue to license the label internationally. In addition, the Company is evaluating strategic alternatives for this entity.
With the filing of Form 10-Q for the third quarter of 2006, the Company reported results for the three and nine month periods ended September 30, 2006 and restated its financial statements for the comparable periods of the prior year to reflect the results of the Audit Committee investigation.
Net sales for the three months ended September 30, 2006 were $112.6 million compared to $123.6 million for the same period of the prior year. Net sales for the third quarter of 2006 included $15.6 million of net sales attributed to the acquired businesses.
The majority of the $26.6 million decrease in the Company's existing business net sales resulted from a decline in 2006 shipments to several customers primarily of the private label business of the women's related separates division.
Net sales for the nine months ended September 30, 2006 were $229.6 million compared to $220.3 million for the same period of the prior year. Net sales for the first six months of 2006 included $52.2 million of net sales attributed to the acquired businesses. The majority of the $42.9 million decrease in the Company's existing business net sales resulted from a decline in 2006 shipments to the customers discussed above.
Income from operations for the three months ended September 30, 2006 was $4.8 million compared to $11.8 million for the same period of the prior year. The 2006 income from operations was impacted by a $1.2 million operating loss from the acquired businesses and $4.0 million in expenses associated with the Audit Committee investigation.
As previously disclosed in a Form 8-K filing dated July 27, 2007, the Company committed to deliver to its lenders its financial statements for the year ended December 31, 2006 no later than August 31, 2007, financial statements for the quarter ended March 31, 2007 no later than September 30, 2007 and financial statements for the quarter ended June 30, 2007 no later than October 30, 2007.
After filing its annual report for 2006, the Board of Directors of the Company expects to schedule the annual meeting of stockholders, which would have been held in May of 2007 if the investigation and resulting restatement had not occurred. After becoming current on all of its filings with the Securities and Exchange Commission, the Company intends to make an application to be re-listed on the Nasdaq Global Market.
Michael Culang, interim Chief Executive Officer, stated: “The retail environment remains difficult, which may negatively impact our ability to show marked improvement in 2007. However, our commitment to quality, design, and value will be the key driver to our continuing importance to our customers and should help ensure broad distribution of our products."
"In addition, the Company initiated a cost reduction plan during the second quarter of 2006 in our women's related separates division in response to the decline in its net sales. This plan contributed to a reduction in SG&A expenses for 2006.”
20240830145952.gif)
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
