News Flash

Exciting time at Hampshire Group – Hampshire Chief

16 Aug '11

5 min read

For the six months ended July 2, 2011, the Company had a loss from continuing operations of $11.0 million compared to a loss from continuing operations of $12.2 million for the same period last year. The reduction in the loss from continuing operations was primarily due to a $4.4 million reduction in special costs, offset by a $1.2 million impairment charge.

For the six months ended July 2, 2011, the Company had negative adjusted EBITDA of $7.2 million compared to $6.2 million for the same period last year.

Basic and diluted loss per share from continuing operations for the six months ended July 2, 2011 was $1.96, compared to a basic and diluted loss per share of $2.20 for the same period last year.

On July 2, 2011, cash and cash equivalents totaled $42.0 million, which included restricted cash of $12.7 million, compared with $31.6 million as of July 3, 2010. The Company's working capital related to continuing operations was $47.9 million at July 2, 2011 compared with $42.8 million at July 3, 2010. As of July 2, 2011, the Company had no outstanding borrowings under its credit facility with approximately $1.1 million of availability and approximately $29.4 million of unrestricted cash that was not included in the availability calculation.

Additional Information

• Sale of Women's Businesses - On May 5, 2011, the Company announced a significant shift in its growth strategy to focus on Hampshire's men's business and pursue other strategic opportunities. In connection with this new strategic direction, the Company sold its women's businesses, Hampshire Designers and Item-Eyes, in two separate transactions. The assets, liabilities, and results from operations for the women's businesses have been presented as discontinued operations in both current and prior year periods. Net of severance and transaction costs, among other things, we recognized a $10.9 million gain on the sale of the women's businesses.

• Acquisition of Rio - On June 13, 2011, we reached a significant milestone with entering into a merger agreement to acquire Rio Garment S. de R.L. (“Rio”). The acquisition is expected to be accretive to Hampshire's 2011 operating results and the Company believes it will be a major contributor to Hampshire's drive to achieve profitability and build shareholder value.

The acquisition will provide a significant opportunity to grow Hampshire's core business into the fast-growing specialty store channel and also allows the Company to leverage its existing operating platforms to expand Rio's business into the department and chain store channels. In addition to consideration to be paid upon closing, the Company will deposit $3.5 million in cash into an escrow account and hold back and reserve for issuance $6.5 million of shares of the Company's common stock for certain post-closing purchase price adjustments and potential indemnification claims. The merger is expected to close during the third quarter 2011.

Hampshire Group Limited

More Hampshire Group Limited News... More Apparel/Garments News - United States Of America...