Alan Rosskamm, Chairman and Chief Executive Officer said, "As expected, our sales growth and gross margin rate remain challenged as we execute on our repair plan against a backdrop of soft industry conditions with lower customer demand.
Although not evident in the numbers, we continue to make progress on our key repair plan initiatives, particularly in the areas of inventory reduction and expense control, as we implement better disciplines, which we expect will benefit our results as we progress through the year."
Mr. Rosskamm, continued, "Our new Opelika, Alabama distribution center now serves approximately 170 of our stores, and we expect it to enhance the performance of our logistics network. Also, we are making substantial progress on our merchandise assortment project.
This project should be completed by the beginning of the third quarter and will bring new, fresh merchandise to our stores which should help drive the business improvement we expect in the second half of fiscal 2007.
I am confident that we are focused on the correct initiatives, which I expect will enable us to end the year as a more disciplined organization with a much stronger balance sheet and a significantly reduced debt balance."
Change in Accounting for Stock-Based Compensation
Effective January 29, 2006, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 123R, "Share-Based Payment." SFAS No. 123R, among other things, changes the way of accounting for forfeited share-based awards. Under the new standard, the Company is required to estimate forfeitures at the time of the award grant, rather than account for them as they occur.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
