Hampshire Group Ltd. managed to reduce its first-quarter loss despite a 29.7 percent contraction in sales.
For the three months ended April 3, the loss was $5 million, or 90 cents a diluted share, compared with a loss of $7.8 million, or $1.42, in the year-ago quarter. Sales declined to $20.5 million from $29.1 million with unit volume down 23.3 percent and average selling prices down 6.4 percent.
“While sales in the quarter declined due to lower volume in our women’s business, for the first time, we had strong spring shipments in our men’s business,” said Heath Golden, president and chief executive officer of the New York-based knitwear and sportswear firm. “Our women’s business, whose results were in line with our expectations, remains an opportunity for growth and an area where we are actively working to improve performance.”
Gross margin declined to 20.7 percent of sales from 21.2 percent in the 2009 quarter, while selling, general and administrative expenses, down 21.8 percent to $8.6 million, rose to 41.9 percent of sales from 37.6 percent a year ago. Cash and cash equivalents rose to $40.5 million from $33.4 million at the end of the last calendar year.
The company said in a regulatory filing with the Securities and Exchange Commission that in August it amended its credit facility with HSBC Bank and others. The facility is a $48 million asset-based revolving credit line that includes trade letters of credit with a $10 million sublimit for standby letters of credit. The filing said as of April 10, there were no outstanding borrowings and $9.7 million outstanding under letters of credit.
The firm said because of a product mix focused on sweaters, the bulk of revenues come in the third and fourth quarters. The category represented 70 percent of sales in 2009 with the balance coming from sportswear.