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Whoa! Hancock ended FY09 with a profit. Yes, the headline earned the exclamation mark.
Baldwyn-based Hancock Fabrics issued the following press release late Wednesday – hours after the market closed:
Hancock Fabrics Announces Fiscal 2009 Financial Results
Net Income Increases by $14.2 Million for Year Comparable Store Sales Increase 0.2%
BALDWYN, Miss., Mar 10, 2010 (BUSINESS WIRE) — Hancock Fabrics, Inc. (OTC symbol: HKFI) today 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.
• Hancock ended the fiscal year with 3,900 employees in stores and 300 at headquarters in Baldwyn. CFO Rob Driskell said the company doesn't plan to change those numbers "significantly."
• Much of the management team has changed in the past five years. In the past year, 40 percent of the district leadership has changed.
• Customers still are focusing on value products. The average ticket is down, but the number of store trips is up.
• The $1.8M profit is by no means acceptable, said CEO Jane Aggers, but it is a significant milestone for the company, which within the past three years filed for bankruptcy and emerged.
Read more in tomorrow's Daily Journal.